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.
Assistant Deputy Minister, Real Property Branch, Department of Public Works and Government Services
I know that in many cases, when the contract transferred from BLJC to SNC-Lavalin O&M, they transferred the people because they were in the building and knew the building and the systems, and the BLJC no longer had a requirement for them.
Liberal
The Chair Liberal Yasmin Ratansi
Thank you very much.
This brings us to the end of the questions here.
Just as a reminder, Mr. McBain, you stated in a response to Ms. Martha Hall Findlay that the amended contract was a very minor amendment. I am wondering therefore if we can have it by June 16. Because the committee has to write a report, this way it will have an opportunity to have a look at it.
Assistant Deputy Minister, Real Property Branch, Department of Public Works and Government Services
Yes.
Liberal
The Chair Liberal Yasmin Ratansi
So June 16 is when we can have the whole contract and the amendment.
Thank you very much for being here.
We will suspend for 30 seconds while we do the changeover.
Liberal
The Chair Liberal Yasmin Ratansi
We're resuming our study of the federal building maintenance contract.
We now have with us from SNC-Lavalin Operations and Maintenance, Mr. Charles Rate, the president; Mr. Justin Sharp, the senior vice-president, facility management; and Mr. Martin Lefebvre, general manager, Department of Public Works and Government Services Canada.
I understand you have some opening remarks, Mr. Rate. The floor is yours.
Charles Rate President, SNC Lavalin Operations and Maintenance (O & M)
I do, Madam Chair. Thank you very much.
Thanks, Madam Chair, for your invitation to appear before this committee. I'm Charlie Rate. I'm the president of SNC-Lavalin Operations and Maintenance. My colleagues are Justin Sharp, who is senior vice-president of our facility management division, and Martin Lefebvre, who is the general manager of our Public Works contract. We're delighted to be here before you today to provide some context and clarity around the services we provide to the crown through Public Works, and we'll do our level best to answer your questions, I hope to your satisfaction.
Our services are provided through adherence to industry-leading best practices, and they support the priorities of safety, service quality, fair access to government funds, and sustenance of thousands of jobs. Our work is professional and transparent, and through the governance model under which we work, it is regularly verified by both internal and independent review.
Since 2005 our company has been providing property and project management services under Public Works' alternative form of delivery contracts. Over time, and in keeping with the initial intent of the contracts and Treasury Board approvals, this has been expanded to include additional facilities, including components of the RCMP and NRCan portfolios.
Our original approach to winning this business was threefold. First of all, we needed to demonstrate a capacity to provide the right level and quality of services for the hundreds of thousands of public servants who work in the buildings and for the countless Canadians who access government through the buildings, all with a mind to prudent stewardship of crown assets through Public Works. Second, we needed to work with a broad and diverse network of subcontracted partners, the vast majority of which are small and medium-sized Canadian companies, to ensure fair and transparent contractor access to government funds administered through our contract and to promote job growth. Finally, we needed to provide aggressive pricing, designed to reduce the total cost of ownership for the government.
The way we operate the buildings, particularly with respect to careful environmental and energy management, combined with the fees that we quoted under very rigorous, competitive processes, have created substantial savings. In light of one of the earlier comments, while our fees are commercially sensitive, we are willing to disclose them in camera to the committee to assure you of value for money.
Since that original competition, we're proud to have continued to support Public Works' evolving needs and priorities, including our role in the recent economic action plan—the accelerated infrastructure program, as it was originally called—whereby we have efficiently and expeditiously managed 1,382 projects in the fiscal year 2009–10 and provided work and jobs to approximately 600 small and medium-sized companies across Canada through this difficult economic period.
We support Public Works' strategy in two ways. The first is augmenting their responsibilities as stewards of crown assets, providing for the efficient operation, safe use, and longevity of these assets. While we provide day-to-day operation of the portfolio, Public Works provides strategic direction and oversight of everything we do.
The second is to provide ad hoc services to all departments and agencies resident in the building portfolios covered by our contracts, allowing occupant departments to access services in a consistent and controlled manner. For this work, Public Works also provides rigorous oversight and has established governance protocols to ensure all approvals and works performed are within government standards.
The work questioned by one recent press article is in the latter category. That is to say it's for small projects carried out in response to tenants' service requests. When a service is required, such as additional cleaning or installation of new equipment, the tenant requiring such services makes a request to an SNC-Lavalin representative responsible for that building. We then review the needs and scope with the tenant. We source external services where those are required and provide a quote to the tenant. Finally, upon the tenant's approval, we deliver the project.
Certain projects and figures mentioned in the article are not reflective of the scope of services, and two distinctions must be made. First, invoice headings such as those quoted are not intended to be full and complete descriptions of the overall scope of service provided. Second, it should be noted that commercial rates and activities are different from those for residential activities.
The laws, conventions, and regulations that apply for various trades for work carried out in commercial buildings have to be respected, especially where safety is concerned or where the delivery of services would be disruptive to government program delivery if carried out during working hours.
The following examples show just how much information is missing in the article.
