Sole-source federal contracts draw ombudsman's scrutiny
Appearance of bid-rigging, report says
A suspicious number of federal contracts for goods and services appear rigged to favour one bidder, suggests a new survey.
The report, from the contracting watchdog at Public Works, provides further evidence of problems with the Harper government's efforts to clean up procurement practices.
The office of procurement ombudsman Frank Brunetta examined all 442 sole-source deals that were posted electronically between July 2011 and January this year.
These so-called advance contract award notifications, or ACANs, are required whenever the federal government plans to buy something without competitive bidding.
The notices are intended to alert unknown potential suppliers, giving them 15 days to challenge the deal by making a better offer.
The survey found that only 247 of the notices, about half, contained enough information about the goods or services the government needed to allow another supplier to mount a competing bid.
And only 100 — less than a quarter of the total — appeared to be a "legitimate attempt by the contracting department to test the market for an alternative source of supply."
"The results of this analysis raise questions about whether the policies governing the use of ACANs are sufficiently explicit and unambiguous," says the report.
Brunetta ordered the survey after complaints from former public servant Allan Cutler, whose career was damaged when he blew the whistle on graft during the so-called sponsorship scandal under Liberal Prime Minister Jean Chrétien.
Cutler, who in 2008 co-founded a watchdog group called Canadians for Accountability, alerted Brunetta to a series of sole-source contracts at the Public Service Commission of Canada that looked tailored to favour four people.
Cooked contracts found
Brunetta's investigation concluded in July last year that the contracts were indeed cooked. Cutler then claimed the case was just the "tip of the iceberg," prompting the latest survey of 442 contracts.
In July this year, Brunetta also reported on a separate but similar case at the Canada School of Public Service. He found school officials had stacked the deck to ensure up to $170,000 worth of work went to a favoured supplier between 2009 and 2011.
Over the last few years, the Harper government has been mired in criticisms about non-competitive contracting, most recently for its now-stalled efforts to buy the F-35 stealth fighter jet. The auditor general of Canada delivered a scathing indictment of the F-35 acquisition process in April.
The military also came under fire from the auditor general in October 2010 for its sole-sourcing of helicopter purchases. Sheila Fraser singled out the Defence Department and Public Works for their blatant misuse of ACANs to justify their favoured supplier.
In January this year, Public Works responded to Fraser by posting what it said were tougher rules surrounding the use of ACANs.
A spokesman for Brunetta said the office has no immediate plans for further work on abuses of ACANs because "it makes sense to allow time for the impact of the notice [by Public Works on new rules] to take effect."
Cutler, who welcomed Brunetta's latest findings as empirical support for his criticisms, says the Public Works notice hasn't fixed anything.
"Although the revision says 'significant' changes, I couldn't find a significant difference," he said in an interview.
Cutler ran unsuccessfully for the Conservatives in the 2006 federal election.
A spokeswoman for Public Works Minister Rona Ambrose says the government will address the issues raised in the report.