One of the most lucrative contracts a private company can sign is any sort of deal they can make with a government. Not only do they know they will be guaranteed payment, supply contracts are usually long term. Whether it's supplying a ministry with office supplies or the janitorial staff with cleaning fluid you can usually be sure of your contract being renewed if you approach competence and the government doesn't change.
It's an accepted fact of life that somebody is going to hire their brother in law's firm to clean the toilets on Parliament Hill over a complete stranger. It's one of the ways that party loyalty is repaid the world over, and not even an ethics commissioner would raise a fuss about it. But it's supposed to be a different story when it comes to matters like multi-year, multibillion-dollar defense contracts.
In Canada, government military contracts involve four separate ministries. The Department of National Defence (DND) sets out the specifications that the military requires from a particular piece of equipment; the Department of Public Works and Supply issues a request for proposals to determine a supplier; Industry Canada are asked to identify Canadian companies that could potentially act as sub-contractors for the production of required equipment and assess the regional economic benefits of each bid; and finally the Treasury Board finalizes the contract – they sign the cheques – and ensures everything is on the up and up according to their policies.
This may a sound a little complex, but what it is supposed to do is make sure that the bidding process is transparent and fair and that Canada is getting the best deal it can for the taxpayers money. But according to a recent report prepared for Canadian Center For Policy Alternatives called No Bang For The Buck, the government of Canada has managed to arrange that more then 40% of the contracts signed in the fiscal year 2006-2007 were non-competitive.
This information was obtained freely from Business Access Canada data available on Public Works contracts. They do add the caveat that the government can and will withhold information about procurements that they consider matters of "National Security" – they can even reclassify items after they have been released if they so desire, as they have done with documents pertaining to the purchase of the Mercedes Benz "G-Wagon" troop carrier.
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