Government Operations Committee on Nov. 9th, 2023

[Majid Jowhari, Liberal, Richmond Hill, ON]

The reason I'm asking and going down that path is that we've heard—now I'm talking about Botler AI—that in Botler's mind, it was doing a pilot and a proof of concept. In the mind of CBSA, it was doing a feasibility study. Those two are completely different things.

When your department was evaluating that contract, is it your understanding that the primary contractor deliverable was a pilot, or was it a proof of concept?

[Michael Mills]

Maybe I'll turn to my colleagues.

My understanding with that piece of work is that the key focus was the task authorization and whether it was aligned with Coradix's or Dalian's requirement to provide IT services.

Were the IT services on the task authorization aligned with the scope of IT services? I believe it was more of a study or a feasibility piece on the TA, as opposed to identifying Botler or identifying specifically piloting the implementation of AI technologies.

[Majid Jowhari, Liberal, Richmond Hill, ON]

You're saying it was a feasibility study rather than piloting.

Ms. Chan, can you add anything to that?

[Anita Chan]

I just want to mention that the original contracting authority that was responsible when that TA was issued was not us. What we have is on file. Basically for the scope of the contract, whenever we have a TA that comes to us for signing, we verify to make sure the scope of the TA aligns with the scope of the contract. This particular contract was for general informatics professional services in relation to feasibility and new technology aligning with CBSA's business and security systems.

AI was part of that—

[The Chair, Conservative, Kelly McCauley]

That's our time I'm afraid, Ms. Chan.

Go ahead, Mr. Brock, please.

[Larry Brock, Conservative, Brantford—Brant, ON]

Thank you, Chair.

I have a couple of housekeeping matters.

To you, Mr. Mills, you referenced that a number of people within the PSPC received bonuses. Would you please table all the names of all employees at PSPC who received bonuses during the ArriveCAN creation implementation, during that period of time, please? Would you do that?

[Michael Mills]

Mr. Chair, I'll take that back to see what we can do in terms of presenting information about the compensation of public servants. I believe some of it's public, but I will take it back in terms of what—

[Larry Brock, Conservative, Brantford—Brant, ON]

I'm specifically asking for the bonuses.

[Michael Mills]

The bonuses are part of the compensation package of public servants under our compensation arrangements. Yes, I'll take that back.

[Larry Brock, Conservative, Brantford—Brant, ON]

You'll do that then, sir?

[Michael Mills]

I will endeavour to take it back. I'm not sure from a privacy perspective if I can make—

[Larry Brock, Conservative, Brantford—Brant, ON]

They're public servants. There's no privacy issue here.

Would you further table the NDAs that should have been signed by the Botler company, the resources for TA 2021002043?

[Michael Mills]

Mr. Chair, I'll have to take that under advisement to see if we have them.

[Larry Brock, Conservative, Brantford—Brant, ON]

All right. I'll take that for now.

Ms. Chan, going back to my line of questioning about all the consultations you had with the DOJ, during any of that period of time, did any memo, did any direction, did any telephone call or any email go to the actual minister, who at that point was Helena Jaczek? Did anything go to Minister Jaczek during that period of time?

[Anita Chan]

I do not have visibility on that, so not to my knowledge.

[Larry Brock, Conservative, Brantford—Brant, ON]

My last line of questions can be answered by anybody.

The Globe and Mail on November 7 reported that on November 3 President Erin O'Gorman of the CBSA “asked PSPC, and they agreed, to temporarily suspend all CBSA contracts with GCStrategies, CORADIX Technology Consulting Ltd., and DALIAN Enterprises Inc.”

The suspension could last up to 180 days.

The article continued, “Although these allegations and investigations are not about ArriveCAN”, she said, “'I recognize the ongoing audits and investigations may yield findings relevant to that procurement.'”

All of Canada found out on October 4, 2023, through another Globe and Mail story that the RCMP was investigating GC Strategies as the sole-source contract with the CBSA and Botler based on the evidence heard regarding the offences of forgery and fraud that were under consideration, yet 20 days later, on October 24, PSPC invited GC Strategies to tender on a temporary help service request.

