Thank you.
The procurement strategy for indigenous business has no governing act. It is not a program; rather, it is a strategy whereby government contracts for goods and services destined for indigenous populations are awarded to indigenous businesses.
Government policy mandated that any set-aside contract for an indigenous business whose value was $2 million or greater was to have a pre-award audit. Contracts of less than that amount could be randomly audited at the discretion of the department.
Large contracts—$2 million or greater—contain a clause that allows the government to perform a post-award audit. This audit is primarily to ensure the business is compliant with the criterion of indigenous content. The criterion states that the indigenous business and/or indigenous subcontractors must perform at least 33% of the work that is required to fulfill the contract.
Today I appear before the committee to answer questions on a particularly egregious file, “Pedabun 35 Nursing Inc., Canadian Health Care Agency Ltd, in joint venture”, hereafter referred to as “the joint venture”.
The joint venture was awarded an eight-year, $160-million set-aside contract to deliver nursing direct services to remote indigenous communities. My audit determined that the joint venture was a shell for the non-indigenous Canadian Health Care Agency. This business took advantage of the naïveté of the owner of Pedabun 35 Nursing to win and execute a large set-aside contract. In my audit, I concluded that the joint venture did not exist for any other function except to enable CHCA to win and execute the PSIB mandatory set-aside contract.
I will also answer your questions on contractual joint ventures as to why they are problematic.
Finally, I would like to discuss with the committee mandatory audits.
When the policy was introduced, the mandatory audits were to be performed by Consulting & Auditing Canada. This branch of the government provided the required third party independent auditors. When it was disbanded, the services were contracted out. In November 2016, Altis Professional Services was under contract to provide the department with third party independent auditors for PSIB. I contracted my services to Altis.
The Altis contract ended in 2021. ISC decided that the new contract should be a set-aside, as required when serving the indigenous community.
Roundpoint Consulting is an Akwesasne business registered in the IBD. Mr. Roundpoint asked me to join him in submitting a bid proposal for auditing service in response to solicitation number 1000226949. Roundpoint Consulting was awarded a two-year set-aside contract. The contract had a typical renewal clause. This clause stated that the government, at its pleasure, could extend the existing contract three times, for one year each time.
In July 2023, ISC decided to ignore the mandatory auditing requirements and terminated Roundpoint's consulting contract. The business was denied any recovery costs incurred to deliver the services required. Although this is arbitrary and violates the government policy, Roundpoint unfortunately did not have the resources to pursue legal recourse. In my opinion, Roundpoint Consulting would have been successful had it sought judicial review.
I ask the committee to address two critical issues: one, the absence of external audits will mean there's a lack of oversight to detect and deter public corruption; and, two, the travesty in terminating a set-aside contract for an Akwesasne business.
Roundpoint Consulting is a small, dynamic business recognized by its community as a model in the era of first nations self-government. Mr. Roundpoint has a growing family. He is active and a valuable member of the Mohawks of Akwesasne. Mr. Roundpoint had plans to hire and train indigenous auditors while I was available to mentor these young people.
