Evidence of meeting #22 for Government Operations and Estimates in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was contract.
A recording is available from Parliament.
4:35 p.m.
Liberal
Martha Hall Findlay Liberal Willowdale, ON
Thank you.
One of the comments in your presentation was that you review the needs and scope of the tenant--these are the ad hoc ones--and you provide a quote to the tenant. I have two questions.
If you have the contract and you provide the quote to the tenant--someone in Public Works, for example--for plants, the tenant doesn't have anywhere else to go, because you are the ones given the task of doing this. First, what option do tenants have if the quote is higher than they would have liked, and therefore there's the incentive that anybody has to make sure it's the lowest-cost quote?
Second, if that's all your revenue, including what you need to make up for the part you lose under operations and maintenance, what incentive is there to make sure the contracts carry the lowest cost and are the most cost efficient? If you were to look at it on a straight, superficial level, not only would you not have a disincentive, but you would have an incentive to have larger-value contracts.
4:35 p.m.
President, SNC Lavalin Operations and Maintenance (O & M)
That's a good question.
The tenants review the quote when we give it to them. They themselves look at it and decide if it's reasonable or not. Remember, these are typically small projects, thousand-dollar projects. The tenants do their own evaluations, and the people we're dealing with in the tenant departments are generally savvy real estate people. That's really the route they've used to come up with Public Works or whichever department, so they themselves know their own numbers.
4:35 p.m.
Liberal
Martha Hall Findlay Liberal Willowdale, ON
If they don't have an option, knowing the numbers won't help. If you give a quote that's 15% higher than it should otherwise be, everybody's stuck, and that would probably give you an advantage because you'd get a cut.
4:35 p.m.
President, SNC Lavalin Operations and Maintenance (O & M)
Well, remember that on a thousand-dollar project we typically make $50.
4:35 p.m.
Liberal
Martha Hall Findlay Liberal Willowdale, ON
My concern is also with the larger projects. If you get a cut, a percentage, and the only revenue you have is a percentage of a contract, where is your incentive, especially if you have so many of the federal buildings...? What's your incentive to make sure you have the most cost-effective contracts?
4:35 p.m.
President, SNC Lavalin Operations and Maintenance (O & M)
If we're not providing value for money... Remember that Public Works audits us to ensure value for money. The actual departments themselves are always looking for value for money, and they will simply keep coming back to us and say, “This is too expensive. I can't afford to do it. You'll have to go and get me a better price.” That does happen. They'll look at ways of doing things--
4:40 p.m.
Liberal
Martha Hall Findlay Liberal Willowdale, ON
You have a contract that goes until 2011. There's not much they can do about it.
4:40 p.m.
President, SNC Lavalin Operations and Maintenance (O & M)
Believe me, they come back to us repeatedly.
4:40 p.m.
Liberal
Martha Hall Findlay Liberal Willowdale, ON
What percentage of the federal buildings does SNC now manage?
4:40 p.m.
President, SNC Lavalin Operations and Maintenance (O & M)
I'm not sure about that.
Martin, do you know?
4:40 p.m.
Martin Lefebvre General Manager, Public Works and Government Services Canada, SNC Lavalin Operations and Maintenance (O & M)
I'm not positive. To be sure, you would need to ask Public Works, but I would say it's about 80%.
4:40 p.m.
Liberal
Martha Hall Findlay Liberal Willowdale, ON
You say about 80% of all buildings leased and owned. About 80% are now managed through SNC.
4:40 p.m.
General Manager, Public Works and Government Services Canada, SNC Lavalin Operations and Maintenance (O & M)
I would specify owned buildings. The leased--
4:40 p.m.
Liberal
Martha Hall Findlay Liberal Willowdale, ON
Does SNC do the maintenance on those seven properties from 2007, those sale-leaseback properties?
4:40 p.m.
President, SNC Lavalin Operations and Maintenance (O & M)
No. They were taken out of our contract.
4:40 p.m.
President, SNC Lavalin Operations and Maintenance (O & M)
Yes. What has happened, though, as I mentioned in my opening remarks, is that the RCMP facilities and the NRCan facilities have added in, so it's a bit of a wash.
4:40 p.m.
Liberal
The Chair Liberal Yasmin Ratansi
Thank you.
Now we go to Madame Faille for eight minutes--huit minutes, s'il vous plaît.
June 7th, 2010 / 4:40 p.m.
Bloc
Meili Faille Bloc Vaudreuil—Soulanges, QC
Thank you, Madam Chair.
Welcome to the committee.
The whole issue of the contracts with Profac and SNC-Lavalin and the people who had the contract before that—I think it was Brookfield LePage Johnson Controls—has given rise to questions, even here in this committee, regarding the share of contracts given to small and medium-sized businesses. According to the testimony of department officials, you are required to submit a Profac report card to PWGSC every year.
Could you give us an overview of that report card?
4:40 p.m.
General Manager, Public Works and Government Services Canada, SNC Lavalin Operations and Maintenance (O & M)
You said report card, but they are actually performance indicators. That is not done just on our end. It is constantly checked by the people at PWGSC. We provide the basic information, but, at the end of the day, the results are determined jointly.
4:40 p.m.
Bloc
4:40 p.m.
President, SNC Lavalin Operations and Maintenance (O & M)
Small and medium enterprises.
