[Recorded by Electronic Apparatus]

Tuesday, November 26, 1996

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[English]

The Chairman: I'd like call this meeting to order.

Pursuant to Standing Order 108(2), the committee resumes its examination of the government contracting process, procedures, and systems, including the open-bidding system.

Our objective today is to update and complete information received in earlier testimony so that we may begin to draft a report that we would have before us sometime in February.

We have witnesses from four organizations with us today, two from associations and two from government. I'd like to invite our non-government witnesses to speak first, beginning withMr. Gray. Thank you for coming before us. Mr. Gray is the vice-president of policy and legislative affairs for the Canadian Federation of Independent Business. We also welcome Mr. Michael Atkinson, president of the Canadian Construction Association.

We know, Mr. Gray, that you must leave at or about 11:30 a.m., so please proceed with your opening statement, which I understand will be fairly brief so we can have ample opportunity for some questioning.

Mr. Gray.

Mr. Brien Gray (Senior Vice-President, Policy and Legislative Affairs, Canadian Federation of Independent Business): Thank you, Mr. Chairman. I do apologize for having to rush off so quickly, but I have another obligation at noon with respect to the joint forum on paper burden reduction.

I do appreciate the opportunity, and the federation appreciates the opportunity, to reappear today to discuss this very important issue.

[Translation]

As we stated previously, government procurement is a major issue for small businesses. Procurement policy affects all the problems that small businesses are dealing with in the economy: lack of information, entry barriers, financing problems, excessive paperwork and lost opportunities.

[English]

As you know, we appeared in June, and at that time we shared with you some extensive and unique survey results that really outline and give some insights into the opportunities, the problems, and the needs of small business with regard to access to federal government contracts.

Because there are some new members of the committee, I've been asked to briefly share some of the highlights of that study.

First of all, we needed to establish what the market truly was. We needed to create a reliable statistical database. We found that 43% of respondents did sell to the government, but we found that 50% had said they'd stopped selling to the government.

We tried to establish the reasons for this. Figure 2 of the brief outlines the lack of information on what governments wanted, the problems with the process, paper burdens being a turn-off, and so on.

We talked a little bit about what were the major departments our members sold to. Those were Public Works and Government Services Canada, DND, Transport Canada, and the like.

We talked about the problems that were encountered in dealing with those various departments. Some of those issues were late payments, difficulty in getting on the bid lists, too much paperwork, not knowing what the government really wanted, and concerns about insiders being favoured.

A good deal of the report also dealt with OBS, and we were surprised to find that 66% of respondents found they didn't use it. The reasons for this were that there was a lack of awareness, there was insufficient time to go over the information, or it was too expensive.

We talked about the concerns about lost bids, and we tried to understand the reasons for them. Often they found that the purchasing agent never gave them feedback, they were never phoned or contacted to tell them they weren't chosen, or they felt the purchasing agent was too close to the supplier.

We then tried to find out what our members felt would make it easier to access the federal contracting system. The majority felt that sufficient advance notice, simplified contracting processes, easy on-line computer access, access to subcontractors, information on procurement processes, and the like, were required.

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Finally, we offered what we thought were straightforward, practical, and doable recommendations to improve the efficiency and the cost of accessing federal government procurement.

We talked about market access. Open up the market and make more things biddable with fewer restrictions - more in and less out.

We talked about the need for a credible statistical database so you can measure over a period of time what is really going on, so we won't have to complain and trade comments over what's really there and what's really not there. If it's good enough for tracking SBLA loans and for tracking bank loans, we should be doing it in this venue as well.

With respect to information, we cited a need not only to educate small businesses on how to better access the system, but also to sensitize policy-makers and procurement officials on how to better treat small business.

We talked a great deal about cleaning up the process, including the OBS, which we said either needed a major overhaul or needed to be replaced.

We talked about the need for tighter policies on late payments. Late payments are fine, and a penalty is fine, but if you have a cashflow problem, it doesn't make much difference. The banker won't be too sympathetic.

We talked about lending a helping hand, such as having departments set up small business procurement supplier assists and things like that.

Finally, we talked about an appeals mechanism, whereby there might be something in the nature of a procurement ombudsman, so if there were problems in the system people could take them somewhere.

Finally, it's our view, after looking at this for some time, that there's a major need for a culture change with regard to federal government procurement. Ten years ago Revenue Canada found the need to reinvent itself, because there was effectively a taxpayer revolt. I would say that if we're able to reform an institution like that - and part of its purpose is also to protect the Crown, as are Public Works and Government Services and procurement processes - and if Pierre Gravelle and various ministers were able to reinvent and change the nature of Revenue Canada, surely we can do it here.

I'd like to congratulate the committee on opening this issue for study. I think you've put the spotlight on an issue that really required it. I congratulate you on your progress to date. We look forward to a report, and I will say once again that the federation is ready to work with whomever, wherever, to ensure that there's better access for small firms to federal government contracts.

Thank you, Mr. Chairman.

The Chairman: Thank you, Mr. Gray.

Mr. Fillion, you're going to start off the questioning. I'm going to ask that the preambles be very short and to the point, because Mr. Gray does have to leave and I want to ensure that all members, or as many members as possible, have an opportunity to pose a question to Mr. Gray.

Is that okay, Mr. Fillion?

Mr. Fillion (Chicoutimi): Okay.

The Chairman: Thank you.

Mr. Bellemare (Carleton - Gloucester): May I make a suggestion, Mr. Chairman?

The Chairman: Yes.

Mr. Bellemare: Usually we have ten minutes each, and I understand I'm the first questioner. I would be willing to reduce my ten minutes to five minutes so that my colleagues would have an opportunity to ask questions. Perhaps Mr. Fillion would adhere to the same thing.

The Chairman: Agreed?

You have five minutes, Mr. Fillion.

Thank you, Mr. Bellemare.

[Translation]

Mr. Fillion: I'm very pleased to meet you. I was familiar with your documents. My office regularly receives your surveys and I think they are very interesting.

I believe I heard you say in your statement "favouritism". What do you mean by that?

Mr. Gray: I was recommending that we give better access to federal contracts to small and medium-sized businesses. That is what we meant.

Mr. Fillion: That is what you meant?

Mr. Gray: Yes.

Mr. Fillion: You don't mean favouritism between a purchaser and the business person meaning that at some point in time the purchaser would chose to deal more with one business rather than with another?

Mr. Gray: No.

Mr. Fillion: So that is not what you meant.

Mr. Gray: Not at all. We already feel that we are the victims of discrimination and it is not necessary to make that situation worse than it currently is.

Mr. Fillion: What is your association doing to improve the participation of business people from more remote regions?

When I say more remote regions, I mean regions like my own, the Saguenay - Lac St-Jean region, where there are few departments who can work easily with buyers that are there. Do you provide this information to people to encourage them?

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Mr. Gray: In that case, there are different stages. We start with a survey, as you mentioned, amongst our members in these remote regions. We do this often. This time, the survey was about supply. We especially wanted to obtain details and statistics, to be aware of the SMBs problems and how to solve them, to then provide this information to the government so that it can change the system.

We can also draft a report with these results to inform our members about the process, about the existing problems and how to solve them, and also about how to draw up a better business plan, etc. We need these statistics to be able to report to our members.

Mr. Fillion: Since you appeared last June, have you noticed an improvement in Public Works Canada's system, an improvement which encourages your businesses to participate in the process?

Mr. Gray: To be fair, I must say that I have seen no change.

Mr. Fillion: There has been no change.

Mr. Gray: It should be pointed out that time period is short. I have just spoken with some officials, including the Deputy minister, and I'm told that changes are taking place. We will see what the results are.

I imagine that you, the members of the committee, would also like to see these changes come about.

Mr. Fillion: In a few months, OBS will have been renewed. Do you see any advantages in the use of this instrument by your members?

Mr. Gray: As we said last June, if the system cannot be radically changed for the better for SMBs then it will simply have to be rejected and replaced by a system that works for the business people. It's that simple.

Mr. Fillion: Yes. Do you have an alternative? If so, what is it?

Mr. Gray: In June we suggested a system on the Internet, where access is much more affordable, or something like that.

Mr. Fillion: Thank you.

[English]

The Chairman: Thank you, Mr. Fillion. Thank you for the brevity of your questions as well.

Mr. Bellemare, you can take your lead from the quick questioning of Monsieur Fillion, please and thank you. You have five minutes.

[Translation]

Mr. Bellemare: Yes sir, Mr. Chairman.

[English]

Thank you very much for coming again and giving us a very good report on your survey, your research.

The word ``favouritism'', of course, rang the wrong bells. Shouldn't the question not be one of a problem with managers in regard to their comfort zone? I keep coming back to that terminology, that procurement managers have a comfort zone. In other words, they know the store they want to buy from, there's a good track record, and they keep buying from the same store. That's what I would call part of the comfort zone. Now some people with an elastic mind may say that comfort zone may also mean that they play golf with the manager of the store and they are wined and dined. But that's for another debate with another person.

Do you have a feeling that the problem could have to do with the wide definition of a comfort zone?

Mr. Gray: It's interesting that you raise the question of favour. Monsieur Fillion talked to you just a minute ago about the issue of favouritism, and I interpreted his question as relating to the favouring of a policy with regard to small firms as opposed to the kind of favouritism you're talking about.

There's no easy way to phrase that question in a survey. Whether it is the way we phrased it or whether it is the extensive comments that came in on this subject, there is a perception. I think in June I talked about whether it's reality or perception. It's a problem. It's seen as a problem out there.

In this area perception actually is worse than the reality. If it's not there, make it clear that it's not there so we can get on with business. But if there's a perception that it's there, it gets in the way.

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I don't have any doubt - and I said this in June - that there are in the public sector, just as there are in the private sector... If you have suppliers that you know, you can trust, you can rely on, and so on, there is a comfort zone, but I would suggest, Mr. Bellemare, that there's also an issue here of access. We really think it's important for some of these purchasing agents to get to know more suppliers, to get this comfort zone with them, and to give them the chance to be the alternative that's looked to, as opposed to the ones that are so frequently on the list.

