The heads of the companies Coradix and Dalian, which received millions of taxpayer dollars to develop the ArriveCan app and then subcontracted the work to other companies, were grilled on Oct. 31 by Conservative MPs on what value they provided to Canadians.
“You represent a two-person company that receives contracts and then subcontracts, and you’ve received millions of dollars from taxpayers for the process of receiving contracts and then subcontracting. So what would you say you do here?” asked Tory MP Garnett Genius during the Standing Committee on Government Operations and Estimates.
“Our value add really is in the area of project management and contracts management as it relates to federal government contracting,” replied Dalian founder and president David Yeo.
The Quebec-based company Botler AI, which acted as a subcontractor for the Canada Border Service Agency (CBSA), raised concerns about the development of ArriveCAN after witnessing subcontracting deals that lacked transparency about where federal dollars went. GC Strategies, Dalian, and Coradix received more than $17 million in 2022, after CBSA had received allegations of contracting misconduct on the ArriveCAN app.
Mr. Genuis accused Dalian of not directly producing anything, as it subcontracted work on the app to other companies, in a process the Botler co-founders Ritika Dutt and Amir Morv referred to as “ghost contracting.”
“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,” Mr. Genuis said to Mr. Yeo. “And you can call that subcontracting, you can call that project management if you want, but I haven’t done anything. You don’t actually do anything for the money you receive, right?”
Mr. Yeo responded that the company spends “hours and days and weeks” replying to Request for Proposals and creating bid responses worth thousands of dollars.
‘Fraud Occurred’: MP Barrett
Conservative MP Michael Barrett asked Coradix President Colin Wood what value Canadians received for the combined $4.3 million they gave the two companies to develop the app. Mr. Wood responded that the company received 20 task authorizations to deliver IT services, but that those were subcontracted out to other companies.When Mr. Barrett asked if Coradix ensured that everyone involved in the project was qualified and security cleared to do the work, Mr. Wood responded that the consultants were under the control of the federal government and that the company was not involved in “scoping the work and providing any of the deliverables.”
“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,” Mr. Barrett said. “And you were serving as this middleman, a very expensive $4.3 million clearinghouse for this work. You cashed your cheque, and in exchange, Canadians didn’t get the value that they should have.”
At the end of the committee meeting, the Conservatives put forth a motion requesting a list of all Coradix, Dalian, and GC Strategies’ subcontractors.
“I think we’ve seen today from the testimony that we’ve received that they are central to determining what is going on and what is happening,” said Conservative MP Stephanie Kusie.
