Bait and Switch – Procurement Ombud Report
Last week, the Government of Canada’s Office of the Procurement Ombud released its Procurement Practice Report, Bait and Switch: Procurement Practice Review of Replacement Resources in Professional Services Contracts, which detailed its findings regarding tactics used for the replacement of resources in federal professional services contracts.
Report Rationale
The review and report came to fruition following a January 2024 appearance of the Procurement Ombud before the House of Commons Standing Committee on Government Operations and Estimates to discuss the results of his review of procurement practices of the Canada Border Services Agency (CBSA), Public Services and Procurement Canada (PSPC) and Shared Services Canada (SSC) pertaining to contracts associated with the creation, implementation or maintenance of the ArriveCAN application.
While the Office of the Procurement Ombud was presenting its findings, the Committee took particular interest in the practice of ‘bait and switch’, as it was found that in 76% of applicable contracts reviewed, some or all of the resources proposed by the successful supplier in their bid did not perform any work on the contract. Through a recognition that this ‘bait and switch’ practice represented a larger problem in Canadian federal procurement, after consideration of the available information and determination that there were reasonable grounds to do so, the Procurement Ombud launched a review to examine the replacement of resources in professional services contracts in order to assess their fairness, transparency, and compliance with legislative, regulatory, policy, and procedural requirements. The fairness of supplier involvement in the development of departments’ operational requirements was also examined.
Report Scope
To determine whether procurement practices regarding the replacement of resources were conducted in a fair and transparent manner, the selected departments for the Review were:
- Employment and Social Development Canada (ESDC)
- Global Affairs Canada (GAC)
- Immigration, Refugees and Citizenship Canada (IRCC)
- National Defence (DND)
- Shared Services Canada (SSC)
The above Departments were selected for review due to the value and volume of their procurement activities under the Task-Based Informatics Professional Services (TBIPS) and Task and Solutions Professional Services (TSPS). Based upon their contracting data provided, the Office of the Procurement Ombud selected 24 procurements for review.
Report Findings
The Report found that in over half of the files reviewed, the replacement of resources was correctly carried out, and the selection of the best-value supplier was not impacted. However, there were instances where the replacement of resources did not meet or exceed the qualifications of the original resource proposed to secure the bid, which does raise concerns regarding the fairness of the federal procurement process. The Report also recognized that while PSPC policy changes have effectively eliminated the prevalence of the ‘bait and switch’ practice, negative impacts upon certain suppliers for departments to mitigate could follow.
Procurement Recommendations
The Report identified the following four recommendations to be implemented to eliminate the practice of ‘bait and switch’:
Recommendation 1: DND and SSC should review its policies and training, and update as required to ensure mandatory resource criteria address the minimum qualifications required by the selected method of supply.
Recommendation 2: PSPC should ensure that the solicitation templates for all methods of supply (MoS) include resulting contract clauses requiring the following when the assessment of specific individuals’ experience or qualifications are a factor in the selection of the best-value supplier:
- The replacement resource has qualifications and experience that meet or exceed those obtained for the originally proposed resource.
- A reason is on file that provides sufficient detail to demonstrate that the originally proposed resource is unavailable due to circumstances beyond the Bidder’s control.
Recommendation 3: PSPC should define what a “large” task-authorization (TA)-based contract is and develop guidance to assist Contracting Authorities in making this determination to ensure application of a common and consistent standard in determining when to apply the condition identified in paragraph 5.3(d)(v) of the MLUA. PSPC should include the definition as an instruction in the solicitation templates.
Recommendation 4: IRCC and SSC should discontinue the practice of evaluating individual resource qualifications at the bid evaluation stage for large TA-based contracts where multiple resources are required, in compliance with the terms of their MLUAs.
Response and Next Steps
In response to the findings, PSPC, ESDC, IRCC, and SSC all released official organizational responses which were included in the Report.
To follow, a review will be conducted in 2-years to determine whether the federal organizations have implemented the above 4 procurement recommendations.