Government Operations Committee on Oct. 31st, 2017

[The Chair, Conservative, Tom Lukiwski]

Even though the full complement of committee members is not quite with us, I think we'll begin, it being 11:02.

I first want to welcome all of the guests who are with us today. We have representatives from the Treasury Board Secretariat, Public Service and Procurement Canada, and the Office of the Procurement Ombudsman.

We will have opening statements from three of our selected guests as per the norm, and then we'll go into our rounds of questioning.

Welcome, all of you, and thank you for being here.

Also, welcome to some of our new committee members who are here, at least for today's proceedings.

From the Treasury Board Secretariat, we have with us Kathleen Owens, who is the assistant comptroller general, acquired services and assets sector, and Mr. Mark Schizkoske.

I hope I'm pronouncing that correctly, Mark. As it's coming from another Ukrainian, I think you can understand that I'm trying to get it close to the correct pronunciation.

We also have with us Madam Reza and Mr. Gray, both from the Public Services and Procurement Canada offices, and Mr. Ieraci, from the Office of the Procurement Ombudsman.

Thanks to all of you for being here, ladies and gentlemen.

Without further ado, Madam Owens, I understand you have an opening statement.

[Kathleen Owens, Assistant Comptroller General, Acquired Services and Assets Sector, Office of the Comptroller General, Treasury Board Secretariat]

I do. Thank you, Mr. Chair.

As the chair indicated, my name is Kathleen Owens. I'm the assistant comptroller general for assets and acquired services at the Treasury Board Secretariat. My colleague, Mark Schizkoske, is the director of procurement policy.

It's certainly a pleasure to be here today to provide you with an overview of Treasury Board policy and the regulatory framework for procurement in the Government of Canada.

As you know, the Treasury Board Secretariat is the administrative arm of the Treasury Board, a statutory committee of cabinet that acts as the government's management board, providing leadership to federal organizations through the approval of government-wide administrative policies and directives.

It's the administrative policy framework around the acquisition or procurement of goods and services that I'm here to talk to you about today.

Procurement is a key mechanism federal organizations use to meet their business needs and deliver results to Canadians. In 2015, the government entered into over 342,000 contracts totalling nearly $20 billion. As a government, we buy a very wide range of goods and services, including professional and construction services, with the majority of our contracts valued at less than $25,000.

In support of the government's commitments to open data, Canadians can find information on government contracts through a number of sources: the open government portal, as well as the purchasing activity report and the report on the proactive disclosure of contracts over $10,000.

I've provided the links in my opening remarks if you want to look at those sites.

When departments need to make purchases to address their operational needs, they have to apply a relatively complex web of procurement rules. Procurement is governed by a combination of legislative, regulatory, and policy requirements, including Canada's commitments under modern treaties with indigenous peoples and provincial and territorial governments, as well as 11 domestic and international trade agreements.

Accountabilities in procurement are also complex.

The Treasury Board sets the administrative policy for federal procurement across government and considers departmental proposals to enter into contracts for high-value and high-risk procurements. The secretariat monitors government-wide performance in the management of procurement and can make recommendations to the Treasury Board on policy changes and on specific departmental transactions.

Public Services and Procurement Canada and Shared Services Canada both act as common service providers that procure on behalf of departments and have exclusive mandates for goods and certain IT services. My colleague from PSPC will explain more about that in a few minutes.

Ultimately, it's deputy heads of departments who are accountable for complying with the requirements of the Treasury Board contracting policy. All departments have the ability to procure goods and services delegated to their minister within certain financial thresholds.

The principles of fairness, openness and transparency are the basis for government procurement, and they are set out in the Financial Administration Act. The Government Contracts Regulations support openness by requiring that bids be solicited before entering into a contract. There are four limited exceptions to this obligation: when a contract is below $25,000; when the contract is for a pressing emergency; when it is not in the public interest to solicit bids; and when there is only one supplier who can provide the good or service.

The Treasury Board contracting policy sets out the principles and the steps for how government procurement should be conducted. It applies to 98 federal organizations, listed in schedules I, I.1, and II of the Financial Administration Act. I would note that the policy does not cover crown corporations or the Canada Revenue Agency, which establish their own internal policies and procedures for procurement.

The objective of the TB contracting policy is to ensure that contracting is conducted in a manner that enhances access for all suppliers, competition, and fairness. The process should withstand public scrutiny for prudence and probity and should result in best value for the crown. By “best value”, we don't necessarily mean the lowest price, but the combination of price, technical merit, and quality, or, as appropriate, the optimal balance of overall benefits to the crown and the Canadian people.

