The Procurement Ombudsman’s 2022-2023 Annual Report

The Office of the Procurement Ombudsman received 8 Alternative Dispute Resolution requests in 2022-23

• 1 resolved formally with settlement agreement
• 3 resolved informally with OPO’s help before the ADR invitation was sent
• 1 supplier withdrew the request
• 3 are ongoing, to be reported in 2023-24

“Thank you for holding the pre-mediation meeting as well as providing an overview of the process, this was very helpful and will allow us to adequately prepare for the next steps”.

Written complaints

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Number of written complaints received by OPO:

• In 2022-23, OPO received 68 written complaints
• In 2021-22, OPO received 60 written complaints

Out of mandate

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Number of complaints received by OPO that were out of mandate:

• In 2022-23, OPO received 64 out of mandate complaints
• In 2021-22, OPO received 55 out of mandate complaints

Reviews of complaints launched

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Number of reviews of complaints launched by OPO:

• In 2022-23, OPO launched 4 reviews of complaints
• In 2021-22, OPO launched 5 reviews of complaints

Reviews of complaints regarding the award of a federal contract

The following section contains summaries of the 4 reviews where the complaint met the regulatory requirements for review, and 2 complaints launched in 2021-22 and completed in 2022-23 in accordance with legislative requirements.

Reviews of complaints regarding the administration of a federal contract

Review of complaint that was terminated

Innovation, Science and Economic Development Canada

The review found that mandatory evaluation criteria were not overly restrictive and were aligned with the requirements; however, in nearly a quarter of files reviewed, these criteria were not defined in a clear, precise and measurable manner. Issues were also identified with scoring grids for point-rated criteria in one-third of the files. Clear, precise and measurable evaluation criteria and scoring grids contribute to fair and transparent procurement by enabling bidders to know the requirements and the methods by which their proposals will be evaluated. Failure to adequately define evaluation criteria at the outset carries the risk that evaluators may struggle to interpret these criteria during the evaluation process and may not apply the criteria equally to all bids.

Most solicitation documents were open to an appropriate number of suppliers, for an appropriate period of time and provided a clear description of the requirements. Communications with suppliers during the solicitation period appeared to be appropriate and supportive of the preparation of responsive bids, and regret letters to unsuccessful bidders were generally adequate.

Innovation, Science and Economic Development Canada's (ISED) bid evaluation processes did not ensure contracts were awarded in accordance with the solicitation. In some cases contracts were wrongly awarded to non–responsive suppliers. Additionally, a number of files were missing evaluation documentation. In order to ensure fairness, evaluators are required to strictly adhere to evaluation criteria included in the solicitation. When bid evaluations are not conducted consistently and in the manner prescribed by the solicitation it calls into question the integrity of the procurement process.

The Procurement Ombud made 5 recommendations to ISED to address the issues identified. ISED has accepted the recommendations and developed an action plan to support their implementation.

Read the full Procurement practice review of Innovation, Science and Economic Development Canada

Correctional Service of Canada

The review found that mandatory criteria were not overly restrictive and, for the most part, aligned with the requirements. Selection methodology was clearly communicated in the solicitation and was aligned with the requirements.

Solicitation documents were in most instances complete, open to an appropriate number of bidders, for the required time period. As well, communications with suppliers supported the preparation of responsive bids, and regret letters were consistently sent to unsuccessful bidders.

Issues were noted with the bid evaluation process including: planned approaches were not followed in several files; non-compliant bids were accepted; and contracts were awarded to non-compliant bidders in some instances.

File documentation was incomplete in the majority of files reviewed, impacting Correctional Service of Canada’s (CSC) ability to demonstrate that procurements were conducted in a fair, open and transparent manner.

The Procurement Ombud made 5 recommendations to CSC to address the issues identified. CSC has accepted the recommendations and developed an action plan to support their implementation.

