Government Operations Committee on Nov. 9th, 2006

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

So you feel these regional offices will obviously have the adaptability to be flexible to the regional needs and to address the concerns of the people in those areas.

[Michael Fortier]

They're headed by people from those regions, so they know their regions well. We have not sent out people who aren't from their respective regions.

And they're not staffed with fifteen people per office. It's a very modest staffing platform. There are one, two, or three people per office, and those people are going to be out there selling the message and explaining to folks how to actually do business with us.

In the months that I've been here, in speaking with many small and medium-sized business enterprises across the country, what I've discovered is that many actually didn't even know they could do business with us, which is amazing. That tells you a lot about our communications message.

So it's a good investment for us, because as I said, it's in the long term that as buyers of goods and services we will reap dividends, and we will also benefit as taxpayers wanting to create wealth in our communities across Canada.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

I have two questions.

Where are these offices going to be?

[Michael Fortier]

They are in Halifax, Edmonton, Montreal, Vancouver, and Toronto, and there's one here in Ottawa.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

What type of marketing and/or public knowledge planning or preparation is there to let the SMEs realize that they have an asset there that they can use? Is there a program, some planning, or a layout to be able to get the message out that there's a resource there that these folks can use?

[Michael Fortier]

There is a communications plan in place. Through various industry associations, Mr. Kramp, we are informing small and medium-sized business owners across Canada of our existence. But that, to me, is only part of the solution.

The other part is that we need to be proactive. We need to have our people from those offices going out there to meet small and medium-sized business owners through all sorts of associations, on the ground floor. This is what they're supposed to be doing.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you.

There's one thing that I was impressed with. We had the suppliers' group in here at a previous committee meeting, the representatives from the manufacturers. I will say that they basically did give a thumbs-up to your department and to the ministry officials for finally involving them in the process; for the level of consultation they had with your ministry; and for your flexibility in recognizing that they have changing needs and that the entire scope of government is changing.

Is that consultation process now complete? We see that you've moved to various suggestions and/or policy processes from that, but is that now a closed door, or is this going to be an ongoing process?

[Michael Fortier]

You're talking about the consultation process for recruitment. As I said in my opening statement, we're actually going to have permanent committees for office temps and furniture. In my opinion, I think consultation should never cease. This will be a live wire between us and those industries, and if we feel there's a need to have more of these permanent committees between us and other industries, we will do it.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

I want to flip back to one other question. There's been some discussion on the reverse option. For the benefit of the committee, and of course the public who would be watching this right now, might I ask you to offer the department's explanation as to why you discontinued them. Some of the public may be under the perception that if the option is there, the government is going to get the best price. If the best price is the prime motivating factor for the government, then why did they not go through with the reverse option process?

[The Chair, Liberal, Diane Marleau]

Please give a very short answer.

[Michael Fortier]

Do you want me to answer later? I think this deserves more than a short answer, if I may say so.

[The Chair, Liberal, Diane Marleau]

I don't want you to take too much time.

[Michael Fortier]

Do you mind if I answer later?

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

If you answer later, I'd be pleased, as long as I get the answer. Thank you.

[Michael Fortier]

Thank you.

I hope you don't mind, Madam Chair, but it's--

[The Chair, Liberal, Diane Marleau]

I don't mind. I don't want to take away time from some of the others.

Mrs. Nash.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you, Madam Chair.

Good morning, Mr. Minister, and good morning to the other witnesses, guests, we have this morning. It's a pleasure to see you.

It's important for us, obviously, to have the opportunity to find out what your plans are with respect to the changes that seem like they're quite substantial to the procurement process and the way government does business in purchasing goods and services, and, as you rightly point out, managing real estate on behalf of Canadians.

I want to ask you bigger questions about that, but I do want to begin by raising an issue that occurred sometime back in the summer. There were media reports about a contract that was initiated under the previous government last November, awarded to A.T. Kearney Inc., and when that contract was finally completed, the costs had gone up, according to media reports, almost fourteen times what the contract was worth when it was awarded. It had gone up to $24 million in nine months. Now, that's a lot of money.

