Government Operations Committee on Jan. 31st, 2024

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you very much, Mr. Chair.

Mr. Jeglic, I'm sure that the ArriveCAN and McKinsey reviews took a good team and a lot of hard work.

In your opinion, is your mandate broad enough to enable you to do a thorough job of reviewing these kinds of contracts?

If not, what should be added to it?

[Alexander Jeglic]

I think I mentioned earlier the right to compel documentation. We don't currently have that, and I see that as a shortcoming because I think it's an example of an opportunity to improve our mandate. There are other examples that we've made, not necessarily specific to procurement practice reviews, which is the question you asked me, but there are certainly additional tools. Like I said, financially, we were given kind of sufficient funding to pursue McKinsey and ArriveCAN, absolutely, but as I mentioned before it's the funding going forward that we need in order to continue to pursue. We need the resources.

Again I'll just say that we have a fantastic team. Thank you for mentioning the diligence in the report. I know that they're very proud of the product. I appreciate the positive feedback that we received about the diligence of the report.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

I'll be brief. What I like about your report is that it's clear and uncompromising. You say what you need to say in a reasonable number of pages. It's not 3,000 pages long. That works for me, because I read them all.

Thank you for your work and your answers. I look forward to asking you more questions if the opportunity arises.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mrs. Vignola, for turning back some time to us.

Mr. Bachrach, please, go ahead.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

Again, thank you to both gentlemen for your time here this evening and your work on this important report.

The last issue I want to raise is this situation that you've documented whereby proponents are essentially taking the mandatory criteria in the procurement documents, copying it and then pasting it to reflect their own expertise and experience. I'm familiar with this in some hiring processes too, where there are certain keywords that the employer is looking for in the job interview, and as long as you say those keywords—it doesn't even matter what order they're in—they tick a box, and then the empirical score goes up and you have a greater chance of getting hired.

How did the empirical rating process that you looked into treat this blatant gaming of the system?

[Alexander Jeglic]

The document itself specifically says that one cannot demonstrate experience by simply restating, and it gives the example, yet that's exactly what was done and ultimately accepted.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

In those cases, obviously there's a score associated with those responses, even though the responses, as you've indicated, weren't allowed at all. How did they end up scoring when they did that copy and paste exercise?

[Derek Mersereau]

I'll separate the two sides. In the process when they put forward resources for individuals as part of the bid to win the contract, there seems to be much more rigour around the evaluation of the assessment of those resources at that phase. Where the issues that we really identified come up is at the task authorization phase after they've already been awarded the contract. The way the system is designed, it's actually the vendor who completes the grid that's used to evaluate them. They actually provide the scores, which are then signed off by the department.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

I've always found that I do the best on exams when I mark them myself. It's funny how that works. It's just astonishing.

I'll leave my questioning on that note, Mr. Chair, and thank our witnesses again for their time this evening.

[The Chair, Conservative, Kelly McCauley]

Thank you for turning over a few minutes of your time, Mr. Bachrach, and for the humour.

Mr. Genuis, go ahead, please, for five minutes.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, Chair.

Thank you again to the witnesses. This really is some of the craziest stuff we've ever heard at this committee, and that's saying something because we've heard some pretty wild things at this committee.

I do want to say that you were asked questions by Mr. Kusmierczyk about corruption. Obviously, you're not prosecutors or police officers, but I think it's very clear that activities like doctoring résumés in order to get contracts would constitute fraud. It would constitute criminal activity, and it would definitely constitute corruption. It's interesting that Liberals want to weasel out of that. I won't press you on that point, because I understand it's not your area of expertise.

I want to ask about the so-called experience criteria. The way the system is structured as you describe it is that people who bid for many of these contracts have to have done work for the Government of Canada before. You might have a better product. You might have more experience working with other clients, other governments or other private sector clients, but if you don't have the direct experience of working for the federal government, then you get cut out on that basis. This means you have a system where you have to be an insider to get the work. The same insider contractors get recycled over and over again by virtue of the fact that the rules specifically require you to be an insider. This severely narrows the band of who can bid to specific existing insider companies.