Mr. Bellemare: How do you resolve the problem, to be fair to the government managers? If you could have in an area, for example, 30,000 potential suppliers, obviously it would be a horrendous problem to try to satisfy all of them. They could be in the Lac Saint-Jean area and want to sell their pencils, water, or whatever they have in excess. In Vancouver they might want to sell toothpicks. Right away you have a problem of transportation, which is added to the cost. How do you resolve this kind of problem?

Mr. Gray: I think we could spend the whole morning talking about this specific issue. I think the issue of transportation may or may not be a problem, depending on the product we're talking about. You may be able to source it more cost-efficiently locally than if you were to come out of Toronto to the west coast, for example.

Mr. Bellemare: I've come to a conclusion, though. I could pursue all of my questions, and I think the bottom line - comment or question - would be that the follow-up by managers is probably a key issue. Would you agree to that?

Mr. Gray: Certainly. Quite apart from my surprise at the lack of professionalism and not following up, I think it's simply bad business.

Mr. Bellemare: So your recommendation, if there's a specific recommendation that will come today, would be that all managers who do receive a submission from a supplier should follow up and say whether or not the supplier got it and why.

Mr. Gray: Absolutely. If you want to really grow this economy and grow firms in outlying regions in the greater part of Canada to get in on some contracts and go from there to provincial contracts, whether private or public, and export as well, you've got to give them some ways to understand where they went wrong. If they don't get any feedback, they'll never understand that.

The government has felt that it's all right to ask banks, and in fact to require banks, to explain why a loan was turned down. It seems to me that this isn't much different. If a bidder is turned down and is given a reason, the chances of success the next time for that bidder are far greater. In the end it's better for the government and for the economy.

Mr. Bellemare: Thank you, Mr. Chairman.

I would end on that, and that would be the recommendation that should come out of this meeting.

The Chairman: Thank you. It's a very good point.

Mr. Gilmour.

Mr. Gilmour (Comox - Alberni): Thank you. It's good to see you back.

Mr. Gray: Thank you.

Mr. Gilmour: I was just curious to know whether you had come across in your surveys a bias or favouritism. My question was raised before you brought up that term, but I'm talking more about favouring regions of the country. I am from the west, and we often feel that we are left out of some of the contracts. In some cases I've seen contracts that have been rewritten to favour central Canada at a disadvantage to the west or the Maritimes. Has anything about a bias towards one region of Canada as opposed to another come out in your surveys, or do you figure there's a level playing field right across the board?

Mr. Gray: We didn't ask the specific question. We asked them whether their contracts were sourced locally or out of the Ottawa-Carleton region, and because the majority of our members are outside of Ottawa, the results showed that the majority of contracts were outside of Ottawa. But if I recall the data correctly, we also asked them... I think there was a sense - and this is not necessarily statistically relevant - that you had a better chance of succeeding if you happened to be in the capital region. Again, I must emphasize that this is not necessarily statistically valid, but there was that sense in terms of what our members were telling us.

Mr. Gilmour: What about a bias towards central Canada versus the two extremes?

Mr. Gray: I wasn't able to detect that. There's the obvious sense that a lot of decisions are made in the capital area, but a bias towards Quebec or Ontario versus other parts of Canada isn't something we tested. I really couldn't give you a good answer on that.

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Mr. Gilmour: I was most interested in your comments - I forget your wording, but basically it was to bring the department into the 1990s, and you used Revenue Canada as an example. How much revamping is required to bring the department...? The department is changing and they've made some good moves, but how far behind and in what areas would you see improvement?

Mr. Gray: Mr. Gilmour, my remarks were predicated largely on... Just as in the mid-1980s there was a feeling among Canadians and certainly among business people that there was an attitudinal problem with Revenue Canada, I think the same is true with regard to Public Works and Government Services Canada.

I think it's a bit of a sad week, because we've heard about the resignation of Pierre Gravelle as Deputy Minister of Revenue. Along with some key ministers, he was largely responsible for changing a culture and an attitude that essentially found the client or customer to be a problem, rather than somebody you could work with. The attitude was that the customer was wrong and we would impose our solution.

Now we have an attitude at Revenue Canada that talks about cooperation, about working together. As somebody representing small business, I think there has been a major change in attitude and culture in that ministry, and I would like to see that replicated in many of the line agencies that deal with business directly, of which Public Works and Government Services Canada would be one.

As this is the week in which Pierre Gravelle announced his resignation, I think a wonderful legacy would be to try to take the spirit of what he's achieved there and replicate it in other departments.

Mr. Gilmour: Okay.

Thank you, Mr. Chairman.

The Chairman: Thank you, Mr. Gilmour.

The last question is to Mr. Bryden.

Mr. Bryden (Hamilton - Wentworth): How big is your membership?

Mr. Gray: We have 88,000 members across Canada.

Mr. Bryden: And what percentage of small businesses does that represent? Do you have a rough idea?

Mr. Gray: I can't tell you exactly. It depends on how you define a small business. If you take home-based businesses as well as those that are up-and-running establishments, there are probably two million establishments in the country.

Mr. Bryden: I am asking because you mentioned in your report that 66% of respondents didn't know about the OBS system. Would it not be possible for the government to use your membership as a means of advertising the OBS system?

Mr. Gray: We would be happy to let our members know about it, but we won't act as your advertiser.

Mr. Bryden: But you are a for-profit enterprise, are you not?

Mr. Gray: No, we're not.

Mr. Bryden: You're not? I thought you were for-profit.

Mr. Gray: No, not at all. We're entirely membership-financed and we are a not-for-profit organization. We don't accept money from governments or from private corporations.

Mr. Bryden: That's fine. Is there any way that government can access this kind of list? You raised the issue that of your membership, 66% do not use the federal OBS system, and of that group, 43.3% are not even aware of it. There's an awareness problem, so how does government approach it? How can one target this group that you have this information from on the lack of awareness? Can we not use the services of an organization like yours, either for pay or for whatever sort of arrangement? Do you have any suggestions in that regard?

Mr. Gray: First of all, I wouldn't promote something I didn't believe in. Unless I feel comfortable that the OBS or its replacement is something our members would find valuable, I'm unlikely to promote it among my membership.

Second, if we're going to promote it, we'll do so directly, on our own basis and at our own cost. We won't ask you to do it and we won't accept payment for that. We'll do it ourselves.

Third, the government has or should have a major database of those people who have either used the system or are currently using it. I think you're probably in a better position than we are to let Canadians who operate within the system know what the system does and does not offer.

Mr. Bryden: As I see it from your own results, the government's problem isn't those who have used the system but those who don't know about the system. So what suggestions do you have? It's not a matter of promoting the system, it's a matter of informing people that the system exists. According to your figures, 43% of 66% don't even know it exists.

Mr. Gray: As I say, if I had confidence in the system I would happy to let our members know it exists. For those who happen not to be our members, I would encourage the government to do the same thing.

Mr. Bryden: What it really boils down to then is that you can't help the government out in this regard because you don't believe in the system as it stands now.

Mr. Gray: I didn't say that.

A voice: He didn't say that.

Mr. Harvard (Winnipeg St. James): That's what I heard him say.

Mr. Bryden: That's what I thought was said.

Mr. Gray: I didn't say that. I said I would be happy to do it if I felt the system was valuable. I think that's a pretty obvious kind of response. Our members are looking for value for money here.

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Mr. Bryden: Do you feel the system is valuable then?

Mr. Gray: Right now I don't.

Mr. Bryden: All right, we have that clear then. So you don't see any point to informing your membership - or the people you send releases or questionnaires to - about the system because at this stage you do not believe it is sufficiently valuable for them to even know about.

Mr. Gray: I'll certainly let them know if we're asked, but I'm not going to go on a costly proactive campaign to let them know if I don't believe in the system.

Mr. Bryden: I think Mr. Fillion might have something to say here.

The Chairman: It is 11:30 a.m. Do you have a moment for some final questions by Mr. Fillion?

Mr. Gray: Unfortunately, it really will have to be the last question because I do have another obligation. I'm sorry.

The Chairman: Thank you.

Mr. Fillion, very quickly.

[Translation]

Mr. Fillion: Yes, it's too bad, on top of which we do not interpret favouritism in the same way.

When I mention favouritism, I am referring to page 5 of your brief where you provide the various reasons why people are not dealing with the federal government and where you say that a certain percentage of small manufacturing businesses say that they have been trying, but they had strong suspicions about the process. What did you mean by that? What do you mean by suspicions about the process? Does that mean that a purchaser might deal with one business to the detriment of another?

In the recommendations that you made in June, you said that we should condemn and even penalize a department that is late in paying its supplier. But what are you doing about condemning favouritism within the system? You do not refer to that in your recommendations. You simply say that you are going to act in order to be paid if payment is late. That is normal and it is of no great help to a government with problems. But if one has suspicions about the process, I think one must react. I don't think you're here because your association is lobbying.

Mr. Gray: No.

Mr. Fillion: It's more than that. This is an association which must defend its businesses. Therefore, if you know that there is truly discrimination somewhere, what are you doing to solve the problem?

Mr. Gray: We identified departments who were late in paying because we wanted to provide that information to our members.

Mr. Fillion: You're avoiding the question. Can you tell me what the department's situation is with respect to its payments?

Mr. Gray: Yes...

Mr. Fillion: That is not an issue of favouritism because the contract had been awarded beforehand. Therefore, that is a question of reorganizing payments, etc.

Obviously that can harm industries. But if you've identified cases where SMBs or industries are suffering from flagrant discrimination within the process itself, because of people who are encouraging the choice of one business over another, what do you do?

Mr. Gray: We have observed the process in each region of Canada. The service provides, to the best of its ability, assistance to members who have noted some type of discrimination within the system. We also want to do this with the responsible departments.

Mr. Fillion: Do you criticize them? Do you take the time to condemn those departments in the way that you criticize departments who are late in paying?

Mr. Gray: If we cannot solve the problem directly with the department or its minister, then we will certainly criticize it publicly.

Mr. Fillion: Has that happened?

Mr. Gray: I do not know, but I can tell you today that if that were to happen, we would tell you. However, we first must attempt to find a concrete solution to the problem.

Mr. Fillion: Yes.

Mr. Gray: For our part and for the member who is affected.

