Question Period Note: Contracts Related to ArriveCan

The Canada Border Services Agency was responsible for developing and managing the ArriveCan tool based on Public Health Agency’s health requirements enforced by the Quarantine Act.

On November 2, 2022, a motion was majority voted by the House of Commons that called the Office of the Auditor General of Canada to conduct a performance audit, including payments, contracts, and subcontracts of ArriveCan.

• Public Services and Procurement Canada is committed to open, fair and transparent procurement processes, while obtaining the best possible value for Canadian taxpayers
  • The Canada Border Services Agency had an urgent requirement for professional services to support the development, integration and maintenance of a new secure application to support its response to the COVID-19 pandemic
  • Public Services and Procurement Canada provided procurement support to the Canada Border Services Agency, who was responsible for defining the business requirements and managing the development of ArriveCan

If pressed on security clearances:

• All vendors and resources that worked on ArriveCan had a valid clearance prior to the commencement of any work
• As the Technical or Project Authority, Canada Border Services Agency established the security requirements for their procurements, including those processed by Public Services and Procurement Canada on their behalf
• Public Services and Procurement Canada verified the security clearances for vendors prior to contract award
• Canada Border Services Agency verified the personnel security clearances

If pressed on subcontracting:

• Within the IT industry, it is common for firms to subcontract or collaborate with other suppliers or individuals to address particular IT challenges and solutions
• The 31 contracts that Public Services and Procurement Canada awarded allowed for the contract holder to sub-contract to other firms as necessary.
• Canada does not have a contractual relationship with any subcontractors. The main contractor is responsible for the performance and the contractual obligations of subcontractors

If pressed on why Public Services and Procurement Canada will not provide the names of subcontractors:

• For confidentiality reasons, the Government of Canada does not disclose the names of companies who have worked as subcontractors for one of its suppliers, as this is considered third-party information

If pressed on who made the decision to contract with GC Strategies:

• GC Strategies was selected by the Canada Border Services Agency. Public Services and Procurement Canada was not involved in the discussions that led to this decision
• Canada Border Services Agency submitted a sole source contract request, along with a valid sole source justification, to Public Services and Procurement Canada for the award of a non-competitive contract due to pressing emergency where a delay would have been injurious to the public
• Public Services and Procurement Canada reviewed the sole source justification and determined it was valid considering the global pandemic context and the urgent need for a tool to support health requirements at the border. Exceptional COVID-19 Emergency Contracting Authorities were in place at the time
• GC Strategies was previously working on other mobile applications with the agency and were qualified under the Task-Based Informatics Professional Service Supply Arrangement when they were selected by the Canada Border Services Agency to develop ArriveCan

If pressed on the fees charged by GC Strategies for managing these contracts:

• The rates were reviewed by Public Services and Procurement Canada officials and were deemed fair and reasonable, based on knowledge of the commodity
• The rates submitted by GC Strategies for the most recent competitively awarded contract were similar to those offered under the non-competitive contracts
• On October 20, 2022, GC Strategies stated publicly in parliamentary committee testimony that the standard industry markup on rates are anywhere from 15% to 30% depending on the skill set and the type of resources required

If pressed on the OAG audit on ArriveCan:

• Public Services and Procurement Canada officials continue to collaborate with government officials and the Office of the Auditor General on any reviews related to ArriveCan
• Work with the Office of the Auditor General is still ongoing. At this point in time, it is expected that the report will be tabled in Parliament in November 2023

If pressed on contracts set-aside under the procurement strategy for Indigenous businesses:

• The Government of Canada is committed to economic Reconciliation with Indigenous Peoples. As part of this commitment, we promote socio-economic outcomes by increasing economic opportunities for First Nations, Inuit and Métis businesses through the federal procurement process
• Public Services and Procurement Canada is working with Indigenous Services Canada and the Treasury Board of Canada Secretariat to implement the government-wide commitment for a minimum target of 5% of the total value of federal contracts awarded to Indigenous businesses by March 31, 2025
• Public Services and Procurement Canada recently asked Indigenous Services Canada to conduct post-award audits on active contracts with Coradix Technology Consulting and Dalian Enterprises Inc. across the Government of Canada. This includes prioritizing those where departments and agencies intend to exercise contract options in the coming months

Public Services and Procurement Canada provided procurement support to the Canada Border Services Agency and the Public Health Agency of Canada in the delivery of the ArriveCan program. Specifically, Public Services and Procurement Canada put in place 31 of the 46 contracts used in the development, launch, and maintenance of the ArriveCan App.

In pressing emergencies where there is significant human and/or financial risks, Public Services and Procurement Canada may enter into non-competitive contracts under exceptional emergency contracting authorities provided for in the Government Contract Regulations and in accordance with the Treasury Board Secretariat Directive. Public Services and Procurement Canada leveraged those authorities for 4 of the ArriveCan contracts.

It is important to understand that contract management is a shared responsibility between Public Services and Procurement Canada and its clients. While Public Services and Procurement Canada negotiates and puts contracts in place, departments are responsible for monitoring and certifying the delivery of goods and services under a contract. In the case of professional services contracts, departments also determine what priorities contractors will work on within the allowable scope of each contract.

• 46 different contracts were used in support of ArriveCan. Among these 46 contracts, it has been confirmed that 31 were awarded by Public Services and Procurement Canada under its authorities
  • The majority of the contracts were issued for broader requirements where ArriveCan was just one of many projects delivered under the contracts
  • According to CBSA (per OPQ-881, November 2022), the government has spent $29.8 million on contracts for ArriveCan:
  • 19 contracts were competitive under normal contracting authorities, including 6 that were set-aside for Indigenous businesses under the Procurement Strategy for Indigenous Business program
  • 12 contracts were non-competitive, including 8 contracts to procure software licenses that were sole sourced due to intellectual property rights or urgent need
  • Of the 12 non-competitive contracts, 4 used COVID emergency contracting authorities for the contracting of IT consultants
  • 11 of the 31 contracts PSPC issued were awarded before the COVID-19 pandemic and were leveraged by the CBSA to bring in resources to work on ArriveCan
  • 4 contracts were awarded to GC Strategies, including 3 that were awarded non-competitively, using emergency contracting authorities
  • After November 2022, the CBSA has continued to manage and maintain the application. PSPC has not been asked to issue any new supporting contracts, though existing contracts may still be leveraged. 16 of the 31 contracts PSPC put in place remain active
  • PSPC requested updated information on the use of contracts and expenditures in support of ArriveCan from the CBSA, but the information is not yet available