OGGO Committee Meeting
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Standing Committee on Government Operations and Estimates
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EVIDENCE
Tuesday, October 31, 2023
[Recorded by Electronic Apparatus]
[English]
I call this meeting to order. Welcome to meeting number 82 of the House of Commons Standing Committee on Government Operations and Estimates, fondly known as the mighty OGGO.
Pursuant to Standing Order 108(2), and the motion adopted by the committee on Monday, October 17, 2022, the committee is meeting for its study of the ArriveCAN application.
Colleagues, I remind you not to put earpieces next to the microphone, as that causes feedback and potential injury.
In accordance with our routine motion, I am informing the committee that all witnesses appearing by video conference have completed the required connection test in advance of the meeting.
We have as witnesses today Mr. Wood and Mr. Yeo. I understand you each have opening statements.
My understanding, and perhaps the clerk will correct me if I'm wrong, is that whether individuals are sworn in or not, under parliamentary privilege, it is still contempt of Parliament to mislead the committee by giving a false statement or false evidence, and to refuse, unless related to cabinet confidence, to answer any questions, or to fail to produce documents that this committee might require someone to produce. That is my understanding.
Could the clerk clarify that for the committee, please?
Thank you, Mr. Chair.
Did you wish a clarification, or would you like me to comment?
Yes, Mrs. Kusie, there are a couple of items from the book, The Power of Parliamentary Houses to Send for Persons, Papers & Records, which says that whether people are sworn in or not, under parliamentary privilege, it is still contempt of Parliament to mislead the committee by giving a false statement or false evidence, to refuse to provide information that has been requested...to questions or documents.
Moreover, on page 1081, House of Commons Procedure and Practice states the following:
Likewise, refusal to answer questions or failure to reply truthfully may give rise to a charge of contempt of the House, whether the witness has been sworn in or not.
Is that satisfactory for your point of order, or your question?
It is satisfactory.
I'm wondering if it's historic practice within this committee to swear in the witnesses.
Perfect. Why don't we start with you, Mr. Yeo, for five minutes, please. We are short of time today and, of course, we're running late, so we'd appreciate if you could just stick to the five minutes.
Please go ahead, Mr. Yeo.
[Translation]
Thank you, Mr. Chair.
My name is David Yeo. I'm pleased to have the opportunity to speak with the committee members today.
[English]
Mr. Chair and honourable members of the committee, I would like to acknowledge that the land that we gather on today is the traditional, ancestral and unceded territory of the Anishinabe Algonquin nation and is now home to many other first nations, Métis and Inuit peoples.
I'm a decorated veteran. During my 36-year career with the Canadian army, which included deployments to Afghanistan and the Middle East, I was held to the highest levels of integrity, and of course, I continue to conduct myself in this manner today.
I would also like to further acknowledge that Chief Robert Franklin, my great grandfather and past chief of Alderville First Nation, was a treaty-signing chief. This treaty was signed on November 19, 1923, almost 100 years to this day. As a direct descendent of a treaty-signing chief, I hold my heritage with the utmost integrity as well.
I happen to have the treaty here with me today to help guide us through these discussions.
In 2003, I was asked to participate in the creation of the Government of Canada's policy for the procurement strategy for aboriginal business, what is known today as the procurement strategy for indigenous business. Mr. Allen Frost, many other indigenous leaders and I created this policy that guides the Government of Canada today in supporting indigenous businesses with federal government procurement opportunities.
Dalian is a hardware and software cybersecurity company that I founded 23 years ago. As much as possible, we prioritize the hiring of indigenous employees and the deployment of indigenous consultants to work on projects for the Government of Canada.
Dalian and Coradix are in a joint venture under the procurement strategy for indigenous business. We established this joint venture in 2004. In the joint venture, Dalian provides professional services in cybersecurity and networking, and Coradix provides IT professional services.
In every project for the Government of Canada, Dalian follows all procurement and contracting rules and policies. We deliver according to scope of work or the task authorizations that we receive, and we only invoice for work performed, completed and signed-off by technical authorities or according to the terms and conditions of the contract.
Meegwetch.
Now I will pass it off to Mr. Wood.
I'm sorry, Mr. Wood. Before you start, we have another point of order, so if you could just bear with us for a second....
Given the unfortunate late start we had as a result of votes, I'm hoping that we might be able to get the witnesses to stay for an extended period of time. We started close to 40 minutes late. I'm hoping that perhaps we could get their assurance to stay until the six o'clock hour, something along those lines. That would be very much appreciated, Mr. Chair, given the late start we had.
Thank you.
I think they have confirmed for an hour from our start time.
Gentlemen, are you able to stay longer than that?
That's correct. We made accommodations to our schedules, and we can stay for the hour that we committed to.
Mr. Chair and honourable members of the committee, my name is Colin Wood. I joined Coradix in 2016 and have been president since November 2021.
I am also a director at Dalian. I have been working in the IT professional services sector for more than 20 years. Coradix is an IT consulting company that has been operating for close to 30 years—since 1995.
Dalian is a hardware and software cybersecurity company that has been operating for more than 20 years. Coradix and Dalian are in a joint venture under the procurement strategy for indigenous businesses.
Coradix and Dalian share a two-floor commercial office in downtown Ottawa. We have several corporate functions including business development, proposal services, account management and administration. We have more than 40 employees and currently have 475 consultants working on a range of IT projects for the Government of Canada.
