Federal Department Refers Three Cases of Contractor Fraud Suspects to RCMP After Investigation
The federal government’s procurement department has referred three cases of suspected fraudulent subcontractor invoicing to the RCMP, and states that it will make efforts to recover approximately $5 million in funds.
During a press conference on March 20, Minister of Public Services and Procurement Canada, Jean-Yves Duclos, expressed his disapproval of these fraudulent billing cases, emphasizing the importance of upholding rules to protect taxpayer dollars and ensuring compliance.
Mr. Duclos stressed that fraud undermines the government’s ability to ensure value for money for Canadians, and highlighted the department’s commitment to actively detect and investigate any suspicions of fraud.
According to a government briefing, Public Services and Procurement Canada (PSPC) discovered that three subcontractors were fraudulently billing 36 different government departments for work completed between 2018 and 2022. The department’s investigation uncovered billing schemes over this period.
An official from the department mentioned that PSPC is investigating five to ten other individuals but refrained from providing further details due to the ongoing nature of the investigations. If criminal elements are discovered, they will also be reported to the RCMP.
After uncovering the allegations, PSPC took swift action by suspending the security clearances of the subcontractors and referring them to the RCMP. Mr. Duclos noted that the alleged fraud occurred partly due to storing billing information in a paper format, which allowed instances of over-billing to take place.
New Procurement Regime
Mr. Duclos explained that the current federal procurement regime, in place since 2015, lacks the authority to address suppliers accused of serious offenses like fraud or human trafficking. To address this gap, the government is introducing the Office of Supplier Integrity and Compliance (OSIC) to enhance oversight and respond more effectively to misconduct in federal procurements.
PSPC will implement additional measures allowing quick action against suppliers of concern, including expanding the range of offenses leading to debarment or suspension. These measures will encompass offenses under the Criminal Code.
Treasury Board President Anita Anand announced a set of measures to strengthen oversight of government management practices, including introducing a new risk and compliance mechanism to analyze trends across government and initiating a horizontal audit conducted by the Comptroller General in multiple departments next month.