Mr. Fillion: Fine.

[English]

The Chairman: Thank you, Mr. Fillion.

Mr. Gray, thank you for coming before the committee. Did you have one final comment?

[Translation]

Mr. Gray: If you want to continue with this conversation, I am available. I can contact you over the next few days.

Mr. Fillion: No problem.

Mr. Gray: Yes?

Mr. Fillion: It will be my pleasure.

[English]

The Chairman: Thank you, Mr. Gray.

Next is Mr. Atkinson from the Canadian Construction Association.

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Mr. Gilmour.

Mr. Gilmour: I have a point of order. It has to do with Mr. Bryden's private member's bill. The broader picture is that a number of bills are in committee and they don't seem to get back out.

We've dealt with Mr. Bryden's bill to a large extent, but we haven't reported back to the House. I would like to make a motion that before Christmas we take a few minutes during one of our sessions to finalize Mr. Bryden's bill and send it back to the House. It's a procedural item. We've dealt with it, but I believe this committee owes Mr. Bryden the favour of reporting it back to the House.

The Chairman: Mr. Gilmour, perhaps we could leave that until the end of this meeting. We have the witnesses before us. Just a few minutes ago we spoke about setting up a meeting with the committee to discuss various issues. Perhaps we can discuss that one within the committee sometime in the near future, at least before Christmas. Fair enough? I don't want get into a debate right now given the time -

Mr. Gilmour: No, it's not for debate. I think it's a procedural item. Unfortunately, I have to get out of here at about 11:50 a.m.

The Chairman: Mr. Bryden.

Mr. Bryden: Mr. Chairman, I think we can dispose of this motion very rapidly. In previous debate this committee agreed that it would not proceed with the bill because many of the proposals in the bill have been met by Revenue Canada, but I think the point being raised here is that this committee still has to report that result. I think you would probably get overwhelming consent to make such a report to the House - that the bill has not been proceeded with because the committee, including the mover of the bill, has agreed that many of the provisions in it have been answered.

I can't second the motion, but if it were put forward I think it would be disposed of very rapidly.

The Chairman: Mr. Harvard.

Mr. Harvard: I don't know the rules and procedures. I don't know whether that's possible. Maybe the clerk can answer the question.

The Clerk of the Committee: Mr. Chairman, the bill itself must be reported to the House. If you're not reporting the bill to the House, then you're doing a substantive report on the subject of the bill. So you report the bill as is, as amended or...but you simply cannot go back to the House and say you do not wish to proceed with a bill.

Mr. Harvard: That's what I thought. I don't know how we provide an answer to that.

The Clerk: The understanding of the House, of course, is that the committee will report at some time. The House has not said when the bill must be reported, so it's really up to the committee as to when it reports.

The Chairman: Okay. Given that we're going to be going back and forth in this discussion, I would suggest, Mr. Gilmour, that perhaps we can pursue that item at the next meeting.

Mr. Atkinson, please.

Mr. Michael Atkinson (President, Canadian Construction Association): Thank you,Mr. Chairman.

The Canadian Construction Association is grateful for the opportunity to share with this committee some of our concerns about current federal government contracting policies and practices.

With me today are Pierre Boucher, the association's senior director, and Michelle Landreville, who is the CCA's director of public affairs.

The Canadian Construction Association is a not-for-profit organization serving the national and international interests of the non-residential construction industry in Canada. The CCA represents some 20,000 member firms from coast to coast, many of which are dependent upon government as a key buyer of construction services. Approximately 90% to 95% of the firms operating in the construction industry in Canada are small businesses, by anyone's definition.

Mr. Chairman, I believe committee members have a brief that our organization used in some discussions with a Treasury Board committee on a particular aspect of federal procurement. This association did not appear before the committee previously, but did write to committee members and the chair, putting forth some concerns with respect to a number of procurement issues, including the OBS.

What I propose to do today is to briefly touch on some of our key concerns and then open it up for discussion and questions. The areas I'd like to cover are the open bidding service, government use of temporary help services, public sector competition, and aboriginal set-asides.

Before commenting on these areas, however, CCA wishes to point out that its current and past working relationship with federal contracting agencies like Defence Construction Canada and Public Works Canada, and indeed its relationship with the Treasury Board Secretariat, has been a most positive and open one. Frank and meaningful consultations have been the standard practice for years, particularly with regard to issues that directly impact on federal construction contracting practices. Each year CCA meets formally for a full day with representatives of the major federal contracting agencies, their client departments and Treasury Board.

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However, that relationship did not exist with the former Department of Supply and Services, which appeared to operate in a distinctly different culture. It did not invite meaningful consultation, at times seeming to view it as an irritant to be experienced only when unavoidable. That different, or should I say indifferent, viewpoint was noticeable following the Supply and Services merger with Public Works Canada, and was clearly demonstrated by the unilateral decision shortly thereafter to expand the OBS to federal construction contracting. While that culture has vastly improved since that time, the old DSS attitude is still somewhat prevalent.

With respect to the open bidding service, CCA supports the introduction of new technologies and systems designed to increase the transparency and accessibility of government procurement and to improve its efficiency and cost effectiveness. It is CCA's view, however, that the open bidding service to date has not met those objectives, and in the case of construction contracts has had the opposite effect.

The OBS was originally designed to meet the needs of goods and services procurement. Construction procurement, on the other hand, presents unique features that were not considered in the initial development of the OBS. It was because of those differences and that uniqueness that the former Department of Public Works had consistently rejected the idea of the OBS as an option for its procurement needs. When construction procurement became subject to the OBS following the DSS-PWC merger, significant problems arose with its application to construction tenders, leading to serious doubts as to whether best value was being obtained by the Crown.

A 1995 survey of members of the Edmonton and Calgary construction associations revealed that only 30% of the respondents were OBS subscribers, and that those who were experienced annual costs in the $800 to $1,200 range. Such results are nowhere near the 54% subscription level or the $400 to $500 average annual OBS costs that were being quoted at the time by OBS proponents.

A particular irritant to CCA has been the federal government's refusal to allow CCA direct access to federal construction information for the purposes of disseminating that information to its members. That has been a traditional service provided by local and regional construction associations, indeed one of the lifeblood services to its members. Our construction associations across the country typically serve what are called plans rooms and provide opportunity information to their member associations.

Under the current situation, in order for us to continue that service with respect to federal government procurement, we must come to an agreement with the current OBS provider. The federal government will not allow a separate regime from the OBS. Any participation in this process must be under the umbrella of the OBS provider.

We understand that there are improvements coming to the system that should impact upon costs, that should help make it more efficient and effective, and they have been helpful to both the department and the current provider in trying to effect change in those situations. But as it stands now, in order to be able to continue to disseminate this information to our membership, we must come to an agreement with the successful proponent on the current RFP.

It is somewhat embarrassing to us on the international scene when we meet with our counterparts from the United States and Mexico who provide this service to their own membership and are interested as one of the NAFTA partners in exchanging this kind of service with their NAFTA partners, and we're not sure we can deliver. Why can't we deliver? Because we're not sure, given the stance the federal government has taken, whether we can effect a positive agreement with the OBS provider.

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Government use of temporary help services. One way we have noticed that federal government contracting authorities can avoid the competitive contracting process altogether is through the inappropriate use of temporary personnel. Treasury Board policy specifies that temporary help services may be sought by federal departments where permanent staff are absent for a short period due to vacation leave or staffing actions, or to bolster permanent staff for short periods of time to meet temporary increases in workloads. CCA has objected in the past to federal departments engaging tradespeople through this vehicle to perform maintenance, repair and other construction work that normally would have been contracted out to the private sector. One department that was caught red-handed doing this has agreed not to continue to do it and has worked out an acceptable arrangement, from our perspective, although we're watching that very closely.

I would like to comment on the area of public sector competition, which is the subject of the brief in front of you. There appears to be a growing acceptance within government that there is nothing wrong with the public sector competing with the private sector. A Treasury Board committee was studying, and may currently be studying, the possible relaxation of the current federal policy that prohibits the public sector from competing with private sector firms for federal government contracts. CCA is vehemently opposed to any such relaxation of that prohibition. There is just no convincing public policy argument to support such a change, and such a change, as you can well imagine, would have serious detrimental consequences for the private sector.

The broader and more fundamental philosophical question that must be considered before any question about level playing field or equal competition is answered is this: what is the appropriate role of government and the type of business government should be in? The role of government is to govern and regulate, not to compete in the marketplace. If certain goods and services are readily available from the private sector, the public sector should not compete for those services.

Just before leaving that last one, we've had a recent concrete example of what can happen when government gets involved in the public sector. CORCAN is now doing some of the in-house maintenance, mechanical and electrical work for Corrections Canada. Previously that had been a market for our members, and on a recent project that's exactly what happened. Rather than work being contracted out, it is now being performed in-house.

With respect to aboriginal business procurement policy and incentives, CCA wants to make it very clear that as an association we support efforts to try to bring about equity of opportunity, equity of access with respect to federal procurement. What we question, however, is policies such as set-aside programs, which seem to put more stock in equity of results and equity of participation.

Supplier development programs for aboriginal businesses, by all means, but not set-aside programs. At one time, under the strategic procurement initiative, there was a proposal to provide set-asides for small businesses. Despite the fact that it is 90% to 95% small businesses, our organization vehemently opposed that, and I think sanity prevailed and that proposal went by the wayside.

Mr. Chairman, thank you very much for this opportunity. We'd like to field questions.

The Chairman: Thank you, Mr. Atkinson.

[Translation]

Mr. Fillion, followed by Mr. Bryden.

Mr. Fillion: The last part of your statement was about the philosophy of the system that we are discussing. I think that it is possible to understand this without asking many questions about it. That is my personal opinion, in any case.

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I think that privatization is very important. However, as long as we have such a significant public service, we will need a mix. I think that currently we are at the mixing stage.

I would like you to tell me today if the business people who deal with the government within the current tendering system feel that the process is trustworthy.

[English]

Mr. Atkinson: I can only speak with respect to construction procurements, because obviously that's the area we're interested in. To some extent, as I've mentioned, the procurement process has been slightly different from goods and services. In fact, there have been unique systems put in place for construction contracts versus goods and services.

