The federal government’s ArriveCan app saga continues, it appears.
On Monday, The Globe and Mail reported more details about the outsourcing of work to an Ottawa-based two-person team (with no offices) for ArriveCan.
“Why is the federal government paying millions to a 2-person company, to then hire other companies to do their work? Can’t the public service hire the companies directly, or perform IT work in-house?”, questioned a reporter on Monday.
“That’s exactly the question I just asked the public service” immediately quipped Prime Minister Justin Trudeau.
“Obviously this is a practice that seems highly illogical and inefficient,” added Trudeau. “I have made sure that the Clerk of the Privy Council is looking into procurement practices to make sure that we’re getting value for money, that we’re doing things in a smart and logical way.”
"Obviously, this is a practice that seems entirely illogical and inefficient," says PM Trudeau as he responds to a question on the two-person company that reportedly received a large commission to handle the ArriveCan app but contracted out actual work to other firms. #cdnpoli pic.twitter.com/7yiEh63EOi
— CPAC (@CPAC_TV) January 23, 2023
GCStrategies was hired by the federal government to create the ArriveCan app. The company then instead outsourced work to multinationals including the likes of Belgium accounting firm BDO and London-based KPMG, according to new documents revealed, reports the Globe.
Kristian Firth is the Managing Partner, Cloud, AI, Data and Mobile at GCStrategies, founded in 2015, alongside other Partner, Darren Anthony.
The details have been revealed after the Canada Border Services Agency (CBSA) in charge of the project refused to identify third-party subcontractors.
The two-person firm billed the government rates of $1,000 to $1,500 per day, per worker, while taking a commission of 15-30%. They previously revealed they do not do any IT work.
GCStrategies said they have been paid $4.5-million a year, or about $9-million as of March 31, 2022, to work on the ArriveCan app.
GCstrategies hired six companies to help create ArriveCan: BDO Canada LLP; Optiv Security Inc./Optiv Canada Inc.; KPMG LLP; Macadamian Technologies Inc.; Level Access and Distill Mobile Inc.
These companies received $8.3 million in payments from GCStrategies from June 2020 to July 2022, says the CBSA, correcting the date noted in one document as showing June-July 2022.
Image via The Globe and Mail
The CBSA told the Globe in a statement it did not know these six companies were involved as subcontractors.
Liberal MP Anthony Housefather previously defended ArriveCan but said he was unaware of the outsourcing to five or six companies. He questioned the need for GCStrategies and also asked if there should be human resources specialists in the federal government to find personnel.
As for the NDP’s Matthew Green, he questioned, “Why does the government continue, in the access to information process, to obscure, block and redact information that ought to be made publicly available?”
“It’s an atrocious abuse of public dollars,” said Green, calling the arrangement to outsource disrespectful. “Here we are shovelling money out the back door to people who are running businesses out of their basements. It is scary.”
Over two years, the two-person firm that works out of their home, has made $44-million in deals to hire subcontractors for over 20 federal government departments. That would result in $6.6 million to $13.2 million in commissions for GCStrategies, if the ArriveCan finder’s fee rate was applied to these hires.
