First, Mr. Speaker, I believe the original question was on Hewlett-Packard. I just wanted the member opposite to know that in April 2003, in a routine audit of contractor records, we identified irregularities at that point in the management of the Hewlett-Packard contracts. The contract was to provide hardware maintenance for computer equipment to DND on an “as and when requested” basis.
We found those irregularities, saying, “Okay, there is a problem there”; we must remember that we are talking about internal identification. In addition, in September 2003 we initiated a thorough forensic audit, engaging the assistance of PricewaterhouseCoopers Canada, an outside firm. To be thorough, we decided to look back 10 years just to see what was going on or to find what could have been problems in those 10 years previous to this. A civilian employee of DND with oversight of the contract was subsequently dismissed and the matter was referred to the RCMP. That is ongoing.
The Offices of the Auditor General and the Comptroller General have been kept apprised of the ongoing audits. In fact, the Auditor General has indicated that management and the internal audit group are handling the issue in a way that seems extremely appropriate.
Hewlett-Packard has a contractual agreement with the Government of Canada and we do not believe that it fulfilled the terms of this agreement. The government contracted Hewlett-Packard to provide specific information management and information technology services.
The government has also demanded that Hewlett-Packard remit to the Department of National Defence the amount of $159 million or provide evidence to substantiate the delivery of goods and services in respect of these amounts.
The department has at this point withheld payments of approximately $50 million that were pending to Hewlett-Packard until the final outcome of the audits.
The government would have been irresponsible not to take these actions, but additional steps have also been taken.
As part of the department's ongoing comptrollership plan, financial controls have been strengthened. The Crown is continuing to investigate the amount of money that may have been wrongfully paid out under the contracts. Also, an interdepartmental team of officials is meeting regularly to direct future actions. The file has been referred to the RCMP, which is conducting a criminal investigation, as well as the Department of Justice civil litigation branch. The government reserves the right to claim from HP any further amounts determined to have been wrongfully invoiced under the HP contracts with Public Works and Government Services Canada for DND.
The government is taking active and decisive steps to ensure that this matter is resolved satisfactorily.