Contracting Out: The Real Picture

Luc Carrière, CS Group President, Deborah Wainright Sub-Group Officer on the CS Group Executive and Stan Buday, CS group Vice-President, met to address the issues of contracting out.

Shirley Gillette and Vice-President Hélène Rogers attended the working session.

The issue of contracting out has been a topic of importance for the Institute and its members for many years. The government is transferring many responsibilities to the private sector. We observe this philosophy at work in the government’s approach to a wide range of examples, from public science to property management to information technology.

Too often, the government estimates that it will save thousands of dollars under the public-private partnership (P3), only to discover the hard reality that the scheme ends up costing the taxpayer more in terms of financial, health, public science, and intellectual property loss.

The bones of failed public-private partnerships are buried across this country. From food inspection to leasing back sold government buildings and corporate-led restructuring of services, P3s have not fared well under federal and provincial auditors’ microscopes. It has long been the Institute’s contention that the government makes too much use of contractors. This becomes more costly for taxpayers as the government has little control over the resources spent.

These contractors sit next to government employees day in and day out for years on end. To quote an example from a recent Auditor General’s report, “consultants appeared to be working full-time since they billed for at least 220 days per year for successive years”. The Auditor General’s report shows situations of conflict of interest whereby the incumbent contractors developed the statement of work and were subsequently awarded the contract. Talk about lack of accountability.

As its latest pursuit of this questionable approach, the government is investigating the contracting out of large portions of its information technology (IT) functions. Under the guise of a pilot project, this “bundling of IT services” is the next “latest and greatest” concept, with large chunks of IT services being transferred to large companies like IBM. This plan entails worrisome security issues. Much confidential personal information about Canadians may well be shipped to other countries through the offshore routing of IT functions by these multinational companies which are used to this way of conducting business to reduce their costs.

In an effort to comprehend the magnitude of the contracting out issue, the Institute has set up a national committee as well as a CS sub-committee on contracting out of IT services. Stay tuned for more information.