Public Accounts Committee on Oct. 9th, 2025

[Arianne Reza]

I was going to say that I think that's really important, that challenge function on the requirements: Is it reasonable or not reasonable? They—the clients—set the technical requirements. Does the plane fly? Does it go under water? We need to challenge whether or not that's a reasonable bandwidth, so that's where I think some of the grey happens.

[The Chair, Conservative, John Williamson]

Thank you very much.

Ms. Tesser Derksen, you have the floor for five minutes, please.

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

Thank you, Mr. Chair.

Thanks to the witnesses.

Through you, Mr. Chair, I'll ask some questions just to follow up on my colleague Mr. Kuruc's questions.

We're talking a bit about bidders raising concerns about the request for bids. I'm curious to know a bit more about how much deference a department owes to bidders. If a bidder is critiquing the restrictiveness of a particular proposal, how much time, staff, energy and effort do you put into addressing that before it becomes, for example, unreasonable?

[Arianne Reza]

I'll just talk a bit about process.

Usually at PSPC we do the big procurements, not the small ones. Because they're big and they're an economic driver for Canada, we have a tendency to do an RFI to look at the market assessment beforehand. We try to build in the questions that we want to ask, so that we're able to formulate whether it's going to be pre-qualified, a down-select or an RFP. That gives a bidder many opportunities to weigh in with their insights and their views.

Often, we do it one-on-one in confidentiality, because there's commercially sensitive information when it's shared. We try to work with the client, as well as the supplier, to say, “You know what? This is too restrictive.”

One of the indicators at PSPC is that competition is the best sunshine. We want to have competitive bids, but we have a problem. One is that if we get only one bidder, we're talking through what we're doing now to make sure we get more bidders, and we try to work with the client departments to say, “If you loosen this—if you adjust this—you're going to get better competition, which is going to drive better value.”

One thing that I think is important for Canadians and for parliamentarians to be aware of is that we're finding it hard to attract people to bid. Suppliers are getting antsy, and I think that's an important piece too. We want to make sure that the federal ecosystem is seen as having integrity and competition. These are areas where that restrictive nature needs to be challenged.

You probably have another question, but did you want to address this, Dominic?

[Dominic Laporte]

I just wanted to say also that if we have an RFP, a request for proposals, for example, and one of the bidders realizes this is too restrictive, there's a Q and A process by which they can raise that and bring that to the contracting officer's attention. Oftentimes, adjustments will be made by talking to the client and asking, “Well, do you absolutely need that specific requirement?”

There is this process that is in place, so we do interact with bidders, but it has to be within the proper framework of the RFP or, as mentioned by DM Reza, in the context of a request for information.

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

I guess that begs the question, then, of how far you go in the opposite direction. You have to be careful that you're not compromising the integrity of the work you're trying to do by loosening the restrictions too much. Is that a fear or something you consider when you're entering these negotiations?

[Arianne Reza]

It 100% is, because there is a requirement. The client departments need to buy something that does X. I'm thinking of a public safety requirement right now. Is it too restrictive? What can I do to change it? They were able to demonstrate that they had to meet these requirements and fulfill their public safety responsibilities.

It can be a bit expanded but other times not expanded. They're very technical. We buy goods, construction and services, and they have to meet a technical level, which sometimes prohibits expansiveness.

[The Chair, Conservative, John Williamson]

You have a minute and a half left.

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

Excellent.

I have a question for the Deputy Auditor General. This is something else that my colleague Mr. Kuruc brought up.

With respect to certain departments that were seeking benchmarking services that may have been available under other national master standing offers, your report states that the Auditor General was unclear why those departments chose to wait rather than use another procurement option. The use of the word “may” there raises a bit of curiosity.

Do you have a sense of how likely the availability of other, better options actually was?

[Andrew Hayes]

Thank you.

I don't have that information for you. That's partly because what we expected to see was documentation for why they did in fact wait. They identified a need, waited a year and used this vehicle.

I think what we're really after with this is that all of the decisions being made in a procurement process should be documented. I recognize that, in the circumstance we're talking about, there was a strategic decision and there could be other reasons. We wouldn't have been expecting a mountain of evidence to show why a strategic decision like this was made, but we didn't see anything to show why.

[The Chair, Conservative, John Williamson]

Thank you. That was your time.

I am going to begin our third and last round, which will consist of, again, five members posing questions.

Mr. Stevenson, you'll start off for five minutes.

[William Stevenson, Conservative, Yellowhead, AB]

Thank you.

I want to boil it down to a little straightforward part. I'll start with Mr. Hayes. I think I know the answers, but I want to make sure I go there before I go to Ms. Reza.

