OTTAWA, Wednesday, November 23, 2011

The Subcommittee on Veterans Affairs of the Standing Senate Committee on National Security and Defence met this day at 12 p.m. to study the services and benefits provided to members of the Canadian Forces; to veterans; to members and former members of the Royal Canadian Mounted Police and their families.

Senator Roméo Antonius Dallaire (Chair) in the chair.

[Translation]

The Chair: Good afternoon. Welcome to this meeting of the Subcommittee on Veterans Affairs. We are continuing our study on the Corps of Commissionaires, and the parameters around that organization and the federal government, as well as the procedures that enable them to become preferred contractors, if I may use that term.

Our witnesses today are Marc O’Sullivan, Assistant Comptroller General at Acquired Services and Assets, and his team; and Pablo Sobrino, Associate Assistant Deputy Minister at the Acquisitions Branch, who is also joined by a member of his team.

Mr. O’Sullivan, you may go ahead with your presentation. Mr. Sobrino will speak after you, and then we will move on to the question period.

I want to point out that our committee is being televised, and I hope that many veterans are following our proceedings.

[English]

Marc O'Sullivan, Assistant Comptroller General, Acquired Services and Assets, Treasury Board of Canada Secretariat: My name is Mark O'Sullivan. I am the Assistant Comptroller General for Acquired Services and Assets of the Treasury Board Secretariat. With me is Shirley Jen, Senior Director, Real Property and Materiel Policy Division. She is responsible for, among many other things, the Common Services Policy. We understand that the subcommittee has expressed an interest in the Canadian Corps of Commissionaires' right of first refusal. Since 1945, the federal government has awarded guard services contracts to the Corps of Commissionaires on a right-of-refusal basis, that is, without competition. The purpose of the right of first refusal was to provide job opportunities to veterans, and this continues to be its primary objective.

This goal, the employment of veterans, provides a justification, under government contract regulations, for awarding these contracts without competition. These regulations normally require the soliciting of bids before entering into contracts. However, an exception is allowed when the nature of the work is such that it would not be in the public interest to solicit bids. The right of first refusal accorded to the Corps of Commissionaires is deemed to be in the public interest insofar as it can be directly linked to the employment of veterans.

[Translation]

Departments are required by the Common Services Policy to use Canadian Corps of Commissionaires’ guard services on a mandatory basis. The contracting mechanism is the National Master Standing Offer, which was created and is managed by Public Works and Government Services Canada. Departments are required to hire commissionaires under this contract before being allowed to consider other contracting options.

The current National Master Standing Offer was renewed in April 2011 for another five years, until 2015-2016. The estimated value of this contract is $1.35 billion over a five-year period. This right of first refusal awarded to the Corps of Commissionaires underwent two Treasury Board reviews: one in 2004 and another one in 2006. The 2004 review was triggered by concerns that the right of first refusal was unfair to security companies, particularly as it was not clear how many veterans were actually employed under these contracts.

The 2004 review resulted in a requirement for a 70 per cent minimum veteran participation rate on contracts awarded to the Corps of Commissionaires without competition. This was deemed necessary to establish the direct employment benefits to veterans from the right of first refusal contracts.

Subsequently, the Corps of Commissionaires expressed concerns about meeting these new veteran participation rates. As a result, in 2006, the Treasury Board reviewed the issue and approved some amendments to make it easier for the corps to meet those requirements.

These amendments included lowering the minimum number of hours worked by veterans from 70 per cent to 60 per cent of the total contract hours. The 60 per cent participation rate was to be calculated on a national basis, instead of by each individual contract, and the definition of "veterans" was extended to include former members of the Royal Canadian Mounted Police.

[English]

Beginning in July 2009 the Corps of Commissionaires engaged the President of the Treasury Board with a proposal to remove the 60 per cent veteran quota and replace it with a new accountability framework recognizing the Corps of Commissionaires as providing services on behalf of all veterans and not just those who work under contract with the federal government.