Over the years Coradix and Dalian have provided IT products and services to most federal government organizations. We have also provided thousands of IT consultants with a broad range of technical skills, expertise, education, training and experience to support, implement and successfully deliver hundreds of projects for the Government of Canada departments and agencies.
In every project for the government, Coradix and Dalian follow all procurement and contracting rules and policies. We deliver according to the scope of the task authorizations we receive, and only invoice for work performed, completed and signed off by technical authorities according to the terms and conditions of the contract.
The outsourcing of IT professional services is an effective approach that allows the government to access the leading-edge skills and expertise that it needs to plan and execute specific projects within a defined period of time. These specialized expertise and skills are not available internally.
Coradix and Dalian compete for, maintain and manage a variety of standing offers and supply arrangements with numerous federal government organizations. We've also obtained and maintain a variety of security clearances for our company, employees and consultants, which allow us to work on highly sensitive and confidential projects. There is, of course, a business cost to all this.
On projects we undertake for the government, we provide task response and administration project planning, contract management, account management, security clearances and CISD administration, and administrative functions including contracting, invoicing, and payments to employees, consultants, and contractors.
These consultants, who provide services to the government, report to and are under the direction, supervision and control of Government of Canada employees.
On ArriveCAN, in May 2020, Coradix and Dalian began receiving task authorization requests to support software development work on mobile applications. This was under our task-based informatics professional services contract with the CBSA.
From May 2020 to May 2023, we provided 20 IT professionals to perform various functions on the ArriveCAN project, including software development, testing, project management, technology architecture and cybersecurity.
The billing rates for these IT professionals ranged from $540 to $1,000 per day depending on the service they were providing, their level of expertise and their experience. These rates are consistent with market rates for IT professional services.
While this does not in any way relate to ArriveCAN, I would like to use my remaining time to provide a few comments relating to Botler.
On November 11, 2020, we were contacted by CBSA for a a task authorization under our BTID contract.
GC Strategies was informed by CBSA that we had received the task request for these services. They then contacted us to advise that they had a team with the experience and expertise that CBSA was seeking to work on this project. GC Strategies provided us with the CVs of the Botler team, which we then submitted to CBSA with our task authorization response.
This project with CBSA was deliverable-based. There were six expected deliverables, each with a budget of $70,000. CBSA received and accepted two of the six anticipated deliverables provided by Botler and were paid $112,000 by GC Strategies. Coradix and Dalian were paid $14,000 per deliverable for the tasking oversight account planning and management, security clearances and administration services related to the project, as well as accepting the overall risk associated in a deliverables-based task authorization.
On December 14, 2021, CBSA advised Coradix, Dalian, GC Strategies and Botler that they were terminating their project. This happens when the client decides the project is no longer needed or is not meeting expectations in terms of quality, timelines and/or budget.
That is the extent of our dealings with Botler.
Mr. Chair, thank you.
Thank you, gentlemen, for being here today.
From our understanding, the CBSA hired GC Strategies to work on ArriveCAN. They in turn hired both of you.
Is this a regular relationship between your firms, where GC Strategies would hire Dalian and Coradix?
Yes. GC Strategies is a subcontractor that we occasionally work with. We worked with them on the Botler AI task authorization.
Our billing process for this contract in particular was deliverables-based. Once the contractor has completed the deliverable, it is signed off by a Government of Canada employee. Once we received the signed-off deliverable, we then invoice CBSA.
There were only two deliverables submitted against this task authorization until the contract was terminated in late December 2021.
We were provided a task authorization by CBSA to provide a pilot project with technology that was built by a company called Botler AI.
CBSA then informed GC Strategies that we received this task authorization. That's when they contacted us.
Can you please provide the committee with the contracts you signed with GC Strategies on the production of the ArriveCAN app, please?
You already agreed to do that. Thank you.
I'll continue.
Can you provide any email communication that contains the words “GC Strategies”, “ArriveCAN” or “Botler”?
Would you table that with this committee, please?
There are many emails that we send to CBSA. GC Strategies was included on some of those. Due to the sensitive nature of those emails, I don't think we're in a position to provide those at this time.
I would talk to CBSA, if you would like—
That's a no. Thank you.
Can you provide the contracts you signed with GC Strategies for the programs set by the CBSA to fulfill their obligations under Bill C-65, otherwise known as the Botler project?
We were not involved with Botler. We didn't have a contract with Botler. We subcontracted the work to GC Strategies.
Okay.
What work did Dalian complete in the building of the program to help the CBSA fulfill its obligations under Bill C-65?
That would go back to 2019 when we responded to an RFP at CBSA.
If the chair would allow me to explain how our business works and how we were awarded that contract, it might help explain how we were given this task authorization.
Mr. Chair, I'm just not prepared to talk about that today.
We're here to talk about ArriveCAN and some expanded questions on Botler AI.
We have responded to and been awarded several contracts in many Government of Canada departments and agencies.
Did you see the résumés that were submitted to CBSA prior to their submission for Mr. Amir Morv and Ms. Ritika Dutt?
I can walk you through that process. We did not produce or edit any of the CVs that were provided to that submission. Those CVs were provided to us by GC Strategies on behalf of Botler.
I understand the question, and we were disappointed that we were put in the position of passing along CVs that did contain incorrect information.
It is not uncommon for us to work with other companies as subcontractors, including big multinational companies, and when those firms provide us with CVs for their individuals or teams, we take those CVs to be valid as provided. As our contract states, we ensure that—
I'm sorry to interrupt, Mr. Wood. That is our time.
