2024 Reports 5 to 7 of the Auditor General of Canada to the Parliament of CanadaPolicies frequently disregarded by federal organizations when awarding professional services contracts
Ottawa, 4 June 2024—A report from Auditor General Karen Hogan tabled today in the House of Commons concludes that federal organizations showed a frequent disregard of federal contracting and procurement policies and guidance when awarding 97 professional services contracts to McKinsey & Company between 2011 and 2023. The value of contracts that departments, agencies, and Crown corporations awarded to McKinsey & Company during this period totalled $209 million, and $200 million of that was spent.
The extent of non‑compliance varied across organizations; however, 9 out of 10 departments and agencies and 8 out of 10 Crown corporations failed to properly follow all aspects of their procurement policies and guidance on at least 1 contract. For example, in 10 of the 28 contracts that were awarded through a competitive process, the audit found that bid evaluations did not include enough information to support the selection of McKinsey & Company as the winning bidder. In addition, in 18 of the 19 contracts issued under the national master standing offer with McKinsey & Company, organizations did not provide the required justification for using a non‑competitive process.
The audit found that contracting practices within each organization often did not demonstrate value for money. In 19 of the 33 contracts included in a representative sample, the audit found one or more issues that prevented organizations from demonstrating that the contracts had delivered value for the money. These issues included a failure to show why a contract was necessary, no clear statement of what the contract would deliver, and no confirmation that the government received all expected deliverables.
As the central purchasing and contracting agent and subject matter expert for the Government of Canada, Public Services and Procurement Canada did not challenge other federal organizations when awarding some contracts on their behalf. For example, in instances where multiple contracts were awarded for the same organization to the same vendor for a similar purpose and within a short period of time, the department did not challenge the organization requesting the contract about whether the procurement strategy used was appropriate.
“While this audit focuses on contracts awarded to McKinsey & Company, it highlights basic requirements and good practices that all federal organizations should follow when procuring professional services on behalf of the Government of Canada,” said Ms. Hogan. “Federal contracting and procurement policies exist to ensure fairness, transparency, and value for Canadians—but they only work if they are followed.”
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The 2024 Reports of the Auditor General of Canada, Report 5—Professional Services Contracts, is available on the Office of the Auditor General of Canada website.
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