Public Accounts Committee on Dec. 11th, 2025

[Alexandre Roy]

The nature of PSP is about being a sophisticated and complex investor by fulfilling our mandate, which is delivering good return without undue risk of loss. We need to be very agile in investing. These contracts you're referring to, which were not subject to the procurement policy that PSP has, were investment-related contracts. If we take, for example, a private firm elsewhere, we need to be very agile and very fast to implement and to invest in them. This is why it's not part of the procurement process we have.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Mr. Hayes, in your view, is it common for departments to only provide non-competitive contracts to a single vendor at a high dollar value?

[Andrew Hayes]

There are a number of ways to deliver non-competitive contracts, but I don't know if I can say in general terms that this is common. What's important is that there should be documentation justifying why those contracts are being awarded. That was what we were looking for in this audit.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Mr. Hayes, in your testimony last week on this study, you spoke about your office's understanding that professional services contracts are needed in some cases. However, what's important is that the reason for contracting needs to be documented, that there is “a clear perspective on how much it's going to cost” and that the department or organization is “getting the services [they're] contracting for.”

Can you elaborate on that, please?

[Andrew Hayes]

I'm glad I'm consistent with myself.

In this audit, we referred to those as some of the fundamental elements of ensuring that value for money is present. If an organization takes a look at their reason for contracting and they have a good reason for contracting—I'm distinguishing from using public servants to do the work—that's step one. Understanding what the costs of the contract are going to be is step two, so that you have a picture and you're not going to be overspending when you don't need to. Number three is making sure that you've gone out and offered the opportunity to as many potential suppliers as possible. That's the way competition can help bring down the cost.

Once you do have a contract, make sure you're monitoring it and getting the services or goods that you are expecting from the contract at the price you're expecting to pay. That's fundamental. Indeed, the law requires public servants to certify that goods and services were received as per the contract.

Those are all critical elements of getting value for money for taxpayers.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Ms. O'Gorman, in the arrive scam scandal, we saw subcontractors hired without proper vetting. In the McKinsey audit, we saw CBSA structure procurements that effectively shut out other bidders. It's different projects, but the same story: The Liberal government failed to enforce the most basic controls in federal contracting.

How did CBSA allow this pattern to repeat?

[Erin O'Gorman]

The McKinsey contracts were competitive or were taken off of a PSPC standing offer. In some cases we received multiple bids, so I would make a distinction with the processes here. The Auditor General found a lack of documentation, and as was said earlier, a lack of documentation is presumed guilt. It's hard to argue with that.

The processes were different from what you're referring to in terms of IT contractors versus the processes that were used to contract with McKinsey.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Where is Cameron MacDonald now?

[Erin O'Gorman]

I don't know.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Where is Minh Doan now?

[Erin O'Gorman]

I don't know.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Who chose GC Strategies?

[Erin O'Gorman]

Can you elaborate?

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

I'd like you to elaborate, please. We haven't received a clear response from your organization as to who chose GC Strategies.

Who chose GC Strategies, Ms. O'Gorman?

[Erin O'Gorman]

There was a contract for GC Strategies that was requested by CBSA of PSPC. In terms of the business case, there's documentation supporting that. I don't have a document saying, “We want GC Strategies”, but there was a sole-source justification.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you.

[The Vice-Chair, Liberal, Jean Yip]

Thank you.

Now we'll go to Ms. Tesser Derksen for five minutes.

[Kristina Tesser Derksen, Liberal, Milton East—Halton Hills South, ON]

Thank you, Madam Chair.

I'll take an opportunity to thank the committee.

I believe we're closing in on our final hour on this particular Auditor General's report. I know that some of my colleagues around this table have sustained a lot of hours questioning witnesses and getting to the bottom of the Auditor General's recommendations. Thank you for the preliminary work you've done there. I appreciate all the thorough answers we're getting from our witnesses today as well.

I'd like to continue with Ms. O'Gorman and CBSA.

Last week, we had Mr. Settano here from the Business Development Bank. I noted to him that the Auditor General had some critiques about his department's lack of record-keeping. I've mentioned already that this is a continuing theme in the Auditor General's report.

I want to pick up on something I mentioned during the last meeting about the Auditor General's role in not necessarily criticizing the departments' selections or their discretion in choosing contract suppliers but more so critiquing how the record-keeping made it difficult to determine whether or not decisions were appropriate in the circumstances.

I want to ask you, Ms. O'Gorman, about the selection process at CBSA. Is there a selection committee that reviews bids? How does that work?

[Erin O'Gorman]

We have a senior committee that looks at all contracts from the beginning, the need for the contract and then the approach for obtaining the contract. Of the contracts we have in place now, 80% are competitive. Almost every contract—every contract over $1 million—goes to that committee and states the rationale for why people at CBSA can't do it and what the timeline is.

If that approach is approved, as mentioned by my colleague, we have very distinct roles and responsibilities. We have a procurement group that will then manage that contract, including the RFP process and the bid process if it's within CBSA's authorities. Then it will use the expertise of others within the department for the bid evaluation. It is segregated from the groups that need those resources as part of either a project or something they're doing.

[Kristina Tesser Derksen, Liberal, Milton East—Halton Hills South, ON]

It sounds like there's not necessarily a problem with the protocols and policies you're following for the selection process. It's just about justifying things with the appropriate record-keeping so your decision can be supported and is not subject to questions.

Can you talk to us a bit about how you're implementing some improvements in that area with your record-keeping?

[Erin O'Gorman]

Sure. It starts with the business plan. Procurement isn't something that someone over there is going to do separately from their mandate, a project and the budget. At the beginning of the year, we map out all of the projects and the work we need to do. Is it within the budget? What's the rationale for needing a contract? It starts with the business plan of the organization.

Then as the contract process gets under way, it's about bringing those things forward to the contract review, subjecting them to the challenge function of the executive table and then pursuing a contract through the competitive process or if there's a rationale for the sole-source process.

We have one file that has all of that documentation, from the business plan to the approval of the procurement itself at the committee, and then all subsequent RFP and statement of work assessments, including for the management and oversight of the contract over the long term.

[Kristina Tesser Derksen, Liberal, Milton East—Halton Hills South, ON]

Thank you.

My next question is for Mr. Roy, respecting the PSPIB.

First, I want to identify that your department is a little different. It's a non-Crown corporation. It's quite arm's length from the government.

I want to talk a bit about the timeline for document retention. There was a real problem with this that the Auditor General identified, particularly that the justification for three of the contracts that were issued by PSPIB could not be reviewed because the contracts fell outside the time frame in the retention policy. They were destroyed, which is unfortunate, because those documents may have avoided this line of questioning.

I'd like to ask if you are continuing with that policy. How do you apply that policy now in light of the Auditor General's problem with not having the documents to review?

[Alexandre Roy]

The retention policy at PSP remains the same. We still have the retention policy that goes from two years to almost an indefinite period of time.

For these contracts, unfortunately, it was beyond the 10 years in the retention policy. We also have to understand that the period covered was from 2011 to 2023. That was going further than the 10-year period of the retention policy of PSP.

[Kristina Tesser Derksen, Liberal, Milton East—Halton Hills South, ON]

Okay. There are no plans to revise that, I take it, because it sounds like a long time frame. Again, we're coming up against this problem.

On that point, actually, I might turn to Mr. Hayes and allow him to elaborate a bit on what I was saying about the—

[The Vice-Chair, Liberal, Jean Yip]

I'm afraid we're out of time. You can take it up in the next round if you wish.