In June 2010 after lengthy consideration, the then President of the Treasury Board informed the Corps of Commissionaires that its proposal could not be accepted. In doing so, he cited the 2004 and 2006 reviews and noted the absence of a compelling reason to revisit the Treasury Board decision yet again. The president also referred to the requirement to comply with government contract regulations.

As I mentioned at the beginning of my remarks, these regulations require a direct public-interest justification for awarding the contract without competition. The direct employment of veterans constitutes that public-interest exception. This was the purpose of instituting the 60 per cent threshold for veterans. Removing the threshold would no longer support a public-interest rationale for the exception to the rule that you must bid for contracts. It would, thus, be contrary to government contract regulations.

This approach is in keeping with the government's commitment, under the Federal Accountability Act, to promote fairness, openness and transparency in the bidding process for contracts.

This concludes my remarks.

[Translation]

The Chair: Thank you very much, Mr. O’Sullivan, for your concise but clear presentation.

[English]

Pablo Sobrino, Associate Assistant Deputy Minister, Acquisitions Branch, Public Works and Government Services Canada: I am pleased to be here today, and I thank you for the opportunity to appear before the subcommittee to speak about how the Government of Canada procures guard services from the Canadian Corps of Commissionaires.

[Translation]

I am Pablo Sobrino, the Associate Assistant Deputy Minister for the Acquisitions Branch at Public Works and Government Services Canada.

With me is Vincent Robitaille, the Senior Director for the Professional Services Procurement Directorate of the Acquisitions Branch.

[English]

Public Works and Government Services Canada plays the role of common service provider for acquisitions in the Government of Canada. For the purposes of security guard services, PWGSC is responsible for negotiating and managing the procurement tool, in this case a standing offer, to meet the requirements of client departments.

[Translation]

As Mr. O’Sullivan said, the policy direction with regards to the procurement of security guard services dates back to 1945, when a Treasury Board decision set out that consideration would be given to the employment of veterans supplied by the Canadian Corps of Commissionaires. The Treasury Board last revised this in 2006, as Mr. O’Sullivan mentioned.

[English]

The Treasury Board's Common Services Policy provides the framework under which Public Works manages the procurement of guard services. This policy authorizes us, as the common service provider for acquisitions, to enter on an annual basis into a non-competitive National Master Standing Offer with the corps.

[Translation]

The National Master Standing Offer is an umbrella agreement that any department needing security guard services must use to enter into a contract. This umbrella agreement provides the corps with a right of first refusal and identifies a minimum threshold for veteran participation.

[English]

To comply with the policy, veterans must perform an average of 60 per cent of the hours worked under the National Master Standing Offer on a national basis. We ensure compliance with this requirement by obtaining a formal annual audit from the corps' third-party financial auditor. According to these audits, veteran participation has decreased from 73 per cent in 2006-07 to 62 per cent in 2009-10.

[Translation]

Public Works and Government Services Canada has also established secondary competitive regional master standing offers. The purpose behind them is to allow departments to enter into contracts if the corps cannot meet the terms and conditions under the National Master Standing Offer. The corps is permitted to compete for the secondary standing offers and, in fact, holds regional master standing offers in all regions of Canada.

[English]

In fiscal year 2010-11, the Government of Canada spent approximately $215 million on security guard services. The corps provided approximately 97 per cent of these services under the National Master Standing Offer.

[Translation]

In conclusion, I assure you that Public Works and Government Services Canada continues to fulfil its role in implementing Treasury Board policy with respect to security guard services, while meeting the Government of Canada’s security needs.

[English]

I would be happy to answer your questions. Thank you very much.

[Translation]

The Chair: Thank you very much. I appreciate the fact that you were brief. We can now begin the discussion.

[English]

Senator Plett: I am certainly very supportive of ensuring that our veterans are given every possible opportunity to provide services wherever we can do this. Certainly our government has been very supportive of that, and I am extremely happy.

