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Round Table on The Proposed Code of Round Table on The Proposed Code of Conduct For Government Conduct For Government Procurement Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP - Ottawa Procurement Group www.governmentcontracting.ca
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Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

Dec 15, 2015

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Page 1: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

Round Table on The Proposed Code Round Table on The Proposed Code of Conduct For Government of Conduct For Government

ProcurementProcurement

Mr. Ron Lunau

Ms. Phuong Ngo

Ms. Catherine Beaudoin

Gowling Lafleur Henderson LLP - Ottawa

Procurement Group

www.governmentcontracting.ca

Page 2: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

Consultation on the draft Code of Consultation on the draft Code of Conduct for ProcurementConduct for Procurement

Question 1: Question 1: Is the purpose of the Is the purpose of the Code of Conduct for Code of Conduct for Procurement Procurement clear? If not, please explain.clear? If not, please explain.

Question 2: Question 2: Does the Does the CodeCode as currently formulated as currently formulated provide adequate information to help guide your provide adequate information to help guide your actions? If not, please provide suggestions on other actions? If not, please provide suggestions on other tools you would like to see.tools you would like to see.

Question 3: Question 3: Do you have suggestions about how to Do you have suggestions about how to better promote the better promote the CodeCode??

Page 3: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

Amendment No. 021 to RFP:Amendment No. 021 to RFP:

“ “It is acknowledged by Canada that third parties were It is acknowledged by Canada that third parties were involved in assisting Canada in the preparation of involved in assisting Canada in the preparation of documentation that forms part of this bid package. As documentation that forms part of this bid package. As Canada has taken the steps necessary to ensure the Canada has taken the steps necessary to ensure the integrity of the bidding process, these third parties are integrity of the bidding process, these third parties are not prohibited from submitting a bid. Bidders, in not prohibited from submitting a bid. Bidders, in submitting a proposal for this requirement, acknowledge submitting a proposal for this requirement, acknowledge

these facts and signify their acceptance of the process.”these facts and signify their acceptance of the process.”

Page 4: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

The Washington Post, November 24, 2004The Washington Post, November 24, 2004 ““Rumsfeld: Druyun Had Little SupervisionRumsfeld: Druyun Had Little Supervision

By Thomas E. RicksBy Thomas E. Ricks

Washington Post Staff WriterWashington Post Staff Writer

  

Defense Secretary Donald H. Rumsfeld blamed an Air Force Defense Secretary Donald H. Rumsfeld blamed an Air Force procurement scandal on high turnover in top management positions, procurement scandal on high turnover in top management positions, which he said reduced the amount of ‘adult supervision’ of major which he said reduced the amount of ‘adult supervision’ of major weapons contracts over the past decade.weapons contracts over the past decade.

Cautioning that his view isn’t yet ‘definitive’, Rumsfeld said at a Cautioning that his view isn’t yet ‘definitive’, Rumsfeld said at a Pentagon news briefing yesterday that he had recently been looking Pentagon news briefing yesterday that he had recently been looking into the case of former Air Force acquisition official Darleen A. into the case of former Air Force acquisition official Darleen A. Druyun, who last month was sentenced to nine months in prison after Druyun, who last month was sentenced to nine months in prison after admitting to granting favors in contracts to aerospace giant Boeing admitting to granting favors in contracts to aerospace giant Boeing Co. before going to work there.”Co. before going to work there.”

Page 5: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

Wall Street Journal, February 18, 2005Wall Street Journal, February 18, 2005

““Former Boeing Finance Chief Gets 4-Month Prison SentenceFormer Boeing Finance Chief Gets 4-Month Prison Sentence

  

Michael Sears, Boeing Cos. former Chief Financial Officer, was Michael Sears, Boeing Cos. former Chief Financial Officer, was sentenced to four months in prison for holding improper job talks with sentenced to four months in prison for holding improper job talks with Darleen Druyun, a former senior Air Force procurement official, while Darleen Druyun, a former senior Air Force procurement official, while she still had sway over contracts involving the company.she still had sway over contracts involving the company.

