Government Operations Committee on Dec. 1st, 2009

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

Merci. Je veux que ça soit clair.

[Shahid Minto]

Thank you.

Let me just clarify two issues. First, I don't negotiate. We facilitate. It's not a negotiating process at all. We do facilitate, though. Second, I am not the Public Works ombudsman. I'm the ombudsman for procurement of the federal government and I have a government-wide mandate. I don't report to the Public Works deputy minister; I report to the Minister of Public Works. So I think there's a nuance and a difference here.

The important thing is that the departments have shown a lot of goodwill and a willingness to resolve the issues. In many cases when we have brought something to the attention of senior management, they've been surprised that there was even an issue there.

What are the issues? For example, somebody phones us and says they were supposed to get their cheque 60 days ago, but they haven't got their payment yet, and what happened? We phone the department and they say they were doing a system change and something happened. The payment may be only $30,000 or $40,000—sometimes there are a lot of zeros behind the cheques in this town—and it's not a lot of money to a procurement officer, but to the supplier that may be all the money he makes this year, so we help speed up the process.

[The Chair, Liberal, Yasmin Ratansi]

As questions come along, you'll be able to clarify.

Mr. Holder, for eight minutes.

[Ed Holder, Conservative, London West, ON]

Thank you, Madam Chair.

I'd like to thank our guest for being here today.

I must say that it is exceptionally refreshing to hear your kind of commentary. From what I've heard you say, Mr. Minto--you and your colleagues--this collaborative and collegial approach is one that I think we could all take lessons in, both at committee and in the House, and also in much of the administration of government. It's certainly something that I would encourage all of us to listen to and hear loud and clear. I salute you and I honour the whole thoughtful approach you take. I think it's terrific.

So please, let me say firstly, that I give my compliments to you, your colleagues, and all of your staff. I think what you've done in a fairly short period of time is very significant. I hope it becomes a model for how all of us pay attention to how government should work at all levels. Again, I give you my sincere compliments, and I quite mean that.

There are a couple of things I want to clarify in my mind and I have some other questions as well. I know that Madam Bourgeois made a very important comment about one formal investigation thus far. You're going to have complaints and concerns expressed. You say that you don't negotiate, but that you facilitate. Can you talk more about your alternative dispute resolution system and how you deal with that, please?

[Shahid Minto]

Madam Chair, let me just start by saying thank you for the kind words. It's the staff who do the work. We'll pass the message back to them. I'm sure it will be very encouraging to everybody.

I'm going to ask Madam Trombetti to answer your question.

[Oriana Trombetti, Deputy Procurement Ombudsman, Office of the Procurement Ombudsman]

Thank you.

Your question raises comments on two areas of our business line. We have an inquiries and investigations line that receives the complaints. This is where we act informally. We facilitate. We try to work with departments, demystify the process for suppliers, and ultimately resolve issues for suppliers.

For the second line that you mention, the ADR line of business, our regulations are quite prescriptive in that we can provide ADR services where the interpretation of the terms and conditions of a contract are at issue. We are ready now to provide these services to suppliers. ADR services can be requested either by the supplier or by a government department.

Right now we're offering three services to suppliers and government departments: a facilitation process, a mediation process, or a neutral evaluation process. So far, the uptake has been on the facilitation process. It is offered by the staff of our office.

[Ed Holder, Conservative, London West, ON]

May I ask you on that, please, how many times have you had that intervention? Do you have those numbers?

[Oriana Trombetti]

Yes: four times. In recent weeks we've seen an increase in the number of requests for ADR. We have made a concerted effort since September to go out to departments and supplier associations to make them aware of the service, so we expect that this line of business will grow.

[Ed Holder, Conservative, London West, ON]

I heard a member opposite express a concern about what she felt was the fundamental lack of transparency in the procurement process.

Mr. Minto, is that your experience? What would your review of that be?

[Shahid Minto]

I think what I heard from people was a concern being expressed that there were some transactions in which there was a fundamental lack of that. That's no secret. I think if you look at the Auditor General's reports, at internal audit reports, and at other reviews that have been done over the years, transparency certainly has been an issue of concern.

How do you improve transparency? How do you get to transparency? One of the ways you get to transparency is to have a well-documented file so that anybody coming in to look at that file can see how the decisions were made, if there was any interference, and how the evaluations were done. The lack of good documentation really raises questions about transparency, questions that are sometimes unnecessary, but it does raise them.

