Government Operations Committee on June 4th, 2013

[Denis Blanchette, NDP, Louis-Hébert, QC]

Thank you, Mr. Chair.

My thanks to our guests for joining us.

I would like to go back to the way in which the fairness monitors work. Given that these can be very expensive contracts in very specialized areas, I would like to know how you are choosing these monitors.

[Michelle d'Auray]

Mr. Chair, they have to have both expertise and experience. They have to be able to follow the procurement activities. I will ask Ms. Glover to provide more detail about the way in which fairness monitors are chosen. Once they are on a list, essentially a list of standing offers, there is a rotation.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Is that a prequalification?

[Michelle d'Auray]

It is, but it is more than that. Once they are chosen, we can award contracts immediately to the companies and suppliers that have been chosen. But there is a rotation mechanism. Ms. Glover makes the selection using a mechanism that I would call independent in the sense that there is no preselection. It is done according to the rotation. Her two colleagues who use the mechanism have no influence over the choice.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Okay.

[Barbara Glover]

Just to add, it's part of the statement of work, which you all have. It states what the fairness monitoring team must have to be eligible. They must have a range of knowledge, disciplines, and skills to carry out the engagement. That means they can acquire a specialist on a specific transaction.

For example, for a complex real property transaction they may wish to bolster their team with a subject matter expert, and that's laid out. There's a provision for that.

They themselves—

[Denis Blanchette, NDP, Louis-Hébert, QC]

Your description of the program gives us an idea of the way in which contracts are managed. The way in which the criteria are evaluated interests me a lot. You know as well as I do that, in a tendering process, the criteria are everything. They define the requirements, pure and simple. Sometimes, people can even be tempted to eliminate potential suppliers by setting criteria that are too specific.

How do you measure that kind of work?

[Michelle d'Auray]

When fairness monitors are called in, they have to follow all the steps in the government procurement process. So they have to be there when the first consultations with potential suppliers are held. When the statements of requirements are drawn up, they have to make sure that it is done correctly and that there is no bias in the process. They follow the process from beginning to end.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Great.

[Michelle d'Auray]

The various players have direct access to them.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Thank you very much, Ms. d'Auray.

I will pass the rest of my time to Ms. Duncan.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thank you.

[The Chair, NDP, Pat Martin]

You have one minute, please.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

I'd like to follow up on the fairness monitoring. There are some concerns in the committee. We wanted to have one of the fairness monitors come forward and we were told they're no longer with the company.

Who actually signs off on these monitoring reports? There have been serious questions raised about the efficacy of this process and how transparent it is when incidents arise. You issued the standing offer with no idea of who's going to be from time to time available. So who actually signs off on these monitoring reports? Who's ultimately accountable for saying something is fine, because certainly we've had circumstances where the fairness monitor has said it's fine, and the courts are saying, we're finding serious problems.

[The Chair, NDP, Pat Martin]

Perhaps you could limit your response to about 30 seconds, please.

[Barbara Glover]

The report is signed off by the fairness monitor. There's no engagement. The department does not sign off.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Well, within a company, you give a standing order to a company who can farm this out to whomever, and most people disappear. Who is actually accountable for signing off? Somebody gets the standing offer. Aren't they accountable?

[Barbara Glover]

Yes, they're accountable when they engage in a specific activity, a specific fairness monitoring activity. They propose a team. So for transaction x—

[Linda Duncan, NDP, Edmonton Strathcona, AB]

I know the process, but I'm asking, who signs off? The company that has the standing offer presumably should be responsible for the efficacy of the report provided. Yet they seem to be saying, “It wasn't us. We farmed it out to someone and they're no longer employed by us.”

[Barbara Glover]

It's not quite that way. I'm not sure how to speak really fast in the time left.

[The Chair, NDP, Pat Martin]

I'm afraid there's no time left, but I think we would be interested in hearing more about that. Just by explanation, our committee has had a terrible time trying to get IT/NET to this committee. They were the fairness monitor twice in a row for this huge relocation program and now they won't come to our committee, because they say nobody in our company remembers anything about either the 2004 or the next.

So there is no fairness monitor who is willing to explain how that company keeps getting the same contract, year after year, and clearly they didn't do it fairly or there wouldn't have been a $30 million court settlement that ruled it was unfair.

So that one went south, and committee members want to know more about how it went south, I think.

Now we'll hear from Bernard Trottier.

[Bernard Trottier, Conservative, Etobicoke—Lakeshore, ON]

Thank you, Mr. Chair.

Thank you for your presentation, Madame d'Auray.

It was very helpful to see the improvements that have been made over time, and it's fair to say, especially since the Federal Accountability Act. You talked about the increased transparency with respect to lobbying, which is important, and also toughening up the Criminal Code, and some of those provisions around things that would exclude suppliers. You also spoke about beefing up the Competition Act recently, and then also in 2012, some tougher rules for procurement.

It is my observation that the federal procurement rules are tougher than any other level of government in this country. Certainly, with respect to municipal procurement, we see time and time again some problems there. I'd say the federal rules are probably tougher than any provincial rules. It's a lot of procurement, $14 billion, as you say, and about 49,000 procurements a year.

I want to ask some questions about some further levels of detail on how that's enforced. When Public Works and Government Services Canada excludes a company that's convicted of an offence, are those companies ever back on the list, or is that forever?

[Michelle d'Auray]

Thank you, Mr. Chair.

That is an interesting question and one that has been posed to us. Right now, it is forever. One of the questions some of the associations have asked us is whether there could be a time-limited debarment. I think that is one of the elements we are also considering.

You mentioned provinces, territories, and other jurisdictions. We've also looked around the world to see what the measures are and what is being applied. Some countries and some jurisdictions have time limitations. Some have them forever. Some have processes to become re-enabled, if I can put it this way, beyond what we have here as a pardon or a record suspension.

We are looking at what other jurisdictions are doing around the world in this area. As one of the members pointed out, the OECD has made a number of recommendations in this area, and I would say most jurisdictions are grappling with some of these issues. So how best to address them and to continue to enhance our framework or to improve the framework is one of the areas where we're continuing to spend time and effort.

[Bernard Trottier, Conservative, Etobicoke—Lakeshore, ON]

What about the principals in a supplier firm that was disbarred from bidding on government contracts? Suppose they show up in another company, would some of those disbarments apply to the new company they've joined?

[Michelle d'Auray]

That, too, is a phenomenon that we are noticing in a number of areas. That is why the provisions apply to companies, their affiliates, as well as their boards of directors.

I could, perhaps, ask Ms. Glover to speak to what measures we take to make sure that the framework applies. There may be some changes in structures that would allow a company to return.

Maybe you could speak to some of those.