Millions in taxpayer-funded consulting work kept secret
TheStar.com – news/investigations – A Star investigation has found 90 per cent of the $2.4 billion paid out in the past decade comes with no description of the work done — and more than a dozen departments refuse to provide details when pressed.
May 08 2013. By: Jesse McLean Investigative News reporter, and Andrew Bailey Data Analyst
Most federal departments are not following government guidelines that encourage them to tell the public just what they’re getting for the millions of dollars spent on management consulting.
A Star investigation found that 90 per cent of the $2.4 billion paid out for management consulting in the past decade comes with no description of the work done on the government’s public disclosure sites.
This is done despite government guidelines recommending departments “provide a brief description of each contract so that the public may benefit from additional context.”
The Star went further and asked more than a dozen departments for details of the consulting work provided on specific contracts.
Even then, several departments and agencies refused to say what services they bought as part of the roughly $700 million in taxpayer money they spent on management consulting.
Human Resources and Skills Development Canada (HRSDC), in charge of delivering social programs and services, has billed more than $420 million since 2004.
One of the department’s most recognizable divisions, Service Canada, has spent another $129 million for management consulting — more than 70 per cent of which was given to a single recruitment company, according to the government’s contract records.
What consulting work was done for all that money?
A spokeswoman with HRSDC refused to say.
The company, Quantum Management Services, was just as tight-lipped.
“I’m not going to answer your questions,” said Anne Cote, a vice-president in the company’s Ottawa office.
Despite repeated government pledges for greater transparency surrounding spending, Canadians are still being left in the dark over just what consulting services their taxes paid for.
The Public Health Agency of Canada gave a $636,000 job in 2009 to a numbered company listed to a Quebec home that now has a defunct phone.
Human Resources paid a marketing research giant more than $8 million for multiple contracts.
Health Canada has awarded an Ottawa staffing agency four contracts worth more than $3 million since 2010.
In each case, the government agencies won’t say what work was provided. The companies would not — or say they contractually cannot — comment.
“If they’re spending hundreds of millions on outside consultants, we need to know what those consultants are doing. Are we getting service for our money? This is taxpayers’ money. There needs to be a standard of accountability,” said New Democrat MP Charlie Angus. “Without transparency, you have no reason to believe the government is acting in the public’s interest.”
The Star analyzed about 34,000 management consulting jobs awarded by the federal government since 2004, when it began requiring agencies to post all of their contracts over $10,000.
Federal departments and agencies are required to offer only the slimmest of details in disclosing the contracts they doled out. In the majority of cases, agencies only post the vendor’s name, a reference number, the dates affiliated with the contract, the amount spent and a bare, generic explanation of the kind of work done — for example, management consulting or temporary help services.
The Treasury Board Secretariat, in government-wide guidelines on disclosing contracts, encourages departments “to provide a brief description of each contract so that the public may benefit from additional context.”
“For example, for a management consulting contract the comments could state, ‘Feasibility study of a green building standard for departmental projects,’ ” the guidelines say.
“As a minimum, departments may provide the title of the contract.”
The vast majority of departments and agencies, including the Treasury Board Secretariat, do not bother to do this.
Nearly 80 per cent of 34,000 contracts reviewed by the Star had no information beyond what is required. Another 4,500 instances included brief details about how the contract was procured or whether it was amended.
When asked why it doesn’t follow the recommendation in the very guidelines it published, a spokeswoman at the Treasury Board Secretariat said the government cannot disclose “third-party proprietary” information or information considered private.
Tony Clement, president of the Treasury Board, did not answer questions from the Star. His press secretary said the Treasury Board Secretariat’s response is “our comment as well.”
In all, less than 10 per cent of the disclosed contracts provided any context about the work done — information the government says could benefit the public.
The Office of the Auditor General of Canada noted it paid consulting firm Hay Group Limited $26,695 in 2012 to “conduct an employee satisfaction survey.”
Meanwhile, the Farm Products Council of Canada readily posted that its 2006 consulting contract for $10,176 was for a review of a study on the cost of egg production.
Several departments, including Natural Resources, Industry Canada and Treasury Board Secretariat, did eventually spell out what work was done, although it took many of them three weeks or longer to provide the information.
In some cases, they offered little more than a sentence of explanation.
The $270,000 contract Environment Canada gave two men was for a “database administrator,” the department told the Star.
Allan Cutler, the former federal bureaucrat who blew the whistle on the misuse of public funds in the federal sponsorship scandal, said a simple description of the type of consulting done should be included when the government posts the contract.
“It says it is management consulting. Well, it’s management consulting of what?” Cutler said. “You don’t know the subject matter when you just see the words ‘management consulting.’ To give a sentence of what the subject matter is is pretty critical for understanding.”
The consulting work went to firms specializing in everything from strategy, policy and information technology to recruitment and communications.
The Star found the Corporate Research Group, a company once at the centre of a government investigation into a senior bureaucrat for having a conflict of interest with the firm, has been given the largest number of contracts.
Last year, the company pleaded guilty to rigging a bid for contracts from Public Works.
In 2011, Fisheries and Oceans hired a retired 36-year RCMP veteran and his private investigation company. The one-month job costs $17,250.
Gary Le Gresley, who runs Moonstruck Investigation Services, said he doesn’t discuss work he does for clients, which ranges from investigating cases of harassment to performance reviews of managers.
“I would like to say more but those are the guidelines I work under,” he said from his Bathurst, N.B., home.
The department would only say Moonstruck Investigation Services was hired to “perform an administrative review.”
The Treasury Board also doesn’t require departments to specify whether a contract was awarded to a firm without seeking bids.
In only about 3,500 cases — just 10 per cent of all the management consulting contracts reviewed by the Star — did the agencies bother to specify whether the contract was competitively tendered or sole sourced.
In those rare instances where such information was disclosed, more than 60 per cent were awarded without being competitively tendered.
“People should be able to know if it’s competitive or not,” Cutler said.
In April, while heralding the launch of an online database that allows users to track individual department’s expenditures, Clement praised the government’s commitment to accountability.
“Our government is the most transparent government in Canadian history. Canadians are accessing more government information than ever before,” he said in a statement.
Health Canada, the Public Health Agency of Canada and HRSDC refused to say what consulting services were provided for millions of taxpayer dollars.
Since 2004, Health Canada spent more than $100 million on management consulting, contract records show.
The Public Health Agency of Canada, spent more than $50 million.
Human Resources and Skills Development Canada, including Service Canada, billed more than $550 million, outspending every other department including the government’s central purchaser.
Instead of providing information on contracts, the departments’ spokespersons directed the Star to file an access to information request, a lengthy process in which details deemed to be personal or confidential business information will be censored.
Federal agencies spent more than $1.6 million on help and consulting for the access-to-information process in recent years.
Among the biggest beneficiaries of the contracts the government won’t talk about is Quantum Management Services.
One of the company’s contracts, its cost apparently bumped up with repeated amendments, is valued at more than $88 million.
Despite the government’s refusal to discuss the contracts it has with the company, the Star obtained tendering and contract records. A significant portion of the management consulting money paid to Quantum goes toward recruiting, training and managing workers for the government’s central help line, 1-800-O-Canada.
The firm is paid millions to provide tens of thousands of hours of “supervisory” work, “administrative and operational support,” “information management” and “editing and linguistic services,” records show.
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