Evidence of meeting #59 for Government Operations and Estimates in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was work.
A video is available from Parliament.
5 p.m.
Conservative
Michael Barrett Conservative Leeds—Grenville—Thousand Islands and Rideau Lakes, ON
Would you undertake to provide a response in writing to the committee to affirm that your organization has not communicated with the lobbying commissioner's office?
5 p.m.
Senior Partner, McKinsey & Company
I'm happy to co-operate with the committee in any capacity possible. I will take that away.
5 p.m.
Conservative
Michael Barrett Conservative Leeds—Grenville—Thousand Islands and Rideau Lakes, ON
Okay, so that's a yes that you will provide that in writing to the committee.
5 p.m.
Conservative
Michael Barrett Conservative Leeds—Grenville—Thousand Islands and Rideau Lakes, ON
Thank you very much.
I'm going to switch gears.
Which countries' militaries has McKinsey done work for?
5 p.m.
Senior Partner, McKinsey & Company
McKinsey's policy about defence work that we apply and that is very important is that we do not—
5 p.m.
Conservative
Michael Barrett Conservative Leeds—Grenville—Thousand Islands and Rideau Lakes, ON
Could you include a list, sir?
5 p.m.
Senior Partner, McKinsey & Company
My answer is going to give an explanation for who we do and do not serve.
5 p.m.
Conservative
Michael Barrett Conservative Leeds—Grenville—Thousand Islands and Rideau Lakes, ON
Does it include the names of the countries that you do work for?
5 p.m.
Senior Partner, McKinsey & Company
McKinsey does not do work with defence agencies for countries that fall below six on the EIU democracy index.
5 p.m.
Conservative
Michael Barrett Conservative Leeds—Grenville—Thousand Islands and Rideau Lakes, ON
How do we know, and can you guarantee us, that no information learned from McKinsey's work with Canada's Department of National Defence has ever been shared with foreign states or foreign state-connected businesses?
Specifically, do any individuals, analysts or anyone else employed by McKinsey who work on contracts for Canada's Department of National Defence...? Is there any crossover between any work done for any other countries and any work done for Canada?
5:05 p.m.
Senior Partner, McKinsey & Company
The question about confidential information and client confidential information is a very important question. It is the central tenet of our firm. We've been in business for a hundred years, working on that tenet. The fact that more than two-thirds of our clients are long-standing repeat clients would seem to indicate that we're managing that.
As it relates to the federal government on this issue, we are required to adhere to all of the federal government requirements about information and information security. We have invested $600 million in compliance processes and procedures to ensure that we comply with them.
5:05 p.m.
Conservative
The Chair Conservative Kelly McCauley
Thank you, Mr. Palter.
Ms. Thompson, you have five minutes, please.
5:05 p.m.
Liberal
Joanne Thompson Liberal St. John's East, NL
Thank you, Mr. Chair.
Welcome to the committee.
How would you characterize your company's relationship with the federal government?
5:05 p.m.
Senior Partner, McKinsey & Company
I think our relationship is one where the federal government looks to us for very specific support on specific issues where we have the global world-class expertise that the government is looking for and that they have been unable to find elsewhere.
5:05 p.m.
Liberal
Joanne Thompson Liberal St. John's East, NL
Thank you.
Did McKinsey compete to provide the best service in order to win the contracts? If so, isn't this how the free market is supposed to work? If not, then certainly we'd appreciate your comments there as well.
5:05 p.m.
Senior Partner, McKinsey & Company
As I stated previously, my best guess is that at least 70% of our work with the federal government has been awarded through the competitive RFP process, where multiple bidders are invited to the process, multiple bidders have to bid and multiple offers are reviewed independently by the civil service, where the civil service is looking for the best combination of expertise and value for money. We've won the vast majority of our contracts through that model.
As I've said, my analysis would suggest we lose 60% of the time. That would seem to me that it is a very competitive and very free market as it pertains to procurement with the federal government.
5:05 p.m.
Liberal
Joanne Thompson Liberal St. John's East, NL
Thank you.
The next question certainly referenced, I believe, the digitalizing of government, but I still want to ask this very specifically. What benefit do McKinsey and other companies bring to the table when it comes to short-term and specialized requirements in government?
5:05 p.m.
Senior Partner, McKinsey & Company
At times the federal government will reach out to a service provider because they do have a short-term need for very specific and pointed capabilities. I think one of the things that a firm like McKinsey can provide, with 45,000 people around the world, is that we likely have the expertise the government is actually looking for and can muster it to support the government when it needs it.
5:05 p.m.
Liberal
Joanne Thompson Liberal St. John's East, NL
Thank you.
Has McKinsey ever declined to do business with a potential client for ethical reasons?
5:05 p.m.
Senior Partner, McKinsey & Company
This is an important question.
Yes, McKinsey routinely declines work with clients and we will continue to decline work with clients.
As part of our compliance process, we have a five-layer screen that every potential client has to pass through. If a client doesn't pass through all five screens, we won't take on the work.
Then you might ask the question, what happens if they pass through the screen? Do they still get to work with McKinsey? The answer is no. They have to go through another screen for the actual particular type of work in question, and an independent check and balance on the team that could potentially do the work makes the decision whether that's a piece of work that McKinsey should actually take on.
5:05 p.m.
Liberal
Joanne Thompson Liberal St. John's East, NL
Thank you.
Again, this was alluded to but I want to ask the question. When the government contracts with McKinsey and that happens, what measures, if any, are in place to ensure that government information is not shared with other organizations that you have contracts with?
5:05 p.m.
Senior Partner, McKinsey & Company
As I alluded to previously, maintaining client confidential information is the fundamental bedrock of our firm. It is fundamental to absolutely everything we do, and our clients know that we can manage that.
We have built world-class technology systems, data management systems and compliance risk management to make sure that the information of our clients stays the information of our clients. On top of that, the federal government has very strict requirements that every provider to the federal government has to adhere to. We adhere to those requirements contractually and as part of our engagement process with the federal government. Before starting work with the federal government, we have an explicit discussion about managing confidential information.
5:10 p.m.
Liberal
Joanne Thompson Liberal St. John's East, NL
Thank you.
How does McKinsey ensure that it contributes to the knowledge transfer to the public service when it's awarded federal contracts?