NDVA Committee Meeting

STANDING COMMITTEE ON NATIONAL DEFENCE AND VETERANS AFFAIRS

COMITÉ PERMANENT DE LA DÉFENSE NATIONALE ET DES ANCIENS COMBATTANTS

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, December 7, 1999

• 1530

[English]

The Chair (Mr. Pat O'Brien (London—Fanshawe, Lib.)): I call to order the Standing Committee on National Defence and Veterans Affairs. Just before we go to the witnesses, I can indicate to colleagues here that the early indication is it looks as though our proposed trip on procurement and RMA to the U.S. about the third week of January is progressing well. I'll be seeking the formal budget committee approval tomorrow. It would be a very busy trip, that's for sure. There are a number of key people to meet and places to see about these issues we're dealing with. But I will let you know as soon as I get approval for that trip. If you are interested in going, indicate that in writing to the clerk as soon as possible. I think he's sent out a memo, or is sending out a memo—it's been sent out today.

We're pursuing the military flight idea to make it possible to take as many members as possible. Also members who have points may want to volunteer to use some of their points. That would assist us in getting as many members as possible on the trip. I think it really is worthwhile, and we intend to pursue it, hopefully successfully.

Mr. Art Hanger (Calgary Northeast, Ref.): When will we know?

The Chair: I go to the committee tomorrow, and if I get their approval I should have an update for you at Thursday's meeting. Then, of course, if you can encourage your House leaders to support this...because the committee was unanimous in wanting to make this good and valuable trip. Unless we go to see some of these people and facilities first-hand, we're missing a good opportunity when the House is not meeting. So if you can all speak to your House leaders in the near future, that will be the next hurdle that sometimes stalled these trips. But I'll give the word on Thursday as to whether their—

Mr. Art Hanger: I spoke to mine already.

The Chair: Great. So the early indication is it looks pretty good.

With that, I'd like to welcome to the committee today Mr. Greg Somers from Osler, Hoskin & Harcourt and also Paul Conlin. Gentlemen, I'll turn it right over to you for your opening statement, following which we'll go to questions from the members.

Mr. Gregory Somers (Partner, Public Law Regulatory Affairs, Osler, Hoskin & Harcourt): Thank you very much, Mr. Chairman. I appreciate the opportunity to address the committee here today. As you said, I'm Greg Somers, and I practice in the procurement area with the law firm Osler, Hoskin & Harcourt, along with my colleague Paul Conlin.

Today, I'd like to make a few brief remarks about recourses available to potential suppliers to government in the event that there's been a failure to follow the procurement policies or rules that are established.

Government contracting is subject to a range of disciplines, beginning with the Treasury Board contracting policy, which could be seen as overarching the procurement system. There are also the government contracting regulations, the North American Free Trade Agreement, the Agreement on Internal Trade, and the more recent WTO Agreement on Government Procurement. All of these various treaty and legislative disciplines on procurement have minimum thresholds for value, covered and uncovered departments that are susceptible to their disciplines, and exceptions available to the government in procuring relating to a national security interest, intellectual property rights, sole suppliers being capable of satisfying the requirement, and matters of urgency. Other than those exceptions, the norm is for the government department concerned to compete a bid subject to the rules laid out in that legislation or those treaties.

Because we're lawyers dealing in government procurement, our main intersection with the system is in challenges and grievances of potential suppliers. In our experience, potential supplier grievances arise typically because of three situations.

The first is that a potential supplier who feels competent to bid is not invited to bid, and that usually arises in a sole-source situation.

In the second situation, a supplier is notionally invited but he cannot bid due to the design of the specification and the impossibility of him meeting it in the terms that it's designed.

The third situation, possibly the most frequent, is that a government department invites tenders on a competitive basis but the potential supplier perceives an unfairness in the way his bid submitted was evaluated or perceives that a competing bid obtained the contract notwithstanding that it was not in compliance with the federal specification.

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In the first situation I mentioned that a government department may decide to sole source a contract, on a non-competitive basis, of course, and in that case usually issues an advance contract award notice or an ACAN. I understand a representative of the Auditor General will be speaking to you shortly about its recent report on the use of ACANs in tendering, and I don't want to anticipate him on that, but we have reviewed the report and I can say that its conclusions, frankly, would not really astound any member of the supplier community with which we've come into contact. The Auditor General found essentially that in the sample studied, ACANs are widely used to test the waters and find out if there would be objections to sole-sourcing, rather than to advise the supplier community that-sole sourcing is being contemplated under one of the permitted exceptions that I mentioned already.

Potential suppliers can respond to an ACAN and assert their confidence to do the work, but challenges of this type are quite rare. The challenges that are effective in reversing the department's intention to sole-source are even more rare. The rejection of a supplier's request to have a procurement competed is usually the point at which we get called to advise on the rights to challenge the procedures, the time and effort required, and the cost it's all going to incur.

The other usual grievance situation is that a supplier has just received tender documents and believes that the tender itself has been devised to predetermine who will get the contract because the documents specify too precisely the sorts of requirements or qualifications a successful bidder must have.

The third situation, and probably the most common grievance, is that the potential supplier has submitted a bid and has lost the award. In the debriefing usually carried out by the department following the award, the supplier finds out why it lost and concludes that the evaluation of the bids was not carried out in the way the tender documents said it would be. At that point the supplier has a choice. He can challenge the procedures used or he can accept the lost opportunity and move on. In making that decision, a supplier has to weigh the cost of the lost opportunity against eroding goodwill with probably its most important customer, the company time and energy a challenge will consume when it could be bidding on other contracts, the amount of money likely to be recovered in the challenge, and the cost of the challenge itself. The majority of grievances don't get past this stage.

So no matter the merits of the case, the process doesn't create enough incentives for it to really have an effect on keeping procurements within the rules. Only a very small percentage of grievances actually do get adjudicated upon. If a supplier decides to challenge a sole-source contract, he or she files a complaint at the Canadian International Trade Tribunal. At that stage the supplier is entitled to ask the tribunal to issue a stop award order. The tribunal usually does so to prevent a wrongful award from going forward. However the department has two strategies available to it in response. It's a breach of policy, but it can hurry up and award the contract ahead of time before the stop award issues, or it can write a letter back to the tribunal certifying the delay is not in the public interest. The tribunal has to accept that certification and the department need give no reasons, so it's very difficult to challenge.

From our experience, reasons or justifications should have to be given so that the exercise of that power has some basis. Ideally a claim of prejudice due to delay would be reviewable by the tribunal. The tribunal operates on a strict timeline in these, so the delay involved is usually no more than 90 days and can be reduced to 45 days.

