2 days ago
- Business
- Hamilton Spectator
Ottawa repeatedly violated procurement rules in giving ArriveCan firm nearly $100M in contracts, auditor general finds
OTTAWA—Federal government organizations repeatedly violated procurement rules as they awarded GCStrategies Inc., the main firm behind the pandemic
ArriveCan scandal
, nearly $100 million in contracts over a nine-year period without proper oversight, Canada's auditor general's probe has concluded in a new report.
Rebuking contracting practices under the Trudeau government, independent Auditor General Karen Hogan found federal agencies failed to justify procurement methods and contract costs, follow security measures and monitor the work of GCStrategies, ultimately falling short in showing value for the money spent.
From April 2015 to 2024, 31 federal organizations provided 106 contracts to the Ottawa-based IT firm, totalling approximately $92.7 million before taxes, of which about $64.5 million was paid out. Nearly half of the money for the contracts came from the Canada Border Services' Agency controversial ArriveCan pandemic project, though the report excluded that project from its scope, instead basing its findings off a sample of 35 contracts during that time period.
The report's findings show the shady contracting practices extended beyond the ArriveCan project, which caused scandal in Parliament in recent years and led to a rare reprimand of GCStrategies president Kristian Firth and the suspension of the company from receiving any government contracts last year.
In what appeared to be a pre-emptive response to the report, Prime Minister Mark Carney's government announced late Friday it was
banning the company from entering any contracts
or real property agreements with Ottawa for seven years.
But the report was focused on how government agencies — not the contracting firm — 'frequently disregarded' their policies that 'promote fairness, transparency, and value for Canadians,' when they awarded contracts to GCStrategies, citing the need for 'specialized expertise, managing unexpected increases in workload, or filling in for public servants during temporary absences.'
The errors were spread throughout the contracting process. In 58 per cent of non-competitive contracts examined, federal agencies did not assess whether a call for competitive bids would be beneficial, instead awarding it straight to GCStrategies. And in half of the contracts that required security clearance, the federal government did not prove all workers were cleared before the contract was awarded. Meanwhile, poorly documented descriptions of the work done, or no timesheets detailing any work, were accepted in 58 per cent of contracts.
Ultimately, the report found that in 82 per cent of the contracts examined, federal organizations could not show that the prices paid did not exceed market values. Finally, in 46 per cent of the contracts examined, the federal government authorized payments despite having 'little to no evidence,' that the work was completed.
While GCStrategies represents less than a sliver of the $18 billion spent on 'informatics services' since 2015, past reports have also found problems in the way the Canadian government awards contracts.
Hogan's report did not make any new recommendations, instead calling on the federal government to follow through on several instructions made in previous probes into government contracting, including the auditor general's 2024 report in the ArriveCan app. That
report had charged
the federal government 'repeatedly failed' to follow proper practices at every stage of launching the ArriveCan app, driving up costs for the tool.
'There are no recommendations in this report because I don't believe the government needs more procurement rules,' Hogan said in a statement. 'Rather, federal organizations need to make sure that the rules that exist are understood and followed.'
More to come.
The headline on this article was updated from a previous version to note that the firm responsible for ArriveCan was awarded nearly $100M in contracts, not other contracts, as previously published.
