Government Operations Committee on Dec. 14th, 2010

[Geoff Regan, Liberal, Halifax West, NS]

Yes, this is hypothetical.

I'd like to come back to the case at hand. In fact, in the case at hand Mr. Varin did arrange a meeting with the minister's.... One of the key elements you've missed in your hypothetical compared to this one is that we have an assistant to the minister of the department responsible meeting with the person. We have the person not so much offering to organize a fundraiser as being told, or being urged or encouraged, that it would be a good idea, as a thank you for receiving the contract, to organize a fundraiser for the Conservative Party. Isn't that quite different from what you've just described?

[Stephen Hollander]

Apart from the meeting with the assistant, not really. You remember that I did allude to saying that you're going to pay off my political debt by holding a fundraiser for me.

[Geoff Regan, Liberal, Halifax West, NS]

What about when we include the fact that you had the assistant to the minister dating a person who had ties to the Hells Angels, the fact that the Hells Angels also had infiltrated LM Sauvé, and the fact that Varin was paid all this money? Does that pass the smell test? Shouldn't we be concerned about that? Wouldn't that have caused you to want to see an investigation?

[The Chair, Liberal, John McKay]

Be very brief on the smell test, Mr. Hollander.

[Stephen Hollander]

This is one of the things that should have been looked into before the request for proposals went out. This should have been done when you had the short list. Do the due diligence, and indeed, make sure that you aren't going to be putting your foot into that kind of trap.

[The Chair, Liberal, John McKay]

Thank you, Mr. Hollander.

We'll go to Mr. Holder, for five minutes.

[Ed Holder, Conservative, London West, ON]

Thank you very much, Chair.

I'd like to thank our guests for their testimony today. It's rather interesting. I'm not sure whether you're here a little too early or a little too late in the process. But I do appreciate the comments.

I find this to be a very compelling series of dialogues.

I'd like to remind colleagues, if I can, as an opening comment, that actually the Office of the Procurement Ombudsman was created by this government back in 2006, and it was precisely to reinforce Canadians' confidence in the procurement process. I've had the opportunity to meet Mr. Minto. I want to remind colleagues as well, so that there's no confusion about this, that his retirement was totally voluntary and well deserved, if I might say. We thank him for his service in that regard.

If I might, Ms. Trombetti, you were hoping to provide a comment after my colleague from the Bloc asked a question related to the potential for conflict of interest as it relates to Public Works. I'm moved by your comments. You said in your testimony that neutrality is one of the core principles, that you're neither a lobbyist for suppliers nor an apologist for government. And that resonates with me. You asked for that opportunity to respond. Could I give you that opportunity, please, to respond now?

[Oriana Trombetti]

Thank you very much.

Yes, I wanted to respond that in fact Public Works and Government Services has figured prominently in many of our practice reviews. They don't always get the praise they received in that particular practice review. We're interested in looking at facts and what they tell us. In that particular practice review, dealing with construction contract amendments, yes, in fact Public Works got high marks. They have a great framework in place. In other areas perhaps they need some improvement, and we have made those comments as well.

[Ed Holder, Conservative, London West, ON]

Could I ask you very directly, then, because I think this speaks to the heart of it, whether the Office of the Procurement Ombudsman has a conflict of interest with Public Works?

[Oriana Trombetti]

No, it does not have a conflict of interest with Public Works.

[Ed Holder, Conservative, London West, ON]

May I ask you, in your expert testimony, has it ever?

[Oriana Trombetti]

No. We've set it up in a way that we preserve our independence and our neutrality. The procurement ombudsman reports to the minister for the purposes of delivering an annual report to the minister, which she then tables in the House.

We pay for our services from Public Works. We have our own legal services, as well. We do not obtain legal services from the Department of Justice, as the Department of Public Works and Government Services does. We have our own in-house counsel. We prepare our own communications products.

