ETS Scandal

Last updated

The ETS Scandal is an ongoing[ as of? ] Canadian political scandal involving alleged wrongdoing by Canadian government officials in the award of a $400-million information technology services contract and allegations of political interference in the ensuing cover-up.

Contents

Background

In 2006, Public Works and Government Services Canada (PWGSC), the federal department in charge of contracting information technology (IT) services, issued a request for proposal for an Engineering and Technical Services (ETS) contract. The contract would involve the right to manage and maintain PWGSC's main computer systems and networks. [1] From 1999 to 2006, the firm that had been providing those services was TPG Technology Consulting Ltd (TPG), an Ottawa-based IT professional services company.

After initially being ruled ineligible for bidding on the new ETS contract based on its size, TPG was finally ruled eligible after partnering with another organization. However, in the new request for proposals, the government officials overseeing the evaluation decided not to use certain standard government procurement practices, such as requiring a fairness monitor to review the evaluation process and providing a debrief once the contract was awarded. [2]

On October 31, 2007, the $400 million contract was awarded to Montreal-based CGI Group. However, there were some inconsistencies in the scoring. Before the award of the contract, TPG raised concerns about the scoring of the technical evaluation in a press conference. [3]

Believing the process had been conducted unfairly, TPG launched a lawsuit in March 2008, raising concerns about the procurement process as well as possible political intervention, particularly from PWGSC Minister, the Honourable Michael Fortier. In his previous role as Credit Suisse First Boston’s key Montreal executive in 2004, Fortier had helped to underwrite CGI's $858 million acquisition of AMS Inc. [4] Based on this apparent conflict of interest, opposition parties and the media called for a public inquiry. [5] These calls were denied by the Conservative government.

On June 10, 2008, Don Powell, President of TPG, testified at a Parliamentary Committee about the irregularities in the ETS procurement. [6] In early 2009, TPG and 17 other defendants were charged with bid-rigging [7] by a newly appointed Crown Prosecutor, who had run for the Progressive Conservatives in the 1997 election. This charge has been presented by the media as retribution by the government against TPG and Powell for alleging unfairness in the procurement process and a political cover-up. [8]

Since 2009, the legal battle has continued, with more information coming out to indicate political intervention. [9]

Oddities

As a result of the many unusual circumstances surrounding the award of the ETS contract and its aftermath, many members of the media, politicians and judges (amongst others) have raised concerns in relation to this scandal. These include:

Government response

When asked in the House of Commons about any potential conflict of interest, the government's initial response was to deny any conflict of interest. [12] However, many of the questions raised in the House Standing Committee on Government Operations and Estimates remain unanswered. Members of the opposition parties (New Democratic Party, Bloc Québécois and Liberal) continue to ask about the issue but get no response from the government.

In February 2009, following press conferences and an appearance by TPG's owner Don Powell to a parliamentary committee, [13] a newly appointed federal Crown Prosecutor charged TPG, Powell and 17 other defendants with an as-yet-unproven allegation of bid-rigging. [14]

In April 2015 the first jury trial ended with not guilty on all counts verdicts for Marina Durward, Sue Laycock, Phil McDonald, Don Powell, Tom Townsend, Ron Walker, Devon Group, Spearhead Management and TPG Technology, with David Watts being acquitted in February by directed verdict. [15]

In May 2015 an official with the federal Public Prosecution Service of Canada confirmed that "There will be no appeal on any aspect of the trial. The case is complete". [16]

Having chosen a trial in front of a judge instead of a jury, the remaining defendants, Barry Dowdall, David Gelineau, Perry Henningsen, Donna Cona Inc. and Brainhunter, still face trial on the same information and set of facts. [17]

Conservative Party connections

This scandal involves a number of present or former Conservative officials:

Continuing controversy

The cases, particularly the lawsuit by TPG and the government’s bid-rigging charges against TPG, continue to be heard in Canadian courts.

TPG has also filed a lawsuit against the Government of Canada and three officials of the Competition Bureau for defamation and abuse of public office stemming from statements published by the government on the Competition Bureau website. The statements claim that there was evidence that TPG and other companies had a plan to defraud the government and to inflate prices.

Initially, in July 2011, Superior Court Justice Stanley Kershman dismissed the claim on the grounds that the allegedly defamatory words were not capable of bearing defamatory meaning.

However, upon TPG's appeal, the Court of Appeal for Ontario ruled in February 2012 that the dismissal of the defamation claim brought by TPG was in error, and TPG’s claim should be allowed to proceed to trial. The court ruled that Justice Kershman had erred, and it could not be determined, based solely on a Crown motion, whether or not statements made about TPG on the Government of Canada’s Competition Bureau website were defamatory. The ruling states, "The determination of that issue is better left to trial on a full factual record." [20]

This trial is also ongoing.[ as of? ]

See also

Related Research Articles

A request for proposal (RFP) is a document that solicits a proposal, often made through a bidding process, by an agency or company interested in procurement of a commodity, service, or valuable asset, to potential suppliers to submit business proposals.