Finally, even if a challenger is successful, the tribunal can award her costs of bid preparation and costs incurred in challenging the improper procedure. In a sole-source ACAN situation, there are no bid preparation costs, of course, since no bids were invited. In addition, the tribunal can recommend that a successful complainant be awarded its lost profit as a result of the breach or damages for lost opportunity if these are not too remote. Unfortunately, in calculating lost opportunity costs the tribunal divides the contract value by the number of potential bidders that might have been able to participate, whether they challenged or not, and then applies the profit percentage to that, making lost profit recovery only a fraction of the actual loss sustained by the potential supplier.

Those are two changes that we would see would greatly assist the system in staying within the procurement rules.

Subject to any questions, those are our submissions for the committee today.

• 1540

The Chair: Thank you very much, Mr. Somers. We'll now go to the questions.

First I'd like to welcome back to our committee Mr. Hanger, who's had some illness for a couple of weeks, and also our colleague, Monsieur Laurin. I understand his car is not in good shape, but we're glad he is. So welcome back to our two members from the opposition, colleagues.

We start with Mr. Hanger for seven minutes.

Mr. Art Hanger: Thank you, Mr. Chairman.

Mr. Janko Peric (Cambridge, Lib.): Mr. Chair, I just want to inform René that the number one cars in Canada are manufactured in Cambridge: the Toyota Corolla. They're very good cars, very reliable. So I would recommend them.

The Chair: Oh, I could sell him a good LAV from General Motors in my riding.

Voices: Oh, oh!

The Chair: I'm not going to take this from Mr. Hanger's time; that's for sure.

Art, we'll start with you.

Mr. Art Hanger: Thank you, Mr. Chairman.

I'm curious about a past issue, obviously something to reflect on for the future: the EH-101 contract cancellation. What laws were broken when that was overturned? Or were any laws broken?

Mr. Gregory Somers: In the context of procurement challenges, a standard remedy in the case of a flawed procurement is to in fact revoke the tender and to reissue it. So I'm not aware of any, in the context of the agreements or the treaties I'm talking about, that would have been breached by that action.

Mr. Art Hanger: Well, something must have been breached. If you don't want to specifically deal with the EH-101, when a tender is already issued, an agreement is reached, and work is proceeding on a particular project, obviously some compensation is going to be awarded, and a tribunal will undoubtedly have to examine the process. Was a tribunal struck to examine that cancellation?

Mr. Gregory Somers: No, to my knowledge a tribunal process was not brought, because of the particular circumstances around that one. The remedies given in both the NAFTA and the Agreement on Internal Trade, as well as the Agreement on Government Procurement of the WTO, contemplate revoking the tender in the event it's been flawed. That doesn't predetermine the outcome or the entitlement to damages. If there were a wrongful procurement step or action whereby rules were broken, there may well be a cause of action, as you have mentioned, by the person who started the work and incurred losses, costs, damages, and so forth, but he would have a separate cause of action against that.

As far as the procurement system goes, the least of all evils is still considered to be, under the treaties, to revoke the tender, correct it, and reissue it. In that way, suppliers' potential opportunity to compete is seen to be preserved.

Mr. Art Hanger: This has always been a rather interesting case, because substantial dollars were paid out after the fact. I brought the issue up when I was in Australia: could this in fact occur in their country, for instance where a contract was let and work proceeding along to fulfil that contract, and the government came along and cancelled? Their very short reply to me was no, it was against the law for them to do that. In other words, it was unlawful for them to do that; other repercussions could be coming down the pike.

Mr. Gregory Somers: Under your last statement, there are definitely repercussions in a breach of contract situation. Clearly damages would flow to compensate the supplier for the costs he incurred, as I've already mentioned. I'm obviously not competent to advise on Australian law, but to the extent that Australia is a signatory to the Agreement on Government Procurement of the WTO, a plurilateral international treaty, it would be controlled by the disciplines in that, and therefore by whatever remedies lie in that international agreement, if properly implemented. And Australian law would be available to the disaffected supplier as well.

• 1545

Mr. Art Hanger: So I guess I'm not really clear on whether such a cancellation in the future would be a breach of any particular law, apart from a breach of a contract of procurement, where there's simply a revoking of the tender. Does that apply to every procurement initiative—the possibility of revoking the tender as the only, if you will, downside to a cancellation?

Mr. Gregory Somers: The breach of contract is the downside I'm aware of; that's right.

Mr. Art Hanger: So the government does not leave itself open to a lawsuit to follow?

Mr. Gregory Somers: Well, that breach of contract often does lead to a lawsuit. But I want to distinguish breach of contract as a common-law procedure from breach of some legislation, a statute or a regulation, where the government, to my knowledge, would not be exposed in terms of a revocation of the kind you describe.

Mr. Art Hanger: Okay.

My next question is about sole-sourcing. There have been contracts by this government that were sole-sourced, but an ACAN notice was never issued.

Mr. Gregory Somers: I'm aware of that happening, yes.

Mr. Art Hanger: What does that say? Does that mean everything is legitimate anyway?

Mr. Gregory Somers: That says at the very least a breach of Treasury Board policy has been committed, and possibly a breach of the government contract regulations, and possibly as well the implementing legislation to the NAFTA, the Agreement on Internal Trade, or the WTO agreement I mentioned.

In other cases where the ACAN is published, it may not be left in the on-line bidding system—the MERX, as it's called—for long enough. Policy requires it to be kept for fifteen days where the dollar thresholds are met and so forth. We do see situations where it's left for something less than that and the contract is sole-source awarded before the fifteen-day period for the ACAN posting has expired.

Mr. Art Hanger: Okay. For the competitors or any potential competitors or anyone who feels they should be able to compete, what recourse do they have?

Mr. Gregory Somers: At that point, presumably, whether the contract has already been awarded or not, they could proceed either to Federal Court or to the Canadian International Trade Tribunal to lodge a complaint and undergo the procedure I described, and to claim that the exception being relied on by the government to sole-source is not valid in the circumstances and that the contract should be set aside and competed to provide best value for the crown.

The Chair: Thank you, Mr. Hanger. You'll have some more questions in another round.

[Translation]

You have five minutes, Mr. Laurin.

Mr. René Laurin (Joliette, BQ): Mr. Chairman, first of all, I'd like to take about 30 seconds to thank you and all of the members of the committee for your kind words following my unfortunate accident. It's the first time this has ever happened to me and I realized how much I appreciated hearing from my colleagues in times like this. I just wanted to let you know how nice it was to be on the receiving end of such kind wishes. I hope you do the same thing in future if someone else finds himself in my unfortunate position. I truly appreciated the gesture.

