Evidence of meeting #100 for Government Operations and Estimates in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was report.
A video is available from Parliament.
6:05 p.m.
Bloc
Julie Vignola Bloc Beauport—Limoilou, QC
I'll use them.
Do you think it's normal for a two-person company to get an $11‑million contract even though it didn't complete the documents properly and its employees turn out not to be the ones that were expected, among other things?
How can that kind of thing be avoided?
6:05 p.m.
Procurement Ombudsman, Office of the Procurement Ombudsman
What I will say is this: I think what the committee hearings have done is exemplify the complexity associated with federal procurement. You have organizations that exist to help suppliers bid on contracts. That is a practice, ultimately, that costs the taxpayer money and comes with a consequence.
I know that wasn't directly your question, but I will say that I think shining a light on this issue will perhaps cause government officials to act differently when considering strategies for how to procure goods and services.
6:05 p.m.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
Thank you, Mr. Chair.
Thank you to both of our witnesses for being here.
I want to extend our gratitude for your work and your report. It was my colleague Gord Johns who brought forward the original motion to study this matter, and I want to thank our colleagues around the table for supporting that. I think this should be an issue of great concern to all Canadians. The revelations you highlighted in your report point to a lot of concerns.
I'm new to this study. I wasn't privy to all the testimony about ArriveCAN prior to this, so I thought I would start at the 10,000-foot level and ask you this: After having looked at this procurement process, how concerned should Canadians be about the way ArriveCAN was procured, in your opinion?
6:05 p.m.
Procurement Ombudsman, Office of the Procurement Ombudsman
Thank you for the question.
I think how I answered a previous question about the emergency context is an important umbrella to remember. ArriveCAN was put together during a very difficult time in Canada's history and the world's history. That being said, there are certainly best practices in emergency procurement, and many of those were not followed.
The best example I can give—I know I said I'm going to talk about this very often, and I will—is documentation. Yes, decisions were required in a very brief amount of time, but that does not mean that documentation should not exist on those decisions. It's very difficult to determine that something was done fairly—and therefore, it raises suspicions as to whether it was not done fairly—when documentation doesn't exist. One of the biggest issues that I found with all of the ArriveCAN documentation we reviewed was the sheer lack of documentation in many instances.
That being said, one excellent practice that we saw was.... In emergency procurement, one of the best practices that one can do is to go to existing suppliers that are known commodities and that have been qualified, as opposed to going to new suppliers that you have no pre-existing history with. That's because they've already been vetted, so it removes some of the concerns associated with emergency procurement.
To directly answer your question, yes, I was concerned by the findings, and I think the recommendations reflect that concern. I believe the report is very factually accurate and devoid of any inflation.
6:10 p.m.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
The question was whether Canadians should be concerned, but I take it that, if you're concerned, Canadians should also be concerned, given your expertise in these areas.
I appreciate the emergency nature of the procurement, but some of the things you've highlighted seem like schemes that were developed. They didn't just all of a sudden arrive out of the blue when the pandemic hit. You talked about the bait and switch scheme, and you talked about these organizations that exist solely to help suppliers get through the government's contracting and procurement system.
Are these systemic issues that run throughout federal government procurement, or are these issues that you've highlighted today specific to the ArriveCAN procurement?
6:10 p.m.
Procurement Ombudsman, Office of the Procurement Ombudsman
They're systemic for ArriveCAN. As I answered previously, I can't say they're systemic because we haven't done the review. For example, with reference to bait and switch, we've not looked at bait and switch across all government departments for me to answer that this is absolutely systemic across other departments and agencies.
That being said—
6:10 p.m.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
It's common enough that it has a catchy name.
What I'm asking is.... Bait and switch can't be specific to ArriveCAN. This is something more systemic throughout procurement.
6:10 p.m.
Procurement Ombudsman, Office of the Procurement Ombudsman
Absolutely, so I would agree with that characterization.
I have to be careful, obviously, because I should be only factual in nature. Where I've done a review, I can give you specific details and specific statistics. I can't give you statistics saying that this is higher than normal, but what I can say is that, even without a baseline figure, this number is very concerning.
6:10 p.m.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
I noted your discussion about the use of median bands to disqualify bids that were either very high or very low. You noted that the way the median bands were set up really favoured higher bids over lower ones.
