Tales from the swamp

Montreal Gazette
Wednesday, March 20, 2002

Éditorial - There's nothing wrong with a company that has donated money to a political party receiving government contracts once that party takes power - as long as established procurement rules are respected. But as the federal-contract fiasco involving Groupaction Marketing Inc. of Montreal has demonstrated once more, existing rules are being flouted. Worse, they are deficient to begin with. So it is welcome news that a fuller inquiry has now been ordered.

Three auditor-general reports dating back to 1998 have recommended changes to the way the government awards contracts for "professional services," or consultants' reports. The government has hardly budged, however. Sole-sourcing, where contracts are let out to firms without competitive bidding, continues to taint government procurement practices. The federal Treasury Department Secretariat has consistently rejected auditor-general recommendations that departments with significant levels of sole-sourcing - such as Public Works, which gave Groupaction, a Liberal Party financial supporter, lucrative contracts in 1998 and 1999 to carry out dubious mandates - be required to conduct annual assessments of their compliance with procurement regulations.

In short, the government just doesn't want to know.

The government spent more than $4 billion last year on consultants' reports, including more than $1.4 billion in contracts awarded on a sole-source basis. Sole-sourcing is OK when the contract is needed in an emergency, when the contract value is small, when public tenders are not in the public interest (national security reasons, sometimes) or when only one supplier can do the work. But none of these criteria applied in the specific case of the consultancy deals awarded to Groupaction.

The Montreal firm was given a $550,000 contract in early 1999 for an advisory report on government sponsorship opportunities, a report neither Groupaction nor the government could find last week. Groupaction has since turned over what it says are segments of that report, but news reports suggest these passages are identical to the contents of another report, costing $575,000, that Groupaction was commissioned to do in late 1999. An internal audit, meanwhile, found Groupaction and affiliated companies had been receiving a larger share of sponsorship contracts than the department's own guidelines allowed.

This is just the tip of the iceberg. The 1999 auditor-general's report looked at 50 sole-source contracts and found 45 of them did not fall under the exemptions allowing for sole-sourcing in the first place. And in most cases, public servants could have carried out the duties. Job mandates were often defined only vaguely, and pricing was not done with due regard for economy. Worst of all, there was no follow-up done to see if the work delivered fulfilled the original requirements.

The process by which the federal government awards contracts simply does not stand up to public scrutiny. The inquiry into 1998-99 Groupaction contracts, which Public Works Minister Don Boudria requested yesterday from Auditor General Sheila Fraser, is a first small step toward cleaning up this swamp.