Clearly, we have heard over the last while and are seeing even by the percentages that you gave us here this morning that it is becoming a little more difficult to employ high percentages of veterans. I guess that is as a result of veterans today being younger; they may be more highly educated and they are going into other fields. Clearly that is presenting a problem.

I have a few questions surrounding that. First, let me clarify the 60 per cent. The contract that is now out there for 60 per cent is for 60 per cent of hours worked; it is not that 60 per cent of the staff needs to be veterans. Is that correct?

Mr. Sobrino: That is correct; it is 60 per cent of the hours worked.

Senator Plett: It could be 50 per cent of the personnel working as long as it is 60 per cent of the hours?

Mr. Sobrino: That is correct.

Senator Plett: That is an average across the country. In my city of Winnipeg, or possibly in Senator Wallin's province of Saskatchewan, I know our numbers are probably a little lower than they are on the East Coast, maybe Halifax. If you would have 90 per cent in Halifax and 50 per cent in Winnipeg, that would be averaged, is that also correct?

Mr. Sobrino: That is correct. We calculate it as a national average.

Senator Plett: That is great. Even at this point, you have a contract or there is a contract that is going to expire in 2015, 2016. Is a review done annually, and what are the consequences if we drop? If we are at 62 per cent now; I am afraid that in a year from now we might be at 59 per cent. What are the consequences if that happens?

Vincent Robitaille, Senior Director, Professional Services Procurement Directorate, Acquisitions Branch, Public Works and Government Services Canada: This is why we have a secondary competitive standing offer. Basically, the corps would have to refuse the work, and it would be done under the competitive contracts that we have for security guard services. They would have to refuse the incremental work, but they could still keep providing the core work that they can do while respecting the 60 per cent.

Senator Plett: By refusing the work, are you saying they could not do the work or they say they will not do the work? To me, there would be a difference. I think one of our problems, maybe even in the past, has been with perhaps an overly optimistic presentation that has been made occasionally, saying we can; maybe we are struggling with that. I would like to make sure that our veterans are protected every step of the way and I am concerned about that.

If the corps says we will do the work but they are failing, what would happen?

Mr. Robitaille: It is a two-step process. First, they could refuse the work, as I mentioned. Otherwise, you would stop awarding new contracts to them until the average comes back above 60 per cent. Again, it is only the incremental work, not the bulk of the work. We would not be in the situation where a contract is cancelled all of a sudden or anything like that.

Mr. O'Sullivan: If I may, I think it is noteworthy that although the corps would not be able to do the work under their contract, under their right of first refusal, the corps has competed and won under the regional National Master Standing Offers — I think in all of the regions, with the exception of Quebec. Therefore, even if the corps cannot do the contract under their right of first refusal, having won the competitions and being on the standing offer in all provinces except Quebec, it can fulfill that contract under that standing offer, which was competed for.

Senator Plett: There they would not be required to use veterans if they have competed, correct?

Mr. O'Sullivan: That is correct.

Senator Plett: That is wonderful. I think that is great. What services are the corps permitted to provide under their standing order? Is there a range of services that you have?

Mr. Sobrino: I can list them for the record. They are intervention responsibilities, such as access control; patrol of buildings and restricted areas using physical or technological means, so they can either watch it through video cameras or be present at the entrances; custodial duties of information and assets, including locksmith responsibilities, which is the work of managing the keys and access control to buildings and facilities; administrative duties that can be assigned in the performance of their services, such as recording of information and getting information through the system, getting information off computers to identify people and arrange for people to come down and meet the visitors, for instance; reception information desk duties at restricted points of access, which is probably the one that is most visible to everyone who enters into a building that has commissionaire service; security scanning of incoming mail, parcels and freight at central receiving areas — they do that initial screening of packages and material that come into buildings, which is a back office kind of responsibility that they fulfill; fingerprinting and other identification services — when you go in to get a pass or whatever, it is mostly commissionaires who are doing that service of making sure that all the ID requirements are met; and involvement on the information management side in the proper disposal of records and issues like that. Again, all these areas are places where you want to have people with bona fide security credentials to be able to handle this kind of stuff. That is the list of services.