Our clerk will provide to you a summary of the requests for documents. In this committee we passed a motion that we do require those documents within three weeks of today, but we will follow up with you.
Mr. Jowhari, you're splitting time with Mr. Bains.
Go ahead.
Yes, I am. Thank you very much.
Thank you to the witnesses coming to the committee.
Right off the bat I want to get some clarification, Mr. Wood.
Did Botler at any time work through GC Strategies on ArriveCAN?
Neither Amir nor Ritika's time was spent in any way on ArriveCAN. Okay.
What was the involvement that your company had, and also Mr. Yeo as far as Dalian is concerned, regarding ArriveCAN?
Okay. I can speak to that, Mr. Chair.
Our involvement on ArriveCAN began in 2000 when we were awarded a contract in August 2019. On this contract to provide services to the BTID group at CBSA, we began receiving in May 2020 task authorizations related to the ArriveCAN project.
All the way through into May 2023 until the last consultant finished their assignment, through the course of providing those, we provided 20 consultants, and I will give you the exact details on that.
Three of the 20 consultants worked on deliverables-based contracts where the client must accept and sign off completion of the project milestones before accepting invoices and making payments. The value of these contracts was $1.2 million and the work was done over three years, for an average of $133,000 per consultant per year.
The remaining 17 consultants worked approximately 5,100 days over a three-year period. The cost of this was $3.7 million, on average $725 a day per consultant. The 5,100 days over the three years works out to an average of 100 days a year per consultant and there are 230 business days per year.
Our total amount invoiced to CBSA was approximately $4.5 million.
The amount of development and resources that you put come to roughly $4.5 million. This is the testimony we had heard before about ArriveCAN, so thank you very much for that.
Who do you specifically work with when you are trying to form this contract with CBSA? Do you go through GC Strategies and GC Strategies comes in, or do you have a direct relationship with someone in CBSA?
Like I indicated, we competed for and won a contract at CBSA in 2019 and were subsequently awarded the contract through that competitive process in August 2019.
The work we performed for CBSA was all based on the receipt of task authorizations provided by various clients at CBSA. GC Strategies is not involved in this at all. They are a subcontractor that we have occasionally done work with.
Thank you, Mr. Chair.
I'm going to jump right into it.
Mr. Yeo, how many years would you say Dalian has been working on federal contracts?
Mr. Chair, thank you for the question.
I started the company 23 years ago. We started out as a hardware and software company back in 2001. We ended up coming into the time frame around 2007. We started adding professional services contracting online, meaning TBIPS, SBIPS and those types of professional services contracts with the federal government.
We're both—
Thank you.
I'm going to ask the same question of Mr. Wood.
For how many years has Coradix been awarded federal contracts?
As I mentioned in my opening statement, Coradix is nearly 30 years old. I would say it goes back approximately 27 or 28 years—our beginning to respond to RFPs provided by the federal government. Our first wins would have been in and around that time period.
During our previous meeting, representatives from Botler claimed that Dalian's alleged aboriginal ownership of at least 51% was a cover to allow Coradix to do the actual work. In their words, they called it “monetisation and theft using the trauma of marginalized communities.”
How do you respond to this accusation?
Mr. Chair, if it's okay with you, I'm going to allow Dave Yeo to answer this question. He can give some clarification on how the PSIB works.
I'll try to be quick.
I'm very proud to be part of the PSAB and the PSIB, which is the procurement strategy for indigenous business. I helped form the policy. I've worked with Allen Frost, INAC and ISC. I still continue to do that today. We are completely registered and have audits very regularly—any time we do JVs. We are completely compliant with the PSAB and the PSIB.
These types of accusations don't ring true, in my opinion.
[Translation]
Thank you, Mr. Chair.
Mr. Wood, I'm trying to sort out how all of this happened. Please confirm or refute what I'm about to say, as needed.
You were awarded a contract by the Canada Border Services Agency, CBSA. You then subcontracted that work out to GC Strategies, which further subcontracted the work out to other people.
That's three levels of subcontractors. How did you ensure data security when ArriveCAN was being developed? All of those people had access to sensitive information.
[English]
[Translation]
I didn't even mention Botler AI. I was talking about the ArriveCAN app.
I'd like you to clarify some things.
You were awarded a contract by CBSA. You then subcontracted that work out to GC Strategies, which then used its own subcontractors—guess who. That's three levels of subcontractors. With all those people involved in developing the app, how did you ensure data security?
[English]
I believe there are a couple of questions in there, Mr. Chair.
We had no contracts and did not do any work with GC Strategies on ArriveCAN.
As for the security process, I can walk you through how it works, particularly at CBSA, for all the contractors we provided for the ArriveCAN project.
When we receive a task authorization, every consultant we propose and put forward in response to that task authorization goes through two processes. They either need to have an existing secret clearance, or we apply for their security clearance through CISD and PSPC. In addition to that, CBSA conducts their own internal security screening. Any consultant working on a project at CBSA—and, for that matter, on any contract in any federal government department—must be security cleared.
[Translation]
[English]
[Translation]
You never sent anyone an invoice listing the name Ritika Dutt and work she performed in respect of the contract. That never happened, not even in 2021.
Is that correct?
