Evidence of meeting #73 for Government Operations and Estimates in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was procurement.
A recording is available from Parliament.
Assistant Deputy Minister, Marine and Defence Procurement, Department of Public Works and Government Services
Could you repeat your question, please?
Conservative
Jacques Gourde Conservative Lévis—Lotbinière, QC
Could the national security exception we are talking about right now cover up financial abuses that would not come to Canadians' attention at all?
Assistant Deputy Minister, Marine and Defence Procurement, Department of Public Works and Government Services
Thank you for the question.
In my view, the answer is no. As my colleagues have explained, the national security exception ensures the integrity of the supply chain and protects Canada's national interests. Furthermore, competition is very important to us. I think I should first explain one thing about it.
Before we acquire most of our procurements, we consult with Industry Canada to find out who the suppliers are, which ones can supply us and what their finances are. Our goal is to find out whether there is a wide range of suppliers who could help us meet our needs.
Afterwards, we try to find the best way for the procurement to occur. What is our procurement strategy? As I mentioned, in 97% of cases, the competition plays a role, despite the national security exception.
Conservative
Jacques Gourde Conservative Lévis—Lotbinière, QC
I understand that the national security exception protects Canadians, but could it also protect some suppliers, meaning that there would be no way to check how competitive they are compared to others?
Assistant Deputy Minister, Marine and Defence Procurement, Department of Public Works and Government Services
Thank you for the question.
For some time now, in addition to looking at the financial records of companies, we have been looking into all their connections around the world. The integrity of the chain of suppliers and companies is very important for us, regardless of whether there is a national security exception or not. We want to make sure that Canada is protected from financial risks, jurisdiction- and capacity-related risks as well as technical risks. Our contracts with the companies ultimately protect us from those risks.
Conservative
Jacques Gourde Conservative Lévis—Lotbinière, QC
In your presentation, you said that, in 2015, you invoked the exception for the refugees.
Assistant Deputy Minister, Marine and Defence Procurement, Department of Public Works and Government Services
That's right.
Conservative
Jacques Gourde Conservative Lévis—Lotbinière, QC
I saw in Quebec City and even in Gatineau, across from my apartment, a village of mobile homes that were built to receive the refugees. It took two weeks of work around the clock to finish everything. However, no one ever stayed in those homes. After three days, everything was gone.
Is there a way to find out the cost of that project or whether it involved a national security exception?
It is impossible to find out the cost of the operation. A private contractor certainly did not set up a village of mobile homes for fun.
Assistant Deputy Minister, Marine and Defence Procurement, Department of Public Works and Government Services
Your request is different from the application of the national security exception. All the procedures to access government information apply. This means that, if there were secret information and confidential reasons, they would be kept secret. However, the information that can be made public will be, as much as possible.
Conservative
Jacques Gourde Conservative Lévis—Lotbinière, QC
How much money is involved in this national security exception? Is it hundreds of millions of dollars, a few billion dollars or tens of billions of dollars? If we consider the entire program, what amount of money are we talking about?
Assistant Deputy Minister, Marine and Defence Procurement, Department of Public Works and Government Services
I don't have that data with me, but I would be happy to send it to you in writing.
Conservative
Assistant Deputy Minister, Marine and Defence Procurement, Department of Public Works and Government Services
Thank you.
Conservative
February 23rd, 2017 / 9:40 a.m.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
Thank you, Mr. Chair.
Good morning, everyone. I have a few questions.
My first question is for Mr. Breton.
I want to talk a bit about process, and I hope I have time to ask all of you this question. First of all, I think there's some confusion in our committee in terms of distinguishing between the NSEs and the sole-sourcing or non-competitive process. They're obviously not the same thing. There's some overlap, I suspect.
We were talking about invoking an NSE, and I want to get at the crux of it. How does that process work in your department? Who is making the decision? What test is applied to that request for an NSE? Obviously, “national security exception” is not readily defined in any legislation. What test does your department put on it before determining whether or not to invoke it?
Director General, Procurement and Vendor Relationships, Shared Services Canada
In my opening remarks, Mr. Chair, I mentioned the process we went through for our initial invocations. At that time, our procurement functions still resided with PSPC, so that went back and forth between SSC, in its newborn state, and PSPC.
Currently, that decision rests with the senior assistant deputy minister of corporate services, who is also our CFO. That decision is taken in consultation with business-line ADMs, including our ADM responsible for cybersecurity and IT security. It includes our legal services, and it also includes our national security colleagues from the Communications Security Establishment.
I should say that right now we are in the process of reviewing and renewing our national security exemptions.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
Thank you.
Ms. Campbell, can you elaborate on the process? You have a lot of clients, obviously, who come to you and at times ask for the exception. What test do you put on before deciding?
Assistant Deputy Minister, Marine and Defence Procurement, Department of Public Works and Government Services
I've been in the job for two years. My predecessor signed some of the omnibus NSEs that are in place now. I've described to you the ones that I have signed since I have been there, such as the Syrian refugee one, as well as about 20 requests per year from individual departments for projects. As I said, they cover large projects, such as fixed-wing search and rescue, interim fighter procurement, and Canadian surface combatants, where there is a whole series of procurements that flow under that.
As for the process that we apply, again, I've talked about robust industry engagement, so we look at what companies are out there to furnish the service. The client departments go through a rigorous process to determine whether a national security exception should apply. That's challenged at several levels in my department. If it withstands those challenges—and those include our legal services, looking at Treasury Board guidelines—eventually I will get a letter of request from my counterpart at the client department, whether it's the RCMP, National Defence, or other departments that have these needs. They will write to me. I will go through the entire thing, look at the reasons, look at the rationale, and look at the type of procurement. If I am in agreement, I will invoke the national security exception, and I write them a letter back. It's all documented and processed and on the file.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
Okay. Thank you.
Go ahead, Mr. Watters.
I represent Newmarket—Aurora. We have an RCMP detachment in Newmarket, so I was happy I could be here.
Acting Chief Financial Administration Officer, Royal Canadian Mounted Police
That's good to know.
Acting Chief Financial Administration Officer, Royal Canadian Mounted Police
Essentially our process within the RCMP mirrors the one at PSPC. As I was mentioning earlier, the deputy commissioner who is in charge of the program has to provide the rationale, the justification and reports to the director general of procurement, who is responsible to provide a challenge function.
Is this consistent with the others that we've had? I could honestly say we haven't had many, but is this consistent to make sure that we're not deviating and applying our processes in an inconsistent manner? From there, the DG of procurement will reach out to our colleagues at Public Works—I call you all the time. I'm sorry—
Assistant Deputy Minister, Marine and Defence Procurement, Department of Public Works and Government Services
It's Public Services and Procurement Canada. It rolls off the tongue.
Acting Chief Financial Administration Officer, Royal Canadian Mounted Police
They will even challenge us, while we're having the discussion ongoing, so we have two sets of subject matter experts challenging the process. This provides me with a lot of confidence that the proper rigorous process is put in place to limit the use of the NSE.
Liberal
