Government Operations and Estimates

The House of Commons Government Operations and Estimates committee met to study the procurement practices review of contracts awarded to Indigenous businesses under the Procurement Strategy for Indigenous Business (PSIB). Appearing were Alexander Jeglic, Procurement Ombud, and Kelly Kilrea, Senior Risk Advisor, from the Office of the Procurement Ombud.

Alexander Jeglic testified that the federal government lacks a clear, centralized policy framework for Indigenous procurement, resulting in fragmented guidance and inconsistent implementation across departments. He noted that many files lacked verification of Indigenous business directory status, mandatory pre-award audits for contracts over $2 million were often not requested or completed, and there was no evidence departments verified the 33% Indigenous content requirement. Jeglic made three recommendations: develop a comprehensive government-wide Indigenous procurement policy with Indigenous stakeholders; establish a permanent recourse mechanism for Indigenous supplier complaints, with his office serving as an interim mechanism; and improve reporting so the 5% target reflects only work actually performed by Indigenous businesses. He emphasized that the current reporting overstates economic benefits and that Indigenous suppliers currently have no accessible recourse mechanism for PSIB contract disputes.

Kelly Kilrea did not provide substantive testimony beyond confirming agreement with Jeglic's statements.

During questioning, Jeglic clarified that the 5% target is calculated using the full value of contracts, including work subcontracted to non-Indigenous entities, which overstates actual benefits. He acknowledged that the 33% requirement was not enforced in any reviewed contracts, and that some departments interpret it as only applying when subcontracting is identified at the solicitation phase, a view his office disputes. He confirmed that his office is working with PSPC on implementing an interim dispute resolution mechanism, and that Indigenous Services Canada is reviewing the Indigenous business directory to address eligibility concerns. Jeglic stated that the failures span 30 years and multiple governments, and that accountability requires transparency, with his office planning a follow-up review in six months rather than the usual two years.

The committee did not engage in procedural debate, motions, or votes during this meeting.