There are two guys working from home on the outskirts of Ottawa who have racked up millions of dollars in commissions by winning government IT contracts and then hiring programmers to do the work.
These are the guys who did the ArriveCan app – wait, scratch that, they didn’t actually do the app. They don’t build apps or code software. They’re salesmen, really. They get government contracts and then get someone else to do the work.
That’s not to knock Darren Anthony and Kristian Firth, the partners in a firm called GCstrategies, for their entrepreneurial spirit. They saw an unserved need, and they filled it. The federal government doesn’t know how to contract people to do IT work, so GCstrategies did it at a hefty profit.
The two-employee firm billed Ottawa $44-million over the past two years, and Mr. Anthony and Mr. Firth told a parliamentary committee last week that they took commissions ranging between 15 and 30 per cent. That’s between $6.6-million and $13.2 million for the pair.
Canada’s border agency launches full review after listing wrong company in $1.2-million ArriveCan contract
We shouldn’t be too surprised that there was some scrambling during the pandemic panic of 2020, and that money was rushing out of government doors. But the story of the ArriveCan contracts indicates worrisome matters that go beyond a bit of crisis mismanagement.
The first is that even now, in late 2022, we don’t really know how the contracts unfolded, or what was spent on what, or who precisely got money for working on ArriveCan, or exactly how much was spent on it.
Second, it has become evident that the federal government is, on the whole, distressingly poor at managing IT projects, and officials are dealing with that by throwing money at consultants and contractors. The amounts spent on IT consultants have ballooned, even while the size of the civil service expanded rapidly.
The cost of ArriveCan work started out at $80,000 and grew and grew and grew. Actually, GCstrategies had a contract with the Canada Border Services Agency for some other software, but the agency used it to start work on ArriveCan. The firm had several contracts with the government, but they covered work on several IT projects, not only ArriveCan. So it’s not clear how much of the work was for ArriveCan, and how much was for other apps or software.
This is a basic transparency problem in government contracting. If the public can’t tell how much of its money went for each project, it cannot judge if money is wasted or abused.
The federal government doesn’t seem to know what happened, either.
CBSA officials eventually told reporters that the entire budget for ArriveCan – the app and a variety of related costs such as call-centre support and employee benefits – was $54-million. The agency broke down the money that went to various suppliers for various purposes. Except one of those suppliers said they did not do that work. CBSA made a mistake. Whoops.
Mistakes get made, but in this case the problem is that it is impossible to tell what happened by reading the record.
Let’s step back to note that CBSA has its own IT people. There is also an agency, Shared Services Canada, that provides IT support to all government institutions. And there is a government department, Public Services and Procurement Canada, that specializes in contracting.
When CBSA needed IT help, they didn’t turn to Shared Services Canada. They didn’t hire outside programmers. They paid GCstrategies to hire outside programmers.
It seems that neither the federal government’s contracting department nor its IT agency is capable of staffing IT projects.
The two-person outfit of Mr. Firth and Mr. Anthony is apparently the rare organization in the capital that has figured out how government IT projects work.
Mr. Firth testified at a House of Commons committee that neither he nor Mr. Anthony do the coding or IT work. They are a staffing firm. The CBSA hired them to hire IT people, who worked alongside CBSA IT people on their IT projects. They made millions in markups.
Maybe that was good value, and the best way to spend public money. Maybe not. One has to suspect that some of the rapidly expanding sums that the federal government spends on IT might be wasted.
But for you, the Canadian taxpayer, there is no way to know.