  

Ms. Druyun, who also pleaded guilty, is currently serving a nine-Ms. Druyun, who also pleaded guilty, is currently serving a nine-month prison term at a minimum-security facility in Marianna, Fla., month prison term at a minimum-security facility in Marianna, Fla., after she admitted giving Boeing special treatment on billions of after she admitted giving Boeing special treatment on billions of dollars in high-profile contracts while negotiating jobs for herself and dollars in high-profile contracts while negotiating jobs for herself and family members.”family members.”

Page 6: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

Roundtable Topic 1Roundtable Topic 1

Responsibilities of vendors in regards to public Responsibilities of vendors in regards to public servantsservants

• Is the Code sufficiently clear in defining a vendor’s Is the Code sufficiently clear in defining a vendor’s responsibilities?responsibilities?

Page 7: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

CBC News, September 12, 2005CBC News, September 12, 2005

““Inquiry Judge: ‘People Disgraced Themselves’ In Toronto ScandalInquiry Judge: ‘People Disgraced Themselves’ In Toronto Scandal

  

The judge appointed to probe a computer-leasing scandal in Toronto The judge appointed to probe a computer-leasing scandal in Toronto criticized participants for greed, mismanagement and lying.criticized participants for greed, mismanagement and lying.

Justice Denise Bellamy investigated how a $40 million computer contract Justice Denise Bellamy investigated how a $40 million computer contract between the City of Toronto and MFP Financial Services swelled to over between the City of Toronto and MFP Financial Services swelled to over $100 million.$100 million.

‘Some people disgraced themselves, failed in their duty to the City, lied, ‘Some people disgraced themselves, failed in their duty to the City, lied, put self-interest first, or simply did not do their jobs,’ she wrote.put self-interest first, or simply did not do their jobs,’ she wrote.

In reference to testimony from the city’s once powerful budget chief, In reference to testimony from the city’s once powerful budget chief, Bellamy said that Tom Jakobek ‘drifted from lie to lie in a performance Bellamy said that Tom Jakobek ‘drifted from lie to lie in a performance worthy of Pinocchio, his phenomenal memory conveniently failed him’ worthy of Pinocchio, his phenomenal memory conveniently failed him’ about a cash payoff he had received from an MFP salesperson.”about a cash payoff he had received from an MFP salesperson.”

Page 8: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

CBC News, May 5, 2006CBC News, May 5, 2006

““Sponsorship Player Brault Sentenced to 30 MonthsSponsorship Player Brault Sentenced to 30 Months

  

Advertising executive Jean Brault – one of the key players Advertising executive Jean Brault – one of the key players in the federal sponsorship scandal – was sentenced to 30 in the federal sponsorship scandal – was sentenced to 30 months in jail on Friday for defrauding the federal months in jail on Friday for defrauding the federal government. … He admitted in March to filing bogus government. … He admitted in March to filing bogus invoices for $1.6 million for work of little or no value.”invoices for $1.6 million for work of little or no value.”

Page 9: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

CBC News, April 7, 2006CBC News, April 7, 2006

““Appeal Court Orders Coffin JailedAppeal Court Orders Coffin Jailed

  

The Quebec Court of Appeal has overturned the conditional The Quebec Court of Appeal has overturned the conditional sentence given to Montreal advertising executive Paul sentence given to Montreal advertising executive Paul Coffin and ordered him to serve 18 months in jail for his role Coffin and ordered him to serve 18 months in jail for his role in the sponsorship scandal. in the sponsorship scandal.