The contract values above which TB approval is required are set out in the policy so that TB ministers can exercise their oversight role over certain transactions. TB can approve exceptions to these limits, which require departments to seek TB authority for emergencies or other department-specific contracting requirements, such as bulk fuel purchases or specialized provisions for construction.

The contracting policy also requires that departments ensure that operational requirements take pre-eminence, that competition is the norm wherever possible, that other national objectives, including aboriginal or socio-economic development priorities, can be supported, and, that departments comply with the government's trade agreement obligations.

In addition to the contracting policy, there are other related TB-approved policies relevant to procurement processes. For example, the policy on green procurement requires that environmental objectives are integrated into contracting decisions.

Now, I will say that the TB contracting policy was approved in the late 1980s and has not been fundamentally renewed in several decades. It has had periodic updates and additions that make it a combination of principles, legal requirements, and practical guidance. Over time, it has developed into a complex web of over 300 requirements, and some are very prescriptive, process-oriented rules. It can be very difficult to navigate for those who are not procurement specialists.

In terms of this committee's two areas of interest for your study on procurement, I can say that beyond encouraging fairness and openness for all participants in the procurement process, the contracting policy does not have specific provisions for small and medium enterprises. My colleagues at PSPC have programs to support small suppliers, which you will hear about.

The contracting policy does have several requirements for contracting with indigenous businesses, including contracting authorities related to modern treaties, as I've mentioned, and also that contracting authorities observe the requirements of the procurement strategy for aboriginal business, which is led by Indigenous and Northern Affairs Canada.

The effectiveness of TB Contracting Policy requirements is something that the Treasury Board Secretariat is currently examining as we undertake a policy reset exercise, in support of the direction given to the Treasury Board president in his mandate letter to review policies to reflect a more modern approach to comptrollership.

Over the past several months, we have held consultations with departments and are working to develop a policy that enables more flexible and innovative procurement strategies, and streamlines policy requirements. We also want to develop policy and guidance that enables better horizontal linkages between procurement, project management and asset management functions to improve project and procurement planning, and hopefully ensure better outcomes overall.

As you can see, this is a very technical policy area, further influenced by a complex legal environment and a number of different players with overlapping responsibilities. Ten minutes is not sufficient to give you the full picture of this, but I hope this gives you a general overview with which to begin your study.

I'm happy to answer any questions you have. Thank you.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Next we'll go to Madam Reza.

[Arianne Reza, Assistant Deputy Minister, Procurement, Department of Public Works and Government Services]

Good morning, Mr. Chair and committee members. Thank you for inviting me to be with you today.

I am the assistant deputy minister for the acquisition program at Public Services and Procurement Canada. Accompanying me is Mr. Desmond Gray, the director general of the office of small and medium-sized enterprises.

I understand that your main interest is to gain an overview of the federal procurement process and to receive some general information related to the set-aside for aboriginal businesses and on small and medium-sized enterprises.

The procurement environment involves many players, the key ones being Treasury Board Secretariat, which, as we heard from Ms. Owens, establishes and monitors the regulatory and policy environment; my department, PSPC, which provides common procurement services and tools to client departments; likewise, Shared Services Canada provides common IT procurement services to client departments; individual federal departments and agencies, which buy goods and services under their own delegations; and, finally, the suppliers that compete for government procurement opportunities.

Mr. Chair, I will keep my remarks focused on the role and responsibilities of Public Services and Procurement Canada, or PSPC.

First and foremost, PSPC is the common service provider for the bulk of government purchasing. The department procures approximately $18 billion's worth of goods and services annually on behalf of client departments, equalling roughly between 77% and 80% of the government's annual procurement expenditures.

At PSPC, there are approximately 1,300 procurement specialists working either in the National Capital Region or in regional offices across Canada. For additional context, the total number of procurement specialists in all of government is about 3,100, meaning PSPC is the employer to about 40% of the government's procurement workforce.

PSPC's authority as a common service provider stems from the Department of Public Works and Government Services Act, which gives the Minister of Public Services and Procurement exclusive responsibility for the procurement of goods. To maximize efficiencies, the Minister has delegated to other departments the authority to acquire goods under $25,000.