Read the full Procurement practice review of the Correctional Service of Canada

National Research Council Canada

The review found that mandatory criteria were not overly restrictive and were mostly aligned with the requirements. Some instances of point-rated criteria were found to be unnecessarily subjective. In most files, the selection methodology was clearly communicated and was aligned with the requirements.

Solicitation documents were complete in most instances, and most solicitations were open to the appropriate number of bidders and respected the required bid solicitation period. Communications with suppliers during the solicitation period supported the preparation of responsive bids.

Significant shortcomings were found regarding the bid evaluation process, and deviations from the planned approach were noted in several files.

Incomplete documentation was found in the majority of files reviewed, significantly inhibiting National Research Council Canada’s (NRC) ability to demonstrate that the procurements were conducted in a fair, open and transparent manner.

The Procurement Ombud made 8 recommendations to NRC to address the issues identified. NRC has accepted the recommendations and developed an action plan to support their implementation.

Read the full Procurement practice review of the National Research Council Canada

Department of National Defence

The review found that a third of the reviewed files had appropriate evaluation and selection plans. Numerous issues were detected regarding mandatory criteria and point-rated criteria including instances of unclear and overly restrictive mandatory criteria which appeared to have favoured a bidder.

While most solicitation documents contained clear and complete information and instructions for submitting compliant bids, several issues regarding unclear or missing selection methodology were identified, which did not support the preparation of compliant bids.

Most communications with suppliers during the solicitation period supported the preparation of responsive bids; however, there were instances where suppliers were not treated equally and did not have equal access to information.

Inconsistencies in the bid evaluation process and deviations from the planned approach were noted in most files, as was missing documentation, which greatly impacts the transparency and integrity of Department of National Defence’s (DND) procurement processes.

The Procurement Ombud made 6 recommendations to DND to address the issues identified. DND has accepted the recommendations and developed an action plan to support their implementation.

Read the full Procurement practice review of the Department of National Defence

Follow-up reviews

As its standard practice, OPO follows up on review recommendations approximately 2 years after completion of the initial procurement practice review. The purpose of the follow-up review is to assess the status of the department’s implementation of the Ombud’s recommendations. Information on action taken by departments in response to the recommendations provides other departments with concrete suggestions on how to improve their procurement activities.

Departments are asked to self-assess their progress made to date in response to each recommendation from the original report. Supporting documentation is required to support responses to each recommendation. This documentation is assessed by OPO against a standard progress scale and any outstanding issues are addressed through additional dialogue with the department or additional testing. A report card is prepared with a rating that depicts the department’s performance with regard to the standard lines of enquiry.

In 2022-23, OPO completed 1 follow-up review launched the previous year, and launched 3 additional follow-up reviews including the Department of Fisheries and Oceans, Environment and Climate Change Canada, and Employment and Social Development Canada, which will be completed in 2023-24.

Canada Food Inspection Agency

The initial review was undertaken in 2019-20 to determine whether Canada Food Inspection Agency’s (CFIA) procurement practices pertaining to evaluation criteria and selection plans, solicitation, and evaluation of bids and contract award supported the principles of fairness, openness and transparency; 8 recommendations were issued. To perform the follow-up review, OPO asked CFIA to self-assess its progress in implementing the 8 recommendations and to provide substantiating documentation to support the self-assessment.

CFIA self-assessed its action plans for all 8 recommendations as fully implemented and provided evidence of a number of advancements including a new Procurement Quality Assurance Process and Compliance Review Directive and implementation of the ePro procurement application software system. As such, OPO found CFIA’s self-assessment and substantiating documentation to be reasonable and credible.

Progress scale

Additionally, OPO follow-up reviews now include a report card. To achieve the highest report card score of “Satisfactory plus” a department must not have received any recommendations in the initial review.

Office of the Procurement Ombudsman report card

CFIA achieved a Satisfactory assessment, as the initial review resulted in 1 or more recommendations, the action plans achieved Level 5 implementation, and CFIA's response was supported with adequate documentation and testing results.

