PACP Committee Report

GOVERNMENT RESPONSE TO THE REPORT OF THE STANDING COMMITTEE ON PUBLIC ACCOUNTS: CHAPTER 3, CONTRACTING FOR PROFESSIONAL SERVICES – PUBLIC WORKS AND GOVERNMENT SERVICES CANADA OF THE DECEMBER 2008 REPORT OF THE AUDITOR GENERAL OF CANADA.

The Government of Canada is pleased to table its response to the Twenty-first Report of the Standing Committee on Public Accounts, Chapter 3, Contracting for Professional Services – Public Works and Government Services Canada of the December 2008 Report of the Auditor General of Canada, that was tabled in the House of Commons on December 3, 2009.

The Government of Canada thanks the Standing Committee on Public Accounts for its Twenty-first Report and welcomes its continuing interest in strengthening contracting management in the federal government.  This document provides the Government Response to each of the three recommendations from the Twenty-first Report.  The Government agrees with all of the recommendations made by the Committee and this Response demonstrates that the Government has acted and continues to act on these recommendations.

RECOMMENDATION 1

That PWGSC provide an interim status report to the Public Accounts Committee on its progress in implementing its action plan by 28 February, 2010.

The Government agrees with this recommendation, and provided an interim status report summarizing the actions taken to address the recommendations contained in the Auditor General’s December 2008 report by February 28, 2010.

In response to the Auditor General’s December 2008 Report and to ensure the deficiencies noted were addressed promptly and effectively, PWGSC developed an action plan which included various actions that, once implemented, would address the deficiencies noted. The action plan focused on the development and implementation of a Contract Management Control Framework, which would help ensure high-quality, consistent and compliant contract administration in PWGSC. The Framework consists of key elements such as: Governance; Controls; Risk Management; Policies and Procedures; Tools and Templates; Management Information Systems; Training and Communication; Monitoring; and Reporting.  Each of these elements forms the basis of several actions that were completed by PWGSC as part of its Action Plan.

PWGSC’s Contract Management Control Framework, the key commitment of this action plan, operates within a well-established governance structure comprised of a senior procurement review committee supported by other branch-specific committees and review functions.

To form part of the guidance supporting the Framework and ensure ongoing access to consistent information including key contract management controls, PWGSC developed or revised various guides related to contracting. These included: The Manager’s Guide, which was revised to identify risks to be managed during the procurement process; a Guide for Risk Management of the Employee-Employer Relationship, which provides the required guidance on the management of consultants, including risk mitigation strategies to manage employer-employee relationships. And finally, a comprehensive Contract Management Guide, which provides employees with key information required to undertake any procurement activity with external suppliers.

PWGSC also finalized a Departmental Policy on Procurement designed to set departmental direction and establish guiding principles and related roles, responsibilities and accountabilities for the procurement and contracting of goods, services, and construction services.

PWGSC has developed and implemented ongoing programs to monitor department-wide compliance with key contract requirements and the use of key procurement tools. Findings from these monitoring programs are reported to PWGSC’s senior procurement review committee. PWGSC has also completed various supporting communication and awareness activities including a communication strategy, the development of procurement training programs and the delivery of national training courses related to contracting for Departmental managers and employees.

To determine whether similar conflict of interest cases have occurred, PWGSC completed a review of contracting data in key procurement branches which found no incidents of conflict of interest. The Department also commissioned an independent third-party assessment of contract administration in 2009.  All areas of concern were successfully addressed.

PWGSC adapted its processes to ensure Department-wide compliance with the revised guidelines and requirements from Treasury Board Secretariat on the proactive disclosure of contracts over $10,000 and the reporting of all task authorization contracts.

RECOMMENDATION 2

That PWGSC initiate a review of its long term IT contracting policy, including issues related to the potential creation of employee/employer relationships, and provide details of its review by June 30, 2010.

The Government agrees with this recommendation and recognizes the need to address issues surrounding long-term IT professional services contracts.

The Government is committed to ensuring existing policies, directives and procedures take into account risks related to the creation of employer-employee relationships and contain appropriate information, measures and processes to identify, control and mitigate these risks.

To that end, PWGSC has ensured that measures to mitigate the risk related to the creation of employer-employee relationships were included as part of its Contract Management Control Framework.

As part of the Framework, PWGSC developed and finalized a policy on procurement designed to set departmental direction and establish guiding principles for the contracting of goods and services including long-term IT professional services.

PWGSC has also developed a Guide for Risk Management of the Employee-Employer Relationship. This comprehensive guide provides the required guidance on the management of consultants, including risk mitigation strategies to manage employer-employee relationships. This guide forms part of a PWGSC Framework for Risk Management of the Employer-Employee Relationship designed to assist operational managers in managing consultants and contractors working on government sites and to assess and mitigate related risks.

Contract management information sessions and workshops have also been delivered to Senior Management and managers respectively as part of the Framework. These sessions include discussions on the issues related to employer-employee relationships.

PWGSC has proceeded with full centralization of its procurement and contract management function within the IT sector.  This ensures effective and accountable procurement management processes and controls for all types of procurement including long term IT Professional contracting.

In response to the Committee’s recommendation, PWGSC will undertake a review of its internal directives, guidelines and procedures related to long-term IT contracting. The scope of this review will include: linkages to existing procurement and contracting policies; issues related to the potential creation of employer/employee relationships; challenges in staffing IT positions; factors and issues surrounding the length of IT professional services contracts. PWGSC will provide details of this review by June 30, 2010.

RECOMMENDATION 3

That PWGSC share its lessons learned with the Treasury Board of Canada Secretariat, and that if necessary, the Treasury Board update its guidelines on contracting, and report to the Public Accounts Committee on its progress in addressing these issues in its interim status report.

The Government agrees with this recommendation and recognizes the potential for conflict of interest in contracting activities in all departments and is committed to ensuring effective measures are shared for the benefit of all federal government departments.

The Government shares in the Committee’s confidence that PWGSC’s Contract Management Control Framework will reduce the risk of conflicts of interest in the management of its contracts.

The Government also acknowledges and agrees that policies and procedures specific to PWGSC contracting activities, including provisions to address conflict of interest, should be shared with the Treasury Board of Canada Secretariat for the possible revision of its contracting guidelines.

In its effort to share the key elements of the Contract Management Control Framework, PWGSC shared the following guides with the Treasury Board Secretariat: the Contract Management Guide and the Guide for Risk Management of the Employee-Employer Relationship related to Procuring and Managing Consultants and Contractors. These guides have also been made available on-line allowing access by other departments.

The Treasury Board Secretariat has indicated that it will consider the PWGSC lessons learned in the development of its contracting guidelines for departments.

PWGSC’s Contract Management guides were also shared with other government departments through a community of Assistant Deputy Ministers who are engaged with procurement renewal.

In accordance with the Committee’s recommendation, PWGSC will continue to share its lessons learned from the various elements of its Contract Management Control Framework with the Treasury Board Secretariat.