PSPC does not have the same exclusive responsibility for procuring services. Instead, other departments can undertake their own procurement of services. Above a certain threshold, usually $2 million, departments have the option of using PSPC or going directly to Treasury Board for contracting authority. PSPC does, however, have exclusive responsibility for the procurement of certain types of services, including printing and translation.

The procurement process is guided by the principles of fairness, openness, transparency, competition, and integrity. Open competition is the default, both in regulation and in practice. PSPC has a well-established code of conduct for procurement that sets out the expectations for ethical conduct on the part of both the employees and the suppliers. PSPC employees receive training and reinforcement of desired and expected behaviours.

Mr. Chair, I thought it would be helpful to share some examples of what we buy on behalf of our clients. We buy everything from complex systems and consulting services to construction and military equipment. This includes aircraft, bridges, the services of health practitioners, bulk purchases of drugs and vaccines, satellites, and repairs and retrofits to government properties to reduce its carbon footprint as part of the greening of government operations.

Regardless of whether PSPC is buying a good or a service, considerable time is spent up front, analyzing how best to acquire it, how it will be used, and how it will be disposed of. This thoughtful approach is designed to help us achieve best value and reduce costs. It means having a thorough understanding of the market conditions and choosing the most efficient method of supply for what is being purchased.

PSPC uses several methods of supply. Some of the most common include standing offers, which are used when it is possible to define the requirement but expected quantities and timing are not known. For example, we have a standing offer for fuel, which allows client departments to purchase fuel as needed at predetermined pricing. Another method of supply is the supply arrangement, which is used to establish a pool of suppliers when there is a recurring need that has not yet been defined. Think of it as a pre-qualified list of suppliers we can call up when client departments determine what they need—for example, professional services for auditors, or tires for heavy equipment. A further method of supply is to enter into a contract with task authorizations, under which the work will be performed on an “as and when requested” basis.

Regardless of the method of supply, significant effort goes into developing the procurement strategy. This starts with the business commissioning phase, in which the client department defines the need. Next, PSPC and its client work together to select the appropriate procurement strategy. During this phase, extensive industry engagement may occur. We work with the client department to identify what socio-economic levers can be brought to bear. For example, the procurement strategy for aboriginal businesses, known as PSAB, is considered at this stage. The goal of PSAB is to maximize the participation of, and benefit to, indigenous peoples, businesses, and communities. Last year PSPC managed set-asides for indigenous business contracts worth around $112 million. We will also take into consideration the applicable trade agreements. If a procurement is valued at or above certain thresholds, the obligations of the agreement apply.

The solicitation is launched and posted on our buyandsell.gc.ca website, which makes publicly available PSPC's procurement opportunities, both active and closed.

We will typically receive questions from interested suppliers. PSPC responds in a transparent manner; the answers are developed, translated, and posted on the web to ensure a fair and competitive playing field for all potential bidders. The minimum length of time a solicitation needs to be posted to satisfy trade obligations is stipulated in the trade agreements and is often extended if suppliers ask for extra time.

The solicitation material contains the statement of work prepared by the client, the contractual clauses, guidelines on conflict of interest, and the evaluation criteria and basis of selection. Once the solicitation is closed, the client conducts the technical evaluation of the bids, and PSPC conducts the financial evaluation.

As a key part of the procurement process, PSPC manages the contract, monitors the execution of the contractor's obligations, and seeks to mitigate risks, such as a delay in the production or delivery of a good.

Depending on the complexity and the monetary value, PSPC will use an independent third party fairness monitor, whose role is to provide an unbiased and impartial opinion on the fairness of the process. If a bidder has concerns that the procurement process was not conducted fairly, there are mechanisms in place to resolve these disputes. The Office of the Procurement Ombudsman is one such mechanism. My colleague Lorenzo leraci will provide more details.

Mr. Chair, I would like to spend the last few moments of my remarks focusing on suppliers. As the committee is likely aware, Canada's supplier base is composed primarily of SMEs. As of today, there are approximately 7,900 suppliers with active PSPC contracts, 80% of which are small and medium-sized Canadian enterprises.

To help SMEs navigate the procurement process, PSPC administers the Office of Small and Medium Enterprises, OSME, whose objective is to increase SME access to federal procurement, reduce barriers, simplify the contracting process, and provide tools to suppliers interested in doing business with us.