[English]
The task authorization requests that we received from CBSA for the Botler AI pilot were subcontracted through GC Strategies, which was in partnership with Botler AI. As part of our submission and response to that task authorization, Ritika Dutt's profile was submitted by them, through us, to CBSA.
[Translation]
[English]
That is the task authorization request from CBSA for firm price deliverables for the Botler AI project.
[Translation]
[English]
I'm sorry for that, Mr. Chair.
Regarding this task authorization and the work with Botler AI, we were the prime contract holder. The resources, including Ritika Dutt, were provided to us by GC Strategies, which was in partnership with Botler AI.
[Translation]
If GC Strategies provided the resources, why was CBSA sent an invoice on Dalian's letterhead, not GC Strategies'? At least one invoice appears on your letterhead.
[English]
I think it's important to understand, and this is probably a question for GC Strategies on their contractual relationship with Botler AI. Our contract to provide these deliverables was through GC Strategies. We invoiced CBSA and paid GC Strategies, which paid Botler AI.
Maybe you can explain something again. What is your relationship with Kristian Firth of GC Strategies, Mr. Wood?
Can you elaborate on how often you did business with Mr. Firth in GC Strategies?
In Mr. Morv's testimony at committee last Thursday, he cited that Mr. Firth boasted to them that he had dirt on various senior federal public servants who were responsible for awarding government contracts.
Did Mr. Firth ever share anything like that with you about his connections in the public service?
Okay.
Let me get this straight.
You submitted information about Ms. Dutt and Mr. Morv around the task authorization. Are you saying you're not responsible because you subbed it out to Mr. Firth? Mr. Firth possibly gave you the wrong information about them by inflating their expertise.
Are you saying you're not responsible even though it's your contract?
No, that's not what I said.
We are accepting responsibility. That was our mistake. We have a quality management system in place. We take these matters very seriously. In a case where we're working with a third party, which is what this was, we don't engage their subcontractors and we don't engage their consultants. We have non-solicitation agreements and we would never reach out to GC Strategies' contractors. We can only accept that those CVs are valid.
Okay. Why not? When you see a situation like this next time, will you be doing your due diligence, given that...?
Yes, Mr. Chair.
To the member, we are an ISO 9001:2015 certified company, which means that our processes are certified. We have a very strict quality management system. We are in the process right now of examining our processes—
Here's the thing. Does Mr. Firth come to you and say, “Hey, I have a solution. Oh, what's the problem?”—
I can answer the question in relation to the Botler AI task authorization. Is that what you're asking me?
We don't have a relationship. We have done business from time to time, but typically, clients come to us. In this instance, for the Botler AI project, they were named in the task authorization request, and the CBSA informed GC Strategies.
Okay.
When you hire a subcontractor and they have a dispute with the sub who's subbing from the subcontractor—like Botler and GC Strategies—and there is work that's been done by one of your subs, but you've been paid for the work, do you leave the responsibility to pay them with the first sub? Because you've been paid for the work they've done—like in Botler's case, where they claim they've done $350,000 worth of work—do you not take responsibility for that, or do you communicate with your initial sub and say, “The work has been done. Why haven't you paid the vendor?”
There are a few things there, Mr. Chair, and to the member.
The CBSA received only two deliverables from Botler AI before it terminated the contract. In these types of relationships, we only communicate with the company we hold the contractual arrangement with.
It's also a fact that—
Okay. They can basically stiff or bankrupt a company that's doing work for Canadian taxpayers. Basically, that sub can bankrupt somebody who is doing honest, good work for Canadians. That's what I'm getting at.
Can you tell me who Patrick van Abbema is, and what his relationship to you is?
Botler was paid for both of those deliverables, by the way.
Patrick van Abbema was also included in the task authorization for the Botler AI project.
The total value of the Botler AI.... Each deliverable was worth $70,000. They submitted two deliverables, and Coradix and Dalian made $14,000 on each deliverable.
In terms of the indigenous set-aside...I have lots of questions related to this. I really value the program because indigenous involvement and leadership in Canadian procurement are important aspects of reconciliation.
How many joint ventures have Dalian and Coradix gone into?
We have been in a joint venture since 2004. From time to time, when we decide to respond to RFPs, we make a decision together on whether to engage in the RFP as a joint venture or independently.
How many joint ventures have Dalian and Coradix gone into that were not connected to the indigenous set-aside program?
Can you produce that number to this committee within three weeks? I'd like numbers both for how many joint ventures Dalian and Coradix have gone into, and for how many joint ventures Dalian and Coradix have gone into that were not connected to the indigenous set-aside program.
Thanks, Mr. Chair.
Mr. Yeo, what's the structure of your business as it relates to your counterpart on the other side of the desk? How many employees do you have?
I'm not looking for what year it was founded. I'm looking for the structure—the org chart—if you can provide that in verbal terms in under 30 seconds.
Absolutely.
In 2001, I went to Coradix when I first won my first contract out of the PSAB. We formed a business together. We basically hold, in a corporate structure.... We have two full-time employees with Dalian—
—but we have a shared services model that helps both companies basically thrive as to what we're doing today.
Thank you. In a minute we learned that you have two employees.
Dalian and Coradix were paid a combined $4.3 million for the ArriveCAN program. Is that correct?
We received approximately 20 task authorizations to deliver IT professional services in software development, testing, project management, technology architecture and cybersecurity. Those were—
So GC Strategies had the appropriate security clearance always to see the material that they worked on.
Did GC Strategies always have the appropriate security clearance for the projects that they were working on?
