New developments have been unearthed in the year-long WE Charity investigation conducted by The Office of the Procurement Ombudsman (OPO).
Ombudsman Alexander Jeglic found a number of contracts exhibiting a troubling pattern of favouritism towards WE. These contracts were dated prior to the government’s controversial decision to award the charity a $43.5 million pandemic grant to oversee the $912 million federal Summer Student Service Grant, which was ultimately axed following public outcry.
In the Procurement Practice Review Of Non-Competitive Contracts Involving We Charity report, OPO found six contracts that had been awarded to WE Charity by four federal departments since 2017. The contracts were all awarded without competition.
The report states that “one of the fundamental principles of federal contracting set forth in the Government Contracts Regulations…is openness and the requirement to solicit bids from potential suppliers when awarding government contracts. There are, however, a limited number of exceptions where contracts can be awarded without soliciting bids through a competitive process.”
WE charity appears to have taken advantage of the loopholes to avoid competition.
The report states that the case in which “a contracting authority may enter into a contract without soliciting bids” is when the contract amount is below $25,000 for goods or $40,000 for most services. Conveniently, one WE contract from the Privy Council for $24,996 was just $4 below the threshold. Another contract from the Public Health Agency for $24,990 was just $10.00 below the open-bidding threshold.
A Global Affairs Canada (GAC) contract originally exceeded the $40,000 open-bidding threshold but was reduced “following a discussion with the GAC.”
The amount in WE Charity’s revised proposal “showed the contract value as $35,398.23 plus applicable taxes for a total of $40,000.”
WE subsequently submitted an invoice for “$40,000 plus $0.00 HST. An email from WE Charity to GAC accompanying the invoice stated it does not charge tax due to its status as a charity.”
GAC subtracted the taxes and added that amount to WE Charity’s payment. This means that the total contract amount remained $40,000, but WE Charity was able to pocket an additional $4,601.77 even though “there was no indication of a change in the scope of work provided to justify the increase.”
In two of the six contracts, “departments did not fully respect internal departmental procedures to record the reasons (i.e. justification) for decisions on the contract file, potentially impacting the transparency of these procurement processes,” according to the OPO report.
True North reached out to WE for comment but did not hear back by the time this article was published.
Prime Minister Justin Trudeau landed in hot water last year for his decision to select WE to oversee the federal Summer Student Service Grant.
Critics expressed concern over a conflict of interest because WE had previously paid Trudeau’s family members $481,751 in speaking services, gifts and free trips to London and New York. According to Dion, while there was an “appearance of a conflict of interest,” Trudeau’s decision to select WE did not violate ethics laws despite family ties to founders Marc and Craig Kielburger. The scandal led to the resignation of then-finance minister Bill Morneau.