According to a Public Services and Procurement Canada spokesperson, three of the contracts were awarded through open solicitations, with a total value of $55.8-million. The other 20 contracts are described by the department as sole-sourced.Adrian Wyld/The Canadian Press
Ottawa has awarded 23 contracts to McKinsey & Company since 2015 with a total value of $101.4-million, federal officials say – a figure that is significantly higher than what has previously been revealed.
Public Services and Procurement Canada has released a statement with a new summary of federal spending with the New York-based consulting firm, just ahead of a House of Commons committee meeting Wednesday in which MPs will debate plans to hold hearings into government contracts with the company.
According to a department spokesperson, three of the contracts were awarded through open solicitations, with a total value of $55.8-million, meaning “more than half of the total value of these contracts was awarded through competitive processes.” The other 20 contracts are described by the department as sole-sourced.
The statement does not explain why the $101.4-million total is significantly higher than the $66.1-million that has been disclosed to date through the annual public accounts, which detail federal spending up to March 31, 2022.
One of the main factors is likely the reporting period. The department’s new figures appear to include spending in the current fiscal year that started April 1, 2022. The department’s initial statement did not provide an explanation, nor did it provide details on each of the 23 contracts.
The Globe and Mail first reported in January, 2022, that the value of outsourcing to McKinsey has climbed steadily under the Liberals. After the latest public accounts were released, The Globe reported in November that contract spending with McKinsey had spiked by 89 per cent in a single year.
The issue resurfaced earlier this month when Radio-Canada reported on the same public accounts figures that had previously been covered by The Globe. Over the weekend, the public broadcaster reported that federal officials had issued a new estimate of $101.4-million.
Public Services and Procurement Canada on Monday provided a statement to The Globe that discusses the new total.
The department said 18 contracts, with a total value of $45.6-million, were part of a process called “call-ups” against a national standing offer to provide benchmarking services for various federal departments. The remaining two contracts were awarded outside of this process, one being low-dollar value and the other zero-dollar value.
“These services consists of functional tools, databases, and expert support to measure their performance against similar Canadian and international organizations in order to identify deficiencies and opportunities for improvement. Such services may be used to support complex programs, including digital modernization and other large transformational initiatives,” the department said in relation to the benchmarking.
McKinsey defended its federal contracting work last week and released a longer statement Monday.
“We’re proud of our 55-year history in Canada, as well as our positive impact in the communities where we live and work,” the company said. “We welcome the Standing Committee on Government Operations and Expenditures review of our work for the Government of Canada.”
The company said it works with provincial and federal public servants in Canada, regardless of political affiliation.
“We work on independent research, economic and sector-based insights, in addition to core management topics such as the reduction of document processing backlogs, digitization of processes, technology strategy, operational improvements, and change management.
“This work does not include policy development and/or political advice. We support the service delivery objectives pursued by the professional public servants who lead the departments and agencies we serve.”
The statement goes on to add that while the number of federal contracts awarded to McKinsey has grown over the past five years, it is a comparatively small provider compared to other consulting firms such as Accenture, Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers.
Prime Minister Justin Trudeau said last week that he has asked Public Services and Procurement Minister Helena Jaczek and Treasury Board president Mona Fortier to look into the spending with McKinsey.
In the early years of the Trudeau government, Dominic Barton acted for a time as both the head of McKinsey and as the volunteer chair of former finance minister Bill Morneau’s advisory council on economic growth.
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Bill Curry