Over and above the dedicated efforts of OSME, PSPC works closely with TBS, a host of departments, the national Supplier Advisory Committee, and individual suppliers to explore ways to improve and modernize our approaches to delivering procurement. This supports Minister Qualtrough's mandate to increase the diversity of bidders—including women, indigenous peoples, persons with disabilities, and visible minorities—and to take measures to increase the accessibility of the procurement system to such groups while working to increase the capacity of these groups to participate in the system.

PSPC officials look forward to having the opportunity to come back and present in more detail on PSAB and SMEs.

Thank you, Mr. Chair and committee members.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Our final intervention will come from Mr. Ieraci.

You have 10 minutes, please.

[Lorenzo Ieraci, Interim Procurement Ombudsman, Office of the Procurement Ombudsman]

Thank you.

Mr. Chair and committee members, thank you for your invitation. It is a pleasure to speak with you about the work done by our office and its role in the federal government's procurement process.

I was named interim procurement ombudsman in May 2016, after having occupied the position of deputy procurement ombudsman for four years. As the interim procurement ombudsman, I have the honour of working with a group of dedicated and quality people who seek to make a positive difference in the lives of Canadians. They do this by helping to resolve procurement-related issues and by promoting fairness, openness, and transparency in federal procurement.

My remarks this morning will focus primarily on the ombudsman's mandate, the work we do, and how we operate. Let me begin with my mandate.

The position of procurement ombudsman became fully operational in May 2008, when our regulations came into force.

The ombudsman's mandate has four main components. I will give you an overview of each one and will go into more detail about them a little later.

The first component is to review any complaint respecting the award of a contract for the acquisition of goods below the value of $25,000 and services below the value of $100,000.

The second component is to review any complaint respecting the administration of a federal contract.

The third component is to review the procurement practices of departments to assess their fairness, openness and transparency.

Lastly, the fourth component is to ensure that a dispute resolution process is provided.

The procurement ombudsman's mandate is government-wide. There are nearly 100 federal organizations that fall within the mandate.

The ombudsman reports to the Minister of Public Services and Procurement. In this regard, the ombudsman is required to submit an annual report to the minister, who in turn is required to table that report in Parliament. Nonetheless, neither the minister nor her staff are involved in our daily activities, our operations, or our reports.

In addition, my office and I operate at arm's length from Public Services and Procurement Canada and all other federal agencies.

Allow me now to give you an overview of the type of work we do.

As I mentioned, the first area of my mandate is to review complaints regarding the awarding of federal contracts for goods under $25,000 and services under $100,000. This part of the mandate was established by the government due to the fact that the federal procurement system, prior to the creation of our office, was limited in providing mechanisms for suppliers who had issues related to the awarding of low dollar value contracts.

For larger dollar value contracts, where the trade agreements apply, suppliers could and still can turn to the Canadian International Trade Tribunal, the CITT. The CITT, as a quasi-judicial tribunal, examines whether procurements undertaken by federal organizations are compliant with domestic and international trade agreements.

While suppliers with issues related to the awarding of larger dollar value contracts could go to the CITT, suppliers with issues concerning lower dollar value contracts had three choices, none of which were very effective for a small business.

First, they could attempt to have their issue addressed by the contracting department, which sometimes worked and sometimes did not. Second, they could accept the situation as an unfortunate cost of trying to do business with federal departments. Third, they could take legal action, which is costly and often not a realistic avenue for small businesses. In creating the Office of the Procurement Ombudsman, the government filled the gap for these low dollar value contracts.

Allow me to emphasize that this part of my mandate is the only one where there are dollar limits. In the other three areas of my mandate, which I will discuss a little later, there are no financial limits on the contracts that we can review.

When a written complaint is submitted to my office, I am required to make a determination within 10 working days after the filing of that complaint as to whether or not to review the complaint.

During those 10 working days, my office will attempt to facilitate a resolution to the issue where possible. If dialogue is unsuccessful and does not result in the withdrawal of the complaint or the cancellation of the awarding of the contract, and if the complaint meets the regulations, then I am required to initiate a review of the complaint.

Once that's completed, I issue a report, which I am required to send to the minister of the contracting department, the Minister of Public Services and Procurement, and the Canadian supplier who filed the complaint. In addition, I provide a copy of the report to the deputy head of the contracting department.

As my mandate is to review contracts of lower dollar values, or where the trade agreements do not apply, the review assesses whether the awarding of the contract was done in a way that aligned with the Treasury Board contracting policy and respected the principles of fairness, openness, and transparency.

In an instance where a written complaint does not meet the criteria of the regulations, I am required to inform the contracting department and provide them with a copy of the complaint. I use this as an opportunity to bring the complaint to the attention of the deputy head of the contracting department.