Senator Plett: You may have mentioned this in your opening remarks, and I apologize if I missed it: What are the results of the last audit on the participation of veterans right now?

Mr. Sobrino: For the last year, 62 per cent.

Senator Plett: Thank you. I will save any other questions, chair, if there is time later.

[Translation]

The Chair: When answering Senator Plett’s question, you said that there is a standing offer for all regions except Quebec. What was the exception you mentioned involving Quebec?

Mr. Sobrino: A competitive process took place, and the Canadian Corps of Commissionaires beat out all the other companies that bid on the contract. In Quebec’s case, private companies bid and won the contract for the province in terms of secondary services.

The Chair: In competition with the private sector?

Mr. Sobrino: In competition with the private sector.

[English]

Senator Wallin: To clarify the 97 per cent figure, the three occurs there. Is that in Quebec City?

Mr. Robitaille: This is correct.

Senator Wallin: I want to drill a little deeper on the issue that my colleague raised on the changes that we have seen from 70 per cent to 62 per cent. What is your assessment? We have all come to a general conclusion that it is because the vets returning are younger, more highly educated and have more options at this point. What does your audit tell you?

Mr. Sobrino: The audit information does not give us any insight into that because it is very much a factual report. Anything we can say would be pure speculation. You have heard more testimony than we have heard on the issue.

Senator Wallin: Your sense of it, as well, is what we have stated here.

Mr. Sobrino: The demographic is changing, which is clearly the issue.

Senator Wallin: On the minimum hours down from 70 to 60 and the national base, do you have any information on the geographic distances? We speculated Halifax high and Saskatoon low because many of our veterans are in rural areas, not in cities. Is there any data on that collected anywhere?

Mr. Robitaille: The information that we obtained is from the financial auditor, which provides us with the national average. This is the data we use and rely on. We do not have the breakdown because we do not get that information.

Senator Wallin: Do you know who has that?

Mr. Sobrino: Presumably the Corps of Commissionaires would have that kind of information.

Senator Wallin: The notion of the exemption because of special circumstances started in 1945, as you say. Is that principle still intact, as far as you understand? Do we believe that there is a special circumstance owed or a special responsibility owed to veterans?

Mr. O'Sullivan: Yes. The standing offer was renewed, which is a decision of the Treasury Board. It signals the commitment to pursue and the recognition of a valid public interest objective — the employment of veterans. No one will argue against that.

Senator Wallin: That has not been changed anywhere. There is no suggestion of a change.

Mr. O'Sullivan: No.

Senator Wallin: As you suggested, if the corps could not reach the standard on the right of first refusal — if it is 59 per cent as opposed to 60 per cent, they could immediately go into the standing offer category. Is that correct? At that minute, do they know it? Do they have to indicate that or do you indicate that? How does that process work?

Mr. Robitaille: With the information they have available, they know whether they are at risk of not meeting that requirement, in which case they can reallocate the work to the competitive standing offer. The prices are slightly different, so they would not have to meet the veteran requirement for that part of the work.

Senator Wallin: I am trying to figure out what special circumstances there might be. Is there another discussion inside the right of first refusal category? Are there considerations other than 60 per cent?

Mr. Robitaille: Yes.

Senator Wallin: Can they say, "We are the best for the job; or we have a history?" How else can they make that case?

Mr. Robitaille: The right of first refusal means that we have to go to them. They do not need to demonstrate that they are the best; we already assigned it.

Senator Wallin: If they are at 59 per cent as opposed to 60 per cent, is there any right of appeal at that point such that they could say, "Look, we know the bar is 60 per cent and we are at 59 per cent, but these are the reasons we should do this anyway?" Is that simply impossible, and they must go into the standing offer category?

Mr. Robitaille: It is not possible. They have to demonstrate that they were the most capable through a competitive process. They have been very successful at that in all regions except Quebec. This is the process that we use.

Senator Wallin: There is no deviance from that.

