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Canadian Government Agencies Have Big Problems With A New Public Blacklist

The Parole Board of Canada is even going to bend its own spending rules to dodge the blacklist.

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Federal government agencies have some major issues with a new so-called "Integrity Regime" that is forcing them to consult a list of blacklisted companies before buying anything, internal documents show.

The Parole Board of Canada is so worried about the "administrative burden" caused by the new procurement policy that it's going to bend its own spending rules to circumvent the regime, briefing notes say.

The parole board is going to tell employees to ignore previous limits and use government credit cards for bigger purchases, thus dodging purchasing rules, says the summer briefing obtained under access to information laws.

The parole board's rules state that government credit cards can be used up to a limit of $5,000, but that individual employees can only spend up to $1,000. "To minimize verification requests, we will encourage the use of acquisition cards to the $5,000 level,” the briefing says, adding that the board will still demand "due diligence."

Under the new policy — a dragged-out response to the sponsorship scandal — federal government departments will have to send information about potential contractors to a team of people at Public Works and Government Services Canada.

That team will then check whether the contractor — or anyone running the company — has been recently convicted of a list of offences, such as fraud, bribery, or tax evasion.

If they have, they'll end up on a public government blacklist that prevents them from bidding on or receiving government contracts for five to 10 years.

As was first revealed by Blacklock's Reporter, Public Works — which quietly launched the Integrity Regime in July — will go so far as to ask potential contractors for fingerprints to check for past law-breaking.

So far, only two small companies are on the blacklist.

Public safety organizations “have raised several concerns” about the regime, according to the briefing note for Parole Board of Canada head Harvey Cenaiko.

One of those concerns is that the Public Works team will only process requests between 8 a.m. and 4 p.m. ET at first, and requests could take up to four hours. Many of the agencies in the public safety portfolio — such as the correctional service and the RCMP — operate at all hours.

The document says Public Works agreed to allow departments to go ahead with any purchase under $10,000 if the company isn't on the list — but there's no list for individual people.

Another concern is the added workload. "The most significant impact on the Board will be the increased burden required, which, despite the PWGSC service standards, will add time and effort to the procurement process," the briefing note says.

The parole board is also worried about its contracts with Aboriginal Elders, who sometimes help with hearings and "may be resistant to such verifications."

The briefing note says Public Works insisted everyone be subject to the Integrity Regime and "noted that there would likely be few offences, if any, which would apply to Elders."

Public Works claims on its website that the new regime "will foster ethical business practices, ensure due process for suppliers and uphold the public trust in the procurement process."

The only way a blacklisted company can get a federal government contract is if the department or agency decides it's "necessary to the public interest."

Canadian business lawyers Milos Barutciski and Matthew Kronby penned an opinion piece for the Globe and Mail in July saying the new regime "fails to strike the right balance between punishment and deterrence of misconduct (principally the domain of criminal law) and protecting the integrity of federal procurement and taxpayer dollars (the domain of procurement rules)."

The parole board and Public Works declined interview requests.

Emma Loop is a politics reporter for BuzzFeed News and is based in Washington, DC. PGP fingerprint: 4A39 DD99 953C 6CAF D68C 85CD C380 AB23 859B 0611.

Contact Emma Loop at emma.loop@buzzfeed.com.

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