Another part of my mandate that I would like to discuss briefly concerns the review of procurement practices. In this area, my office works independently in reviewing the procurement practices of federal agencies to assess the fairness, openness and transparency of them, and to recommend improvements.

We determine the subjects of the reviews, in part based on the comments we receive from Canadian suppliers and federal officials. We also undertake an assessment of the various parts of the procurement process to identify the ones that may pose a risk to fairness, openness and transparency.

In addition, we undertook follow-up reviews to determine whether the federal agencies had taken steps to respond to the recommendations made by the ombudsman in the previous reports relating to the review of procurement practices.

So far, our follow-up reviews, which are available on our website, have confirmed that federal agencies follow the ombudsman's recommendations seriously and, in general, take steps to respond to these recommendations.

The last part of my mandate that I would like to provide you a brief overview of is alternative dispute resolution. The ombudsman is required to ensure that a dispute resolution process or service is made available to the parties of a federal contract—namely, a supplier and a federal department. Either party to the contract can request this process. When we receive a written request, we ask the other party to participate in our voluntary process.

Since my appointment as interim procurement ombudsman, we've handled 16 requests for our dispute resolution process. Of these, four requests were declined by one of the parties; 10 requests were withdrawn after our office helped the parties reach an informal resolution prior to the launch of our formal process; and, in two cases, we addressed them through our formal process. In both those cases, we were able to help the supplier and the federal organization reach a legally binding settlement agreement.

Lastly, my office doesn't hesitate to invest the time and effort needed to respond to people who contact us. Every time someone contacts us with a procurement-related question, issue or concern, we try to provide impartial and helpful information, quickly and professionally.

Our approach is three-pronged: to educate, facilitate and investigate. These three pillars are described in detail in the annual reports my office produces. I encourage you to consult these documents to learn more about this.

In undertaking our work, we seek to be a useful recourse mechanism for Canadian suppliers and federal officials who are dealing with procurement issues. We strive to be part of the solution by promoting fairness, openness, and transparency in federal procurement.

Thank you.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Colleagues, before we begin our rounds of questions, I have a couple of quick housekeeping notes. I don't want to arbitrarily truncate the proceedings here, particularly if there are questions, but I have about 10 minutes of committee business that I wouldn't mind trying to get in, if we have time at the end of the meeting. We'll see how it goes and play that by ear.

Our first seven-minute intervention comes from Monsieur Drouin.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair.

I thank all the witnesses for appearing today. It is a study that I believe is extremely important, as I have heard comments from the SME community on this. Some are great comments and some are not so great. Some say that they're being pushed out of procurement opportunities, and that they have to deal mainly with prime contractors. I think it's important for us to get your thoughts on that.

As technology moves rapidly, part of my question, starting probably with Treasury Board, is about what are some of the policies to shorten the procurement cycle. We know that technology changes so fast that if our procurement strategy can't keep up we'll keep buying old technology, and not necessarily IT, but other aspects of what the Government of Canada buys. I'm wondering if you have any thoughts on how we can promote the shortening of the procurement cycle.

[Kathleen Owens]

That's a good question.

In terms of contracting policy, what we're trying to do is have the right balance between what's operational and what's a principle-based policy. Right now, as I said, we have a very detailed policy that is probably down into the weeds a bit more, which is more the side of the operational policy and which is the purview of the common service provider and other departments.

In terms of IT, I understand that this committee recently had a presentation on agile procurement and agile project management. That's certainly something that we are looking at, both us and PSPC. We're looking at the ways in which it won't take so long to award the contract by using some of these agile methods.

Maybe Arianne can speak to the pilot. Our chief information officer branch recently used PSPC to do an agile pilot for procurement, so that the contract was actually awarded in a much quicker time frame.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Go ahead, Ms. Reza.

[Arianne Reza]

Not necessarily to focus the discussion on the pilot, but what is appealing about agile methodology I think goes to your question on how we can shorten the process. Agile procurement means that we work with the SMEs, with the sector, to figure out what the issue is.

We have a challenge and we have a problem in government, say, and instead of providing the solution and being prescriptive about what we need, we go to the industry and say that we're looking, that we have this issue and this type of challenge, and we ask if they can help us. This cuts down a bit on that lengthy time of where we're prescribing what we need in detail. We're providing a solution base and going forward to a more interactive dialogue. I think that type of frame is very helpful and is the tenet of agile.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

That's what we'd call outcome-based procurement as opposed to prescriptive procurement.