Senator Plett: I would like to continue with that. Using the illustration I used before, in Halifax we could have 90 per cent, in Winnipeg we could be down to whatever and, overall, the national average could be 59 per cent. However, there is a contract in a certain region where the veterans make up 80 per cent of the hours worked. I do not want to intervene in contract negotiations, but I find it a little disturbing that in a region at 80 per cent while the national average is 59 per cent they would not be given some special treatment. I believe in free enterprise, let us be straight, but I also believe in giving our veterans every opportunity possible. If that is the case, at least I have gone on record stating that it is a bit concerning for me.

Mr. Robitaille: The way the Common Services Policy is structured, the Treasury Board decision uses a national average. We are leaving it to the Corps of Commissionaires to make the decision on how they allocate the work to achieve the 60 per cent. We do not do that on their behalf.

Senator Dawson: In terms of the changing nature of our veterans, Mr. Sobrino, you talked about computer skills. Are we studying ways to widen the scope for returning veterans so they can participate in a favourable environment? Are other contracts awarded by the government that would categorize the new type of veterans so they could be favoured? We are talking about those with computer skills, military skills and better education than those we used to see; as well, they are much younger. Are you or the Corps of Commissionaires studying what type of projects they could be favoured for?

Mr. O'Sullivan: You have to understand that the right of first refusal operates within certain limits established by our trade agreements. Under the North American Free Trade Agreement and our agreements with the World Trade Organization, guard services are excluded, so we do not have a problem. We are not running afoul of our trade agreements by giving right of first refusal to the Corps of Commissionaires because guard services are excluded.

If we were to examine other types of commercial activities that could be undertaken by the veterans, you would have to verify whether those activities are covered by trade agreements. If they are covered by trade agreements, then you have to open them up to competition. You cannot remove the requirement for competition. The public interest exception that I mentioned in my opening remarks applies to Canada's regulations on contracts, but it does not apply to our trade obligations. We are a bit hampered to what extent we can decree that we will give preferential sourcing strategy for a given product or service.

Senator Dawson: Is there a process by which we are studying whether there is that little category beyond security that is not covered by trade agreements? I agree with trade agreements and our commitments towards other countries.

In that zone, are there other jobs not covered by trade agreements where we could define a category in which they could be favoured? We know the growth industry in security is the airports, and in the Canadian Air Transport Security Authority, CATSA, in particular. We know that because of CATSA and the very strong contracts given to guards for G4S and Securitas, there is a competitive environment that is now influencing the Canadian Corps of Commissioners. They are having trouble competing with these people because they have now these very important, lucrative contracts in cities. When a bid, preferential or not, is put on the table, the growth of those three companies in particular has made the Canadian Corps of Commissionaires' job a little more difficult.

[Translation]

I told you that Quebec was an exception. Is Quebec’s performance so much poorer because of the competitiveness of organizations already in the market? Or is it due to the fact that there are fewer francophone veterans in the City of Quebec, for instance?

What kind of feedback have you received to explain why Quebec in particular is weaker when it comes to this?

Mr. Robitaille: In terms of the outcome of the secondary standing offer in an open competition, we based our selection on the statement of work and obtained the best prices. This was an open competition, and we did not go any further than the results obtained.

Senator Dawson: If we were to ask Public Works and Government Services Canada or the Canadian Corps of Commissionaires itself, could they explain to us why Quebec’s performance is so poor?

Also, what can be done to improve the role of the Corps of Commissionaires in Quebec? Whom should we turn to for the answer to this question?

Mr. O’Sullivan: The outcome of the competition was not an assessment of the performance of the Corps of Commissionaires, but rather an assessment of the bids submitted in response to an invitation to tender. It is not a comment on the performance of the Corps of Commissionaires.

Senator Dawson: However, since there must be a reason behind their being less competitive, could regulations or negotiation be used to influence things? Or is this something — since it is the case — that is not seen as very important; it concerns Quebec and we will live with the fact that there is less competitiveness?