Contractors that appear on our contracts must have security duplicated by the company holding the contract. As such, anybody being put forward on a task authorization to any government department, including CBSA, has to have a duplication of their security clearance by that firm.
Therefore, we held the security clearance for those three contractors on that TA.
That's what I'm just communicating to you. The three consultants that were on that TA all had security clearance.
The folks at Botler said they did not have the appropriate security clearance for the work they were contracted to do.
Mr. Chair and member, we processed their clearances ourselves and granted their security clearance through our security group, by CISD.
Those CVs were provided by GC Strategies. Unfortunately, some of the information on those CVs was incorrect.
Isn't that part of the value-add that you're telling us Canadians received for the $4.3 million? Isn't that what we paid you for?
I think the value-add was what CBSA was trying to accomplish with bringing Botler AI in to help them build an AI technology pilot.
So if Botler built it, and CBSA used it, and your job was to make sure that everyone was qualified for the work, delivered the work, and were security cleared to do the work, did you make sure all those things were done?
The consultants that we provide through our task authorizations are under the direct supervision and control of Government of Canada employees. We do not get involved in scoping the work and providing any of the deliverables in the task authorization or the list of responsibilities for these consultants. That is—
Sir, with all due respect, we know that the information with respect to the CVs for Botler was fraudulent, that fraud occurred, and on your letterhead you passed it on to the government. You were serving as this middleman, a very expensive $4.3-million clearing house, for this work.
So you cashed your cheque, and in exchange, Canadians didn't get the value that they should have. The billing that was done was based on fraudulent information. Who is responsible for that? How is it you're able to continue to do business with the Government of Canada when in fact we know that the billings...that this work was predicated on fraud?
It's incredibly concerning. It would be very helpful for this committee to have a list of all the subcontractors you do business with, because this is a very grey area. We don't know who those people are. Would you be willing to provide a list of all your subcontractors for Government of Canada contracts to this committee?
It's a request from one of our members. It's a simple yes or no, Mr. Wood.
I apologize, but I can't add context to it.
I think that it would be important for the Standing Committee of Government Operations of the House of Commons to know everyone that you're using as a subcontractor, because there was fraud in this contract. Canadians should know who your subs are, because this is essential for integrity. Our role here is to provide that to Canadians.
We're looking for the list of your subcontractors so that we can find out if all of your representations to the government are true.
Mr. Chair, to the member, we have 15,000 consultants in our database right now, and 475 of them are doing work in the federal government right now.
Is there agreement that the committee orders the production of that information?
The Liberals are saying no.
Thank you, Mr. Chair.
As we move into November, Mr. Yeo, I want to say thank you for your service in our armed forces. Thank you very much, Mr. Yeo, for that.
This is a question for both of you. Roughly what percentage of your annual revenue is federal contracts?
Is it all federal? Do you have, for example, contracts with provincial governments, or are they 99% federal contracts?
Dalian and Coradix found themselves at the centre of this storm. There are accusations of fraud, for example, and misconduct that are being levelled.
Looking back, what would you do differently?
I understand.
In this case, the optics were brought forward because of these CVs. Like I mentioned earlier, we're extremely disappointed that this has happened, and we are making changes to our quality management system. We are going to review more closely our arrangements with third parties and the consultants who are provided to us. I think, as a starting point, that attestations from not only the subcontractors but the subcontractors' consultants will be a requirement of any task authorization for us going forward.
You guys have been around for 30 years. Do you see the inflating of numbers to score higher points to get contracts? Does that happen? How frequently does that happen?
For example, in this instance, there are accusations and evidence that numbers were being inflated for the experience of a certain subcontractor. Is that typical in federal contracting where, again, experience numbers are inflated in order to be able to get the contract? Do you see that? How endemic is that issue? How frequent is that issue in your experience?
It is not a normal practice. Unfortunately, the administrative errors on those CVs were a mistake.
As for billing rates and contracting rates in the federal government, it's a highly competitive business. There are over 300 companies, and most of the RFPs that we respond to are a combination of financial and technical scores. This does nothing but drive rates down to extremely competitive levels. All of the rates that we use are consistent with market rates in the IT industry.
Let's talk about ArriveCAN, since we are doing an ArriveCAN study. You guys have a piece of the puzzle that you designed over some time. The ArriveCAN app was used by 60 million travellers to cross safely across the border. When we talk about travellers, we're also, I imagine, talking about people who are bringing across medicine, food and other important supplies, making sure that, in that national emergency, we had a clear flow of traffic. That was something that was absolutely critical.
The Conservatives state that, had they been responsible during this pandemic, they would have designed an ArriveCAN app that cost $200,000 and delivered that for Canadians during our national health emergency. Can you tell us what the Conservatives would have delivered to Canadians for $200,000?
Mr. Chair, for the member, I can't speak to what could have been delivered for $250,000. I can only comment on what our contributions were in the task authorizations we received from CBSA.
Again, you guys are IT specialists, and you've been working on projects for 30 years. There is a cost that was obviously attached to ArriveCAN. Can you tell us why an ArriveCAN cost $54 million? Can you speak to that?
Yes, certainly.
I can give you my opinions on that. Again, we worked on only parts of ArriveCAN. We delivered the work we were asked to by clients on our contracts.
The ArriveCAN app is not an app that people use. It's not Candy Crush, and they weren't ordering pizza with this. It needed to interface with a number of complex and highly secure systems, including border security and passports. Moreover, this app needed to ensure that Canadians' passports and health information were fully secure and protected.
