Public Accounts Committee on Feb. 27th, 2024

[Andrew Hayes]

I'll start with this one.

The concerns we raised were really about public servants undertaking activities that gave GC Strategies an advantage, whether it's in the non-competitive context, where GC Strategies hadn't even provided a proposal but won the first contract, or in the competitive process, where there was GC Strategies' involvement in setting the requirements. Those, to us, are concerns. They raise questions about whether there was bias or unfair advantage, but whether it's criminal is really a matter for the RCMP.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Would you like to comment on whether the rigging component specifically appears to be criminal?

[Alexander Jeglic]

I will answer in the same way that my colleague finished. Now that there actually is an investigation, I think any commentary around criminality is inappropriate. Let the RCMP make that determination.

[The Chair, Conservative, John Williamson]

Thank you very much. That is your time, Mr. Genuis.

I'll now turn to Ms. Khalid.

You have the floor for five minutes.

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

Thank you very much, Chair.

Thank you to the witnesses for being here today. I really appreciate it.

I have a couple of things. I'll turn to the ombudsperson first.

Does your report allege corruption by public servants?

[Alexander Jeglic]

There are no direct allegations of corruption in the report. As I said, our report is intended to be factual in nature. We don't identify individuals; we identify procurement practices, which is the nature of the review. If, by virtue of some of the practices we identified, it results in a secondary review, that's not a bad thing.

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

Does your report allege any political interference by any minister or any elected official?

[Alexander Jeglic]

No, it does not.

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

Thank you for that.

I really appreciated your recommendations and your findings. I thought they were reasonable, practical and actionable. Can you give us a bit of a rundown as to what actions have been taken, based on those findings and recommendations, so far? What do you think the government needs to do further?

[Alexander Jeglic]

Essentially, what you would have seen in our report is the proposed management action plan on behalf of all three departments. In terms of me being able to comment on what has been implemented to date, we've done no testing, but as I mentioned, we will do a follow-up two years after to ensure that each one of the 13 recommendations has been assessed for whether it has been fully implemented or not.

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

In the past, you have expressed some frustrations about the lack of action on your recommendations. Do you want to comment a little as to what your expectations are with these recommendations?

[Alexander Jeglic]

I wouldn't say that I'm frustrated by the lack of compliance with the recommendations. I will say that the purpose of our follow-up examinations is to ensure compliance. The main goal for our office is to make the procurement system work better for everyone, so we always make recommendations with that in mind. The ArriveCAN circumstance is no different. The intention behind each one of the recommendations is to improve the process.

I appreciate that you recognize the practicality behind the recommendations, because we have identified what we think are some fixable problems. I also know, as part of other questions, that there are larger-scale issues that I still think go unaddressed by some of the recommendations.

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

In those recommendations, I really appreciate that you outlined that PSPC needs to play a better oversight role. In fact, you have a whole section in the report on it.

I want to turn to an example you provided with respect to emergency issues and their management within the procurement world. You talked about the way hurricane Katrina was dealt with. Can you perhaps expand on that a bit and on its comparison to COVID-19 procurement in Canada?

[Alexander Jeglic]

To be completely honest with you, I hadn't been made aware that the emergency procurement piece we had written about would come up today. Specifically on the hurricane Katrina example, I'd prefer to provide you a written answer, just to make sure it's factually accurate.

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

Thank you. I really appreciate that.

We talk about transparency and the need for efficiency within our public procurement system and about how relationships work with contractors who are perhaps embedded in the system or who have built trust within the procurement system in our country. What is the number one thing, very practically, that you think we can do to make sure these kinds of issues don't happen going forward?

[Alexander Jeglic]

As a basic element, when contractors are embedded within government departments, we should never fall prey to the notion that we are all the same when we're in the same working environment. Always be mindful of the fact that these individuals have a different incentive, a different role. Therefore, when they are being made privy to information, you must be mindful of the fact that these are not employees; these are private contractors who are incentivized to continue to win government business. To protect the fairness of the process, you must always maintain this at the heart of all decisions and in how you include them in discussions and interact with them. There's a reason they're defined as consultants and not as employees.

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

Thank you.

[The Chair, Conservative, John Williamson]

You have time for a brief question, Ms. Khalid, if you want.

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

I have a very brief question.

With respect to the Lobbying Act and PSPC employees retiring, do you think we need to revisit the Lobbying Act to address some of these challenges?

[Alexander Jeglic]

While I like to answer all question as directly as possible, I think commenting on the Lobbying Act is probably beyond the parameters of my mandate.

[The Chair, Conservative, John Williamson]

Thank you very much.

Ms. Sinclair‑Desgagné, you have the floor for two and a half minutes.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Thank you, Mr. Chair.

I would now like to talk about the nature of certain contracts awarded in a non‑competitive process. Your report notes that a number of contracts were awarded on a non‑competitive basis.

Can you explain the theoretical justification for awarding contracts on a non‑competitive basis? I know that there are standards based on contract amounts. I believe that a contract under $25,000 can normally be awarded on a non‑competitive basis. However, for contracts over $25,000, a number of companies must be invited to bid. For contracts over $100,000, other rules apply. I'm going from memory. As a former consultant, I remember the rules. Personally, I strictly adhered to them.

When is it normal to award a contract on a non‑competitive basis?

Ideally, what proportion of its contracts should a government award on a non‑competitive basis?

[Alexander Jeglic]

I want to make clear that having a directed or sole-source contract is absolutely within the rules in certain circumstances. It's specifically contemplated in the government contracts regulations in section 6. There are four specific examples that are considered appropriate, the first being for emergency circumstances, which we did look at. We found it to be an appropriate allocation of the exception.

The second is the monetary thresholds you mentioned. Those were somewhat recently updated, so it's $25,000—I'm generalizing here—for goods and $40,000 for services.

The third exception is if it's not in the public interest. An example of that is the correlation among the national security aspects.

The fourth is if there is only one supplier capable of doing the service. There are some sensitivities associated with identifying only one supplier capable of performing it, because I think sometimes it became “it's the only supplier we know” as opposed to the only supplier that truly can. The Treasury Board has quite a comprehensive document with seven questions that need to be asked and answered before invoking the last exception associated with only one supplier being available.

All that said, these are exceptions that are absolutely acceptable. They are captured in the government—

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

That wasn't the point of my question, but my time is up.

[The Chair, Conservative, John Williamson]

Yes, sorry.