Evidence of meeting #159 for Government Operations and Estimates in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was audits.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Garry Hartle  Senior Compliance Auditor, As an Individual
Alexander Jeglic  Procurement Ombud, Office of the Procurement Ombud

Rachel Blaney NDP North Island—Powell River, BC

Just help me understand. These organizations can't go to you on these particular issues. What's the alternative for them? Do they have an alternative at this point?

12:40 p.m.

Procurement Ombud, Office of the Procurement Ombud

Alexander Jeglic

To give you a bit of historic context, when the PSIB was originally known as PSAB, there was documentation that seemed to indicate that a dispute resolution mechanism would be stood up at some point. However, until such time, the departments were to determine their own dispute resolution mechanisms within their respective departments. A dispute resolution mechanism was never stood up, and we were prevented from having jurisdiction based on how our mandate is structured.

As I said, it's created a bit of a difficulty when an indigenous supplier comes to us with a complaint. We do have statistics. From 2019 to date, we had 40 indigenous suppliers come to us; 11 were specific to PSIB and four of them filed written complaints that we could not look into because we lacked jurisdiction.

Rachel Blaney NDP North Island—Powell River, BC

Is there no alternative?

12:40 p.m.

Procurement Ombud, Office of the Procurement Ombud

Alexander Jeglic

The alternative, I believe, as highlighted in the previous testimony, is the court system.

Rachel Blaney NDP North Island—Powell River, BC

Thank you.

12:40 p.m.

Conservative

The Chair Conservative Kelly McCauley

Thanks very much.

Mrs. Kusie, go ahead, please.

12:40 p.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

Thank you very much, Mr. Chair.

Thank you very much, Mr. Jeglic, for returning to the government operations committee.

The President of the Treasury Board came to committee last week and claimed that the new Treasury Board manager's guide for procurement was fixing many problems with the federal procurement process.

In your opening statement, you had five recommendations. Is there any interest from the President of the Treasury Board or the minister of procurement in these five recommendations? Have they indicated to you that they are reviewing these recommendations and taking steps to implement them?

12:45 p.m.

Procurement Ombud, Office of the Procurement Ombud

Alexander Jeglic

To be fair, we've been fully transparent with two of the five. They're in our annual report, and we've highlighted them. I've spoken to the Minister of Public Services and Procurement Canada about those foundational changes.

The other three I've highlighted in my testimony today, but we have not finalized our work, so I can't say those are the definitive five that we will put forward at the end of the work. Those were the five we went out to the experts with.

We will engage in consultations upon conclusion of our work. I can't speak to the likelihood of implementation by ministers.

12:45 p.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

You mentioned in your opening statement the necessity to stop having band-aid solutions and have real change.

Are you sensing an appetite from either the President of the Treasury Board or the minister of procurement for real change and to bring an end to these band-aid solutions?

12:45 p.m.

Procurement Ombud, Office of the Procurement Ombud

Alexander Jeglic

In some ways yes, and in some ways no.

For those who have worked within the system—and I apologize because I've said this at this committee before—if you look back at historic reviews and audits going back decades, you'll see that you could change the date on them and they would still be relevant. That tells me that the existing framework and the recommendations that were made throughout the following two decades have not been sufficient to rectify long-standing issues.

I think we're at the point now that we need to recognize that broader solutions are necessary, with outside-of-the-box thinking. That is why we've taken the approach of saying that a new car is needed. This car is asked to do many things, but primarily it's to bring us from point A to point B, and I'm not sure it's doing that anymore.

Given the transactional volume per year—$37 billion—we need a vehicle that's going to work. It almost doesn't matter whom you talk to within the federal procurement system; if they're being honest with you, they will tell you that it's not working.

12:45 p.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

Would you say that this government has taken significant steps to reform the procurement process, or have they simply written new guides and directives with additional rules or a simplified version of the existing rules?

12:45 p.m.

Procurement Ombud, Office of the Procurement Ombud

Alexander Jeglic

I think, to be honest, that it's all of the above. They have taken steps to simplify the process. They have taken steps, particularly during COVID.

There was a unique opportunity to work closely with provincial and municipal entities to engage in bulk buying. That created some economic synergies across procurement that I had hoped would continue beyond the COVID dynamic. There's still work going on in that area, and documentation is made available to provincial colleagues so that they can use federal templates. I know that there has been significant work on simplification.

However, again, the work that's been done is insufficient. It's not to comment on the intention, but if you pick up a solicitation document.... I'm a lawyer and I've been in this space for over 20 years, and I find it incredibly cumbersome and difficult sometimes to understand what I'm being asked to look at or do, and I'm someone who should know. Imagine if you were a small or medium-sized business.

The one thing I will say is that the inclusion of Procurement Assistance Canada is a significant step in the right direction. They essentially provide the opportunity to work one on one with small and medium-sized suppliers and help guide them through the process. That, in and of itself, is not simplification; that's an acknowledgement that the system is too complex and that you need this additional measure to guide them. The answer is to fix the system.

12:45 p.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

I think that the term “COVID environment” is a very gracious depiction of panic and reaction.

Thank you for your time here, Mr. Jeglic.

Thank you, Chair.

12:50 p.m.

Conservative

Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB

On a point of order, Chair, I will just flag that a revised version of the motion has been sent by email and put on notice. I wanted to make sure that people were aware.

12:50 p.m.

Conservative

The Chair Conservative Kelly McCauley

That's perfect. Thanks very much.

Mr. Jowhari, go ahead, please.

Majid Jowhari Liberal Richmond Hill, ON

Thank you, Mr. Chair.

