Compared to the C$496 billion the federal government spent last yr, these amounts are minuscule. But this week’s revelations about hundreds of thousands of dollars in potentially fraudulent invoices from subcontractors, coupled with the continuing ArriveCAN app scandal, show what a multitude government software development might be.
As Karen Hogan, the auditor general, found, even after an in depth investigation she will be able to not define exactly as much because it cost to create ArriveCAN, which was launched in 2020 to gather contact and health data from international travelers through the Covid-19 pandemic and coordinate quarantine activities. Mrs. Hogan’s best guess that is about $60 million for an app that was widely derided as difficult to make use of. The original budget was $2.3 million.
This week, federal officials announced measures to assist tighten supervision of government procurement, specifically for software services, said the government had asked the Royal Canadian Mounted Police to analyze $5 million in invoices from three software vendors for potential fraud. Officials didn’t name the businesses but said the suspicious accounts were unrelated to ArriveCAN.
Citing the course of the investigation, Jean-Yves Duclos, Minister of Public Services and Public Procurement, refused to supply details about potential fraud. But he suggested that contractors took advantage of the incontrovertible fact that government contracts were mostly in paper form to bill several government departments for a similar work.
“When everything was done on paper until recently, it was difficult for departments to coordinate and share this information,” he said at a news conference. Duclos noted that 98 percent of contracts are actually electronic, which allows officials to simply search for attempts to fraudulently duplicate invoices.
The political debate surrounding ArriveCAN and the auditor general’s report have highlighted that the government procurement system flows hundreds of thousands of dollars to firms that don’t actually create software. Rather, these firms are middlemen who find developers to do the work after which collect a big portion of the contract value for his or her efforts.
In the case of ArriveCAN, the intermediary was a two-person company, GC Strategies. The auditor general estimates that the corporate raised $19 million from the project. During a parliamentary hearing, certainly one of the corporate’s owners, Darren Anthony, stated this the right number was around $11 million. He also stated that he had not read the auditor general’s report and had no intention of doing so.
Regardless of the quantity, Mr. Anthony said that after paying the subcontractors who actually built the app, he and his business partner were left with about $2.5 million over two years. He said the corporate spent about 30 to 40 hours a month on the project. Following the publication of the Auditor General’s report, the government suspended all contacts with GC Strategies.
prof. Daniel Henstrapolitical scientist studying public administration on the University of Waterloo, told me that the rise of firms like GC Strategies was a direct results of the government’s decades-long shift from contracting out software development to public officials.
When a project must be accomplished on short notice, as was the case with ArriveCAN, the regular procurement system is “almost impossible to follow,” he said. Even if government officials were capable of discover all of the mandatory subcontractors – which Professor Henstry says is rare – certifying that they were as much as the duty after which contracting each of them would overwhelm the system.
For government officials, firms like GC Strategies are “like gold,” Professor Henstra said. “It is very advisable for the government to simply move the money through one of these companies, which are basically just a coordinating company, and ask them to find the actual contractors to do the work.”
But, he said, at each the federal and provincial levels, agreements sometimes “blow up,” as within the case of ArriveCAN, and lift uncomfortable questions on what exactly intermediaries do in exchange for hundreds of thousands of dollars of public money.
Professor Henstra said he believes Canadian governments currently outsource an excessive amount of work – including the policy consulting work he does for the federal government.
“If we had strong policy analysis capabilities in government, my services would not be needed,” he said. “They would and should do it in government.”
But the times when the government had a military of programmers who spent their entire careers in public service will probably never come back, he added.
Demand for skilled programmers continues to outstrip supply despite recent layoffs within the tech industry, Professor Henstra said, and no government is more likely to need to shoulder the fee of outbidding firms like Google and Microsoft for his or her services.
“There should be more such competences in the government,” he said. “The trade-off is that government action is expensive and likely to take longer.”
Still, Professor Henstra said that despite the present heated political debate, the rising cost of the ArriveCAN app and up to date allegations of fraud are exceptions.
“The government is really doing everything and its relationship with contractors is pretty good for the most part,” he said. “Bad actors can break the law and when detected, they face prosecution. But within the meantime, most of those contracts are entered into in good faith, are always evolving and serve the general public interest.
Trans Canada
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Originally from Windsor, Ontario, Ian Austen was educated in Toronto, lives in Ottawa, and has been writing about Canada for The New York Times for twenty years. Follow him on Bluesky: @ianausten.bsky.social
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