A report by the auditor general says there is “frequent disregard” for procurement policies across numerous government departments and agencies with $209 million in contracts awarded to a global consulting firm.
“We found that the organizations’ awarding of the contracts showed a frequent disregard for federal contracting and procurement policies and guidance,” Auditor General Karen Hogan said in her opening statement before the Public Accounts Committee June 4. “We also found that each organization’s own practices often did not demonstrate value for money.”
Nine out of 10 departments and agencies and eight out of 10 Crown corporations audited by the Office of the Auditor General failed to properly follow all aspects of their procurement policies and guidance on at least one contract, Ms. Hogan wrote in her report.
The report found that of the 28 contracts that were awarded to consulting firm McKinsey & Company through a competitive process, 10 bid evaluations did not have enough information to support why the company was chosen as the winning bidder.
Additionally, for 18 of the 19 contracts issued under the national master standing offer with the company, organizations did not give the required justification for using a non‑competitive process, according to the report. A standing offer is an offer from a potential supplier to provide goods and services at pre-arranged prices and under set terms and conditions.
There were also four sets of contracts where organizations awarded additional non‑competitive contracts for related work after awarding an initial contract to McKinsey & Company with no competition. For four other sets of contracts, only the initial contract was awarded competitively, while the subsequent contracts were non-competitive. The auditor general said these eight sets represented $58 million worth of contracts.
The report provided just one recommendation, calling for agencies to ensure officials involved in the procurement process do not have conflict of interest.
“In other areas, our audit confirms gaps and weaknesses that have been raised in other internal and external reviews of government procurement processes,” the report said.
Ms. Hogan noted during her testimony that the amounts paid to McKinsey & Company rose sharply after the Liberals came to power, totalling just $8.6 million before 2015 and $191 million in the nine years following.
She also noted that six of the 97 contracts appeared to be “designed to suit or to favour McKinsey,” and in four out of 28 competitive contracts, there was “a change in strategy that made it easier for McKinsey” to obtain the contracts.
“We’re not saying that you can’t change your procurement strategy. But you need to really justify why you are changing strategy to award a contract to a specific vendor,” Ms. Hogan added.
Ms. Hogan also said there was no reason to believe the audit’s results were limited to just McKinsey & Company.
Auditor General Report Echoes Procurement Ombud
An April 2023 report from Canada’s Office of the Procurement Ombud also found that Public Services and Procurement Canada failed to provide justification for awarding McKinsey & Company with government projects. It said this created a “strong perception” of favouritism for the consulting firm, and that it was troubled by the “lack of diligence and oversight of departments in this regard.”
That report claimed that the government’s procurement strategies were changed to allow for the company to participate in Canada Border Services Agency, and Innovation, Science and Economic Development Canada contracts. However, sufficient documentation to justify these actions could not be found by the Procurement Ombud.
Minister of Public Services and Procurement Minister Jean-Yves Duclos said his department is attempting to improve how contracts are managed.
“We are committed to protecting the integrity of procurement and expect public servants in all departments to operate at the highest standard and prioritize value for money for all Canadians,” he said during a June 4 press conference.
Mr. Duclos said his department planned to make it a requirement that documents related to contracts be kept on file, as well as improve the criteria for standing offers.
The Conservative Party called the auditor general’s report “damning” and suggested the Liberal government had awarded contracts to its allies at McKinsey & Company.
“At the time, McKinsey was led by Dominic Barton, a close friend and advisor of Justin Trudeau and Chrystia Freeland,” the party said in a press release, adding that it would “end the corruption and fix the budget by firing the high-priced consultants.”
The Tories have accused Prime Minister Justin Trudeau of being friends with Mr. Barton. Mr. Barton testified before the government operations committee in early 2023 that he’d had a “professional relationship” with Mr. Trudeau and met with him several times, but never discussed offering McKinsey & Company’s services to the government.
McKinsey & Company did not immediately respond to The Epoch Times’ request for comment.
Friends Read Free
Copy
Facebook
Tweet