I think overall our membership believes the system to be honest, particularly with respect to construction contracts, where the lowest responsive competitive bid normally gets the job. The bidding system and the bidding practices used by the federal government are very similar to those used by other levels of government. If your question is whether our members feel the current system is honest, I think the majority would say yes.

[Translation]

Mr. Fillion: The distinction should be made between contracts awarded upon invitation and those awarded according to a bidding process. In our ridings, especially in more remote regions such as the Saguenay - Lac-Saint-Jean region, we are regularly told about businesses that cannot participate in the process because they lack the necessary information. You said earlier during your presentation that the department did not co-operate much in providing this information.

How is it that it is almost always the same businesses who are called upon to bid? Some have told me: "We have tried several times, we are registered, but we are never called upon." It is always the same businesses that are chosen. I don't know if there's a random selection. What do you do in a situation like that? These are situations that we hear about regularly from our constituents.

[English]

Mr. Atkinson: Again, I can only really comment on construction. With respect to construction, there is a separate and unique system that is used for invitational bidding, which you're referring to, and that's called the ACCORD system. Under the ACCORD system the supplier really has to provide the interest, provide the information, provide the types of jobs he would like to bid. The selection of who will be invited is based on a rotational process.

As I mentioned earlier, we had an awful lot of input into Public Works Canada's development of the ACCORD system for construction. Yes, we continue to see some problems with it, particularly with how to notify bidders, when their name does pop up, that they are invited.

That particular system was really designed to try to take away the subjectivity of who you invite and who you do not invite by using a system that essentially is a random selection process based on the number of times your name has come up before. If your name has come up before, the chances of your name coming up a second or third time are reduced under this computerized random selection process. We had an awful lot of input into that.

With respect to that process, I don't hear a suspicion or suggestion that the same names are coming up. The criticisms I have of that particular process are that often people are asked to quote or are invited to bid on jobs that aren't really within their bailiwick, even though they provided their information. Number two, sometimes the geographical location is a deterrent, construction again being different. If you're on Prince Edward Island and you're invited to bid a $15,000 project in New Brunswick, chances are you're not going to bid it. Yet contractors sometimes get invited in that situation.

I think if there is a criticism with respect to that system, it's more with respect to its accuracy.

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[Translation]

Mr. Fillion: What do you do to encourage businesses in more remote regions to register with the government process to sell their goods? What do you do in that regard?

[English]

Mr. Atkinson: The first thing we always recommend is that they join the local construction association, because that is their source of the most in-depth knowledge of what they need to know to access government work, or any work, for that matter. The local associations are where our members often go for help in procuring work.

The Chairman: Thank you, Mr. Fillion.

Mr. Bryden.

Mr. Bryden: What I'd like to do is give my colleague an opportunity to go just before me, because he wants to follow up on Mr. Fillion's comments.

The Chairman: Thank you, Mr. Bryden.

Mr. Bellemare.

[Translation]

Mr. Bellemare: With all due respect to Mr. Fillion, I think that the subject he has raised borders on the ridiculous. The province of Quebec has extremely strict regulations on employment. Businesses from Ontario cannot work in Quebec, but workers and business people in Quebec come to work in Ontario.

[English]

The Chairman: Mr. Bryden, are you taking up the questioning?

Mr. Bryden: Yes, I'll carry on, but I'll change the theme slightly from my colleague's.

We heard from the previous witness - and I was quite shocked to hear - that his organization is so down on the OBS that he wouldn't even inform his members that it exists. Do you have the same negative feelings for the OBS?

Mr. Atkinson: I'm going to have to answer this question both ways.

You should realize, number one, that the OBS is perceived by many of our local construction associations as an absolute threat to their continuation, because of what I mentioned earlier about the OBS being ``the only game in town'', unless the associations can make a deal with the OBS provider. For me, as the national organization, to go out and start advertising the OBS would be perceived by some as promoting the competition, if you will. So we've been somewhat sensitive to that.

However, we certainly have been very cooperative in ensuring that our membership across the country is familiar with the OBS and how it works. In fact we worked initially with PWGSC in trying to ensure that information got out. Why? Not because we were particularly enamoured with the system, but because we realized that if we were going to have any ability to influence its future and change it, we would have to have feedback on experience and use, primarily. From that perspective, we were very much interested in ensuring that our members fully understood how the OBS worked.

In fact, quite frankly, from our recommendations, the OBS process did improve. One of the things of major importance in construction procurement, just to use an example, is to maintain a list of bidders. That is very important because of the pyramidal contracting process in the construction industry. Early on, when the system was extended to construction, the OBS provider really wasn't aware of what had to be done there. We assisted in that area.

There are a couple of other examples, but to answer your question, we have participated in getting that information out, but we always run the risk of being accused by the local and regional associations, who see the OBS as a definite threat, of promoting ``the enemy''.

Mr. Bryden: You make me feel better, because I can therefore take it from what you say that it's not unreasonable to expect a non-profit organization that has business membership to at least inform that membership that this government service does exist.

Let me change direction briefly. In the report you presented before the committee, which I read right through, I was very interested in your comments about the principle that government should not compete with private sector industry. What about Canada Post? Surely it does that all the time. Surely that's exactly the thing you are decrying, is it not?

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Mr. Atkinson: I would say that depends on what you would define as the public sector. I was very clear, hopefully, in trying to distinguish between government and the public sector.

I guess if you take a broad definition of what the public sector is, Canada Post certainly would be in there. But the concern is that any time you have an entity that is subsidized through public funds, etc., operating in a competitive environment against somebody who really is watching the bottom line every day, that is when the red flag goes up the pole.

Mr. Bryden: So you would consider it unfair that Canada Post competes with courier services, direct mail advertising, premium advertising, and other areas it's getting into that are traditionally in the realm of private enterprise?

Mr. Atkinson: I would question the appropriateness of Canada Post being involved in that, yes.

Mr. Bryden: Let me change direction yet again.

I was interested in your very brief comments about aboriginal set-asides. I have two questions. Can you tell me how this set-aside program is going down among your membership? How is it being received in the country? You're a perfect witness for this.

Mr. Atkinson: Number one, it may surprise you to know it doesn't affect our industry very much at all, at least from the federal point of view, because the policy applies to federal procurement only. Almost 99.9% of all construction activities that occur on aboriginal lands now are administered directly by the Indian bands, so it's not considered federal procurement, even though the federal government signs the cheque.

So in construction, it probably will affect us very minimally, at least as far as the mandatory set-aside portion of the procurement initiative goes.

Our concern is that there is a strong push in that policy for federal contracting departments and agencies to look at voluntary set-asides. That's almost an oxymoron, but anyway, our concern is that the pressure may be so intense to ``do the right thing'' that it may well spill into areas that would impact upon our membership.

Our association and our membership are completely opposed to any kind of procurement practice or preference that uses race, size of business, regional residency, etc. Again, I would stress that unfortunately what this policy seems to be aiming at is equity of participation, not equity of opportunity.

Just so you understand this, we are working very much with aboriginal owners as clients. We also see aboriginal firms as prospective members and certainly want them to be part of our membership in the construction association. So it's not the aboriginal adjective that we have problems with in the set-asides. We have problems with set-asides, period.

Mr. Bryden: I have just one final question on that line. It's a theoretical question, and I'm just asking your general opinion.

The set-aside program, at least in intent, is to try to help a group in society, a group that is perhaps better loosely defined rather than defined specifically by race. Would it be practical to develop a program based on region or locality, where you're trying to direct funds to firms that are locally based as opposed to firms that may have their head office in some urban community?

In other words, would a better way to accomplish the intention of the aboriginal set-aside be to direct it towards local businesses or businesses around reserves or in remote communities, rather than making it specifically based on race?

Mr. Atkinson: We would be opposed to that.

I put the question back to you. Wouldn't it be better to ensure a level playing field? If there are certain barriers or impediments to a particular group or to businesses from a particular region competing in that marketplace for government procurement, isn't it better to try to provide assistance to those firms so they can compete on an even keel, rather than trying to, if you will, fix the outcome so those firms never have to learn how to compete and never really learn what it takes to operate on their own?

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We've looked at this issue for years, and what happens on the regional side is that you put in a procurement preference to enhance local business. Regional development in the eyes of one person is just another person's preference policy. What happens, though, is when local business starts to grow, they find they can't expand their market because the neighbouring region down the road didn't like it the first time around when they cut out their people and they can't go anywhere anyway. It does nothing but fragment the market.

From that perspective, our message is to look to making equity of opportunity equity of access, not equity of results.

Mr. Bryden: Thank you very much.

The Chairman: Mr. Fillion.

[Translation]

Mr. Fillion: Mr. Chairman, that should not be counted in my allotted time.

I would just like to clarify one point. This morning, we are here to discuss the process involved in obtaining government contracts. That is this morning's subject.

It's unfortunate, but my colleague Mr. Bellemare's comment was not relevant because it was about labour mobility and not about this morning's topic. It is too bad that comment was made before the witnesses. It is of absolutely no concern to them.

I would like the association's representative to tell me whether or not the members of his association are currently satisfied with the government's system of awarding contracts.

If he is capable of telling me firmly that all is fine, that there is no favouritism, that all those who bid are treated fairly and that it is always the lowest bid... I think that it is always the lowest bid, but there are other factors.

If they tell me that everything is fine, then that is all very well for you, the Liberals, but let us hear them out. Let us not try to mix up contract problems and labour mobility problems.

Are your members all satisfied with the way the government awards its contracts? Are there points that could be improved? Is there favouritism?

Of course, people may try to hide problems, but does this system truly meet the needs of the members of your association?

That is all I'm asking. If you say yes, then fine, and goodbye.

[English]

Mr. Atkinson: First of all, I know it's not perfect. I don't know of any procurement system that is perfect. If there's one thing I remember, it's that what a person would want is much more contracts; we need the work.

As far as whether transparency is a concern or whether the objectivity of the awards is important, which I think is the root of your question, it is absolutely so. I can only speak for construction, and to date it would appear to us that the problems have been more the exception than the rule.

