Ombud Calls for Overhaul of Federal Contracting Practices

Federal procurement ombud Alexander Jeglic is advocating for a significant overhaul of the Canadian government's contracting practices, which involve billions of dollars annually. He highlights long-standing issues within the system that have yet to be addressed.

Jeglic expressed his frustration with the current state of affairs, leading to a report containing specific policy recommendations. He acknowledged the increased media attention on federal contracting shortfalls, crediting it with enhancing accountability.

The procurement watchdog's report offers several recommendations, with two prioritized. Firstly, Jeglic suggests appointing a chief procurement officer as a senior official responsible for federal contracting. Secondly, he emphasizes the need for improved review and tracking of the performance of contractors to ensure the government works with the best individuals and companies.

The current system lacks a clear mechanism to identify and warn departments about underperforming contractors. The report proposes a "vendor performance management" system to track and rate contractors, addressing issues in how departments handle poor performers. Without such a system, officials resort to restrictive criteria or other methods, potentially violating trade obligations.

The report also notes the rising costs of outsourcing, which reached a record high in the fiscal year ending March 31, 2024. Jeglic's office reviews a broader category of procurement, including goods and equipment, worth approximately $37 billion annually.

The government's platform promised to reduce spending on external consultants, bring more services "in-house," and implement a "made-in-Canada" procurement policy. The platform also criticized the federal procurement system as slow and outdated.

The Finance Minister informed cabinet ministers of plans for a "Comprehensive Expenditure Review," requesting them to identify internal savings. A spokesperson for the Minister of Government Transformation, Public Works and Procurement stated that the ombud's report aligns with ongoing plans within the public service.

The ombud's report is based on interviews with federal procurement experts, who expressed concerns about the loss of corporate knowledge due to high turnover and retirements of experienced officials.

Jeglic's office, along with other bodies, has investigated issues related to the ArriveCan app. His investigation found that outsourcing companies repeatedly won contracts by listing subcontractors who ultimately did no work.

Jeglic has called for accurate and reliable data related to procurement. He believes that accurate data is critical for effective reporting and providing information to the public. He hopes his recommendations, if implemented, will prevent controversies through increased oversight, rigor, and transparency.