Evidence of meeting #9 for Government Operations and Estimates in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was office.
A video is available from Parliament.
Liberal
Conservative
The Chair Conservative Kelly McCauley
Thank you, Mr. Gasparro. We'll get back to you for more time, I'm sure, if Mr. Jeglic is not replaced by AI in the next hour or so.
We'll go to Ms. Gaudreau, please, for six minutes.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
Thank you, Mr. Chair.
We're pleased to have you with us today, Mr. Jeglic.
This is new to me, but given all the recommendations you've made for a very long time and your relevant experience over the past seven years, that raises questions today, in 2025.
I will ask you this: Can we guarantee Quebeckers and Canadians that, when a contract is signed, the government is getting its money's worth? You may tell me that it is impossible to guarantee that right now.
I'd like to hear your comments on that.
Procurement Ombud, Office of the Procurement Ombud
I may not be able to guarantee that. By way of an answer, I will express my frustration.
As you say, I have been in this position for seven years. Hence, I have made a number of recommendations.
In a procurement process, there are a number of stages where there is a responsibility to do more training, provide more details and enable more simplification measures. In my opinion, the word “simplification” is probably the most important of all the recommendations, because the process has to be accessible to all Canadians. If you're a medium-sized supplier, you need to have the same opportunity to get a federal contract as a supplier from a large organization.
I don't know if that answers your question.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
Absolutely.
This summer, I met with some extremely competent people to help our interpreters. It is clear that, in Quebec, as a result of the interpretation courses, they had trouble entering the market to come here and work interpreting in both official languages. I think this issue is currently being studied by the Standing Committee on Official Languages, but it worries me.
That leads me to ask you the following question.
On Thursday, we will be hearing from the Minister of Government Transformation, Public Works and Procurement. I would like your opinion. Do you think the defence investment agency is going to address some of your concerns?
Procurement Ombud, Office of the Procurement Ombud
I hope so.
It's very important for us to make transparent recommendations. I've tried on a number of occasions to talk to people in Parliament and to the minister himself about the importance not only of suppliers, but also of those who make acquisitions on behalf of the government. They even have concerns about procurement. I don't want to repeat myself, but I think we need to focus on simplification or we will lose a lot of suppliers.
This isn't just true for translation; it affects a lot of people.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
My understanding is that, when the minister visits, he is expected to reassure you about transparency and about having the necessary staff and money to avoid getting caught in a trap. I wasn't around to see that happen with McKinsey, ArriveCAN and others, but I think there are huge conclusions to be drawn to prevent similar situations from reoccurring.
Let's talk about federal contracts and defence spending, which are of great concern to me.
Will the defence investment agency have everything it needs to monitor contract acquisition?
Procurement Ombud, Office of the Procurement Ombud
I will answer that question in English.
As I'm sure we're all aware, a new agency was created with a specific focus on defence procurement. Currently we've assessed that the new agency will form part of our mandate, so those procurements will be subject to review from the office.
What I think is an overt positive is that it's a recognition that things need to be done differently. We've spoken about the need for foundational changes. I think the recognition of creating a separate agency for defence procurement recognizes that the old ways of doing things were not working effectively.
We would echo that sentiment, but what I don't want is for the rest of the procurement universe to be left behind, because, while we focus on defence procurement as a priority, the procurement universe will still exist. My hope is that many of the changes being thought about in defence procurement will equally be thought through as a whole environment to ensure that the positive changes reflect all of that.
The last thing I'll say, if I may, is that the five foundational changes we're putting forward should equally impact the defence environment as well, because, as you see, they're called foundational for a reason. They're not nuanced, and they're not specific to a sector.
I'll leave it there.
Conservative
The Chair Conservative Kelly McCauley
Thanks very much.
We'll go to our five-minute then two-and-a-half-minute round.
Colleagues, we do have a fair amount of time available to us today. If it's fine with everyone, if you can get your question in by your mark, if Mr. Jeglic's answering a question, we'll allow him to continue on past our regular five minutes, six minutes and two and a half minutes.
