Government failed to follow procurement, security rules with ArriveCan contractor

Federal organizations failed to follow procurement and security rules when awarding contracts to the company behind the controversial ArriveCan app, the auditor general said Tuesday.

The report on GCStrategies — one of several audits tabled in the House of Commons on Tuesday — says the company was awarded 106 contracts by 31 federal organizations between 2015 and 2024.

The maximum value of those contracts was more than $90 million but only $65 million was paid out.

Auditor general Karen Hogan looked at a sample set of contracts to see whether they fell in line with federal policy and whether the government got value for taxpayers' money.

Her report says many contracts did not follow procurement rules and organizations often provided little evidence to show the work had actually been done.

The report says that, for half of the contracts that required security clearances, federal organizations weren’t able to show that those doing the work had the appropriate clearance before the contract was awarded.

Federal organizations lacked documentation to show that they had confirmed security clearances for just over one in five of the contracts Hogan’s office examined.

The report found that federal organizations failed to monitor contract work and performance. Many accepted poorly drafted timesheets or failed to collect them at all. Others couldn't show that the people doing the work had the required experience and qualifications.

Hogan said that in more than 80 per cent of the contracts examined, organizations couldn't prove that the fees paid didn't exceed market rates.

In just under half of the contracts, the report says, organizations had "little to no evidence" to show that deliverables were received. Despite that, payments were still made.

The report also says that most contracts were awarded without organizations assessing whether they should call for bids. Many organizations justified the need for the contracts by pointing to increased workloads or public servants' absences.

In September, the House of Commons agreed unanimously to ask Hogan to look into contracts.

In a news release, Hogan said the audit findings echo those from previous audits by her office which “found deficiencies in how public servants applied federal procurement rules.”

“There are no recommendations in this report because I don’t believe the government needs more procurement rules,” Hogan said. “Rather, federal organizations need to make sure that the rules that exist are understood and followed.”

Minister of Government Transformation, Public Works and Procurement Joël Lightbound said in a media statement that while the report did not make any new recommendations, the government has taken "significant actions" on past recommendations and continues to take steps to "improve oversight and management of federal procurement."

"Our new government remains committed to strengthening federal procurement practices," he said. "We also expect public servants and departments to operate with the highest standards of integrity when procuring professional services to support their program delivery."

GCStrategies was banned last week from entering into contracts or real property agreements with the federal government for seven years. Last year, the government suspended the company’s security status.

Hogan's previous report on the app's development found it did not deliver the best value to taxpayers and concluded that three federal departments disregarded federal policies, controls and transparency in the contracting process.

Picture Courtesy: THE CANADIAN PRESS/Giordano Ciampini