Canada’s federal procurement watchdog has launched a review into a contracting method known as “bait and switch,” a practice that occurs when suppliers identified in a winning procurement bid are not the same ones who perform the work.
Bait and switch occurs when suppliers apply for contracts by proposing “highly qualified individuals,” but later substitute them for “less qualified personnel” to carry out the actual work,
according to Procurement Ombud Alexander Jeglic.
“This undermines the fairness and transparency of the procurement process and compromises the best value for Canadians,” he said in an Oct. 2 release.
The Office of the Procurement Ombud (OPO) will review practices related to resources in professional services contracts to ensure the processes supported the selection of the best-value suppliers and were conducted “fairly and transparently,” the release said.
The procurement practice review will look into five federal departments: Employment and Social Development Canada; Global Affairs Canada; Immigration, Refugees and Citizenship Canada; National Defence; Shared Services Canada; and Public Services and Procurement Canada.
The review was initiated on Sept. 24 and aims to be completed within one year.
Jeglic
previously told the House of Commons government operations committee in January that resources at his office were “certainly an issue” that needed to be resolved before the bait-and-switch issue could be investigated.
The investigation comes after a January 2023
review by the OPO into ArriveCan contracts, which found that for 76 percent of the contracts, “some or all of the resources proposed by the successful supplier did not perform any work on the contract.”
While the office acknowledged there could have been legitimate reasons for this, the number of times it occurred and the lack of documentation justifying the decisions “raised serious concerns with these contracts.”
The OPO was also asked to investigate the issue by the government operations committee, which for more than a year examined how the companies GC Strategies, Dalian, and Coradix received millions to
develop the ArriveCAN app. The application was used by Ottawa to track the COVID-19 vaccination status of travellers entering Canada.
A committee investigation found that GC Strategies was paid $8.9 million as a general contractor on the ArriveCan project in 2020 before it
outsourced the work to six other companies and took a commission of between 15 and 30 percent. GC Strategies Managing Partner Kristian Firth defended the practice, saying 40 other firms could have made a bid for the contract, and added he had not used the bait-and-switch tactic but was familiar with it.
In February, Auditor General Karen Hogan tabled a report on ArriveCan. Her report found a “glaring disregard for basic management and contracting practices” in ArriveCan’s development and implementation. Her report estimated the app cost $59.5 million to develop, but said the exact figure could not be determined because of missing and incomplete paperwork.
