Tracing the Steel Industry Supply Chain

From: Innovation, Science and Economic Development Canada

The challenge seeks to create a novel application of a digital tracing system enabled by blockchain and artificial intelligence for the Canadian and possibly North American steel supply chain for business users and government.

Sponsoring Department: Innovation, Science and Economic Development Canada (ISED)

Funding Mechanism: Contract

Opening date: December 6, 2018

Closing date: February 15, 2019, 14:00 Eastern Standard Time

Please refer to the tender notice for this challenge on Buy and Sell

Phase 1 award recipients

Challenge

Problem Statement

Steel products and inputs are not being comprehensively or securely traced with modern digital systems. Access to information related to the steel supply chain is also worsened by a lack of a standardized information-sharing mechanism which can result in delays in acquiring relevant data impacting government operations and steel business profitability. Currently there are no known applications of artificial intelligence analytics on Canadian steel sector information. Moreover, tools for trade and border activity are not optimizing tracing (blockchain) and AI technology in the steel sector.

The challenge is to develop a digital tool that would trace inputs and outputs in real time in the steel supply chain — up stream and down stream — using blockchain technology, and apply artificial intelligence enabled data analytics on this information, to better capture activities across the steel supply chain. ISED would directly benefit from such a technology as it would facilitate and enhance evidence-based policy making. Moreover, it could also be used by government to ease and digitize customs clearance procedures.

For industry, in particular downstream firms, it would offer product supply and demand predictions, instant verification of origin and quality of inputs and products (allowing for confirmation of responsible sourcing), reduced costs, increased efficiency and productivity, and predictive insights about inputs, use and demand metrics.

Desired outcomes and Considerations

Essential (Mandatory) Outcomes

Proposed solutions must:

provide real-time insights and information; be available to users within minutes of upload (on smart phone and web interface), in order to digitally automate steel supply chain transactions, information, and data flows; allow for export of some data;
be secure — where individual business information and confidentiality is regulated by guaranteeing levels of protection of elements of government and firm data; allow users to be private, public or a hybrid and have commensurate access views and functionality; business and government must be confident that sensitive information cannot be viewed outside allowed users;
use blockchain technology to ensure accuracy of data and transparency. To maintain a full digital trail in case of input errors, users must be able to rectify mistakes by "adding onto the log", rather than deleting mistakes entirely;
use artificial intelligence enabled data analytics to better capture activities across the steel supply chain. For example, using AI to have information on past, current and predicted demand for any input and output and predicting downstream product volume from supply products to name several;
allow for appropriate users to be alerted for anomalies in the supply chain and offer suggestions as to what action could be taken;
provide a comprehensive digital breakdown of the component parts of steel and steel products, such as coal, iron ore, nickel, steel scrap, and finished steel products; and,
easily integrate with existing government and industry digital infrastructures to facilitate adoption processes, and not be costly to adopt.

Additional outcomes

Proposed solutions should:

have a user-friendly interface (smart phone and web interface) that is easy to navigate.

Considerations

The development of a shared approach to integration of steel data between businesses and government would significantly increase timeliness of data access, efficiency, and communication networks. Steel businesses on occasion undergo delays at border crossings which can last weeks due to the inability to obtain required documentation. It is imperative that the technology solution allows access to information in a short amount of time to avoid these types of delays.

The implementation of a new platform could require re-training personnel as well as either updating business information systems and/or establishing new ones to ensure interoperability; the technology solution will have to be able to interface and interact properly with government and business systems. As such, adoption of this process will likely involve both monetary costs and time for Canadian firms and government departments and agencies.

Another consideration will be sharing and distributing information between governments and industry such that there is a consensus on data access and privacy. The technology solution must have the capacity to process and store large amounts of data, which will be accessible by multiple end users over geographically diverse locations. Data regarding steel and steel inputs will be able to be accessed and uploaded by steel producers, input producers, distributors, fabricators, downstream users, government offices, etc.