We had the President of the Treasury Board in here a few weeks back, and I was asking him about the $2 million that was cut for the entire funding for the court challenges program, which is an important program on behalf of people who want to secure their rights within Canada under the Charter of Rights and Freedoms. That $2 million was completely cut, but $24 million was awarded to A.T. Kearney in nine months.

I guess more troubling were media reports that a person named Mr. Rotor, who was identified as a special adviser to you, Mr. Marshall, had been with a colleague, Mr. Tipple, in London, studying public-private partnerships and the British experience with these. There were meetings with British officials that were cancelled or postponed, and ultimately Canada's Deputy High Commissioner felt compelled to send letters of apology to those parties who had meetings with these folks that never took place.

At the time, Mr. Minister, you had said that you would get a report on this--the media reported that. I'm wondering if you did a get a report on the specific visit that I was describing and also the overall report with this contractor. Can you share that with our committee?

[Michael Fortier]

Let's deal with the gentlemen and the visit to London. I had a report from the deputy on what the business trip was about, and I'll let him talk about this in a second.

With respect to A.T. Kearney, there is no report. They were hired, as you pointed out earlier, more than 18 months ago through a fair RFP open process. Big numbers. I totally agree with you. Where I come from, $19,000 is a lot of money. The original contract was for $19 million with the ability to go to $24 million. The media reports talk about the contract being seven or eight or nine or ten times what it was supposed to be. The reality is it was signed by the former minister, and the number that he authorized is the number that was spent.

I will let the deputy address the back end of your question.

[David Marshall]

Maybe I could just add a bit. The minister has pointed out correctly that the firm of A.T. Kearney, an international procurement expert, was retained under a competitive process in November 2005.

The amount authorized for the contract was $19 million, and not a lesser amount. Instead of issuing a single contract for $19 million, we began the process by issuing a small contract for $1.75 million. Then as the scope became clearer and new tasks were apparent, we authorized the subsequent expenditure.

But technically or legally the first contract is called “the contract”, and every subsequent increase is called “an amendment”. But it's not really an increase in the authorized amount, which was $19 million with the option to go to $24 million. That's what we've kept under, and it's been done with proper authorization.

[Peggy Nash, NDP, Parkdale—High Park, ON]

I understand that was over four years, and their work was completed in nine months. So I'm wondering what you got in nine months for $24 million.

[Michael Fortier]

If I had been at the controls at that time, I wouldn't necessarily have done it this way, and I'll explain why. We're running a large procurement operation, and the fact that the department would hire consultants is not a shock to anybody. A lot of companies do that, as do states in the United States and countries in Europe. I think that's something we all understand.

What perhaps was different from what I would have done was that the previous Liberal government, Minister Brison, and the Treasury Board decided what the projected savings would be before they hired the consultants. So they picked a number from thin air and decided that would be the savings. Then they said, oh, I guess we need consultants.

In my humble opinion, the way to do this would have been to hire consultants. I'm not against consultants. This is a very significant procurement operation we're running, and it's reasonable to have people help us intellectualize some of these issues.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Excuse me, Mr. Minister, you say there was no written report that came out of this $24 million contract. What did come out of it?

[Michael Fortier]

They were advising the department in three or four specific areas. One was to actually look at these savings and see how they could be generated. They were looking at $20 billion of procurement through 50 to 60 departments, and they were helping the department literally collect data and strategize on the reform itself.

The reform is not just about saving money. We've talked about it. It's about proceeding with procurement in a smarter and more transparent fashion.

[Peggy Nash, NDP, Parkdale—High Park, ON]

When there were reports of the two representatives who spent a week in London and cancelled meetings—I don't know if they actually succeeded in meeting with anyone there—the media reported that you had asked for a report. Did that happen?

[Michael Fortier]

I spoke with the deputy. The deputy reported to me on what the situation was.