A lower court had given Coffin two years less a day, to be A lower court had given Coffin two years less a day, to be served in the community, and ordered him to give lectures served in the community, and ordered him to give lectures to university business students on ethics after he pleaded to university business students on ethics after he pleaded guilty to 15 counts of fraud involving $1.5 million. …”guilty to 15 counts of fraud involving $1.5 million. …”

Page 10: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

CBC News, June 19, 2006CBC News, June 19, 2006

““Guité Sentenced to 3 ½ Years in PrisonGuité Sentenced to 3 ½ Years in Prison

  

Chuck Guité, the former civil servant who ran the federal Chuck Guité, the former civil servant who ran the federal sponsorship program, was sentenced Monday to 3 ½ years sponsorship program, was sentenced Monday to 3 ½ years in prison for his conviction on fraud charges.”in prison for his conviction on fraud charges.”

Page 11: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

Roundtable Topic 2Roundtable Topic 2

Responsibilities of public servantsResponsibilities of public servants

• Will the Code Will the Code be be broad enough so that public broad enough so that public servants will be more accountable?servants will be more accountable?

Page 12: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

New York Times, Friday February 23, 2007New York Times, Friday February 23, 2007

““COMPANY NEWS; AIR FORCE BARS DEALS WITH BOEING COMPANY NEWS; AIR FORCE BARS DEALS WITH BOEING SPACE UNITSSPACE UNITS

  

The space units of Boeing were suspended by the Air Force The space units of Boeing were suspended by the Air Force yesterday from seeking military contracts after the Air Force yesterday from seeking military contracts after the Air Force concluded there ‘serious violations of federal law in Boeing’s use concluded there ‘serious violations of federal law in Boeing’s use of documents from Lockheed Martin to win a $1.5 billion rocket of documents from Lockheed Martin to win a $1.5 billion rocket contract. The Air Force also stripped seven launches from contract. The Air Force also stripped seven launches from Boeing’s schedule, won in a 1998 competition to develop a rocket Boeing’s schedule, won in a 1998 competition to develop a rocket for military satellites. … ‘Our inquiry into Boeing found that they for military satellites. … ‘Our inquiry into Boeing found that they were in possession of thousands of pages of Lockheed Martin were in possession of thousands of pages of Lockheed Martin proprietary documents during the 1998 selection,’ Peter Teets, Air proprietary documents during the 1998 selection,’ Peter Teets, Air Force under secretary, said in a statement.”Force under secretary, said in a statement.”

Page 13: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

Interim Administrative Agreement Interim Administrative Agreement Between The Boeing Company And Between The Boeing Company And The United States Department of The The United States Department of The Air ForceAir Force

Employees responsible to comply with Ethics and Business Employees responsible to comply with Ethics and Business Conduct ProgramConduct Program

All employees to sign Employee Certification to comply with All employees to sign Employee Certification to comply with code of conductcode of conduct

Compliance Assessment Team to establish robust compliance Compliance Assessment Team to establish robust compliance processesprocesses

Compliance Review Board to receive reports from Compliance Compliance Review Board to receive reports from Compliance Assessment Team and ensure risk areas identified, prioritized Assessment Team and ensure risk areas identified, prioritized and followed upand followed up

Page 14: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

Interim Administrative Agreement Interim Administrative Agreement Between The Boeing Company And Between The Boeing Company And The United States Department of The The United States Department of The Air ForceAir Force

Promulgation of Marketing Policies and ProceduresPromulgation of Marketing Policies and Procedures Issue a procedure on Procurement Integrity Issue a procedure on Procurement Integrity Ethics/Compliance Training Program for new Ethics/Compliance Training Program for new

employeesemployees Revision of offer letters re: other companies’ proprietary Revision of offer letters re: other companies’ proprietary

informationinformation Boeing Law Department to conduct investigations of Boeing Law Department to conduct investigations of

potential violationspotential violations

Page 15: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

CanWest News Service, March 5, 2006CanWest News Service, March 5, 2006

““The Scandal That Went Away”The Scandal That Went Away”

An “obscure” government employee, Frank Brazeau, with An “obscure” government employee, Frank Brazeau, with Consulting and Audit Canada (CAC)Consulting and Audit Canada (CAC) suspended after suspended after contracting irregularities were uncovered by auditors for KPMG, contracting irregularities were uncovered by auditors for KPMG, including contracts improperly let to the family company of including contracts improperly let to the family company of Quebec MP David Smith. Quebec MP David Smith.

