Two information-technology staffing companies accused of misconduct in their federal contracting said they take responsibility for submitting false work records to the government, but told MPs they had simply passed on documents provided by their subcontractor, GCStrategies, and didn’t know about the errors.
Members of Parliament on the government operations committee heard on Tuesday from executives of those two companies, Dalian Enterprises Inc. president and founder David Yeo, and Coradix Technology Consulting president Colin Wood.
It was the first time the two companies have commented since The Globe and Mail first reported on Oct. 4 that Montreal software company Botler, which had performed contract work for the Canada Border Services Agency in 2020 and 2021, had raised allegations of misconduct with the agency. Those allegations named Coradix, Dalian and GCStrategies, another IT staffing company.
The issues Botler raised included layers of subcontracting that hid key details about who was getting paid for what, and cozy ties between private staffing firms and the public servants who hire them.
Botler first came forward with its concerns in 2021, and followed up with a detailed report in November, 2022. In response to the second report, the border agency launched internal audits and investigations and referred the allegations to the RCMP. The national police force confirmed to The Globe that it is also investigating the matter.
The Globe reported last week that Dalian and Coradix jointly provided CBSA officials with a résumé and a contracting points form that listed Botler co-founder Amir Morv as having nearly 13 years of experience working for an independent business called Moravej Inc. Mr. Morv has said he never owned or worked for a company by that name. He described the documents as “forged” during testimony before the committee last week. Botler’s original complaint included similar allegations related to Botler chief executive officer Ritika Dutt’s work history.
The federal government uses work history to determine pay rates, and whether a person qualifies to work on a contract.
At Tuesday’s hearing, Mr. Wood responded to the issue, saying Coradix was not aware at the time that Botler’s work history was inaccurate.
“We are accepting responsibility. That’s our mistake. We have a quality management system in place,” Mr. Wood said.
Both Mr. Wood and Mr. Yeo said their companies, which share office space and often work as a joint venture, have a decades-long history of following federal contracting rules and receiving clean audits. They also said their commissions are in line with industry standards.
“Those CVs were provided to us by GCStrategies on behalf of Botler,” Mr. Wood said. “We were disappointed that we were put in a position of passing along CVs that did contain incorrect information.”
Mr. Wood said that as a result of this issue, the companies are “examining our processes” related to ensuring the accuracy of documents submitted to the government.
“I bet you are,” replied NDP MP Gord Johns.
Coradix, Dalian and GCStrategies were among the top recipients of outsourcing work related to ArriveCan, a smartphone app the federal government released during the pandemic in an attempt to streamline border crossings for travellers.
The Botler team did not work on that app. Botler’s product is software that assists people who are dealing with sexual harassment. The company worked on a small pilot project that would have seen the service offered to some CBSA employees, but it was never launched.
Both the pilot project and ArriveCan were overseen by some of the same senior public servants and both share layers of subcontracting that keep key details from being disclosed to the public.
Mr. Wood said he has not been contacted by the RCMP.
Ms. Dutt and Mr. Morv have said then-CBSA director-general Cameron MacDonald urged them to work with GCStrategies managing partner Kristian Firth and “let Kristian work his magic.”
Months after starting work on the pilot project, according to Ms. Dutt and Mr. Morv, they were shocked to receive an e-mail from Mr. Firth on Jan. 26, 2021, that explained they had not been hired directly by the CBSA.
Instead, the CBSA relied on a contract with Coradix and Dalian operating as a joint venture. Then a separate subcontracting document listed GCStrategies as a subcontractor to Dalian. Ms. Dutt and Mr. Morv were listed as consultants. Botler’s company name did not appear on the contract or subcontract.
Tuesday’s hearing was part of the committee’s study of the cost of the ArriveCan app. The committee decided recently to expand that study to include new allegations brought forward by Botler. Committee members unanimously approved a summons Tuesday to have representatives of GCStrategies appear on Thursday.
Mr. Wood and Mr. Yeo also defended their use of a contracting program aimed at supporting Indigenous businesses, saying their activities are regularly reviewed and approved by federal auditors.
Botler’s 2022 misconduct report to the CBSA noted with concern that Dalian’s general services contract – which had a value of $21.2-million and was used to fund both Botler’s project and ArriveCan – was awarded under the federal government’s set-aside program for Indigenous business. Ms. Dutt and Mr. Morv are both Canadian citizens who immigrated to Canada and are not Indigenous.
Ms. Dutt told MPs last week that the contracting arrangement was “another example of monetization and theft using the trauma of marginalized communities.”
The Dalian website describes the company as “Aboriginally Owned – Veteran Operated.”
Mr. Yeo told MPs yesterday that Dalian has just two employees and both are Indigenous. He said he is an Indigenous military veteran and that his great grandfather was once chief of Alderville First Nation.
The terms of the set-aside program for Indigenous business say bidders must be Indigenous businesses, and must ensure that at least 33 per cent of the value of the work done under a contract will be performed by Indigenous businesses.
Ms. Dutt said Botler never worked with anyone at Dalian, or any Indigenous person, while working on the project for the agency.
Mr. Yeo said Dalian prioritizes hiring Indigenous employees and consultants as much as possible, but he did not identify any who had worked on the Botler project. He was asked to respond to Ms. Dutt’s allegation that the set-aside program is being misused.
“These types of accusations don’t ring true in my opinion,” he said.
GCStrategies has also said it has just two employees. Mr. Wood said Coradix has more than 40 employees.
The Globe reported Thursday that the CBSA had paid more than $17-million last year to the three IT staffing companies. That was after the agency received Botler’s initial allegations accusing the businesses of contracting misconduct.
The flow of tax dollars to the three companies from all government departments combined has increased steadily each year, from $32.6-million in 2016-17 to $84.2-million in 2022-23, the most recent year for which figures are available.
Bill Curry