Watchdog finds 'strong perception of favoritism' toward McKinsey in some government contracts

The federal procurement watchdog says the government has created a «strong perception of favouritism» in awarding certain contracts to the consulting firm McKinsey & Company.

A report released by Canada's procurement ombudsman Alexander Jeglic last month examined government contracts awarded to McKinsey between April 2011 and March 2023.

Jeglic found that McKinsey had been awarded dozens of contracts totalling $117 million over that period of time.

CBC News has reported that the amount of public money Ottawa has awarded to McKinsey has skyrocketed since the Liberals formed government in 2015. Jeglic's report echoes CBC's findings.

«The value of contracts awarded to McKinsey started to increase in 2018 with significant increases observed in 2019 through 2022,» the report says.

Jeglic also noted that most of the contracts awarded to McKinsey were sole-sourced and primarily came through a «standing offer» — an agreement between the government and a contractor to provide goods and services under pre-established terms and costs. The government can then issue a «call-up» contract to the contractor to provide the services established in the offer when the need arises.

McKinsey was awarded a standing offer through Public Services and Procurement Canada (PSPC) to provide «benchmarking services which consist of functional tools, databases, and expert support to measure their performance against similar Canadian and international organizations,» said Jeglic's report.

Ombud flags concerns about documentation

Jeglic says the standing offer was sole-sourced even though PSPC failed to provide proper justification for the non-competitive process.

"[McKinsey's standing offer] may have been improperly established on a non-competitive basis given