Government Operations Committee on Nov. 9th, 2023

[Michael Mills]

Under the code for procurement, suppliers are supposed to act honourably and ethically, and if we were to find out that they were not doing so and that they had misrepresented themselves, we could stop work on a contract. We could set aside a contract. If it was founded, we could terminate for default.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Is it possible that the vendor would also be banned, for example? If there is misconduct whereby the CV is embellished and whatnot, could that certain company be banned as well from future procurement?

[Michael Mills]

Yes, Mr. Chair, there are vendor performance measures under which we could suspend them from being able to do business with the Government of Canada for a period of time. In extreme cases, if there were criminal findings of fraud and the like, the integrity regime could come into play, and they would be barred for up to 10 years.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Even it doesn't rise to the level of, let's say, fraud in the legal sense, for example, how long would something like CV embellishment or whatnot stay on the record for future bids? Is that something that PSPC would take into consideration?

I'm talking about the whole gamut of misdemeanours against an organization, everything from misdemeanours to fraud. Is there a track record? Does PSPC keep tabs on bad behaviour?

[Michael Mills]

I'll ask Levent to answer. He has a long career in procurement and may have better examples.

[Levent Ozmutlu]

Under the vendor performance corrective measures policy, we do keep track of terminations for default. In the case of a false certification, that certainly would be grounds to terminate a contract for default, and that would remain on the record for a period of time. Depending on the severity of the termination, that could also result in debarment, either on the first offence or for subsequent offences.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

How severe is CV embellishment when someone is submitting to try to win a contract? How severe is that in the eyes of PSPC?

[Levent Ozmutlu]

It is a very severe occurrence. There's also a framework to assess the impact on the specific clients in the project and what that might cause in terms of damages to the Crown. From there, there's an assessment that is made to determine the ultimate outcome of the penalty.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

So there is a framework and a process in place to determine how serious that misclassification or embellishment is.

[Levent Ozmutlu]

That's correct.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

With respect to investigation of misconduct, for example, in this situation, would that be the responsibility of PSPC? Would it be the responsibility of the department—CBSA, in this case—to further investigate that misconduct? Who takes the reins on investigating misconduct?

[Michael Mills]

We in PSPC have a departmental oversight branch, and within its unit there is an investigative group that would look into it. They would typically coordinate with the client department and, based on the situation, decide who would be the lead and how they would collaborate.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Is that what's happening here with the investigation of Botler AI currently? Who's taking the lead on that? I understand that the CBSA is doing its own internal investigation. Is PSPC part of that investigation as well? Was PSPC part of that?

[Michael Mills]

To my understanding, Mr. Chair, our department has assisted them, but certainly it's the CBSA.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

It's the CBSA that's taking the lead. Okay.

I have a question for you. In the procurement process, when the CBSA comes to you and wants to hire, for example, vendors, do they usually come to you with choices, such as “Here are the three horses we're looking at”, and then PSPC makes the final determination on which is the best one, or do they come to you with one and then PSPC simply investigates one, or do both things happen?

[The Chair, Conservative, Kelly McCauley]

That's our time, but maybe you can offer a very brief answer, Mr. Mills.

[Michael Mills]

In most cases, they come to us to use the TBIPS, which has a requirement to actually compete it to a number of firms already pre-qualified on that instrument.

[The Chair, Conservative, Kelly McCauley]

Thanks, Mr. Kusmierczyk.

We'll go to Ms. Vignola and then Mr. Johns. We'll combine the two-and-a-half-minute rounds for the next two rounds, so that it will be five minutes and five minutes, and then we'll be done for the day.

Go ahead, Ms. Vignola, please.

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

Thank you very much, Mr. Chair.

Mr. Ozmutlu, Coradix Technology Consulting and Dalian Enterprises were awarded two contracts for work on the ArriveCAN application, contracts that were set aside under the procurement strategy for indigenous businesses. However, only Mr. Yeo, the president and founder of Dalian Enterprises, is a member of the first nations. Mr. Yeo told us that some of his subcontractors were also members, but was unable to specify how many.

The purpose of the strategy is not only to give more control to first nations, but also to encourage their members to acquire specialization and expertise in fields that are useful to them and also useful to the Government of Canada, as well as to the overall economy.

If only one person in a company is first nations and that person is a contractor, does the contract automatically meet the objectives of the procurement strategy for indigenous business?

[Levent Ozmutlu]

Thank you very much for the question.

In the case of the procurement vehicle that we're talking about, which is the TBIPS supply arrangement, there are a number of indigenous firms that are qualified and are eligible to compete for business that is directed under that stream. That would determine the winner of that contract. In this case, it was Dalian and Coradix.

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

That is a point I understood.

On the other hand, I'd like you to tell me whether having just one person from a first nation in a company, and that person happens to be the boss, is enough for the company, specifically Dalian Enterprises, to be awarded a contract.

[Levent Ozmutlu]

Thank you for the question.

The requirements under the PSIB program are administered by Indigenous Services Canada, which periodically audits the companies to ensure that they are in line with those requirements. As indicated earlier, there are some content requirements that must be met in order to meet that requirement.

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

So I would say, using language that everyone understands, that the company must include more than one member of a first nation to meet the requirements of the strategy.

Did I understand correctly?

[Levent Ozmutlu]

Thank you for the question.

It's more about the value that's delivered as opposed to the number of employees, in this instance.

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

How do you ensure that a company owned by a member of the first nations is not used as a front or a smokescreen for another business, joining it simply to win contracts, without any real consideration for the objectives of the strategy, which is to empower first nations economically?

How can you ensure that such abuses are not occurring outright?