By extension, can we infer that the government paid more for the ArriveCAN app than it otherwise could have?
6:10 p.m.
Procurement Ombudsman, Office of the Procurement Ombudsman
Yes, I would agree with the characterization that the bands had a negative impact on the price paid, meaning higher prices than necessary were probably paid.
Again, I think one of the distinctions one can draw is that the traditional band is the median plus 30 and the median minus 20, meaning that prices within that range are acceptable. In this situation, it was done differently and there was no justification provided. That's why you saw the recommendation you did in this area.
6:10 p.m.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
Out of curiosity, what is the justification for an asymmetrical median band?
6:10 p.m.
Procurement Ombudsman, Office of the Procurement Ombudsman
Again, I wish I could give you one. We were looking for one to better understand and none was provided.
6:10 p.m.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
This is a similar question, based on the issue with resource swapping whereby, let's say, less qualified resources end up working on the project. You thought you were getting the all-star lineup and instead you got the third-string.
What's the likelihood that, at the end of the day, the product the government procured was lower quality than one that might otherwise have been created, had these companies actually provided the resources they said they were going to at the initial stage?
6:10 p.m.
Procurement Ombudsman, Office of the Procurement Ombudsman
You've put your finger right on the issue around best value. In both the technical and the price component there were impediments to seeing the best outcome. I think you very nicely summarized the issue in both areas.
6:10 p.m.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
Mr. Chair, we overpaid and we got a product that wasn't as good as it should have been. I think that's the sum of the story.
6:10 p.m.
Conservative
The Chair Conservative Kelly McCauley
Thank you very much.
We have Mrs. Kusie, please, for five minutes.
6:15 p.m.
Conservative
Stephanie Kusie Conservative Calgary Midnapore, AB
Thank you very much, Chair.
Thank you to our witnesses for being here today.
I'm going to continue with this theme of bait and switch. Of course, for clarification, this is where a vendor provides a proposal with specific contractors, is awarded the contract and then, after being awarded the contract, uses other individuals not specified within the proposal that was submitted and that the contract was awarded on to complete the work.
As you pointed out in your report, in 76% of the contracts, the resources proposed to work on the contract did no actual work on the contract.
Do you see this as a form of fraud on behalf of the vendor that submitted the proposal?
6:15 p.m.
Procurement Ombudsman, Office of the Procurement Ombudsman
Because this is actually a contemplated occurrence, it's the frequency that makes it so concerning. The replacement of individuals is something that's likely to happen, and as another committee member rightly pointed out, some of this was happening during the time of the pandemic.
That being said, the systematic nature of it and the frequency with which this was occurring was much higher. It's the systematic non-compliance that becomes troubling.
6:15 p.m.
Conservative
Stephanie Kusie Conservative Calgary Midnapore, AB
Do you believe, after seeing this occurrence in 76% of the contracts that were awarded, that there should be a system in place to immediately suspend contracting with the company? We did see with this government that they had indicated they were suspending operations across the government with this vendor and then later seemed to withdraw that.
What are your thoughts on that, please?
6:15 p.m.
Procurement Ombudsman, Office of the Procurement Ombudsman
My role is to make recommendations to the departments themselves. In terms of an outcome for a specific supplier, it wouldn't be appropriate for me to comment because, again, that wasn't the nature of this review.
6:15 p.m.
Conservative
Stephanie Kusie Conservative Calgary Midnapore, AB
System-wide, having seen this in this specific case, would you make that recommendation?
6:15 p.m.
Procurement Ombudsman, Office of the Procurement Ombudsman
I would not. I have not, so I can't say I would have.
6:15 p.m.
Conservative
Stephanie Kusie Conservative Calgary Midnapore, AB
Okay.
This was alluded to earlier. There is now evidence that the chief information officer at the time, Minh Doan, who has appeared before this committee and who we are attempting to get back, deleted emails in regard to the procurement of this app. Although the reasoning behind it is not clear, he tried to explain publicly to the press, or I should say the press garnered information that he attempted to explain that it was in the transfer of files from his laptop to a new system.
Do you think that this deletion of information could have possibly led to the incomplete information record that we have at this time?