Question Period Note: Contracts awarded to McKinsey & Company

There has been recent media and Parliamentary attention related to contracts awarded to McKinsey & Company.

Note:

All questions related to McKinsey’s work on Robotic Process Automation and Accelerator Services are in a separate question period note (Phoenix IBM and pay stabilization)

• Public Services and Procurement Canada is committed to open, fair and transparent procurement processes, while obtaining the best possible value for Canadian taxpayers
  • The decision to procure professional services to meet operational requirements rests with client departments, which can then request Public Services and Procurement Canada’s procurement services or award contracts within their own authorities

If pressed on reviews of contracts to McKinsey & Company:

• In January 2023, the Prime Minister tasked the President of the Treasury Board and my predecessor to review contracts awarded to McKinsey. The review’s final report, published on June 27, 2023, noted the integrity of the procurement process was maintained, compliant with the Values and Ethics Code for the Public Sector, Directive on Conflict of Interest, and supporting procurement policy. It also noted areas for improvement related to record management and contract administration
• Public Services and Procurement Canada has accepted all the recommendations and put in place a Management Action Plan

If pressed on allegations of tax fraud and actions abroad that McKinsey is facing:

• We are aware of the adverse information related to McKinsey & Company and its affiliates. The company’s status under the Integrity Regime remains unchanged at this time
• Under the Government’ Integrity Regime, if a supplier is charged or convicted of an offence listed in the Ineligibility and Suspension Policy, the supplier may be suspended determined to be ineligible to be awarded a contract. A suspension or determination of ineligibility would also be triggered by a foreign offence that is similar to one of the listed offences

Public Services and Procurement Canada awarded 24 contracts to McKinsey & Company between 2011 and 2023. These contracts have recently been assessed via Public Services and Procurement Canada’s internal audit services and are also subject to ongoing reviews by the Office of the Procurement Ombudsman and the Auditor General.

The internal review determined that overall, the integrity of the procurement process was maintained and complied with the Values and Ethics Code for the Public Sector, Directive on Conflict of Interest, and supporting procurement policy instruments and procedures. Specifically, no instances of non-conformity were found with respect to conflict of interest regarding current or former public servants or public office holders as well as McKinsey & Company. However, it also found areas for improvement related to record management and contract administration.

Public Services and Procurement Canada has accepted all recommendations associated with this audit and has put in place a Management Action Plan. In addition, the department is reviewing all National Master Standing Offers related to Benchmarking data analytics and services and will replace these tools in the future with a procurement approach that ensures open, fair and transparent competition as a starting point.

The McKinsey & Company standing offer has sunsetted in February 2023 as planned and all other Standing Offers for benchmarking services will sunset between February and June 2024.

At the request of the Minister of Public Services and Procurement, the Office of the Procurement Ombudsman is currently reviewing the procurement processes associated with the award of contracts to McKinsey & Company by all federal departments and agencies.

Ten departments that contracted with McKinsey & Company have been the focus of attention from the Treasury Board of Canada Secretariat and auditors including the Office of the Auditor General and the Office of the Procurement Ombudsman. Public Services and Procurement Canada procured various professional services including strategic advice, subject matter experts, benchmarking services and development of transformation strategies for 7 of these departments.

• As central purchaser for the Government of Canada, Public Services and Procurement Canada awarded 24 contracts to McKinsey & Company since 2011 with a total value of $104.6 million
  • Of the 24 services contracts awarded by Public Services and Procurement Canada, 3 contracts were awarded through competition,19 were undertaken as call-ups against a non-competitive standing offer that was established for McKinsey & Company’s benchmarking services and which ended as planned in February 2023, and 2 other sole source contracts, of low dollar value, were awarded outside the standing offer
  • All 24 contracts were awarded in 2018 or later. The 3 competitive contracts represent more than half (53%) of the total value of contracts awarded to McKinsey & Company