Government Operations Committee on May 1st, 2024

[The Chair, Conservative, Kelly McCauley]

Wonderful.

I apologize.

Mr. Jowhari, please, you have five minutes.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair.

Welcome back, Madam Reza, and your team.

I'm going to ask a number of rapid questions in trying to make a point that I think Canadians deserve to understand.

As for best practices in the industry when it comes to procurement, what is the trend? Have you seen the trend that a lot of organizations are moving away from task-based to solution-based, outcome-based, yes or no?

[Arianne Reza]

I think the Government of Canada and private industry are always looking for agility in procurement. Moving from task-based to solutions is a key piece of that. It's also going to be supported in terms of what we do with our own HR policies and staff augmentation with our public service, as well as project management and moving to more holistic solutions. This is where we'd like to go in this space.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Does solution-based allow the organization to flourish and also be able to work better together to come up with an ultimate outcome that the task-based solution will not allow?

[Arianne Reza]

I think there are niche uses for both. From a client perspective, having a solution is probably a very helpful approach in terms of digital delivery.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

I'm glad that you talked about the niche approach. When an organization like the Government of Canada goes through a large business transformation under many aspects, whether it's the process, the people, the technology or the back end, benchmarking is one of those activities that will really benefit from a solution-based approach rather than a task-based approach. If traditionally we have done a task-based approach, as you are trying to understand the requirement and you decide that a solution-based approach is a better fit for that transformation, it's logical to change. Is that a fair statement to make?

[Arianne Reza]

I think those decisions are made in consultation with the client and the business requirement, and that procurement strategy evolves and looks at those different elements.

[Majid Jowhari, Liberal, Richmond Hill, ON]

I'll take that as a yes.

Now let's talk about the national master standing offer, or NMSO. For Canadians, for simple Canadians like me, what would be the equivalent of a national master standing order? If I use the terminology “standard purchase order”, would that make sense?

[Arianne Reza]

I think, in trying to explain the policy instrument, you'd have to think of it as a catalogue of a very specific store, the self-benchmarking and data—

[Majid Jowhari, Liberal, Richmond Hill, ON]

That's perfect, but that does not in any way mean that there was no process, before the issuance of a national master standing offer, for looking at vendors, evaluating vendors, making sure that they are qualified and then issuing up to five national master standing orders or master purchase orders for, as an example, benchmarking, which could cover a gamut of activities such as people transformations, technology transfers, process transformation or documentation transformation. All of those are various types of services that we and the department go through, and they need to do benchmarking against all of those to be able to go through the transformation. Is that a fair statement to make?

[Arianne Reza]

That is a fair statement to make. If you'll permit me to add, I would also note that one of the key elements of establishing those national master standing offers is that we did it in a very transparent way. It may have been unique to the various vendors in question—McKinsey is today's topic—but we had it out, it was posted, it was published and they're aware....

I draw your attention to the fact that, even in competing and re-competing, based on some of the guidance that was received and observations of the procurement ombudsman.... We sent it out recently, I think in mid-June 2023, to 5,000 suppliers, and only 13 have come back to us because it's such a niche space.

We've opened it up to make that playing field transparent for procurement purposes.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

I would say that going to a solution-based contract from a task-based contract, when you're in that specific niche activity, is quite logical, so there is no conspiracy in there. That's just the right way of doing business. Having master standing offers, five of those among five competing top benchmarking organizations, means that there is no hidden agenda in there. We are making sure that we as a government have access to five best practices across that spectrum. Is that a fair statement?

[Arianne Reza]

That is correct. Moreover, it was the intent to make it more efficient for the government to procure those services.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

[The Chair, Conservative, Kelly McCauley]

We have Mr. Genuis, and then we have Mr. Kusmierczyk.

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

Thank you, Chair.

It was said earlier that the procurement ombudsman did not find fraud. I would just say, he also did not find pickles, because that wasn't what he was looking for. His mandate isn't to lay criminal charges. I do expect that criminal charges will be laid in relation to government procurement. We've already had one contractor's house raided, and time will tell.

I want to ask about the issue of money being paid back in relation to the arrive scam scandal. Parliament passed a motion asking for money to be paid back. Kristian Firth testified that no one had even asked him about returning money.

Ms. Reza, have you had conversations with the minister about this? Is the minister seeking information or seeking processes to have that money paid back or not?

[Arianne Reza]

Restitution is something that we look at across various elements of ArriveCAN and other cases like we just described. We have had conversations. I have advised the minister that the issue is with legal, looking at the various approaches that can be taken and with the client whose budget it is.

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

To follow up on that, the House prescribed a timeline. Do you have a timeline? Clearly it's not the House's timeline because the House's timeline has elapsed.

Do you have a timeline on this from legal?

[Arianne Reza]

I'm going to ask Catherine, who's closer to the....

[Catherine Poulin]

Thank you for the question.

When we find a substantiated file that clearly demonstrates overbilling by specific consultants, we can carry out—

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

I'm sorry, I don't need an explanation of the process. I want to know what is being done to get this money back in accordance with the House order. The time has elapsed on it. What is your timeline for reporting back, asking for the money and advising the House on next steps?

[Arianne Reza]

We'll have to come back with a written response in terms of the Department of Justice and the CBSA, in terms of next steps for restitution for ArriveCAN.

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

There's not much more to be said except that I don't think that's acceptable. We'll wait for your written response, but the House passed the motion, prescribed a timeline asking for the money to asked for, and we're well past that timeline. We're hearing that essentially it's in the process of being studied. That's clearly not good enough, but we'll look for a response. Fundamentally, this is on the government for setting those expectations.

You were a bit ambiguous in your response on the particular aspect of favouritism in the McKinsey report from the ombudsman. The ombudsman found that favouritism was shown towards McKinsey. You seemed to say that you agreed with the findings of the report yet also you seemed not to be clear on whether you agree with the finding of favouritism.

Did the government show favouritism toward McKinsey?

[Arianne Reza]

In terms of PSPC's position on findings and recommendations, we agreed with the procurement ombudsman's report. On his conclusions, and he has come here and spoken about the fact that he is making negative inferences, PSPC is a little bit more nuanced.

We have found no examples of favouritism. These cases PSPC is not involved in. These in 110...the four factors in terms of favouritism are based on many contracts of small value. As a contract authority, as a common service provider, we haven't issued that many to be able to make the assessment that this is an accurate bias.

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

In terms of the evidence, he provides a report in which he demonstrates clearly the reasons why he came to the conclusion that favouritism was involved. Based on your reading of the report, do you agree that the government showed favouritism for McKinsey? Is there a recognition of that finding or are you skeptical about that finding?