Government Operations Committee on April 10th, 2008

[Bill Casey, Independent, Cumberland—Colchester—Musquodoboit Valley, NS]

Thank you.

Anyway, the bottom line is that it's a four-year extended docking work process.

When I complained that this whole submarine operation should be a major capital project, your spokesperson told the Halifax Chronicle-Herald that the definition of a major crown project only applies to capital projects. That's the excuse for not making this a major capital project, which would then have given it a lot more scrutiny.

So I just went to the Treasury Board glossary and looked up “capital project”. It says, “A project to improve a capital asset is considered to be a capital project when the performance, value or capability of that asset is...increased or its useful or economic life is extended by more than one year.”

If you put a submarine in a dry dock for two years or three years or four years, you've automatically extended the life of the submarine at least that much, even if you don't improve it. But these refits and overhauls are major overhauls. They dismantle the sub and put it all back together to increase the performance and extend the life of it.

Why are they not called major capital projects?

[Liliane saint pierre]

The determination of capital projects versus ongoing projects is different, as you mentioned, through the policy, but at the same time is related to the financial statement, the source of money. As such, it's up to the Department of National Defence to deal with Treasury Board and determine which category those initiatives pertain to.

[Bill Casey, Independent, Cumberland—Colchester—Musquodoboit Valley, NS]

I don't understand that answer, because it meets the definition of capital project by Treasury Board and it extends the life of a capital asset by two years at least.

[Liliane saint pierre]

The Department of Public Works is a service provider, really, for procurement. As such, it is the department that buys, that holds the funds, that has the responsibility to determine whether it's a capital project or not. So we'll be pleased to refer your question—or you could—to the Department of National Defence.

[Bill Casey, Independent, Cumberland—Colchester—Musquodoboit Valley, NS]

It seems to me you're doing everything you can to misrepresent this contract, which is a major capital project.

By only tendering 4% of the contract, 96% of the contract will go to amendments, which doesn't make sense. If even 10% of the initial contract had gone to tender, this would have been considered a major capital project. If this refit had been designated as a capital project—which it fits, under the glossary or the definition by Treasury Board—it would have been a major capital project.

It appears to me that you're misrepresenting this contract to try to get under the $100 million threshold, so that it doesn't go to the senior project advisory committee.

[Michael Fortier]

Mr. Casey, I take exception to that. Ever since I've been minister and have been briefed on this, that has never been an issue. The issue—

[Bill Casey, Independent, Cumberland—Colchester—Musquodoboit Valley, NS]

How can you possibly justify 96% of the contract going in amendments and only 4% being tendered?

[Michael Fortier]

With respect, I think you're misrepresenting what Madame saint pierre said. She explained to you the process—

[Bill Casey, Independent, Cumberland—Colchester—Musquodoboit Valley, NS]

I'm not misrepresenting.

[Michael Fortier]

She explained to you the process in terms of tendering.

What you haven't said yet is that the objective was to have a competitive process—

[Bill Casey, Independent, Cumberland—Colchester—Musquodoboit Valley, NS]

For 4%.

[Michael Fortier]

No, to basically do the overhaul and the maintenance of these assets. That's really at the core of this, isn't it, Mr. Casey? That is the objective.

[Bill Casey, Independent, Cumberland—Colchester—Musquodoboit Valley, NS]

Exactly, and they're not included in the tender..

[Michael Fortier]

The determination of whether it's a capital project or not is not our responsibility; it is the client department's responsibility, sir.

[Bill Casey, Independent, Cumberland—Colchester—Musquodoboit Valley, NS]

So the Department of National Defence is supposed to determine whether this is a major capital project.

[Michael Fortier]

If you look at the Treasury Board rules, you'll find that that's their responsibility.

[Bill Casey, Independent, Cumberland—Colchester—Musquodoboit Valley, NS]

Amazing.

Thank you.

[The Chair, Liberal, Diane Marleau]

Are there any other people who want to speak?

Madame Bourgeois.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Minister, further to what Charlie said, you told us you had nothing to apologize for over the contract awarded to CGI. Do you have any objection to the committee asking the Office of the Auditor General of Canada to investigate that, to avoid any misunderstanding?

[Michael Fortier]

First, you should always act on the principle that the Minister of Public Works and Government Services—this minister and, I hope, the others as well—is not involved in the awarding of contracts. I tell you that with all the sincerity in me. That matter is currently before the courts. I won't tell you how to act. If you want to make suggestions... It's not up to me to tell you what to ask the Auditor General. This is before the courts, so I'm going to let you reflect on the matter and take the actions you think are right.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

That's fine. Thank you.

[The Chair, Liberal, Diane Marleau]

Does anyone else want to ask a question?

Does anybody else want to ask a question of the minister while he's here?

If not, thank you, Minister, for taking time to come before us and answer all our questions.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Madam Chair, may I introduce a motion?

[The Chair, Liberal, Diane Marleau]

If you wish.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

It's in both languages. My colleague is absent; I'm introducing it for her.