Read the full Follow-up report to the 2018-19 procurement practice review of the Canadian Food Inspection Agency

ArriveCAN Application

On November 14, 2022 the Standing Committee on Government Operations and Estimates (OGGO) adopted a motion recommending that the Procurement Ombud “assess whether contracts awarded by departments in relation to the ArriveCAN application were issued in a fair, open, and transparent manner, and whether contracts awarded on a non-competitive basis were issued in compliance with the Financial Administration Act, its regulations, and applicable policies and procedures”.

After the Procurement Ombud was able to establish reasonable grounds, as per regulatory requirements, the review was launched in January 2023. The scope includes all contracts, contract amendments, standing offer agreements, supply arrangements, task authorizations and service orders under which work was performed for the ArriveCAN application that were awarded/issued before December 31, 2022, from the following departments:

• Canada Border Services Agency (CBSA)
• Public Services and Procurement Canada (PSPC)
• Shared Services Canada (SSC)

The results of this review and any recommendations made by the Procurement Ombud will be published on OPO’s website in 2023-24 in accordance with regulatory requirements, and summarized in OPO’s next annual report.

McKinsey & Company

On February 3, 2023 the Minister of Public Services and Procurement requested that the Procurement Ombud undertake a review of the procurement practices used by federal departments and agencies to acquire services through contracts awarded to McKinsey & Company.

The review was launched in March 2023 and includes all competitive and non-competitive procurement processes and resulting contracts, contract amendments, task authorizations, standing offer agreements or supply arrangements and call-ups against standing offers awarded or issued to McKinsey & Company since April 1, 2011, from the following 10 departments:

• Canada Border Services Agency (CBSA)
• Department of Finance Canada (FIN)
• Department of National Defence (DND)
• Employment and Social Development Canada (ESDC)
• Immigration, Refugees and Citizenship Canada (IRCC)
• Innovation, Science and Economic Development Canada (ISED)
• Natural Resources Canada (NRCan)
• Privy Council Office (PCO)
• Public Services and Procurement Canada (PSPC)
• Veterans Affairs Canada (VAC)

The results of this review as well as the ongoing reviews of Shared Services Canada (SSC), Public Health Agency of Canada/Health Canada (PHAC/HC) and Public Services and Procurement Canada (PSPC), all of which were all launched in 2022-23, will be published on OPO’s website in 2023-24 and summarized in OPO’s next annual report.

5-year Procurement Practice Review Plan report

This year marked the conclusion of OPO’s 5-year Procurement Practice Review Plan, which examined the 3 highest-risk procurement elements across the top 17 federal departments (see Annex A), based on the value and volume of their annual purchasing activity.

Systemic documentation issues undermine the transparency of government procurement practices.

A total of 15 reviews have been completed or substantially completed as of publication, with the remaining 2 to be completed in 2023-24. While a summary report will be published once all reviews have been finalized, OPO has identified key recurring issues that were found across all reviewed departments, including:

• Instances where mandatory criteria, point-rated criteria or associated rating scales were not clear
• Issues related to communications with suppliers, including problems with the sharing of information with suppliers during the solicitation period and the communication of results of solicitation processes, such as regret letters and debriefings
• Bid evaluation processes not consistently applied or carried out in accordance with the planned approach, with some resulting in wrongly awarded contracts

The largest and most consistent problem observed relates to insufficient file documentation practices. Documentation deficiencies were noted in over a third of the 554 files reviewed, and documentation to support evaluation processes was found to be particularly problematic. These systemic documentation issues undermine the transparency of government procurement processes, and can erode public trust in the Public Service’s ability to exercise sound stewardship.

The planning process for OPO’s next Procurement Practice Review Plan is underway, and will focus on the highest risk areas as well as trends that have the potential to impact fairness, openness and transparency across the federal procurement landscape.