Getting back to our witness, Mr. Chairman, I'd like to focus on the question of sole-sourcing. You seem to be saying that the government could, through its actions, succeed in excluding several suppliers by crafting specifications that are too restrictive. Could you give us an example of one such case?

Mr. Gregory Somers: Certainly. I think I understood your question correctly, but with your permission, I'll respond in English.

[English]

The technical terms escape me in French; I'm sorry.

The context wherein bid specifications are too specific is not a sole-source situation. It arises in a notionally competitive situation wherein the government will put out a requirement and say, to really overstate it, a company whose name begins with the letter X and who has consultants on board who meet the descriptions Y and Z will be eligible to submit a bid in response to a tender in this situation. The government department crafts the specifications so narrowly that notwithstanding the fact that it allows anyone in Canada to bid, only one supplier can responsively bid, because only he or she can meet the exact terms of the specification.

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That amounts to a breach of the treaties I've already mentioned, which provide that specifications ought not to be crafted to have the effect of excluding true competition unless there's a specific need for a specific requirement that has in it no available latitude.

If you want a painting by Picasso, it's not enough to say you need a painting that looks like someone stepped on the subject. You need that particular painter, for example, and therefore you have to specify very closely. But if you just need a wall covering, there's no need to craft the specifications so narrowly that only one person can supply.

[Translation]

Mr. René Laurin: This means the department can craft very narrow specifications, focussing either on the supplier's expertise or the product itself.

[English]

Mr. Gregory Somers: Absolutely correct.

[Translation]

Mr. René Laurin: Supposing there are three possible suppliers and the government wants to exclude two of them, all it needs to specify is that no supplier with less than 20 years of experience will be allowed to bid, realizing full well that only one supplier has more than 20 years' experience. That would be one way of narrowing the field.

[English]

Mr. Gregory Somers: That's exactly right.

[Translation]

Mr. René Laurin: Similar requirements could be put in place respecting the product. Can you give us one example of a case when the government took this approach? Do you think such an approach is feasible? It's difficult to say for certain in this field.

[English]

Mr. Gregory Somers: Yes. Unfortunately, the examples that immediately come to mind are only specific examples where I was in situations of advising persons on one or the other side of a dispute that did not go to adjudication and did not become matters of public record. Therefore, my clients in that case have privilege over my ability to speak about it.

[Translation]

Mr. René Laurin: Do you have any idea of the amount of money involved here? What is the value of the contracts awarded through sole-sourcing over a one-year period?

[English]

Mr. Gregory Somers: Because, in our estimate, far less than 10% of flaws are actually challenged and sent to adjudication, it would be very difficult to arrive at that number. I couldn't even begin to estimate the value of contracts that go with that particular flaw.

[Translation]

Mr. René Laurin: In his report, the Auditor General alluded to the fact that sole-source contracts accounted for between 25 and 30 per cent of all DND contracts. If DND contracts are valued at $10 billion, this means that approximately $3 billion in contracts were awarded without tender.

[English]

Mr. Gregory Somers: Yes.

[Translation]

Mr. René Laurin: When a contract is not put out to tender, obviously the government is free to choose the supplier it wants.

[English]

Mr. Gregory Somers: That's right.

[Translation]

Mr. René Laurin: Do you have some idea of the cost of doing business this way?

[English]

Mr. Gregory Somers: Again, I could not give you a dollar number. One of the problems with it is that when a contract is sole-sourced, it's not put out to the market in order to test whether the value of that contract has any market reality. When a contracted is competed, obviously persons are going to put in an estimate of a bid that's going to tend to make things cheaper. They realize that if they're underbid by a competitor, they won't win the contract. So the sole-sourcing procedure tends to inflate the value of those contracts that are sole-sourced.

[Translation]

Mr. René Laurin: A $2.8 billion contract was awarded to Bombardier through sole-sourcing, a fact mentioned by the Auditor General. Clearly, this was a rather unique situation because Bombardier may possibly be the only supplier in this field. Could you talk to us about this case? Could the government have proceeded any differently and not used sole-sourcing? Would you care to comment on this contract?

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[English]

Mr. Gregory Somers: Without knowing the department that was ordering the goods or the particular goods concerned, it's difficult to know whether the rules apply, or even which rules apply. Normally in a contract of that size, though, a spectacularly large contract, it would be subject to all of the disciplines of all of the treaties. In fact, under the WTO agreement, it's well above the threshold to have to allow national treatment and most-favoured-nation treatment to international suppliers as well as Canadian suppliers.

That was one of the commitments Canada undertook in entering into the WTO agreement on procurement, to extend these opportunities to not just Canadian suppliers, subject to the rules, but international suppliers as well.

[Translation]

Mr. René Laurin: What steps do you recommend be taken to avoid any abuse in the tender process? You can't tell me if sole-sourcing saves money or if it's more expensive. If you can't answer that question, then maybe it's not such a bad thing to resort to this approach. It may even be a good thing, but judging from your testimony, I'm not certain if we should be criticizing or congratulating the government for taking this approach.

Mr. Robert Bertrand (Pontiac—Gatineau—Labelle, Lib.): You can congratulate us, René.

Mr. René Laurin: I probably can. However, if this isn't such a sound approach, what would you recommend the government do?

[English]

Mr. Gregory Somers: The persons who know most about what's going on, the persons who have an eye on the system every day, are the potential suppliers. It has to be worth their while to look for abuses, to try to obtain redress, to draw attention to these things. Before the Auditor General's report on sole-sourcing, the degree of this was not publicly known. Absent a policy rationale, in fact in breach of regulation, the degree of sole-sourcing was not known except in the supplier community.

To give supplier community real remedies, and to make it worth their while to call the department on this activity, would discourage that from happening. There might be an initial increase in disputes, but quickly both sides would get used to the enforceable discipline that was there.

It would tend to improve the crown's opportunity to get best value to compete the requirements and to find out the market value of what was being purchased as opposed to the more expedient and perhaps easier route of just going to the supplier the department happens to know or happens to be familiar with, or who happens to be an incumbent, or who happens to be related in one way or another.

So the disciplines need teeth, and they need to assist suppliers more than penalize them.

[Translation]

The Chairman: Thank you, Mr. Laurin.

[English]

Now to the government side for questions.

[Translation]

Do you have any questions, Mr. Bertrand?

Mr. Robert Bertrand: Thank you very much, Mr. Chairman. I have a few brief questions.

