Thank you so much, Mr. Chair.
Good afternoon to all committee members. Thank you for inviting me today as you conduct this important study.
Let me begin by acknowledging that we are gathered on the unceded territory of the Algonquin and Anishinabe peoples.
With me today are my deputy minister, Paul Thompson, and the associate assistant deputy minister of procurement, Mollie Royds.
I'd like to begin by saying that I believe the growth in the use of consultants in the public service is an important question. That's why the Prime Minister has asked me and Minister Fortier to review the government's practices. I also believe that these important questions can and should be asked and answered with the thoughtfulness and respect that Canadians deserve.
As this committee undertakes its work, my colleagueTreasury Board president Mona Fortier and I are also undertaking a full review of all Government of Canada purchases from McKinsey & Company.
Under Minister Fortier's direction, the Treasury Board Secretariat will require federal departments to review their contracts with McKinsey through their internal audit teams to assess if contracts complied with Treasury Board policies and departmental internal control frameworks.
On the PSPC side, my officials have already begun a preliminary assessment of the 24 contracts that fall under our department as the central purchaser. These contracts will also be more formally reviewed by the departmental internal audit team. In addition, to ensure that there is a more independent review, I have written to the procurement ombudsman to ask him to review the procurement processes associated with the awarding of contracts to McKinsey & Company by all federal departments and agencies.
I know this committee has also adopted a motion that calls on the Auditor General to conduct a performance and value for money audit.
While we have found no indication to date that any rules or policies were broken, I also know that there is always room for improvement. I welcome these reviews, which may help determine what further adjustments or refinements should be undertaken to continue to strengthen the fairness, openness and transparency of federal procurement practices.
Of the 24 contracts awarded to McKinsey by PSPC since 2011, three of them, worth more than 50% of the total value, were awarded through open, fair and transparent competition.
With the exception of one low dollar value contract, the remainder were awarded as call-ups through what is referred to as a “National Master Standing Offer”.
I recognize that there may be some confusion related to the terms standing offer and supply arrangements, which I would like to clear up.
Standing offers and supply arrangements are not contracts and do not guarantee a company future business with the government. They are administrative tools that streamline procurement for departments and agencies, and reduce red tape and costs for governments and businesses. A company's status on a standing offer or supply arrangement list is reviewed regularly and can be revoked at any time if it no longer qualifies.
In addition, standing offers have expiry dates, as these are instruments whereby goods or services are provided at pre-established prices.
Supply arrangements, on the other hand, do not have expiry dates. That is because supply arrangements are established to allow for regular refreshes of qualified suppliers and to allow competition among pre-qualified suppliers for each contract.
For administrative and technological reasons, an arbitrary end-date—far into the future—is used when reporting supply arrangements on our website.
To be clear, there are no 80-year contracts with McKinsey. That said, I have asked my officials to address the way in which these standing offers are reported in order to avoid future confusion.
I look forward to working with you and I am pleased to answer your questions.
Thank you, Mr. Chair.
