Perfect. Thank you.
I'd like to begin by acknowledging that the land from which I am joining you is the traditional unceded territory of the Algonquin Anishinabe people.
Mr. Chair, committee members, thank you for inviting me here today.
My name is Alexander Jeglic. I appreciate the opportunity to appear before this committee to shed a light on the findings of my office's recent report on procurement practices of federal departments pertaining to contracts associated with ArriveCAN.
With me today is Derek Mersereau, acting director of inquiries, quality assurance and risk management.
I'd also like to acknowledge my esteemed colleagues from the Office of the Auditor General, who have undertaken a review of this topic and shared the results of their findings in recent weeks.
My office is independent from other federal organizations, including Public Services and Procurement Canada.
I submit an annual report to the Minister of Public Services and Procurement Canada, but the minister has no influence over my reports or reviews, and all my activities are concluded at arm's length from PSPC and other federal organizations.
Specifically, our legislative mandate has three components.
First, we review complaints from Canadian suppliers about the awarding of federal contracts below $33,400 for goods and $133,800 for services.
The second component of our mandate consists of reviewing complaints respecting the administration of contracts, regardless of dollar value.
Third is alternative dispute resolution services that Canadian businesses and departments can utilize to resolve contractual disputes. The process is voluntary, and my office's certified mediators assist parties in resolving disputes in a cost-effective and timely manner without resorting to litigation. There are no dollar-value thresholds associated with our mediation services.
Fourth, we review the procurement practices of federal departments to assess fairness, openness, transparency and consistency with laws, policies and guidelines, which led to my review of the ArriveCAN-related contracts.
On November 14, 2022, the House of Commons Standing Committee on Government Operations and Estimates, OGGO, adopted a motion recommending that my office conduct a review to assess whether contracts awarded by departments in relation to the ArriveCAN application were issued in a fair, open and transparent manner, and whether contracts awarded on a non-competitive basis were issued in compliance with the Financial Administration Act, its regulations and applicable policies and procedures.
Once my office was able to establish reasonable grounds, as per our regulatory requirements, the review was launched in January 2023. As per its legislated deadline, my office completed the review of ArriveCAN contracts on January 12, 2024.
The report was published online on the Office of the Procurement Ombudsman's website on January 29, 2024.
My office completed a review of 41 competitive and non-competitive procurement processes and resulting contracts, contract amendments and task authorizations or service orders, under which work was performed for the creation, implementation and maintenance of ArriveCAN. The review does not include subcontracts, as these are beyond the legal authorities of my position.
CBSA was the client department for all 41 contracts. These contracts were established for CBSA by PSPC, Shared Services Canada and CBSA under its own contracting authority.
Regarding competitive procurement practices leading to the awarding of contracts, all 23 solicitations reviewed were issued under a PSPC supply arrangement. Overall, solicitation documents were clear and contained information potential bidders required to prepare a responsive bid. For the most part, solicitations, solicitation amendments and responses to questions from potential bidders were appropriately communicated, and bids were evaluated and contracts awarded in accordance with solicitation documents. However, mandatory criteria used in one solicitation, leading to the awarding of a $25-million contract, were overly restrictive and favoured an existing CBSA supplier.
My office has identified issues related to the achievement of best value in many procurements. For 10 of the 23 competitive procurements reviewed, the use of overly restrictive median bands in the financial evaluation of bids stifled price competition and resulted in rejection of some otherwise high-quality bids.
In roughly 76% of applicable contracts, resources proposed in the winning bid did not perform any work on the contract. This is known as a bait and switch. When TAs, or task authorizations, were issued under these contracts, the supplier offered up other resources, but not the individuals who had been proposed in order to win the contract.
Files for non-competitive contracts included written justification for awarding a contract through a sole-source process based on the exceptions to competition provided by the government contracts regulations. Reasons were cited for not competing these contracts: They were necessary due to the need being a pressing emergency or due to only one supplier being capable of performing the work.
Insufficient records maintained by Shared Services Canada raised questions as to whether certain service orders under the GC Cloud Framework Agreement followed appropriate procurement practices. There was no documented procurement strategy for work associated with ArriveCAN, and multiple service orders issued to one supplier were treated as separate, unrelated requirements despite the fact that all were associated with ArriveCAN.
A majority of the files reviewed were for professional services contracts through which work was authorized under a TA. Overall, documentation of TAs used for ArriveCAN was complete and, for the most part, properly authorized. However, 20 of the 143 TAs reviewed did not include specific tasks, including descriptions of the activities to be performed.
Resources authorized to work on a contract with TAs must be assessed by the business owner before a TA is issued to ensure the individual meets evaluation criteria for the resource category, as specified in the contract. There were no assessments for more than 30 resources named for ArriveCAN-related TAs.
Overall, amendments to the contracts reviewed were appropriate and in line with the contracting policy.
As the client department, CBSA was responsible for the proactive publication or public disclosure of contract information on the Open Government website for the contracts reviewed. Information was not proactively published for 17 of 41, or 41%, of contracts reviewed. In these 17 cases, the original contract or one or more contract amendments were not available on the Open Government website. This result runs counter to broader government commitments to transparency and strengthened accountability within the public sector.