Go ahead, Ms. Jansen.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
Thank you so much, Mr. Jeglic, for your report.
I have to say, the fact that we're talking about bait and switch in government contracts today is outrageous to me, and it should be for all Canadians.
Canadians expect that, when their government signs a multi-million dollar contract, the people hired to do the job are the ones who were promised. Your report shows that, in many cases, companies win a contract by proposing top-tier experts and then quietly replace them with less qualified staff once the ink is dry. You describe this as “bait and switch tactics”, potentially violating procurement rules and possibly crossing the line into fraud.
Can you explain what you mean by bait and switch in federal contracting?
Procurement Ombud, Office of the Procurement Ombud
I don't want to be too nuanced, but I've described it somewhat as “bait and switch lite”, and then “bait and switch”, which includes the fraud element. The fraud element includes intentionality on the part of the supplier.
Just to clarify, our mandate is to review the practices of federal departments. It's difficult for us to assess the intentionality of the supplier. It would have to be putting forward resources with the intention of never having them perform any of the work. That's what gives rise to the fraud.
What we've identified in the report—in the 41% that you rightfully identify—is that there's still a risk to the procurement of that specific contract. How this plays out is that, in the selection criteria, typically, the methodology in many of these contracts is either balanced on an 80-20 or 70-30 split, with the technical being the 80 and the financial being the 20. This means that if you're evaluating resources, that factor ultimately is and can be the tipping point for the decision as to which supplier is successful.
Here, in the examples that we've highlighted, is where you have decided that the resource and their skill set matter. You've chosen to evaluate them. You do evaluate them. You base your selection on that evaluation, and then, in the actual performance of the contract, there's a replacement of that resource. That's the component that we identify as problematic.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
What does it say about the integrity of our system when companies can profit from taxpayers by offering one thing and then delivering something completely other?
Procurement Ombud, Office of the Procurement Ombud
To be fair, as we mention in the report, there are a number of reasons a replacement might take place. We want to make sure that's also clear to the viewers and to the members of the committee. There are a multitude of factors that could result in the replacement of resources, one of which is timing. What we put in the report is just to give you an indicia of how long it sometimes takes to go from the bid close period to awarding the contract, and then to the actual tasking.
The counterpoint to that is that everyone involved in the system understands that, so you're still attesting to the fact that you're going to provide these resources, knowing that there are going to be delays throughout the process, so it can't be an argument to say that delays in and of themselves are a surprise, because that's normal.
What I will suggest is that we essentially agreed that this is a highly problematic practice. The tools existed at the time to better enforce and prevent the incidence of bait and switch. However, the department has opted to go on the path that it has, which is to promote the use of corporate criteria as the new determining factor, so it takes away the emphasis on the individual resources and places the emphasis on the corporate entity and the experiences of the corporate entity.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
What your report shows is pretty simple. Companies are winning government contracts by promising top-notch experts, then swapping them out for people who don't have the same skills once the deal is signed. Instead of using the tools they already have to stop it, the government's main contracting department decides to stop checking the qualifications of the people doing the work at all.
Help Canadians understand this. Why would a department decide it's easier to change the rules than to enforce them? What does that say to taxpayers, who just want to know that when they pay for quality, they actually get it?
Procurement Ombud, Office of the Procurement Ombud
Again, I obviously am not a spokesperson for the department, nor should I be, but based on the information provided to us as part of the review, the changes made also align with a broader change towards a solutions-based environment, meaning that the contracts we looked at were task-based. Internally, I've used the example to demonstrate the difference, and I was just waiting for the opportunity to tell it, so if I'm allowed, I will.
The difference between a task-based and a solutions-based opportunity, in laymen's speak, would be as follows: If I need my lawn cut on Tuesdays and I pay you on a weekly basis, that would be an example of a task. In a solutions-based environment, I tell you that I'm an individual who travels a lot and wants a nicely maintained lawn but isn't around to figure out how to have that done, and the solution offered would be to provide a solution to my problem, as opposed to the tasking.