Convincing companies at various stages of the supply chain (steel input producers, steel producers, steel distributors, fabricators, and downstream users) to input transaction records in a shared system will be difficult. Concerns would include ensuring the security of the system and immutability of the data. As such, safety of the system is crucial and all aspects will have to be considered including: logical and physical storage security, monitoring for deviations and responding to suspicious behaviour, and protecting against unauthorized access and digital attacks.

The development of a computerized system providing a comprehensive digital breakdown of the component inputs of steel and steel products will advance sustainability and responsible business conduct by allowing firms and government agencies to ensure responsible sourcing of materials, and verify domestic content requirements when needed. When developing the technology solution, options related to physical tagging to best trace the supply chain should be considered.

Background and Context

Current rules of origin verification methods and trade facilitation processes are built on existing and somewhat antiquated information technology systems, where origin of steel can be validated largely through documentation such as a steel mill certificate. New opportunities regarding shared value, transparency and trade could be realized through the implementation of an innovative digital system. The development and adoption of a new blockchain and AI enabled technology platform would allow for a seamless integration of industry data with government required documentation (e.g. mill certificates, licenses) which could help improve accountability and transparency through the supply chain, while also reducing costs and delays. Also, as trade and domestic policy adjusts, for example, Canada's recent alignment of its country of origin marking regime, certification and labeling for steel products in accordance with U.S. requirements, a digital tool that is flexible and can serve new demands from government and industry will reduce transaction costs and create efficiencies for both government and industry.

There is greater pressure than ever for industry to produce more socially and environmentally sustainable products. One example of this comes from the Mining Association of Canada, whose members are leaders in corporate responsibility; their "Towards Sustainable Mining" commitment ensures that mining risks are managed responsibly. This represents an innovative pledge to facilitate engagement, drive world-leading environmental practices, and ensure the safety and health of employees and communities. The Canadian Steel Producers Association has also demonstrated interest developing a tool that will ensure sustainability in production. Other examples of these types of goals can be seen across supply chains.

An opportunity exists for the Canadian steel industry to implement a new, cutting-edge approach to the sourcing of steel and inputs, and therefore establishing "responsible steel". This goal could be achieved through a rigorous industry-wide tracing mechanism within the supply chain, and through increased transparency.

Maximum value and travel

Maximum Contract Value:

Multiple contracts could result from this Challenge.

The maximum funding available for any Phase 1 Contract resulting from this Challenge is $150,000.00 CAD (plus tax) including shipping, travel and living expenses, as applicable, for up to 6 months.

The maximum funding available for any Phase 2 Contract resulting from this Challenge is $1,000,000.00 CAD (plus tax) including shipping, travel and living expenses, as applicable, for up to 2 years. Only eligible businesses that have completed Phase 1 could be considered for Phase 2.

This disclosure is made in good faith and does not commit Canada to contract for the total approximate funding.

Travel:

For Phase 1 it is anticipated that two meetings will require the successful bidder(s) to travel to the location identified below:

Kick-off meeting
Ottawa, ON

Mid-project Meeting
Teleconference/Videoconference

Final Review Meeting
Ottawa, ON

Meetings could also be called on an ad hoc basis to discuss progress in Phase 1.

Eligibility

Solution proposals can only be submitted by a small business that meets all of the following criteria:

for profit
incorporated in Canada (federally or provincially)
499 or fewer full-time equivalent (FTE) employees^{Footnote *}
research and development activities that take place in Canada
50% or more of its annual wages, salaries and fees are currently paid to employees and contractors who spend the majority of their time working in Canada^{Footnote *}
50% or more of its FTE employees have Canada as their ordinary place of work^{Footnote *}
50% or more of its senior executives (Vice President and above) have Canada as their principal residence^{Footnote *}

Application guide

Evaluation Criteria

The official source of the Evaluation Criteria for this challenge is the Government Electronic Tendering System (Buy and Sell) (https://buyandsell.gc.ca/procurement-data/tender-notice/PW-18-00846769)

In the event of a discrepancy between the information below and the information published on Buy and Sell, Buy and Sell will take precedence.