On the maintenance cost for the cleaning of two offices of $36,000 a year, these costs, in reality, cover the enhanced cleaning of two floors of the building for one year. This includes labour and supplies to service a total of 22 enclosed offices, two common areas, two kitchens, and two complete washrooms, which together add up to 1,500 square metres.
Regarding a new doorbell that cost $1,000, in fact the electrical services required for this project constituted the bulk of the cost. Installation of a current-reduction transformer was required, as was the opening and repair of part of a wall in order to install an electrical panel, electrical conduit, and wiring extending more than 12 metres from the doorbell. This was in quite a busy area. In order to keep the workplace safe and secure during installation, it required completion after hours.
Regarding plants that cost $2,000, this covered sourcing of two mature plants, one metre and two metres high, as well as large self-irrigating pots, delivery charges, planting and servicing, and maintenance over a one-year period.
In terms of the installation of blinds costing $1,414, the sourcing, installation, and anchoring of three large energy-efficient industrial blinds were required. The blinds themselves were 57 inches by 76 inches and cost $392 each. Due to their size and weight, it required several workers for safe installation. Again, this was in a busy office area and could not be done during work hours; therefore, overtime had to be paid to the subcontractor.
The installation of six recessed pot lights at $5,266 included six non-standard halogen recessed lights, installation of a dimmer, a separate circuit breaker, 100 feet of conduit and cabling, including an independent outlet for a new projector that was installed in the ceiling at the same time. Again, to be performed safely, this work had to be done after hours.
Regarding the removal of an exit sign costing $256, this project required two electricians so that one could secure the electrical panel while another completed the sign removal and safe wiring termination--
Liberal
The Chair Liberal Yasmin Ratansi
Mr. Rate, I'm mindful of the time. People have this in front of them, so let's go and pose questions.
Mr. Holder, do you have a point of order?
Conservative
Ed Holder Conservative London West, ON
I think it is, Madam Chair.
I know in the last round you had only one go-around. I think that's still what our time would allow. I would actually appreciate absorbing this as they speak. Would you mind if I ask for the deference of the committee, if they wouldn't mind?
Liberal
President, SNC Lavalin Operations and Maintenance (O & M)
As for the removal of a light switch costing $1,000, this work consisted of removing the switch and the cabling and conduit up to the electrical panel, which was 50 metres away. After removal, the lighting needed to be reconnected to the building lighting system, which was 50 metres in the other direction, with additional conduit and cabling, which again had to be done after hours.
We were responsible for the complete management of these installations. It includes the supervision of work entrusted to over 7,000 pre-qualified subcontractor companies. These subcontractors are, for the most part, small and medium-sized Canadian enterprises.
As contractual commitments under our contracts with Public Works, we apply a third-party certified quality assurance program covering all aspects of our service delivery. We achieved ISO quality management in 1996, and for the Public Works account in 2005. We've renewed that designation ever since.
Our contracts are subject to significant audit scrutiny, both internally and externally. We carry out approximately 400 internal audits annually and we've had about 170 external audits every year by organizations such as Public Works and Audit Services Canada. We note that the minister is requiring additional audits, which are ongoing at present. PricewaterhouseCoopers, as you know, is doing that. We're obviously cooperating with that. It's one more audit firm.
Additionally, as we've been doing on a periodic basis since 2005, we've taken it upon ourselves to further clarify our processes and procedures for all our existing and any potential subcontractors who want to work with us. Recently we've met with a number of construction associations across Canada, including the Ottawa Construction Association here in the national capital region. We'll continue to meet with any of these organizations that want to meet with us. It's in not only our best interest, but theirs also to do that.
In closing, we're pleased to spend time with you and answer any questions you have.
Liberal
The Chair Liberal Yasmin Ratansi
Thank you very much.
We're going to go to the first round of questions.
Ms. Hall Findlay, for eight minutes.
Liberal
Martha Hall Findlay Liberal Willowdale, ON
Thank you very much, Madam Chair.
Thank you very much, the three of you, for being here.
I must pay my compliments to the speedy and complete reaction of the company to that press report. I think most of us, as politicians, wish we had that level of capability to respond to media reports.
My questions are fairly specific.
On the contract you have with Public Works, for the work that SNC does and the subcontracting out to all the many, many SMEs you work with, do you get a flat fee and then a percentage of the contracts you then arrange?
President, SNC Lavalin Operations and Maintenance (O & M)
Madam Chair, would it be useful for us to reveal our fees to you now? It will probably short-circuit a bunch of the questions. We would like to do that in camera, if you wouldn't mind.
Liberal
Liberal
Liberal
The Chair Liberal Yasmin Ratansi
I think he stated it will curtail other questions that will be the same, so we'll go in camera for at least two minutes.
I will suspend the meeting.
[Proceedings continue in camera]
[Public proceedings resume]
Liberal
The Chair Liberal Yasmin Ratansi
We will resume.
Ms. Hall Findlay, you have about three and a half minutes left.
Liberal
Martha Hall Findlay Liberal Willowdale, ON
I have only three and a half minutes left? That was to the benefit of the entire committee.
Liberal
Liberal
Martha Hall Findlay Liberal Willowdale, ON
You are welcome for that. I just want that on the record.
