Ombudsman Says Federal Departments Withhold Documents

Filomena Tassi (C), minister of public services and procurement, along with Anita Anand (2nd R), minister of national defence, and representatives from the federal government hold a press conference in Ottawa on March 28, 2022. (Sean Kilpatrick/The Canadian Press)

Alexander Jeglic, the independent ombudsman tasked with investigating allegations of bias in the award of government contracts, has filed an annual report that says federal departments refuse to provide his office with documents and participate in mediation to solve disputes.

On Oct. 19, the Office of the Procurement Ombudsman (OPO) presented its annual report in Parliament for the period of April 1, 2021, to March 31, 2022.

The report states that many complaints received were about “the lack of transparency” associated with government procurement of COVID-19-related items. He also stated that “the failure to maintain appropriate records of key decisions” was a persistent problem.

Jeglic will be looking for new ways to compel government departments to provide requested documents. He said, “Departments are currently able to disclose only what they choose to disclose, and can suppress information vital to conducting fair and transparent reviews without fear of potential consequences.”

Hiding Documents

The ombudsman said in many cases, his office writes to federal government departments and has to “remind them to provide documents that we know exist.” He said it is essential to be able to compel the production of documents to “increase both fairness and transparency.”

He said many complaints were received from suppliers “about their inability to gain information” about the bidding process “and why their bid was unsuccessful.”

He also noted that in early 2020, the federal government invoked the National Security Exception (NSE) in the purchasing of COVID-19 items. The report suggests that the use of NSE has led to a reduction in government accountability, and further reduced fairness, openness, and transparency.

The annual report lists the top ten issues Jeglic’s office investigated. Sixty-one complaints alleged government contracts were awarded with bias against individual suppliers; based on unfair or biased criteria; or using criteria in awarding contracts that were overly restricted, limiting competition.

Jeglic, who did not respond by press time for an interview request, said he would also be seeking regulatory changes that would allow him to remove the cap on compensation he can award when he finds a complaint has merit. “The maximum compensation I can currently recommend is $3,030 for goods contracts, and $12,120 for services contracts.”

“In many cases, these amounts are insufficient to cover the supplier’s lost profits or bid preparation costs, let alone the time and expenses required to file a complaint,” he wrote. He said the cap “disincentivizes suppliers with legitimate complaints from seeking recourse.”

Refusing Mediation

During the period covered by the annual report, the ombudsman said his office received seven requests from suppliers for mediation with the government, and in three of those cases, the federal department involved refused to participate in mediation to resolve the dispute.

Jeglic singled out Health Canada, the Natural Sciences and Engineering Research Council, and Employment and Social Development Canada as the three departments that declined to participate in mediation services offered by the OPO.

He said, “It is frustrating to have departments refuse to try and resolve issues through mediation, as suppliers want to try to resolve their contract dispute outside of costly legal proceedings.”

The ombudsman’s role is to provide a neutral and independent way to resolve contracting disputes between businesses and the federal government. The ombudsman reviews procurement practices, reviews and investigates complaints related to the contracts awarded by the government to companies, and provides alternative dispute resolution.

On Nov. 7, Blacklocks Reporter identified a number of government contracts awarded to a sole source, which were obtained from the Commons health committee in its 2021 documents. These were not included in Jeglic’s report, but were in the news as being questionable.

These included:

• a $237.3 million purchase order for ventilators from Baylis Medical Co., a company that had never manufactured ventilators, and was operated by ex-Liberal MP for Pierrefonds-Dollard, Quebec, Frank Baylis

• a $23.4 million grant and $118.6 million contract for masks by 3M Company, after the firm contacted lobbyist Kevin Bosch, ex-deputy director of the Liberal Research Bureau who boasted in an email of “getting things done”

• an appeal by Elly Alboim, former Liberal Party organizer, who emailed a cabinet aid requesting a contract be awarded to his son. “I vouch for Elly,” wrote the chief of staff to the minister of public works

• a $149 million contract to Spartan Bioscience Inc., a now-bankrupt test kit supplier hired after “a couple of good meetings” in the prime minister’s office

• a $150 million contract for SNC-Lavalin Group field hospitals that no health authority requested

Blacklocks Reporter contributed to this report.