That amount is small compared to the C$496 billion the federal government spent last year. But this week’s revelations surrounding millions of dollars in potentially fraudulent claims by contractors, along with the ongoing ArriveCAN app scandal, show just how disruptive software development can be for governments.
Even after an extensive investigation, Auditor General Karen Hogan said she still doesn’t know exactly how much it cost to create ArriveCAN. ArriveCAN was rushed to launch in 2020 to collect contact and health information from international travelers during the COVID-19 pandemic. Coordinate quarantine measures. Mr. Hogan’s guess is that the app, which was widely ridiculed for being difficult to use, cost about $60 million. The original budget was $2.3 million.
Federal authorities this week announced measures to strengthen oversight of government procurement, especially of software services, saying the government has asked the Royal Canadian Mounted Police to investigate $5 million in invoices from three software contractors for possible fraud. It was revealed. Officials did not name the company but said the suspicious bills were not related to ArriveCAN.
Public Services and Procurement Minister Jean-Yves Duclos declined to provide details about the potential fraud, citing a criminal investigation. But he suggested that contractors have taken advantage of the fact that government contracts are mostly in paper format to bill multiple government departments for the same work.
“Until recently, when everything was done on paper, it was difficult to coordinate and share information between departments,” he said at a press conference. Mr. Duclos pointed out that 98 percent of contracts are now in electronic form, making it easier for officials to detect fraudulent duplicate billing attempts.
The political controversy surrounding ArriveCAN and the Comptroller General’s report have highlighted the millions of dollars flowing within the government procurement system to companies that don’t actually make software. Instead, the company is a middleman that finds software developers to do the work and then takes a cut of the contract value for their efforts.
In the case of ArriveCAN, the intermediary was a two-person firm called GC Strategies. The comptroller estimates the company earned $19 million from the project. At a congressional hearing, Darren Anthony, one of the company’s owners, claimed the exact amount was around $11 million. He also said he had not read the Auditor General’s report and had no intention of reading it.
Whatever the amount, Mr. Anthony said he and his business partners were left with about $2.5 million two years after paying the subcontractors who actually created the app. He said the company invested about 30 to 40 hours a month on the project. After the Audit Office report was made public, the government suspended all dealings with GC Strategies.
Daniel Henstra, a political scientist who studies public administration at the University of Waterloo, said the rise of companies like GC Strategies is a direct result of the government’s shift from decades of relying on civil servants to develop software to outsourcing the work. . .
When a project needs to be completed on a tight deadline like ArriveCAN, typical procurement systems are “almost impossible to keep up with,” he said. Even if government officials were able to identify all the subcontractors needed (which Professor Henstra said is rare), certifying that they can do the work and awarding contracts to each would overwhelm the system.
For government officials, companies like GC Strategies are “like gold,” Professor Henstra said. “It’s very convenient for the government to move the money through one of these companies, which are basically coordination companies, and have them find the actual contractor to complete the work.”
But he said agreements, like ArriveCAN’s at both the federal and state levels, sometimes “explode” and spark uncomfortable questions about what exactly brokers are doing in exchange for millions of dollars in public money.
Professor Henstra said he believes the Canadian government currently outsources too much work in general, including the policy consulting work he does for the federal government.
“If the government had a strong policy analysis capacity, my services would not be needed,” he said. “That’s what they will do in government, and that’s what they should do.”
But the days when governments had armies of software coders who devoted their entire careers to public service will probably never return, he said.
Professor Henstra said despite recent tech industry layoffs, demand for skilled software developers continues to outstrip supply and no government would want to pay more for their services than companies like Google or Microsoft. said.
“There needs to be more of this capacity within government,” he said. “The trade-off is that doing it within government can be more expensive and take longer.”
But Professor Henstra said despite the ongoing heated political debate, the ArriveCAN app’s soaring costs and recent fraud allegations were an exception.
“The government is getting things done and our relationships with contractors are actually working pretty well for the most part,” he said. “There is room for bad actors to break the law, and if they are caught, they will be prosecuted. But in the meantime, the vast majority of these contracts are all made in good faith, continue to rise, and serve the public interest.”
trans canada
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A Canadian man living in China has been arrested for allegedly trying to sell Tesla’s secret battery manufacturing technology, prosecutors said.
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After some behind-the-scenes negotiations that led to a series of amendments, the government supported the New Democracy proposals on Gaza and Israel. The Conservative Party resolutely rejected this.
A native of Windsor, Ontario, Ian Austen was educated in Toronto, lives in Ottawa, and has reported on Canada for The New York Times for 20 years. Follow him on Bluesky: @ianausten.bsky.social
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