Government Operations Committee on June 4th, 2013

[Michelle d'Auray]

We have chosen to solve that problem with what we call a public interest exception.

If we find ourselves in an emergency situation, if it is a matter of national security or if a single supplier is available in a given area, we can, in those circumstances, award a contract, even if the company should not be able to do business with the government under the provisions we have put in place. However, they are very specific situations. We do that on a case by case basis.

As I was explaining earlier, since the implementation of the enhanced integrity provisions in November, we have awarded contracts to companies found guilty of breaches of our code on three occasions. We did so either because there was only one supplier—and the product, the service or the item, was essential—or because signing a contract with a company was essential for health and safety reasons.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

A supplier getting a contract from Public Works and Government Services Canada can sometimes subcontract work to a company that is no longer on the list and that can no longer submit bids. Are you able to monitor that. Is that possible?

[Michelle d'Auray]

When we sign contracts with companies, they have to require their subcontractors to comply with the same provisions that they have to comply with themselves. However, since we sign the contract with the main company, we trust that company to follow up and be responsible for the integrity of their suppliers. If we find, as the result of an investigation or of our monitoring, that there really is a problem with a subcontractor, we will alert the company and ask them to cease the activity. However, in all cases, the responsibility rests fully on the shoulders of the supplier with whom we have signed the contract.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

What happens if all those subcontractors have the same supplier for some basic material? In construction, that sometimes happens. In a given area, one person or one company can have a monopoly on certain construction materials. It does not matter who you are dealing with, you are going to end up indirectly dealing with that company, and it will supply the goods or the service.

[Michelle d'Auray]

To my knowledge, that has never happened with a contract signed by Public Works and Government Services Canada. If it were to happen, we have very specific and rigorous follow-up procedures.

Perhaps I can ask Ms. Glover to give you an example of the kinds of steps that we would take if something like that were to happen.

[Barbara Glover]

If there were a situation where we had to, for reasons of public interest, contract with a company that had a conviction, perhaps about which we had concerns, we would put in place a range of mechanisms. We would ensure that any amendments were done scrupulously, that every invoice was done properly, that the company itself, as it engaged with us, documented everything, again I'll say scrupulously. We would do that in order to ensure that while we got the contract done—because there's a public interest to doing that—it was done properly and it was carefully monitored to ensure good value for money and to meet taxpayers' interest.

[The Chair, NDP, Pat Martin]

That concludes your time, Monsieur Gourde. Merci.

That concludes our first round of questioning.

I'd like clarification on a question that was put to virtually the same panel on May 21. We received a written answer to a question that requires a little more clarification. The question was whether Envoy would be allowed to compete and bid on the next relocation contract, or would they be precluded because of the appeal that's under way.

The response we have is one sentence. It says, “The next competitive solicitation process for the integrated relocation program will be open to all potential bidders.”

Does that include Envoy, or will Envoy be precluded from pre-qualification?

[An hon. member]

[Inaudible--Editor]

[The Chair, NDP, Pat Martin]

I'm sorry. Am I using the wrong...?

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Yes. They're the good guys.

[The Chair, NDP, Pat Martin]

I'm wondering whether Envoy will be allowed to bid again, or will it be precluded because the appeal is currently in effect in the courts?

Can you answer that cleanly, yes or no? We don't have very much time.

[Michelle d'Auray]

If they choose to bid, they will be able to bid.

[The Chair, NDP, Pat Martin]

Perfect. That's exactly what I wanted to know.

Next, is SNC-Lavalin on any qualified bidders list for procurement contracting with the Government of Canada?

[Michelle d'Auray]

Yes, Mr. Chair.

We have a number of contracts with SNC-Lavalin. We have a number of major contracts, primarily in what we call the operation and maintenance of our federal properties. There are a number of other contracts that Public Works has issued on behalf of other departments.

So yes, there is a range of contracts with SNC-Lavalin.

[The Chair, NDP, Pat Martin]

Are they eligible by virtue of a public interest override, or did they receive a pardon, as it were?

[Michelle d'Auray]

The company has not been convicted, nor have its directors been convicted of any of the offences. While some former members might have been charged, there are no convictions.

However, the company has willingly integrated all of our integrity provisions into its current contracts. As I mentioned in my remarks, our integrity framework is not retroactive, but the company has in fact integrated our framework and the list of offences into their existing contracts.

[The Chair, NDP, Pat Martin]

So that's okay with everybody.

Okay. Mathieu Ravignat, you have five minutes.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

I had a follow-up question first, and then over to Mathieu.

I have to say, Mr. Chair, that I'm deeply troubled by the response that if you break the law and you already have contract, you still get hundreds of millions of dollars of taxpayer's money. It sounds like there is something very seriously wrong with the system, and that's why I asked the question earlier.

Instead of relying on this non-binding code of conduct, unless it's attached to a contract, surely the government must have mechanisms available where through regulation or amending the legislation they can make these provisions applicable in all cases. If you've already signed a contract and you are then convicted of fraud or bribery or collusion or drug trade, I find it unbelievable that you then say, "Oh, well. Too bad. We will monitor you in the future."

I wonder if you can speak to that. It doesn't give a whole lot of confidence that there is any kind of severe accountability if you break the law when you have a big hundred-million-dollar contract with the Government of Canada.

[Michelle d'Auray]

If the law is broken and one of the offences is covered under our measures, then you cannot do business with the government or we terminate the contract for default. The measure that we have is to terminate contracts or to not enter into contracts. The other convictions are related to the activities—the convictions or the crimes that have been committed—but if you have been convicted of any of the offences on the list, then you cannot do business with us.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

That varies from what you said in your opening statement, that the provisions aren't retroactive and that if they break the law while they have a contract you'll monitor them.

I'll go over to Mathieu.

[Michelle d'Auray]

If I may, Mr. Chair, I did say in my remarks that there are a list of offences that were put in place in 2007. We did add some, and we have refreshed and updated most of the standing offers and supply arrangements. There are only a small number that have not yet been refreshed for the purposes of integrating our framework.

The recent changes do not apply retroactively. Nonetheless, we issue contracts on a fairly regular basis, and as these new contracts come up and convictions are made around these offences, they will not be able to do business with the government.

[Mathieu Ravignat, NDP, Pontiac, QC]

Thank you for that.

It's clear that the fairness monitoring process is not working the way that it should. In 2009, when we were talking about the relocation program—and I'll remind you that we were talking about billions of dollars—it seemed not to have worked then. All of this is fine, but if there is political involvement in these contracts then you can have all the regulations in place that you'd like.

We know that Minister Toews, for example, on the 2009 relocation programs, asked to see the statement of requirements. Minister Paradis went to present this to cabinet and was told not to prolong the bid process.

We can learn a lot from the past. Do you know of any other ministers who were involved in that 2009 IRP bid process?

[Michelle d'Auray]

I can actually speak to the 2009 process since I was at the Treasury Board Secretariat at the time. I can assure you that the minister did not get involved in the selection or any of the other elements related to the process of the contract. We were under tight timelines and there was in fact interest in getting this done within the timelines that we were given.

[Mathieu Ravignat, NDP, Pontiac, QC]

So why not prolong the bid process?

[Michelle d'Auray]

Because the—