Public Accounts Committee on Dec. 12th, 2006

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Would it have been basically the same team in 2002 that would have put this thing together?

[Ian Bennett]

Mr. Chair, could I seek a clarification? I believe the question was on the 2002 process. To make sure the facts are correct, I'll mention that Mr. Goodfellow was not involved in the 2002 process; Mr. Goodfellow oversaw the 2004 process. That was part of the—

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Okay, that's fine.

Who was in charge of the 2002 process? Mr. Bennett, you should know that.

[Ian Bennett]

David Pyett was accountable for the 2002 process.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

I want to get something clarified here. Maybe I could start with Mr. Campbell. On the volumes of work involved with the property management matter, if I understand the auditor's office correctly, you did check this matter out, and as far as you were concerned, the actual volumes were information that was readily available. Is that correct? Is it correct that you went to two terminals and found out what the actual volumes were?

[Ronnie Campbell, Assistant Auditor General, Office of the Auditor General of Canada]

Yes, Mr. Chairman, that's correct. The information was readily available.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

I'm going to ask Mr. Bennett. You state that all available information was used to get this information correct, but you basically admitted at this point that you re-used something from 2002, which wouldn't strike me as using all available information to get this right. I'm wondering how you could square this with what Mr. Campbell just said, that he could readily find this information and your people apparently couldn't.

[Ian Bennett]

Mr. Chair, this goes to a fundamental question with respect to accountabilities. We sought the information from the departments that would have had the program requirements and would have understood how the program requirements would change in the future. This was validated with the department, and this was the basis for the inclusion in the RFP. In other words, we looked to the departments we were dealing with, with respect to their business volumes and how it was going to evolve in the future, and that is the information that is reflected in the RFPs.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

I'm having difficulty following that line.

In the material I also see a question. I don't know which document this would be. The bureaucratic mumbo-jumbo on every cover sheet makes them all look like the same document, but there's a question in the document that says, “Property Management, provide actual annual volume numbers for member use of property management services over the past 5 years.”

Then it says in response to that question, “Actual volumes for property management services are unavailable for the past 5 years, but the estimated number of annual moves per region is provided on Table 2 of Appendix 1 to Annex D.”

The difficulty I'm having here is that the Auditor General's office actually checked terminals and found the actual volumes. This answer here doesn't fit with what the Auditor General's office is saying, and quite frankly, the explanation that you just gave, which I'm having trouble trying to understand, doesn't fit with what the Auditor General has said on this matter either.

Do you disagree with the Auditor General that the actual volumes were not available?

[Ian Bennett]

In hindsight, we agree with the Auditor General that the actual volumes were available. What I am trying to stress with the committee, Mr. Chair, is that when we sought confirmation from departments that these were the correct business volumes--and they would have that information--we were told that for the purposes of the RFP they were the correct business volumes.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Right.

I'm going to pursue another area. I have the summary of the scores, but I don't think we have the scorecard--how you arrived at that. I'll go to the scorecards.

The technical, I understand, was 75% of the scoring, and from what I can gather, that would really measure the quality of the service that was required. I can understand that. You don't shop on price alone in this world; you need quality as well. I think we've all bought something on the cheap and found out we should have paid more to get the quality we want in life, so I can understand that point.

But the difficulty I have under the technical part—In baseball, the best hitter in baseball in my books was Ted Williams, who hit I think over .400 four or five times. But .400 isn't perfect. A perfect in baseball would be 1,000%. But he hit .400, and I don't think anybody has done it since he hit .400.

But I see on the technical scoring for quality, Royal LePage got a perfect score on all the rating systems. Really, unless I'm misreading this, it shows 75 points out of 75 points on that. I don't know of any system or anything in this world that lends itself to perfection. There's always room for improvement.

Am I reading this thing wrong?

[Ian Bennett]

Perhaps, Mr. Chair, Mr. Goodfellow can walk you through the analysis.

[Richard Goodfellow]

Thank you, Mr. Chair.

You'll see that the lowest price and the highest technical score would become your baselines against which you would evaluate the other bidders. In this case, Royal LePage got 984.2 out of a possible 1,000 points. Because that becomes your baseline, they therefore get the full 75 out of 75 marks for the technical.

And then for the price, Envoy, being the lowest price, was used as the baseline. Therefore, Envoy got 25 out of 25 for the price and 70 out of 75 for the technical.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

I'm going to ask a question that I think is quite relevant to this whole matter. Assuming the information was correct in your proposal on the property management, and let's just assume for the purposes of mathematics that the competing bidder had bid zero on that property management, the same as Royal LePage—I think this question is crucial to the whole process. The way I'm reading your scorecard here, the results would have narrowed, but Royal LePage would still have come out the winner under your score system.

Could I get some clarification on this point?

[Ian Bennett]

That's a correct conclusion. Holding all things equal, and not getting into speculation on what would have changed, what could have changed, that's a correct conclusion.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Could I get the auditor's response to that?

[Ronnie Campbell]

Mr. Chairman, I think Mr. Sloan will add a little bit of light to how those calculations would have impacted.

[Bruce Sloan, Principal, Office of the Auditor General of Canada]

Thank you, Mr. Chair.

As was indicated, the person with the lowest price got the maximum number of points. In the situation described, had Envoy bid zero, their points would have remained the same; however, that would have had the effect of reducing the points awarded to Royal LePage for the financial component of the bid.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

But who would have won the bid, then?

[Bruce Sloan]

I think to arrive at what may have happened you would need to take into consideration the other issues that the CITT ruled on as well. Then, as the Auditor General said last week, you'd get into a fair amount of speculation.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Fitzpatrick.

Mr. Christopherson.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you very much, Chair, and thank you all for your presentations today.

My question is for Mr. Campbell, the acting Deputy Auditor General?

[Ronnie Campbell]

Assistant Auditor General.

[David Christopherson, NDP, Hamilton Centre, ON]

Good enough. I learned in this business early, always promote high. Especially when they're in uniform, call them all generals and if they're only a colonel, you're all right.

I want to read from the Auditor General's opening statement at the last meeting, point 4:

Government contracts should be awarded through a process that is fair, equitable, and transparent. We found that these contracts were not awarded through such a process, despite various warning signs. The request for proposal contained materially incorrect business volumes that gave an unfair advantage to the bidder who had the previous contract.

Secondly, you went on to say: “We have concluded for two reasons that the Canadian Forces and RCMP/Government of Canada contracts”--meaning the current ones--“were not tendered in a fair and equitable manner.”

And you make a comment in the main report on page 15 at the bottom, where it says:

Even though the government may incur additional costs as a result of terminating the 2002 contract for the Integrated Relocation Program, PWGSC acted appropriately to preserve the integrity of the government's procurement process.

My question is, in order to preserve the integrity of the government's procurement process, do you believe it's in order that this contract be retendered?

[Ronnie Campbell]

Mr. Chairman, as the Auditor General said the last time we met, that's a decision for government. I don't know what other options they have available to them.