Government Operations Committee on April 30th, 2013

[John McCallum, Liberal, Markham—Unionville, ON]

Is it possible that you might split the delivery of relocation services across more than one provider?

[Michelle d'Auray]

The current relocation services are offered for the Canadian Forces, the RCMP, and for public servants. They are three separate contracts, and they are available for competition.

[John McCallum, Liberal, Markham—Unionville, ON]

But for each of the contracts, there would be one single winner?

[Michelle d'Auray]

It could be one for three, or it could be separate ones for each.

[John McCallum, Liberal, Markham—Unionville, ON]

Now, I understand that the staffing and funding levels for the acquisitions program activity in your department are dropping. I believe the shipbuilding and fighter jet secretariats are a part of that program. To put it mildly, those programs face challenges. I'm wondering if this drop in resources means that the secretariats, one or both, are faced with declining resources at a time when they have a great deal of work to do.

[Michelle d'Auray]

As I was looking at the FTE counts, the FTE counts for acquisitions are going down essentially because of the number of the projects that we are terminating or that are coming to a close. They do not include the shipbuilding and the jet secretariats.

[John McCallum, Liberal, Markham—Unionville, ON]

So, those are not facing declining resources.

[Michelle d'Auray]

No, they are not.

We are winding down other projects. For example, the Sydney Tar Ponds project is coming to a close. When we have resources that are allocated to specific initiatives, they do go down. As other initiatives come in, we will then be looking at increasing the FTEs in relation to those.

[John McCallum, Liberal, Markham—Unionville, ON]

The Auditor General's report just came out today. It identifies a backlog of contractor security clearances in your industrial security program. I noticed that you agreed with the Auditor General's recommendation, but I would imagine there are many security clearances required for military shipbuilding.

How is the department prepared to deal with the large volume of workers requiring such security clearances? Will there be delays and backlogs? How will you deal with it?

[Michelle d'Auray]

The audit report that was tabled today includes a chapter that is a follow-up to a previous audit. On the areas for which the original audit had given us some recommendations, the Auditor General did give us—I do want to point this out—a satisfactory rating. That's important because we worked very hard on meeting the commitments and the management action plan we had set out for those recommendations.

With regard to the backlog, I think there are about 2,300 or 2,400 that were identified at the time the post-audit was done, and we're at just over 300 cases that are still being dealt with within that. Quite a few of those, essentially, have been addressed and cleared.

With regard to the processes that we have put in place, we have developed a case management system. We have reduced our timelines to clear significantly because we recognize the imperatives for a number of the initiatives we have under way, so that we do, in fact, ensure the clearances within a speedy timeframe.

On the other hand, we balance that with making sure the integrity of the clearance is maintained. Again, given the nature of the work, we do have to balance timeliness with the integrity and the accuracy of the clearances we provide.

[John McCallum, Liberal, Markham—Unionville, ON]

I did not say your grade was other than satisfactory.

[Michelle d'Auray]

I could not resist. I'm sorry, Mr. Chair.

[The Chair, NDP, Pat Martin]

I don't blame you.

[John McCallum, Liberal, Markham—Unionville, ON]

Does this mean that, at the end of the day, there will be significant delays to the shipbuilding program because of this issue?

[Michelle d'Auray]

Mr. Chair, I can assure you that there would not be. A number of the contractors in this area—we took steps to ensure that—already have security clearances. In areas where they need an increased clearance, we process those as quickly as possible. We have not noticed or been advised by the shipyards of any delays in their ability to contract or to work in this area.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you very much.

[The Chair, NDP, Pat Martin]

Thank you, John. Your time is up.

Next, for the Conservatives, is Monsieur Gourde.

You have five minutes.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you, Mr. Chair.

I would like to thank the witnesses for being with us this morning.

My first question is for Ms. Forand.

With respect to modernizing telecommunication services, the number of data centres is going go from 300 to 20, I think. You can give me an update on the situation.

Is Canadian expertise going to be used to build these new centres?

On the weekend, I heard that Canada, and in particular Quebec, was at an advantage at the international level in relation to data centres. Because it is more cold than hot 80% of the time, it is easy to remove heat from buildings. As well, the price of electricity is very competitive.