I would quickly add that with changes in procurement methods, which are being forced on governments to some extent because of the fiscal reality, going to procurement methods like design-build, where you cannot just award a contract on the basis of price but must look at somewhat subjective criteria like design, the experience of the management team, and that kind of thing, yes, we have major concerns in those areas. Given the subjective aspects of awarding those contracts, it is something we must continue to watch very much more closely as more federal government construction procurement is delivered through those types of processes rather than giving your price and having the lowest acceptable bidder get the job.

So to answer your question, it is more the exception than the rule right now, but we are very conscious of the fact that we must be vigilant and look very closely at these new methods as they come out.

The Chairman: Mr. Fillion.

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[Translation]

Mr. Fillion: You must have figures. What is the percentage of members of your association who do not deal with the government because they think that the system is too complicated, because there is too much paperwork, because it is a waste of time? Do you have a way of knowing how dissatisfied your members may be?

That is what is important. We hear these people in our offices and we don't always have answers to give them. When we attempt to obtain answers to our questions from the departments, we end up in a maze and it takes an enormous amount of time.

If everyone is happy with the system fine. But how is it that so many people who are probably with your association and are dissatisfied are coming to see us in our riding offices?

[English]

Mr. Atkinson: As far as the paper burden goes, on the procurement side, yes, that is sometimes a problem, particularly where, on federal government projects as opposed to other projects, more and more of the cost of the procurement process is being put on the bidder. That is a concern in our industry. Certainly as small business firms, dealing with government generally and not just in the procurement area, the paper burden has always been a concern, not just at the federal level.

Maybe Mr. Boucher would like to comment as well. We don't have any hard data on that.

[Translation]

Mr. Pierre Boucher, (Director, Canadian Construction Association): I would simply like to add, as Mr. Atkinson said earlier, that the CCA has about 70 member associations. All those people are involved at the local level and when there are problems, they tell us about them.

Here is a concrete example. Until now, there were problems with the regional offices where bids are submitted on federal projects. Federal regulations applied and that was causing problems.

During the discussions that we had at the federal department, we agreed that provincial and local regulations would be applied.

Thus, where there were problems, in some cases we have been able to solve them with federal representatives. In some cases, and this is perhaps the exception, things happened that shouldn't. In most cases, we are able to solve these problems through discussions with the departments and with our local associations.

Mr. Fillion: Has there been improvement over the past two or three years? Could you confirm that? Do you have other practical examples to give us? Have the number of businesses bidding increased?

Mr. Boucher: I don't believe so. But the access to that information has been more difficult. We've had to play an important role in ensuring that information reaches our members. We're still discussing things with the federal government. As of next June, those services will be provided and we hope that there will be improvement in that area as well.

[English]

The Chairman: Thank you, Mr. Fillion.

Mr. Jackson, please.

Mr. Jackson (Bruce - Grey): Mr. Chairman, I have just a few comments and then perhaps a suggestion.

One of the problems you have at all levels of government is that government for the most part has a lot of clout. They have a big treasury and so on and so forth. I guess they have a certain amount of strength and authority to manipulate contracts.

On the other hand, you have the small business person who is saying that the government is using this power to make sure people don't mess up. You can look at the failure of Confederation Life, for instance, where some groups gave up a pension to an insurance company and it failed.

I remember one time when I was mayor and we had a tender for a telephone system. We opted to go for Bell because we felt that the person who was trying to provide the phone system didn't have enough resources to look after it. I think it was in Hamilton where in fact the thing went belly up and the municipality had to pay.

On the one hand, people are asking for fairness. On the other hand, if the bureaucrats screw up, then the government pays and we will have to answer for that. I just wanted to make that point.

We don't want to reinvent things. We want this system to be a learning organization. We want the best for everybody. We want the best thing for the government.

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In the end we're talking about the people we represent. We want what is best for them. They should get the best value, the cheapest product and the best construction. We don't want a house constructed and then an earthquake or a tremor or something happens and the whole thing collapses because we didn't have certain checks and balances.

Mr. Atkinson, feedback and paperwork seem to be critical types of things. I suspect, although I don't know this, that if I were a bureaucrat and you asked me for feedback and I said you didn't do this and that at the time, and I wrote you a letter in black and white, the next time you came back to me about a contract you didn't get, you'd say, ``You said I should do this and I gave you all this stuff; now why didn't I get the contract?''

I know there are answers to a lot of the questions you asked. A lot of these things are repeated. There are reasons why a person didn't get the contract from the government. It was of poor quality, they couldn't be bonded, all this kind of stuff. So notwithstanding that there are some easy answers to some questions that small business people ask all the time, could you not collaboratively try to look at the paper burden, get rid of most of it, and make sure it's down to a little bit by cooperating?

Secondly, just have a feedback form that the bureaucrat could look at and check those things off, rather than him writing you a letter, because I suspect that letter is why you don't get the feedback. Once they get the feedback, they say, ``You said if I did that I'd get a contract'', and they decide to throw their hands up and walk away. That would be my suggestion to you.

Mr. Atkinson: First of all, we'd be happy to work with anybody in the government to lessen the paper burden; our door is always open on that one.

But I'd like to catch up on something you said, because I find it very interesting.

It's been our experience that when it comes to procurement, the federal government often does not use its clout - for example, the national infrastructure program that is winding down right now. We argued and lobbied quite strenuously to make that program conditional on no regional or local preferences, because we always know what happens when money gets in the hands of some municipal politicians. In fact, what happened was no conditions, no strings, were put on those funds, and the federal government funds were being used on municipal projects for which only those within the city limits may apply, thank you very much. Your signs on those projects didn't do you much justice. In fact, if you want to see where that was used, look no further than the city of North York.

Another area where federal clout is not used is with respect to northern governments, particularly the Northwest Territories, which practice a very overt northern preference policy. In many cases, those construction projects are 100% funded by the federal government and the government takes a complete hands off attitude. Northern contractors need only apply, thank you very much.

The other one is with respect to construction on Indian band lands. There are many sophisticated, good Indian clients and owners, just as there are many good owners and bad owners in both the public and private sectors. There are many situations where one would like to have seen the federal government use its financing and funding power to a little more persuasive degree with respect to some of the procurement practices that go on with respect to those Indian band projects on Indian band lands.

Just to pick up on your point, in some areas we wish the federal government would use its procurement power much more effectively and not have such a hands off attitude.

The Chairman: Mr. Harvard, the last question.

Mr. Harvard: Thanks, Mr. Chairman. I just want to touch on three subjects as quickly as possible.

One, sir, is on the issue of aboriginal set-asides. I'm glad you raised that, because I think it is a legitimate issue. It's something that I think concerns all of us, and I think it's something the government is going to have to work on, on a continuous basis.

However, I would say this to you, and I'll invite you to respond after I finish. You do say that you are in favour of enhanced access. Presumably, you're referring to aboriginal firms, but once you say that, it in itself raises questions. If you recognize, for example, that my colleague here, Mr. Bryden, is somehow disadvantaged, and if you're prepared to help him to overcome that disadvantage, then you offer help to him but perhaps not to me or my colleague. Under your proposal, perhaps my colleague will be as upset with your proposal called ``enhanced opportunity'' as people are with respect to so-called aboriginal offsets.

.1220

Any time you get into what I call affirmative action, you are encountering problems. I simply ask you not to be as simplistic in your criticism of the government policy as I perceive it to be. That's number one.

Number two, on CORCAN, you say the government shouldn't be competing with the private sector where the private sector is prepared to offer a service. I accept that, but life is never as simple as that. Life is not always black and white.

I think you know as well as I do there is a general agreement in this country when it comes to the treatment of prisoners. Getting them involved in work is a good thing. They should be involved in constructive work to develop their habits, because hopefully some of them, or most of them, will come back; they'll leave jail and they'll work in the community. It's easy for you to say, if the private sector is prepared to provide the service...but that's not necessarily the answer for those inmates behind bars. They have to be engaged in constructive work.

As for the business community, I can assure you the chambers of commerce want these people to be engaged in constructive work, and that means sometimes the private sector is going to have to forgo some work for the sake of this program. My understanding of the program, and I don't pretend to be an expert on it, is that CORCAN in most places does bend over backwards to choose work that is not going to be very destructive if taken away from the private sector. The work generally represents just an infinitesimal part of the private sector service available in any locality.

My third point is on rotation, and maybe this is where I have a question for you. I'm not an expert on the rotation in that so-called ACCORD system, but where I hear criticisms, the criticisms are something like the following.

I'll use the example of an electrician in my riding. It's a small electricians firm; I think there are two or three electricians who work in the company. Under this program called ACCORD, the government in effect, at any given time, selects two or three companies on a random basis to bid on a small contract. One of the problems that presents itself to this small electrical firm in my riding is they don't know who is under consideration at any given time. By the time the process is finished and the selection is made, it's already too late. The company has already decided that it's going to hire Mr. Smith as electrician and not this particular electrician in my riding, even though he may, and I emphasize may, have some natural advantages to provide - but he can't get the information.

I understand there are questions and matters of privacy and so on, but it seems to me that - and perhaps I should be addressing this question more to Public Works than to you - we should be doing everything possible to get as many people into the system as possible.

Speaking of the constituent I have in mind, he said he was very much involved in the building of a school. A number of years later there had to be some repairs. Public Works called for a contract, but he was never told. Because he did the work at the school, he felt he had the best opportunity to do the repair work, but he never had the information, so he was, as they say in the vernacular, ``SOL''. Thank you.

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Mr. Atkinson: I would like to deal with your third question first, because it's the easiest one for me to deal with.

I absolutely agree with you. It is a problem. The only thing I would say in defence, if you will, of Public Works, who don't need me to defend them -

The Chairman: They're coming right after you.

Mr. Atkinson: - is that the old system not only had that problem, but had much more in addition to that. It was essentially the list in my bottom drawer. From that perspective, yes, I think ACCORD doesn't deal with that either.

With respect to your first one about access, first of all, I only concentrated on that part of it to make the distinction that what ought to be the objective is access, not result. I absolutely agree with you that meddling even in this area can cause irreparable damage.

