Government Operations Committee on Dec. 10th, 2024

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Yes. I noted that some information I had here actually stated that there were 35 plus 12. I understand that must have been the eight who are missing or had left their positions.

You also talked a little bit about the complexity of the cases having changed in the past few years. Could you perhaps explain why you feel that the caseload may be increasing? Is there a trend you're seeing that may continue? With the work that you're doing now and the recommendations that are put forward, will we be able to reduce the risk or the complaints?

[Alexander Jeglic]

The complexity continues to increase, partly also for good reasons. In the work of this committee, as an example, you pass motions requesting our office to look into specific subjects. As a result, we take those motions very seriously. Our legislation requires us to establish reasonable grounds prior to launching a review, but we do use the motion from the committee as an initial substantiation of reasonable grounds. Then we have to validate that substantiation by doing background research.

There are cases, again, that have been brought to us by outside sources, which hadn't traditionally been the case, such as members of Parliament, parliamentary committees or the minister herself at the time. Those were new areas where we were brought procurement-related issues and asked to do investigations and deliver the results before a parliamentary committee for scrutiny.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Could you expand on the minister bringing something forward, and maybe provide an example of where that was born?

[Alexander Jeglic]

The McKinsey review was actually a specific request from the minister.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

You talked a little bit about the one-time funding allocations and that it's not sufficient. You know that this work is going to continue.

I'm not sure if I heard when you were talking about it whether there is an opportunity to put in enough measures, based on the recommendations.

I know you have the report coming at the end of the month. Will we be able to at some point to have some measures in there so that eventually we will see further reductions in some of the complaints? Do you have an idea of how you think you can get that done?

[Alexander Jeglic]

I'll answer it as honestly as possible. I think we're nowhere near that point. I think we will continue to see an increase in the number of complaints, primarily because I think our office still does not have a well-known standing within the procurement community.

The more people learn about our office's services, the more people use our services. In many ways, that's a good thing, and we are seeing positive outcomes. I don't want the message from me to be doom and gloom only.

There are certainly aspects of—

[The Chair, Conservative, Kelly McCauley]

I'm sorry. That is our time. We're trying to get you out of here at a decent hour.

Go ahead, Ms. Vignola, please, for six minutes.

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

Thank you, Mr. Chair.

Mr. Jeglic, I see that in the 2024‑25 budget, the operating budget for the procurement ombudsman is $4,480,464. I don't see any increase in the supplementary estimates (A) or the supplementary estimates (B). That budget has to be enough to keep your entire team working and meet the growing demand.

Have you had the same budget for 15 years?

[Alexander Jeglic]

Yes, we have that, plus the one-time funding. We do receive one-time funding for the ad hoc review.

We received $250,000 for McKinsey, $250,000 for ArriveCAN and $300,000 for bait and switch.

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

We, too, have received a lot of documents about McKinsey, ArriveCAN and others. I haven't finished reviewing them, because they are tens of thousands of pages long. In my case, it's just me looking at all of them. You have a team. However, I know that, even when you have a team, it takes an enormous amount of time. It's one thing to read the documents, but it's another to analyze them, compare them, determine which documents are duplicates and retain the ones that will be used for analysis.

You say that your office received $250,000 for document review in the case of McKinsey, which amounts to about $1 or $1.50 per page, at most. Is that enough to pay your team members to do the work in the allotted time?

[Alexander Jeglic]

This gives me the opportunity to speak about the team we have.

We have an excellent team, and I am incredibly proud of the work we do. I think that if I didn't have such a strong team, I wouldn't be able to answer the question as confidently, but we were able to do the review within the allocated budget.

One thing we're trying to do very diligently is ensure that we're spending taxpayer dollars as carefully as possible. Whenever we receive monies, we don't spend in ways that are unnecessary.

That being said, certainly we would benefit from a larger review team, because there is an inordinate amount of pressure on individuals. Again, what we could see happen is that if one of those individuals should leave, it would create an enormous pressure on the organization, because there aren't many resources who are capable of doing these reviews. Therefore, I'll answer your question with a “yes”, but with some caveats.

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

I see that the same operating budget, $4,480,464, has been allocated to you for 15 years. However, other budgets have doubled over the same period.

Do you need your office's budget to be doubled so that you can operate as you need to and meet the demand?

[Alexander Jeglic]

Over the three-year term, that is essentially what we're asking for, but it has to be staged. As a small organization, we can't dedicate all of our time to human resource actions either, so doubling the organization takes time, and we have to do it strategically.

I think we've asked for a $1-million increase for the next financial year, and then $3.4 million and then $4.7 million, which would essentially be a doubling of our annual budget in three years.

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

If I understand correctly, you want the budget that you're asking for to remain and become the budget base.

[Alexander Jeglic]

That's correct, yes.

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

Okay, that's great.