Remember, too, we needed to remember that this application was being built during the pandemic. People were getting sick. They were needing to isolate. People were dying. There were lockdowns. There were travel restrictions. This is not a $250,000 endeavour. We were dealing with citizens' private information.
With all this going on, the Government of Canada was building an application for Canadians to upload their most personal and sensitive information to help slow or stop the spread of COVID in our country.
I'm going to have to cut you off there, Mr. Wood. We're going to move on, but perhaps you can get back in another round.
Ms. Vignola, you have two and a half minutes, please.
[Translation]
[English]
[Translation]
[English]
Yes, we are in the process of trying to expand.
We've done very well in the NCR area and through what we call Coradix Technology—
[Translation]
I asked for CORADIX's mailing address in Toronto. I'm not interested in your expansion plans. I'm interested in CORADIX's address in Toronto.
I'm going to tell you what it is, Mr. Wood. Your website lists the address as 609 Bloor St. West, Toronto. Apparently, you're in the same building as a barbershop—
[English]
[Translation]
—and a store called Tibetan Paper & Handicraft. There's something else on the second floor. CORADIX, however, is nowhere in the building.
[English]
[Translation]
[English]
[Translation]
You have a lot of partners, but you don't have your own space. That's a funny way to operate, but it is 2023.
Given the answers we've heard today, I'd like to know what purpose GC Strategies served, other than billing slightly higher amounts or being a middleman for I don't know what in connection with various contracts.
What did GC Strategies do? What purpose did you serve if everyone other than you and GC Strategies did the work?
[English]
That is probably a question that's more appropriate for GC Strategies.
However, I can tell you that GC Strategies was working with Botler for over a year in marketing to Public Safety, to departments in the public safety domain. That's the relationship between those two companies.
As far as our involvement is concerned, this contract was competed for and won at a significant cost in 2019. We held the contract. There are no stipulations in our contracts with the Government of Canada that prevent us from doing this. Partnerships are encouraged by PSPC.
It's a highly competitive industry. Are you dealing with a lot of vendors, like GC Strategies, coming to you?
From time to time, clients will ask us to consider working with other companies to deliver against a project. It's something that occurs in our industry.
Clients become aware of these arrangements.
Thank you. I'm going to go back to Mr. Yeo.
Thank you again for your service, sir.
I do want to add to that. I hope it doesn't come across wrong, but I want to talk about the allegations Botler made around the set-aside program for indigenous businesses. As I stated, I highly support it.
In terms of the work you listed for Ms. Dutt and Mr. Morv as consultants, has PSPC audited or required evidence from you as per the requirements of the indigenous set-aside program?
Second, would you be willing to provide that evidence to this committee?
Right now, they say that they were hired on a contract through the indigenous set-aside program and they are not indigenous.
Can you speak to that?
Certainly. I appreciate that, Chair and honourable member.
The aspect of us creating the indigenous track on the contracting side of things allows us to hire pretty much whoever we want as far as consultants are concerned, but the indigenous side of it or the PSIB side of it is auditable. It is audited on every JV that we do.
If we do a JV with Coradix and we win a contract or a task authorization, it is audited by ISC.
Not at all. Colin can correct me if I'm wrong, but I believe that we already went through an audit process—
The PSIB program is designed to help indigenous entrepreneurs. There are 50 other companies doing similar work under TBIPS.
The program is designed to help indigenous people build up, scale and grow their businesses. Its purpose isn't to bring on indigenous IT subcontractors. I think there is some confusion there.
Thank you very much, Mr. Wood.
We are entering our final two interventions, which will be from Mr. Genuis and Mr. Sousa.
We're running a few minutes late.
Mr. Wood and Mr. Yeo, I hope you'll stick with us for seven minutes later.
I'm going to be ruthless with exactly five minutes and then we'll cut off.
Could we stick to that please?
Go ahead, Mr. Genuis.
Thank you, Chair.
Mr. Yeo, you represent a two-person company that receives contracts and then subcontracts. You've received millions of dollars from taxpayers for the process of receiving contracts and then subcontracting.
What would you say you do here?
Chair and honourable member, you ask about what I do, but I have to go back to the beginning. The amount of effort and—
I don't actually think you do. I'm not looking for prevarication or distraction.
What is it that you do for the Government of Canada in exchange for millions of dollars?
I don't know if it's an exchange for millions of dollars because there is so much overhead to running a bricks-and-mortar business here in Ottawa. There are expenses relating to indigenous employees that I have and indigenous consultants that we pay—
You're asking two things there.
What I do as an executive on the board of directors for Dalian is look at governance and the way the company is run on a daily basis. I've earned that by building the business over 23 years.
As for what we do—
You're a company with two people, so I appreciate that you have to pay office expenses and you have to manage your partner's activities, I suppose. But what do you do? What does your company do? What value does it produce? What is it that you do?
Our value-add really is in the area of project management and contract management as it relates to federal government contracting in the—
Okay, so the federal government gives you a contract. You give the contract to somebody else, and you're telling me that the value you add—
You subcontract to someone else, and you're telling me that the value you add is in the process of project management. What does that mean? What do you do?
We were told earlier that the subcontractor deals directly with the federal government in terms of many of the details, so what do you do?