When you look at your audit, every department had rules that were set out and checklists on how to deal with outside contracts. Is that correct?

[Andrew Hayes]

That's correct. Every federal department is subject to the same regulations and policies.

[William Stevenson, Conservative, Yellowhead, AB]

That's good.

In your determination, there were a bunch of audits that found.... I've forgotten the numbers exactly, whether it's 10 or 13 of 17. A bunch of the contracts did not follow it.

Now, in your audit, were you able to determine the reason, whether it was lack of knowledge among the people enforcing it in the departments or because they were told to get the job done and not worry about the rules? Could you determine the reason they were not followed?

[Andrew Hayes]

Well, in some cases, if we're talking about decisions to go with particular procurement strategies, there can be a variety of reasons.

One thing we raised in the report was about the end of the procurement process. Why did a bidder get asked to submit an invoice before work was done? The drivers on those kinds of decisions could be different fiscal year-ends, for example—trying to get amounts in before the end of the year.

Really, what I would say to you on this point is that it is a critical question—identifying why rules aren't being followed. What is important is identifying where efficiencies can happen. As the Auditor General and I have said many times, we don't necessarily need more rules. We need to follow the right rules that will—

[William Stevenson, Conservative, Yellowhead, AB]

A good portion of that is.... It's more that the documentation doesn't say, either way, what the reason was. You don't have, in your audit, an ability to determine what the reason was either way, whether it was a lack of enforcement or going around it. You cannot tell that.

[Andrew Hayes]

I can't, no. I can't tell you there were particular reasons. In fact, if we did see that evidence, we would have noted that in our report.

[William Stevenson, Conservative, Yellowhead, AB]

Okay.

Ms. Reza, you mentioned earlier that it seemed that, going back to your challenge function from PSPC, you do not necessarily have the ability to tell the departments, or to enforce upon the departments...whether they have followed the rules or have gone around the rules. Not having the documentation, you don't necessarily have the ability to say, “Departments, you needed this,” because you're looking at this after the fact.

Is that correct?

[Arianne Reza]

That's mostly correct. If I could just add one footnote, I think that would be helpful, and I'm going to take us into the world of procurement.

Bids come in, and the bids get separated. The financial aspects to the bids stay within PSPC, and they do an evaluation. The technical bids go to the client departments, and they do an evaluation. Each department has its own evaluation teams and its own paperwork, and I think, up until recently, the bids would come back together, but the quality of the paperwork to be able to document the decision—if everybody filled out their conflicts of interest and if everybody had the security—those were put together in a paper folder.

What's changed? We moved to e-procurement. We put in so many checklists. We put in a director of compliance, who is reviewing every file for completion.

To get to your point, we would be able to tell better what the reason was that the rules were not followed or if they were not followed.

[William Stevenson, Conservative, Yellowhead, AB]

One question came to me from what Ms. Beck said. It seemed to me that, in this process, there was self-reporting, and the individuals had to fill out the checklist to say, “I think I might have a reason that there might be a conflict.” However, on the other end of it, there's no positive end from the department to say, “I think you have one because of this.” It's all based on the individuals and not the other way around. Is that correct? There isn't necessarily the oversight from the department. It's all reliant on somebody else self-reporting.

[Stefanie Beck]

We can probably both answer, but I guess I would distinguish between someone self-declaring for a conflict of interest versus something where we're talking about compliance within a fraud framework, so it's trust but verify when it's personal. You're explaining—

We can probably both answer, but I guess I would distinguish between someone self-declaring for a conflict of interest versus something where we're talking about compliance within a fraud framework, so it's trust but verify when it's personal. You're explaining—

[William Stevenson, Conservative, Yellowhead, AB]

Okay, you didn't say that part before. You just said the self—

[The Chair, Conservative, John Williamson]

Mr. Stevenson, your time has expired.

I'm going to allow Ms. Beck and then Ms. Reza to answer, and then I'll go to Mr. Osborne.

[Stefanie Beck]

That would be one aspect of it, if I'm asking you whether you have a conflict of interest. I don't know if you have another business on the side. You need to be able to tell me that. We can check, and we would if there was something that looked suspicious.

More importantly, I think for what we're talking about right now, in the process that we're conducting—let's say that we're in the process of procuring something—if a form is not filled out properly, or if a section of the form is incorrectly signed, we can see that. We have layers of supervisors who will check, and we have risk management and fraud oversight committees, so it's a bit different.

[Arianne Reza]

It's a mini triage. You have a code of values and ethics. Each employee must adhere to it. On top of that, if you're part of the procurement process, madame, for example, is responsible for oversight for almost the whole government, in terms of looking for fraud. It's a whole combination of how to triage it, but we need to document those steps better.