April 2022

• The new Appendix E of the Directive on the Management of Procurement: Mandatory Procedures for Contracts Awarded to Indigenous Businesses became effective. It was developed in collaboration with Indigenous partners and describes procedures to address the Government of Canada’s requirement for the mandatory minimum target of 5% of the total value of contracts to be awarded to Indigenous businesses annually.
• Global Affairs Canada and Finance Canada launched consultations on potential approaches to implement reciprocal procurement policies in Canada. This will help ensure that Canada’s trading relationships are mutually beneficial, and that countries restricting Canadian access to their procurement markets do not unfairly benefit from Canada’s procurement system.

May 2022

• The Directive on the Management of Procurement officially became the new federal government procurement framework upon completion of the transition from the Treasury Board Contracting Policy.
• PSPC announced the launch of a new coaching service, delivered by Procurement Assistance Canada (PAC). It is designed to help bidders from diverse socio-economic groups that have had limited success bidding on federal procurement opportunities. The coaching service will give businesses from diverse socio-economic priority groups access to 1 introductory meeting and at least 3 personalized coaching sessions with a procurement specialist from PAC’s regional offices.

June 2022

• The COVID-19 vaccination requirement for supplier personnel (including subcontractor personnel) and contractors was suspended. The policy had previously applied to all new and existing Government of Canada contracts that involve services (including goods contracts that have a services component and construction services) where, in order to perform the work, supplier personnel access Government of Canada workplaces (i.e., places of work owned or operated by the Government of Canada) where they may come into contact with public servants.

August 2022

• The Honourable Helena Jaczek appointed as Minister of Public Services and Procurement.

September 2022

• The CanadaBuys e-procurement platform officially replaced the Buyandsell Government Electronic Tendering Service as the place where suppliers go to search and bid on federal government tender opportunities. It also provides a single place for suppliers to view tender opportunities from federal, provincial and territorial governments, as well as academic institutions, schools and hospitals.

October 2022

• PSPC launched a request for information (RFI) process on ethical procurement, inviting businesses to complete an online questionnaire on the risks of human trafficking, forced labour, and child labour in the supply chains of their goods. The information gathered will be used to inform the development of guidance and awareness materials, including content for upcoming supplier engagement sessions.
• The Standing Committee on Government Operations and Estimates (OGGO) adopted a motion to undertake a study on the development, launch and maintenance of the ArriveCAN application.

December 2022

• The Office of the Auditor General released a procurement-related audit, which focused on COVID-19 Vaccines. The audit found that the Public Health Agency of Canada and Health Canada, supported by Public Services and Procurement Canada, responded to the urgency of the coronavirus pandemic in 2020 and procured COVID-19 vaccine doses so that everyone in Canada who chose to be vaccinated could be. The establishment of advance purchase agreements increased the chances that the government would obtain enough doses to meet Canada’s needs. It also found that the Public Health Agency of Canada’s efforts to minimize wastage were unsuccessful, in part because of delays in developing and implementing the information technology system and data sharing agreements to support planning and managing vaccine use.

January 2023

• The Department of Canadian Heritage (PCH) released its Audit of Procurement Practices. The objective of the audit was to assess the effectiveness of the procurement governance, risk management, and control processes, and to determine whether PCH practices related to contracting for goods and professional services are effective and in compliance with the government and departmental contracting policies, directives, and procedures. It found that while PCH has overall established a framework, several gaps were noted. Key opportunities for improvement include active and effective guidance, oversight, and leadership over procurement activities; effective planning and a strategic deployment of resources; and a quality assurance program to ensure that procurement activities are undertaken in a compliant manner.

February 2023

• The Procurement Ombud appeared before OGGO in relation to the Committee’s study of federal government consulting contracts awarded to McKinsey &Company. The Procurement Ombud was also tasked by the Minister of Public Services and Procurement to undertake a procurement practice review to examine the practices used by federal departments and agencies to acquire services through contracts awarded to McKinsey & Company.

March 2023

• The Government released Budget 2023 which noted a number of procurement-related commitments, including $79.3 million over 3 years, starting in 2023-24, to improve procurement opportunities for Canadian businesses by maintaining the Government’s electronic procurement platform and a commitment to reduce spending on consulting, other professional services and travel.