Public Accounts Committee on March 19th, 2024

[David Yeo]

No.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

You stated previously that you are constantly audited to ensure you're eligible for the indigenous set-aside when winning bids as a joint venture with Coradix.

Who is conducting these audits, and when was the last audit done?

[David Yeo]

The audits are done by ISC, which is Indigenous Services Canada. The last one was done in February 2024, just a few weeks ago.

[The Chair, Conservative, John Williamson]

Thank you very much, Mr. Barrett.

Next, we have Mr. Chen, for six minutes, please.

[Shaun Chen, Liberal, Scarborough North, ON]

Thank you, Mr. Chair.

Mr. Yeo, how many years has Dalian been working on federal contracts?

[David Yeo]

I started the company in 2001-02. We won our first contract within the first year, so shortly after that.

[Shaun Chen, Liberal, Scarborough North, ON]

Could you describe the nature of your contributions to the ArriveCAN application?

[David Yeo]

I'm very much two gates deep at DND in what I do, or what I did at the department before I had to resign after 168 days. The upshot is that when it comes to ArriveCAN, and I've been read into the file now and have been for a while, the aspect of revenue, from what I understand, is $4.9 million. That's basically $1.6 million per year for the three years the contracts were open. From what I understand, that went through a staff augmentation contract at the CBSA, so it wasn't actually an ArriveCAN app, it was a directorate or a department level standing offer through TBIPS, or, in this case, BASD. From my understanding, that's the staff augmentation contract that was used to facilitate this. It was 20 contractors for three years for approximately 100 days per year, which is basically part-time.

[Shaun Chen, Liberal, Scarborough North, ON]

Could you describe your relationship, if any, with GC Strategies and also Coradix?

[David Yeo]

I don't have a personal relationship or a professional relationship with GC. I mean, from my understanding and getting read into the file, it was part of the communication from the CBSA that there was a task authorization coming that needed to be fulfilled through GC. As a prime contractor and a general contractor for that contract, we facilitated that. That was basically my interaction with GC, which was nil. I haven't spoken to any of the principles. I've just been read into the file, and this is what I know.

As far as Coradix is concerned, it's a much different relationship. I've been with it since 2001-02. I first started this company from Barrhaven on my kitchen table. Going after the first indigenous contract that I was awarded in the first year with the RCMP and Bell Canada was to provide hardware to the RCMP.

Obviously, being one guy trying to start a business, I partnered with Coradix, because I know some people. We've had a very good relationship since then. It's been a shared services model between two companies. Coradix does much different work than we do at Dalian as far as security is concerned, so it seemed like a good fit. It's been a 22, 23-year relationship with Coradix, yes.

[Shaun Chen, Liberal, Scarborough North, ON]

I'd like to hear, in your view, the timeline of the events. We've been talking about various dates already in this meeting. What is the timeline of events that has led us to this point?

[David Yeo]

Again, I'm buried two gates deep doing high-assurance security, trying to get it out to our war fighters, so getting right into this file was probably my first shot, back in October of last year, realistically, when we got the notification that we needed to go and talk to OGGO. From a timeline perspective, that's where I sit, from getting right into the file.

However, after gaining some knowledge on it, my understanding is that this goes back to 2019. We had a very good contract with the CBSA, a staff augmentation contract through PSPC, and we were doing some good things over there. The intent of the CBSA was actually to bring over 25% of its server applications from the CBSA on-prem to the AWS cloud. I think that's where it started in 2019.

Then, obviously, in the early 2020s, we had this whole COVID-outbreak thing happen and all of this craziness that happened with the ramp-up to getting ArriveCAN out the door. We were a small part of that; we were $4.9 million of that—$1.6 million per year and 20 part-time contracts. From that perspective, that's where I think it started.

When it finished was May 2023, from what I understand, and that was certainly well before I started with the public service.

[Shaun Chen, Liberal, Scarborough North, ON]

Have you spoken to the RCMP on anything to do with government contracting?

[David Yeo]

No. The RCMP has not been in contact with me at all.

[Shaun Chen, Liberal, Scarborough North, ON]

Have you spoken to anyone else on this issue, to anyone who has been looking into the matter—for example, the Auditor General?

[David Yeo]

No, I have had no interaction with the Auditor General at all, other than I know that our staff noticed the discrepancies within the Auditor General's report. They notified the Auditor General on January 30 of this year of the discrepancy, that it wasn't $7.9 million but $4.9 million, but that never made it into the report.

[Shaun Chen, Liberal, Scarborough North, ON]

You mentioned discrepancies in the report. You just mentioned one of them. Are there any other discrepancies that your staff or you have noted in the report that you brought to the attention, or plan to bring to the attention, of the Auditor General?

[David Yeo]

As it sits right now, I have read the report. I am a certified contract and procurement specialist. That's what I did for my first 100-some-odd days with DND, and I've been around contracting forever, so I understand it completely.

What I can say out of the gate is that when I read through the Auditor General's report, I see that it's a good report, but it has vagaries and discrepancies in it. There is incorrect information in it. One of those incorrect areas is in our revenue stream because $7.9 million is not $4.9 million, and $4.9 million is not $7.9 million. There's a $3-million difference, and it's a 60% delta. From that concept right there, it's definitely a different aspect.

The other side of it is that, under “Findings”, there is a paragraph in there that says, “We found that 18% of invoices submitted by contractors that we tested did not [provide enough information] to determine whether expenses related to ArriveCAN or another information technology (IT) project.”

I have a good number of notes on this. I've gone through the entire thing. I have a lot of questions and things like that.

[The Chair, Conservative, John Williamson]

Thank you, Mr. Chen. That is your time.

Ms. Sinclair‑Desgagné, you have the floor for six minutes.

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

Thank you, Mr. Chair.

Mr. Yeo, how many employees has Dalian had since 2008?

[David Yeo]

I tried to understand a bit of that, but unfortunately there was no interpretation in my ear.

[The Chair, Conservative, John Williamson]

Apparently there is a globe on the bottom of your screen. If you click on that, it will probably give you interpretation.

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

Are you going to reset the clock, Mr. Chair?

[The Chair, Conservative, John Williamson]

Yes, absolutely.

Do you see anything like that, Mr. Yeo?

[David Yeo]

I do, yes, absolutely.