The point I was trying to get across was that where somebody has been disadvantaged, you don't necessarily have to favour them. For example, one of the constant concerns we hear from not only aboriginal businesses but some small businesses - and I'm sure you've heard this - is that it's often difficult for them to get bonding or types of contract-for-tender security requirements.

I would say that on the particular projects, you don't say, ``Okay, you don't have to put up tender security, but all you people who can get it still have to''. What you would do is look at your tender security requirements in your contract security requirement and ask, do we really need this? Can we, in this particular project, given perhaps its value or its location, etc., say that on this project we are not going to require the traditional security requirements for all bidders - not just the disadvantaged or the one who wasn't able to access that?

I think your point is well taken. Certainly if there were some kinds of interventions in that area to try to help out a disadvantaged firm and it ended up disadvantaging other firms in the process, we would be the first one knocking on your door asking you to stop. From that perspective, I think we're of the same mind.

With respect to CORCAN, I again agree with your comments about the need to put the prisoners to some kind of effective work-rehabilitation process. What I would argue is why can't they work for the private sector, given the security problems and all that comes along with it? I'm sure my mechanical contractor members wouldn't mind going in and doing those mechanical repairs using people on site, if I can say that. From that perspective, I'm not arguing against the prisoners' welfare in that situation. I'm saying, however, that I find it hard to believe what the public policy is, which is to allow a ``government or public sector organization'' in fact to do that. If it's indeed for the health and welfare and betterment of the prisoners, then let them work for the private sector first.

The Chairman: On that point, Mr. Atkinson, thank you very much for coming before us.

Mr. Bryden: Mr. Chairman, on behalf of those who have been questioning the witness, I want to congratulate him on his excellent testimony. It's some of the most intelligent and interesting testimony we've heard here for quite a long time.

Mr. Atkinson: I wish I could take the credit, but I have 20,000 members behind me who -

The Chairman: Thank you again for your testimony and for the quality of the testimony.

Mr. Harvard: It was constructive, right?

The Chairman: It was very constructive.

Members of the committee, still to come we have the Treasury Board Secretariat and Public Works and Government Services. I would call both Mr. Campbell and Mr. Williams, and their officials, to come before the committee and provide a very brief opening statement. We are running behind because Mr. Atkinson's testimony was so constructive, to use Mr. Harvard's term. We have run a little behind, which I apologize for, but we do want to hear from you, and I know that members have some very probing questions for you gentlemen this afternoon.

We're going to start with Mr. Campbell. Mr. Campbell, please introduce your associate.

Mr. R.K. Campbell (Director, Contract, Project and Risk Management Division, Treasury Board Secretariat): Thank you very much. It's a pleasure to be here once again before this committee. I'm Ron Campbell and I'm the director of the contract, project and risk management section of the newly established office of the deputy comptroller general.

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With me is Bob Kelly, who is the group chief of contract management. There are a couple of things in Bob's area. One, he has responsibility for the government's contracting policy and also for the number of reports that are now in place as a result of Treasury Board requirements for reporting and the various trade agreements, each of which have their own reporting requirements.

We have here, and I hope it has been distributed, the latest contracting report for the 1994-95 fiscal year. It was reviewed and accepted by Treasury Board last Thursday and as a result was distributed out of the president's office to your committee yesterday, I believe.

The data in this 1994-95 report reflect a period in transition. The request for data was issued to departments back in early 1994. You'll note that was approximately one year before the previous reports were presented to this committee. Because interest in earlier reports, these being the ones from 1991-92 and forward, had concentrated on total contract award statistics, coupled with additional reporting requirements imposed upon departments and agencies by the North American Free Trade Agreement, which came into effect on January 1, 1994, departments and agencies were not requested to provide data on contract amendments during 1994-95.

The basic data used in the report you have before you was data collected by Public Works and Government Services Canada from the various departments and agencies that come under Treasury Board's contracting policy, as well as the information on contracts that this department does on behalf of itself and its various client departments.

The report also marks the beginning of Public Works and Government Services Canada as the collector of contracting data for these types of reports - both these and the various reports involved with trade agreements. The collection procedure required to permit preparation of a growing number of reports, etc., will now be part of this collection by Public Works and Government Services Canada.

Complicating the matter, however, is the fact that the agreement on internal trade, which came into effect July 1, 1995, and the World Trade Organization agreement on government procurement, which came into effect in January 1996, have thresholds, scopes and extent of coverage that differ from each other and also from the North American Free Trade Agreement. So departments are now faced with providing information on different thresholds and at different times of the year in order to meet their various commitments, both internationally and to the annual report required by the Minister of Treasury Board.

Departmental data on contract amendments were not requested from the departments and as a result were not practically available for this particular annual report. However, Public Works and Government Services Canada was requested to provide information on amendments it undertook on contracts it manages both for client departments and itself.

These figures from 1993-94 and 1994-95 cover a significant portion of the federal contracting activity, and in the report they will provide a proxy for reviewing this aspect of contract management. Beginning in 1996, departments have been requested to provide better data that will enable greater analysis of both contract entry and amendments in the future.

You have recently been provided with the report and I believe also with a short deck. If we turn to slide 2 of that deck, we will look at a summary of the contracting activities by the government departments during 1994-95.

You'll note that the total value of contracts awarded was $7.4 billion, compared to $8.9 billion for 1993-94. This total consists of just under $1 billion for contracts below $25,000 and $6.4 billion for contracts valued at $25,000 and above.

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The overall decrease of approximately $1.5 billion in the value of contracts awarded during 1994-95 is accounted for in declines primarily in four departments. Public Works and Government Services Canada, on behalf of other departments and themselves, had a decrease of approximately $841 million. Health Canada had a decrease of $313 million. Transport Canada had a decrease of $300 million.

The Chairman: Mr. Campbell, could I just ask you something? This information is in the deck and members of the committee can certainly refer to it. I'm sure a lot of the information you may be providing to us in your preamble would probably come out in the actual questioning. Given the time constraint we're faced with, I would prefer to allow the members to actually ask questions that are pertinent to what we want to in fact include in our report.

I'll allow you a minute to wrap up, and then I want to go to the questioning. Actually, before going to questioning, we need to go to Mr. Williams, who will be extremely brief, I understand, so that we can allow the questioning to continue.

Mr. Campbell: Very briefly, just to wrap up, the conclusions are that a number of changes have been introduced, including the $25,000 ceiling or threshold for competition. We feel the steps that have been taken with departments will improve the competitive percentages of contracts starting with the 1996 year, which would in effect be the first year after these changes have been introduced.

The Chairman: Thank you, Mr. Campbell.

Mr. Williams, very briefly.

Mr. Alan Williams (Assistant Deputy Minister, Supply Operations Services Branch, Department of Public Works and Government Services): Thank you very much.

I'm not going to read my speech at all. You have it in front of you. I thought it might be useful for me to give you some feedback on what I've heard already, just to take one or two minutes based on what the federation and the CCA indicated.

I was struck by the federation's comment about no confidence. As you're probably aware, we do a survey just about every year. The last survey we did was in the summer of 1995, a year ago. Of the 24,000 subscribers, 90% indicated satisfaction with the system, which was up 7% from the year before, and 83% said they would recommend it to others. So I would debate that point with him.

Having said that, we recognize it's not perfect. There were a lot of comments here about access and costs. Let me talk about that for a moment.

We have recognized the problems with access. Last year we conducted over 180 kinds of seminars, which 14,000 suppliers went to. Already this year, if you look at the number of times we've done OBS demonstrations, seminars, and trade shows, there are more than 500 of these occurrences, with over 20,000 suppliers attending. While this isn't the only answer, I think it's fair to make you aware that we're trying to respond to your comments and other critiques by much more aggressively going out and trying to make companies aware of the system.

Cost is a big issue. I guess I could say that if we were to sole source everything, the cost would be a lot less. What you're really trying to do is balance your different priorities. Our commitment is to openness and transparency. That does cost some money. It's not free.

I think it's also fair to note that in the contract that's expiring in May 1997, the existing provider did lower the costs, and we are now in the process of finalizing a new contractor. The winner will be announced within the next month or so, I hope.

The costs associated with this initiative are going to be dramatically lower than they have been. The system is now fully linked on Internet. Everybody can get it. Bid sets are now electronically distributed, which cuts back on the cost of mail by about 15% to 25%. It cuts back on the cost of faxing this material by about 40% to 60% and it cuts back on the cost of courier service by up to 80%. These are enhancements that have been made just over the last few months in order to try to address this.

The new proposal that's coming in goes even further. It provides increased accessibility to the MASH community, if you will, to municipalities, schools, hospitals, etc. It involves provinces. Again, you'll see an efficacy of the system here whereby suppliers, by going to one system, can get all of the opportunities, not just from the federal government but from the provinces as well. These things not only are more cost-effective but dramatically reduce the paper burden exercise too.

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For those who aren't aware, over the next two days there will be a conference, also involving the federation, on how to reduce the paper burden as well. That's only to say we're trying to aggressively satisfy some of these concerns.

There is also one other initiative, made reference to by this committee last year, called Contracts Canada. That's an initiative we're aggressively pursuing that will allow one point of information for suppliers, city by city, and hopefully will dramatically simplify the access to the government.

I have one final comment dealing with favouritism. I can't let that go by. There's always the concern that in fact there's bureaucratic patronage going on. I'd be naive if I said it didn't happen. On the other hand, I can say there are a great number of appeal and redress mechanisms in place now.

The CITT is a clear-cut example. In the last seven or eight years, of the tens of thousands of contracts, less than 0.5% have gone to CITT, and you can count maybe 30 or 40 where we've been found wanting - not that that's acceptable. Any time we do wrong is not good, and we try to redress it by learning.

This is only to say I'd like people to come forward with examples of where we showed favouritism as opposed to simply making accusations that there is favouritism. If we do find it, we'll try our best to address and ensure it doesn't happen again.

The Chairman: Thank you.

[Translation]

Mr. Fillion.

Mr. Fillion: Did I understand correctly? No one was accused this morning.

Mr. Williams: Absolutely, but from time to time someone indicates that these things are happening. If that is the case, I want to obtain the information. That way, I can follow the situation and deal with it.

If there isn't integrity in the process, I can assure you that we will make changes in our monitoring to improve the situation.

