Procurement Ombudsman Alexander Jeglic is urging Ottawa to change the way it spends on government contracts.Justin Tang/The Canadian Press
Federal procurement ombud Alexander Jeglic is calling for a major overhaul of the way Ottawa spends billions of dollars a year on government contracts, including stronger efforts to weed out poor performers.
Mr. Jeglic said there are several obvious problems with the system that have been known for years but not addressed.
“I think my frustration has bubbled to the point where I know that something needs to be done,” he said at a news conference Tuesday to release a report that contains a list of specific policy recommendations.
Mr. Jeglic, who has served in his role for more than seven years, praised increased media attention on shortfalls with federal contracting, saying it has brought added accountability to the process.
“I do think the media has done a great job in creating a chill effect, because now people are paying attention,” he said.
Tuesday’s report from the procurement watchdog provides several recommendations for change, but it places two at the top of the list.
Mr. Jeglic said Ottawa should name a chief procurement officer as a senior official and the main person responsible for federal contracting.
Secondly, he said Ottawa must do a better job of reviewing and tracking the performance of the individuals and companies it hires so that the government is working with the best people.
He said the current system lacks a clear way to flag weak contractors and warn colleagues in other departments about their poor track record.
The report calls for a new “vendor performance management” system to track and rate contractors, saying it would address problems with how departments deal with poor performers.
In the absence of such a system, the report says, procurement officials have attempted to avoid working with unreliable contractors “by either creating excessively restrictive criteria” or other means, which could run afoul of Canada’s trade obligations.
The Globe and Mail has reported in recent years on the steady increase in federal spending on outsourcing, which set a record high of $17.8-billion on professional and special services in the fiscal year that ended March 31, 2024. That’s up from about $8-billion when the Liberals came to power in 2015.
Mr. Jeglic’s office reviews a broader category of procurement, including the purchase of goods and equipment, worth about $37-billion a year.
The Liberal Party platform promised to significantly reduce spending on external consultants, bring more services “in-house,” and bring in a “made-in-Canada” procurement policy that prioritizes Canadian suppliers. The platform also described the federal procurement system as “too slow and out of date.”
Finance Minister François-Philippe Champagne sent letters to all cabinet ministers on Monday informing them of plans for a “Comprehensive Expenditure Review” and asking them to identify “ambitious” internal savings by the end of summer, ahead of the 2025 fall budget.
Victor Kandasamy, a spokesperson for Minister of Government Transformation, Public Works and Procurement Joël Lightbound, said the ombud’s report aligns with plans already under way inside the public service.
“We thank the Ombud for his report and the important work he does on behalf of Canadians,” he said in an e-mail, adding that the minister and Mr. Jeglic recently met to discuss procurement issues.
“Our new government was elected on a bold agenda to modernize government, including making our procurement processes more efficient and improving service delivery,” he said.
The ombud’s latest report is based in part on interviews with federal procurement experts. The report says these specialists repeatedly expressed concerns about the loss of corporate knowledge inside government because of high turnover and retirements of experienced procurement officials.
The Globe has also reported on the rising costs of the ArriveCan app for cross-border travellers, which led to more than a dozen related investigations by committees and watchdogs, including Mr. Jeglic’s office.
Mr. Jeglic released his own report on ArriveCan last year, just two weeks before Auditor-General Karen Hogan released her Feb. 12 audit about spending on the app. Both reports took aim at how Ottawa hires contractors and the poor quality of information that is disclosed to the public.
Mr. Jeglic’s ArriveCan investigation found that outsourcing companies repeatedly won contracts by listing subcontractors who ultimately did no work. He has called this practice “bait and switch,” saying some staffing companies list specific experienced contractors to win a contract and then find other people to do the work.
As part of a pledge to be transparent, the federal government pro-actively releases information about all contracts worth $10,000 or more. However, Mr. Jeglic said that information can often be inaccurate and unreliable, preventing outside groups such as journalists from using the information.
He said that underscores his recommendation for a robust focus on releasing accurate data related to procurement.
“Accuracy is critical in data, and so how can you effectively do your jobs as reporters and provide information to the Canadian public if you don’t have accurate data?” he said.
Ultimately, Mr. Jeglic said his recommendations, if implemented, would prevent controversies from happening before they start through increased oversight, rigour and transparency.
“We don’t want to create scandal and address our issues by way of scandal. We want to be proactive, and we want to ensure that we’re catching these issues in real time. And so if we have a more robust data framework, then all of a sudden, a red flag would go up immediately,” he said.