Government Operations Committee on April 17th, 2018

[Brian Masse, NDP, Windsor West, ON]

No, but the reality is that they're going to be your competitor.

[Jessica McDonald]

Well, they're a customer. As you point out, and as another member has pointed out, they do provide to some extent their own delivery services at the same time as we want to continue to be Canada's number one parcel company. It's an interesting relationship in terms of having a major customer that has such a large share of the online commerce world, including the delivery side of that, while at the same time they are such a large share of our own customer base in terms of parcels, which is very important to us.

While ensuring that we are nimble and smart in terms of our relationship with Amazon, we recognize that they're a company driven by their own business interests. We need to be smart enough to figure out how we can ensure that we meet their needs and at the same time use our own system in a way where our customers and their customers are more satisfied with us than with going to delivery by themselves.

[The Vice-Chair, Liberal, Yasmin Ratansi]

Thank you very much, Ms. McDonald, and congratulations.

That brings us to the end of this session. I will suspend the meeting for a couple of minutes.

Thank you.

[The Vice-Chair, Liberal, Yasmin Ratansi]

Committee members, please take your seats.

We have with us Mr. Alexander Jeglic, procurement ombudsman.

Welcome to the committee. I believe you may have some opening remarks. Go ahead and start your presentation.

[Alexander Jeglic, Procurement Ombudsman, Office of the Procurement Ombudsman]

Thank you, Madam Chair and committee members, for this invitation. It's an honour to be here today participating in this discussion.

My name is Alexander Jeglic. I have been the procurement ombudsman since April 3, so for exactly two weeks today.

From my first day on the job, it has been evident that my office is made up of quality people who are working hard to respond to the questions and concerns of Canadian suppliers and who work to promote fairness, openness, and transparency in federal procurement.

I'm proud to have been chosen to lead this valued and trusted organization.

I understand the committee wanted to hear from me as the new appointee to the position of procurement ombudsman. Allow me therefore to provide you with some information on my previous experience, education, and training.

Before joining the Office of the Procurement Ombudsman, I served as general counsel, access to information and privacy co-ordinator, and, more recently, as corporate secretary for PPP Canada.

PPP Canada, or Public-Private Partnerships Canada, was a federal crown corporation created to improve the delivery of infrastructure by achieving better value, timeliness, and accountability to taxpayers through public-private partnerships. At PPP Canada, I provided legal and strategic advice on procurement processes for large infrastructure projects, predominantly in an oversight role.

Prior to joining PPP Canada, I worked at the Canadian Commercial Corporation, another federal crown corporation, as senior legal counsel. There, I was involved in the drafting of solicitation documents for projects of varying complexity and provided legal advice on the procurement process through to contract award. Post contract award, I was responsible for the resolution of disputes associated with contract management.

Over the course of my six plus years at the Canadian Commercial Corporation, I had the benefit of playing a multitude of different roles, including those of drafter, evaluator, and adviser. Playing these respective roles provided me important insights into each aspect of the procurement process and the associated issues.

While working at the Canadian Commercial Corporation and PPP Canada, I taught dispute resolution and negotiation at Algonquin College. I also taught procurement law in the undergraduate law program at Carleton University. At Carleton University, my teaching spanned a six-year period, and it provided me the opportunity to connect with students and to help prepare and equip the procurement practitioners of the future.

Prior to joining the Canadian Commercial Corporation, I worked for the Department of Justice. I was assigned to the legal services unit at the Department of Foreign Affairs and International Trade, now Global Affairs Canada.

While there, I had the opportunity to assist in the drafting and review of solicitation packages, participate in supplier debriefs, and resolve disputes associated with ongoing contracts.

Prior to that, I worked in Washington, D.C., for the Australian trade commission as a business development manager and international trade adviser. In this role, I was part of the “selling to the U.S.” government team that was created as a result of the then newly signed U.S.-Australia free trade agreement. My role allowed me the opportunity to assist Australian companies to identify and bid on government procurement opportunities at both the federal and the state level. I learned a great deal about procurement in this role and experienced first-hand the challenges faced by suppliers.

Before that, I worked for the Chicago International Dispute Resolution Association in Chicago, Illinois. The association provides a forum for resolving transnational business disputes in a neutral and private setting for arbitration and mediation. At the association, I was primarily responsible for outreach, research, and facilitation of monthly meetings. I gained skills that continue to help me successfully de-escalate contractual disputes.

