Auditor-General Karen Hogan attends a news conference on Dec. 2.Adrian Wyld/The Canadian Press
Export Development Canada’s contracts with international consultancy Accenture Inc. are set to jump to more than $1-billion, according to newly obtained records, raising concerns about the size of the deals and the narrow focus on one provider in the wake of a critical report by the federal Auditor-General.
The report on the administration of the Canada Emergency Business Account (CEBA) program, which provided emergency loans to businesses during the COVID-19 pandemic, was released Monday. Most of the administration of CEBA was done by Accenture, which charged $313-million to EDC in a series of contracts that began in 2020.
Auditor-General Karen Horgan said EDC “failed to exercise basic controls in contract management” on the CEBA work and the report pointed out examples of invoices that did not match work done.
Records obtained under access to information law show the relationship between EDC and Accenture goes far beyond just the CEBA program, and that the Crown corporation has dramatically increased its spending on IT contracts in recent years, with the lion’s share of that spending directed to Accenture.
In 2019, according to a contract database obtained by The Globe and Mail, EDC awarded Accenture about $10-million for contracts initiated that year, or about 14 per cent of all contracts to IT firms. That number jumped to $50-million the year after, buoyed in part by the first CEBA contracts, and continued to grow to $189-million in 2023, the last full year covered by the records, or about 72 per cent of all contracts to IT firms that year. (Contract lengths vary and can run from weeks to years.)
In total, EDC awarded Accenture more than $620-million in contracts up to April 16, 2024. The amount includes work for CEBA – such as running a call centre – that runs until 2028, but also includes numerous non-CEBA contracts, such as creating a new digital system for EDC’s business customers to see the status of their requests.
The CEBA contracts were sole-sourced, but Accenture has continued to win contracts put out publicly, too. In June, 2023, EDC signed a multiyear “master service agreement” with Accenture to overhaul all of its IT systems at a total cost of $550-million over five years.
About $129-million of that amount is included in the database obtained by The Globe, and EDC confirmed that it expects to pay out a total of $350-million to $550-million through the life of the deal, which ends May 31, 2028.
“Accenture has become EDC’s primary IT provider following the outcome of the competitive procurement process,” EDC spokesperson Louis-Antoine Paquin said in an e-mail.
All told, if the contracts are paid in full, the committed and planned spending amounts to more than $1-billion in contracts for Accenture, an international firm headquartered in Dublin that has more than 600 subsidiaries worldwide. Some of the work done for EDC has been carried out in those subsidiaries; for example, The Globe previously reported that a large piece of the CEBA contract was done from an Accenture subsidiary in Brazil.
Accenture declined to comment for this story.
Benjamin Bergen, president of the Council of Canadian Innovators, which represents many domestic tech companies, said that this level of outsourcing to a single international entity denies opportunities to Canadian firms, which negatively affects the growth of the economy and expertise in the tech sector.
“By outsourcing all of the capacity around how to transform IT systems to foreign multinationals and consultancy firms, we’re losing the ability” to do that work, Mr. Bergen said.
EDC executives, including chief executive officer Mairead Lavery, appeared at a parliamentary committee Wednesday night to answer questions from MPs about Accenture’s work on CEBA.
One focus of questions was the Auditor-General’s findings that many of the contracts were scoped and priced by Accenture and, in one instance, EDC directed Accenture to lead an informal procurement process that resulted in Accenture recommending one of its own subsidiaries for the work.
“You sole-sourced to Accenture and allowed a shark of a consulting company to sole-source a contract to themselves, dictating to Canadians how much taxpayers were going to pay and for what services,” Conservative MP Kelly McCauley said.
“We were aware that one of the options had recently been acquired by Accenture, yes,” said EDC chief financial officer Scott Moore. He later added: “EDC made the final decision to go with the option that was presented to us. It was the lower cost and lower execution risk from among the choices that were available to us.”