Once again, welcome, Mr. Jeglic. It's good to have you in our committee.

I had an opportunity to read the report. In your recent annual report, you referred to the need for a change to your mandate. I think, in response to Madame Block, probably that's the area you were tangentially passing on.

Can you explain what changes to the mandate of your office are being considered right now?

12:50 p.m.

Procurement Ombud, Office of the Procurement Ombud

Alexander Jeglic

The changes that we've requested are long-standing and go back three or four years. Those were the regulatory changes. The way I answered the question was also with the foundational changes that we've seen necessary that are much more broad than the ones that I'll describe to you.

One of them gives us the authority to review complaints from indigenous suppliers on contracts awarded pursuant to the PSIB.

The second is the right to compel documentation. That has been something that this committee has kindly offered to help with. If we're seeing issues of documentation not being provided by departments or agencies pursuant to our reviews, we could engage this committee. The marker I'll put down is that I still have more rights as a Canadian citizen making an access to information request than I do as the procurement ombudsman requesting documentation.

The final one is changing the opportunity to award damages so that I can make a recommendation for lost profit or a recommendation for bid costs associated with complaints. Currently that's capped at 10%. We've heard that this is an artificial restriction on some people bringing forward complaints because, again, these are busy businesses. If they don't see that it's worth their while financially to bring a complaint forward when there is merit, then they're not going to bring the complaint. We're seeking that ceiling to be increased to 25% from the existing 10%.

That being said, documentation has to be provided in order to validate it, so it's not just a simple jump from 10% to 25%. It would be upon validation of actual lost profits or upon validation of actual bid costs.

Majid Jowhari Liberal Richmond Hill, ON

That's great. Those are points that we could use in our study.

What impact does this new mandate have on the budget and on your FTE equivalents?

12:50 p.m.

Procurement Ombud, Office of the Procurement Ombud

Alexander Jeglic

Making those changes would obviously increase complaints, and it would also increase the eligibility of additional complainants on the indigenous side.

On compelling documentation, that should have no impact on the FTEs or costing; it's just access to documentation.

Majid Jowhari Liberal Richmond Hill, ON

Thank you.

My next question has to do with independence. I'm referring to section 11 of your report. On page 33, under “Parliamentary Authority”, it reads:

The funding approved by the Treasury Board for the operation of the Office of the Procurement Ombud is part of Public Works and Government Services Canada’s (PWGSC) appropriation, and consequently, the Office is subject to the legislative, regulatory and policy frameworks that govern PWGSC. Nonetheless, implicit in the nature and purpose of OPO is the need for it to fulfill its mandate in an independent fashion, and be seen to do so, by maintaining an arm’s-length relationship with PWGSC and all other federal departments.

What is the issue here?

12:50 p.m.

Procurement Ombud, Office of the Procurement Ombud

Alexander Jeglic

From an independence standpoint, if you're talking about.... I just want to make sure I'm answering your question properly.

When it comes to one-time funding, what is my concern around independence?

There's something called the Venice principles. Those are the governing principles for the operation of ombuds' offices. One of the principles, number 21, speaks to how “Sufficient and independent budgetary resources shall be secured”.

Currently, being independent is a challenge of resources. If I'm asked to do a review that I don't currently have the budget for, I need to go to the minister and ask for those financial resources. It gives the minister a decision point that I would argue impedes our independence. If he should determine that no resources will be provided, but we have determined that reasonable grounds exist to launch the review, it's a bit of an awkward situation.

Now, the statute indicates that we must launch a review, but I do not have the resources to do so. It puts the minister in an awkward position as well.

Majid Jowhari Liberal Richmond Hill, ON

Thank you.

I have five seconds, which I yield back to the chair. Thank you.

12:55 p.m.

Conservative

The Chair Conservative Kelly McCauley

Thanks very much for those five seconds.

Mrs. Vignola has the floor for two and a half minutes, please.

Julie Vignola Bloc Beauport—Limoilou, QC

Thank you, Mr. Chair.

Mr. Jeglic, we've talked a lot about the increase in requests. We also talked a little bit about indigenous businesses and their needs. Everything you are saying is helpful, but hearing you talk about the need to fix the system delights me the most. As you say, the procedure is not working. When you have to have someone meeting with a contractor to explain the procedure and support them in their process, something is wrong.

What would you suggest to streamline the process while keeping any gaps out and preventing fraud so that nothing falls through the cracks, as they say?

12:55 p.m.

Procurement Ombud, Office of the Procurement Ombud

Alexander Jeglic

I'll compliment the committee. I think the accountability the committee is bringing to the supplier community is incredibly important. The work I do looks more at the practices of departments and less at the practices of suppliers. I find the work the committee is doing to hold suppliers accountable for inappropriate practices is particularly helpful. I guarantee you it will have positive outcomes in the procurement system moving forward.

In terms of what I can suggest as foundational changes—I'll never stop talking about this until it happens—there's the government-wide vendor performance management framework. Its implications are so significant. It's such a basic principle: The Government of Canada should work only with suppliers that are performing well. It should not work with poorly performing suppliers. Everyone would agree with that principle. We have to stand up not just a department-wide system, but a federal system across all departments and agencies. Public Services and Procurement Canada, to compliment the department, is currently running a pilot within the department, but that's still at the departmental level.

One other thing I'll highlight is that we would like to perform ADR work for appeals pursuant to the vendor performance management framework, so we need to stand up that capability, but again, where are we going to find those resources, both financial and human, in order to do that? We believe we're the right entity to do it, but we need the resources. Those will need to be stood up in the next year or two. Time is of the essence.

I think we'll also—