Standing Committee on Government Operations and Estimates: February 28, 2024
ArriveCAN
Date: February 28, 2024
Location: In person
General items
In this section
Opening statement
Arianne Reza, Deputy Minister
Public Services and Procurement Canada
Standing Committee on Government Operations and Estimates
Report of the Auditor General on the ArriveCAN Application
February 28, 2024
Opening
Thank you, Mr. Chair.
Before we begin, I would like to acknowledge that we are meeting on the unceded territory of the Anishinaabe Algonquin nation.
As the Deputy Minister of Public Services and Procurement Canada (PSPC), I am pleased to be here to discuss the Auditor General’s report into the development of the ArriveCAN application, as well as the findings of the Procurement Ombuds on the same topic.
I’m joined today by my colleagues: Dominic Laporte, Assistant Deputy Minister, Procurement Branch; Catherine Poulin, Assistant Deputy Minister, Departmental Oversight Branch; and Ron Cormier, Director General, Business and Technology Solutions Sector.
Mr. Chair, PSPC is the government’s central purchasing agent, ensuring departments and agencies have the goods and services necessary to deliver on their various mandates.
In this role, among other things, my department establishes and administers central procurement tools, such as Standing Offers and Supply Arrangements.
Client departments and agencies can then access these tools directly for their procurements.
Mr. Chair, in the case of ArriveCAN, PSPC provided procurement support to the Canada Border Services Agency (CBSA) to procure professional services that were used for many purposes, including to develop the application.
Taking action to strengthen procurement
As this Committee has heard, the Procurement Ombud found that certain practices related to the procurement of professional services were inconsistent with government policy and threatened the government’s commitment to fairness, openness and transparency. 8 recommendations from that report were addressed to PSPC.
The Auditor General’s report makes 1 recommendation that implicates PSPC. Namely, that PSPC and the CBSA should ensure that tasks and deliverables are clearly defined in contracts and related task authorizations (TAs).
Mr. Chair, we are committed to ensuring that the lessons learned from the reports of the Ombud and the Auditor General are turned into concrete actions, to make certain that the deficiencies uncovered do not occur again.
We have already introduced several new control measures that begin to address their recommendations.
In November 2023, PSPC temporarily suspended all delegated authorities of all departments and agencies, including those of CBSA, to authorize professional services based task authorizations.
Later, in December, PSPC provided direction to its procurement officers to ensure that task authorizations include a focus on clear tasks and deliverables.
Now, federal departments must formally agree to a set of terms and conditions to obtain access to select professional services methods of supply.
Key changes also include the use of new contract provisions to increase costing and subcontractor transparency, and provide important clarifications on the role of departments when using these instruments. The intent is to improve consistency in practices.
My department is also updating its guidance to aid other departments in procuring effectively and responsibly when using PSPC’s procurement instruments under their own authorities.
Closing
Mr. Chair, we recognize that there is a real and immediate need to strengthen specific areas of our procurement processes related to professional services.
We will continue to build upon the actions I’ve outlined today, to improve the Government of Canada’s procurement process and practices.
Thank you
Response to Auditor General’s audit
Recommendation 73: PSPC and CBSA should ensure that tasks and deliverables are clearly defined in contracts and its related TAs.
PSPC accepts this recommendation, and has already taken action with the following (from the Management Action Plan):
- PSPC has provided direction, in a December 4, 2023 communiqué, to procurement staff to ensure that TAs 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 procurement, indicating this change was immediately being 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
Additional key messages, not from the Management Action Plan
As the central purchasing agent for federal departments and agencies, PSPC puts contracts in place on behalf of client departments and agencies.
PSPC cooperated with the Office of the Auditor General (OAG), providing them all relevant information to conduct their independent review of the ArriveCAN contracts.
PSPC is committed to continually improving and strengthening all aspects of the federal procurement process and has already begun to take steps to implement the OAG’s recommendation, as well as those made by Office of the Procurement Ombudsman (OPO).
PSPC took immediate action to strengthen existing controls and oversight for professional services contracting.
Changes include:
- 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 validated security clearances
- improving documentation requirements at the time of contract award and when TAs are issued
- suspending delegated authorities for departmental issuance of TAs 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 these new measures are implemented quickly and efficiently.
PSPC will continue its review of procurement tools for professional services, while modernizing them to ensure they support best value, and provide appropriate due diligence and control frameworks.
Office of Auditor General’s audit of ArriveCAN
| Number | Recommendation | Response / Action plan | Timeline for implementation |
|---|---|---|---|
| 1 | Recommendation 73. PSPC and CBSA should ensure that tasks and deliverables are clearly defined in contracts and its related TAs. | PSPC accepts this recommendation, and has already taken action: PSPC has provided direction, in a December 4, 2023 communiqué, to procurement staff to ensure that TAs 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 procurement, indicating this change was immediately being 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. | Communiqué to procurement officers: December 4th, 2023. (completed) Guidance document update: April 2024 |
Changes to the procurement of professional services
Issue
On November 2, 2022, a motion was passed by the House of Commons that called on the OAG to conduct a performance audit, including payments, contracts, and subcontracts, of ArriveCAN.
