Auditor's report details 'missing bid evaluations and poorly justified use of non-competitive approaches'
A report by Canada’s auditor general found that several federal agencies failed to follow their own policies when awarding contracts to consulting firm McKinsey & Company.
“We concluded that professional services contracts were often not awarded to McKinsey & Company in accordance with applicable policies,” the report says.
“The federal organizations’ frequent disregard of policies and guidance was evident by missing bid evaluations and poorly justified use of non-competitive approaches.”
CTV News reported that Auditor General Karen Hogan detailed in the audit that 97 contracts, awarded to McKinsey & Company between January 2011 and September 2023, were worth $209 million -- $200 million of which has already been spent.
About 70% of the contracts were issued as non-competitive contracts, the report said.
“We also found 4 series of contracts where, after awarding an initial contract to McKinsey & Company with no competition, organizations subsequently awarded additional non‑competitive contracts for related work,” the audit detailed.
“For 4 other series, only the initial contract was awarded competitively. In total, these 8 series represent 30 contracts with a total value of approximately $58 million.”
The federal agencies were not able to prove any value it gained from the contracts, Hogan said. According to CBC, the audit also found that the amount awarded to McKinsey & Company jumped from less than $5 million per year prior to 2014, to $10 million in 2015-16, increasing steadily since then.
Unclear deliverables, statements of work prevent value assessment
There were also security issues, the report stated, as out of the 17 contracts with security requirements, 13 were not able to confirm that all the consultants involved possessed the required security clearances.
The audit listed vague statements of work, lack of clarity around deliverables and no justification for contracts awarded as preventing the assessment of value; 22% of the contracts did not receive listed deliverables.
“While this audit focused on contracts awarded to McKinsey & Company, it highlights basic requirements and good practices that all federal organizations should follow when procuring professional services on behalf of the Government of Canada,” Hogan said.
“Federal contracting and procurement policies exist to ensure fairness, transparency, and value for Canadians—but they only work if they are followed.”
