Regina 鈥� TransCanada looked at the way it does business and realized it wants to diversify its supplier base.
That was the message from Andrea Korney, senior manager, supplier diversity and stakeholder relations with TransCanada. She spoke to the Saskatchewan Oil and Gas Supply Chain Forum in Regina on Oct. 4
This is of particular consideration as the long-delayed Keystone XL pipeline project is now planned to start construction in the second half of 2019.
鈥淲e are re-engaging in this project,鈥� she said. 鈥淲e have all the major permits that we need, across Canada and the U.S.
The project will have 38 pump stations. Eight of those pump stations are in Canada, three of which are in southwest Saskatchewan at Fox Valley, Piapot and Grassy Creek.
The 36-inch pipeline will run from Hardisty, Alta., connecting to the original Keystone pipeline at Steele City, Nebraska. It鈥檚 almost 2,000 kilometres of new pipeline, of which 529 kilometres are in Canada, and of that, a large portion is in Saskatchewan.
She noted there was some long political history involved, saying 鈥淲e鈥檝e been trying to build this pipeline for over 10 years.鈥�
In January 2017, newly-elected President Donald Trump invited TransCanada to resubmit its application. (The project鈥檚 Presidential Permit application had been denied by previous President Barack Obama.) A few months later, he granted the Presidential Permit. She noted it was a big move for TransCanada. The recent approval by the Nebraska Public Services Commission in November 2017 led to the company re-engaging.
鈥淲e are in the process, right now, of construction preparation activities. This is engaging with our prime contractors, understanding what suppliers exist locally across where this project will go ahead. We鈥檙e also looking to secure some of the land permits and agreements that we to go; environmental surveys, of course, as well.鈥�
鈥淭he anticipated construction for this project is for 2019 and 2020, with an in-service date of 2021. And of those of you who speculate this might have something to do with U.S. elections, you鈥檙e probably not wrong. Our intention is to really get this project going, but it is also very important to TransCanada. This is something we really believe in. Its been in our books for a very long time.鈥�
She noted there are still some regulatory challenges in the U.S. they are keeping a close eye on. 鈥淏ut we鈥檙e continuing to proceed as if we鈥檙e going to have construction in that 2019-2020 time frame.鈥�
The pipe refurbishment program started this past July. (See related story Page A???)
Qualified suppliers
Korney spoke of engaging with a broad range of qualified suppliers. 鈥淨ualified suppliers lead to safe projects, lead to reduced opposition, lead to protection of the environment, lead to protection of people. So we really love to engage with the top primes and the top subcontractors with inclusive qualification programs and performance management programs.
鈥淭he original Keystone line really brought to our attention that we really need to focus on diversification of our supply base,鈥� she said. 鈥淲hat can happen in supply chains is you can get very long-standing relationships with your prime contractors and they tend to know how to bid your projects, you know how to receive their projects. If we don鈥檛 continue to add diversification in our supply base, we could not be getting the best commercial value. We might not be seeing the most innovative practices and processes. So we really want to continue to make sure we work to diversify that supply base, work with our primes to ensure they鈥檙e following the principles TransCanada really values, making sure work stays locally around your communities.鈥�
She noted Bloomberg recently recognized TransCanada on a sustainability index for Indigenous relations, public affairs, community relations and their supplier diversity program. A lot of that came from these efforts seeking diversity in their supply chain.
鈥淥ur contracting strategy is to ensure we are including diverse, local, Indigenous suppliers within our overall supply chain, whether, we, with a unionize workforce or non-union. We do that in many ways. Through our major projects, what we do is we look at the scope of the projects. We look at the areas the projects are happening. And we try to align those things with the local goals of some of the associations, ministries, chambers of commerce, any of the unions that happen to be present in the places we鈥檙e working.鈥�
Korney noted the use of local hotels and restaurants, as well as educational opportunities.
In operations, she said they have a very intensive pipe integrity program, spending hundreds of millions of dollars each year on things like integrity digs.
