The use of federal IT consultants, who often charge up to $1,000 a day, costs taxpayers approximately 25% more than having departments perform the work internally, according to a Budget Office report released Thursday.
Blacklock's Reporter says the report analyzed spending in four major departments and raised questions about the justification for such premiums.
“The Budget Office found the cost of external contractors was between 22 and 26% higher than their public sector equivalents for four departments analyzed,” the report noted.
“With the data that was provided, the Budget Office is unable to determine the underlying reason for these premiums and whether these premiums were justified.”
The study focused on Employment, National Defence, Public Works, and Shared Services Canada — departments with the highest spending on IT services.
Analysts calculated the average number of days consultants worked and their daily rates. The findings showed a range of 222 to 238 days worked per year, with daily rates varying from $924 at Shared Services Canada to $964 at Employment.
Recordkeeping issues further compounded concerns. Public Works, responsible for overseeing federal contracting, lacked a central financial system to track the number of consultants hired, their charges, or work durations. The Canada Border Services Agency, another major user of IT consultants, failed to provide sufficient data for analysis.
The report stemmed from a request by the Commons government operations committee following hearings into the $59.5 million ArriveCan program. The program faced scrutiny over sole-sourced contracts awarded to GC Strategies Ltd., a two-person consulting firm operating from a private home.
Evidence revealed that GC Strategies secured contracts without competitive bidding, often after socializing with federal managers. The firm subcontracted much of the work while collecting a 30% commission, resulting in billings equivalent to $2,600 an hour.
“We did as we were told,” GC Strategies managing partner Kristian Firth testified on April 17. “We invoiced monthly. At any time we could have been stopped.”
The RCMP is investigating GC Strategies for fraudulent billing. Since 2011, the firm has collected $107.7 million in federal contracts, according to then-Comptroller General Roch Huppé, who testified before the Commons public accounts committee last March.
“I find what occurred deplorable,” Huppé said when asked about ArriveCan spending. When Conservative Calgary MP Stephanie Kusie inquired whether Canadians received value for money, Huppé responded, “It was very difficult to understand exactly the value for money.”
