Public Accounts Committee on Nov. 6th, 2024

[Dominic Laporte]

Sure. The goal of procurement is to promote more competition. The more competition we get from small and medium-sized businesses across Canada, the more we're going to get the best value for taxpayers. This is key. We mentioned tools like TBIPS, for example. I'm pleased to say that we have over 650 vendors qualified through those. It gives a small business an opportunity to bid on government contracts and get access to those posters. They're going to see the notices. They're going to be aware that the government has needs and requirements. They can also position themselves to be successful with that.

We're also very proud of the procurement assistance Canada group. This is a group that reports to me. We have a DG who's very engaged. What they do is travel across Canada. They want to meet young entrepreneurs from diverse backgrounds and communities, including indigenous- and Black-owned minority businesses. How do we make sure people have the opportunity to bid on Government of Canada contracts?

We've been extremely successful. There's a lot of awareness. We need to demystify procurement. It's not an easy task. We need to make sure we encourage people to become suppliers for the federal government. This is one element we're covering.

I know you wanted me to touch on the—

[The Chair, Conservative, John Williamson]

Thank you, Monsieur Laporte. I'm going to stop you there. I'm sure we'll come back to it. I'm just over my time. I like to give witnesses ample time to answer. That was a good break point there. I'm sure there will be a follow-up question for you.

Mr. McCauley, you have the floor for five minutes.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks, Mr. Chair. I just want to get back to the issues I was chatting about before.

Help me out here. How does PSPC discover that there's this time theft, but the general contractor does not? Having done large projects with contractors, I would think that the prime contractor is responsible. How is it that PSPC is finding this fraud and the contractors are not?

As a follow-up, GC Strategies was the prime contractor, and we went after them for a time theft issue and suspended them, but we're not doing it to the other prime contractors who seem to be suffering the same lack of principles.

Just briefly get to it, please.

[Catherine Poulin]

Yes. Thank you for the question.

It's important to note that each prime contractor hires the resource. There are multiple prime contractors who have hired the same resource at the same time to work on different contracts. Each of them did not know that the others had hired the same resource.

Since we have access to information on those multiple contracts—

[Kelly McCauley, Conservative, Edmonton West, AB]

Let me just interrupt you there. If three of us have hired the same person for the same work, we're not getting the work. How is the contractor not aware that, while they've hired this person for eight hours a day, they're not getting eight hours of work out of them?

[Arianne Reza]

Perhaps I could speak to this. I grilled Madame Poulin on this when she first brought it to our attention.

Often, these professional service contracts are awarded on an as-and-when-needed basis, so they're not working.... It's not necessarily transparent to the Crown or to the supplier. It's only through the invoice, the review of the work and the sign-off that these issues come to light.

[Kelly McCauley, Conservative, Edmonton West, AB]

The department's not aware that they're getting robbed.

[Catherine Poulin]

Of course there's an increased diligence that will need to be applied by the client when looking at the work.

[Kelly McCauley, Conservative, Edmonton West, AB]

Let me stop you.

Why now? Why are we just looking at this now? How is it that, with all the resources the government has...? We have chief audit executives for every department who should be looking at risk assessments for large projects like this. How is it that we're figuring this out just now?

[Catherine Poulin]

What I can offer is that it's very hard, because, while there is a central repository for all contracts, there is no central repository for individual resources.

[Kelly McCauley, Conservative, Edmonton West, AB]

These groups across the whole breadth of government have been billing for services not provided. Every department is just cutting cheques without verifying that work has been done, which taxpayers have paid for. If we did not have this arrive scam issue come before us, we'd be sitting here right now, unaware.

Let me just finish up quickly. I have heard from CFOs who have approached me, saying that this is endemic through government. Large contracting companies and management consultants are billing departments for the same work three times.

It seems to be widely known in the government that this is going on. How is this possible?

[Catherine Poulin]

It's what we are trying to do by doing those investigations. It's important to mention, however, that those investigations started way before ArriveCAN. The first investigation that was referred to the RCMP started in 2021—

[Kelly McCauley, Conservative, Edmonton West, AB]

It's so widespread that even the procurement ombudsman is looking at it, yet we've found only seven out of how many tens and tens of thousands of contracts? We even have a term for it, the “bait and switch” that the procurement ombudsman is looking into, yet—

[Arianne Reza]

We're conflating issues. Resource substitution is not time theft, and—

[Kelly McCauley, Conservative, Edmonton West, AB]

There is time theft going on.

[Arianne Reza]

This is why we've put in place the data analytics. That's why we have done a total scrub. That's why we're working with every CFO in town. That's why we also agree with what you're saying, in the sense that if you're signing off on it, you need to make sure you're getting the goods. There's an issue there, not just through the procurement lens but throughout the project management and the FAA responsibilities.

