Decades-old problems are plaguing federal contracting system, watchdog says

CBC

08-07-2025

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As the Liberal government attempts to clean up federal contracting, the procurement watchdog says the current system is in desperate need of "fundamental change" and is calling for the creation of a central body to oversee all government purchasing.
"The same issues are identified year after year and most span decades," a report from the Office of the Procurement Ombud, Alexander Jeglic, says.
The report, released Tuesday morning, highlights a number of potential solutions to clean up a procurement system it characterizes as being plagued by long-standing issues. It says the "most critical change required" is the creation of a chief procurement officer (CPO).
The CPO would be a central body that oversees government purchases, simplifies contracting processes and fills in accountability gaps that exist between various departments involved, the report says.
"The current procurement system is marked by silos of responsibility and accountability that sometimes overlap with each other or leave glaring gaps. When accountabilities and responsibilities in a procurement system are not exceptionally clear, it becomes very difficult to address the problems plaguing the system," the report says.
Other jurisdictions, including the U.K., have such a central body, it notes.
Jeglic's report also called for the creation of a "vendor's performance-management system" — a way to keep track of a company's history with government contracts.
Federal contracting and procurement has been under a microscope in the wake of the COVID-19 pandemic.
Last year, Auditor General Karen Hogan reported excessive reliance on contractors was a major factor contributing to the controversial ArriveCan app's ballooning $59.5-million price tag. That report also said there were several omissions in financial record-keeping for the pandemic-era project that made it almost impossible to determine final costs.
In the wake of that report, the feds have referred several cases of suspected contractor fraud to the RCMP and have filed a civil lawsuit against a number of contractors and one IT subcontractor.
Hogan conducted a subsequent audit of government contracts awarded to GC Strategies — the main contractor for the ArriveCan project. That report, released last month, highlighted several "deficiencies in how public servants applied federal procurement rules."
Just prior to the release of last month's audit, the government banned GC Strategies from bidding on federal contracts for seven years.
Jeglic made a number of other recommendations. They include a call for the government to create one body of procurement rules, harness artificial intelligence to modernize the contracting system and establish a government-wide framework for procurement data collection.
Tuesday's report comes as Prime Minister Mark Carney has promised to boost defence procurement to reach NATO spending targets. Carney has promised that Canada will be spending two per cent of its GDP on defence by March.
To that end, Defence Minister David McGuinty announced $850 million in infrastructure upgrades to CFB Trenton on Monday.
Jeglic's report notes that defence spending currently involves a number of various departments and says the government should consider creating a separate CPO for defence. Alternatively, the government could hand over all military procurement activities to one department, either the Department of National Defence or Public Services and Procurement Canada.