Mr. Fillion: Of course, these issues of integrity and favouritism may bother some people, but as long as there will be people awarding contracts, doing the judging and analysing, then we will have to be vigilant.

In a system such as ours, 98% of what is done is fine, but that is not what appears in the papers and that is not what people come to tell us about in our offices. It is the other 2% that we have to deal with. People are very aware of that.

So this should not be taken as an attack to demolish someone or an organization. We simply want to know if you are taking the necessary precautions.

Earlier on, you used one of the answers of the Canadian Construction Association in your preamble when you said that you were flattered because they seemed to be saying that the system was watertight. But there is always a risk somewhere. It often happens and sometimes it is discovered three or four years later, when the politicians have left. That is what hurts, that we were not able to find out about it when we had our positions. However, we still have to be vigilant, because we are dealing with Canadian men and women's money.

This is not a trick question. I know that it is costly to make a bid, and those who want to be informed have the right to go and to be invited to make a bid.

How much time and money can you spend to try to make your system more transparent? It is important that the people have the information and that everything be transparent. People are not afraid to discuss things when everything is transparent.

If mild criticisms are still being made, it is because things still need to be improved.

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Mr. Williams: As I said, we are implementing a new system. In our opinion, this system will be much more open. It will meet the needs of the suppliers much better. The system will cost less and be more open. This system will be implemented in May 1997.

We have not yet completed the update of the system. Our department, together with the federations and the private sector can develop a system that responds to their concerns. I will be talking to Mr. Gray myself in order to invite him to participate in the development of the new system. In this manner, the system will perhaps better meet his requirements.

Mr. Fillion: Some associations are satisfied and still others are more or less satisfied and have made some recommendations.

Mr. Williams: Absolutely.

Mr. Fillion: One association even suggested that an ombudsman be appointed to resolve certain conflicts. Would this be because there are conflicts and people are drawing them to your attention?

Mr. Williams: We know that we cannot make all of our clients happy, but we are trying. I will also be working with Mr. Atkinson and the federations. Perhaps we will be able to resolve certain situations by doing this.

Mr. Fillion: Earlier, an issue was brought up concerning the Canadian Construction Association and the public and private sector phenomenon. In the professional services sector, we have small firms in our regions. We are not talking about Lavalin here. These are small firms employing a dozen or so individuals who live off of contracts awarded to them by the municipalities and the school boards. It is more difficult for these firms to deal with the governments as they are very remote.

Are you going to be turning to these types of firms more often? Are you going to be privatizing these services to a greater extent? Have you begun privatizing?

Mr. Williams: We will be providing the municipalities and the provinces with a great deal more information on a more regular basis in order to give them an opportunity to bid on a contract.

Mr. Fillion: You have not answered my question.

Mr. Williams: I know. I cannot guarantee...

Mr. Fillion: Right now, are you turning more toward the private sector for architectural and engineering projects?

Mr. Williams: Without a doubt.

Mr. Fillion: Today, in 1996, are there many more private firms than there were in 1993 in these two sectors?

Mr. Williams: Without a doubt. We are completing a report with the architects and engineers. They participated in the preparation of this report. I am hoping that the report will be finished by December or January. It appears to me that the recommendations made in this report will be in line with what you have just said.

Mr. Fillion: Okay.

[English]

The Chairman: Thank you, Mr. Fillion.

Mr. Bellemare, please.

Mr. Bellemare: Mr. Chairman, I wish I had 20 minutes.

The Chairman: You don't.

Mr. Bellemare: How much time do I have?

The Chairman: You have five minutes.

Mr. Bellemare: Then I will be cutting off the witness on many occasions.

The Chairman: I would only suggest this, Mr. Bellemare. If you make your questions very pointed and allow the witnesses to answer them, I'll ensure they answer them very specifically.

Thank you.

Mr. Bellemare: First I have a comment.

I don't appreciate, and I'm quite sure my colleagues don't appreciate either, that we got a snow job this morning, the snow job being that we get a tonne of papers that we are expected to read while we're listening to other witnesses. That is not appreciated; take note.

My second point is this. You said we should come forward with names of those who accuse your people of favouritism. It's a topic I am extremely knowledgeable about, and you're probably aware of it. I've advised deputy ministers on this subject.

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The problem is one of blackballing, and you know what I'm talking about. No one, no contractor, no worker in his right mind will put the finger on your managers who should be fingered, because of the problem of blackballing. You know what I mean by blackballing: ``No more contracts, sir. You're out of business.'' This is the problem.

You should have a mechanism to be able to do more than what you do now. You investigate, but it stops right there. If we are in a mode of decreasing the number of employees, perhaps those who are highly suspected on a continuous basis are the ones who should go first, not the good workers.

In your report, which I hardly had time to glance at, you talk about the number of contracts being valued at $8.6 billion.

A voice: That would be, I believe, the Treasury Board.

Mr. Bellemare: It doesn't matter; I prefer talking to the deputy minister.

There's no breakdown here. Is this $8.6 billion for service contracts, construction contracts, procurement contracts and government agencies, including CIDA, the RCMP, NRC, you name it - everything that we can say is federal property? Does that include all of that?

Mr. Campbell: Yes, it does. It gets -

Mr. Bellemare: Why don't we have a breakdown of the $9 billion? Is it for service, is it for procurement, or is it for construction contracts?

Mr. Campbell: That breakdown was not available in 1994-95. It will be available in 1996. It will be broken down into several different categories.

Mr. Bellemare: Why is it not available?

Mr. Campbell: Because the request for the departments went out in early 1994, at a time when the main purpose of the report was to provide a total picture of government contracting, which was a requirement of the Treasury Board at the time. It's been subsequent to then -

Mr. Bellemare: Wait a minute. Every time Treasury Board comes here, they tell us they set policy, they give directives and they collect data.

I would assume you're all a bunch of writers. You don't do much management.

Do you do any corrective management? When a contract goes improperly, either in your eyes or in the eyes of the contractors or the general public, do you have corrective measures? Do you have corrective measures that you put in application? Do you walk into a department and say, ``You should not have done that and this is the penalty''? Do you do that?

Mr. Campbell: Personally, I do not. Treasury Board delegates authorities to departments. These delegated authorities can be reviewed and revoked.

Mr. Bellemare: So as long as each department has its own feet in there, they run their own show.

Mr. Campbell: Each department has -

Mr. Bellemare: And they can interpret your directives.

Mr. Campbell: Within the context of the directives, there are requirements they must follow.

Mr. Bellemare: What if they don't follow those?

Mr. Campbell: If they do not follow them, then they can be taken to task by -

Mr. Bellemare: They can be taken to task. Have they ever been taken to task? Can you give me one example?

Mr. Campbell: I'm not aware of any particular case.

Mr. Bellemare: You cannot give me any examples.

Let's move on to the OBS. OBS is a system of putting everything on a database and turning it over to private industry. Private industry then sells the information to the general public who wants to contract with the government.

I don't find that a very good system. We should be running the system. If people want information from the government, they shouldn't have to pay a private contractor, because that poses very many hard questions. OBS should be on some kind of Internet site that everyone can access. If people want material, paper, documents, that is what they should be charged for.

I sat through a whole morning in a private company downtown here looking at how OBS operates, and I was not impressed. As a matter of a fact I was cheesed off because of the time it takes, the slowness. This private company actually misuses time, because the minute a little contractor gets on the OBS to get a contract, time is of the essence. They pay by the minute. It takes time, and the flipping of pages... I think you're working on a 286, while private industry is working on a 486, or even better if something else is out now. This is not proper, and then to charge people so much money that by the end of the day when they submit...it's overly costly.

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By the end of the week, if they submit to more than one contract, they just give up. That's why people give up, and that's why bigger companies, like Lavalin, come in and just take over everything.

This would not be a question period, because I'm just going to have an avalanche of fuzzy answers. The assembling of contracts -

The Chairman: You have about 30 seconds left, Mr. Bellemare.

Mr. Bellemare: I don't appreciate the assembling of contracts. How can the little firms in Toronto and Montreal - two big cities - and Ottawa compete with the big organizations? If you're going to assemble contracts, for example, a contract that's supposed to be let out in Toronto or in Ottawa here, assembling it in such a manner that only huge firms can actually bid on it...

A little firm that wants to repair part of a shop, building, floor, office, just can't because there's a comfort zone, I think your person in charge of OBS knows what I'm talking about - a comfort zone - and right now you're preparing new directives for the manner in which we're going to attack OBS or present OBS to the general public.

The Chairman: Okay, thank you -

Mr. Bellemare: The problem -

The Chairman: - Mr. Bellemare.

Mr. Williams, could you address the part of Mr. Bellemare's statement with respect to the OBS and how you're establishing these new directives. For the benefit of the committee - and this may alleviate a lot of Mr. Bellemare's concerns, although I'm not sure - can you be specific with respect to the changes and the specific improvements you're going to be announcing or introducing to OBS. Then I want to go to Mr. Bryden.

Mr. Williams: Thank you. I'll try not to be too fuzzy.

The existing OBS system was developed in 1992. A lot has changed there. This new system will be fully Internetable. In fact, you can get onto the web site even today, if you want to. The search engines are much faster and much more explicit. It's accessible by many more organizations, other than just the federal government. So without any question, it's brought it up, I would say, a couple of levels in a much more dramatic way.

Will it satisfy everybody? No. But of the 24,000 people on it, two-thirds have fewer than 50 people. So it is in fact addressing a lot of small and medium businesses. It's not the perfect system, but this new version will address virtually all the concerns you raise.

The Chairman: Thank you.

Mr. Bryden.

Mr. Bryden: On that point, may I suggest that when you have an opportunity to bring that system, let us have a live demonstration as we had about a year ago.

Also, to give you a bit of encouragement, Mr. Williams, I did note - and I will mention it for the record of this committee - that the CFIB survey was focused on small businesses that would normally be interested in the OBS possibilities. Of 15,000 questionnaires sent out, only 2,700 were returned, which is a response rate of only 18%.

I point out to the members of the committee that this illustrates the comments of the witness. The data he had collected have to be looked at very gingerly, shall we say, because this is obviously a very crude tool.

