Public Accounts Committee on Dec. 7th, 2006

[Ian Bennett]

Yes, in terms of the due diligence....

Again, I go back to this point, Mr. Chair. Our line of sight in terms of looking at what is required in a contract is from the department. I take the comments with respect to the business volumes. It's particularly important because if program requirements are changing, if in the future those business volumes would change for any reason, we need to have that information from the department.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

Historical information is the basis of good, accurate information. You mentioned that there was an internal investigation when there was already a perception of impropriety. By the way, some of the answers I guess are coming out. If perception is reality, that's a concern to me right now.

On the internal investigation that took place originally--you mentioned there was an internal one--who conducted that investigation? Was it one person or a team of investigators?

[Ian Bennett]

I would need to verify. I can't answer that question. It was an internal investigation. I know, as part of a follow-up to an earlier question, Mr. Chair, the question was asked about whether this matter was referred to the RCMP. I am advised that they were apprised of it and they saw no reason to proceed.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

If there was an internal investigation, I take it there are notes and records of the interviews that happened.

[Ian Bennett]

Yes, but I'm sure the chair and the committee can appreciate that these things would be very sensitive. Yes, it was a formal investigation.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

Could we have those tabled forthwith? Then of course for any information that would be personal in nature, they could do their due diligence in making sure that was protected.

[The Chair, Liberal, Shawn Murphy]

Are you able to table them, Mr. Bennett?

[Ian Bennett]

No, I can't. I would need to take counsel from the human resources end because of the privacy and the personal information. I can't commit that the report, as it is, would be tabled with the committee, Mr. Chair. I will take counsel on that.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

Mr. Chair, I think it's the right of this committee to demand that documents be delivered to the committee as evidence.

[The Chair, Liberal, Shawn Murphy]

It's normally the case. Yes, you're entitled, as a member of the committee, to summon documents. If you want to do that, it would depend on the nature. There might be privacy issues, but I think you should make your motion.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

Yes, I do, Mr. Chair. I think it gets right to the essence of the issue we're talking about.

[The Chair, Liberal, Shawn Murphy]

If you could succinctly word what documents you're looking for, that will be a motion to that effect.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

Mr. Bennett referred to an internal investigation from the first contract, the first Royal LePage contract. Those were his numbers—

[The Chair, Liberal, Shawn Murphy]

So you're looking for a copy of the internal investigation that was carried out in the 2002 contract.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

That's correct.

[The Chair, Liberal, Shawn Murphy]

Okay. And you want those documents tabled before the committee.

That's the motion by Mr. Sweet. I don't think we need any discussion.

(Motion agreed to) [See Minutes of Proceedings]

[The Chair, Liberal, Shawn Murphy]

That, colleagues, concludes the first round. We're going to go to the second round.

I want a couple of things.

In about ten minutes I have to leave, because I'm involved in a private member's bill at 5:30. At that time, Mr. Fitzpatrick will take over as chair.

Before I turn it over to Mr. Wrzesnewskyj, I have one question for Mr. Goodfellow.

I've been here all afternoon, and I've been listening to the questions and listening to the answers. Mr. Goodfellow, it's my thinking that this erroneous information in the RFP was a mistake. It's also my thinking that it was probably an honest mistake. It's my thinking that it probably should have been caught and picked up during the tendering process, but it wasn't. Is there any possibility that my thinking could be correct?

[Richard Goodfellow]

Yes, sir. In fact, Public Works was not aware that this estimate for property management services may have been inaccurate until the issue was raised by the Auditor General.

I'd like to point out, sir, that the volume that was used for property management services in the 2004 RFP was the same volume that was used in 2002, which at that time was only 18 months old.

[The Chair, Liberal, Shawn Murphy]

Mr. Wrzesnewskyj.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Thank you, Mr. Chair.

Reading through this particular report and listening to the testimony, I can't help but feel the same way as Mr. Christopherson did when he stated that this may take us more than just two sessions.

Looking at what's transpired, I guess we'd have to break things down into three parts. We have a tendering process and we need to take a look at the issues around that, because it was not a fair or equitable process. The report establishes that. We have services being provided for which there are no tools or mechanisms to report and really have accurate information. Is there value, or how are those services being provided? There doesn't seem to be the accounting oversight that's necessary.

Finally, we spend $280 million per year on services, and we have no analysis of whether or not outsourcing provides any additional benefit or is cost-effective. From tendering, through to the actual delivery, to the whole idea of this, we should have serious concerns.

On the tendering process itself, Mr. Bennett, I was quite unnerved when you reported and basically tried to minimize the skewing of the tendering process by saying that 88% of the financial valuation was accurate. For something that involves hundreds of millions of dollars, I'd be in a panic about a 12% error if I were in your shoes. You seem to be stating, the way this is written, that you're quite pleased with that. I think that's a terrible result.

When you look at it, one of the bidding parties during this tendering process not only has the advantage of having accurate information, but has the additional advantage of knowing that the tender being put out is inaccurate in its requests. Plus there's an established relationship that in the past we had grave concerns about. I guess we'll be getting some of the documentation that establishes what some of the previous problems were in the relationship between the department and the contractor.

I'll skip over the actual delivery and the fact that there are no mechanisms in place to measure. It just states in paragraphs 5.69, 5.75, and 5.59 of the Auditor General's report that there was no accurate measure. It's fascinating. We could have had accurate measures for numbers, yet the only information that flowed from Royal LePage was self-serving. It was on the quality-of-life component of what they were providing. In paragraph 5.71 it talks about Royal LePage providing information back to the departments on quality of life, but we don't have the other numbers that would have played a key role.

Let's just go to the final result. You seem to be quite happy with it costing $280 million for 17,000 relocations. That's $16,500 per relocation. How does that compare to the private sector? I've moved a number of times, and it has never cost me anywhere near that amount. That's not even an accurate number, either.

When we take a look, we find out that some of the people who were being moved--well, ten out of ten situations--were paying between $800 and $8,000. I don't know what the average was, but if it was somewhere in the middle, it was $4,000 on top of this cost. My goodness, we're up to $20,000.

[The Chair, Liberal, Shawn Murphy]

Mr. Wrzesnewskyj, you're out of time. So much for the short, focused questions; that was a five-minute question.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

That's why I think we're going to need more—

[John Williams, Conservative, Edmonton—St. Albert, AB]

That's not so good, Mr. Chairman.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Mr. Bennett, how does that compare to the private sector, that result?

[Ian Bennett]

I would need to look at the comparisons. The administration fee—