Government Operations Committee on May 21st, 2013

[John McCallum, Liberal, Markham—Unionville, ON]

There is another issue. I wonder whether you're necessarily going to have a single winner or whether you might split the work among a number of businesses that would handle a certain percentage of the work at specific price points. Is that an option?

[Pablo Sobrino]

We could adopt a variety of procurement strategies, but the idea is to consult with industry and deal with our client departments to adopt the appropriate procurement strategy. An option may be to separate each of the Canadian Forces and the RCMP and Treasury Board. Other options that would be considered in the industry might be to do it by geography, but we have no preconceived notion of how to proceed with this.

Our knowledge of the relocation service business has changed quite a bit in the last year. There are a lot more web-based services and things like that, so that may change the nature of the service as well. But I'm just speculating at this point, because we need to do the procurement strategy in consultation with industry.

[John McCallum, Liberal, Markham—Unionville, ON]

Okay. I think one of the general concerns is that these processes seem to be preordained in favour of a certain party. My understanding is that in 2009, in an initial letter of interest, the winning bidder would be given six months lead time to prepare before the start of the contract, and this rule was subsequently changed. That might have made it much more difficult for potential new service providers. Can you tell me why that rule was changed in 2009?

[Pablo Sobrino]

The timeline was compressed for that procurement. The contract had to be awarded to take effect on December 1, 2009, because the decision had been taken not to extend the option years. Because of the timelines, we ended up with essentially three months for the winning bidder to be able to stand up their contract. We extended it a further three months into the after-contract award, where the successful bidder would not have to meet the service standards, and we would recognize that it was an acceptable wind-up period. Nevertheless, the total time was six months: three months in advance of contract work and three months after. We weren't expecting performance for the first three months of the contract award.

[John McCallum, Liberal, Markham—Unionville, ON]

The current contract, I believe, expires in November 2014.

[Pablo Sobrino]

That's correct.

[John McCallum, Liberal, Markham—Unionville, ON]

So by what date do you think you will award that contract?

[Pablo Sobrino]

The current contract expires November 2014 with two option years, so it can be extended to November 2016. We expect we will have to exercise one option year to allow for the process of consultation, etc., for the award.

[John McCallum, Liberal, Markham—Unionville, ON]

Do you think there's a risk that the contract may not approve an extension?

[Pablo Sobrino]

The contractor?

[John McCallum, Liberal, Markham—Unionville, ON]

Do you believe there's a risk that the current contract may not be extended?

[Pablo Sobrino]

There could be a risk. We will advise that we should have an extension so we can do a proper, complete procurement process for the next contract.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

[The Chair, NDP, Pat Martin]

Thank you, John.

Next, for the Conservatives, Mr. Dan Albas.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Thank you, Mr. Chair.

I want to thank our witnesses for being here today. I certainly look forward to asking a few questions. I'm a new member of the committee, by the way, so I'm still trying to ascertain the proper structure for many of these contracts. I'm certainly glad you're here to explain a lot of it.

I'm familiar with the Office of the Procurement Ombudsman. Does that office have anything to do with the procurement of contracts like this?

[Pablo Sobrino]

The procurement ombudsman operates for low-dollar-value procurements. I forget what the threshold limit is.

[Normand Masse]

I believe it's below $100,000, or procurements that are not subject to the CITT. That is the case here. The Office of the Procurement Ombudsman could look at systemic issues or procurement issues in general.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Okay. That's good to know.

I'm going to go back to some of the things that both Mr. Saxton and Mr. Cannan covered, and more specifically back to the AG report of 2007. Apparently the AG recommended that, “Public Works and Government Services Canada should ensure that all ceiling rates are in accordance with the terms and conditions of the contract.”

Your department vowed to conduct a detailed investigation to ensure they're in accordance, and that any overpayment would be reimbursed to the crown in accordance with the audit provisions of the contract.

Can you explain how you went about doing this, and what the results of that particular investigation were?

[Vincent Robitaille]

We've worked with the client departments—that is, the Department of National Defence, the Treasury Board Secretariat, and the Royal Canadian Mounted Police—to identify any of those payments for property management services that may have been charged to the employees or the relocating members. We identified 225 of them, and they've been fully reimbursed by the contractor. We made sure none of the members were charged for this or that they were all reimbursed.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Just to correct the record, Mr. Chair, I've been informed by my colleagues it was 2006, not 2007.

Moving forward, the fairness monitor identified a potential fairness issue concerning the reduction in the transition period that was set out in the RFI, from six months to three months. In response, a ramp-up period of three months was introduced, which, when you add the three-month transition period, resulted in the effective restoration of a six-month window for a contractor to attain the capability required to meet the total estimated workload.

Can you also explain why the contracts would include a change in provision of an adequate transition period?

[Pablo Sobrino]

The change in provision of an adequate transition period was because we originally envisaged having six months to transition from the old provider to the new provider, but because of the procurement process and the deadline of the final contract, we weren't able to achieve that, which is why we made that modification. It could add up, effectively, to six months—three months' transition and then three months' start-up.

The notion is not to penalize the bidder in the transition phase.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Great.

Thank you, Mr. Chair. Those are all my questions.

[The Chair, NDP, Pat Martin]

Thank you, Mr. Albas.

That concludes our first round.

I have one question of clarification that I think might benefit committee members, and even anybody who might be tuned in and watching. The figures we bandy about, the number of people relocated and the total dollar figure of the contract, don't move a single box of clothes or piece of furniture, do they? The services being offered here are consulting services.

Who moves your furniture from A to B, and is it above and beyond the cost of this contract?

[Pablo Sobrino]

The furniture and your car, etc., are moved under our household goods moving contracts, which are the moving lines that move our goods. The program administers or provides advice on the policy, and the money flows through the relocation service provider to fund the benefits that moving members are entitled to.

[The Chair, NDP, Pat Martin]

But it doesn't pay for the moving.