I wouldn't suggest to you, Mr. Williams, that this committee would suggest that you set policy based on questionnaires with such low results.

Finally, Mr. Chairman, I agree with Mr. Bellemare that the report on government contracting by departments and agencies is of major interest to this committee, and we dealt with it in great depth before. We've had little opportunity to examine it, and indeed, Mr. Chairman, there are a number of other reports pending before this committee that we haven't had a chance to examine. So I would like to suggest that rather than trying to explore this particular report at this time, perhaps this committee could have an informal in camera meeting in which we can update ourselves on all such reports and determine the line of questioning we would like to take and the witnesses we would like to have back.

Perhaps these gentleman... I'm sure they would like to come back -

A witness: Very much.

Mr. Bryden: - if we had a chance to have a game plan.

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The Chairman: In my conversations with Mr. Gilmour...and I'm sure Mr. Fillion would probably agree that we're in agreement with what you're suggesting. The clerk in fact is going to be putting aside a date to go through that exercise. So thank you, Mr. Bryden.

Mr. Harvard please.

Mr. Harvard: Thank you. I, too, want to allude to this issue of OBS. You heard Mr. Gray from CFIB dump all over OBS. He went so far as to say that it's really not worth telling his membership about.

I really was thunderstruck when he said that over 40% of the respondents to the survey he carried out were not aware of OBS. Now, I don't know, maybe the survey was carried out on Mars.

If over 40% of the CFIB members are not aware of OBS, that's akin to politicians not knowing they're going to have to file papers to contest for elected office. That kind of ignorance is stunning, and also disturbing.

So my question would be something like this, Mr. Williams. Let's assume that Mr. Gray is guilty of some hyperbole. Let's say that perhaps the figure is not 40%. Let's just guess that the figure may be closer to 5%. Even that I would find very difficult to believe. If I'm a businessman, I would be asking myself questions like, well, what is my product? What is my service? Who might be interested in my products and service? Perhaps even the federal government would be interested. Now, how do they go about procuring my product and my service? This doesn't take rocket science.

My question would be something like this. Let's assume there is some ignorance out there about the service. Have you been able to get to the bottom of the ignorance? What causes it? Why wouldn't someone who is in the business of being in business know how the federal government goes about procurement?

Mr. Williams: I wish I had a magical answer. We are doing our darndest to try to communicate. You can see by the numbers I gave you, like 500 forays into all parts of this country in the last5 months.

I will make a comment, though. I believe that when you talk about the federation's clientele, a lot of them, of course, may be the local mom-and-pop store, the corner grocery, those kinds of things, that really have no interest. They're not there to do business with the Crown. That might be a big part of the clientele.

Having said that, I know I'm going to try to get a hold of them to follow up on your suggestion and to see if there's any way that together... I don't want to put words in his mouth or make him do something he doesn't want to do.

I agree with you. There's no reason why we shouldn't be able to aggressively go out and at least make people aware of when our seminars are coming up. He doesn't have to comment on them and give a value judgment, but simply make them aware that this is happening. It seems to me that we ought to be able to pool our forces to make this thing happen.

I agree there shouldn't be any reason... We certainly don't want there to be any reason that people aren't aware of this.

Mr. Harvard: The only thing I would add to that, Mr. Chairman, is that I didn't have a chance to talk to Mr. Gray, but I disagree with Mr. Gray when he suggests that the information about OBS is not worthwhile distributing to his members. I would suggest that if he is genuinely interested in improving his service - and I'm sure he is - the best way to do that is to distribute the information.

Give members of CFIB an opportunity to use it. Based upon that experience, they may come back to the government and provide all kinds of suggestions on how the service can be improved.

I think that would be a more realistic and a more responsible and constructive approach. Would you agree with that?

Mr. Williams: I would agree with that totally. It will be interesting to see his reaction to my offer to have him or some of his members assist us in the final design and development of the new OBS, to better meet their needs.

The Chairman: Thank you.

I believe Mr. Gray did say that he'd be willing to work with anybody, anywhere, any place. So I would expect a positive response to your particular invitation.

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Mr. Bellemare has a few additional comments.

Mr. Bellemare: I have two questions. I'll start with the easy ones.

You have a lot of people on standing orders, especially contractors and other people, professionals, and they're never called. Again, I go to the comfort zone of your managers who keep calling only the same guys - or the same ladies - over and over and over and over and over and over and over again. Do you get my point about ``over again''?

A witness: Yes.

Mr. Bellemare: The others that had standing orders accept that it could go three, four or five years - no show. What are you doing to improve on that?

Mr. Williams: I think you're referring to standing offers.

Mr. Bellemare: Yes.

Mr. Williams: These are a tool provided to departments across government to allow them to go to these lists of companies and avail themselves of their services.

Generally speaking, a department can only procure, let's say, for up to $5,000. This allows them to go up to $40,000, if they take it off a standing offer. So the accountability, first of all, rests with each government department.

Generally speaking, you're talking about fairly low thresholds, and so, generally speaking, there is no obligation for them to do the competition. You're quite right, they can go ahead -

Mr. Bellemare: Would it be possible to get the list of all those people who got contracts on standing orders, all the lists of all the contracts?

Here's what I'm looking for. Assuming for a particular section you have ten people on a standing order. My suspicion is that maybe two are called upon constantly. I'd like to know who these two - or these three or this one contractor - are and why the others aren't called upon. I think there's a malaise there in some sections.

Mr. Williams: I'd be happy to give you... For perspective, there are about 12,000 standing offers out there.

Mr. Bellemare: Could you do that?

Mr. Williams: Let me see what information is readily available. Keep in mind, as I said, that most of these procurements are done by departments across the government, so in our department -

Mr. Bellemare: But you keep data; you told me that at the beginning of the meeting. You are a data collector, so can you collect that data for me?

The Chairman: I think Mr. Lipsett wants to speak. Can you answer the question specifically?

Mr. Barry Lipsett (Director General, Supply Program Management Sector, Department of Public Works and Government Services): Perhaps I'll just add something. We'd certainly be more than pleased to provide you with a list of standing offer holders, and we can break it down by commodity and region, or however you would like it.

Mr. Bellemare: Yes. Will I also be able to get from the other gentleman the amount of service contracts that were provided for that $8.6 billion?

I'm not interested in procurement for the contractors. I'm interested in government downsizing and whether we are not spoiling, wasting, or being foolish about going out and hiring staff on the outside and creating the phantom public service, which I keep mentioning at every meeting.

The phantom public service is like the Phantom of the Opera. They're all making money outside, but they're killing the public service culture. In a few short years, we won't have you four here. You'll all be retired, and there will be no one to expound on that.

My last point -

The Chairman: Could I get Mr. Campbell to respond to the question?

Can you provide that information to Mr. Bellemare?

Mr. Campbell: I believe we can get the total for service, but don't forget that service consists of everything from servicing military equipment to temporary help. We would not have the breakdown since...it would require individual departments to provide it. I don't think it would be readily or economically available.

Mr. Bellemare: I don't mean servicing army trucks. I mean providing a service, like a professional service, teaching a second language, or someone who comes into the department and works on a database and does this kind of work. This is what I mean by service.

Mr. Campbell: I realize that, but we would only have an aggregate that's called service -

Mr. Bellemare: Could you give me that?

Mr. Campbell: - versus goods versus construction.

Mr. Bellemare: My final, final question, Mr. Chairman, may be provocative in some quarters where people possibly like to have the monopoly on all the contracts.

How can you, Mr. Deputy Minister -

A witness: Assistant -

Mr. Bellemare: Assistant - I just promoted you.

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How can you, Mr. Assistant Deputy Minister, in Public Works, tolerate what is going on now in the national capital region? Contractors on the Hull side, the Quebec side, and - the word ``mobility'' was used - the subcontractors and the workers may work anywhere they feel like in the national capital region, if they are from la belle province de Québec. But those on the Ontario side may not - cannot - work on the Quebec side. How can you tolerate this happening in the public domain, in the federal buildings? You cannot do anything about interprovincial rules and laws, because what happens over there, whatever they want to do, that's their business, but we do it over here in Ontario. Fine.

But in our federal buildings, how is it that we discriminate for a group and against the rest of the community in the contracting field by adhering to those malicious rules, where someone from my riding cannot go and work on the Quebec side unless he or she is going to be caught, penalized, picked up by the police, the Quebec police, and brought to court?

Why do we tolerate this in federal buildings?

The Chairman: Mr. Williams, please answer specifically on the federal role in what Mr. Bellemare has stated to you very clearly and distinctly.

Mr. Williams: We follow the provincial regulations.

The Chairman: Thank you.

Mr. Bellemare: Mr. Chairman, the federal government does not need to follow provincial regulations, especially when they are not correct, proper, or honest. That is a dishonest organization over there. They manipulate the mobility situation of workers - Canadian workers.

We don't need to do that. We can say that it is open bids to everyone, every Canadian. We can do this. This is the national capital region. These are federal buildings. We don't need to adhere to these stupid rules they have in Quebec.

The Chairman: Mr. Bellemare, you've made your point.

Mr. Fillion, the point Mr. Bellemare is making has to do with federal contracts in federal procurement procedures. The response by Mr. Williams is that they follow the provincial rules and regulations. We have essentially the exchange in the information that's there.

I don't know whether there's anything you can add to that particular discussion. This is a review and a study on federal contracting-procurement issues. The point has been made. Besides getting into a political debate here, which I don't want to do, I don't know whether you're going to be able to add anything.

I would suggest you would not be able to add anything to that particular discussion, so at this point I would thank the witnesses for coming before this committee. We as a committee have discussed, and Mr. Bryden had put forward, the suggestion that the committee will get together, perhaps in an in camera meeting, to discuss the reports that are before us.

The information presented to us this morning and this afternoon will certainly be part of that discussion. We may have to call back Mr. Williams, Mr. Campbell and other witnesses who have been before the committee. So I thank you for coming before this committee.

On Tuesday morning we have a request by the Professional Institute of the Public Service to appear before this committee on the study of public service renewal initiatives. We have an opportunity on Tuesday. Is it agreed to call these witnesses before this committee?

Some hon. members: Agreed.

The Chairman: Thank you. The meeting is adjourned.

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