Procurement Ombudsman Alexander Jeglic said the major problems with how contracts are made public is an issue that is broader than ArriveCan and must be fixed.Justin Tang/The Canadian Press
Problems exposed by investigations of ArriveCan spending show the federal government must fix its error-filled website for disclosing government-wide contracts, says Procurement Ombud Alexander Jeglic.
In an interview with The Globe and Mail, Mr. Jeglic said the major problems with how contracts are made public is an issue that is broader than ArriveCan and must be fixed.
“It’s pretty basic information. And it should be available publicly and easily searchable,” he said. “And it should be accurate.”
Mr. Jeglic’s comments comes as Public Services and Procurement Canada said in a statement that GCStrategies is no longer eligible to participate in government tenders “in light of recent allegations of wrongdoing.”
In November, the Canada Border Services Agency had temporarily suspended all contracts with GCStrategies, the two-person IT staffing firm that received $19.1-million to work on the ArriveCan app, more than any other contractor. At the time, Public Services and Procurement Canada said it was conducting an in-depth review.
Mr. Jeglic released his own report on ArriveCan two weeks before Auditor-General Karen Hogan released her Aug. 12 audit about spending on the app. Both reports took aim at how Ottawa hires contractors and the poor quality of information that is disclosed to the public.
Both reports also raised concerns about interactions between Canada Border Services Agency officials and GCStrategies.
The Auditor-General said GCStrategies was involved in the development of the “extremely narrow” requirements for a $25-million contract that it ultimately won after no other bids were received.
Ottawa gives the appearance of transparency with an “open government” portal that includes a searchable database of all federal contracts with values above $10,000. But the ombud’s report found that of the 41 ArriveCan-related contracts it reviewed, 17 had missing information on the pro-active disclosure website, such as the original contract or contract amendments. In 16 cases, the contract number was not accurate. The report said the ombud team was only able to draw conclusions because it obtained access to contract files through other means.
Mr. Jeglic said the government should ensure information on the website is accurate so that the public and the media can know how Ottawa spends federal tax dollars.
The ArriveCan app is the graveyard of accountability and common sense
“If you can’t rely on the government dataset to do your role, then that’s a pretty damning outcome, right?” he said in reference to the media. “And so certainly, why we included it in the report was because we wanted to highlight the issue … It is something that needs to be rectified.”
The risks of relying on that database were made clear this week as several media outlets filed erroneous reports based on that information. LaPresse was first to report in error that GCStrategies had won $258-million in federal contracts since 2015.
The LaPresse figures were then reported on by CBC News, Radio-Canada and CTV and were used in the House of Commons by Conservative Leader Pierre Poilievre and NDP Leader Jagmeet Singh, producing social media clips that were widely shared online.
However, federal departments such as the CBSA and Public Services and Procurement Canada’s strongly caution against using those figures as spending totals, given that contracts are often “up to” amounts. The figures can also lead to double and triple counting, as the same contracts reappear in the database because of amendments and more specific task authorizations.
LaPresse followed up with a story Friday titled “Confusion in Ottawa over the total paid to company behind ArriveCan,” that stated the figures posted online are “incomplete and unreliable.”
Adrienne Arsenault, host of CBC’s The National, delivered an on-air clarification Thursday to address the figures used in the previous day’s reporting.
Procurement Canada was unable to provide an amount Friday for the total number and value of all federal contracts awarded to GCStrategies.
Because of the issues with the pro-active disclosure database, The Globe’s reporting on GCStrategies has focused on figures published in the audited public accounts, which are the official, audited final numbers for what was spent in each fiscal year.
The public accounts show federal departments spent a combined total of $58.7-million with GCStrategies between the fiscal year that began April 1, 2016, and the fiscal year that ended March 31, 2023.
Kristian Firth, the managing partner of GCStrategies, has told MPs the company consists of just him and his business partner Darren Anthony. They describe themselves as an IT staffing company that wins contracts and then finds subcontractors to perform the work in exchange for commissions.
They say they typically charge a commission of between 15 per cent and 30 per cent of the contract value. They have also said they work from home, have no standalone office and do not perform IT work themselves.
Mr. Jeglic said there are no rules in terms of how much profit an IT firm can charge. He said that’s why it is important that contracts are awarded through genuine competition to encourage fair pricing.
“The competitive tension associated with a competitive process should help dilute the risks of overinflated profit margins,” he said.
During Question Period Friday, the last sitting day before a one-week parliamentary recess, Conservative MPs once again led off with a focus on ArriveCan.
“Canadians want to know who got rich, other than of course these two guys working out of their basement,” said Conservative MP Michael Barrett.
Bloc Québécois MP Nathalie Sinclair-Desgagné said the Auditor-General’s report raised a host of issues, including the fact that Ms. Hogan could not confirm the cost of ArriveCan – she said it was around about $59.5-million – and the government’s close ties with contractors.
“It’s a Russian doll of scandals,” she said. “It is even more unacceptable that GCStrategies was in the position to write the call for tenders to ensure they won it.”
Public Services and Procurement Minister Jean-Yves Duclos repeatedly responded Friday by thanking the Auditor-General for her report and pledging to act on her recommendations.
He agreed with the report’s criticism over the government’s failure to document spending decisions properly.
“This is faulty, incomplete documentation that has not been stored correctly and that we are unable to share. This is indeed at the heart of the Auditor-General’s findings,” he said.
“We have already said that we have taken into account all the recommendations she has provided, and many of them have already been in place for a few weeks now.”