Government Operations Committee on May 1st, 2024

[Arianne Reza]

In terms of the conclusion, PSPC has also noted in a document that it doesn't have the same assumptions as the procurement ombudsman. I don't know if you'd like to add anything—

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

Can we just get a yea or a nay, though? Do you accept the conclusion that favouritism was shown for McKinsey or do you not? Either position would be a fair answer, but I'd like to know, really, from the deputy minister, do you accept the findings or do you not accept the findings?

[Arianne Reza]

I do not accept the findings, although PSPC is not impacted in it, so it's a little bit difficult—

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

I'm sorry, did you say you do not or you do?

[Arianne Reza]

I do not accept that there is favouritism for McKinsey in the current system based on our assessment as a common service provider.

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

Okay, so you're not accepting the conclusions of the report in this sense.

[Dominic Laporte]

If you would allow me to jump in—

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

No, I'm sorry, I've got one more question.

[The Chair, Conservative, Kelly McCauley]

You have about 10 seconds, so make it very brief and a very brief answer.

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

Should McKinsey, because of their broader conduct, be on a blacklist? Why were they being contracted at all in light of all the things we know about their behaviour, conflicts of interest around the world, human rights abuses, etc.?

[The Chair, Conservative, Kelly McCauley]

I'm afraid you should have left it at a yes or no. I don't think we're going to have time for a fulsome answer. Perhaps you can get back to us in writing, though.

Mr. Kusmierczyk, please go ahead for five minutes.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you, Chair.

Thank you so much for being here with us today and providing us with some insights and shedding some light on the world of government procurement. We certainly have learned a lot over the last number of weeks. Again, the scale of procurement that takes place by the federal government—I think it's 300,000 contracts annually—is a massive amount of work.

Ms. Reza, my colleague used the word “collusion”, and I know that you took exception to that word. You were just about to, I think, speak about why you took exception to that word. I think you ran out of time, if I'm not mistaken.

I wanted to give you the floor to speak about favouritism and collusion in procurement again.

[Arianne Reza]

Thank you very much for allowing a follow-up. We did want to come back and talk about what we're doing on measures of collusion to ensure that the procurement system has integrity.

I think it's worthwhile to circle back to the issue that we just went with in terms of the findings and recommendations as they relate to favouritism. At PSPC, we look at the procurement ombudsman's report, how we can best apply it, put in best practices and adjust.

In terms of this particular element, it's difficult for us because we do hundreds of thousands of contracts. We need to be able to assess the broader bidder pool—for example, how many times McKinsey competed—to be able to assess whether there was favouritism. Is this structured on these very modest contracts? We have to look at the contract value to see whether or not it exceeded what they competed for when they were sole-sourced. There are a lot of different assumptions that we need to unpack and work with the procurement ombudsman on.

On favouritism, while PSPC as a common service provider was not implicated in the findings—there's one small contract—I do want to be able to give a thoughtful response and make sure that we're not offside, because there are so many recommendations and best practices here.

Now, I'll turn to my colleague Mr. Laporte.

[Dominic Laporte]

Thank you.

From my standpoint, you need to look at whether there is positive, concrete evidence that would demonstrate that PSPC did favour McKinsey over another supplier. I know the ombud drew some negative inferences for the lack of information. I think when we drill down on PSPC contracts, we cannot accept the fact that there is evidence that shows that there was a preferential treatment that was afforded to McKinsey. There's no such evidence on file.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

One of the things that we heard today is that the procurement officers work together. There's also an iterative, back-and-forth process at times between the procurement officers and the vendors. Can you just explain why it is appropriate to have that exchange back and forth between the procurement officers and the vendors?

[Arianne Reza]

I think the procurement ombudsman also spoke about this in terms of having industry participation. We have to make sure that we're shaping a solicitation that is not too restrictive and is encouraging open competition. We need to have the dialogue with the supplier base to see if it's doable and if the timelines are going to be met. There is a certain level of back-and-forth as the strategy is being shaped. Once we move into a solicitation phase, it becomes a much more gated, transparent element of the process, where that continuum has changed, and it's a more formal response.

Mollie.

[Mollie Royds]

What I would add here is that when looking at the types of contracting that were done in the instance of McKinsey, you have the full range: we've used supply arrangements and standing offers, as well as competitive processes and sole-source. In each of those instances, there would be a different type of engagement with the industry members that would have been competing.

For instance, for the large-value contracts, we would have had an open process. We would have had a fairness monitor and others who would be involved to ensure that those were open, fair and transparent. In certain other circumstances, such as a low dollar-value contract, it's completely appropriate for us to deal directly with the supplier to negotiate the best possible price and work through that together. It's a negotiation process; it really is on a spectrum.

There are very clear guidelines and frameworks that are used for that type of industry engagement. As the deputy minister has indicated, we are encouraged to engage with our supplier community. It's something that we take very seriously to ensure that it's done professionally.

That's something we also work on with our client departments, which are the technical authorities. They're the ones responsible for defining the actual requirements of an individual contract. It's very important that they also be involved in this and respect the integrity of the process. That's something that our procurement officers work very hard to do, as well.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

We are done with our witnesses.

Ms. Reza, Ms. Royds, Mr. Laporte and Ms. Poulin, thank you for joining us again. You're welcome to stay and listen to the riveting discussion on our budget if you wish. Otherwise, you are dismissed.

Colleagues, we're just going to go and—

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Mr. Chair, I have something I'd like to talk about.

[The Chair, Conservative, Kelly McCauley]

Yes, let me, please, get to my stuff, sir.

Colleagues, we're just going to do the budgets. They have been distributed to everyone. Again, these are the upper limits. There's $24,750 for Canada Post rural and remote communities.

Are we all in agreement?

[Some hon. members]

Agreed.

[The Chair, Conservative, Kelly McCauley]

Wonderful. It's the same amount for a red tape reduction modernization study.

Are we all in agreement?

[Some hon. members]

Agreed.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

I'll get to you, Mr. Perkins, but I have two items quickly. Mr. Firth, in our committee of the whole when he was called to the bar, was asked several questions that he promised to respond to us on. He has responded, and that is getting translated right now and will be sent out to members; however, it is the members' responsibility to check whether the answers are satisfactory or if the questions were answered.

For the sake of argument, if Mr. Louis asked for something and there is no response, it's up to him to advise the committee of that. Probably by the end of the week or early next week, when you have it, keep an eye on it. Again, it's your responsibility.

On Canada Post and the main estimates, we're running into some headwinds from the ministers. We were going to have the president of Canada Post here on May 29. Lo and behold, TBS Minister Anand and Minister Duclos are both insisting that they're only available on that date as well, so we'd be looking at 16 witnesses; and with our new set-up they would be out in the hallway.

We're trying to arrange different times, perhaps a four-hour meeting on the Wednesday so we can accommodate everyone and we don't have 16 people in here for an hour. I will let everyone know hopefully by the end of this week or early next week if we have another solution. We might have to find another time for the president of Canada Post. If everyone will allow me flexibility with the president, we will do so, but it's certainly not our intention to have 16 witnesses in here for two hours on the main estimates and Canada Post rural.

Was there something, Mr. Bachrach?

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

First of all, Mr. Chair, thanks for all the legwork you're doing on this. It's frustrating.

I wonder, for the estimates, if we could name the specific individuals we want as witnesses. It seems like a funny process where we say we want the minister, and then 20 people show up. It almost seems like an intentional strategy. I'm not sure what the strategy is, but it seems like a way to muddy the waters and dilute what is really about accountability.