Part 1: Mandatory and Minimum Pass Mark Criteria

Proposals must meet all mandatory criteria (Questions 1a and 2) and achieve the minimum pass mark for Question 3 in order to be deemed responsive and proceed to Part 2.

Mandatory and Minimum Pass Mark Criteria (Applicant/Bidder's proposal must address)
Question	Evaluation Schema
1 a. Scope Describe your proposed solution and how it responds to the challenge. Include in your description the scientific and technological basis upon which your solution is proposed and clearly identify how your solution meets all of the EssentialOutcomes (if identified) in the Desired Outcomes and Considerations section in the Challenge Notice.	Mandatory - Pass/Fail Pass The Applicant/Bidder's proposed solution is clearly articulated, within the scope for the challenge and addresses all Essential Outcomes (if identified) in the Challenge Notice. Fail There is little or no evidence that the proposed solution is likely to meet the challenge. OR The proposed solution is articulated as out of scope for the challenge. OR The proposed solution does not address all Essential Outcomes listed in the challenge. OR The proposed solution is poorly described and does not permit concrete analysis.
2. Current Technology Readiness Level (TRL) Indicate the current TRL of your proposed solution. (Drop Down Menu of the Application/Bid Submission Form) Describe the research and development activities that have taken place to bring the proposed solution to the stated TRL.	Mandatory - Pass/Fail Pass: The Applicant/Bidder has demonstrated that the proposed solution is currently between TRLs 1 and 4 (inclusive), and provided justification by explaining the research and development (R&D) that has taken place to bring the solution to the stated TRL. Fail: The Applicant/Bidder has not provided sufficient evidence to demonstrate that the current TRL is between 1 to 4 (inclusive) including: There is insufficient/no evidence provided for TRL judgment. The solution involves the development of basic or fundamental research. The solution is at TRL 5 or higher. Insufficient/unclear/no justification explaining the R&D that took place to bring the solution to the stated TRL. The explanation simply paraphrases the description of a given TRL level.
3. Innovation Describe the novelty of your solution and how it advances the state-of-the-art over existing technologies, including competing solutions.	Point Rated with Minimum Pass Mark The minimum pass mark for this criteria is 4 points. 0 points/Fail: The Applicant/Bidder has not demonstrated that the proposed solution advances the state-of-the-art over existing technologies, including available competing solutions; OR The stated advancements are described in general terms but are not substantiated with specific, measurable evidence. 4 points: The Applicant/Bidder has demonstrated that the proposed solution offers one or two minor improvements to existing technologies, including available competing solutions, that have potential to create competitive advantages in existing market niches. 6 points: The Applicant/Bidder has demonstrated that the proposed solution offers three or more minor improvements to existing technologies, including available competing solutions, that together are likely to create competitive advantages in existing market niches; OR The Applicant/Bidder has demonstrated that the proposed solution offers one significant improvement to existing technologies that is likely to create competitive advantages in existing market niches 8 points: The Applicant/Bidder has demonstrated that the proposed solution offers two or more significant improvements to existing technologies, including available competing solutions that are likely to create competitive advantages in existing market niches and could define new market spaces; OR The Applicant/Bidder has demonstrated that the proposed solution can be considered a new benchmark of state of the art that is clearly ahead of competitors and that is likely to define new market spaces

Part 2: Point-Rated Criteria

Proposals that do not achieve the overall minimum score of at least 55 points out of a possible 110 points (50%) will be declared non-responsive and given no further consideration.

The overall minimum score is determined by adding the Applicant/Bidder's scores from the following questions together (1b, 3, 4-13).