Arianne, while I have you on the mike, you said that 80% of contracts are given to SMEs. Is that 80% of contract value or 80% of the contracts?

[Arianne Reza]

This figure is PSPC-specific, so it's 80% of the contract transactions that go to SMEs.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Do we have the number in terms of the value of the contracts? I think the government buys around $16 billion of goods and services per year. Do we know how much of that goes to SMEs?

[Arianne Reza]

I can answer for PSPC. For PSPC, about 35% of the procurement that PSPC does, as you know, is complex procurement, so 35% of the value goes to SMEs.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Okay.

Mr. Gray, do you have anything to add to that?

[Desmond Gray, Director General, Office of Small and Medium Enterprises and Stakeholder Engagement, Department of Public Works and Government Services]

I take your point. The supplier community is always concerned about the speed of procurement, especially for small and medium businesses, but we've had a number of tools in place.

We also do pre-facilitated contracts, which are standing offer and supply arrangements that are already in place and allow departments to immediately access those suppliers on these documents. It really expedites the whole process. Also, these are generally competitive processes, so suppliers get the opportunity to bid. They offer their services and they can get contracts awarded. For many small businesses, standing offers and supply arrangements are key and important parts of their business. That's one thing.

I would also mention that in terms of dollar value, as Arianne was mentioning, the bulk of the lower dollar value procurement, a lot of which goes to small businesses, is with the other departments, because they can buy up to $25,000 in goods. There are probably somewhere around 400,000 procurements that are done every year with other federal departments. Again, these are all about how we can expedite these processes, these low dollar value contracts.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Lorenzo, I was curious to find out what are most of the complaints from SMEs that you're getting in your office.

[Lorenzo Ieraci]

Thank you for the question.

The vast majority of companies that contact us tend to be small and medium-sized enterprises that have questions or are looking for help or answers in terms of the procurement process.

Our annual report identifies or lists their top procurement issues, questions, or concerns. What our experience has been is that in the vast majority of instances where suppliers contact us, they have questions in terms of the procurement process. They're not necessarily understanding the rules, the procedures, or what they have to do in order to do business with the Government of Canada, because that approach in terms of doing business with the public sector differs fairly fundamentally from the way business is done in the private sector.

Most of the questions we receive have to do with how to do business with the Government of Canada or with understanding some of the rules and the procedures associated with that. In those instances, for those who are having a bit of a hard time getting into the game in terms of doing procurement, we often—if not always—recommend that they contact the Office of Small and Medium Enterprises.

Our annual report outlines the most common concerns that we hear from small and medium-sized enterprises and from everyone who contacts us.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Mr. McCauley, please, for seven minutes.

[Kelly McCauley, Conservative, Edmonton West, AB]

Good morning. I'm going to start with you, Mr. Ieraci. Thank you for joining us.

Do we need to move up the base limit? It's $25,000 for products and $100,000 for services. Is that too low? That was set years ago, I assume. Do we need to move that up to be more effective?

[Lorenzo Ieraci]

If I may ask a question of clarification, do you mean in terms of the mandate that has been provided to the ombudsman?

[Kelly McCauley, Conservative, Edmonton West, AB]

Yes.

[Lorenzo Ieraci]

Thank you for the question.

That's a very interesting question. About four years ago, we had an evaluation of the office done to ensure that the office was operating as intended in terms of the mandate given to us by the Government of Canada. One of the things that we received as feedback from the evaluators was that in their discussions with suppliers who had dealt with us and our office, the suppliers had requested that our monetary thresholds be increased so that our office would be able to assist them in more cases and more situations.

At that time, we decided to take a look at the policy rationale for why it was that those monetary thresholds had been established for our office. We hired some external folks to undertake some analysis and provide us with a report. That report is available on our website.

Fundamentally, the response was that when we were established with regard to the awarding of contracts, the idea or the policy rationale was that we should be able to help in situations where the Canadian International Trade Tribunal cannot, so our monetary thresholds are underneath those of the trade agreements—roughly.

The idea was that the government did not want to give suppliers the opportunity to “doctor shop”, which means that when you get an answer that you don't like from one doctor, you go to the next one until they give you what you want. They didn't want that to happen between us and the CITT, so that's why those thresholds were identified.

[Kelly McCauley, Conservative, Edmonton West, AB]

You're comfortable with them?