People may not be aware of how important the role of the procurement ombudsman is in ensuring that procedures are followed. Can you give us a few more details so that the people watching us understand the importance of your role as ombudsman? In a way, you are a guardrail against fraud and non-compliance with procedures, among other duties.

[Alexander Jeglic]

Thank you for your confidence in my explaining of the importance of the role of the federal ombud.

Again, there's only one. I have the authority to do three main things.

Number one is that we do systemic reviews with recommendations across over 90 departments and agencies to improve procurement practices where we see reasonable grounds.

Two, we review complaints from Canadian suppliers about the awarding or administration of federal contracts. Again, that makes us different from the Canadian International Trade Tribunal, which can look only at complaints associated with awards covered by free trade agreements.

Finally, we offer alternative dispute resolution services for Canadian suppliers that successfully win federal government contracts and experience issues. This is something that has been historically underutilized. Here we're seeing more and more acceptances from departments. That's where I see optimism. We are seeing departments with the goal of resolving these disputes successfully. That's happening, and it's an efficiency that saves taxpayer dollars, because it's not going to litigation. It's not costing millions of dollars. Our mediation services typically only take one day. If you have the right people in the room, absolutely, you get resolution and results.

We also see the importance of professionalizing the community. That's why we share knowledge across the community broadly with our knowledge-deepening and knowledge-sharing pieces. We've committed significant energy to diversifying the federal supply chain. I've said a number of times that one of the shocking statistics we've come up with is this: Over the course of my tenure, we have analyzed the data and seen that in many instances of competitive procurements, only 32% result in more than one competitive bid. You have one bidder. Part of my role is making that system work better. You're not benefiting from diverse solutions, or from pricing and competition. That's inefficient.

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

Thank you.

[The Chair, Conservative, Kelly McCauley]

Ms. Blaney is next.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Thank you, Chair.

Thank you very much for being here with us today.

I want to start off with a statement about how much I appreciate what you're sharing. You're making how this works so clear and accessible. That is not always the case.

I want to know a little more about alternative dispute resolution, which you talked about at the end of the past question. Can you give us an example of what you're actually dealing with?

You said that sometimes it can be as quick as one day. Is there a common issue that can be resolved fairly quickly—one you could point out for the committee?

[Alexander Jeglic]

Oftentimes, because they're in the administration phase, these disputes revolve around payment or nonpayment for performance, goods or services. Sometimes the question is about conformity of goods, about whether the goods provided meet the specifications.

I just want to say about our ADR services that the dollar value can be $5,000 or it can be $500 million. It's an important distinction. I know that sometimes people equate the services we provide with low-value contracts. That's not the case with our ADR services.

I can give you an example. In one of the cases we saw, there was a communication breakdown over a large $50-million-plus construction contract. These parties had a long-term relationship but stopped communicating with one another. There was needed communication. Our intervention in that situation was simply to re-establish the communication that was legally required by the contract. The parties failed to perform certain obligations because they were so upset with each other. They both lived in a relatively small community and would see each other regularly. You can imagine how this friction point was causing them significant heartache, both professionally and, I imagine, personally. Our intervention was to re-establish the communication. Though there was no monetary component in that mediation, it put them on a solid footing to continue their relationship.

[Rachel Blaney, NDP, North Island—Powell River, BC]

I assume that if this had continued, it would have impacted the financial process, for sure.

[Alexander Jeglic]

It would have, absolutely.

[Rachel Blaney, NDP, North Island—Powell River, BC]

I know we've been talking a lot about indigenous procurement. I'm wondering how these services that you have—I know you have five pillars—relate to the indigenous community, and what kind of work you do there.

Today we had testimony earlier that felt like the only way indigenous people can get clarity or justice is through the judicial process. How could you be helpful in this? What are you doing currently?

[Alexander Jeglic]

That is a point of contention within our office. I'll try to break it down by service, but for indigenous suppliers that have been awarded a contract pursuant to the PSIB, if there's another indigenous supplier that wishes to complain, they cannot complain to our office, because we derive our mandate as a result of the CFTA, the Canadian Free Trade Agreement. Because the PSIB is an exception to the application of the CFTA, we do not have jurisdiction to review complaints from indigenous suppliers for contracts awarded pursuant to the PSIB.

That's also true for the Canadian International Trade Tribunal. Both we and the trade tribunal have flagged this issue.

We also understand, both from testimony and from our own consultations, that there is a desire to have an indigenous-led solution and dispute resolution mechanism, and we also agree with that. However, we think that all suppliers should be put on the same footing by making them eligible to participate in our reviews of complaints.

We can, however, offer dispute resolution services to indigenous suppliers. If an indigenous supplier has an issue under a federal contract, they can in fact seek our ADR services. That is a distinction.

On the first one, I've three times highlighted as a call to action in our annual report that this change is necessary. I think it needs to happen.