Auditor General reports
Federal organizations frequently failed to follow procurement rules when awarding contracts to GCStrategies Inc.
Report 4—Professional Services Contracts with GCStrategies Inc.
Report metadata
- Tabling date:
- Audited entities:
- Agriculture and Agri-Food Canada
- Canada Border Services Agency
- Canada Revenue Agency
- Canadian Nuclear Safety Commission
- Employment and Social Development Canada
- Environment and Climate Change Canada
- Federal Economic Development Agency for Southern Ontario
- Fisheries and Oceans Canada
- Global Affairs Canada
- Health Canada
- Housing, Infrastructure and Communities Canada
- Indigenous Services Canada
- Innovation, Science and Economic Development Canada
- Department of Justice Canada
- Library and Archives Canada
- National Defence
- Natural Resources Canada
- Natural Sciences and Engineering Research Council
- Office of the Superintendent of Financial Institutions Canada
- Parks Canada
- Public Safety Canada
- Public Services and Procurement Canada
- Social Sciences and Humanities Research Council of Canada
- Statistics Canada
- Transport Canada
- Treasury Board of Canada Secretariat
- Topics:
- Financial management and government spending
- Government purchasing
- Public Administration
- Report type
- Auditor General reports
At a glance
From April 2015 through March 2024, federal organizations awarded 106 professional services contracts to GCStrategies Inc., an Ottawa‑based staffing company in the information technology sector. The contracts were for services that included technology support and had a maximum total value of $92.7 million, of which about $64.5 million was ultimately paid out.
In 21% of contracts examined, we found that federal organizations lacked documentation on file that showed valid security clearances for contract resources. Having contract resources working on government networks without the required security clearance compromises the government’s ability to protect sensitive information, assets, and work sites.
Federal organizations are required to monitor the work performed by contractors. However, we noted that federal organizations frequently disregarded government policies in this area. This included not having records showing which contracted resources performed the work, what work was completed, and whether the people doing the work had the required experience and qualifications. In addition, in 82% of examined non‑competitive contracts and competitive contracts that received only 1 valid bid, federal organizations failed to verify that the fees paid did not exceed market rates.
Although this audit focused on contracts awarded to a particular contractor, it highlights gaps in basic requirements that all federal organizations should follow when procuring services. This report has no recommendations but confirms weaknesses raised in previous audits. Rather than repeat previous recommendations on procurement, this audit re‑confirms that policy should be well understood and properly applied. We found in our 2024 audit of professional services contracts that federal procurement policies promote fairness, transparency, and value for Canadians—when they are followed.
Why we did this audit
- The federal public sector spends billions of dollars of public funds on contracting each year.
- Canadians expect that federal organizations have controls, processes, and policies in place to support fair, open, and transparent procurements and to promote value for money.
- Federal organizations need to ensure that public funds are spent with due regard for value for money, including in decisions about the procurement of professional services contracts.
Highlights of our recommendations
We did not issue recommendations in this audit report. We encourage federal organizations to implement the recommendations from recent procurement audits.
Key facts and findings
- From 13 April 2015 to 31 March 2024, 31 federal organizations had contracts with GCStrategies Inc.: 29 federal departments and agencies, 1 Crown corporation, and 1 agent of Parliament.
- Government spending on contracts with GCStrategies Inc. grew between the 2015–16 and 2021–22 fiscal years, at a time when government spending for outside professional services was on the rise.
- GCStrategies Inc. represented 0.37% of the total amount paid for informatics services across all federal organizations from 2015–16 to 2023–24.
- In 33% of contracts we examined, federal organizations could not show that contract resources had the experience and qualifications needed to complete the required work.
- In all the contracts examined, federal organizations provided justification for the contracts with GCStrategies Inc. Reasons cited included the need to procure specialized services or to temporarily supplement capacity.
- In 58% of the non‑competitive contracts examined, federal organizations failed to assess whether there would be benefits to calling for bids.