““Evidence of manipulation of procurement process, including Evidence of manipulation of procurement process, including

apparent manipulation of evaluations”, as well as “evidence that apparent manipulation of evaluations”, as well as “evidence that in three cases contractors were directed to submit false or in three cases contractors were directed to submit false or misleading invoices”misleading invoices”

Page 16: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

PWGSC cancelled the two contracts handled by Smith’s family PWGSC cancelled the two contracts handled by Smith’s family company and dismantled the CACcompany and dismantled the CAC

It was discovered later by PWGSC thatIt was discovered later by PWGSC that• Smith and Brazeau were cousins and grew up togetherSmith and Brazeau were cousins and grew up together• Brazeau – secretary of Smith’s Liberal riding associationBrazeau – secretary of Smith’s Liberal riding association

Evidence of “contract-splitting” found where bureaucrat found to Evidence of “contract-splitting” found where bureaucrat found to

have split a contract into chunks of $25,000 or less to avoid have split a contract into chunks of $25,000 or less to avoid mandatory open competitionmandatory open competition

Bureaucrats at CAC suspended and disciplined.Bureaucrats at CAC suspended and disciplined.

Page 17: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

Roundtable Topic 3Roundtable Topic 3

Accountability of VendorsAccountability of Vendors

Should a vendor be held accountable for everything Should a vendor be held accountable for everything its employees do?its employees do?

Page 18: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

Roundtable Topic 4Roundtable Topic 4

Are there other issues not addressed in the proposed Are there other issues not addressed in the proposed Code? Code?

Do you want to make submissions to PWGSC?Do you want to make submissions to PWGSC?

http://www.pwgsc.gc.ca/acquisitions/text/cdccp-http://www.pwgsc.gc.ca/acquisitions/text/cdccp-e.htmle.html

Page 19: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

Breaches of the CodeBreaches of the Code

What does this mean to vendors?What does this mean to vendors?

• Existing remedies set out in existing legislation Existing remedies set out in existing legislation and policiesand policies

PLUSPLUS

Page 20: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

Breaches of the Code (cont’d)Breaches of the Code (cont’d)

• Failure to limit enquiries and communications Failure to limit enquiries and communications during bid solicitation period solely to identified during bid solicitation period solely to identified contracting authority:contracting authority:

• may result in bid disqualificationmay result in bid disqualification

Page 21: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

Breaches of the Code (cont’d)Breaches of the Code (cont’d)

False certification of compliance with the False certification of compliance with the requirements of the Code will be developed and requirements of the Code will be developed and implemented to include:implemented to include:• Bid inclusionBid inclusion• Termination of contractTermination of contract• Exclusion from future workExclusion from future work• Sanctions imposed in relation to severity of Sanctions imposed in relation to severity of

conductconduct

Page 22: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

Visit our website at Visit our website at www.governmentcontracting.cawww.governmentcontracting.ca

Page 23: Round Table on The Proposed Code of Conduct For Government Procurement Mr. Ron Lunau Ms. Phuong Ngo Ms. Catherine Beaudoin Gowling Lafleur Henderson LLP.

Thank you.Thank you.

Mr. Ron LunauMr. Ron Lunau

Ms. Phuong NgoMs. Phuong Ngo

Ms. Catherine BeaudoinMs. Catherine Beaudoin

Gowling Lafleur Henderson LLPGowling Lafleur Henderson LLP

Tel: (613) 233-1781Tel: (613) 233-1781

Fax: (613) 563-9869Fax: (613) 563-9869