Question Period Note: Changes in Procurement services in response to the Procurement Ombud’s And AG's reports

On November 2, 2022, a motion was passed by the House of Commons that called on the Office of the Auditor General of Canada to conduct a performance audit on ArriveCAN, including on contracts and subcontracts, as well as payments under those contracts.

Reports resulting from a review carried out by the Office of the Procurement Ombud (OPO) and an audit conducted by the Office of the Auditor General (OAG) were tabled on January 29, 2024, and February 12, 2024, respectively. The reports highlight serious concerns regarding project management and offer recommendations pertaining to procurement, specifically with regard to professional services.

• PSPC takes the conclusions of the AG and of the OPO very seriously and is acting on the recommendations, in line with our commitment to open, fair and transparent procurement processes, while obtaining value for Canadian taxpayers
• Over the past year, PSPC has taken concrete actions to strengthen oversight on all professional services contracts falling under PSPC authority
• In light of the OPO and AG reports, PSPC instituted measures and controls on new and existing professional services contracts to strengthen contract management practices and is actively engaging with client departments and agencies to ensure that these new measures are implemented quickly and efficiently
• Collectively, these measures will help us continue to strengthen and enhance federal procurement processes to promote greater competition, particularly in the field of Information Technology (IT) consulting services

If pressed on immediate actions that PSPC is taking to strengthen existing controls and oversight for professional services contracting:

• PSPC has implemented the following changes:
  • Requiring increased clarity from business owners on the scope, tasks and deliverables of new professional services contracts and task authorizations
  • Improving evaluation requirements to more effectively validate that all resources have the required work experience and valid security clearances
  • Improving documentation requirements at the time of contract award and when Task Authorizations are issued
  • Suspending delegated authorities for departmental issuance of Task Authorizations against contracts awarded by PSPC until PSPC’s newly mandated professional services measures are implemented by departments
• The department is actively engaging with client departments and agencies to ensure that these new measures are implemented quickly and efficiently

If pressed on the actions being taken in response to the auditor general report:

• PSPC accepts recommendation 73, and has already taken action:
  • PSPC provided direction to procurement staff in a December 4, 2023 communiqué to ensure that Task Authorizations include clear tasks and deliverables, in addition to identifying the specific project(s) or initiative(s) that are included in the scope of contracts
  • Additionally, PSPC sent a directive to its client departments, via their Senior Designated Official for the Management of Procurement, indicating that this change was brought into effect for professional services contracts as of November 28, 2023
  • PSPC will also update the Guide to Preparing and Administering Task Authorizations, as well as the Record of Agreement template for clients, by April 2024
    

If pressed on the actions being taken in response to the procurement ombud’s review:

• The Procurement Ombud’s report made 13 recommendations, 8 of which were assigned to PSPC
• PSPC has taken immediate action in response to the recommendations to strengthen existing controls around the administration of professional services contracts:
  • PSPC has implemented a new checklist for Task Authorizations to ensure that contracts include specific criteria for Technical Authorities to assess resource qualifications and criteria
  • PSPC will ensure that Task Authorizations include clear tasks and deliverables and identify the specific project or initiative on which a resource will be working
  • PSPC will ensure more robust procurement files, by, for example, obtaining security clearance confirmation, copies of résumés and evaluation grids that demonstrate that resources meet qualification and experience requirements, copies of invoices accompanied by time sheets
• PSPC is also reviewing the “Substantiation of Professional Services Rates” clause that permits Canada to require bidders to substantiate proposed rates that fall below the lower limit of the median band

If pressed on indigenous contracting:

• The Government of Canada is committed to economic Reconciliation with Indigenous Peoples. As part of this commitment, we will promote socio-economic outcomes by increasing economic opportunities for First Nations, Inuit and Métis businesses through the federal procurement process
• Indigenous Services Canada (ISC) administers the Procurement Strategy for Indigenous Businesses  and is responsible for assessing suppliers' eligibility for the program and for maintaining the Indigenous Business Directory
• When awarding contracts under the Procurement Strategy for Indigenous Businesses program, PSPC relies on pre-award audits performed by ISC to verify if the Indigenous business meets the ownership and control criteria
• Post-award audits are optional under the program. These audits re-examine ownership and control criteria and Indigenous content criteria, including the requirement that 33% of the work be performed by the Indigenous partner in a joint venture

Under its authorities, PSPC awarded contracts in support of ArriveCAN and was responsible for providing procurement guidance to the client department. The Canada Border Services Agency (CBSA) was responsible for developing and managing the ArriveCAN tool based on the Public Health Agency of Canada’s health requirements enforced by the Quarantine Act.

A total of 46 different contracts were used in support of ArriveCAN. Of these 46 contracts, 31 were awarded by PSPC under its authorities:

• 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 competitive and non-competitive contracts that PSPC issued were awarded before the COVID-19 pandemic and were leveraged by the CBSA to bring in resources to work on ArriveCAN

On November 14, 2022, the House of Commons Standing Committee on Government Operations and Estimates (OGGO) adopted a motion recommending that the Procurement Ombud conduct a review of contracts awarded in relation to the ArriveCAN application.

On January 13, 2023, the Office of the Procurement Ombud determined that there were reasonable grounds to launch a review of procurement activities associated with the creation, implementation and maintenance of ArriveCAN.

In light of the findings of the review and audit, PSPC took immediate action to strengthen existing controls around the administration of professional services contracts. On November 28, 2023, other government departments and agencies were informed of new measures, introducing a common set of principles and mandatory procedures that clients must abide by to use PSPC’s professional services contracting instruments.

These changes closely align with the recommendations in the OAG and OPO reports and are echoed in the resultant management action plans to which PSPC has committed.

• The Procurement Ombud report made 14 recommendations based on the analysis of information and documentation provided to OPO by the Canada Border Services Agency (CBSA), Public Services and Procurement Canada (PSPC) and Shared Services Canada (SSC) during the course of the review; PSPC responded to 8 recommendations
• The Auditor General (AG) report made 8 recommendations, 1 of which relates to PSPC (jointly with CBSA)