Exhibit highlights
Thirty-one federal organizations issued 106 contracts to GCStrategies from 13 April 2015 to 31 March 2024
| Federal organization | Total value of contracts (before taxes) | Total amount spent (before taxes) as of 31 March 2024 | Total number of contracts | Number of competitive contracts | Number of non‑competitive contracts |
|---|---|---|---|---|---|
|
Canada Border Services AgencyFootnote 1 |
$49,878,495 |
$30,851,291 |
4 |
1 |
3 |
|
Treasury Board of Canada Secretariat |
$10,034,407 |
$8,808,375 |
11 |
6 |
5 |
|
Innovation, Science and Economic Development Canada |
$9,913,134 |
$5,113,638 |
8 |
8 |
0 |
|
Natural Sciences and Engineering Research Council of Canada and Social Sciences and Humanities Research Council of CanadaFootnote 2 |
$5,509,877 |
$5,212,374 |
4 |
2 |
2 |
|
Agriculture and Agri‑Food Canada |
$4,080,000 |
$3,152,719 |
3 |
3 |
0 |
|
National Defence |
$3,624,582 |
$3,085,749 |
12 |
11 |
1 |
|
Employment and Social Development Canada |
$2,771,985 |
$2,393,491 |
3 |
3 |
0 |
|
Invest in Canada Hub |
$1,864,200 |
$1,660,374 |
7 |
1 |
6 |
|
Housing, Infrastructure and Communities Canada |
$1,037,300 |
$911,918 |
2 |
2 |
0 |
|
Natural Resources Canada |
$732,684 |
$692,704 |
3 |
1 |
2 |
|
Global Affairs Canada |
$644,166 |
$576,783 |
10 |
3 |
7 |
|
Fisheries and Oceans Canada |
$605,350 |
$379,871 |
6 |
3 |
3 |
|
Environment and Climate Change Canada |
$328,600 |
$327,199 |
5 |
4 |
1 |
|
Office of the Secretary to the Governor General |
$300,490 |
$282,882 |
3 |
2 |
1 |
|
Courts Administration Service |
$234,995 |
$144,750 |
4 |
3 |
1 |
|
Public Safety Canada |
$175,850 |
$175,848 |
1 |
1 |
0 |
|
Transport Canada |
$158,761 |
$158,761 |
4 |
2 |
2 |
|
Health Canada |
$127,100 |
$93,970 |
2 |
1 |
1 |
|
Department of Justice Canada |
$93,615 |
$84,929 |
1 |
1 |
0 |
|
Indigenous Services Canada |
$93,000 |
$93,000 |
1 |
1 |
0 |
|
Office of the Superintendent of Financial Institutions Canada |
$88,200 |
$60,957 |
1 |
1 |
0 |
|
Canadian Nuclear Safety CommissionFootnote 3 |
$75,000 |
$0 |
1 |
1 |
0 |
|
Parks Canada |
$71,500 |
$71,456 |
1 |
1 |
0 |
|
Federal Economic Development Agency for Southern Ontario |
$59,000 |
$22,000 |
2 |
1 |
1 |
|
Library and Archives Canada |
$52,594 |
$52,594 |
1 |
1 |
0 |
|
Statistics Canada |
$42,000 |
$41,758 |
2 |
0 |
2 |
|
Office of the Chief Electoral Officer |
$34,790 |
$16,434 |
1 |
0 |
1 |
|
Public Services and Procurement Canada |
$22,104 |
$22,104 |
1 |
1 |
0 |
|
Canada Revenue Agency |
$18,130 |
$18,130 |
1 |
0 |
1 |
|
Canadian Broadcasting Corporation |
$11,985 |
$11,985 |
1 |
0 |
1 |
|
Total |
$92,683,894 |
$64,518,044 |
106 |
65 |
41 |
The years of highest federal spending with GCStrategies were because of contracts with the Canada Border Services Agency
Text version
This stacked bar chart shows separately the approximate spending by federal organizations excluding the Canada Border Services Agency and the spending by the Canada Border Services Agency:
2015–16: $87,000 and $0
2016–17: $587,000 and $0
2017–18: $2,244,000 and $0
2018–19: $5,977,000 and $0
2019–20: $8,576,000 and $0
2020–21: $6,912,000 and $6,819,000
2021–22: $4,946,000 and $13,591,000
2022–23: $3,533,000 and $9,665,000
2023–24: $749,000 and $776,000
2024–25: $0 and $0
Related report(s)
Auditor General reports