Public Accounts Committee on Feb. 21st, 2024

[Michael Mills]

Maybe I will turn to Dominic to talk a bit about the procurement system.

[Dominic Laporte]

Thank you for the question.

In the past, our procurement officer would receive documents in different formats. Those could be CD, fax, hard copies or email. Basically, there were a myriad ways of communicating. The good thing, a very positive thing, about the e-procurement solution, which will solve a lot of these issues, is that all the documentation, all the interactions between a contracting authority and suppliers, will be part of the platform. Everything will be recorded on the cloud.

The likelihood that the issues we faced in the past will reoccur for procurements that are handled by PSPC is very thin. On top of that, we are also reinforcing training for staff. Deputy Mills alluded to that. Also, there will be mandatory checklists for task authorizations.

I have to say that there was already a requirement to have clear tasks. That was already there in the supply manual. What we need is greater oversight and making sure there are procedures in place for that.

[Shaun Chen, Liberal, Scarborough North, ON]

Aside from the need for more documentation, which would be very helpful, the cumulative effect of all the issues that have been identified by the Auditor General and the procurement ombud was that too much was paid for ArriveCAN.

While there were a number of non-competitive contracts, there were also a number of competitive ones with high values. What is PSPC doing to ensure that we are paying a fair price for services that are being sought?

[Michael Mills]

As I mentioned, we're doing a few things. Our core focus is to ensure that we make procurement simpler and more open for all businesses that can meet the goods and services requirements of the Government of Canada. Increased competition will be the most important factor in driving down prices and ensuring value for Canadians.

In addition to that, as I mentioned before, we're trying to bring more transparency to how the work is priced within these contracts. We're also expanding the use of our price verification tools, so that if we do have to do non-competitive contracts—and there are legitimate cases set out in our policy—we have greater transparency and more recourse to price verification to ensure the price reasonableness in non-competitive contracts.

[The Chair, Conservative, John Williamson]

Thank you very much.

That is your time, Mr. Chen.

Mr. Paul-Hus, you have the floor for five minutes.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Thank you, Mr. Chair.

Mr. Mills, I'd like to understand why the Government of Canada deals with a company like GC Strategies as an intermediary. We give a contract to this company, which in turn finds subcontractors and pays them, which dramatically increases the cost of the contracts.

Aren't there public servants who can take charge of finding subcontractors for projects? Is this a common practice in the Canadian government?

[Michael Mills]

I'll begin by saying that, at the general level, departments will have identified that they do not have the in-house skills they require, so they will look to have an external piece.

Under these instruments, they are looking for IT professionals with certain skills, and the competitive mechanism is open to firms that are structured like GC Strategies, as well as other firms that are integrated firms that would have IT professionals with a range of skills. They normally compete, and whoever ends up having the most skilled team at the best price would win the contract.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

The history shows us that at the end of the day, these people had no skills other than to have obtained contracts with the Government of Canada starting in 2015, contracts that eventually reached a value of $250 million.

Ms. Poulin, on this subject, you are assistant deputy minister in the Departmental Oversight Branch, whose role is to monitor. As such, do you consider this situation to be one of corruption?

[Catherine Poulin]

As I mentioned earlier in response to another question, we really take this information very seriously. We're comparing it with other information we have on hand within the department itself. We're in the process of doing some important analysis. We have a framework—

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Excuse me for interrupting, Ms. Poulin. I understand your answer, which was prepared, but, since your branch is in charge of oversight, I imagine that some people are banging their heads against the walls. It's the whole system that's in question here. As far as we're concerned, there's clearly corruption. Is this one of the possibilities you're considering?

[Catherine Poulin]

We're considering it and we're not ignoring any scenario. We are taking this information very seriously indeed. Analyses are under way. If the analyses we are currently carrying out point to any sign of criminality, we will turn these cases over to the Royal Canadian Mounted Police.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Is your unit required to establish guidelines to prevent documents or emails from disappearing? We hear, indeed, that people are deleting emails and that the shredder is going strong. Do you have the power to prevent or control this?

[Catherine Poulin]

It's not within my authority. However, when we do analyses in cases like this, we sometimes make recommendations to change certain practices, which must fall under our authority. What you—

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Thank you, Ms. Poulin.

Right now, we clearly have an elephant in the room. You talk of the future. Everyone is talking of the future. We're told that directives were issued in December and that they're going to change the way things are done. The fact remains that the rules have been in place for a number of years in the Government of Canada. The Treasury Board is there to put rules in place. Public Services and Procurement Canada establishes the contracts and the departments then make their purchases.