On the subject of sole-source contracts, Mr. Laurin alluded earlier to a contract awarded to Bombardier for a NATO training school in Moose Jaw. Were some people unhappy with the fact that this contract was awarded to Bombardier? Has your legal firm been following this matter very closely? When you see that a supplier has a problem with the contract that was awarded, do you contact him or does he in fact contact you?

[English]

Mr. Gregory Somers: Normally there are many disputes of this type going on, or potentially able to go on. There's an ethical issue as well with regard to our seeing an unfairness and contacting a client. As well, we are called to address an issue.

You have to keep in mind that certain types of procurements related to the national defence department are not subject to the disciplines I talked about. They're exempt for various reasons, as contained in the treaty.

I'm not personally familiar with the details of the procurement you've mentioned, so I can't speak to whether that one in fact had rules or disciplines involved in it when it was tendered.

Mr. Robert Bertrand: But in the cases you have worked on, would you go against...? As you know, in a large majority of the contracts that are handed out, they might belong to DND, but everything is done at Public Works. In the cases that you have worked on, would you go against Public Works, for instance, or would you go against the ministère concerné, the department?

• 1600

Mr. Gregory Somers: Typically, what happens is that DND is known as the technical authority and Public Works is called the contracting authority. Public Works is the agent for all of the details about the procurement process. In a sense, you don't go against either one because you don't proceed.... It's not a lawsuit against a minister or against the government department. It's a complaint about procedure, and you let them, DND and PWGSC, work out who's going to supply what documents and what individuals had a role in making what decision.

Normally, particularly when you go to the tribunal, which is where I advise clients to go because of the relative simplicity of the process and the likelihood of success, you file your complaint, the tribunal obtains the facts—the government report—and audits the procurement for both departments.

Mr. Robert Bertrand: Do you do this strictly when it comes to Canadian companies bidding for Canadian contracts, or, for instance, for a company from Montreal that is bidding on a contract that's being handed out in the United States, if the company's operators feel they were not...? They met the criteria, but they were pushed aside in favour of an American company, for instance. Would you go in, in that circumstance?

Mr. Gregory Somers: No, because that would be an issue of U.S. law. Since ratification of the Canada-U.S. Free Trade Agreement, Canada has established its procedure for Canadian procurement practices. The General Accounting Office in the United States, in Washington, has a comparable procedure that it imposes for suppliers from Canada, the United States, or Mexico who feel they've been wrongly treated by the system. Those suppliers would hire a U.S. procurement lawyer, my analogue down there, because he would be familiar with the laws and procedures that apply in the United States.

Mr. Robert Bertrand: What about the signatories of WTO? Would it pretty well work on the same basis?

Mr. Gregory Somers: Yes, that's right. Each country is responsible for making sure its own house is in order in the procurement sense, and the implementation of international law into domestic law is always a matter for the domestic lawyer. It's up to the domestic lawyer of that country to make sure it is being observed.

The Chair: Mr. Earle.

Mr. Gordon Earle (Halifax West, NDP): Thank you, Mr. Chair.

As you mentioned at the beginning of your presentation, Mr. Somers, there are a number of government departments involved in the defence procurement process, and you touched upon those: Treasury Board; the Department of National Defence itself, of course; the Department of Foreign Affairs and International Trade; Industry Canada; and Public Works and Government Services Canada. In looking at this whole process, we've found that sometimes problems develop simply because of the multiplicity of departments involved and all the different rules, regulations, and so forth. With the clients you've been dealing with, have you found the companies that you've been involved with to be clear on the roles and distinctions of these different departments and what they're supposed to do, and so forth? Have you had any cases or grievances that in essence resulted from that particular problem, more so than any particular breach of contract?

Mr. Gregory Somers: That's an excellent question, but obviously asking a lawyer whether he likes regulations to be simple enough for his clients to understand without him is always a tricky question. You're absolutely right. Every treaty has a different threshold value. Sometimes it's 25, 30, or 62. There could be many different dollar values, just to pick an example. It is not a transparent system. It is not something that anyone with a significant dispute on their hands could go into without advice.

As well, the process has other disincentives that make it difficult not to retain advice before you proceed with it, not the least of which is the fact that you can't obtain the confidential information from the government department if you're a supplier yourself. You have to hire an arm's-length lawyer to review it for you, and then he's prohibited from telling you. If you don't do that, you can't fully participate in the challenge process. You can't see the confidential file, because it usually contains confidential materials from your competitors.

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Mr. Gordon Earle: What I was interested in particularly was if some of the cases or complaints that have come to you, in your opinion, have arisen as a result of the kind of complex system that's involved. In other words, have some of your clients come to you simply because they didn't know the roles of all these different departments? Or have they been very clear about what each of the departments is doing when they've come to you, and why?

Mr. Gregory Somers: Oh, okay, I misappreciated your question. I apologize.

By the time someone calls me—and it's usually a potential supplier—they have usually, and almost invariably, had many conversations with the department in which the issue has been batted back and forth. If there's a deficiency of knowledge, it's within the department itself, because I'm given that correspondence after the fact and I'm told about what went on as far as the dispute that went back and forth is concerned. Often it reflects a deficiency and understanding about what policy and regulations require. So where the complications cause difficulties is actually within the departments themselves. At the line level, persons don't seem to be aware of the obligations they're under.

Mr. Gordon Earle: Canada's defence procurement process is currently subject to the industrial and regional benefits policy. Generally speaking, I think people want to support the idea of a policy of that nature, but have you found that particular policy has presented any kind of grievances coming through to your office? Have people come in feeling they've missed out on a contract because of the industrial and regional benefits policy, or have they held any kind of grievance in that area?

Mr. Gregory Somers: No, and I say that with just the proviso that certain types of defence contracts are excluded from many of the rules. The defence suppliers as the supply community are quite sophisticated in terms of knowing these rules, because it's their livelihood. They would be less likely to grieve something they knew wasn't covered by disciplines anyway. Even if they were negatively affected by the regional initiative you talked about, they would know they did not have a solid legal recourse and wouldn't contact us in the first place.

Mr. Gordon Earle: Lastly, if I have a moment, based on the experience you have with people who have been dealing with the procurement process, what single thing would you point to as being most important to making the process more effective and more efficient?

Mr. Gregory Somers: Give the tribunal sufficient authority to award damages for a breach of the rules. That would act as a check.

Mr. Gordon Earle: Thank you.

The Chair: Thank you, Mr. Earle.

We'll now start a second round of questions, at five minutes per member, again beginning with Mr. Hanger.

