Public Accounts Committee on April 9th, 2024

[Nicole Foster]

To my knowledge, I was not.

[Larry Brock, Conservative, Brantford—Brant, ON]

Thank you.

[The Chair, Conservative, John Williamson]

Thank you very much.

Mr. Chen, you're up and you have the floor for six minutes. Go ahead, please.

[Shaun Chen, Liberal, Scarborough North, ON]

Thank you, Mr. Chair.

We've talked a lot about the technology you have provided with respect to ArriveCAN and to support the work of the government.

One of the ideas you brought forward was the notion of modernizing procurement.

Could you explain to us what you see as the current challenges in the way things are done that modernizing procurement would help resolve?

[John Weigelt]

Certainly it could take longer than the six minutes we have available today. It is quite a challenging file that has been under way for many years.

I will highlight a couple of things. One is that it's very challenging to keep up with the ever-increasing pace of technology. Government procurements have often envisioned a 10- to 20-year life cycle for equipment, and that's thinking about trucks or planes. Technology changes far more rapidly than that, and we need a way to keep abreast of that type of change.

We also need to make sure that the way technologies are specified reflects today's technologies and not yesterday's technologies. We find that some of the terms and conditions and the way the requirements are defined are more about people having computers on their desktops instead of in the cloud or being available on demand.

Those are two of the top areas that I think are worth exploring.

[Shaun Chen, Liberal, Scarborough North, ON]

Thank you.

You are part of this project that has now received a lot of attention in the public. The Auditor General has questioned the value for money. You are one of the organizations that have been part of developing this.

In terms of your contributions, you mentioned that Microsoft was responsible for building the bridge between the ArriveCAN app and the BSO app, that I am assuming CBSA officers would be using, and I am guessing there is some form of data integration between the two apps.

Do you believe you provided value for money in your contributions to this project?

[John Weigelt]

I might have spoken too quickly over the examples of the different applications. Microsoft was not involved with the ArriveCAN projects or those applications, nor did we build the BSO app.

We worked with CBSA and provided them with cloud computing capabilities. The application let them learn how to build applications and use the cloud services. Then our training and advisory skills helped to really skill CBSA employees to be able to use these tools. They created a pilot connector, that bridge between the two islands. They were able to then use that as an example as they went forward during the COVID crisis and further to be able to then grow on that capability. Absolutely, we feel that we've provided great value to CBSA, to the Government of Canada and to Canadians.

[Shaun Chen, Liberal, Scarborough North, ON]

Help me understand. If you had not built that bridge, how would a CBSA officer—you might not be the right person to ask this question of—be able to see the information that's inputted into an app that is not connected to the application in front of them?

[John Weigelt]

The BSO app was intended to be on a mobile phone. It enabled a faster, streamlined approach. For those who were in western Canada, you may recall having a QR code on your phone that enabled you to go into restaurants in a more streamlined fashion. That was to be the same thing, to enable the border services officer to look at the ArriveCAN QR code and then streamline that process. It is our understanding that they had to have two separate applications, which could have potentially slowed that progress across the border.

[Shaun Chen, Liberal, Scarborough North, ON]

I'll move to AWS.

You talked about the work you did with CBSA in providing expert advisory services and design advice on architecture.

You talked about reusable assets. Could you explain a bit further what types of reusable assets there are and how they can be applied to support the work of the government?

[Nick Markou]

I think, from a reusable asset perspective, we built out components of the ArriveCAN program along the lines of security, data management and those types of things. When we were working with CBSA, ArriveCAN was one of the many applications and programs that we were working with them on.

The analogy that I like to use, to remove the technicality from it, is that, if you were building a condo building, for instance, you build the foundation once. You don't build a new foundation for every condo that you equip. I would say that would be an analogy for some of the reusable assets that we built.

Ultimately, for CBSA, on things like the authority to operate, they were able to gain the audits that they passed. Those were essentially reusable assets. While they may have been built as part of the ArriveCAN program, they're not necessarily for the exclusive use of the ArriveCAN program. They can, at the choice of CBSA or other parts of government, be used for other components.

