Ottawa has just recouped more than $300,000 from a major supplier that was recently at the centre of a conflict of interest probe involving a senior bureaucrat.
Public Works Canada launched an audit in the fall of 2008 into the work of the Corporate Research Group after allegations that the department's former assistant deputy minister, Tim McGrath, gave preferential treatment to the company because he was a friend of its president, Brian Card.
The audit examined 25 contracts, and found a total "overpayment" of $303,000 in five files, according to the government.
The company was unable to provide records to substantiate the hours of work that were recorded on timesheets and billed to the government.
"In response to a request for [the Corporate Research Group]to either provide further documentation to support the time charged or repay the amount owing, [Public Works]received a cheque in the amount of $303,737," a spokeswoman for the department said this week.
In a recent statement, Mr. Card called the repayment "voluntary," and did not address the government's threat to deduct the money from other contracts if it was not reimbursed.
"We acknowledge that in these limited cases, proper procedure was not followed. However, the work commissioned under these contracts was delivered on time and on budget to the satisfaction of the client," Mr. Card said.
"For nearly three decades, we have provided exceptional value to our clients. If mistakes are made, we make a point of going above and beyond to remedy the situation. This case is no exception."
Over the past three years, CRG has received $24-million in federal contracts, including $21-million from Public Works for consulting on real estate and other matters.
The government has investigated a complaint made under Ottawa's whistleblower legislation that Mr. McGrath, when he was in charge of Ottawa's massive real-estate portfolio, was in a conflict of interest in awarding contracts to the Corporate Research Group.
The allegation was deemed to be "founded," and Mr. McGrath left the government after "disciplinary measures were invoked," Public Works said in a statement.
According to a statement from Public Works, the investigation concluded there was "an inappropriate personal relation" in the case, with sources saying investigators were concerned by the frequency of the contacts between Mr. McGrath and Mr. Card.
Ottawa asked KPMG to audit the work of the Corporate Research Group to "ensure the Crown received value for money." The government said this week that it will not post the final KPMG report on its website because "the review contains third party confidential and/or proprietary information."
Corporate Research Group continues to work for the government and is eligible to bid on future contracts.
"Until firms have been found to be in violation of federal legislation or in breach of a government contract or of the Code of Conduct for Procurement or have been found to have compromised the procurement process, PWGSC cannot exclude any firm from submitting bids or terminate a federal contract," the department said.
Robin Sears, a public-relations expert hired by the Corporate Research Group, said there will be no further comment on the matter.
Editor's note: An earlier version of this story misstated Tim McGrath's publice service rank. This version has been corrected.