During the COVID‑19 crisis, Jean-Yves Duclos was president of the Treasury Board. Given the follow-up that had to be done, a lot of questions were asked about the various contracts awarded. However, when we asked Mr. Duclos, he always seemed to say that it wasn't really the Treasury Board's responsibility.

Ms. Hogan, as Auditor General, what do you feel the Treasury Board's responsibilities are in a situation like this?

[Karen Hogan]

During the pandemic, the secretary of the Treasury Board Secretariat sent a letter to the public service to say that people could be a little more flexible with the usual rules, because of the pandemic and the need to react quickly. However, the letter also made it very clear that each department was responsible for fully documenting decisions and judgments to ensure proper accountability to Canadians.

That's where the big failure happened with ArriveCAN. The documentation isn't there to ensure proper accountability to Canadians. Going forward, I would expect the Treasury Board Secretariat to make sure that measures are in place in the event of another emergency to secure strong oversight and compliance with letters or directives.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Here we are talking about the future again, but we have to stay in the past, because the rules have—

[The Chair, Conservative, John Williamson]

Please be brief, Mr. Paul‑Hus.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Enough said. Thank you, Mr. Chair.

[The Chair, Conservative, John Williamson]

Thank you very much.

I turn now to Ms. Khalid.

You have the floor for five minutes, please.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Thank you so very much.

Thank you to the witnesses for appearing today. I do apologize that you were not able to come in because of a last-minute cancellation last week to have you appear.

I'm hoping that you can help me understand how procurement works. First and foremost, I want to say how disappointed I am that we did not take care of taxpayer dollars better, that we really had a lacklustre and faulty system for procurement. Ultimately, it was taxpayers and taxpayer dollars that suffered from this. I am trying to understand a bit better how that procurement process works, if that's okay.

Last week, we saw some wide variations on the amount of money that GC Strategies has received in contracts over the years, and there is confusion around how these contracts are reported to the government. Now, we also heard last week from witnesses that in order to get a contract, you have to have that relationship with whichever department it is that you're trying to get a contract from.

Can I ask PSPC to very briefly help us understand the differences between supply arrangements, standing offers, task authorizations and the like, and what those relationships have to do with whether you get the contracts or not?

I would also like to know point-blank if the people who have now taken over the name GC Strategies, or who have changed their name to GC Strategies, were known to procurement over the past decade.

[Michael Mills]

Maybe I'll begin, and then I'll ask Dominic to jump in to fill in.

Supply arrangements and standing offers are methods of supply to pre-qualify companies that are able to produce a good or service that's required by the Government of Canada. I believe there are 11 categories of supply arrangements that exist. Companies would, as I mentioned before, demonstrate that they have done like projects and like services in the past, with a sufficient volume of business that they would have the capability to meet the needs of the government. They would be pre-qualified on these supply arrangements and standing offers.

When a department has a specific requirement and it aligns with the areas of concern within those supply arrangements, it would come to PSPC, and PSPC would typically run a mini competition. Depending on the value, sometimes there are 15 firms that are pre-selected from a pre-qualified list of vendors. If it's a large-value contract, the competition would run all pre-qualified vendors on it. Then, ultimately, there would be a choice of the winning firm, based on a combination of technical evaluation and price evaluation.

The point of reference here, I think, is that there have been a lot of questions around GC Strategies. GC Strategies was pre-qualified on supply arrangements. They had previously bid on a number of different pieces of work with different departments across the government. As people have mentioned, they had a significant volume of transactions. They had competed in those, and they had put together teams and provided services for departments and agencies. From all the dialogue with departments and agencies, the IT professionals working under GC Strategies were delivering activities and services that were amenable to the departments.

In the case of ArriveCAN, we are aware from CBSA that they previously had awareness of GC Strategies as a firm and were kind of proposing them as someone who they knew had the ability to put together a team that could actually meet their needs. The GC Strategies non-competitive contract was not a contract under the supply arrangement or the standing offer, but the kind of familiarity with the firm was with respect to previous work done under standing offers and supply arrangements.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

You're saying that GC Strategies, the people who are currently known as GC Strategies, had a relationship with the government in the past, and that is now kind of continuing on.

[Michael Mills]

What I'm saying is that GC Strategies, as has been mentioned here before, is two individuals who have engaged IT professionals with a wide range of IT backgrounds, and those professionals performed IT consulting services for the Government of Canada. People were aware that GC Strategies, as a firm, had the ability to assemble teams of IT professionals to meet the needs of government departments.

[The Chair, Conservative, John Williamson]

Thank you very much.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

How often do you do checks—