Evidence of meeting #32 for Public Accounts in the 39th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was contract.
A recording is available from Parliament.
Conservative
The Vice-Chair Conservative Brian Fitzpatrick
You're out of time. I just thought I'd point that out to you.
Conservative
John Williams Conservative Edmonton—St. Albert, AB
How can I be out of time, Mr. Chairman? I thought you were on my side.
Conservative
Conservative
Conservative
Acting Assistant Deputy Minister, Acquisitions, Public Works and Government Services Canada
Mr. Chair, that's a vital question. I hope I answered it very clearly.
Pardon me?
Acting Assistant Deputy Minister, Acquisitions, Public Works and Government Services Canada
The question, as I understood it, Mr. Chair, was whether there was any collusion with respect to this contract. I believe I answered the question directly that there was no collusion that I am aware of.
Every scrap of information that we have available--and I believe the Auditor General has asked for an opinion on this as well--says there was nothing untoward about this contract.
Conservative
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
Thank you, Mr. Chairman.
I would like to come back to the weighting issue. I did not really understand the explanation. I asked earlier whether there were documents, and you answered that you would provide them. The Auditor General said that she did not have access to any of those documents.
Is that correct? Do the documents exist or not?
Acting Assistant Deputy Minister, Acquisitions, Public Works and Government Services Canada
Mr. Chair, the documents that were referred to in the question do not exist. They are not on the file.
The answer I responded with earlier--and I apologize for any confusion--was, in general, why you would have 75-25. It was a general, not a specific answer.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
How was it determined that the ratio should be 75-25? You are telling me that there is no document to support that weighting. Why was a 75-25 split chosen? What criteria were used to determine that the ratio should be 75-25? I find that very hard to understand, if you do not have any documents to support this decision. It seems arbitrary to me.
Acting Assistant Deputy Minister, Acquisitions, Public Works and Government Services Canada
Mr. Chair, the 75-25 would have been a product of looking at the impact of the quality of services to Canadian armed forces personnel and RCMP personnel. As you can appreciate, a relocation for a family is very stressful, so having quality services and making sure that any firm that was awarded the contract would have very full and technical capability to deliver the services.... Again, that's a general answer, but that was the thinking.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
You are telling me what you told the Auditor General. I find it scandalous that a department like Public Works and Government Services Canada, which manages billions of dollars, has no document to support a 75-25 weighting in a contract such as this one. Moreover, it led to a financial analysis—this is clearly indicated in Ms. Fraser's report—that was done by one person.
Once again, I find it scandalous that, in such a large department, responsibility for the financial analysis of such a major contract—we are talking about $280 million a year—was given to a single person. That leaves room for what could be called arbitrary decisions, as I mentioned earlier. I am trying to find the right words but this strikes me as surprising, to say the least. I find it very disappointing and unacceptable.
I do not know how such a process could be deemed to be fair and honest. You say that things worked well, but I cannot believe that. As Mr. Williams said earlier, it led to a difference of $48.7 million. No one reacted. If the bid had been half as much, that is, $24 million, everyone would have wondered why the difference was so great. Here, the difference was between zero and $48 million, and the department did not react at all. Give me your opinion about this, because I do not understand.
Acting Assistant Deputy Minister, Acquisitions, Public Works and Government Services Canada
Mr. Chair, to respond to the question, let me first say that the lack of documentation on the file in terms of the 75-25 was an oversight. It will be corrected in the future files.
Let me also respond, Mr. Chair, that in terms of having one person do the financials, we acknowledge that on major contracts such as this, and going forward, it needs to be addressed. We have sent a directive to our staff that in future all major files will be analyzed by more than one person.
I would leave it to the Auditor General to respond, but in terms of our discussions with the Auditor General's office, I want to be very clear that I am not aware of any sense that the analysis on the appropriateness of the financial considerations was not properly done. I believe the Auditor General said that it is a systemic weakness in the process that only one person was doing the analysis. As I said, we've corrected that.
Bloc
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
You are telling me that there was an oversight, but we are talking about a contract worth $280 million a year. One has to question the judgment of the people at Public Works and Government Services. We are talking about $280 million, but I cannot imagine what it would be for an even larger contract. This is alarming.
December 7th, 2006 / 5:20 p.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
My question is for the Auditor General. This entire contract has been under way now for several years. I think it goes to 2009. Is that correct?
Auditor General of Canada, Office of the Auditor General of Canada
Yes, that's right.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
So the contract has been active now for two years. Is that correct?
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
Now that you've discovered these problems with the way it was awarded, what are you suggesting the government do with the contract? Should we continue to honour it as it is? Should we stop and start all over again? What are you suggesting we do? We of course inherited this entirely from the previous government. This was not something our government made a decision on. But we are where we are today, so what can we do?
Auditor General of Canada, Office of the Auditor General of Canada
As I mentioned earlier, I really believe it is up to government to decide what action it will take. It would appear that government does not agree with us that the process was not fair and was not equitable. Certainly that is the indication we have received, that government's intention is to continue with the contract and review the process when it comes up for tender again. That is a decision that I think is up to government to decide, obviously depending on the consequences of the various options available to them.
