Public Accounts Committee on May 30th, 2024

[John Bernard]

If you're asking if 84 employees and maybe 200 or 300 others is enough, yes, that's enough.

[The Chair, Conservative, John Williamson]

Thank you very much.

Next up is Mr. Desjarlais for two and a half minutes, please.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Mr. Chair.

What we've heard today several times is how far back these issues of procurement actually go, starting from as early as at least 2009. Our committee actually received documentation of the cost of these insiders against the better wishes for what I believe could have been work done by the public service.

Between January 1, 2011, and February 16, 2024, when our committee requested the documents, we found that the Government of Canada, through two subsequent governments, was able to give three companies over a billion dollars.

My concern is about how this can happen. How can consecutive governments explode in resourcing three contractors by continuously feeding into these contractors and subcontractors in a giant web?

The Auditor General actually found, in finding 1.50 of her report, for those who know it, that:

Multiple amendments were made to those non-competitive professional services contracts. Approximately half of the contract amendments extended the contract beyond the original period, which prevented or delayed opportunities for other contractors to compete for work.

Ms. Lee, you said that the invoicing was pre-approved by the government and that the process never changed, when it has been established by the AG that this was a non-competitive contract with a lack of proper financial documents to verify these details.

Ms. Lee, did you have any awareness of how the invoices and task authorization amendments were increasing costs without deliverables to such an extent overall in this project?

[Lydia Lee]

Thank you for the member's question.

As I mentioned the last time I was here, there are a couple of things. One is on the invoicing. The very first time that we issued an invoice was against the original CEPS, the COVID emergency professional services. It was the first TA, or task authorization, and we asked for the Public Health Agency to approve the level of information, the details that were described in the invoice, to validate that they were getting enough information in order to process the invoice on their side correctly. They verified that, yes, this was sufficient, and we never changed that whole level of detail in all of our invoices for every contract that we had throughout the COVID-19 pandemic.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Who added the amendments?

[Lydia Lee]

When we got to the end of the CEPS agreement term, the Public Health Agency sponsor at that time said that they wanted to go back to CEPS and ask for the ability to use that vehicle to renew. Our understanding was that PSPC said, “No, you can't use that vehicle any longer.” I don't know why. They said, “Okay, fine. Then we will have to renew our agreement with KPMG through a Public Health Agency direct contract.”

[The Chair, Conservative, John Williamson]

Thank you—

[Lydia Lee]

That's why we were not given the information.

[The Chair, Conservative, John Williamson]

Thank you.

Next up, we have Mr. Brock for five minutes, please.

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

Thank you, Chair.

This is for Mr. Bashir.

Mr. Bashir, did you read the Auditor General's report?

[Imraan Bashir]

Yes, sir, I did.

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

There are three sections of significance that reference your company, KPMG. I'm going to read that into the record:

We also found that the Public Health Agency of Canada awarded a professional service task authorization using a non-competitive approach to KPMG. We found no documentation of the initial communications or the reasons why the agency did not consider or select other eligible contractors to carry out the work.

We found that 3 contractors (GC Strategies, 49 Solutions, and KPMG) were originally awarded professional services work with an original estimated total value of $4.5 million through non-competitive approaches. Multiple amendments were made to [these] non-competitive professional services contracts. Approximately half of the contract amendments extended the contract beyond the original period, which prevented or delayed opportunities for other contractors to compete for work. These amendments also resulted in additional costs. We also found that GC Strategies and KPMG were each awarded 2 additional contracts through non-competitive approaches. This further limited the opportunities for other contractors to compete for subsequent work.

We found similar issues in the 2 professional services contracts awarded by the [PHAC] to KPMG. While the first contract included milestones with clear deliverables and pricing, these were later amended and replaced with less-specific deliverables to allow for more flexibility. In addition, the agency did not set out specific tasks, levels of effort, and deliverables for these contracts and task authorizations.

Mr. Bashir, what I just read out essentially captures the activities of GC Strategies. It highlights, in my opinion, both non-ethical and possibly criminal activities that caused the RCMP to launch an investigation, to ultimately raid the home of Christian Firth of GC Strategies and to possibly lay at least fraud—if not forgery—charges in addition to other criminal activities.

Were you aware of that, sir?

[Imraan Bashir]

Thank you for the question.

I'm aware of what was in the Auditor General's report, so yes, I'm aware that's there.

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

Were you aware of all of these amendments that were made? Was the company part of this? Were you engaged in making amendments to this contract, or was it done without the knowledge of KPMG?

[Imraan Bashir]

Given that it's a PHAC question, I'll pass that over to my colleague Lydia, who worked on that engagement.

[Lydia Lee]

Thank you for the member's question.

If I can also bring you back to the testimony that I shared the last time I was here, after the original CEPS TAs expired and the Public Health Agency wanted to try to extend KPMG under that contract and were told by PSPC that they could no longer use that vehicle—and KPMG does not know why—KPMG was informed by the Public Health Agency that they were working through, with their own internal procurement team, a justification and rationale for keeping KPMG on.

As you'll remember, this was at the height of the lockdown of the COVID-19 pandemic, and the subsequent contracts that were awarded to KPMG by the Public Health Agency were of the same type of work that we had been doing along the first original CEPS agreement, and they—

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

Can I be more specific?

Were you actually involved in amending the terms of your own contract?

[Lydia Lee]

We absolutely were not. We were acting under the direction of the Public Health Agency at that time.

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

You're saying—your evidence is—that the activities that the Auditor General highlights were done without your knowledge and consent. Is that correct?

[Lydia Lee]

We understood that the Public Health Agency wished to keep KPMG extended, but in terms of the inner workings of their local procurement team inside the Public Health Agency, we were not involved in any of that.

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

Has the RCMP contacted KPMG to this date?

[Lydia Lee]

Regarding the ArriveCAN work that I supported and that Imraan did, we are not aware of any RCMP conversations or communications.

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

In relation to any contracts that involve GC Strategies and Kristian Firth, have you been contacted by the RCMP?

[Imraan Bashir]

I have not been, personally.

[Lydia Lee]

No, thank you. Neither of us have been.