Audit at a Glance—Chapter 7—Outsourcing Building Management Services—Public Works and Government Services Canada

Audit at a Glance

Chapter 7—Outsourcing Building Management Services—Public Works and Government Services Canada

What we examined (see Focus of the audit)

In this audit, we examined whether, when outsourcing building management services, Public Works and Government Services Canada had adequate controls to monitor that the service provider complied with the contracts’ terms and conditions. This work supports the Department (and other government departments) in ensuring that the following selected obligations related to building management services would be met: environment and health and safety, building security, operational building continuity, accessibility, and fairness when subcontracting. We selected these obligations because of the potential impact on the public servants and the public who use the buildings should these obligations not be met.

What we found

Controls were adequately designed to address contractual requirements in support of selected building management obligations (see paragraphs 7.16-7.24)

The finding is important because, when outsourcing building management services, Public Works and Government Services Canada is supposed to have well-designed controls that, collectively, when applied as designed, provide reasonable assurance that the service provider is complying with the contracts’ terms and conditions.

Implementation weaknesses reduced the effectiveness of the Department’s controls (see paragraphs 7.25-7.56)

We found that the Department’s monitoring controls identified useful information. Nevertheless, we found deficiencies in the way the Department conducted each monitoring control we examined (its Quality Monitoring Program, environmental due diligence reviews and accessibility evaluations). For example, we found a lack of information to support critical decisions and to demonstrate the extent of work conducted for the Quality Monitoring Program, which is the key control used by the Department to monitor the service provider’s compliance with the relevant contract requirements. We also found specific monitoring issues related to buildings that are owned by other government departments or leased by the Department, and problems related to performance incentives.

This finding is important because weaknesses in the implementation of controls reduced the Department’s effectiveness in monitoring the service provider’s compliance with contractual requirements—work that supports the Department (and other government departments) in ensuring all applicable obligations would be met.

Recommendation. Public Works and Government Services Canada should implement its controls rigorously. It should:

• clearly define and document roles and responsibilities of all players, including itself and other government departments, in monitoring the service provider’s performance and in ensuring that selected obligations are met;
• determine and document which monitoring controls are to be applied for each category of buildings managed under the contracts;
• consistently and rigorously apply the appropriate controls to address the implementation weaknesses identified in the report.

(See full recommendation at paragraph 7.56.)

Response

The Department has agreed with our recommendation, and has responded (see List of recommendations).

Why this audit is important

For about 1,800 locations across the country, the Real Property Branch within Public Works and Government Services Canada provides building management services. The buildings contain offices and other workspaces for a large number of public servants who deliver government services and programs to the Canadian public. For some of these buildings, the Department has outsourced building management services to the private sector.

Following competitive processes in 2004 (which we have not audited), a single service provider, SNC-Lavalin Operations & Maintenance Inc., was awarded eight contracts covering buildings in six regions across Canada. The total approved value of the eight contracts is $5.91 billion over 10 years.

The contracts started in 2005 and expire on 31 March 2015. The Department is undertaking a procurement process to replace them. The Department expects that the total value of the new contracts will be significantly higher, possibly more than double the value of the 2005 contracts.

Details of the audit

For more information, please click here.