Mr. Art Hanger: Just to pick up from Mr. Earle's and your last comments, take a cancellation like the EH-101 one that occurred. There was an award for damages above and beyond maybe what would normally be received for breach of contract. Is that what you're saying would be a good check to prevent something like that from happening in the future?

Mr. Gregory Somers: I would have to distinguish that case. First of all, with a cancellation like that, you would have to make it out to be a breach of the rules before you would be entitled to tribunal damages. If they find that a wrongful procurement act was committed, they address that with compensatory damages for lost profit or lost contract opportunity. That would be a totally separate procedure from breach of contract and the damages that would entail between that supplier and the government department.

Mr. Art Hanger: Thank you.

Something I've heard—and maybe others at this table have heard it too—is that when it comes to sole-sourcing, a competing defence industry complaint is that nobody will complain because that will then eliminate them from the next round, when they may have the opportunity of being the recipient of the sole-source. You won't have any formal complaints laid.

• 1610

Mr. Gregory Somers: That's right.

Mr. Art Hanger: However, in speaking to a lot of smaller companies and mid-sized companies, especially in the high-tech industry, they would like to become part of the process, but they're only included through the larger companies having received sole-sourcing, and they would be excluded if they complained too loudly. It seems to me that this is an inappropriate kind of relationship to have. I would therefore ask you what you think could happen or should happen to make it a little more open.

Mr. Gregory Somers: First of all, let me say that our experience in the defence sector, and in the high-tech sector in particular, is exactly that fear of loss of goodwill. As I said earlier, especially for the smaller companies or the subcontractors, this is likely their best customer. It may be their only customer in some cases, so there's a great disincentive. The cases that you see come along occur when, like as not, if that's a supplier's only customer and he doesn't get this contract, he's at a serious risk of having financial difficulties. In a sense, he has less to lose if he proceeds than if he doesn't proceed.

Again, in response to Mr. Earle, I mentioned giving the tribunal more teeth. For those challenges that are brought, they will succeed, because the majority of them do. That would sensitize the department's concern that they'd better get up to speed on the procedures. It would make it less likely for them to breach them in the future, and we would therefore avoid the problem of the smaller or captive supplier having to decide whether he wants to take on this very important customer or not.

Mr. Art Hanger: Right now, though, the disincentive to complain supersedes anything that may happen at that tribunal. Of course, as you point out, the tribunal doesn't have the teeth, if you will. Even if it's given some more teeth, even if it's given the opportunity to levy a sufficient—

Mr. Gregory Somers: A cost award.

Mr. Art Hanger : —cost award, thank you—is it really going to open the door for a legitimate complaint in a formalized way, without that company or that complainant losing out in the end anyway?

Mr. Gregory Somers: What we have is a situation in which, let's say—I'm pulling these numbers out of a fairly unscientific but experiential hat—six of 100 procurements get grieved, and they get grieved today notwithstanding that the cost awards are inadequate and the odds against winning aren't all they could be. Those examples at least will continue to occur, and better cost awards will therefore pave the way for these abuses to happen less and less often.

Mr. Art Hanger: Okay.

The Chair: You're right on five minutes.

[Translation]

You have five minutes, Mr. Laurin.

Mr. René Laurin: You mentioned that one solution to the problem of sole-sourcing was....

The Chairman: I'm sorry, Mr. Laurin,

[English]

but I forgot our own rules. I have to come to this side, and then I'll come back to you. It's over to our friend Mr. Clouthier and then to Monsieur Laurin.

[Translation]

Mr. Hec Clouthier (Renfrew—Nipissing—Pembroke, Lib.): It's not a problem, my friend.

[English]

The Chair: That's the chairman's fault.

Hector, you're up.

Mr. Hec Clouthier: With the sole-sourcing, do you have a figure for the total contracts that are given, either monetary-wise or just as the percentage of, say, 1,000 contracts? How many would be sole-sourced? Do you have those numbers, those figures, or do you know them offhand?

Mr. Gregory Somers: I believe they were cited by Monsieur Laurin earlier, but out of $10 billion, something like a proportion of about $3 billion are sole-sourced. The Auditor General has done a scientific sampling of all that.

Mr. Hec Clouthier: So what you're saying is that it's about 30%.

Mr. Robert Bertrand: The NATO training school is in that, and that's why it—

Mr. Gregory Somers: It inflates the value of it.

Mr. Robert Bertrand: Yes, it inflates the value of it.

Mr. Hec Clouthier: Yes.

Mr. Gregory Somers: I can't comment on that. I would steer you to the Auditor General's report for a specific answer.

Mr. Hec Clouthier: Okay, but isn't a lot of the sole-sourcing a direct result of emergencies like the ice storm and blowdown? In my particular riding of Renfrew—Nipissing—Pembroke, with a lot of the DND stuff, there was some sole-sourcing last summer as a result of blowdown, and a year and a half before that there was the ice storm. Would that not be the case in much of the sole-sourcing?

• 1615

Mr. Gregory Somers: As for that view, again, let me defer to the Auditor General, who sampled it. His report states that the procedures, when an urgent matter requires a sole source...and there are circumstances like you're mentioning that very much validly require sole-sourcing.

Mr. Hec Clouthier: Because of expediency.

Mr. Gregory Somers: In dire distress, that have to be addressed in short order without having the time to evaluate this. Procedures require departments to check whether there's such an urgent situation and to document the urgency and keep it on file in order to be able to check that sort of thing. The Auditor General will be able to tell you his findings on the compliance level of those things.

Mr. Hec Clouthier: Let's go back to the EH-101. I wasn't elected at that time, but when it was initially contracted out, was there an actual RFP for that? Was there a competition for the EH-101 initially? I thought it was just designated to that particular company.

Mr. Gregory Somers: Are you speaking about the procurement that was ultimately cancelled or the one that was—

Mr. Hec Clouthier: No, the one that was ultimately cancelled. I know I was deeply involved with the other one with Boeing. There certainly was a competition on that. With the original EH-101 contract back in 1993, was that sole-sourced or was there a competition for that?

Mr. Gregory Somers: I can't answer that. I was involved in the latter one, but not in the former.

The Chair: Does anybody recollect? It seems the consensus is there was a competition.

Mr. Hec Clouthier: That's what Art says. I don't know about that.

The Chair: The researchers are backing him up on that too.

Mr. Hec Clouthier: Okay, fine.

The Chair: Good enough.

Okay, Mr. Laurin, there is another minute left.

[Translation]

Mr. René Laurin: You were saying that one way of resolving the problem of sole-source contracts was to allow a tribunal to impose sanctions of some kind. Did I understand you correctly?