Point-Rated Criteria (Applicant/Bidder's proposal to address)
Question	Evaluation Schema
1b. Scope Describe how your proposed solution addresses the Additional Outcomes (if identified) in the Desired Outcomes and Considerations section in the Challenge Notice. If no Additional Outcomes are identified in the Challenge Notice, Bidders/Applicants will receive 10 points	Insufficient or no information provided to demonstrate that the solution will address any of the Additional Outcomes. 0 points Information provided clearly demonstrates that the solution will address some (<50%) of the Additional Outcomes. 5 points Information provided clearly demonstrates that the solution will address most (50% or more) of the Additional Outcomes. 8 points Information provided clearly demonstrates that the solution will address all (100%) of the Additional Outcomes. 10 points
4. Phase 1 Science and Technology Risks Identify potential scientific and/or technological risks to the successful development of the proof of concept and how they will be mitigated in Phase 1?	Insufficient or no information provided to demonstrate that the Applicant/Bidder has considered potential risks and mitigation strategies and/or information provided contains significant gaps. 0 points Information provided demonstrates that the Applicant/Bidder has considered some potential risks and associated mitigation strategies but there are minor gaps in risks and/or associated mitigation strategies. 5 points Information provided clearly demonstrates that the Applicant/Bidder has sufficiently considered the risks and defined associated mitigation strategies. 10 points
5. Benefits to Canada Describe the benefits that could result from the successful development of your solution. Applicants/Bidders should consider the potential benefits using the following three categories: Innovation Benefits: Expected contribution towards the enhancement or development of new industrial or technological innovations. Assessment factors could include: potential spillover benefits, creation of intellectual property, impact on productivity of the new technology, etc. Economic Benefits: Forecasted impact on the growth of Canadian firms, clusters and supply chains, as well as its expected benefits for Canada's workforce. Assessment factors could include: number of jobs created, number of high-paying jobs, project-related revenue growth, etc. Public Benefits: Expected contribution to the broader public, including inclusive business and hiring practices (e.g., gender balance), investment in skills and training and environmental best practices. Assessment would consider the degree to which the Applicant/Bidder demonstrates that the solution is expected to generate social, environmental, health, security or other benefits to Canada. Assessment factors could include: solution-related environmental benefits, investment in local communities and solution-related impact on Indigenous communities.	Innovation Benefits Benefit not identified or insufficient claim of benefit. 0 points Benefit has marginal increment or limited justification. 1.5 points Benefit is significant and well justified. 3 points Economic Benefits Benefit not identified or insufficient claim of benefit. 0 points Benefit has marginal increment or limited justification. 1.5 points Benefit is significant and well justified. 3 points Public Benefits. Benefit not identified or insufficient claim of benefit. 0 points Benefit has marginal increment or limited justification. 1.5 points Benefit is significant and well justified. 3 points
6. Phase 1 Project Plan Demonstrate a feasible Phase 1 project plan by completing the table. Include: Project milestones; project activities under each milestone; time required to complete each milestone (e.g., days, weeks and/or months); (Indicate if any milestones and activities will be completed concurrently) total time required to complete the project; and key success criteria. Note: Phase 1 cannot exceed 6 months and TRL 4.	Insufficient or no information provided to demonstrate a feasible project plan for Phase 1 and/or the project plan exceeds the maximum duration indicated in the Challenge Notice. 0 points Project plan for Phase 1 is conceivably feasible but not clearly demonstrated and/or includes gaps. 5 points Information provided clearly demonstrates a feasible project plan for Phase 1. 10 points
7. Phase 1 Project Risks Identify potential project risks (eg. Human resources, financial, project management, etc) to the successful development of the proof of concept and how they will be mitigated?	Insufficient or no information provided to demonstrate that the Applicant/Bidder has considered potential risks and mitigation strategies and/or information provided contains significant gaps. 0 points Information provided demonstrates that the Applicant/Bidder has considered some potential risks and associated mitigation strategies but there are minor gaps in risks and/or associated mitigation strategies. 5 points Information provided clearly demonstrates that the Applicant/Bidder has sufficiently considered the risks and defined associated mitigation strategies. 10 points