On a daily basis, that's true. The subcontractor does deal with the task authorization or the technical authority on a daily basis. But in behind all of that is the plethora...whether it's security clearances, billing, ensuring that the actual contract.... We're the prime on the contract, so we are also ultimately responsible for the overarching contract management of everything that goes on.
I understand that you're the prime on the contract, which means that you collect the money, but if the federal government is dealing directly with the subcontractors and if there have been various problems along the way that have been identified in terms of the results anyways, I'll ask it again, what do these words that you're saying actually mean? What is it that you do here?
I have answered that. I am an executive on the board of directors for Dalian, and I maintain all of the governance as it relates to the PSAB and make sure that the company is absolutely in line, in step, with everything that relates to procurement and government contracting within the federal government.
You don't actually make anything or produce anything, right? You're making sure of all these things, but fundamentally—
What is that service? If Stephanie gives me $100 to paint her fence and then I hire Larry for $50 to paint the fence, what have I done? I've just received money and then hired someone else to do the same thing.
You can call that subcontracting. You can call that project management, if you want, but I haven't done anything, right? You don't actually do anything for the money you receive, right?
There's a lot that we do, actually. As a matter of fact, we spend hours and days and weeks replying to RFPs, creating bid responses, which cost thousands and thousands of dollars, where some we win and some we lose. There is so much background activity that goes on in the contracting world. It's not just a matter of doing A and B and getting C—collecting money for C. It's not that simple.
There's a lot of background activity that happens and [Inaudible—Editor].
Mr. Garnett Genuis: This is fascinating. There's a lot of room to save money.
Gentlemen, I'm sorry, but that is our time. I said I was going to stick to five minutes.
Mr. Sousa, you are next, please, for five minutes.
Thank you very much, guys.
Mr. Yeo, I really appreciate your military service to Canada. I want you to recognize that we appreciate what you did over that period of time.
Mr. David Yeo: Thank you.
Mr. Charles Sousa: I know that these are tough situations right now, and all of us have a lot of questions in terms of the activity by which this contracting process took place. We appreciate your patience in trying to get some clarity as to how these practices take place.
Mr. Wood, I just want to understand it. With regard to the the practices you're implementing today, is it exactly the same way as it was 10 years ago?
We are an IT consulting company or an IT staffing company. The key components of our business are in proposals, recruitment and account management. We also have teams in IT and teams in innovation. We also have a finance and administration team and a small team that handles our security.
Our focus in this business that allows us to do work with the federal government is all around proposals. Last year, we responded to 93 proposals, at a significant cost. We win under 10% of those proposals. Once we are awarded contracts, we then are sent task authorizations by our clients, and the consultants are found and searched through our recruitment teams. Last year, our recruiters had over 1,500 meetings with consultants.
We do this, so that when we are successful and the government awards us these contracts, we're able to successfully deliver against them, with the best talent we can find, so that they stay and fulfill their contracts and complete the work.
Mr. Wood, thank you for clarifying that. We understand the complexities required in these contracts. They're no easy task.
If you open Canada.ca, much of what has been requested of you is listed there, as well. There are a lot of contracts that Coradix, Dalian and GC Strategies.... Quite a bit of it is outlined there. It's confusing to us, because there's so much. We're trying to understand specifically what these contracts mean.
In regard to Botler specifically.... To clarify, you had no relationship with Botler. It was in regard to a pilot. There was nothing around ArriveCAN. Any amounts outstanding between Botler and GC Strategies was between themselves. You had no opportunity to oversee what Botler was doing.
That's true. I apologize for that.
The process by which you operate today and by which Dalian operates today, even with the joint venture, is exactly the same as it's been for the last.... How many years is it?
You were operating the same way under the former government.
Mr. Colin Wood: Yes.
Mr. Charles Sousa: With respect to the process and the allegations you're facing.... How do you respond to that?
Mr. Chair, I will respond, but first I'd like to clarify an earlier comment by a member about the Botler project being $4.3 million.
That's completely incorrect. It was a $140,000 contract.
The issues going forward.... Given the circumstances you're facing now, have you changed the way you operate?
I was explaining that earlier.
We take it seriously. The audits we go through under the International Standards Organization are intense. The audits are on our processes. We are audited every year. We are currently certified under the International Standards Organization.
In addition, part of that is a quality management system. We are examining what went wrong and how we can ensure it doesn't happen again.
Mr. Wood and Mr. Yeo, that is our time. Thank you for sticking around an extra nine minutes past the one-hour mark.
I suspect we might possibly have an invite for you to return. In the meantime, we will be excusing you. Thank you for your time with us today, gentlemen.
Mr. Chair and honourable members, I appreciate all the work you do and the time we've had today.
[Translation]
Thank you.
[English]
Give me two seconds.
On November 7, we have Mr. MacDonald and Mr. Utano confirmed.
Mrs. Kusie, go ahead.
Mr. Chair, given that we had Dalian and Coradix here today—I was putting the emphasis on the wrong syllable—I'm wondering where we're at with GC Strategies. When are they scheduled to appear?
There's an update.
The ministers on the original motion will not be joining us, which is perhaps not a surprise. The other one is outstanding. Now that we've confirmed Mr. MacDonald and Mr. Utano, there's GC Strategies and Mr. Brennan individually. Mr. Brennan has declined. GC Strategies is playing hard to get. That would be a polite way of saying it. We have not been able to get a commitment from them, despite our clerk going above and beyond in trying to accommodate them. We're having difficulties with them.