How do you reconcile this option with the right of the party awarding the contract to manage that contract? That party must still be able to make management decisions. If the contract is poorly administered, then someone will let him know. Therefore, how do you reconcile the right of a tribunal to impose sanctions of some kind on the one hand, and the right of the party awarding the contract to administer that contract and to select suppliers, always with the taxpayers' best interests at heart?

[English]

Mr. Gregory Somers: You anticipated my answer, actually. There is always that balancing process that has to go on. On the one hand, someone who loses a contract is always going to be mad and is always going to want money in return for compensation. He's going to feel he was badly done by. On the other hand, there is a procedure that has been arrived at, derived from Treasury Board policy and negotiated in the various treaties. It balances the efficient management of government business with the value issue you mentioned and with the transparency, openness, and accessibility of the various suppliers to the system. It is a matter of striking that balance. Right now the Treasury Board policy does it in the way it is drafted.

The difficulty is when a particular contract manager assesses and modifies that policy for purposes of a particular procurement. There is absolutely no way to ensure that those competing values are getting balanced, and it may be that the system is very much thrown out of kilter and that expediency, or relationships, are favoured over best value for the taxpayer's dollar.

In our submission, the way to do that is to actually apply the Treasury Board policy where these things have been studied and that balance has been struck on a principled basis.

[Translation]

Mr. René Laurin: In your opinion, where does the problem lie? With DND contracts, there are many stakeholders: the departments of National Defence, Foreign Affairs, Public Works, and so on. There can be three, four or even five stakeholders.

Therefore, where does the problem really lie? When contract requirements are too specific, who is responsible for this? Is it the armed forces or Public Works? Which is it?

• 1620

[English]

Mr. Gregory Somers: It's the particular issues. Just to use the example that comes to mind immediately, the Auditor General's report talks about Human Resources, it talks about Public Works, it talks about Industry Canada, and it talks about DND. And it finds similar problems in each.

In my experience, the cases that are brought forward have absolutely no connection to a particular department. It's not one department or another that keeps coming up. It's not one particular level. It could be an ADM. It could be a line contract evaluator. It's the general awareness, and usually it has the incentive to get an awareness of the regulation. It has to come from the top down, because it's just too diffuse an operation otherwise. These are immense departments.

The actual failure to abide...the lack of knowledge of what the rules require permeates any given department that I'm aware of, and you can't find a specific focus like that.

[Translation]

Mr. René Laurin: There are those who claim that the Defence Production Sharing Agreement and the Defence Development Sharing Agreement concluded between the US and Canada benefit the former more than the latter. What do you think?

[English]

Mr. Gregory Somers: Again those are primarily U.S. law issues, or at least they have a big component of U.S. law to know where the balance falls. That's not my sense of it. My sense of it is that Canadian contractors and subcontractors value those arrangements and those provisions as giving them an advantage in the U.S. market that is not available to any other suppliers from any other country.

[Translation]

Mr. René Laurin: I'm sorry, but what I really wanted to know was this: have more Canadian suppliers than US suppliers come out on the winning end as a result of these agreements?

[English]

Mr. Gregory Somers: In Canada you mean.

[Translation]

Mr. René Laurin: Yes, comparatively speaking. Obviously, in order for this to be an interesting proposition, there must be benefits for both side. If US suppliers have a four to one advantage over Canadian suppliers, although both parties benefit to some degree, the benefit is disproportionate. That's what I'm asking you. Some claim that the United States benefit more from these agreements than Canada does. Is that in fact the case, in your opinion?

[English]

Mr. Gregory Somers: No, it's not, again with a caution that the industrial base in the United States is different from and much broader than the Canadian one. So it would be difficult to do a like-to-like comparison, unless you take into account the different denominator, the different manufacturing base that's involved in the two countries. It's not a matter of just adding up the dollars on each side and dividing by the number of contracts.

[Translation]

Mr. René Laurin: Is there some reason why we should be importing our defence supplies rather than manufacturing them here in this country? Is this sound policy? Is it to Canada's advantage to base its procurement policy on imports?

[English]

Mr. Gregory Somers: I have difficulty commenting on that question because it's a policy consideration that I don't have enough experience to address as far as basing it on imports is concerned. I'm sorry I don't feel confident. I'd just be supplying an opinion without an actual basis and experience.

[Translation]

The Chairman: Thank you, Mr. Laurin.

You have five minutes, Mr. Bertrand.

Mr. Robert Bertrand: You recommend, among other things, that the tribunal be given more teeth to assist suppliers. I have a question for you. Under what circumstances would you feel it was the right decision to sole source a contract? Earlier, a number of scenarios were mentioned. I'm convinced that under certain circumstances, it's the only approach to take. Would you agree with me on that score?

[English]

Mr. Gregory Somers: Absolutely. There are situations, as you mentioned, like an emergency of some sort. It's well known that there is only one supplier who can fulfil the contract. At that point it becomes wasteful to issue a bunch of tenders, wait, and then put the whole process into motion for something you know is of no use in the first place.

There may be intellectual property rights that are involved and only one person can supply for that reason. There may be a specification that cannot be met by anybody but one, and in that case those are fully justified.

• 1625

[Translation]

Mr. Robert Bertrand: Speaking of subcontractors, do they enjoy more or less the same rights as the main contractor in terms of bringing a claim before the CITT? Is that in fact the case?

[English]

Mr. Gregory Somers: Normally at the tribunal a contractor or a supplier is challenging the government department's treatment of its bid or the fact that the government department didn't invite it to bid. Subcontractors normally don't have that direct relationship. Given a contract being struck with the prime, they simply feed into the process at that stage. So while they're not submitting a bid or they're not being invited to bid, they don't have the grievance the prime has.

[Translation]

Mr. Robert Bertrand: Let's suppose the contract is awarded to the main supplier, who then decides after two months that his subcontractor isn't up to the task and chooses another one. Can the first subcontractor appeal to the tribunal, arguing that his rights have been compromised by the main supplier? Does he have the right to do this?

[English]

Mr. Gregory Somers: He definitely has those rights, and if you were to ask me, I would advise him of them, but the procurement rules we're talking about only discipline government activity. They can't be brought to bear against a prime contractor or a private entity.

[Translation]

Mr. Robert Bertrand: Then, he would have to take the matter before a regular court.

[English]

Mr. Gregory Somers: Exactly.

[Translation]

Mr. Robert Bertrand: In other words, either way, the lawyers are the ones who come out on the winning end.

[English]

Mr. Gregory Somers: I hope so.

[Translation]

Mr. Robert Bertrand: Thank you very much.

[English]

The Chair: Thank you, Monsieur Bertrand.