Hopefully that centralizes the difference between a task- and a solutions-based.... The government is moving towards more of a solutions-based environment, where there's more emphasis on creativity on the part of suppliers.
Again, I'm not a spokesperson for the department. That's essentially the decision that was taken. I will say that there were subsequent changes made effective in July of this year, also around professional services, that include things like a cap for the total value of professional services that can be contracted.
I'll leave it there.
Conservative
Liberal
Pauline Rochefort Liberal Nipissing—Timiskaming, ON
Thank you very much.
I found the report to be very thorough, very well done and very informative. Actually, I don't know if it's okay to say this, but I enjoyed reading it.
Overall, I found it was good to learn that Public Services and Procurement Canada has done a good job. That is how I interpreted the findings of implementing several process changes and improvements to address the procurement deficiencies you've identified or that have been identified in previous audits.
I particularly noted the finding that changes to professional services contracts have significantly reduced the risk of suppliers engaging in what I guess would be referred to as deceptive tactics, such as bait and switch. I have a problem with that term, because, overall, when I read the report and all of the incidents, I didn't find them deceptive in nature in any way. I find to some extent, like in the line of questioning we just had, that it suggests a mis.... I'm sorry. I have a hard time with this word.
Liberal
Pauline Rochefort Liberal Nipissing—Timiskaming, ON
Thank you for helping me with that term.
It suggests a deceptive tactic, which I did not find in your report, so, to some extent, I questioned the title of the report, “Bait and Switch”, but that's not actually my question.
Like Mr. Patzer, I was very intrigued by the segment of your report on unintended consequences and possible solutions.
Related to your comments on small and medium-sized businesses, I did note on page 33 that the response from PSPC was that it did not feel this should form part of the report, and you've responded. I was going to ask you why, but you've responded to the question.
For me, what's very important as well is the ability for small and medium-sized businesses, as Madame Gaudreau has just highlighted—and I suspect it's the same for all of us—to participate in the purchasing and procurement process of the government.
I was just wondering if you are aware—and I'm sure you are—of why it wasn't highlighted more that PSPC will be launching a new small and medium-sized business procurement program in the spring.
Procurement Ombud, Office of the Procurement Ombud
I think Kelly will agree with you in terms of the title of the report, because that was actively discussed within the office.
Liberal
Procurement Ombud, Office of the Procurement Ombud
In essence, I want to be able to respond to one part of your first comment, which was about good practices seen in the report as well. What I will say was a true, marked difference between what we saw in ArriveCAN and this report was the state of the documentation. There were a lot of inferences that had to be drawn when we were doing reviews, specifically on ArriveCAN, because the documentation was not of the quality that was expected. As a result of many highlighted issues and concerns, including recommendations from our office, the documentation in almost all of the files was excellent. That might not seem like a significant takeaway, but it really is from an accountability and transparency standpoint. I don't want that to be lost from the report, but that was certainly a good practice.
In terms of what the departments themselves did in relation to some of the recommendations, that also was highlighted in the report. There were, in fact, good practices associated with the work of the departments. We highlighted an example of PSPC and ESDC working in tandem to ensure that, at contract award, there was a confirmation of the resources and their availability, which we identified as a good practice. Then, further, we noted a good practice where the replacement of resources was substandard, so it was the department that took proactive measures to ensure that those resources were replaced with, effectively, better resources than those that were being provided.
We did want to highlight those, because we think those are great examples. That being said, I think it's really important to take a balanced view.
On the unintended consequences piece, we are acutely aware of the potential impacts of those unintended consequences to small and medium businesses. As I mentioned, they have been contacting us in other ways, identifying concerns that are aligned with what you would have seen in the RFI response in the report. Because we saw a consistent concern from small and medium-sized businesses, we thought, for accountability and transparency purposes, it was important to include that.
To be honest, the fact that this committee is highlighting it means it will be top of mind for the department as well. We could have highlighted this by way of a separate letter to the department, but it wouldn't have had the same impact, so I honestly think the impact that we were hoping for has been achieved.