Most importantly, the hallmark of our independence is that we can choose what we want to look at. We have that ability, through the legislation, to choose those practice reviews, those areas where we believe we need to be examining documents, talking to people, and looking at processes. This is what we believe.

We are totally independent, and we operate that way.

[Ed Holder, Conservative, London West, ON]

I appreciate that you've not had a practice review of the situation as it relates to the West Block. But based on what you have seen or observed and on your experience thus far, do you have any sense of whether there's been any bid-rigging associated with the awarding of this contract?

[Oriana Trombetti]

We have not looked at the contract at all. I've only reviewed the testimony of the witnesses from Public Works. We have not looked at the documents.

[Ed Holder, Conservative, London West, ON]

Based on your review of that testimony, do you have any comments?

[Oriana Trombetti]

No. I would prefer to look at the documents before we express an opinion.

[Ed Holder, Conservative, London West, ON]

I think that's fair.

Mr. Hollander, you appear to be very learned in these matters. I agree with my colleague from the Bloc that it would have been compelling to have had you here at the front end. Your information seems to be a how-to manual on how to corrupt a process or how to find interventions to foil wrongdoing. I thought your presentation was extremely good.

It's rather interesting that Mr. Sauvé, unlike some others, had no sub-contractors to inflate the price. That could have been part of the reason for a lower bid. That's my sense of it.

Is there any indication, from what you've read, of bid-rigging in the awarding of this contract?

[Stephen Hollander]

Bid-rigging is something specific. It is a situation where the contractors who have been asked to bid on a contract will agree among themselves which one is going to get it. It's a form of anti-competitive practice. I don't have any reason to believe that this was the case here.

[The Chair, Liberal, John McKay]

Thank you, Mr. Hollander and Mr. Holder.

Madam Bourgeois, you have five minutes, please.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Thank you, Mr. Chairman. My questions are for the representatives of the Office of the Procurement Ombudsman.

In your 2009-10 report, you note "two recurring problems that call for immediate attention by senior government officials: lack of essential procurement documentation, and poor communications between government representatives and the supplier community".

Mr. Hollander, however, told us that preventive measures should be put in place and, more particularly, that there should be segregation of duties when a contract to be granted by the government is being studied. Inasmuch as you are saying that officials should talk to each other, set up a committee and discuss the contract, Mr. Hollander is saying that these tasks must be segregated.

What do you think of that? Your positions are at both extremes.

[Oriana Trombetti]

The comments I made about oversight committees and discussions do not take away from my observation that everything needs to be documented. At an oversight committee, presumably there would be an agenda, minutes of the meeting, and records of discussions and decisions.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Mr. Hollander, in the case of several contracts entered into by Public Works, that are presently the subject of legal action before the Canadian International Trade Tribunal or other court procedures, what was observed is that changes had been made to the original contracts or specifications by public servants working in committee. Committees of public servants for example administer tests or impose specific requirements.

You are saying that the segregation of duties would be a partial solution to the problem. Could you explain that?

[Stephen Hollander]

In this case, I was talking about separating the responsibilities within the procurement and purchasing process. For instance, I talked about the individual who developed the specifications not having the authority to make changes to the contractor database. I also talked about the individuals who have the authority to make additions.

Have I answered your question?

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Yes, absolutely. It is much appreciated. It is perhaps a detail for you, but it is an extremely important element in several files.

I would like to come back now to Ms. Trombetti, from the Office of the Procurement Ombudsman.

You say that, in response to your concerns, Public Works Canada prepared a detailed action plan with established deadlines and put an ethics program in place.

I imagine that in your office you have this ethics program and this detailed action plan that was presented to you. Would it be possible to provide it to the committee?

[Oriana Trombetti]

Absolutely. In fact, I should inform the committee that this year we're going back and looking at the practice reviews that we did in year one and determining to what extent the recommendations that we have made have been implemented by departments. Certainly we can give you a copy of the action plan, and we would be happy to share that review with the committee when it is complete.