That's a lot to unpack, but I'll start with the front end in terms of how we can reinstill integrity into the process.
The requirement to be registered on the IBD is that initial check to determine compliance with indigenous eligibility. That check happens, and then there's a subsequent check that can happen by way of contractual provision. The contractual provision can stipulate that there's an attestation indicating that they continue to comply at the time of contract award. Then there's a final contractual provision that would also require continuity of the 51% maintenance through contract performance.
You'll note in our report we also identified that, in contracts in excess of $2 million, there's a mandatory pre-award audit that would validate that contract award that the supplier is in fact compliant with the 51% ownership and control requirement.
You have four different touch points that would help determine whether that eligibility is being maintained. What you saw in our report was that there were gaps in compliance with each one of those elements. That's how you get to a situation where, even with all of these considerations in place, if the implementation isn't appropriate then, all of a sudden, they're meaningless.
I'll now turn to the 33%. You'll note that we actually excerpted it in our report. There's a fundamental difference of opinion as to what the 33% is meant to achieve. From at least several departments, the view is that unless there's subcontracting involved in the contract, as identified on contract award, there's no need for the 33% provision because ultimately the contract is awarded to an indigenous entity, and there is no subcontracting. Therefore, 100% of the value is flowing back to the indigenous supplier.
The issue we see is that they, in fact, allow for joint venture agreements. There are also instances where you may not identify subcontracting at the initial phase, but the subcontracting happens later, and if you don't have that provision in the contract, you can't enforce the 33% requirement.