Report Finds “Strong Perception of Favoritism” in Government Contracts Awarded to McKinsey & Company
The Canadian government is under scrutiny after a report from procurement ombudsman Alexander Jeglic revealed a concerning trend of favoritism in awarding contracts to consulting firm McKinsey & Company. The report, which examined contracts awarded between April 2011 and March 2023, found that McKinsey had won dozens of contracts worth $117 million, with a significant increase in contracts awarded between 2019 and 2022.
Many management consulting firms, including McKinsey and Deloitte, have been heavily involved in helping governments manage the Covid-19 pandemic, providing services for healthcare response, loan programs, and unemployment programs. However, the report raises questions about the fairness and transparency of the procurement process, particularly in the case of McKinsey.
Previous reporting by CBC News revealed that McKinsey had won over $100 million in consulting contracts since the Liberals took office in 2015, compared to just $2.2 million under the prior Conservative government. The report also highlighted issues with the procurement process, including sole-sourced and standing offer contracts that lacked proper justification and documentation.
Jeglic’s report pointed out that the government’s standing offer for McKinsey was sole-sourced, but the justification documents did not provide sufficient information to justify the non-competitive process. Additionally, many call-up documents did not specify the work to be performed by McKinsey, raising concerns about the lack of transparency in the contracting process.
The ombudsman also identified cases where the procurement process was altered to enable a McKinsey bid that would not have otherwise qualified, further highlighting the need for improved documentation and oversight in government procurement. The report comes on the heels of Auditor General Karen Hogan’s findings on the ArriveCan application, which cited cost overruns due to an overreliance on third-party contractors.
As the government faces mounting criticism over its handling of contracts with consulting firms like McKinsey, questions remain about the fairness and transparency of the procurement process and the need for greater accountability in awarding government contracts.