That's very disappointing to hear. I think we've seen again today from the testimony that they are central to determining what's going on exactly, and what is happening.
I think it's of the utmost importance—and I believe my colleagues agree—that we get them in front of this committee once again, and so I think I'm prepared at this point, Mr. Chair, to put forward a motion of summons. I'll read that into the record now.
Thank you. I move that in the context of the study of the ArriveCAN application, GC Strategies be summoned to appear before the committee on Thursday, November 2, by the Chair.
Excuse me.
I move that in the context of the study of the ArriveCAN application, Mr. Kristian Firth and—
—Darren Anthony—thank you so much—be summoned to appear before the committee on Thursday, November 2.
Thank you.
An hon. member: Agreed.
The Chair: Fine? Thank you very much. I think that was our second date we had offered them. That will be at 3:30, I will assume?
Given the apparent centrality of Mr. Brennan as determined by the evidence of Botler, I would also like to move a motion, Mr. Chair, to summon Mr. Vaughan Brennan, and on this one I will provide more flexibility. Therefore, I move "That, in the context of the study of the ArriveCAN application, Vaughan Brennan be summoned to appear before the committee at a date and time to be determined by the Chair."
Are we fine with that, colleagues?
(Motion agreed to [See Minutes of Proceedings])
The Chair: We've only been declined once by Mr. Brennan, so we'll choose an open date, fit him in, and advise the committee for two hours, the same?
I'll just be very quick.
We haven't had the chief executive officer of Canada Post show up at this committee for a long time now.
Can I just ask for support from everybody here to invite the CEO, Mr. Doug Ettinger, to appear before the committee?
So we're fine with that as part of the supplementary estimates (C) process?
(Motion agreed to [See Minutes of Proceedings])
The Chair: It's rumoured that they're going to be out the next week, so we might be able to determine time then, but if that's fine with everyone, we'll wrap it into that.
Mr. Kusmierczyk and then Mr. Genuis.
Mr. Chair, I'm fully in support of the summons for Thursday. I just wanted to know when they will be served that summons.
Thank you, Chair.
We had some issues arising during testimony regarding documents that the committee, I think, will require. I'd like to seek the agreement of the committee to request all task authorizations related to work done by Coradix, Dalian, and GC Strategies for the Government of Canada.
Is there agreement for that?
We need to call for copies of all task authorizations related to work done by Coradix, Dalian, and GC Strategies for the Government of Canada from the companies.
Additionally, Chair, I move that we send for a list of all subcontractors used by Coradix, Dalian, and GC Strategies for Government of Canada contracts.
I understand the purpose of that, and I understand that we are trying to see whether, because of the perceived tampering, there are others, but specifically what type of information are you asking for? Is it their first name and last name? Are you asking for their résumé? What is it that's being asked for? If they have 1,500 résumés.... They claim that they have 1,500 résumé, and 476 of those are already working in the federal government, and if there are....
Are you looking for contracts to the subcontractors' invoices? With the GC, we got invoices from GC of who they subcontracted to. Are you able to define a big player?
In this particular case, I was asking simply for a list of all subcontractors of these three companies for work done by the Government of Canada. That—
If there are 1,500 names, I'm sure they have a list of them, and they can print.... I think that this is pretty straightforward, simple information. Presumably, they have a list of people they've subcontracted to, and they can print it off and send it in. If that list contains, you know, “Bob” with no further qualifying information, the committee would likely want to follow up to ask, “Who's this Bob you subcontracted to?”
Can we set a time limit so that we're not going, as Mr. Powlowski's commented about....? I think one of them was 32 years.
Chair, initially, I think it's reasonable to request the list of who the subcontractors are, and I think it would be... I mean, I hope that list contains the relevant identifying information. As I say, if some of the subcontractors are listed as, you know, “Bob's Garage” or something, then I think we're going to want further information on who exactly works in Bob's garage. I think, as an initial volley, it's fair to say that we'd like the list of who the subcontractors are so that we can use that information to get to the bottom of what happened.
With your permission, can I read both of them back? Excellent, because I'm definitely going to need some clarification.
So, it's “That the committee send for copies of all task authorizations for the government...." I'm sorry; I really didn't get all of the wording there, but most importantly, it's that the documents be sent for from Coradix and Dalian. That was the absolute measure I wanted to be sure of.
Could you elaborate a little more on all task authorizations of all past organizations for the government? I need a little more clarification.
It was for copies of all task authorizations related to work done by Coradix, Dalian and GC Strategies for the Government of Canada. That was the first one that we agreed to.
Then you said that we had to request it from someone, and I said from the companies themselves.
And the request for information as well, so I can clearly task the assignment to whomever. This will be going to both Coradix and Dalian.
Oh, it's going to GC, yes.
Is there a chance of getting overlap of the same information from all three parties? I'm just curious.
Based on the [Inaudible—Editor ] they had a non-compete agreement. Dalian has non-compete agreement with GC, so there shouldn't be.
That was “in 30 days following the adoption of this motion”. Did you wish to set a time, or do you want 11:59?
That is very much appreciated, thank you, sir.
The second order for production of documents is “That the committee send for a list of subcontractors used by Coradix, Dalian and GC Strategies for Government of Canada contracts for the previous 12 years”, so it's sending for documents from Dalian, Coradix and GC Strategies, “and the documents be provided to the clerk of the committee in 30 days following the adoption of this motion”. If you want to set a time, that would be appreciated as well.
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