Now, Mr. Earle, you have five minutes.

Mr. Gordon Earle: Your firm has obviously represented a number of companies before the Canadian International Trade Tribunal. Can you give us an indication of what kinds of complaints they've made? Is there a general kind of run-of-the-mill complaint that you handle? We're looking particularly at what problems these would highlight in the procurement process and specifically what problems, say, within the Department of National Defence these claims might highlight. What would you suggest or recommend to improve the process to avoid these kinds of complaints, to work yourself out of a job?

Mr. Gregory Somers: Generally, the most common kind of complaint we receive is that after the bids are open and the evaluations are undertaken, the evaluations are not done on an even-handed basis.

A little less frequent, but more frequent in terms of the Department of National Defence, is the too specific narrowing of the specification to exclude too many people. Let's say DND has a very clear idea of what it wants and crafts a specification that in our client's sense tends to leave them out by making it so particular. An example I used earlier, which I have experience with, is saying you need 20 years of experience. If only one supplier has that, this predetermines who's going to win.

The sole source we've talked about considerably is definitely a contender for first place in frequency, primarily in National Defence but across other departments as well. It happens more frequently as well in services contracts rather than in goods contracts, in our experience, because these often depend on personal relationships. They're above the threshold amounts, but they're smaller amounts. They attract less attention and often there's more of a personal employer-employee relationship involved in these smaller contract amounts of, let's say, under $400,000.

Mr. Gordon Earle: Apparently, around 1995 the defence industry productivity program, which aimed to develop and maintain strong defence-related industries across Canada, was cancelled. Industry Canada developed another program, an investment fund under Technology Partnerships Canada, and a section of that targets the defence and aerospace industries.

In your opinion, do such programs have a positive effect on some of the companies you represent? Have you had any involvement with that particular program, and have the companies found that to be beneficial? Should there be any changes made to that program to make it perhaps more efficient and cost-effective?

• 1630

Mr. Gregory Somers: Yes, clients of the firm do generally find the technology partnerships program to be extremely beneficial. You may be aware, though, that it has been recently scrutinized under the WTO rules. It's been altered.

The tendency—and the safer ground—has been for the TPC to fund more basic research, not free-market research. Something that's about to go on the market has a chance of being found to be an illegal subsidy now as a result of the Bombardier case. Notwithstanding the revisions to the TPC program, Brazil has complained that they are not adequate to address the concerns the WTO ruling addressed. So it's thrown the system into a bit of instability right now. No supplier wants to be the beneficiary of that and trigger an international food fight as a result.

The Chair: Thank you, Mr. Earl.

Mr. Pratt.

Mr. David Pratt (Nepean—Carleton, Lib.): Thank you, Mr. Chair. My question, I suppose, is a bit of a follow-up to Mr. Earl's question relating to the DIPP program. I wasn't here when the DIPP program was cancelled, but I would be interested in getting your comments on why the changes were made, and with the benefit of hindsight and a few years experience with the TPC in terms of the defence and aerospace industry, which program better served the needs and interests of the Canadian defence industry?

Mr. Gregory Somers: There was not a clear disclosure as to why the changes went ahead, but one of the beneficial results of it, and therefore, it is reasonable to speculate, one of the reasons DIPP went to TPC, was because of the WTO rules that prohibit subsidies that are specific, subsidies that go to a specifically identified industry in order to increase its export competitiveness in the world market. The TPC expanded DIPP to make it available to a wide range of industries without specifically targeting one industry and opening it up to that kind of challenge at the WTO level. The timing was pretty close to when WTO disciplines had to be implemented in Canada as well.

I've forgotten the second part of your question.

Mr. David Pratt: Weren't there certain common exemptions throughout defence industries around the world that allowed certain levels of government subsidy to take place because of security related issues and...?

Mr. Gregory Somers: That's true. National security exemptions permeate the GATT and the subsidiary agreements. But many defence industry contracts don't engage those sorts of concerns where tendering them, funding them, or not being able to fund them would put the defence industry in jeopardy in a national security sense.

Mr. David Pratt: The second part of my question was whether or not in retrospect one has been better than the other in terms of serving the needs of Canada's defence and aerospace industry.

Mr. Gregory Somers: In my experience, the TPC is very well received by the defence industry. I can't say it's superior, because I haven't really entertained the debate of which was better, but definitely the TPC is welcomed by the industry as extremely helpful to it in advancing Canada's industrial base—more enthusiastically than what I've heard for DIPP. But I can't do a fair comparative analysis.

Mr. David Pratt: Another question I have is with respect to the ITAR issue and the extent to which that issue has undercut some of the advantages we would have obtained through the defence production sharing agreement.

Mr. Gregory Somers: Yes, it is of great concern, and I understand progress has been made on it. One of the difficulties with it—it's a bit of an insidious one, and it remains a sticking point between Canada and the U.S.—is that.... I don't want to stir up a hornet's nest, but the brain drain—

Mr. David Pratt: Go ahead.

• 1635

Mr. Gregory Somers: —from Canada to the U.S. has been significantly offset by Canada being able to use highly qualified engineers from eastern European countries. With the change in the ITAR and the issue of dual passports in a country with an engineer with dual citizenship, Canada and another country, particularly an eastern European country, that prohibits it from being able to compete in the market.

All these highly qualified engineers are the company's resources, its stock in trade. Where they have lost staff to the United States, they've been able to supplement it with these; therefore they are frustrated by not being able to operate fully in the community. It is a very serious thing indeed.

Mr. David Pratt: Yes.

Do I have any more time, Mr. Chair?

The Chair: You have about another minute, Mr. Pratt.

Mr. David Pratt: Okay.

From the standpoint of defence and the way they write the statement of requirements for particular contracts, are you seeing a substantial movement away from DND overspecifying and allowing some of the suppliers to get a bit more creative in terms of how they solve problems within a contract and how they serve their clients?

Mr. Gregory Somers: My experience would not pass the test for statistical representativeness, so I will say that I have not seen as many narrow specification problems, let's say, in the last year and a half, or in the last couple of years, as I did formerly.

That's totally unscientific. Who happens to dial my number is the extent to which I can vouch for that number.

Mr. David Pratt: Right.

Mr. Gregory Somers: But speaking personally, yes, that's the experience.

Mr. David Pratt: Thank you.

The Chair: Thank you, Mr. Pratt.

That's two rounds of questions. I don't know if members have any more questions. If they do, we still have some time. We don't necessarily need to use it all, but if members have more questions, we'll take some more.

You do, Mr. Hanger?

Mr. Art Hanger: Maybe it's actually a continuation of what Mr. Pratt has been speaking of, and I think Mr. Earle too.

