The recent procurement controversies involving ArriveCan and the federal green fund raise the possibility that more potential unethical practices are waiting to be unearthed, especially given that federal contracting is at record levels.
As a government committee continues its investigation of the COVID-19 vaccination travel app and its $54 million cost, an economics professor and a Conservative MP on the committee both say more unscrupulous contracting practices are likely in the offing.
“There isn’t any sense of a fastidiousness and ensuring that there’s a full due diligence on any of these contracts, so I would not be surprised if there are some other scandals in the woodwork, so to speak, buried in the government that have not yet been exposed,” Ian Lee from Carleton University’s Sprott School of Business told The Epoch Times.
Company partner Kristian Firth told MPs that his firm subcontracted the app’s development to “five or six subject matter firms” and took a commission of between 15 and 30 percent. Mr. Firth confirmed that his company was paid $9 million and that he and his partner made between $1.35 million and $2.7 million “pre-tax” between the two of them over the two years of work.
Increased Spending on Contracts
The two controversies have led Conservative MP Garnett Genuis to voice worries that the OGGO committee’s ArriveCan study has only “scratched the surface” of contracting scandals emerging due to structural issues in the federal government’s procurement process.“This is a large problem,” he told The Epoch Times. “It’s not the only problem, but it’s a large problem that we see revealed through the ArriveCan scandal that led to so much more money being spent than was reasonable.”
The analysis found that McKinsey & Company in particular received less than $4 million in 2018–19 but over $17 million in 2021–22.
Mr. Lee said that, from what has been revealed about the ArriveCan scandal, it appears the government’s procurement process is “not as rigorous as it once was,” with less attention to ensuring an appropriate value for taxpayer dollars is being spent.
“What we’ve seen with some of these latest decisions is that there seems to be a rather cavalier attention to the taxpayers’ interest,” he said.
However, Mr. Lee notes that outsourcing can be beneficial for the government in many cases, since “not every government department can be an expert on everything” and it can be more cost-effective and efficient to hire outsiders to do work.
“The problem is not contracting or outsourcing—the problem is a failure of management due diligence inside the government,” he said.
Public Services and Procurement Canada (PSPC) told The Epoch Times that it has a number of mechanisms to prevent and respond to potential wrongdoing in federal contracts, including internal controls, awareness campaigns, and mandatory fraud training for employees.
“If fraudulent behaviour is reported, Public Services and Procurement Canada responds by referring the matter to a dedicated unit that conducts investigations into potential fraud and wrongdoing,” a spokesperson said.
Reports of Alleged Unethical Contracting
As federal spending on consultants has risen, so have reports of alleged unethical conduct related to contracting. According to Procurement Ombudsman Alexander Jeglic’s 2022–23 annual report, his office was contacted 30 times during the year about concerns involving federal officials not following the Values and Ethics Code for the Public Sector.“I remain concerned regarding negative trends related to the lack of competitive processes and deficient documentation practices that continue to pose problems and undermine transparency in federal procurement,” he wrote.
Mr. Jeglic—whose office is responsible for reviewing the practices of federal departments for acquiring goods and services—said his office continues to receive feedback from stakeholders saying that the contracting process is “unnecessarily complex.” He said this complexity has contributed to a lack of bids observed in reviews done by his office since 2018.
“The benefits of competition are greatly reduced when no competitive tension exists,” he said.
Mr. Lee said the report indicates that the federal government is not practising due diligence when it comes to contracting.
“My concern is that it’s undermining confidence in the procurement process. And this is their squandering of scarce taxpayer dollars, clearly a problem because an independent agency has evaluated that and determined that this is a problem,” he said.
OGGO committee member Mr. Genuis said the ArriveCan development has highlighted how taxpayer dollars can be squandered by “middlemen who do no work, collecting very large commissions for essentially collecting contracts and subcontracting it.”
“It’s like if you hired me to paint your fence for $100 and I hired someone else to paint the fence for $50, and I just took $50 in between for being the person that was transferring the the contract and providing no value,” he said.