[Ed Holder, Conservative, London West, ON]

I'm sure all members around this table were delighted to hear that your officials have received all documents and information requested from government. You said that in your formal comments. I think that is just fabulous and I know that they would all want to compliment all levels of government for doing that.

But here's a more pointed question. You're relatively new. I think we would all agree that the approach you take is positive, refreshing, and important, but for people who have a concern, how would they know to come to you?

[Shahid Minto]

Madam Chair, I'm relatively new, but I have 30 years of experience in the procurement business, with 28 years at the AG's office and a couple of years at Public Works. So I think I knew where to go and that's one of the reasons why we got off to a good start this year.

How do people know? We've established what I think is an outstanding outreach program and communications program. We have a website, a 1-800 number, and a very easy form to fill out on our website if people have a complaint. We have some performance standards. We try to get back to people within 24 hours of them calling us. We try to provide a more substantive answer within 48 hours. Usually within 10 to 12 days we have resolved the matter at hand.

One thing that does happen is that you get a lot of complaints in one area. For example, this year we were getting a lot of contacts from suppliers and supplier debriefings. We no longer think of it as a one-off; we think of it as a systemic problem and we move it to our practice reviews. We really feel that practice reviews are where we get the biggest bang for the buck, because that's where we go in and try in a proactive mode to prevent problems before they become big issues.

[Ed Holder, Conservative, London West, ON]

I noted that your office was created in December, 2006. If people had a concern with respect to procurement or any concerns about the whole process, what was the process they followed before you existed?

[Shahid Minto]

On the complaints side, I think people went back to the department they had a complaint about. That was the process. There was no independent forum, other than CITT, for the awarding of contracts. CITT, if you recall, has no mandate relating to contract administration. They look at the awarding of contracts.

But the government is signing some very long-term contracts. You buy a submarine and get a 20-year maintenance contract, or you buy a computer system and get a 10-year contract with it. Over the life of these contracts, differences come up. That's where we add value. People come to us, whereas before they had no independent place to go.

[Ed Holder, Conservative, London West, ON]

So as the new kid in school, as the interloper, as it were, how well have you been received by departments since you now have effectively usurped their role, especially in the area that's probably most sensitive, which is where somebody has a complaint? That's probably when I'm the most cranky, and if I'm a department, I might well be the most defensive. How do you believe you've been received?

[Shahid Minto]

That's a food question.

Let me just say that when we were created, the background for when we came in was that it was following the sponsorship era. The procurement community had taken a huge beating.

Let me be up front about it. Morale was pretty bad. Initially when we went into departments, people were thinking of us as another policeman on the block. That's where we had to establish their trust and that's why it was so critical. We had to explain to them that we weren't there for public hangings. Our real job was to be part of the solution.

We understood the problem. We had really knowledgeable professionals with us who understood procurement. Our issue was really how to make this better. I think the deputy ministers really embraced the notion. For everybody, procurement, which is a means to an end, had become a roadblock in good program delivery.

I have to tell you that initially we had a lot of awkward questions from the people working there. Everybody thought it was their job to ensure fairness and they asked, “What are you doing in this business?” That has changed considerably. The supplier community was very, very supportive.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

Mr. Martin, for eight minutes.

[Pat Martin, NDP, Winnipeg Centre, MB]

Thank you, Chair.

It's very nice to see you again, Mr. Minto.

Let me begin by saying I can't imagine a person better qualified to take this role. I read in your CV that not only are you a chartered accountant, but you have a master's degree in political science and a law degree—those three together.

I also note that much of your career was spent in the Office of the Auditor General, a truly independent officer of Parliament, and you operated within that framework. There's nothing independent about your job now in that you report to the Minister of Public Works. While I appreciate and accept the value of your ombudsman role, do you not find this limiting?

Let me ask you a direct question. When Public Works looks at your office's reports, what comment do they have? Do they accept it at face value or do they bargain with you and negotiate with you as to what should and what should not go into your reports?

[Shahid Minto]

Madam Chair, Mr. Martin can add to my experience that I've appeared before parliamentary committees, including his, many times, and it was a learning experience.

Let me say that the one thing I learned at the AG's office is that in order to have credibility you need to have independence. When we started this office, that's where we started from. When I was interviewed for the job, that was my number one issue with the government: how will I get independence?

