Professional Service Contracts Related to Service Processing
- Centre de services partagés du Québec
- Revenu Québec
- Régie des rentes du Québec
- Secrétariat du Conseil du trésor
Audit Scope and Objectives
The audit objectives were to obtain the assurance that:
- the audited entities administer the contract management processes for professional services related to information processing in accordance with the normative framework for contract management in effect and sound management practices.
- the Secrétariat du Conseil du trésor (SCT) conducts an appropriate follow-up of contract management processes for professional services related to information processing.
Selected Audit Criteria
- A rigorous needs assessment is done (description, duration, experience and knowledge required) and various possibilities are analysed adequately (internal resources, external resources and costs of each option).
- Cost estimate and scheduling are done with rigour.
- Supplier solicitation is done in accordance with the normative framework and with the view of obtaining several bids.
- Supplier selection is done in accordance with evaluation processes stipulated in the normative framework.
- The contract is complete and signed before work begins and significant variances between the estimate and the value of the contract are explained and approved by proper authorities before contract signature.
- Contract awarding is approved by proper authorities.
- Relevance of any amendments to contracts is demonstrated and amendments are approved in a timely manner by proper authorities.
- Follow-up is done in order to ensure that the contract is carried out by the personnel designated in the proposal, that the timeframe and budget is respected, that the invoicing is accurate, and that a supplier performance evaluation is carried out.
Main Audit Findings
- While most of the legislative and regulatory provisions that were examined are being followed, the numerous deficiencies in contract management raise concerns with regard to the fair treatment of suppliers and the judicious use of public funds. The deficiencies noted indicate that different contract management stages have not always been subject to sound management practices.
- Use of the daily rate as a type of remuneration was generalized for the 38 audited contracts. While the regulation permits this type of remuneration, the suppliers assumed only a small portion of the risks associated with executing the contracts.
- Supplier solicitation did not enable the objective of free competition to be fully reached. The average number of tenders received that were compliant and acceptable following a public call for tenders is not very high.
- An entity entered into nine contracts, for which the maximum amount exceeded what was proposed by the supplier in its tender. The contracts were signed based on the amount estimated by the entity.
- Often, the supplier who continued the work was the one who had been awarded the previous contract. As a result of a public call for tenders, the contract was granted to the same supplier 18 times for the 25 contracts in question. Such a proportion raises concerns with regard to the fair treatment of suppliers, especially since for 10 of the 18 contracts referred to, only one tender was compliant and acceptable.
- Several elements specified in the contract were not rigorously monitored by the entities. Deficiencies were noted, namely with regard to the execution of unplanned work, invoicing at higher rates than stipulated in the contract and non-compliance with the designated personnel.
- As for the use of external resources, when comparing the Government of Québec with other administrations, it is clear that the Government of Québec used these resources a lot more frequently. In the long term, frequent recourse to subcontracting may result in the stagnation or even the loss of internal expertise. Further, there is a risk this practice may create a dependency on suppliers.
Recommendations to the Centre, Revenu Québec and the Régie:
- Adequately document the definition of the needs and the cost estimates.
- Assess how suppliers may assume a greater portion of the risks associated with contract execution.
- Analyze the difference between the amount estimated by the entity for the contract to be awarded and the amount in the tender accepted, as well as the differences between the amounts in the tenders found to be compliant and acceptable for the same contract.
- Improve the neutrality of selection committees.
- Analyze situations where work is continued with the same supplier as a result of a public call for tenders with a view to ensuring fair treatment of suppliers.
- Document, in a timely manner, the details given to suppliers concerning the work to accomplish and the necessary profiles of resources.
- Improve the monitoring of elements in each contract with regard to:
- the execution of the work, to ensure that it corresponds to the work provided for in the contract;
- the application of the specified type of remuneration;
- the application of rates provided for in the contract upon payment of the supplier;
- the execution of the work by designated personnel.
- Include a penalty clause in the contract with regard to designated personnel and apply it, where appropriate.
- Carry out a supplier evaluation.