8. Phase 1 Implementation Team Demonstrate how your project implementation team has the required management and technological skill sets and experience to deliver the project plan for Phase 1 by completing the table. A member of the implementation team can have more than one role. Include the labour rates and level of effort for each member. A day is defined as 7.5 hours of work, exclusive of meal breaks. The labour rates and level of effort will be reviewed as part of the evaluation for Question 10.	Insufficient or no information provided to demonstrate that the project team has the required management and technological skill sets and experience to deliver the Phase 1 project plan. 0 points Information is provided but there are minor gaps in required management and/or technological skill sets and/or experience to deliver the Phase 1 project plan. 5 points Information provided clearly demonstrates that the project team has the required management and technological skill sets and experience to deliver the Phase 1 project plan. 10 points
9. Inclusivity If your business were to receive funding from Innovative Solutions Canada, describe what actions (e.g., recruitment strategy, internships, co-op placements, etc.) might be taken in Phase 1 to support the participation of under-represented groups (e.g., women, youth, persons with disabilities, Indigenous people, visible minorities) in the research and development of the proposed solution.	No description and/or concrete examples of actions provided that would be taken to encourage greater participation of under-represented groups. 0 points A description and concrete examples of actions to encourage greater participation of under-represented groups provided. 3 points
10. Phase 1 Financial Proposal Demonstrate a realistic financial proposal for the Phase 1 project plan by completing the table.	Insufficient information provided and/or information provided significantly lack credibility. Does not demonstrate a realistic financial proposal for the Phase 1 project plan. 0 points Information is provided but some costs appear to be either over or under estimated for the Phase 1 project plan. 5 points Information provided contains credible elements to clearly demonstrate a realistic financial proposal for the Phase 1 project plan. 10 points
11. Phase 1 Financial Controls, Tracking and Oversight Describe the financial controls, tracking and oversight that will be used to manage the public funds throughout Phase 1.	Insufficient or no information provided to demonstrate the Applicant/Bidder's ability to manage public funds in Phase 1. 0 points Information provided is vague and/or contains gaps. The Applicant/Bidder has some controls, tracking and/or oversight in place to manage the public funds in Phase 1. 5 points Information provided clearly demonstrates that the Applicant/Bidder has strong financial controls, tracking and oversight to manage public funds in Phase 1. 10 points
12. Phase 2 Strategy Describe a realistic strategy for the prototype development if selected to participate in Phase 2. Responses should include: anticipated barriers key tasks estimated cost	Insufficient or no information provided to demonstrate that the Applicant/Bidder has contemplated a realistic strategy for the Phase 2 prototype development. 0 points Information provided demonstrates a conceivably realistic strategy for Phase 2 prototype development, however there are gaps and/or the strategy is vague. 5 points Information provided demonstrates that the Applicant/Bidder has a clear and realistic strategy. 10 points
13. Commercialization Approach Describe your overall commercialization approach for the proposed solution. Responses should include: Target markets (excluding Government of Canada) Non-ISC funding sources Transition to a commercially-ready product or service Any other indicators of commercial potential and commercial feasibility	Insufficient or no information provided to demonstrate that the proposed solution has commercial potential. 0 points Some information provided to demonstrate that the proposed solution has commercial potential, however there are gaps in the commercialization approach. 5 points A realistic commercialization approach is provided that demonstrates that the proposed solution has commercial potential. 10 points

Questions and answers

Please refer to the tender notice for this challenge on Buy and Sell.

All incoming questions regarding this specific challenge should be addressed to SIC-ISC@pwgsc.gc.ca

You can also consult the Frequently asked questions about the Innovative Solutions Canada Program.

A glossary is also available.

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