How is this remotely defensible?

[Alexander Jeglic]

I think you're referring to the section that speaks to mandatory criteria—

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Exactly.

[Alexander Jeglic]

—and how it would be next to impossible for any other bidder to meet those criteria.

Again, it's a very disappointing outcome. When you run a competitive process, you're telling the universe that you want the best outcome and you want competition, yet you structure the mandatory criteria in a way that essentially eliminates the competitive aspect. To answer your question of does it make sense, it does not make sense.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Hypothetically, you have a company based in the Maritimes that has done extensive IT work for the four provinces on the east coast, as well as, let's say, for some states in the northeast of the U.S. They see a contract for the federal government that seems like a good fit, but based on this criteria, even though they've done IT work for other governments, they can't bid at all just because they don't have that federal government experience.

This seems like a system designed to protect insiders and exclude outsiders so that those insiders can charge higher prices and continue to get the same jobs over and over again regardless of quality.

[Alexander Jeglic]

It's not a requirement in all solicitations that they would have previous government experience. That being said, it often is one of the characteristics that's used in the mandatory criteria to diminish the field of eligible options. When we see that, it often draws our attention by noting that it's a restrictive criteria, and then there has to be a justification. That's the other side. When you develop these mandatory criteria, you need to be able to justify why they're so essential to delivering on the ultimate outcome. In many instances, there might be justifiable reasons, but when you couple everything together, it's impossible to meet all of those characteristics and still have an open and fair competition.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you.

The last thing you said, let's underline. If you take all of those pieces together, it's impossible to have a fair and open competition.

You put together this excellent report. I'm not as familiar with the processes of your office. I just want to understand this. Is there some process by which the government will be required to provide a written response to your recommendations?

[Alexander Jeglic]

The response to the recommendations is actually embedded in the report, and you'll see that. That's actually part of the process. I will say that we also do a follow-up. Two years from the date of the finalization of the report, we will commence the process of actually assessing compliance with the recommendations.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

You'll have a follow-up process to assess compliance.

Did the government accept all of your recommendations?

[Alexander Jeglic]

Yes, they did.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

They're saying they've accepted them. We'll have a chance to see whether they actually follow through on them later on.

If I can just circle back again quickly to the issue of the missing records, you have no way of knowing why those records are missing. It could be because somebody deleted those records. It could be because they were never submitted. It could be because conversations happened in an informal setting or over the phone, but should have happened in another way.

Your report highlights the fact that, as part of the ArriveCAN procurement, there seems to be a bizarre pattern of missing records. You don't know why that is, but you're underlining the fact that this is strange and unusual. Is that fair?

[Alexander Jeglic]

It is fair, but I will also say that what we have heard is that it's a very pandemic-specific issue. You went from an environment where almost all records were on paper to an environment where that was impossible. Everyone was working remotely. As a result, there were no record-keeping practices.

That being said, I think people understand that they still have an obligation to keep accurate records whether they're working remotely or in an office, taking them on physical paper.

While I have heard that explanation and I'm understanding of that explanation, it doesn't dilute the fact that you still have to have appropriate record-keeping safeguards to ensure that exactly what we've seen does not occur.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

There would have been emails. There would have been some kind of back-and-forth, surely—

[The Chair, Conservative, Kelly McCauley]

Thank you, gentlemen.

Mr. Jowhari will finish us off, please.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair.

For those Canadians who are watching this today, I wanted to make sure that I clarified the statement that my colleague PS Charles Sousa made. I think the reference that PS Charles Sousa made was to Mr. Kristian Firth—going back to a previous government—having and receiving contracts, not GC Strategies.

Having said that, let's go back to.... One thing that you brought up, Mr. Jeglic, was the concept of best value, and you broke it down into two categories: one was technical, and the other was a financial or dollar value.

In your testimony, you talked about how there seems to be a rigorous process at the earliest stages of the evaluation, but somehow that process runs into a lot of systematic non-compliance when it comes to the task authorization, when, at that point, we are locking in the resources.

If that's the case, what skill set...? Which body verifies before the task authorization is done? Is it the department, or is it PSPC?