The OPO and the OAG audit reports 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 professional services.
Key facts
- the Procurement Ombudsman report gave 14 recommendations based on the analysis of information and documentation provided to OPO by CBSA, PSPC and Shared Services Canada (SSC) during the course of the review; PSPC responded to 8 recommendations
- the Auditor General (AG) report gave 8 recommendations, 1 of which relates to PSPC (jointly with CBSA)
- PSPC is committed to continually improving and strengthening all aspects of the federal procurement process, particularly information technology (IT) services, and has already begun to take steps to implement the OAG and OPO recommendation
Key messages
- PSPC takes the conclusions of the AG and the OPO very seriously and is acting on the procurement recommendation 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 the oversight of all the professional services contracts falling under PSPC authority
- in light of the reports from the OPO and the AG, 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 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 IT consulting services
- as of February 23, 2024, according to information gathered by PSPC, all contracts with GC Strategies and the Government of Canada have either expired or have been suspended. GC Strategies is no longer eligible to participate in PSPC tenders, and has been removed from supply arrangements
If pressed on immediate actions 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 TAs
- improving evaluation requirements to more effectively validate that all resources have the required work experience and validated security clearances
- improving documentation requirements at the time of contract award and when TA are issued
- suspending delegated authorities for departmental issuance of TAs 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 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 has provided direction, in a December 4, 2023 communiqué, to procurement staff to ensure that TAs 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 procurement, indicating this change was immediately being 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 ombuds review:
- PSPC responded to 8 of 14 recommendations outlined in Procurement Ombud’s report
- as one example of actions being taken, PSPC is implementing a new checklist TA to ensure that contracts include specific criteria for Technical Authorities to assess resource qualifications and criteria
- 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 suspension of GC Strategies:
- PSPC suspended the CBSA contract with GC Strategies on November 3, 2023, and has not awarded any new contracts to GC Strategies
- on February 14, 2024, PSPC informed GC Strategies that, until further notice, they were suspended from all business and solicitations issued by PSPC, either directly as a contractor or indirectly as a subcontractor. GC Strategies were also informed that all their existing supply arrangements have been suspended
Background
Under its authorities, PSPC awarded contracts in support of ArriveCAN and was responsible for providing procurement guidance to the client department. The CBSA was responsible for developing and managing the ArriveCAN tool based on the Public Health Agency of Canada’s (PHAC) health requirements enforced by the Quarantine Act.
46 different contracts were used in support of ArriveCAN. Among these 46 contracts, it has been confirmed that 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-19 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
On November 14, 2022, the House of Commons Standing Committee on Government Operations and Estimates (OGGO) adopted a motion recommending the Procurement Ombud conduct a review of contracts awarded in relation to the ArriveCAN application.
On January 13, 2023, the OPO determined 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 audits, PSPC took immediate action to strengthen existing controls around the administration of professional services contracts. On November 28th, 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 audits and are echoed in the resultant management action plans PSPC committed to.
Inquiry of ministry
Question number: Q-2056
By: Mr. Albas (Central Okanagan-Similkameen Nicola)
Date: December 5, 2023
Print name of signatory: Charles Sousa
Signature: Minister or Parliamentary Secretary, Signed by Charles Sousa
Question
With regard to the awarding of the $8.9 million ArriveCAN sole-sourced contract to GC Strategies: who (i) signed, (ii) authorized, the contract?
Reply
Based on information provided by CBSA, 3 sole-sourced contracts awarded to GC Strategies included work related to ArriveCAN. These contracts include:
- 47419-212524/001/EL for the development of a mobile application in response to the COVID-19 global pandemic
- 47419-202719/001/EL for developing critical solutions pertaining to Advanced artificial intelligence (AI) driven tools for CBSA’s frontline officers, remote border crossing capabilities, touchless services leveraging biometrics and cloud, and an e-commerce solution to facilitate increased shipments crossing the border
- 47419-215022/001/EL for professional resource services to support the incorporation of accessibility into ArriveCAN web and mobile applications in order to comply with Bill C-65
None of these contracts was worth $8.9 million. The requested information for these contracts is as follows:
| Contract numbertable 2 note 1 | Signed by | Authorized by |
|---|---|---|
| 47419-212524/001/EL | Manager, Informatics Professional Services Division Team | Assistant Deputy Minister, Procurement Branch |
| 47419-202719/001/EL | Manager, Informatics Professional Services Division Team | Assistant Deputy Minister, Procurement Branch |
| 47419-215022/001/EL | Manager, Informatics Professional Services Division Team | Senior Director, Professional Services Procurement Directorate |
Table 2 Note
|
||
Page details
- Date modified: