Evidence of meeting #34 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.
4:35 p.m.
Liberal
Pablo Rodriguez Liberal Honoré-Mercier, QC
My question is addressed to you again, Ms. Fraser. I want to go back to the matter of the 2004 contract. That call for tenders was the result of a problem which occurred with regard to a 2002 call for tenders, correct?
4:35 p.m.
Liberal
Pablo Rodriguez Liberal Honoré-Mercier, QC
So there was a problem in 2002. Did those problems reoccur? Did you see similar problems in 2004?
4:35 p.m.
Auditor General of Canada, Office of the Auditor General of Canada
We did not review the 2002 process, we simply indicated that there had been conflict of interest allegations in 2002. The department investigated and established that there had not been a conflict of interest as such, but that there could be negative perceptions. Consequently, the government decided to cancel the contract and to do a new call for tenders. There were no such issues in 2004. The team was completely different.
4:35 p.m.
Liberal
Pablo Rodriguez Liberal Honoré-Mercier, QC
Precisely. You were given the mandate to do an audit for 2004, but since what happened in 2004 derived from what had happened in 2002, why were you not asked to also do an audit for 2002? Do you know?
4:35 p.m.
Auditor General of Canada, Office of the Auditor General of Canada
That was the committee's decision. We were asked to review the 2004 process because there had been several questions and complaints with regard to the awarding of the contract in 2004.
4:40 p.m.
Liberal
January 29th, 2007 / 4:40 p.m.
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
Thank you, Chair.
Concerning the volumes that were misdescribed in the tender document, if I understand the Auditor General correctly you didn't feel there was anything that was deliberate. It was simply the product of a mistake or a screw-up, if I can use that term.
4:40 p.m.
Auditor General of Canada, Office of the Auditor General of Canada
We saw no indication that this was wilful in any way. I think many people would say it was kind of an honest mistake.
The volumes that were in the 2004 request for proposal were the same as those in the 2002 one. They were simply carried forward.
4:40 p.m.
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
I shouldn't doubt you, Auditor General. When I first asked you about this report I had a difficult time trying to envision how such a glaring error could take place.
But I think Mr. Goodfellow, who was the witness before us, was a good, honest witness. He gave his version of events. He said that the thing was so thick and there was some urgency to get on with it, so he just re-used the first one. He duplicated a mistake that was already in the first set of documents. I think I can understand that part of it.
There are two aspects to the assessment process or the evaluation process: 75% is technical or quality, and 75% is money. If I understand your report, you could not find anything wrong with the way the department handled the technical part of the evaluation. Is that correct?
4:40 p.m.
Auditor General of Canada, Office of the Auditor General of Canada
In the report we note that the department put in place many good procedures and a fairness monitor, for example. There were a number of procedures they put in place that would have given rigour to the evaluation. It's perhaps unfortunate that the business volumes were wrong, because otherwise it could have been a very good process.
4:40 p.m.
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
With that information, I want to thank the department also. There was some hesitation to provide members of Parliament with stuff, but they did provide us with their scorecard. The department didn't appear to want to provide the scorecard to MPs, but we did get it.
I actually accept your point that the 75% technical—the result that was given on that one—is valid. I actually reversed the scoring to give Envoy the benefit of the doubt on the financial...and did my calculations on it. If I'm correct on those, the Royal LePage people would still have won the tender. I'm not a mathematician, but to me this is giving the most generous of interpretations to Envoy on this process.
Would you have any disagreement with me on that, Mr. Marshall?
4:40 p.m.
Deputy Minister, Public Works and Government Services Canada
No, we agree with you on that, and that's the basis of our assertion that it would not have changed the result. We obviously would have loved to have had better data, but they wouldn't have changed the result.
4:40 p.m.
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
Okay.
I'm trying to get my mind around the personalized accounts as well. If I were an employee, let's say in the armed forces or the RCMP, it would seem to me that if I wanted to keep my property the government isn't incurring a realty commission on the sale of the property—and the government credits the employee that amount of money in their own account as their own money.
4:40 p.m.
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
They have the option, if they want, to manage that property on their own, which many people try to do in this world. I'm not sure it's advisable or not, but many people do that; they rent out their own property and take care of it themselves, through friends or relatives, or the private sector, or whatever, and it's their money to keep. If they save anything out of that, they don't refund it to the government. It's their money.
4:40 p.m.
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
And if they decide to have a property manager like Royal LePage come in, they're going to have to pay them a fee to manage the property for them. Correct?
4:45 p.m.
Deputy Minister, Public Works and Government Services Canada
Yes, correct—normally.
4:45 p.m.
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
So if somebody did bid more than zero vis-à-vis the government, then you have this other arrangement, which is not a contract with the government, but a contract between the member and the property relocation service, which is a different kettle of fish, as it's their money. So if it were anything more than zero, it would seem to me that the relocation people would actually be getting more money than was bargained for.
Am I wrong in this interpretation?
4:45 p.m.
Deputy Minister, Public Works and Government Services Canada
No, that is exactly the interpretation Royal LePage took. That's why they said they bid zero. That's very important to understand, because there's an implication here that they used insider information, and I don't think that withstands scrutiny.
4:45 p.m.
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
No, I think the thing we've all been confused about is this account. We assume that it's the government's account. It's not the government's account, but the individual's account, and they can do what they want with that money. So it's in fact their personal property, and it doesn't get refunded back to the government if they don't use it.
4:45 p.m.
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
Maybe the department might want to re-evaluate this kind of arrangement, but that's the way I understand the arrangement is right now, and I think it's important that everybody on this committee understand what the factual arrangement is.
Now, I come from the school of thought—which maybe is wrong—that not only must justice be done, but it must also be seen to be done, to use a lawyer's statement. I guess I've got a number of questions here, because it's going to be very difficult to explain to taxpayers in this country that this arrangement or process we went through here is fair to the taxpayer and that they're getting good value for their money out of this whole process. I think a lot of us are starting to grapple with the mistake and all of the consequences of the mistake. But it's going to be hard to explain to my constituents how this thing worked out. People have to believe that the process is fair and equitable to taxpayers in this country, and I'm not sure we're going to be able to do that.
I'm going to have to ask you, Mr. Marshall, as you're in charge of the department as the deputy minister—and I believe the political minister at the time was Mr. Brison—where does the buck stop here? Who is responsible for this colossal screw-up?
