Question Period Note: Allegations of misconduct by Canada Border Services Agency officials and industry regarding Botler AI

The Royal Canadian Mounted Police is investigating allegations of misconduct involving contracting to procure software that would provide harassment support to employees of Canada Border Services Agency. Allegations involve misconduct by Canada Border Services Agency (CBSA) officials and industry. The issue is also being examined by the Standing Committee on Government Operations and Estimates (OGGO) as part of its ArriveCan contracts study.

• The Government of Canada is committed to taking action against improper, unethical and illegal businesses and to holding companies accountable for such misconduct
  • Public Services and Procurement Canada fully supports all efforts to investigate the matter
  • My department is reviewing and modernizing professional services procurement tools to ensure that they support the value for money that Canadians expect, as well as to ensure appropriate due diligence and control frameworks are in place

If pressed on allegations that canada supports unethical business practices or supports a system of improper contracting or contractors:

• As a common service provider on behalf of federal departments, Public Services and Procurement Canada is dedicated to managing open, fair and transparent procurement processes
• In order to support this, Public Services and Procurement Canada has a number of mechanisms in place to prevent, detect and respond to fraud and other potential integrity issues within procurement and real property transactions
• To prevent fraud, the department deploys a range of measures including: instituting an array of internal controls; awareness campaigns; mandatory fraud training for staff; deploying the Government-Wide Integrity Regime; outlining expectations of ethical conduct by vendors (such as the Code of Conduct for Procurement) and for staff within the Values and Ethics Code for the Public Sector
• The department is active in detecting fraud through its participation in the Federal Contracting Fraud Tip Line, disclosures under the Public Servants Disclosure Protection Act, and using data analytics to identify undetected fraud, amongst other activities
• If fraudulent behaviour is reported, Public Services and Procurement Canada responds by referring the matter to a dedicated unit that conducts investigations into potential fraud and wrongdoing

If pressed on the suspension of the cbsa contracts with the three vendors:

• Public Services and Procurement Canada has suspended the contracts at the request of the Canadian Border Services Agency while they conduct an ongoing investigation
• Public Services and Procurement Canada is undertaking an in-depth review of the security verifications of all the existing contracts with these three suppliers in order to assess the overall risk posed by these suppliers, and will take appropriate actions once assessments are complete
• In addition, all departments and agencies with active contracts with these companies have been asked to verify that the CVs of the resources connected to these contracts are accurate and free of exaggeration, and that the appropriate consent to use their CVs was secured
• These stop work orders can remain in effect for up to 180 days, during which time Canada will need to assess whether the contracts will be terminated or re-instated
• Public Services and Procurement Canada takes protecting the integrity of the procurement system very seriously and it is a cornerstone of our responsibility for ensuring fair, open and transparent procurements
• Depending on the seriousness and veracity of the allegations of wrongdoing, Public Services and Procurement Canada will deploy a variety of measures to mitigate the risk posed by a supplier or a supplier’s resource. These measures range from vendor performance corrective measures, stop work orders, security revocations, internal investigations and, where warranted, referrals to law enforcement for criminal investigations

An October 2023 Globe & Mail article alleged collusion between Dalian Enterprises and Coradix Technology Consulting, in Joint Venture, GCStrategies and a Director General (then at the Canada Border Services Agency in 2019) to secure work with excessive mark-up. It also alleges Botler AI employee credentials were falsified to win work and increase billing.

It is notable that the three companies involved (GCStrategies, Coradix, and Dalian) were involved in work related to the ArriveCan app, on behalf of Canada Border Services Agency. GCStrategies was the subject of media and political scrutiny after the Globe & Mail reported that it had received more than $9 million to work on the ArriveCan app across several contracts.

In relation to their work on the implementation of their software for CBSA, Botler AI has alleged that their work was done inappropriately under a general IT Services contract, names of resources were used without their permission, work experiences were forged, and contract values were inflated through layered subcontracting.

Rikita Dutt and Amir Morv, delivered a testimony at the Standing Committee on Government Operations and Estimates on October 26, 2023, where they alleged systemic GC corruption and purposeful masking of contractor identities via subcontracting. Subcontracting is a common practice in the professional services industry. The terms and conditions of the contracts issued by PSPC typically allow for subcontracted work to ensure business needs are holistically met.

PSPC put in place the contract in question on August 8, 2019 with Dalian Enterprises and Coradix Technology Consulting, in Joint Venture. It was structured as a general IT professional services contract that would allow CBSA to assess new evolving technologies and risks on critical business applications and security systems. The procurement was set-aside for Indigenous businesses under the Procurement Strategy for Indigenous Businesses (PSIB).

CBSA issued a Task Authorization (i.e. a work order) against this contract in January 2021. The Task Authorization did not refer to Botler AI, or artificial intelligence work, and PSPC has not found any records that reference this type of work at the time. PSPC received additional information from the CBSA in May 2023 indicating that Dalian Enterprises and Coradix Technology Consulting, in Joint Venture, intended to use this TA to assess the feasibility of Botler AI’s software for implementation on the CBSA’s systems. CBSA was responsible to monitor the delivery of the work and make payments to the contractor against the contract.

Botler AI did not have a contract with Canada. The contract is with the prime contractor, Dalian and Coradix in joint venture. The contractor has obligations to make accurate certifications and representations both at contract award, and as part of the subsequent Task Authorization issuance processes. PSPC does not typically engage in direct communications with resources that a prime contractor provides to a client department. The nature of the relationship between a prime contractor and its resources, either employees or subcontractors, is treated confidentiality, and PSPC treats directly with its prime contractors.

• Allegations involve a competitive contract issued to prime contractor Dalian Enterprises and Coradix Technology Consulting, in Joint Venture, valued at $23.4 million, by Public Services and Procurement Canada for Canada Border Services Agency in August 2019. The contract is for the provision of IM/IT Professional Services supporting a range of Canada Border Services Agency initiatives
  • Under the contract, Canada Border Services Agency officials issued a firm-priced, deliverables-based Task Authorization (TA) to the prime contractor, to procure the services of a Project Executive, Technology Architect and Business Analyst to produce a Discovery Report, Project Plan, Feasibility Study, Fit-Gap Analysis, Pilot Plan and Executive Summary at the close of work, all related to a Human Resources application
  • The agreed price was $420K (plus tax). In response, the Joint Venture subcontracted GC Strategies, who in turn engaged Botler AI. The TA was later amended down to $140K (plus tax) and closed
  • Some work under the same contract supported ArriveCan development, but not the work related to Botler AI’s products
  • Public Services and Procurement Canada (PSPC) was made aware of some of Botler’s allegations on May 10, 2023, when they wrote an e-mail to the PSPC contracting authority alleging their resumes had been used by the prime contractor, Coradix and Dalian in Joint Venture, in a Task Authorization work proposal to the CBSA without their consent
  • After a series of exchanges with Botler AI and the prime contractor, and after consulting legal representation, PSPC responded to Botler that their issues were a “matter between the three parties, yourself, the Contractor Dalian Enterprises and Coradix Technology Consulting in joint venture, and the third party GC Strategies. No further action is required on our (PSPC’s) part”
  • Botler AI raised concerns to the Canada Border Services Agency and the media. In November 2022, Canada Border Services Agency investigated and subsequently referred the matter to the RCMP
  • On November 3, 2023, at the request of the Canada Border Services Agency, Public Services and Procurement Canada issued stop work orders to Dalian, Coradix and GC Strategies halting the work on all their 7 active contracts with the Canada Border Services Agency while the investigations proceed