Government Operations Committee on March 27th, 2014

[Michelle d'Auray]

I believe you are referring to the public interest exception. The only exceptions really that apply are when it is necessary to enter into a business with a supplier where no other supplier is available, or there is an emergency, there are national security issues, health and safety, or there would be economic harm. The exceptions are fairly well limited and defined. At that point, we are also, if we have to exercise the exception....

To your question, yes, it is at the assistant deputy minister level, but it is done with a governance committee, and the exceptions are rigorously assessed and applied. Then we also exercise some fairly stringent control in administrative measures. We essentially raise the level of delegation for approvals of invoices, and we extend a fairly robust monitoring process, as well as audit provisions.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thanks very much for that.

For reasons of national security, Canada may have to engage in business practices with an organization or a company that has a criminal past. Will there be some transparency to this? Will you publish on an annual basis, in a very clear and concise format, which is not difficult to find, instances where the exemption has been offered?

[Michelle d'Auray]

Mr. Chair, I think the number of instances where that applies would be fairly limited; they have in fact been fairly limited.

The contracts change and the approaches change. Also, we assess companies on a contract-by-contract basis and their situations do change and evolve. As I indicated, we've also changed the provisions which started on March 1. We are also aware that when we do a contract-by-contract assessment, the situations around those assessments do change.

The publication of a list is something which we are also aware would create situations. In a particular circumstance, a company may find itself in a situation but then might also change.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

I'm not following that, Deputy Minister. Could you elaborate on that?

[Michelle d'Auray]

As we do contract-by-contract assessments, the circumstances around a particular company can change.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

They can have their criminal records expunged.

[Michelle d'Auray]

In some instances, it is possible for that to happen, or—

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

With only a brief period of time....

Will you be able to publish those lists, Deputy Minister?

I apologize, but I'm going to be cut off by the chair.

[Michelle d'Auray]

Mr. Chair, when we are asked to provide we can provide, but we do not maintain lists. It is not in our practice to maintain lists. We assess the contracts on a contract-by-contract basis.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

You do not publish the exemptions.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you, Mr. Byrne. I am sorry, but I must cut you off.

I will now give the floor to Mr. O'Connor for five minutes.

[Gordon O'Connor, Carleton—Mississippi Mills, CPC]

Madam d'Auray, I think my question is for you.

I've had a number of complaints about the contracting process, and I'd like you to explain to me how the process works with prime contractors and subcontractors.

[Michelle d'Auray]

Mr. Chair, when we contract, we establish our contract provisions with a prime contractor. Since our relationship is with the prime contractor, we do not have a contractual relationship with a subcontractor. However, we do bind the prime contractor to its subcontractors. We hold the prime contractor accountable. The prime contractor is accountable to us, but we do not hold the subcontractors accountable to us.

My colleague Mr. Sobrino might want to elaborate. Or is there a specific circumstance, Mr. Chair?

[Gordon O'Connor]

The complaints I have from a number of people are the subs.

When you went from the old system where you had MERX.... Do you still have something like MERX? I don't know.

[Michelle d'Auray]

Our acquisition system is now called Buyandsell. It is open. It is on an open source non-proprietary platform. There are no requirements now for people to pay to download the information. It is publicly available. Contracts, RFPs, are open for any company to assess and bid on.

[Gordon O'Connor]

I assume that this system was adopted to reduce the number of contracts. In the past, I believe you had subcontracts. You had every kind of contract, and you have fewer contracts now.

If you don't win a contract as a prime, then as a sub, you have to wait for a prime to pick you, if they pick you at all. There have to be a lot of losers in this game. There have to be a lot of small companies that have lost out in this game.

Are the savings worth it? How much money has been saved going to this system where you only have primes?

[Michelle d'Auray]

I believe you are referring to the fact that potential suppliers can no longer see who has won a contract in the past.

I will ask Mr. Sobrino to give you a bit of background on that.

[Pablo Sobrino, Associate Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services]

Buyandsell.gc.ca is where you access all tender information. Under the old system, which was administered by a third party, Mediagrif, and which is called MERX, in that system when you downloaded a tender document, you were identified and anybody could see that you had downloaded it. Subs would reach out to those primes to see if they could get subcontracts. This is particularly of interest in the construction field, for instance, where electrical companies, etc., would like to do the electrical work on a major contract.

The principles of open data and privacy, which is what we're having via Buyandsell.gc.ca, is that you're allowed to download whatever information you'd like from the government and not be identified as someone downloading that information. Buyandsell.gc.ca has that provision now. We are putting measures in place whereby if a company would like others to see them, they can positively ask for that to happen; a prime could ask that their name be publicized for downloading. We're putting in that functionality.

As well, a number of the associations, the Canadian Construction Association, for example, are looking at also providing their own service where they can identify who's bidding on major contracts. There are workarounds, but the principle here is open data. The government's open data policy is really that you have the discretion to download information without being identified, so that is one of the trade-offs we have.

[Gordon O'Connor]

One good thing I've just heard from you is that if you download you can ask to be identified so that people know you're out there and interested. That at least helps some of the subs to get the word out that they're around.

[Pablo Sobrino]

That's correct and that's a capability we're putting in place. It's not in place yet, but we are building that now.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you, Mr. O'Connor.

Mr. Martin now has the floor. You have five minutes.

[Pat Martin, NDP, Winnipeg Centre, MB]

I'd like to use my time to follow up on what Mr. Byrne was talking about. I'm still not clear about just what kind of screening does take place and will take place to ensure that contractors working for the federal government are not only not convicted criminals but that they live up to a fairly high corporate social responsibility and reputation.

What about the existing contracts? I know SNC-Lavalin, their real property division, has a huge operations and maintenance contract, and I believe that contract is for $1 billion or more. They've been convicted even recently for shenanigans and monkey business offshore at least. Do existing contractors get screened after the fact in an example like that?

[Michelle d'Auray]

Mr. Chair, there are two aspects. One of them is do we apply this rigorously to any new contract, and do we do an assessment on a contract-by-contract basis? We do.

The list of offences covered in fact was expanded as of March 1 of this year. One of the elements that we have added is a specific.... If you are unable to contract with us, the debarment period is now 6 to 10 years. One of the factors we found is that sometimes when companies bought each other out and one of the assets that they were acquiring would have had a prior conviction, but the company had actually changed all of its processes, it was no longer able to compete for contracts. We put in a limit of 10 years and then after those 10 years, there are still some measures that have to be put in place for us to be able to open the doors for contracting purposes. That said—

[Pat Martin, NDP, Winnipeg Centre, MB]

I do understand that.

[Michelle d'Auray]

—with regard to a number of large contracts that we currently have, including, for example, the building maintenance contracts that we have with SNC-Lavalin, the company has voluntarily added to its existing contracts with us the terms of the integrity provisions that we have.

We have been working with a number of companies with which we have significant contracts or that span a long term to see if they would voluntarily adopt the integrity provisions. They're not compelled to do so, because obviously the contracts were signed before the integrity provisions were put in place in some instances. For any new contracts that we have with the company or any other company, as I mentioned earlier, we do the systematic review and check on a contract-by-contract basis.