Evidence of meeting #33 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 bélair.
A recording is available from Parliament.
Royal Lepage
We, Royal LePage Relocation Services, do not provide property management services to members. This is done through outside agencies.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
At the same time, the contract seems to imply that you were supposed to.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
It says:
The Contractor will be reimbursed for [third party service] fees at actual cost up to the ceiling rate quoted with no allowance for profit or overhead.
This is what the Auditor General found:
We found that all 10 Canadian Forces members had paid an amount for property management services, from their own funds, that exceeded the contractual rate by between $800 and just over $8,000.
So according to the Auditor General there were fees paid by Canadian Forces members that should not have been paid.
Royal Lepage
We are working with our client departments to review these issues, and I want to be clear that if for any reason, at the end of this process, it is concluded that one penny has been overcharged, we will reimburse the money directly to every transferee.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
I will just conclude by saying that you should have known what your obligations were for property management when you started this contract. We should not be reviewing these questions after the fact, and I hope our Canadian Forces members are in fact reimbursed for fees they have been charged illegitimately.
Thank you.
I turn my time over to John Williams.
Conservative
John Williams Conservative Edmonton—St. Albert, AB
Thank you, Mr. Chairman.
I thought it was the other way around, that I turned my time over to Mr. Poilievre, but anyway, thank you.
Mr. Campbell, in paragraph 5.26 of your report you say:
—the bid evaluation process, a contract was issued to RLRS for the ceiling rate of zero percent for property management services, indicating that these services were to be provided without cost to Canadian Forces members.
From my reading of Mr. Bélair's opening statement, he would suggest that they were paid money to oversee property management and they bid zero for overseeing property management services. Then he goes on in his opening statement to say that property management fees are to be paid from this personalized envelope, which is to be reimbursed by the personnel.
My question to you on paragraph 5.26 is, are you absolutely clear that Canadian Forces members were to be provided this service for free?
Assistant Auditor General, Office of the Auditor General of Canada
Yes, Mr. Chairman, we are.
Conservative
Assistant Auditor General, Office of the Auditor General of Canada
No, sir.
December 12th, 2006 / 4:50 p.m.
Conservative
John Williams Conservative Edmonton—St. Albert, AB
Mr. Bélair, you were saying in your opening statement—and you read the testimony of last week where the Rear Admiral admitted that having these people pay these costs was wrong and that they were to be reimbursed. He could not give any assurance that the money would come from you.
Mr. Bélair, are you going to reimburse the government, as they have to reimburse these military personnel?
Royal Lepage
Once we've reviewed this process with the client departments, we will reimburse the moneys directly to transferees, if they have been overcharged, yes.
Conservative
John Williams Conservative Edmonton—St. Albert, AB
And we just heard from Mr. Campbell that there is no ambiguity here. The bid was evaluated on those third-party services, which included property management services, and therefore you bid according to that, so that you were to ensure that a third party would provide these services.
Why would you be charging the military personnel for their own move when your contract is with the government?
Royal Lepage
There's clearly a disagreement on the contract in its policy interpretation. I want to at least have the opportunity to work with our client department to develop a process to resolve these differences and to come to an agreement within a reasonable timeframe.
Conservative
John Williams Conservative Edmonton—St. Albert, AB
Okay, Mr. Bélair. I presume the Auditor General advised you of this and brought to your attention months ago that their interpretation of the contract was different from your ambiguity—
When did you raise the possibility with your client or departments that there might be some misinterpretation and that perhaps you owed some money back?
Royal Lepage
We were aware of the recommendations when the report was tabled.
Conservative
John Williams Conservative Edmonton—St. Albert, AB
But you had the contract. You knew it was under discussion and debate. Has anybody read this contract?
Royal Lepage
The Auditor General's office never discussed property management with us.
Conservative
John Williams Conservative Edmonton—St. Albert, AB
I'm concerned about the 60%. There were 15,000 moves, and the government said 60% of them would be requiring real estate management services. That's about 9,000 moves. That's a lot of supervision, Mr. Bélair. Even if you weren't actually involved in the actual provision of the services, you were going to be supervising 9,000 houses under management, and you bid zero. Was that based on knowledge from elsewhere--in fact, you already had the contract--or were you prepared to bid zero based on the fact that there were 9,000 moves you weren't going to charge for?
Royal Lepage
The volumes are an issue that you'll have to ask the client departments about.
Conservative
John Williams Conservative Edmonton—St. Albert, AB
No, no. The client departments said in the RFP that 60% of the moves would require property management services. If there are 15,000 moves, 60% of that equals 9,000 houses, so 9,000 houses required property management services. You're saying you bid on the basis that you would charge nothing for overseeing the management of 9,000 houses--or were you privy to information from another source?
Royal Lepage
We have to be clear that this contract really specifically prohibits us from charging anything other than an administration fee. There's no connection between the two.
Conservative
John Williams Conservative Edmonton—St. Albert, AB
Mr. Chairman, I have to object. I specifically asked a question about the RFP, which said 60% of 15,000 moves would require property management services; that is, 9,000 moves would require property management services. We know Royal LePage bid zero. My question was quite specific. Did Royal LePage bid zero knowing that they would have to supervise 9,000 moves, or did they have information from another source, presumably knowing the contract already, that allowed them to say they didn't have to worry about it and could use a different figure?
I am asking where you got the information that you used to bid zero.
Royal Lepage
The estimated volumes, in our opinion, ultimately used in this bid were irrelevant, since property management is a personalized benefit and has zero impact to the Crown and its total expenditures under this contract. The numbers there were for evaluation purposes.
Conservative