[Shaun Chen, Liberal, Scarborough North, ON]

Did AWS ever consider developing the actual application itself, like the ArriveCAN app? Is this an area of business that you are involved in?

[Nick Markou]

We are not an application development firm. AWS by definition provides infrastructure and cloud services to organizations globally. We are not in the business of application development.

[Shaun Chen, Liberal, Scarborough North, ON]

As you work to develop reusable assets that can be applied across different applications and purposes within the government, how do they coordinate with you in terms of upcoming projects or other applications that are being developed so that those reusable assets can be leveraged?

[Nick Markou]

The contract vehicle, the agreement that we used, was designed by the Government of Canada. It was called the cloud framework agreement, which is the direct vehicle by which the Government of Canada engages our advisory services. Typically, in discussions with our customers—and we do have many departments that are customers of AWS—they may bring this up to us at some point in time. They may or may not engage our services.

Ultimately, from an AWS perspective, what we're trying to do is provide innovation and assist the government through complexity. We then transfer those skills and knowledge to both our government customers and our partners so ultimately they don't need to rely on us to consult with us, let's say, on every single aspect that they want to move ahead on. Our entire program is about enablement.

[The Chair, Conservative, John Williamson]

Thank you. That is the time.

To our witnesses, we take questions and answers in both French and English. Could you prepare your earpieces if you don't speak or understand French?

Next is Bloc Québécois member Ms. Sinclair‑Desgagné. She'll be asking her questions in French, but you can answer in French or English.

Go ahead, Ms. Sinclair‑Desgagné. You have six minutes.

I'll turn the floor over to you.

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

Thank you, Mr. Chair. I appreciate that introduction. I'm honoured.

Thank you all for being with us. Today, you're helping us understand what really happened and the various layers of government mismanagement.

Here's one of the biggest questions we have, not just all of us here on the committee, but also many taxpayers in Quebec and Canada: How does the subcontracting process work when businesses are very small and don't actually provide any services? I'm talking about businesses such as GC Strategies, Dalian, Coredal and Coradix, which we heard about earlier.

My first question is for you, Mr. Abbott. You said in your opening remarks that you had carried out a number of contracts and that only one of them was as a subcontractor through GC Strategies.

Is that correct?

[Mike Abbott]

That's correct.

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

You had entered into contracts directly with the Canada Border Services Agency, or CBSA. Then, GC Strategies asked you to be a subcontractor.

Why didn't you just say that you would deal directly with the CBSA? Why did you agree to let a company earn commission on work that you were actually going to do?

[Mike Abbott]

The contract we had with CBSA direct to BDO was a contracting vehicle for business services, and we were qualified in six specific categories. The categories for what our Lixar team did around data scientists and around part of the application development for the optical reader technology didn't qualify on the contract that we were qualified on with BDO Canada.

By extension, GC Strategies reached out to us. It understood that we had that capability and then asked whether we would be interested in supplying that.

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

If you had that capability, why didn't you qualify for the contract with the government? Given BDO's size, if you had that capability, you should have already been qualified with the government.

[Mike Abbott]

We acquired Lixar in March 2020. Lixar did not have the prerequisite qualifications as an organization to meet the overall corporate qualifications at that time. Today we would.

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

Was it the same process that was used for your $800,000 in contracts with Dalian? Was it the same as it was with GC Strategies, where you didn't qualify with the government, so you had to resort to the somewhat sneaky method of going through Dalian?

[Mike Abbott]

That's correct. It was for a technology-specific.... Our contracting vehicles were for business services at the time. At the time, we, as a firm and an organization, did not qualify because we had not had our technology capabilities long enough.

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

Don't you find it ridiculous that a two-person company that provides no services qualified for a government contract, when a company with the capability to do the work did not qualify? As a result, taxpayers had to pay a two-person company that provides no services but was qualified a commission of 20%, and even 15% to 30% in Dalian's case.

Is there something wrong with the Government of Canada's procurement practices?