(Ottawa) Violations of federal government procurement policies have occurred frequently in the awarding of contracts to McKinsey since 2011, notes the Auditor General in her latest report. The consulting firm was awarded 97 contracts worth 209 million, the majority of which were awarded without competitive bidding.
Absence of documents to justify the need for a contract or justification to explain the absence of a call for tenders, non-existent cost assessment, lack of supervision of the work carried out by the firm, the Ministry of Public Services and Procurement (SPAC) which is not playing its role… These findings recall those already made by Karen Hogan in her report in February on the ArriveCAN application.
“I have no reason to believe that the results are limited to McKinsey,” she said at a press conference.
The Auditor General found that nine of the 10 federal departments and agencies and eight of the 10 Crown corporations that awarded contracts to McKinsey “failed to follow at least one aspect of their procurement policies and guidelines for at least one contract.” She said the federal public service needs to ask itself why the rules aren’t being followed, especially since part of their purpose is to ensure the government gets value for its money.
“Are they so complex that people try to circumvent it to speed up the procurement process or are there so many that it’s impossible to know them all,” she asked. […] Should it be simpler or make a good reminder? I think we should start with a reminder and not create more rules. »
The Auditor General issues a single recommendation Tuesday regarding conflicts of interest and invites departments and Crown corporations to review previous recommendations on the awarding of contracts during other reviews, including that of the Procurement Ombudsman . For her part, she suggests that they proactively identify “real or apparent conflicts of interest” and keep this declaration in the purchasing file.
The former big boss of the firm, Dominic Barton, defended himself before the government operations committee in February 2023 from having privileged links with Prime Minister Justin Trudeau. He chaired the Economic Growth Advisory Council at the request of former federal Finance Minister Bill Morneau in 2016. Mr. Barton led McKinsey until 2018. A year later, he was named ambassador to the Canada in China, a position he held until 2021.
The Treasury Board concluded after a review of contracts in ten departments that there was “no evidence of political interference”. The Auditor General comes to the same conclusions.
The no-bid contracts are due to a “mechanism that existed since 2008” and which ensured that the government could work quickly and directly with a professional service provider “when the intellectual property of a certain technique or an information base” was clearly identified with it, explained the Minister of Public Services and Supply, Jean-Yves Duclos, in a press scrum. This mechanism has been shut down for more than a year.
We also learned during the committee study that the federal government had signed an open contract without monetary value until 2100 with McKinsey for IT services. The government defended itself by indicating that it was a pre-selection to save time and money.
“The standing offer with McKinsey expired in February 2023 and no standing offer is being renewed,” Minister Duclos indicated in a statement earlier in the day.
The Auditor General examined the 97 contracts awarded to the consulting firm between 2011 and 2023, a period that covers both the final mandate of Stephen Harper’s Conservative government and subsequent mandates of Justin Trudeau’s Liberal government. It states that 200 million was spent out of their total value of 209 million. Professional services offered included benchmarking services, management consulting services and information technology consulting services.
The value of these contracts increased significantly under the Liberals, but Ms. Hogan says she saw non-compliance with the rules by public servants under both governments. The largest contracts were awarded by TransMoutain Corporation, Canada Post, PSPC, National Defense and the Department of Immigration.
Minister Duclos indicated that he accepted the single recommendation and “those that preceded it.” He recalled that training had been given to all ministries and agencies on the procurement process “to strengthen the rules.” The ministry is also requiring “suppliers to demonstrate greater transparency in terms of pricing.”
This audit was carried out at the request of the House of Commons Government Operations Committee which had examined the professional services contracts awarded to McKinsey. The Auditor General unveiled two other reports on Tuesday, one on failures in the management of the Sustainable Development Technology Canada fund and the other on shortcomings in the fight against cybercrime.
