Government Operations Committee on Nov. 28th, 2013

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you very much.

[The Chair, NDP, Pierre-Luc Dusseault]

Mr. Byrne, you have the floor for five minutes.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thank you, Mr. Chair.

Thank you very much to our witnesses.

Deputy Minister d'Auray, if you could provide the committee with some additional information about the new integrity measures for the tendering process, we'd be delighted to hear that.

[Michelle d'Auray]

We have had integrity measures for the procurement processes for some time, but the last set of changes we made were in July 2012, when we added a set of infractions where a bidder would be considered ineligible to do business with Public Works following a conviction.

I can give you a sense of what some of those offences would be: if they're found to be convicted of fraud against the government; frauds under the Financial Administration Act; payment of a contingency fee to a person to whom the Lobbying Act applies. There's a fairly extensive list of convictions that would render you ineligible to bid.

The other element that we will render ineligible is if you are found to be in collusion. If the Competition Bureau has found you to be in collusion but has given you a leniency provision, we will not consider the leniency provision. So you will also be banned or prevented from bidding and/or contracting with us.

We also have the provisions to terminate a contract or a real property transaction if in the course of a contract the company or its board of directors has been convicted of one of these offences. So it's not just prior to signing the contract, it's also during the duration.

There is no dollar threshold to this. It applies to every contract that is signed with Public Works.

Now, it does apply to procurements under the aegis of Public Works and Government Services Canada. It doesn't apply to other departments that have the authority to procure. We are now signing a memorandum of understanding with other departments that wish to use the provisions of our integrity framework and our validation and certification processes.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

How many firms have been excluded since July of 2012 from bidding on contracts as a result of these more robust provisions?

[Michelle d'Auray]

Mr. Chair, we do not count the ones that have potentially not applied. In fact what we have received is a number of letters from companies that have indicated that they have not applied to us because they knew that the provisions, once applied, would render them ineligible.

What I can say is that we have in certain instances found about a dozen companies, I would say, when we were about to sign the contract, that would be non-compliant.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

One particular supplier of management consulting services to the Government of Canada is a company by the name of Accenture, which is, as you are aware, a derivative of Arthur Andersen, which of course was involved in the Enron scandal.

I think it would be fair to say that this Accenture was very directly related to Arthur Andersen and Andersen Consulting. Would you be able to describe to the committee the current portfolio of management consultant contracts that Accenture would currently have with the Government of Canada?

[Michelle d'Auray]

Mr. Chair, we would have to get back to you with that information. We would be in a position to do that for the data for which we hold the information, which is what Public Works would have.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

It would probably be in the tens of millions, though?

[Michelle d'Auray]

I really would not want to venture a guess at this point, because consultancy contracts and expenditures vary quite significantly from year to year.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thank you.

[Michelle d'Auray]

At the request of the committee, we can do that.

[The Chair, NDP, Pierre-Luc Dusseault]

Yes, you may send that information to the clerk, who will forward it to all the members of the committee.

[Michelle d'Auray]

All right.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thank you.

I'd like to move to the Champlain Bridge contracts. A circumstance that seems to be evolving is that a number of contracts, some important contracts, are going to single bidders. Arup engineering has already received a $15.2-million contract. I understand there were no bidders other than this particular engineering firm for this project. They have no particular history in dealing with Transport Canada. They're a U.K.-based company with I think a very small office in Toronto.

More recently, IBI Group has received a $1.1-million contract for electronic tolling.

Does this cause concern for value for money for Canadian taxpayers, that there is a potential here that contracts for a very major project are going to one bidder? While the $15-million mark and the $1.1-million mark may be relatively small considering the total size of this project, it does allow both of these companies to now be grandfathered for future contracts, which now may be sole-sourced.

Could you give the committee some description of how this tendering process occurred and whether or not you have any concerns about value for money for taxpayers as a result?

[Michelle d'Auray]

With regard to the first contract that was mentioned for Arup, it was in fact a sole-source contract that was accorded to the company. It was part of a subcontract that had been competitively won by PricewaterhouseCoopers to help in the definition of the design and engineering elements. Given the time compression that we have to undertake at this point for the procurement of the construction company for the Champlain Bridge, and given the background and the work done to date by this company, we issued a sole-source contract to Arup. Arup is not going to be able to bid or be part of any consortium for the request for proposals for the public-private partnership construction of the bridge.

This was a means for us to accelerate the work in order to be able to give a potential consortium, when we put out the request for proposals, a sense of what the requirements are. This is a fairly technical request for proposals that would be going out and this company is helping us define what those elements will be.

With regard to the second contract that you mentioned, it was in fact competitively attributed. There was a competition and IBI Group won the competition. So there has been a series of contracts that have been issued for the bridge. The only sole-source contract was the one attributed to Arup.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you.

Mr. Byrne, your allotted time is up.

Mr. Aspin, you have the floor for five minutes.

[Jay Aspin, Conservative, Nipissing—Timiskaming, ON]

Thank you, Mr. Chair. Welcome, Madam d'Auray and your officials. Thank you for assisting us with this examination of supplementary estimates (B).

I have a few technical questions. Maybe I could begin by zeroing in on the department's supplementary estimates reference funding for accommodation costs related to the pension administration project.

It's my understanding that the transformation of the pension administration project has been recognized with prestigious awards. It has also been recognized as being a tremendous achievement. Could you elaborate on why this funding was necessary? Can you shed some light on why the transformation of the pension administration project has been deemed such a success?

[Michelle d'Auray]

The amount requested in the supplementary estimates of $5.7 million is to provide office space for the pension administration, now that it has been consolidated. This amount is listed separately because it will be charged to the superannuation account and the pension fund. So it is a chargeable amount. We are provided with the amount and then we charge it back to the funds.

The pension project itself was another large information technology project to replace another 40-year-old IT system for which there was no longer any technical support or capacity. The investment required was about $260 million. Starting in 2016-17, about $29 million a year in savings will be generated as a result of it.

The reason this project is garnering so many prizes is that this is a service and a system that supports almost 600,000 users. It is the biggest of its kind in Canada. The pension project was not just to develop and re-base the system but also to turn it into a paperless system. All the transactions are done electronically. It has a very extensive web-based user system, so people actually access their services and their information directly from the web. There are some pension advisers and a call centre with a 1-800 number that people can call. It is very simple and at the same time very sophisticated. The system will give people their information and accelerate the processing of the requests for pensions.

One of the other members of the committee asked about the deposits. These are done as direct deposits. There are no paper transactions; it's all electronic. In fact, it has turned into a model that other countries are looking at. We're now going into different phases for the pension—it went live in January 2013. We are now applying the same rigour to transform the RCMP's pension system and add it to the platform. The next phase will be to bring the Canadian forces pension system onto the same platform.

My colleagues who are winning all these prizes will say that what they developed is the religion of on-scope-on-time-on-budget. They call it a religion because they inculcate it in all their employees. In fact, we now have a hard time keeping those employees. They are superb project managers, they have now got the religion, so to speak, and they are being used in different projects in IT transformation across the government.

[Jay Aspin, Conservative, Nipissing—Timiskaming, ON]

On scope, on time, on budget. Good news indeed. Congratulations.

Do I have any further time, Mr. Chair?

[The Chair, NDP, Pierre-Luc Dusseault]

Fifteen seconds.

[Jay Aspin, Conservative, Nipissing—Timiskaming, ON]

I'll relinquish those seconds.

Thank you.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you.

Mr. Martin, you have the floor for five minutes.

[Pat Martin, NDP, Winnipeg Centre, MB]

Thank you, Mr. Chairman.

Looking at the estimates and the departmental report of this portfolio it reminds us what a staggering scope and magnitude of activity there is there. As one of the oversight committees of Parliament that is supposed to provide scrutiny and oversight it's almost impossible in this amount of time to do justice to the amount of activity that's been presented to us today. The best we can do is pick narrow little subjects and drill down a little bit in those. While I appreciate the task that you have, Madame d'Auray, we simply can't do it justice in this limited amount of time.

I'm going to use what little time I have to ask specifically about some of the contracts that go through Public Works, specifically the advertising contracts on behalf of other departments.

My information is the entire federal government's advertising budget last year was about $65 million. Minister Oliver wants $40 million this year alone to promote the oil and gas industry. I'm wondering if there are any criteria or limitations imposed on you as to what nature of advertising the government is allowed to buy. I've always understood that government advertising is to inform Canadians of the services government has to offer, to make sure that they're aware of their entitlements and the services, etc., not to promote one particular industry sector. And it's not even in Canada, I understand he wants to spend this money advertising abroad in Europe and the United States.

Nobody has to do any tag day sales for the oil and gas industry. Second to the big banks, they're about the wealthiest corporations in the country, if not the world. When you're put in the position of purchasing these advertising blocks is there any screen that you use to push back and say, why are we promoting the Canadian Association of Petroleum Producers with taxpayer's money?

Do you have any obligation or responsibility, as Public Works, to that effect?

[Michelle d'Auray]

The responsibility of Public Works is to manage the procurement of the advertising agency and the placement of the media at the request, and according to the media plan, of the department or organization.

The funds, as the member indicated, are actually allocated to each department and it is up to each department to manage the content according to the government's communications policy. In terms of any specific questions with regard to the content of the ads and the communications aspects, those would be best directed to the responsible department.