Public Accounts Committee on March 21st, 2024

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

On a point of order again, Mr. Chair, that was a very, very low blow by Mr. Genuis.

[The Chair, Conservative, John Williamson]

Mr. Genuis, you have four minutes. Why don't you get back to your line of questions to the witness and you can save Ms. Khalid for the House of Commons.

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

This is unreal.

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

Thank you, Mr. Chair.

To the witness, you said your department spends $5 billion on external contracts. How much of that goes to middleman operations—that is, to hiring people to hire others instead of to perform specific tasks?

[Bill Matthews]

Mr. Chair, I'll have to come back with that. It's a subset, and there will be some speculation involved in terms of which companies are in that business. Roughly speaking, there's probably $73 million on professional services, and a subset of that will be apportioned to the type of company the member's asking about, so we'll have to come back with an assessment.

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

Okay. I asked the PBO a similar question, and they said they have a very hard time pulling this apart as well, but they're external. I would expect that within government you would be in a better position to break these numbers down: Of the amount you spend on contracting, we would like to know how much is going to middleman operations and how much is for professional services advice. Could you provide the committee with a breakdown?

How much went for GC Strategies?

[Bill Matthews]

Over what period of time are we talking about?

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

Since 2015, let's say.

[Bill Matthews]

The numbers I have are since 2011, and for GC Strategies, it was $4.2 million. Obviously, the amount since 2015 is a subset of that.

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

GC Strategies in particular was founded in 2015, so it might be different.

[Bill Matthews]

I believe the committee's request was—

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

What was it for Dalian? How much went to Dalian?

[Bill Matthews]

For Dalian, it was $7.2 million since 2011.

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

Have you referred these or other contracting-related files to the RCMP?

[Bill Matthews]

As I said in my opening remarks, Mr. Chair, I've made the provost marshal—who is military police, which would be the starting point for jurisdiction here—aware of our work concerning Mr. Yeo and his employment and his potential activity as a contractor at the same time. At this point, I'm just keeping them apprised. I have not referred formal files to them.

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

Would you expect that they would ask for information and then you would provide it if they asked for that information? Would the RCMP ask you directly, or is the process that they would go through the force you mentioned?

[Bill Matthews]

It depends. If concerns are specific to activity at National Defence, they would normally come through the provost marshal. I know my colleagues at PSPC have been in touch with the RCMP. If there is information the RCMP needs from National Defence for that investigation, they may come directly to us, or it could be through the provost marshal.

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

Okay, then that process hasn't been initiated yet, but you have been keeping the contact informed. Okay. I see you nodding.

You spoke with respect to Mr. Yeo's activities. More broadly, we had the announcement just yesterday of multiple other companies, not the ones we're aware of, being involved in fraud. Beyond the case of Mr. Yeo, has DND been impacted by contracting fraud in the context of these kinds of contracts and arrangements? What can you tell us about that and what referrals of information have you made on that?

[Bill Matthews]

There are a couple of points here, Mr. Chair.

PSPC has made us aware that of the contract-related fraud they're looking into, about $400,000 of it relates to activity at National Defence. We don't yet have details on what that is and who the vendors are, but that information will be coming shortly.

I would also stress that this is what they know right now and that there is the possibility they will find more. This is work that PSPC started a few years back as more and more contractual information was digitized into databases. Now they're basically using data analytics to highlight potential fraud. I applaud that work and I'm grateful that they have let us know.

Independent of that, we have concerns about a few contracts we are aware of, and for those we are dealing with the provost marshal. That's all I can say about them at this stage.

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

It seems like a lot of fraud.

[Bill Matthews]

As a percentage of our total spend, I can't say—it's too early—but I don't think it's significant. On this notion of contractors working on multiple contracts at the same time across the federal government, of getting line of sight on how many different contracts a contractor may be working on and of getting some common-sense analytics around there being only so many hours in a day and how much you can bill during a week, putting that information together is very important. PSPC has launched a process with some of their tools that lets them do those analytics, so I expect they will be highlighting more for us as we go forward.

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

I like the words “common sense” that you used there. We could get more common sense in the government.

[The Chair, Conservative, John Williamson]

Mr. Genuis, that is your time.

We turn now to Ms. Shanahan. You have the floor for five minutes.

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

Thank you very much, Chair.

Thank you very much, Mr. Matthews, for being here with your team, because of course, as egregious as the testimony of Mr. Yeo was on Tuesday to this committee, it's not normally the purview of this committee, as I'm sure you're well aware, to be hearing testimony from individual contractors to the federal government, but the situation is such that we are here.

What is more concerning to this committee, I think, is the structure and processes in place that would identify a Mr. Yeo much earlier in the game, because they will always exist, right? He's not the first and he's not the last, as we clearly know.

My first question is this: Did he seek the job at National Defence, or was the offer made to him? You said something about converting him.

[Bill Matthews]

Isabelle, I may refer to you on this one for the staffing process.

There was an external competition staffing process launched, which means that it's open to individuals outside the public service. That was a generic competition that was launched. He applied and was added to a pool of IT professionals that one could then draw from. I don't know for certain, but I expect that he was encouraged to apply by the people he was working with on contract, because there would have been value to turning him into an employee, if possible. He was successful in that process. He was added to the pool and then he was picked by the hiring manager and offered a job, which he then accepted.

The reason it's important for me to stress that this was an external pool is that it means that the Public Service Commission will be looking into any sort of investigation in terms of whether it was appropriately used. I imagine that they will be looking at things such as the reference checks and whether they were appropriately done. He did not declare any conflicts at that stage, but we will look into that process with the help of the Public Service Commission.

Do you want to add something, Ms. Desmartis?