Public Accounts Committee on Feb. 27th, 2024

[Alexander Jeglic]

If you're asking why they might have challenged the processes, it's likely due to.... Again, I feel a little reluctant to comment on things that were not in our report and were found in the OAG report. I will say that, likely, there were inconsistencies in what CBSA and PSPC thought were best practices for the road forward on that specific contract.

Do I think that's a normal occurrence? Yes, absolutely. I think there are times when there are differences of opinion between the business owner and the contracting authority on what methodology should ultimately be used. However, I think the contracting authority should also have a very significant say in ultimately making the determination.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

In your opening statement, you mentioned that there were overly restrictive requirements. Of course, we know that's because GC Strategies made them. Those overly restrictive requirements precluded pretty much anyone else from being competitive at all and even being able to bid.

Why was this allowed? Why were they allowed to come up with what were clearly overly restrictive requirements that would eliminate anyone else right from the very beginning?

[Alexander Jeglic]

It's a frustrating kind of circumstance in the sense that it should have been caught. I think it's a circumstance where everyone who was involved likely had more obligations on them than they acted on.

What we found unusual, though, which we've been discussing since the finalization of the report, is the idea that even when it was made competitive—and it was made competitive to 40 suppliers, 10 of which indicated an interest to participate—not one of the suppliers challenged the restrictive nature of the requirements. To me that's baffling, particularly given that 10 of them expressed an interest. Either the community of suppliers accepted that this process was geared to a specific supplier or something else happened that I can't even hypothesize on.

However, I will say that these requirements were drafted in such a way that, having the benefit of all the information, they now seems even more restrictive than they would have if you were involved in the process, because you might not have been aware of the three previous contracts that had been delivered by that supplier if you were within PSPC. You may not have been aware of the exact circumstances of those contracts.

As I said, though, when they're as restrictive as these were on their face—it doesn't take any technical expertise to identify that these are heavily restrictive criteria—I expect PSPC to catch and push back on these types of criteria in the future.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

You more or less answered my next question, because given your mandate, suppliers are supposed to complain to you if they feel the bidding process is unfair. Isn't that right?

[Alexander Jeglic]

Absolutely.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

It's a mystery why no one brought this up as a concern to you, given that it clearly did look like the bar was pretty high and only one particular company met it. Is that correct?

[Alexander Jeglic]

I'll just say one point of clarification. We cannot review complaints from suppliers until the contract is awarded. In this circumstance, it would have been too late. However, there is another organization, called the Canadian International Trade Tribunal, that may have the authority to review any types of procurement-related issues in advance of or prior to contract awards, like overly restrictive criteria.

However, the first step in that process is for a supplier to step forward and challenge it by way of clarification or questions during the live process. As I said, I find it baffling that not a single one of those suppliers did so.

[The Chair, Conservative, John Williamson]

Thank you very much.

That is the time, I'm afraid.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

I just have one more, and maybe he can send the answer in, because I think it's really important.

[The Chair, Conservative, John Williamson]

Sure.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Do you have any suggestions for changes to the legislation so this can be precluded and they can identify it during the process rather than after the process when the contracts are awarded and it's too late?

[The Chair, Conservative, John Williamson]

Be brief, please.

[Alexander Jeglic]

I just want to clarify that. Are you referring to our legislation and regulations?

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

That's right.

[Alexander Jeglic]

I think it's very important that we have complementary jurisdiction with the Canadian International Trade Tribunal. We have a very good relationship with them to ensure that suppliers have a recourse mechanism available to them. In this circumstance, I think the appropriate recourse mechanism would have been through the Canadian International Trade Tribunal.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Thank you.

[The Chair, Conservative, John Williamson]

You're very welcome.

Mrs. Kusie, you have the floor for five minutes.

This begins our fourth and final round.

It's over to you.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you very much, Mr. Chair.

Thank you very much to our witnesses for being here today.

I want to thank you all for your work in bringing to light so much of the mismanagement of the Liberal government with regard to the arrive scam scandal. I was speaking in the House today on this issue, and it's evident from the evaluations of both of your offices that there is very little positive, if anything at all, to say about the ArriveCAN application. Again, I thank you both very much for your work.

Mr. Jeglic, in November 2021, you had a report on the CBSA. You stated in the report that your office, the OPO, “observed instances where CBSA failed to disqualify non-compliant bids, and awarded at least 1 contract to a non-compliant bidder. File documentation was also found to be incomplete and of significant concern in several files.” You recommended that they needed “to document every decision of business value”, and the CBSA agreed to do this by June 2022.

Certainly, there's been a lot of water under the bridge since then. Based on this most recent report of yours, do you feel these recommendations were followed?

[Alexander Jeglic]

I'm sure the CBSA is not looking forward to our follow-up review, because one of the things we will be looking at is specifically the recommendation about documentation.

That being said, the scope period was slightly different, obviously, for that review. It was 2018 to 2020. That predates the pandemic, so it identifies the seriousness of the documentation deficiencies at the CBSA. Also, you'll note that in the report—thank you for bringing it up—we identify the seriousness associated with the issue and specifically say that the procurement file documentation was “incomplete and of significant concern”. It was back in 2021 that this was ultimately released. To give you the specific date, it was November 9, 2021.

To say that they were unaware of their documentation practices I think would be inappropriate. What I think the work of this committee and other committees has done is elevate the importance of my office and the work done by the Office of the Procurement Ombudsman. This is not to say that the recommendations were not taken seriously, because they were, but there's an additional enhanced scrutiny associated with the work of our office by parliamentary committees, which I think will result in stronger and swifter action.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

That's excellent news. I'm also very pleased to see your office elevated through the heeding of advice and information, as well as your colleagues to the left of you.

We've seen a lack of documentation in three different agencies: the Canada Border Services Agency, the Public Health Agency of Canada and Public Services and Procurement Canada. You mentioned a lack of compliance. How do you think, then, compliance is ensured?

[Alexander Jeglic]

The way we ensure compliance is by conducting follow-up reviews. We allow for the elapsing of two years. We find that to be a sufficient amount of time to allow departments and agencies to react to the recommendations being made, and then we do a secondary review.

The nature of the review depends on what we see, but it is something we specifically contemplate doing. Then we issue report cards that speak to whether the recommendation has been complied with or not.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

I have said several times, both in live broadcasts and within the House, that to me, the most concerning thing about the arrive scam is that it's a microcosm of how this government has operated everything, with its mismanagement and lack of oversight.

In your opinion, is the lack of documentation a systemic issue throughout all federal departments or would it be specific to these departments, based on your analysis?

[Alexander Jeglic]

I talk about baseline data, and this is one area where we have baseline data. We've done over 17 reviews of departments and agencies, the highest value and volume departments and agencies. I would say the number one issue—if not 1(a), maybe 1(b)—is documentation. This is not unique to these three departments. This is a struggle across the federal government.

This needs to be taken seriously. As I said, I think the work of this committee and the OGGO committee to spotlight the seriousness of the documentation deficiencies will actively and rapidly address the deficiencies.

[The Chair, Conservative, John Williamson]

Thank you very much.

We're turning now to Mrs. Shanahan.

You have the floor again for five minutes, please.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you very much, Chair.

I find it very interesting to get the procurement side of this equation. Although it's not the usual purview of this committee, it is certainly clarifying a number of different things for me and reassuring me that indeed there are review procedures in place.

I have a question for Mr. Jeglic.

Do you work with the Auditor General's office in any way? Do you collaborate in any way?