<span class="mw-page-title-main">Educational Testing Service</span> Educational testing and assessment organization

Educational Testing Service (ETS), founded in 1947, is the world's largest private nonprofit educational testing and assessment organization. It is headquartered in Lawrence Township, New Jersey, but has a Princeton address.

Events from the year 2004 in Canada.

<span class="mw-page-title-main">Mike Duffy</span> Canadian former senator and journalist (born 1946)

Michael Dennis Duffy is a former Canadian senator and former Canadian television journalist. Prior to his appointment to the upper house in 2008, he was the Ottawa editor for CTV News Channel. In turning 75 on May 27, 2021, Duffy retired from the senate due to mandatory retirement rules.

Free Dominion was a Canadian conservative internet forum. The site used the phrase "Principled Conservativism" to describe its ideology.

<span class="mw-page-title-main">Bid rigging</span> Form of procurement auction fraud

Bid rigging is a fraudulent scheme in procurement auctions resulting in non-competitive bids and can be performed by corrupt officials, by firms in an orchestrated act of collusion, or between officials and firms. This form of collusion is illegal in most countries. It is a form of price fixing and market allocation, often practiced where contracts are determined by a call for bids, for example in the case of government construction contracts. The typical objective of bid rigging is to enable the "winning" party to obtain contracts at uncompetitive prices. The other parties are compensated in various ways, for example, by cash payments, or by being designated to be the "winning" bidder on other contracts, or by an arrangement where some parts of the successful bidder's contract will be subcontracted to them. In this way, they "share the spoils" among themselves. Bid rigging almost always results in economic harm to the agency which is seeking the bids, and to the public, who ultimately bear the costs as taxpayers or consumers.

<i>R v Canadian Dredge & Dock Co</i> Supreme Court of Canada case

R v Canadian Dredge & Dock Co is a landmark Supreme Court of Canada decision on corporate liability where the Court adopted the English identification doctrine for liability, which states that culpability for acts and mental states of a corporation can be represented by employees and officers on the basis that they are the "directing mind" of the corporate entity.

<span class="mw-page-title-main">Contract A</span> Concept in Canadian contract law

In Canadian contract law, Contract A is a concept applied by Canadian courts regarding the fair and equal treatment of bidders in a contract tendering process. Essentially this concept formalizes previously applied precedents and strengthens the protection afforded to those who submit bids in the tendering process. The concept was introduced in 1981 by the Supreme Court of Canada, in R. v. Ron Engineering and Construction (Eastern) Ltd. The court found that a "duty of fairness" was owed to all bidders by an owner in a tendering process.

In the United States, the processes of government procurement enable federal, state and local government bodies in the country to acquire goods, services, and interests in real property. Contracting with the federal government or with state and local public bodies enables interested businesses to become suppliers in these markets.

The Court of King's Bench for Saskatchewan is the superior trial court for the Canadian province of Saskatchewan.

<span class="mw-page-title-main">Agusta scandal</span>

The Agusta scandal, alternatively known as the Agusta–Dassault Case, was a major political scandal which occurred in Belgium during the 1990s, based on allegations that two multinational companies had used bribery to secure large defence procurement contracts. The companies in question, Agusta and Dassault, bribed numerous political office-holders in 1988 in order to secure a large order of Agusta A109 helicopters and the contract for re-fitting Belgian F-16 Fighting Falcon fighter jets respectively. The scandal came to light during investigations into the death of the socialist politician André Cools in 1991 and an official enquiry was opened in 1993. Numerous senior figures in both Walloon and Flemish socialist parties were implicated, including the incumbent Secretary General of NATO Willy Claes who was forced to resign.

Canadian Surface Combatant Royal Canadian Navy warship upgrade program

The Canadian Surface Combatant, formerly the Single Class Surface Combatant Project is the procurement project that will replace the Iroquois and Halifax-class warships with up to 15 new ships beginning in the mid to late 2020s as part of the National Shipbuilding Procurement Strategy.

Eurest Support Services (ESS) is a subsidiary of the catering company Compass Group PLC specializing in harsh-environment large-scale food service and facilities management. Its primary clients are military forces and other security services, major defense contractors, and construction, mining, and oil exploration and production facilities worldwide.

<span class="mw-page-title-main">Government procurement</span> Purchases by a government body

Government procurement or public procurement is the procurement of goods, services and works on behalf of a public authority, such as a government agency. Amounting to 12 percent of global GDP in 2018, government procurement accounts for a substantial part of the global economy.

