Government Operations Committee on April 26th, 2018

[Brian Card]

I think you have to take away the perception. I travel from Halifax to Vancouver regularly. I represent companies that tell me they don't have a security clearance, they don't have a buddy, they're not bilingual, or they don't have this and don't have that. There's a huge perception out there that unless you're connected with the civil service, you're not going to get work. Across Canada, that is a very strong perception for Canadian businesses.

I would go to them and say that I would look after all of that, that it's not true, that it's a myth—and it is a myth, okay? Somehow, the federal government should have someone going out.... Now, they do—through the SME, I believe it is—but in my opinion, they're not doing a very credible job. They're not getting to the people.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Okay. You would suggest to us that we should have a better communication strategy and better educational sessions for that.

My time may be running out, but I have a question for you, Mr. LeClair. You came before us in November, and then Mr. Wright came afterward, in March. He was talking about voluntary set-asides. Are you in agreement with the voluntary set-asides, or would you say that every contractor should have a percentage, a 5%, 10%, or 15% set-aside, put in their contract for subcontractors who are of indigenous background?

[Marc LeClair]

I think you can have both, depending on what the government is buying, on what service it is. I think it can be an effective vehicle so that you just have indigenous groups competing against each other for that. Where we have that capacity, I think the voluntary set-asides are good.

The problem is that it's not being used enough, it's not being promoted enough, and it's not at the right level, so we're having poor results. To be fair to all those people who work at PSAB, I think they're doing as well as they can, but it's just not on the radar. It's not high enough on the pay grade that they work under. We need to bump it up.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Mr. McCauley.

[Kelly McCauley, Conservative, Edmonton West, AB]

I have a couple of quick questions.

Mr. Card, are you familiar—you probably are—with the American gsaadvantage.gov website?

[Brian Card]

No. I'm only in the Canadian market.

[Kelly McCauley, Conservative, Edmonton West, AB]

It's like an Amazon site, where companies just throw up their pricing for projects. You can actually pick off and filter out everything except indigenous, so indigenous companies would actually bypass a lot of what we have to go through right now with the paperwork, etc., to post their stuff, whether it's for labour or services, etc.

Would it be of any value to have a program such as that? That's for Mr. LeClair as well.

[Marc LeClair]

Yes. Those types of programs exist in the United States, like the section 7(a) one, where the Government of the United States works with firms to build their capacity, because they know that on large contracts you have to build the capacity of the small business. There are a number of measures there—which I'd be happy to send to the committee—that the Department of Commerce is doing in the United States to grow minority business.

[Kelly McCauley, Conservative, Edmonton West, AB]

Mr. Card, you gave us an example of a bid where they pre-qualified two and that's all they went to.

[Brian Card]

That's all that was registered in their system: these two firms in Canada.

[Kelly McCauley, Conservative, Edmonton West, AB]

We were looking at a shipbuilding bid recently, where they put out a tender but said “by the way, here's the company we're choosing”. They sole-sourced it, but for transparency they posted it and said, “Here's the company.” They explained that they had worked with the company in the past and no one else could do it. Even though it's the RAND Corporation, lots of large consulting firms could easily do it.

How much do you think this is costing taxpayers and small businesses, etc., when we're doing these processes where we're excluding so many other bidders based on the excuse that “we've worked with these guys before”?

[Brian Card]

It's very costly and, to some extent, unfair to the other businesses that put a competitive bid in. Along with that, we're seeing recently now that the government is going out with 15-year contracts. It just went out with one several months ago for a team of 15 different people. I knew most of the people who where bidding. They were 65 and 70 years old, and they won a 15-year contract. Okay, hello?

The other difficulty with that is that they put in a rate today and they have to hold that rate. What I've seen over the last 20 years is that they'll sign a 10-year contract with an industry. Now they're getting $1,200 a day per diem. Five years down the road, the supply of those people has gone way up and the demand's gone way down, yet the government continues to pay double or let's say 25% more than what it should be paying because they commit themselves to these five-, 10-, and 15-year contracts.

[Kelly McCauley, Conservative, Edmonton West, AB]

Why do you think we're going this? Is it just laziness? Is it a lack of resources on the procurement side: let's just get this done and we move past?