Going back to the situation with the United States and Canada, and the U.S. concerns over security issues, in effect, prohibiting Canadian companies from bidding on projects south of the border, my understanding is that you and your firm have actually acted on behalf of different national and multinational firms in Canada regarding trade proceedings, whether that be in front of NAFTA or other tribunals or the courts. Are you actively engaged in pursuing on behalf of other firms here, on behalf of industry here, some of these security concerns with the Americans?

Mr. Gregory Somers: Yes, we are advisers, but there are no tribunal or court proceedings I am aware of involving the international traffic in arms regulations issue. It's a matter for executive negotiation between the two countries, but we're advising aerospace and defence companies on the current situation as far as transfer of technical documentation across the border is concerned, which the change in the regulations affected. So it's at an advice and monitoring level with the firm.

Mr. Art Hanger: The defence industry in Canada is quite concerned about this particular initiative taken by the States, because they're looking elsewhere to stay alive—

Mr. Gregory Somers: That's my experience.

Mr. Art Hanger: —in other words, in Europe—

Mr. Gregory Somers: Yes, Europe in particular.

Mr. Art Hanger: —and even south of the border, if they have to make the move. That's how it will impact on Canada.

Where do you see it going from this point? That's a concern expressed by the defence industry at large right now. What do you see six months down the road for some of the defence industry firms?

Mr. Gregory Somers: It would depend on the particular situation of that firm, whether it has native contracts available to it to keep body and soul together, whether it pursues and finds opportunities in Europe.

• 1640

The particular issue there is the ability to get technical documentation without the permit required to send that technical documentation from the U.S. to other countries where contracts don't have the degree of urgency that would cause the problem because they couldn't get the permit in time to obtain the technical data and respond in a timely way to a bid. If that's not the issue, then there's still cross-border opportunity, but I definitely don't mean to diminish the seriousness of the problem.

The other advantage we have is that Canada's subcontracting base has a lot of friends in Washington with American suppliers who value the ability to subcontract to Canada, whether that be for the quality of the goods, the value of the dollar, or the value received in return. So there's significant assistance happening there as well.

Mr. Art Hanger: As a follow-up to another question that was asked on the EH-101, a statement of requirements was submitted by the military, ratified by the government, and of course required a number of companies to bid. Some bid, feeling they could fulfil; others did not bid because they felt the requirements were too narrow. Of course, then the issue was overturned.

Now another statement of requirements is going to be forthcoming, which may be narrow in another perspective. This is the type of issue that I would assume your firm would be involved in. If there are contractors out there who feel they can supply but because of the statement of requirements all of a sudden they're not in the running, is that fair?

Mr. Gregory Somers: Generally, in a situation like that particular one, they would deal not at the tribunal level and that sort of thing, but they would deal with whether the drafting of the specification was in accordance with Treasury Board policy. It would stay at the policy level, and it would probably be complemented as well by a lobbying activity, because that's just the reality of contracts of that size.

Mr. Art Hanger: So if there were firms that were unhappy with the way the second contract was let, if you will, what is their recourse when it comes to maybe having part and parcel of the initial bid and now they're suddenly faced with a new initiative here? Do they have any recourse as a result of that?

Mr. Gregory Somers: As a result of the initial bid, no, that has been set aside and it is history. They're working from the ground up again as far as the relationship to the process is concerned because they put in a bid in the prior tender.

Mr. Art Hanger: So ultimately it's government's prerogative, or whoever, to set whatever the requirement is, and what was in the past is the past.

Mr. Gregory Somers: Yes. That's subject to the rules, that it's not being drafted in order to frustrate the objectives of accessible, transparent, best-value tendering, but, yes, it is up to them within those policy disciplines.

Mr. Art Hanger: Thank you.

The Chair: Are there any further questions on this side? No.

[Translation]

Do you have any questions, Mr. Laurin?

Mr. René Laurin: No, I'm fine.

[English]

The Chair: Okay.

Mr. Earle.

Mr. Gordon Earle: There is one more question on a topic that I don't think has been discussed yet today. In terms of procurement, National Defence has moved in terms of procuring services to what they refer to as the alternate service delivery concept.

The Auditor General recently examined a number of projects that involved ASD, and it's kind of interesting to note that in the projects that had in-house bids, they seem to meet a lot of the criteria for a good business case more so than some of the projects that were externally bid. Have you had any cases or any clients come to you feeling aggrieved as a result of the ASD process?

Mr. Gregory Somers: In a word, no. In fact, I've had clients who were part of in-house teams and so actually felt quite advantaged or quite fairly treated by the process, if I can say that. So I don't have the perspective of a dispute on the in-house bids issue. I don't have the hostile perspective on that at all.

Mr. Art Hanger: Thank you.

• 1645

The Chair: Again, seeing no other questions here, I'll give Mr. Hanger the last question.

Mr. Art Hanger: Are you familiar with the acquisition reform guide, the one that was submitted by National Defence to the Auditor General?

Mr. Gregory Somers: I'm familiar with some of its terms, but not the guide as a whole.

Mr. Art Hanger: Okay. Have you or your firm played any role in its development?

Mr. Gregory Somers: No.

Mr. Art Hanger: Nothing at all?

Mr. Gregory Somers: No.

Mr. Art Hanger: So you really couldn't comment whether it's going to fix things up as far as procurement is concerned.

Mr. Gregory Somers: In my opinion, the provisions I'm aware of will definitely improve the manner in which procurements are carried out by DND—

Mr. Art Hanger: What specifically?

Mr. Gregory Somers: —if only by educating on what the requirements are at all levels of the department and having some objective monitoring going on about the procurements. That just has to help.

Mr. Art Hanger: Thank you.

The Chair: I believe that's the end of questions, other than maybe one last one. I'll save the last one for myself, Mr. Somers.

I would just like to make sure you've had a full chance to make any recommendations to this committee vis-à-vis the improvement of our procurement strategy or process as a government. We will be reporting to the House, probably in March, so we're looking for any way possible. I know you've offered a couple in response to questions, but if you have any other thoughts, either now or later, we would be happy to receive them.

Mr. Gregory Somers: With your permission, sir, if we could have the opportunity to file a brief submission in the coming week or two that would capture what we've talked about today and give a little meat on the bones, I would very much appreciate that opportunity.

The Chair: Sure. We would welcome that brief. Just send it to our committee clerk, Mr. Morawski.

With that, to you, Mr. Somers and Mr. Conlin, thank you very much for being here. We appreciate your help.

Colleagues, the meeting is adjourned.