Thank you, Mr. Chair.
We thank you for this opportunity to present the results of chapter 1 of our October 2007 report, entitled “Safeguarding Government Information and Assets in Contracting”.
Joining me today are Ronnie Campbell, assistant auditor general, and Bruce Sloan, senior principal, who were responsible for this audit.
The Government of Canada's ability to protect sensitive information and assets it entrusts to Canadian industry is critical to ensuring the health, safety, security, and economic well-being of Canadians, both at home and abroad. This ability is also important for maintaining Canada's international reputation and ensuring the continued growth of international trade.
We found serious weaknesses at almost all levels in the processes set up to ensure the security of government information in assets entrusted to industry. These weaknesses range from incomplete policies, an unclear mandate, poorly defined roles and responsibilities for industrial security, to a willingness of some officials to circumvent key security procedures in order to reduce costs and avoid delays in completing projects.
We found that many who play a role in industrial security are not sure of their responsibilities. All stages of the process rely on the assumption that the proper procedures were followed at the earlier stages, but there are few mechanisms to provide assurance that this is so.
As a result of weaknesses in the system, many federal contracts providing access to sensitive government information and assets have been awarded to contractors whose personnel and facilities had not been cleared to the appropriate security levels. These include a number of contracts awarded by the Department of Public Works and Government Services on behalf of other government departments, and thousands of contracts for national defence construction and maintenance projects awarded by Defence Construction Canada.
Of particular concern was the failure by officials at National Defence to properly incorporate contract security requirements for the construction of the above-ground complex in North Bay, Ontario. Contracts for this project were awarded by Defence Construction Canada to unscreened contractors. As a result, Canadian and foreign workers had virtually unlimited access to the construction plans and the construction site.
I am pleased to note that Defence Construction Canada has begun to address some of the issues raised in our report. We received a detailed management action plan that outlines the actions the entity will take to address our recommendations. The committee may wish to ask the entity about the progress it has made.
National Defence has also provided us with an action plan to address our recommendations. The committee may wish to ask the department what progress has been made to date and what steps have been taken to ensure that the NORAD above-ground complex can be used for its intended purpose.
PWGSC's Industrial Security Program plays a major role in ensuring that contracts with security requirements comply with the government security policy. We found that the program's operating procedures were in draft form and did not cover key activities essential to ensuring security in contracting . In addition, the program did not have stable funding, thus limiting its ability to hire and retain enough qualified security professionals.
I'm very pleased to note that Public Works and Government Services Canada has provided us with its management action plan. Although we have not audited the plan, we did review it. We believe that if it is carried out, the plan should address the concerns raised in our report. The committee may wish to ask the department about its strategies and the progress it has made to date, particularly its progress in obtaining stable funding for the program.
We found that the government did not know to what extent it is exposed to risks as a result of less than adequate industrial security. A concerted effort to strengthen accountability, to clarify policies, and to better define roles and responsibilities for security in contracting is required to help reduce these potential risks to the national interest.
Mr. Chair, this concludes my opening statement. We would be pleased to answer any questions the committee members may have.
Thank you.