[Brian Card]

My experience and observation is that there are a lot of dinosaur practices in the federal government. A new government will come in, and I find that the different political bodies really don't change the procurement system whatsoever. I think if you talk to government employees in procurement when a new government comes in, they'll say, “So?” It doesn't change. Nothing's ever changing. Nobody has taken a close look at the procurement world.

[Marc LeClair]

I think, for example, precinct two is a good example, 100 Wellington. I spoke to the committee about this last time. When that RFP came out, you had to have local resources. They still had 100 Wellington listed as the portrait gallery, so they didn't even have the time, or nobody took the effort to say that 100 Wellington is kind of changing now. There was no requirement for indigenous resources there.

Brian and these guys won it; we complained about the 50-kilometre thing. We wrote to public works. To their credit, they pulled back on it, but....

[Kelly McCauley, Conservative, Edmonton West, AB]

There seems to be a will among ourselves, all three parties, to try to help, but I'm not sure that there's the will on the other side, outside of these doors.

[Marc LeClair]

I think this is why the committee...you're going to make some recommendations. I encourage you to put in your report that you're going to look back at this thing in a year's time to see if there's anything that's going to change. We're all going to be here in one year, hopefully.

[Brian Card]

The difficulty is that, when you see RFPs come out that make no sense from the private sector, there's nowhere to complain. By the time you put a complaint in, the job will be done and built and finished. That's how long.... There's no process within the government to complain about awkward RFPs.

[The Chair, Conservative, Tom Lukiwski]

Mr. Jowhari, you have five minutes, please.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Welcome to the committee again, our presenters.

A lot of discussions have been had over the last hour about some of the challenges, some of the recommendations, different procurement programs, to the tune of 26, and some of the jurisdictions.

One of the things that stuck in my mind was the success story that Mr. LeClair talked about, and Manitoba Hydro was highlighted as one of the success stories.

You also balance that—or at least I heard you balance that—with the ability to build capacity. I'd like to link that and ask the following question. You mentioned that we are coming up with a strategy on the demand side and a strategy on the supply side. You said that the demand side is now in place and what's missing is the supply-side strategy.

Can you explain that, or can you expand on what we need to do on the supply side and how the characteristics of a successful story around Manitoba Hydro can help us build that supply-side strategy?

[Marc LeClair]

I'm going to leave two documents with the committee. Really what you've got to do is incentivize the contractor. In this case, in Manitoba Hydro Schedule VIII — Indigenous Engagement Strategy & Requirements, Manitoba Hydro outlined for the contractors what they wanted for the indigenous Canadians in the contracting documents. This one is Socio-Economic Requirements of Contractors for Enbridge. This is what Enbridge put out and said, “Okay, you guys want to do this job for us? Answer the mail here, and it's mandatory.”

This is what we need to do with the Government of Canada on these contracts—and they can be over a certain value, over $100 million, $50 million. It should say that, if companies want that work, they have to find those indigenous businesses and give them a certain percentage. That's how we incentivize companies to do work with indigenous people. The Government of Canada should be doing it on the large contracts. It's all in there and the Government of Canada has this, but as I told you, it lost the template. I think it was just that guy who lost the template.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Mr. Card, do you want to add anything?

[Brian Card]

I'm fine with that.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Okay, so incentivize, put a target, as you said, hold their feet to the fire, and make sure that you measure your report and do your review. It's compliance reporting, as you called it, Mr. Card.

Now, my last question is on the 26 programs, as you called it, the procurement vehicles, and the jurisdictions.

Is there anything you could shed light on to as to what procurement program has worked well and what program hasn't done well, as it relates to the indigenous and Inuit?

[Brian Card]

To answer that question, I'd need more time.

To give you an example, they have what they call TSPS. There's a level amount. Anything over $2 million has to go to what they call “tier two”. To me, tier two should be completely abolished.

Anything over $2 million should go out to all Canadians, not just the limited few on their preferred list. You would get many more bids. You would save millions of dollars. You would encourage more Canadians to bid on federal government work if that were put in place.

I see no reason for a tier two.