Federal contracting watchdog digs deeper, finds more cooked deals

OTTAWA - A federal watchdog is blowing the whistle again on a series of cooked contracts at a school that teaches public servants about ethics and values.

Frank Brunetta, the procurement ombudsman, said Tuesday he found more evidence that the Canada School of Public Service rigged its contracts to make sure they went to favoured suppliers.

His report examined the way contracts worth $1.7 million were awarded to six consultants from 2008 to 2011.

Brunetta's inquiry was sparked by a tip he received in April last year from a "stakeholder" who claimed contracts awarded to two consultants for $435,000 and $260,000 showed clear signs of favouritism.

The investigation confirmed the tip, with evidence of contract splitting, unfair evaluations and dubious contract amendments — all of which occurred without triggering the school's supposed checks and balances.

In the case of one consultant given access to confidential files, there was no effort to determine whether the person had secret security clearance.

Investigators "found sufficient evidence to suggest the two consultants at issue were favoured," the report concludes.

Brunetta then expanded his investigation to four other consultants at the school to determine whether the first cases were an anomaly, and again found compelling evidence of favouritism.

Rules were broken, security clearances not verified, and contracts cooked — all without triggering oversight mechanisms that might have halted the bogus procurements.

The report does not identify by name the tipster, the contractors or the misbehaving managers at the school, which is owned and run by the federal government.

"This does not appear to be a case of deficiencies with the school's procurement policy framework, but rather a case of key controls circumvented for specific contracts," Brunetta said in a release.

His office cannot levy fines or other penalties for bad behaviour, only requiring that an action plan be drawn up.

The findings drew the ire of Treasury Board Minister Tony Clement, to whom the school reports.

"We find the conduct described in this report is unacceptable," Clement said in a statement.

"The government will be seeking appropriate sanctions against those responsible."

A spokesperson for the school could not be reached immediately for comment, but the report said officials had pledged to fix the problems.

"The ombudsman is encouraged with the swift and decisive measures taken to address the identified procurement shortcomings once they were brought to light," said Gilles Pineau, a spokesman for Brunetta.

Pineau added that most government departments deal fairly with prospective contractors.

"The vast majority of federal contracting is done fairly, openly and with transparency," he said. "Cases like this one are rare and appear to be in the minority."

Last summer, Brunetta reported on other tilted contracts at the school that benefited one supplier, who was awarded a dozen training contracts worth $170,000 between 2009 and 2011.

Brunetta found that the school split contract amounts and generally stacked the deck so that a retired public servant already collecting a pension could get all the work.

At the time, a spokeswoman for Clement also said the actions were "unacceptable" and that Treasury Board would be monitoring the situation to ensure the problems were fixed.

The Canada School of Public Service was created in 2004 to "foster a common sense of purpose, values and traditions in the public service."

Allan Cutler, a former whistleblower whose public-service career was damaged in the Liberal sponsorship scandal, last summer called for an audit of all the school's contracts.

Cutler said Tuesday he was not surprised by the latest report.

"These procurement practices by the Canada School of Public Service are not new," he said. "They are systemic to the school and have been their practice in ensuring former senior executives can supplement their pensions."

"The reason why the school of public service continues to exist is unknown," he added. "It duplicates training already better offered by universities and colleges."

Cutler co-founded the non-profit Canadians for Accountability in 2008, which presses for transparency and fairness in government procurement.

Brunetta last year conducted a wider survey of sole-source contracts across all of the federal government.

He found that of 442 sole-source contracts examined, only 100 — less than 25 per cent — showed any evidence that the federal government had shopped around for the best deal.

In 2011, Brunetta's office reported on problems at the Public Service Commission of Canada, which issued four sole-sourced contracts crafted in a way to ensure favoured workers got hired.

The ombudsman's office says it received 204 procurement-related complaints in 2011-2012.