Evidence of meeting #85 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 contract.
A video is available from Parliament.
3:50 p.m.
Conservative
Stephanie Kusie Conservative Calgary Midnapore, AB
You certainly always have standing when you're dealing with taxpayers' money.
Ms. Chan, what was your understanding of the situation when you wrote Ms. Julie Prud'Homme of Coradix about TA number 2021002043?
3:50 p.m.
Supply Specialist, Professional Services Procurement Directorate, Department of Public Works and Government Services
Are you asking me, from my understanding—
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Conservative
Stephanie Kusie Conservative Calgary Midnapore, AB
I'm asking what was going on when you wrote, with the uncertainty of the situation.
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Supply Specialist, Professional Services Procurement Directorate, Department of Public Works and Government Services
Okay.
Please keep in mind that the only information that was brought to PSPC was the email, the complaint from Ms. Dutt. The email stated that their names—her name as well as that of Mr. Moravej—were used without consent or knowledge for this particular TA. Obviously, we wanted to investigate this because their claim was, frankly, quite severe.
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Conservative
3:50 p.m.
Liberal
Parm Bains Liberal Steveston—Richmond East, BC
Thank you, Mr. Chair, and thank you to all of our witnesses for joining us....
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Liberal
Parm Bains Liberal Steveston—Richmond East, BC
I'm sorry.
Your co-operation here is greatly appreciated. After several meetings, we're still trying to unpack and piece together what has taken place here.
What we as a committee have learned, from my understanding, is that ArriveCAN isn't under investigation, but allegations from Botler about a tender to build a sexual harassment app are now being reviewed. While the total $55 million cost of ArriveCAN and its 70 updates reflect development, updates, information security, data management, cloud services, the app also saves three dollars per traveller when compared to the old paper system. We learned that it was actually cheaper and it was done in record time under the circumstances.
Botler's principal issue here is a contract between themselves and Coradix and Dalian. Botler was to conduct a six-month proof of concept for their software at the CBSA, with the potential for broader government use. Payment issues arose. Botler claims to have received only two installments, totalling $112,000, of the promised $336,000 for their software configuration work.
We've heard numerous allegations of individuals misleading this committee, from public servants to Botler themselves. This is where we're at right now.
My first question is to Mr. Mills.
At the heart of this situation is a dispute between a subcontractor and a federal government supplier, which began with claims of non-payment. How often would you say that PSPC hears from subcontractors in similar situations or in a dispute with contract holders? Is this common or rare? Can you expand on this?
3:55 p.m.
Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services
Mr. Chair, thank you for the questions.
We do about 10,000 contractual measures a year, and many of those contracts involve subcontracts. Unfortunately, it is common in certain cases that there will be disputes between prime contractors and subcontractors about payment. This is probably the reason that our department has been very active in spearheading efforts for prompt payment requirements, so that we can ensure that prime contractors pay their subcontractors in a timely fashion after the Government of Canada has paid out claims.
I would say—
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Liberal
Parm Bains Liberal Steveston—Richmond East, BC
If this is common, what's different here in this situation?
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Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services
I'm not sure I can answer what's necessarily different.
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Liberal
Parm Bains Liberal Steveston—Richmond East, BC
If it's common to have disputes, why has this situation come to the forefront in this manner?
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Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services
I would argue, Mr. Chair, that this has come through because of the allegation that there was misappropriate use of subcontractors' résumés and credentials in terms of obtaining the work.
However, from a contracting perspective, in our understanding this was a task authorization that was issued to a company that had a task-based contract. The task-based contract was for IT work, so it was a task authorization that was fairly general. It said that they were going to do feasibility work in the IT space under an IT contract. That task authorization didn't name who the resources were and it did not name Botler. It was only after they made the allegation that their résumés were used and put forth by GC Strategies that it came to light that there were these issues.
3:55 p.m.
Liberal
3:55 p.m.
Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services
Perhaps I will turn to Angela or someone else to explain what we normally do when a dispute comes in.
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Angela Durigan Manager, Professional Services Procurement Directorate, Department of Public Works and Government Services
Is this with respect to this dispute?
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Manager, Professional Services Procurement Directorate, Department of Public Works and Government Services
In cases where we seek subject-matter experts.... In this particular instance, we consulted with the justice department. From there, we made a determination on how we would proceed. Again, in this instance, as directed by Ms. Chan, we found—based on information provided to us by both Coradix and Dalian in joint venture, as well as by CBSA.... We took that information and determined it was a dispute between the subcontractor and, in this case, the sub-subcontractor.
3:55 p.m.
Liberal
Parm Bains Liberal Steveston—Richmond East, BC
Does government intervene—for example, by paying a company's subcontractor directly—even if there isn't a contractual relationship with that company?
3:55 p.m.
Manager, Professional Services Procurement Directorate, Department of Public Works and Government Services
We did not, in this circumstance, have a contractual obligation or contractual situation with Botler, nor did we have one with GC Strategies. Our contract was with Dalian and Coradix in joint venture. With respect to that, we advised Botler as such.
With respect to payment and the task authorization itself, CBSA determined that only two of the deliverables were accepted. They provided payment for those two deliverables through Dalian and Coradix. Thereafter, it is our understanding that the TA was amended to close out with only those two deliverables having been completed.
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Liberal
Parm Bains Liberal Steveston—Richmond East, BC
Would you say, from a PSPC standpoint, that standard procedures were followed in this particular dispute?
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Manager, Professional Services Procurement Directorate, Department of Public Works and Government Services
Yes.
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Conservative
The Chair Conservative Kelly McCauley
That is our time.
Thanks, Mr. Bains.
Ms. Vignola, go ahead for six minutes, please.
3:55 p.m.
Bloc
Julie Vignola Bloc Beauport—Limoilou, QC
Thank you, Mr. Chair.
In recent weeks, an anomaly was brought to the public's and the committee's attention concerning the awarding of a contract to Dalian Enterprises and Coradix Technology Consulting, which also involves GC Strategies and Botler. As you know, it was the latter company that leaked the information. All this happened around the same time that the three companies, GC Strategies, Dalian Enterprises and Coradix Technology Consulting, were working on the ArriveCAN application.
Ms. Chan, as part of these three companies' work on the ArriveCAN application, were any subcontractors not paid on time?
3:55 p.m.
Supply Specialist, Professional Services Procurement Directorate, Department of Public Works and Government Services
I thank the member for her question.
To be clear, are you asking me whether I received, personally, any complaints from subcontractors on the TAs for the contracts I have in my file—that I have visibility on—over the course of any work performed on ArriveCAN? Is that correct?