The government has taken a number of steps to go that route. Let me explain. I was appointed through an order in council. I'm not an administrative ombudsman. I'm a legislative ombudsman. My mandate comes through an act of Parliament so nobody can change my mandate. If they don't like what I'm doing, they can't change it. It has to come back to Parliament.

My budget, although included in the appropriations of the Department of Public Works, is really protected by Treasury Board. Public Works cannot change my budget. I do not report to the deputy minister at Public Works. He and I, equally, report to the Minister of Public Works.

Let me explain what that reporting to the Minister of Public Works means in practice. What that has meant this year is that at the end of this year, once our report was finalized, we gave him our report and we explained to him what was in it. He tabled it in Parliament and that was the end of it.

[Pat Martin, NDP, Winnipeg Centre, MB]

That's good for me to know. We have seen the problems that the Parliamentary Budget Officer is having with the independence of his office. There are subtle ways and overt ways to manipulate or pressure an office that's not truly independent, whether its budgetary or otherwise, so you can understand why we would ask this question, Mr. Minto.

Given my limited time, though, I'll move on. One of the comments you made in your report to us today, on page 4, was, “Nothing bothers me more than hearing that a supplier has given up on dealing with the government because of the perceived inefficiencies and perceived lack of fairness in the system”.

But let me tell you, Mr. Minto, we have heard suppliers as recently as a month ago say that very thing to us: that they've simply thrown their hands up in the air and have given up. They're fed up because they think it's a stacked deck. It's like some ring toss on a carnival midway; it's rigged against them.

That frustrates me no end, too, because a lot of people in this town.... I'm more frustrated on behalf of the smaller operators who may come to you when that contract for $40,000 or $50,000 represents all they've managed to earn this year. Ottawa's full of people like that. Of the 350 or so people that have come to your office since you've been open, how many are telling you this? Is this something you have heard? Have you heard that people are ready to give up on bidding on government work?

[Shahid Minto]

Yes, we've heard that. We've heard it in regional discussions with suppliers and we've heard it from supplier associations. You have to keep in mind that in our business every time a contract is awarded there is one winner, and there may be four losers, and the four losers are going to be unhappy. Some of them are going to be very unhappy, because times are tough.

So the perceptions of the suppliers are not always well founded. For example, when we were looking at the question of debriefings, suppliers said many times that they didn't get a good enough debriefing. But when you investigate it, you often find that what they were really looking for was not why they didn't get the contract, but why somebody else did, and this couldn't be shared with them. So I think you have to temper the reports of suppliers with general experience.

[Pat Martin, NDP, Winnipeg Centre, MB]

That's fair enough. There's a decent amount of sour grapes, but some of those people that came to you were angry that $1.7 billion went to ACANs, which means that they were sole-sourced, right? I mean, there weren't four bidders on those jobs; there was one sole-source person.

A lot of those are in the immediate Ottawa area. The $25,000 to $100,000 jobs often go to people right in our backyard, and they seem to be going to a privileged few who are identified as pre-qualified or whatever you call it. Anyway, they're on the list and they don't have to go to any competition at all.

I don't blame those people for being frustrated and angry when they watch $1.7 billion worth of work go to people who, I presume, are well connected. They're not necessarily well connected politically, just well connected with the people who are awarding the contracts.

[Shahid Minto]

ACANs have been a subject of concern to all parliamentary committees for a long time. The Auditor General has written three or four chapters on it, I believe. I really think it's time to rethink that policy.

There's no question that you increase transparency when you give public notice that you're awarding a contract to a particular person. But simply the fact that you've gone out and done a market test that confirms there is only one supplier doesn't make it automatic--

[Pat Martin, NDP, Winnipeg Centre, MB]

It doesn't mean you're right. It doesn't mean you're correct.

[Shahid Minto]

I'm just saying that maybe we should think about that. We've talked to Treasury Board and we've talked to people at Public Works about a rethink.

When you look at the application of that policy, there are things that really bother us. For example, we've found files where people would put out a contract in ACAN for 15 days, but before those 15 days were up, they were negotiating with their preferred supplier. Now, what is the message you're sending out to the rest of the community?

Let's suppose there is a challenge that is successful. What you've done is that you've violated the fundamental principle that all suppliers would have the same information at the same time.