Public Accounts Committee on May 7th, 2007

[The Chair, Liberal, Shawn Murphy]

Mr. Wrzesnewskyj.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Just take my question off Boris's time. Just kidding.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

That's taking accountability pretty far.

[The Chair, Liberal, Shawn Murphy]

Mr. Wrzesnewskyj.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Mr. Chair, before I start, perhaps we could call Mr. Gauvin to the front and have him sworn in.

[The Chair, Liberal, Shawn Murphy]

Okay.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Point of order, Mr. Chair.

It makes sense that Mr. Gauvin be asked questions about this, given that he was the financial officer. My only plea to you is that we stay on the audit and its contents for today. I would like, at some point, to call Mr. Gauvin back to discuss the ATI issue in isolation with Mr. Estabrooks, etc. I think it would help the committee's focus if we stayed narrowly fixated on the matters before us relating to contracting right now to avoid dispersing our efforts.

Thank you.

[The Chair, Liberal, Shawn Murphy]

I think it would suit the committee greatly if everyone stayed focused on the issues we're talking about, although Mr. Gauvin was the chief financial officer and should or ought to have known what was going on.

Is that what you want to follow up, Mr. Wrzesnewskyj?

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Yes.

[The Chair, Liberal, Shawn Murphy]

Mr. Gauvin, I'd ask you to come forward.

I'd ask the witness to be sworn in.

[Deputy Commissioner Paul Gauvin, Deputy Commissioner, Corporate Management and Comptrollership, Royal Canadian Mounted Police]

I, Paul Gauvin, swear that the evidence I shall give on this examination shall be the truth, the whole truth, and nothing but the truth, so help me God.

[The Chair, Liberal, Shawn Murphy]

Mr. Wrzesnewskyj.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Thank you, Chair.

Mr. Crupi, in your opening statement, on the contracting methods that were used, you referred to Mr. Gauvin as having stated that they were an acceptable risk. We've just heard from Mr. Marshall, and he provided a very different take on it. He said the whole thing stinks. In previous testimony, Mr. Gauvin has made it clear that he attempted to take away your contracting authority.

I'd like to get to the bottom of this whole thing. Did Mr. Gauvin say this was an acceptable risk?

[Dominic Crupi]

Yes.

The acceptable risk was going to CAC when his procurement officials said they were too busy—I don't know the other statement that was made—to continue providing contracting services to us and to go to Public Works, who said they couldn't meet the timeframes. The acceptable risk was we had a contract with Morneau Sobeco, which was to start in March 2003, which would immediately have payments start to go to Morneau Sobeco. If we did not have the work in place, if we did not have the clean-ups of data and whatever in place, we would have had to pay Morneau Sobeco in the millions of dollars for not doing any work. The acceptable risk Mr. Gauvin identified was the additional cost—and I keep hearing it was 15%.

The way it was described to me—and I could be wrong—was that on a $100 contract, you would charge $107 if I went through Mr. Gauvin's shop, $100 plus GST. If I went through Consulting and Audit Canada on a $100 contract, I would be charged $115. That's an 8% difference. I could be wrong, but that's how it was explained to me, sir. That was the acceptable risk that I understood.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Okay.

Mr. Gauvin, for clarification, Mr. Crupi, in his opening statement did not perceive himself to have had his contracting authority removed. He referred to the situation as a glitch. You made it clear previously in testimony here that you had attempted to have him removed. How do you match the two?

[D/Commr Paul Gauvin]

First of all, this was a very difficult project, and it had to be done within certain timeframes. I agree with that.

Second, we did have some problems in contracting, and we stopped it. We took the contracting authority away. Our people would not process these contracts and break the rules.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

So Mr. Crupi had his contracting authority taking away.

[D/Commr Paul Gauvin]

Yes, he did.

Now, I think Mr. Crupi explained that they put a process in place whereby they had five or six signatures, and eventually Mr. Ewanovich made the decision as to whether or not to go with the contracts.

I also want to say that PWGSC also knew us well as a client, and we had a job to do, and there were fairly complex requirements. We honestly felt that PWGSC—

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Is this almost like an opening statement? We've moved on—

[D/Commr Paul Gauvin]

No, it isn't.

[The Chair, Liberal, Shawn Murphy]

You called him up.

[D/Commr Paul Gauvin]

I'm only trying to answer the question, sir.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

It seems you've veered off somewhat, but—

[D/Commr Paul Gauvin]

No, I'm just trying to finalize the question.

We honestly felt that PWGSC meant we were totally protected because of their experience and expertise in government contracting. They are the experts; they do procurement on behalf of all departments.

As we heard today, in going to CAC there were issues, but I don't think anybody knew those issues were there. I mean, CAC was a very reputable organization; it had been there for a long time and it had done a lot of contracting for many departments. Therefore, what happened there was that there happened to be some collusion between two individuals, and that's where the problems occurred.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Thank you.

You must have been quite worried about the escalating costs in the procurement process for the pension and insurance funds. What did you do about those concerns?