[Kelly McCauley, Conservative, Edmonton West, AB]

It just seems to be a whole-of-government approach to being ripped off, and poor oversight.

I'm expressing some frustration and also disbelief, because there are a lot of parliamentarians, and probably a lot of people watching, who have a business background and know that they actually have to check that the work is being done that was paid for, even if it's gone through a major contractor. I'm just befuddled, I guess.

[The Chair, Conservative, John Williamson]

Thank you, Mr. McCauley.

Mr. Drouin, you have the floor for five minutes.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair.

I'm going to build a bit on what my good friend Mr. McCauley was asking with regard to, but I'll go back to the TBIPS procurement vehicle and to SBIPS.

I think, when SBIPS was created, back in around 2009 or 2008, the point was to focus on solutions that.... It was easier for the government to manage costs, because I think there may have been some change orders that often happened through TBIPS. I'm just wondering whether or not your department is doing the analysis.

I think the Auditor General touched on a good point as well. I understand and fully respect our obsession to ensure that there is a fair, open, transparent and competitive process, but are the internal processes too long? Do they sort of discourage your client departments across the government, so that they may not be incentivized to use the current processes in place? They may go to you and say, “Well, this is why. We ran out of time. We need to do a sole-source contract.”

I hope I was clear enough, but if you can build on that....

[Dominic Laporte]

In terms of the TBIPS solution base, I would say that oftentimes it takes a bit more time to do a solution-based contract. You need to properly describe your statement of work. You need to invest in that procurement. Oftentimes, TBIPS is more efficient.

What we've been doing is working with clients to make sure that the resources on TBIPS don't become long-term resources. The TBS also has published guidance on that. When you're going to be procuring professional services, how do you ensure that it's a fly-in, fly-out relationship? This is what we're working on with clients, also questioning the need. Are you able also to source those resources internally as your own FTE?

Those kinds of key questions must be asked before we even think about getting into a procurement.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

I'd like to ask a question about task-based informatics professional services, or TBIPS.

Who does the analysis to determine whether the contractual obligations have actually been fulfilled? Is it PSPC or the client who confirms that the task was indeed completed by the IT consultant?

[Dominic Laporte]

PSPC provides the platform, but the onus is really on the client to confirm that they received the services for which the TBIPS was set up and a task authorization was issued.

PSPC doesn't necessarily know. We don't get involved in the client's day-to-day activities. It's really up to the client to confirm that the work is done and then make the payment.

It's the client's responsibility to review everything set out in the project's technical specs.

[Arianne Reza]

If I could just add....

If we go back to this question about whose responsibility it is to review and ensure that they are getting the goods and the services they need, we see that this is our clients' responsibility. The fact that we're uncovering fraud is putting a very sharp point on the fact that people need to know and be accountable for what is being signed off on, to ensure.... We have to approach it in terms of finding the fraud, detecting it and deferring it, while also making sure that people are properly trained to discharge their responsibilities under the FAA.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Okay.

I'm just wondering whether or not there's been some analysis done on.... I've heard Mr. Laporte mention the fact that it's longer to go towards an SBIPs procurement model, sometimes, but I'm wondering if PSPC has the capacity to do an analysis in terms of understanding whether the same project or the same results can be achieved through TBIPs or SBIPs. Yes, it may take a little time to go towards a contract award, but taking that little time will manage costs.

I'm wondering whether or not you guys are doing some of these analyses and whether or not you're talking to client departments to find out.... Let's say you had somebody at, for example, Health Canada, working on Oracle or something, or on an IT project, and somebody else was working at ESDC on a very similar project but using the same technology. Are you all doing these analyses, and are you able to compare them to manage costs?

[Dominic Laporte]

We certainly do analyses, and we're going to be able to do more. TBIPS are very popular. They account for $1.7 billion worth of business. As I mentioned, there are 650 suppliers. TBIPS also uses categories. I would say that it's much more efficient to use TBIPS than to do your procurement yourself.

I'd like to discuss this in connection with fraud. One thing we've done is implement new time sheets that are much more precise. We encourage all client departments to use them to describe the work done to within half an hour. They are asked not to bill 7.5 hours without justifying what's being billed.

In this context, processes like TBIPS and Solutions-based informatics professional services, or SBIPS, help us prevent fraud and work with the client.

In addition, the Treasury Board of Canada Secretariat does a lot to build managers' awareness. When managers certify that conditions have been met under section 34 of the Financial Administration Act, that means something. They know that comes with a responsibility.

It's up to managers to ask questions to make sure that, when a client signs a time sheet, they've really ensured it is accurate.

We have put in place a number of auditing methods to encourage our clients to be as disciplined as possible with their contractors.