The federal government is alleging in a lawsuit that an Ottawa-area IT subcontractor submitted time sheets that add up to more than 24 hours of work in a single day.Adrian Wyld/The Canadian Press
The federal government is seeking $1.6-million from an Ottawa-area IT subcontractor and companies that hired him, alleging in a lawsuit that he submitted time sheets that add up to more than 24 hours of work in a single day.
A notice of action filed in court by the government identifies the subcontractor as Ripu Rishi. Ottawa says in the claim that the allegations against him are the result of a “detailed, lengthy and complex” investigation.
Also named in the lawsuit are several IT services companies that hired Mr. Rishi to deliver on their own contracts with the federal government. The list of companies includes GCStrategies, which was the main contractor on the government’s ArriveCan app, a project that grew from $80,000 to nearly $60-million and led to widespread scrutiny of how the federal government manages spending on IT contractors.
The government is seeking $198,000 from GCStrategies, accusing the company of breach of contract, negligent misrepresentation and unjust enrichment.
GCStrategies managing partner Kristian Firth did not respond to a request for comment, nor did his lawyer.
Mr. Rishi could not be reached for comment. The Globe and Mail left him phone messages and knocked on his door at home, but no one answered. Neither Mr. Rishi nor the named companies have filed statements in their defence and none of the allegations have been tested in court.
The documents do not say what IT projects were involved, only that the companies had contracts with Ottawa for the provision of a variety of IT services.
In a statement, Public Services and Procurement Canada said the lawsuit is part of the department’s effort to actively pursue the recovery of illegitimate amounts billed to the federal government by contractors. It said this effort has recovered $3-million to date.
In a March, 2024 announcement, the department said investigations found nearly $5-million in illegitimate payments to three information technology subcontractors, alleging they fraudulently billed on contract work across a number of federal departments. The department said then that the three cases had been referred to the RCMP, but the subcontractors were not named. The allegations against Mr. Rishi and the other defendants named in the lawsuit are one of those three cases, said Michèle LaRose, a spokesperson for Public Services and Procurement Canada.
The department’s efforts to tackle alleged contracting fraud were announced last year amid heightened focus of federal procurement, including parliamentary hearings into ArriveCan spending that examined the use of outsourcing and staffing companies that charge commissions of up to 30 per cent to find IT subcontractors.
A month before the department’s announcement of a crackdown, Auditor-General Karen Hogan released a report on the management of ArriveCan that found “a glaring disregard for basic management and contracting practices” throughout the app’s development and implementation.
The internal investigation that led to the lawsuit focused on the period between April 1, 2018, and May 31, 2022. leading to a final report dated April 3, 2023.
“In numerous instances, Rishi submitted time sheets on multiple contracts where the cumulative total exceeded twenty-four (24) hours in a single day,” the federal government states in its notice of action. “As it is not possible for the defendant Rishi to have actually worked that number of hours, this called into question the validity and reliability of all the time sheets the defendant Rishi submitted on the contracts with the corporate defendants.”
Mr. Rishi told federal investigators that his time sheets included “standby time,” the notice of action alleges, that covered time “where he was allegedly available to perform work but did not actually perform any work.” The federal government alleges that was not reflected in his time sheets.
“In fact, in all cases, the entries on the defendant Rishi’s time sheets reviewed were made to look like he was carrying out work under the terms of the contracts with the corporate defendants,” the documents state.
The existence of the lawsuit was previously reported by CBC News, but the report did not name the subcontractor or most of the companies named in the lawsuit.
In an e-mailed response to questions about the lawsuit, Ms. LaRose referenced the department’s previous announcement that internal administrative investigations have so far uncovered a total of seven cases of alleged individual subcontractor overbilling. All seven cases have been referred to the RCMP for criminal investigation. The RCMP declined to comment on the matter.
In addition to Mr. Rishi and GCStrategies, the government is seeking $731,000 from TRM Technologies Inc.; $398,000 from IPSS Inc.; $197,000 from MDOS Consulting Inc. and $107,000 from a joint venture called AGM, led by MDOS Consulting.
The lawsuit alleges that the companies hired Mr. Rishi but did not have independent systems in place to verify the accuracy of his time sheets.
In similar e-mailed statements, executives representing TRM, IPSS, MDOS and the joint venture said they reject any wrongdoing and said public servants approved Mr. Rishi’s sheets.
“What the lawsuit fails to mention is that Government of Canada officials were responsible for directing the resource’s work; Government of Canada officials were in the best position to determine whether the work was completed to its satisfaction and whether the time was appropriate,” said Murat Cecen, managing partner of MDOS.
The statement said public servants should have raised their concerns at the time if they had any. Mr. Cecen said public servants signed off on Mr. Rishi’s time sheets.
“This lawsuit is without merit,” said Mr. Cecen.
Ms. LaRose, the department spokesperson, said the government is “making progress” toward reaching settlements with the parties listed in the lawsuit.
With a report from Stephanie Chambers in Toronto