A new international industry is in the process of setting up in Quebec. A number of large international data centres are considering the opportunities that Quebec offers. This new industry could be very promising over the next few decades.

Could these data centres promote it and become a valuable showcase?

[Liseanne Forand]

Thank you for the question.

You began by saying that the number of our centres was going to go from 300 to 20. The 300 figure had been used before we reviewed all our investments and assets. It appears that we actually have about 485 data centres. Of those, 30 are large centres, about 60 are relatively average sized — they cover about 2,000 sq. ft. — and many are small. So that means we are going from a large number to a smaller number: fewer than 20.

In planning this transformation, we are doing a lot of analyses relating to where to locate these data centres, an aspect you mentioned. There are all sorts of factors that may be relevant in making that kind of decision. As well, we have retained the services of a third party to get advice about what criteria are most important when it comes to determining where to locate a data centre.

Obviously, there are geological criteria. You do not want to set up a data centre in a place where there is too high a risk of earthquakes or floods. As you said, some criteria relate to climate and costs, including electricity.

We have not yet made a decision about the recommendation we will be making to the government, but obviously we are going to study the advantages offered in Quebec and in other regions of the country. It is cold in a lot of places in Canada. We are very lucky in that sense.

On the other part of your question, we will be using Canadian expertise wherever we can. We have also initiated a discussion with people in the industry about the innovation factors and the contribution that Canadian expertise could make in this field.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

My next question is for Ms. d'Auray.

Day-to-day maintenance of Government of Canada buildings is contracted out to firms. If problems arise involving one of those firms, is the firm going to be considered to be liable, or just the individuals? Will that be dealt with case by case? Some firms that work for the Government of Canada have 2,000 or 3,000 employees. In cases where there were only two or three people causing the problem, would the entire firm be penalized or would the situation be looked at in greater depth?

[Michelle d'Auray]

Thank you for the question.

As I said in my presentation, the department has a whole range of measures it can take, if, for example, there are problems relating to payments or billing, or if we receive complaints, or much more directly, in relation to our integrity framework, if there are convictions involving either members of the board of directors or the companies themselves.

Under our integrity framework, if companies or company directors have been caught in violation, we can cancel the contracts or terminate them. More precisely, more pointedly, if there are incidents or we receive complaints or information, we can exercise oversight to ensure the integrity of the processes. In other words, we have a whole range of measures available to us.

In any event, the accountability framework we put in place in July 2012 and strengthened in November 2012 is very specific. For cases involving upgrades or large maintenance outsourcing contracts, we have asked the companies to adopt our integrity framework, and they have done so.

[The Chair, NDP, Pat Martin]

Thank you, Jacques. That concludes your time.

Just from the prerogative of the chair again, I'd like a little more expanding on a question asked by both Mr. Ravignat and Mr. McCallum. It strikes me that the most contentious procurement contract the government has faced isn't the F-35 or the shipbuilding; it's this relocation contract that keeps popping up like some kind of a bad rash or something.

Is it not true that we just settled a $30 million lawsuit that we had to pay out? That's the largest commercial settlement I've ever heard of in a contractual basis. What could have gone so terribly wrong, and what are we doing to preclude this nightmare from happening again in 2014?

[Michelle d'Auray]

Mr. Chair, the dollar amount that you're referring to is the result of a judgment that was released recently. That judgment is still under review by the department. It's a 350-page judgment so we are reviewing it at this particular juncture to determine next steps with regard to that. So the payment has not occurred. That is the recommendation coming out of the judge's ruling.

With regard to the process itself, when this was competed in 2009 there was a fairness monitor attached who oversaw every step of the procurement process.

As the committee members have indicated or have asked, we will be recompeting this service in the future. But the 2009 process was reviewed completely by an outside expert to ensure that the process was in fact—

[The Chair, NDP, Pat Martin]

What did the judge find that the government did so wrong that it owed $30 million in damages to one of the bidders?

[Michelle d'Auray]

I would not want to interpret the judge's assessment at this particular juncture. I would just say that we are reviewing the conclusions.