Question Period Note: OAG Report – Professional Services Contracts with GCStrategies Inc.

The Auditor General has concluded that government contracts with GC Strategies and the payments made to it were not in accordance with applicable policy instruments and that value for money for these contracts was not obtained. The Auditor General was also critical of three instances in which TBS used paid for services without a contract in place. What is the government doing to fix this situation?

• The Government has rules and requirements in place that departments must follow so that procurements are conducted in a fair, open and transparent manner.
• The Auditor General has been clear that procurement rules are in place but have not been consistently followed. She also did not issue any new recommendations, as her findings had already been addressed through recommendations in previous internal and external reports.
• Efforts have been taken or are underway to strengthen procurement, including:
o a Manager’s Guide with mandatory procedures for
procuring professional services,
o providing more information about contracts on the Open Government Portal, and

o undertaking a horizontal audit on the management frameworks for procurement.
• We have also developed a new Risk and Compliance Process which will help departments assess compliance in various areas of management, including procurement.
If Pressed on Findings related to TBS:

• TBS has implemented corrective measures to address the
Auditor General’s observations.
• The specific contracts noted in the report represent less than 1% of the total value of TBS contracts assessed as part of this audit.

 The OAG Audit on Professional Services Contracts (GC Strategies) focused on whether professional services contracts awarded and payments made by federal organizations to GC Strategies and other companies incorporated by its co-founders were in accordance with applicable policy instruments and whether value for money for these contracts was obtained.
 From April 2015 through March 2024, federal organizations awarded 106 professional services contracts to GC Strategies, with a maximum value of $92.7 million, of which $64.5 million was ultimately paid out.
 The report was critical of three instances in which TBS used confirming orders to pay for services (valued at less than $100K) where resources worked without a contract in place. While the total value of these contracts was relatively low, TBS has since taken measures to ensure these situations do not reoccur.
 The audit concluded that these professional services contracts and the payments made were not in accordance with applicable policy instruments and that value for money for these contracts was not obtained.
 No recommendations were issued as part of this audit report, but the OAG encouraged federal organizations to implement the recommendations from other procurement audits recently completed, including the Horizontal Audit conducted by the Office of the Comptroller General.
 PSPC and TBS continue to work in close collaboration with client departments and agencies to address the gaps identified in previous audits related to professional services contracting, including improving data collection, increasing transparency in procurement decisions, clarifying roles and responsibilities and strengthening oversight and accountability in procurement activities.
 These changes will help strengthen the federal procurement process, improve the way the Government does business with suppliers and ensure best value for Canadian taxpayers.

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