OTTAWA — The federal government ignored its own procurement policies and did not properly check whether it got what it paid for as it gave consulting giant McKinsey tens of millions of dollars of business across more than a decade, auditor general Karen Hogan reported Tuesday. 

Here’s what you need to know.

The key figures: Some 20 departments, agencies and Crown corporations awarded McKinsey a combined 97 contracts worth $209 million between January 2011 and February 2023. Those deals bought the government management consulting, IT help, research support and health services. Of those contracts:

• 69, worth about $117.7 million, were non-competitive, meaning Ottawa didn’t take other bids for the work. Departments are allowed to use “standing offers” to buy goods and services at set prices. But those pre-established deals are designed for cases where the supplier has a unique offering, which the auditors said the Public Services and Procurement Canada didn’t properly prove in this instance. 
• Four of the 28 that did go out to tender used a procurement strategy that “appeared to be designed and implemented to suit McKinsey.”

• 17 had security requirements, and in 13 of those cases, departments failed to show the consultants working with them had compulsory clearances.  
• 15 of 33 that the auditors examined didn’t show evidence that the departments were actively monitoring the work they’d bought; in six, McKinsey failed to deliver everything set out in the agreement, while another five were too vaguely worded for the auditors to figure out whether the firm had done so.

The auditors said: “Federal contracting and procurement policies exist to ensure fairness, transparency and value for Canadians—but they only work if they are followed.”

Procurement Minister Jean-Yves Duclos said the government has applied recommendations from prior reviews to its practices for buying professional services, and established a new executive role to ensure documentation and monitoring of contracts. 

McKinsey said: “We stand by our work and are confident that we both satisfied the needs of our government clients and delivered value for money,” said spokesperson Alley Adams. The report, she noted, did not suggest McKinsey had done anything wrong in its pursuit of contracts. Adams also highlighted the finding that the firm received just 0.27 per cent of payments that the government made over the 12-year period for the type of work McKinsey does.