In terms of education and training, I graduated from law school at Loyola University Chicago with a certificate in international law. I completed my undergraduate studies here in Ottawa at Carleton University, where I completed a B.A. in law, with a concentration in business law.

I am incredibly proud to be a graduate of Carleton University and continue to give back to the Carleton community through the mentorship program.

I genuinely believe that my work experience, combined with my training and education, has provided me a well-rounded perspective and prepared me well for my role as procurement ombudsman. I am confident my perspective will allow me to have an objective and impartial view of the current approaches being used in federal government procurement.

My perspective also provides me with a balanced appreciation of what suppliers are going through in trying to navigate the federal procurement process, since I’ve essentially been on the other side of the fence.

While it's very early in my mandate, the priorities that I will focus on are starting to crystallize in my mind.

First, my office will continue to focus on the core activities of my legislative mandate in a way that is straightforward, efficient, and transparent.

This applies to reviews of supplier complaints, reviews of departmental procurement practices, and the contract dispute resolution services that we provide. I want to increase the amount of information we share with suppliers, departments, and other interested parties in the area of procurement.

In addition to transparency, I want to emphasize the theme of simplification. Procurement is by its very nature quite complex. Suppliers must be clearly told what the buyer is looking for, how their proposals will be evaluated, and how the winning bid will be selected. This can be painstakingly detailed but often necessary to ensure fairness, openness, and transparency. I am a strong believer that federal organizations need to take every available opportunity to simplify procurement.

Simplification will help address concerns that my office continues to hear from suppliers and federal officials alike. My office often hears that federal procurement is too complicated, time-consuming, and bureaucratic.

This will not be an easy task, and as I begin this mandate as the procurement ombudsman, I plan on both encouraging and promoting efforts across the board that contribute to the simplification of federal procurement.

Another area where my office can add a great deal of value is in the resolution of disputes for contracts that have been awarded.

When Canadian businesses and federal departments get bogged down in lengthy disputes, nobody benefits, least of all the taxpayer. The co-operative nature of dispute resolution services provides faster results and more flexibility to both parties. My office’s alternative dispute resolution services represent an effective tool to get contracts back on track, goods and services delivered, and suppliers paid.

My office has a successful track record in providing dispute resolution services and in mediating disputes. I would like to see these services leveraged by more federal organizations and suppliers across the country.

There isn't always a need for formal dispute resolution. My office has done a great job in resolving issues without having to resort to a formal dispute resolution process. Although these instances don't show up in our official statistics, this is something I intend to continue to promote and track as it aligns with the principles of simplicity and helpfulness that my office stands for.

Finally, I will also be looking to expand my office’s procurement expertise by performing deeper and more comprehensive analyses on procurement-related issues. This will enable my office to have a more fulsome understanding of the root issues driving complaints to my office. To align with transparency, this research will be shared as broadly as possible.

My office will then be in a position to help resolve issues before they turn into complaints, which in turn simplifies the process. I believe that my office is well placed to play this role, because we hear first-hand from both suppliers and federal officials about the good and not-so-good practices in federal procurement.

We have a lot of information to share, and I will seek opportunities to do so in the future through consultations with stakeholders, participation in procurement-related conferences, and meetings with federal government decision-makers to provide my perspective.

I welcome the opportunity to come back to this committee in the future and report back on the four priorities I have just laid out, namely: one, transparency; two, simplification; three, growth in dispute resolution services; and four, knowledge development and sharing.

In closing, I would like to thank the committee members for the opportunity to speak with them, and I would be pleased to answer any questions you have.

Thank you.

[The Vice-Chair, Liberal, Yasmin Ratansi]

Thank you very much.

We'll start our first round of seven minutes with Monsieur Ayoub.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Thank you, Chair.

Thank you, sir, for coming before us. I congratulate you on your appointment.

[Alexander Jeglic]

Thank you.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

I'll be asking my questions in French.

[Alexander Jeglic]

All right.

Just to be sure I understand, I'm going to listen to the interpretation.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

I really appreciate your French. Thank you very much for that.

You spoke about a number of your priorities. However, according to Public Services and Procurement Canada's 2017-18 departmental plan, the office of the procurement ombudsman must be independent.

What will that independence look like, in terms of being transparent with other government departments? How could you improve upon past practices?

How do you intend to assert your leadership, as ombudsman, with respect to your office's independence and transparency?