Regarding contracts, she said, 鈥淎ll types of contracts can be used in our contracting strategy. We are a category management shop at TransCanada, so we do have categories of spend, however, that doesn鈥檛 limit the opportunity to do things that make sense on a scope by scope basis, and using different forms of contracts and how we do that.鈥�
TransCanada works with Indigenous communities in several ways. This includes traditional knowledge studies, opportunities in the supply chain, and educational opportunities.
鈥淲e鈥檝e been doing Indigenous relations at TransCanada for a significant number of years. We鈥檝e extended our diversity program to include other diverse groups across Canada, and into the U.S. as well.鈥�
That also includes Mexico.
Becoming a vendor
The online vendor registration portal is where to start. 鈥淎 lot of suppliers see this as a big black hole. It isn鈥檛,鈥� Korney said. 鈥淭his is the first step in identifying yourself to us. If you are a local supplier and you do have a local contact that you鈥檙e working with TransCanada, don鈥檛 be afraid to ask questions.鈥�
Korney explained that when prime contactors are asked to include and Indigenous participation plan or a diverse and local participation plan in a bid package, 鈥淭he message I want to get out to you is we really want you to be as robust and thorough as you possibly can.鈥�
鈥淎nd while I understand that traditionally TransCanada鈥檚 response is you must have the best commercial value or come in at the lowest price, we will not be able to work with you if you do not identify what those options are.鈥�
鈥淚t might take longer and cost a little bit more money. Just tell us that, and let us make the choice. Oftentimes we do have extra budget that we can kick in, or, in regards to the Indigenous relations effort, we have people that will help negotiate those subcontracts that you receive, and help get them into the price and it helps you be more competitive,鈥� Korney said.
鈥淭he most important message I need to give to you is communicate with us.鈥�
On vendor qualification, she said, 鈥淲e do a general qualification that looks at your safety, your quality, your technical and your financial ability to do the work. Ours is risk-based, so high-risked all the way down to low-risk, requiring different things.
鈥淭hose of you who worked with TransCanada in the past may think TransCanada鈥檚 impossible to get qualified by, and we may have been, at times. But we鈥檝e been doing a lot of work to make this easier for our suppliers and to help you get through the process.
鈥淨ualification will not be a barrier to you getting work. We will just work with you and help you get those expectations on track to bring you in. So if you do have problems, and again, don鈥檛 be afraid to ask. Our goal is to have a very diverse workforce and a large supplier pool to draw from. It benefits us to help you with your qualification.鈥�
She noted there鈥檚 a lot of opportunity for local supply on the operations side, and a lot of it is low risk, too. These low risk opportunities are good for younger businesses.
Talking about the supplier development strategy, she explained big projects often go to big companies, but they are looking for opportunities to include smaller companies.
鈥淥ftentimes, when you have a company as large as TransCanada, the scope of work is very big. And they typically go to firms that can bid on a several-million-dollar scope. What we鈥檙e trying to do, with our carve-outs, is even if it鈥檚 pipe construction, if you only have the capacity or experience to do a smaller spread, or smaller diameter pipeline build, that鈥檚 okay. It doesn鈥檛 mean we don鈥檛 want to include you on the bid, and it doesn鈥檛 mean we won鈥檛 consider you. We might award smaller sections of work based on capacity. As resources get tighter and tighter, we tend to get more creative in this space,鈥� Korney said.
That could involve joint ventures or partnerships. 鈥淲e will never tell you you must joint venture, however, we will tell you if we believe there鈥檚 an opportunity for you to joint venture with another company to bid on a larger scope of work. We can make introductions for you. Hopefully, you have a happy marriage. As soon as we make the introduction, that鈥檚 where our part stops.鈥�
She noted a big expectation is the Indigenous and local participation components on an ongoing basis.
鈥淚ndigenous and local participation is in every bid,鈥� she concluded. And the company tracks these items, too.聽