Why? You knew they were under RCMP investigation and you invited them to tender yet again. This is for—get this—computer support on a temporary basis. You were asking a two-person company that works out of their basement, that doesn't provide any service, that was under criminal investigation, to tender on this. Why?

[Michael Mills]

Mr. Chair, we currently have a number of supply arrangements and methods of supply to which GC Strategies is currently a member.

When a requirement comes in, under the rules, in some cases the contracting officer is required to go to every qualified supplier on those instruments and ask for a proposal.

In this case it would have been—

[Larry Brock, Conservative, Brantford—Brant, ON]

That's regardless of whether or not they've received national attention for being under criminal investigation.

You knew full well they'd lied at committee. Mr. Firth has lied at committee. He'd committed the act of forgery and fraud with respect to changing résumés, yet your department thought it prudent to include him in a tendering process, knowing full well that he didn't have staff.

Why couldn't you simply reach out for temporary staff? Why couldn't you put in an advertisement on LinkedIn or an advertisement on the Internet asking for help? Why did you need a consultant to do your basic work? Why?

[Michael Mills]

Mr. Chair, these instruments have been put in competitively. Many firms have bid on these and have spent time to get on these arrangements. I'm not familiar with the full details, but I can imagine that a requirement came in for services under this instrument, and our procurement officers would have administered the instrument as per the rules.

As was mentioned before, GC Strategies is under investigation, but they are still members of these instruments.

[The Chair, Conservative, Kelly McCauley]

That's our time.

I understand that we're going to Mr. Powlowski, please.

Go ahead.

[Marcus Powlowski, Liberal, Thunder Bay—Rainy River, ON]

Mr. Johns brought up the fact that we're wasting a lot of Canadian taxpayers' dollars and that we have these cascades of contracts and subcontracts and subcontracts, and everybody takes a bit of a cut, and why don't we do something to address this?

Isn't what normally happens, what prevents this, the competitive process? If you have a lot of people taking a cut of the pie, you're not going to be able to provide or bid for a service at a reasonable price, so that keeps people in line and it keeps this kind of waste from occurring.

Is that normally not what happens? Was not the problem under COVID the fact that you had to get something out really quickly, so you couldn't go through that normal competitive process?

[Michael Mills]

As I tried to explain before, it's that these contracts are ultimately about IT professionals' doing work. Those IT professionals have very unique skills, very sought-after skills. In many cases, in the competitive process, these firms are very challenged to find available resources who will be able to come and do the work for the Government of Canada.

In those circumstances, there is a market rate for these sought-after resources that does place limits on what you can have for overhead. Ultimately, the fixed-rate per diem for the resource is competed, and those firms in turn have to offer compensation that is amenable to those scarce resources to attract them to make them want to come and do the work for the Government of Canada. In that environment, the competitive process does enter into and reduce the overhead and the profit in these industries.

[Marcus Powlowski, Liberal, Thunder Bay—Rainy River, ON]

You must have been involved in a lot of different procurement processes under COVID. I would have thought that there were a lot of single-source contracts awarded under COVID because of the time frames involved. Is there a concern that a lot of companies that we contracted with, because there was no competitive process because of the urgency, were allowed to charge inflated rates?

[Michael Mills]

Mr. Chair, it is true that in the early days of COVID there were not many suppliers for many commodities, so we did have to enter into sole-source contracts.

We do, as a course of action, have price verification when we do sole-source contracts.

Maybe I'll turn to Mr. Ozmutlu to explain the work that we do in sole-sourcing to validate pricing and to do price certification.

[Levent Ozmutlu]

For sole-source contracts, we seek price support to ensure that the prices that we're paying are in line with market rates. That could be looking for price certification from a vendor, essentially certifying that Canada is being provided the best price in line with other preferred customers. As well, we may ask for things like invoices and charges to other customers for similar quantity and quality of the goods and services.