<span class="mw-page-title-main">Star Route scandal</span> 19th century U.S. Postal Service delivery route contract award scandal

The Star Route scandal was a political scandal in the United States, stemming from allegations of bribery and bid rigging in the United States Post Office Department which came to light as early as 1872 and which were the focus of public scrutiny following the election of President James A. Garfield. There were no fewer than four federal investigations into bribery in the postal service from 1872 through 1883. The scandal and public reaction to it contributed to the passage of the Pendleton Civil Service Reform Act.

GCSurplus is a Canadian government department responsible for handling moveable Crown assets that a federal department or agency has declared as surplus under the Surplus Crown Assets Act. Surplus assets are typically auctioned off to the public through the GCSurplus website.

<span class="mw-page-title-main">Lockheed Martin F-35 Lightning II Canadian procurement</span> Possible purchase of the F-35 for Canada

The Lockheed Martin F-35 Lightning II Canadian procurement is a defence procurement project of the Canadian government to purchase Lockheed Martin F-35 Lightning II Joint Strike Fighters for the Royal Canadian Air Force (RCAF), a process started in 1997. The F-35 procurement has been a source of considerable controversy in public policy circles in Canada since the federal government announced its intention to purchase the aircraft in 2010. In April 2012, with the release of a highly critical Auditor General of Canada report on the failures of the government's F-35 program, the procurement was labelled a national "scandal" and "fiasco" by the media. In a December 2014 analysis of the procurement Ottawa Citizen writer Michael Den Tandt cited the Harper government's "ineptitude, piled upon ineptitude, and bureaucracy, and inertia, driving a lack of progress".

The National Shipbuilding Strategy (NSS), formerly the National Shipbuilding Procurement Strategy (NSPS), is a Government of Canada program operated by the Department of Public Works and Government Services. The NSS was developed under the Stephen Harper Government in an effort to renew the fleets of the Royal Canadian Navy (RCN) and the Canadian Coast Guard (CCG). The strategy was broken into three sections; the combat package, the non-combat package and the smaller vessel package. The companies who won the bids for the larger ships were not permitted to bid on the smaller vessel package. In 2019 the Trudeau Government decided to add a third shipyard to the NSS specializing in the construction of icebreakers for the Coast Guard. The agreement to incorporate Davie as a third shipyard within the NSS was finally signed in April 2023.

<span class="mw-page-title-main">Invitation to tender</span> Business process

An invitation to tender is a formal, structured procedure for generating competing offers from different potential suppliers or contractors looking to obtain an award of business activity in works, supply, or service contracts, often from companies who have been previously assessed for suitability by means of a supplier questionnaire (SQ) or pre-qualification questionnaire (PQQ).

References

  1. ↑ "Evidence - OGGO (39-2) - No. 34 - House of Commons of Canada".
  2. ↑ "Evidence - OGGO (39-2) - No. 23 - House of Commons of Canada".
  3. ↑ "Archived copy". Archived from the original on 2016-03-04. Retrieved 2011-12-13.{{cite web}}: CS1 maint: archived copy as title (link)
  4. ↑ "Ottawa tech company challenges awarding of $400M contract". CBC News. 2007-04-17.
  5. ↑ "Handling the fortier file". Archived from the original on 2016-03-04. Retrieved 2011-12-13.
  6. ↑ "Evidence - OGGO (39-2) - No. 34 - House of Commons of Canada".
  7. ↑ "Archived copy". Archived from the original on 2013-10-19. Retrieved 2011-12-13.{{cite web}}: CS1 maint: archived copy as title (link)
  8. ↑ "Archived copy". Archived from the original on 2013-10-19. Retrieved 2011-12-13.{{cite web}}: CS1 maint: archived copy as title (link)
  9. ↑ https://ottawacitizen.com/news/Businessman+files+complaint+about+judge/5808643/story.html [ dead link ]
  10. ↑ http://www.nomus.ca/en/nomus/raw?nodeId=21028%5B%5D
  11. ↑ "TPG fires back at Competition Bureau with $125M defamation lawsuit - Local - Ottawa Business Journal". Archived from the original on 2011-12-27. Retrieved 2011-12-13.
  12. ↑ "Debates (Hansard) No. 133 - April 16, 2007 (39-1) - House of Commons of Canada".
  13. ↑ "Evidence - OGGO (39-2) - No. 34 - House of Commons of Canada".
  14. ↑ "Archived copy". Archived from the original on 2013-10-19. Retrieved 2011-12-13.{{cite web}}: CS1 maint: archived copy as title (link)
  15. ↑ "Analysis: Bid-rigging trial ends with 60 not-guilty verdicts".
  16. ↑ "Crown won't appeal bid rigging trial verdict".
  17. ↑ "Crown won't appeal bid rigging trial verdict".
  18. ↑ "Ottawa tech company challenges awarding of $400M contract". CBC News. 2007-04-17.
  19. ↑ "Judge orders trial in government bid-rigging case". Archived from the original on 2011-12-09. Retrieved 2018-10-04.
  20. ↑ "Court of Appeal for Ontario" . Retrieved 5 April 2012.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.