[Alexander Jeglic]

I'm going to answer in English, if you don't mind.

In terms of independence, that's a great question. That's one of the primary issues that I had upon assuming the role, because there is an interrelationship between the ombudsman's office and the department, so I was adamant to make sure that regardless, not only in optics but also in practical aspects, this independence in maintained. I can assure you, though I'm only two weeks into the role, that this independence is in fact maintained.

In terms of the role from the mandate perspective, the mandate is preserved, and there is no oversight capacity on the part of the department. That role is untouched by the department. It's only in issues for administrative purposes, such as information technology and human resources, where the department has any direct liaison with the procurement ombudsman's office. Therefore, in terms of priority-setting, the ombudsman's office is clear to set its own priorities without any implications from the department itself.

In terms of what I can do to enhance that independence, again, one of the things that I intend to do is transparency. Transparent behaviour is a fundamental underpinning of the importance of the ombudsman's office. Therefore, as one of the things we look to do, specifically on reviews of complaints, we anticipate now publishing a more fulsome document, which includes additional factors that currently aren't being published. This will further allow for additional oversight from the outside world beyond the department itself.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

You say it's important that the office maintain its independence. I understand and agree. However, is there some sort of mechanism that would provide reassurance and ensure that independence, both on your end as well as the minister's? The type of independence I am talking about goes beyond having someone look over your shoulder to tell you which priorities you should be working on.

You've just been appointed, and we wish you a long career. Now, is there some sort of structure in place that we, as legislators, can have confidence in?

[Alexander Jeglic]

Yes, absolutely. There is in fact a document in place. It's a memorandum of understanding that stipulates exactly where, how, and when the two entities will interplay with one another, and the theme of independence is a penultimate theme in the MOU. It is captured in writing, so whether I'm here or not, that independence exists, and it has pre-existed my arrival.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Very well.

In your opening statement, you said you sometimes preferred not to go through formal channels. I gather that, in some cases, it's easier to take a more direct approach. When you do so, however, it does not get captured in any report.

How will you remain transparent when using a process that can be effective in some cases, but not others? Would you mind elaborating on that idea?

[Alexander Jeglic]

In terms of the informal process, I think that maybe in my opening remarks it was misunderstood. It's not something that's currently tracked. If there is an informal resolution to a complaint, the way we track it now doesn't make its way into the official statistics; however, that will change under my five-year mandate. We will now be tracking that, so it does align perfectly with transparency.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

That's reassuring. Thank you very much. I understand it very well now.

That's it for me.

[The Vice-Chair, Liberal, Yasmin Ratansi]

Does anybody want to use his time? He has one and a half minutes left.

Mr. Peterson.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

I'll jump in and take the one and a half minutes.

I want to touch on this briefly. I'll elaborate more when I get to my allotted time. On the alternative dispute resolution process, can you tell me what form that takes now and what control you might have to shape that form going forward? I can elaborate more when I get into my questions.

[Alexander Jeglic]

Again, this is not to criticize the regulation, but the regulation currently requires the consent of both parties. It seems that most often consent is established only once a dispute arises.

Typically, here's the way the construct works. There is an existing dispute for a contract and one of the parties—typically the supplier—approaches the ombudsman's office. The ombudsman takes that complaint and maps it against the regulation. If it's in compliance with the regulation, the office seeks consent from the other party. If the other party consents, an attempt at facilitation or shuttle diplomacy is used. If shuttle diplomacy isn't effective, ultimately mediation would be the final step. Again, it is all consensual.

At that point in time, if the parties can't agree, the process has failed, but I will say that of the 25 times where it has gone to ADR through the regulation, in 23 of the 25 times it has been successfully resolved, through either facilitation or mediation.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you for that.

[The Vice-Chair, Liberal, Yasmin Ratansi]

We have Mr. McCauley for seven minutes.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thank you, Chair. I won't need the full seven minutes.

Congratulations on your appointment. I look forward to working with you. You've laid out a great plan.

[Alexander Jeglic]

Thank you.

[Kelly McCauley, Conservative, Edmonton West, AB]

You're probably aware that we're studying small business procurement. All we hear are nightmares of how difficult it is and how the government makes it so. I don't mean the current government or the past government. It's just that the process is so difficult for average Canadians to bid, so I'm glad to hear about this.

I realize that your role is a bit limited towards changing some things, but I'm wondering how you might assist in the simplification of the bidding process.