They have lost more contracts in Quebec, and we would like to know why.

Mr. Sobrino: At the end of a procurement process, we can conduct a general examination to see what factors led to the results. It is not really a study, but rather a consultation with those who participated in the procurement process. However, my duties do not include figuring out which areas — in other words, which other services — the Corps of Commissionaires could get involved in. I also do not think that this has to do with policy. It has more to do with the Corps of Commissionaires putting some thought into what role it could play.

Mr. O’Sullivan: When the corps suggested, in 2009, a new accountability framework to replace the threshold requirement of 60 per cent of hours worked by veterans, they were mostly interested in knowing whether they could have the right of first refusal on services other than security guard services.

We then explained that our international obligations placed some limitations on us. The discussion did not go any further. In other words, the corps did not specifically suggest that the security guard services be expanded to include other kinds of services.

I do not think that there are many exceptions in our trade agreements. The list is very short. In addition, I do not know how effective that approach could be because the norm, in terms of international agreements, is to allow competition.

The Chair: I would like to raise a few issues.

Without a doubt, if we are discussing the issue mentioned by Senator Dawson, the Corps of Commissionaires itself should be responsible for determining why it lost the contract.

However, since we are talking about a specific type of contract, a preferred contract, is it not up to the Treasury Board Secretariat and the government to see whether the market may tend to jeopardize the prerogative of the Corps of Commissionaires to meet that need?

Mr. O’Sullivan: If I understand your question correctly, you want to know whether the trend is ongoing, that is, whether the number of hours worked by veterans is in constant decline.

The Chair: No. Let us say that we are taking that for granted. However, let us say that competitors have become more competitive and, potentially, our results have dipped below the threshold of 60 per cent of hours worked by veterans. Is it not your responsibility to examine that issue with your client, the Canadian Corps of Commissionaires, in order to figure out if certain criteria should be revised?

Mr. O’Sullivan: A distinction needs to be made between a contract awarded under the right of first refusal and contracts awarded through an open competition. Our policy applies only to contracts with the right of first refusal and contracts associated with that right of first refusal. As for whether the Canadian Corps of Commissionaires is successful in invitations to tender for other contracts, that has to do with competition.

The Chair: Yes.

Mr. O’Sullivan: It is difficult to see how the government can try to influence the results of a competitive process to award contracts. That would be interference, and competition must be open, transparent and fair.

We are focusing on the only competition where the corps was unsuccessful, but let us not forget that the Canadian Corps of Commissionaires has won the competitions in all the other provinces, so, in most of the country. Even in the cases where they are below the threshold of 60 per cent of hours worked, they can access other contracts with Public Works and Government Services Canada.

[English]

Senator Manning: Thank you for your presence here today.

I would like to follow up in regards to other contracts. Are there any other contracts within the government of Canada creating employment opportunities for our veterans similar to security services through the commissionaires?

Mr. O'Sullivan: As I mentioned earlier, the difficulty is that we are hampered by our trade agreements. Guard services work because they are excluded from our main trade agreements. However, if we were to contemplate other types of services, we would have to check what the coverage is in our trade agreements. The trade agreements are premised first and foremost on open competition for contracts. The exceptions are few.

Senator Manning: In other countries, are guards protected when we have a trade agreement?

Mr. O'Sullivan: I understand that we excluded guard services in NAFTA, but the United States did not.

Shirley Jen, Senior Director, Real Property and Materiel Policy Division, Treasury Board of Canada Secretariat: With the WTO, a number of countries who are signatories to that agreement would also exclude guard services, but some may include guard services.

Mr. Sobrino: This is anecdotal, but the reality is that many veterans are employed through contracts the Government of Canada enters into. We do not track that number, and there is no requirement to track that number. Certainly, with companies that we do business with, we know there are veterans who work for those companies. That is a piece where we cannot ask people to report that information; there is no authority to do that. In other countries, they do report that information as to how many veterans they have employed in an organization, but we do not. I do not have any figures other than to tell you that many companies that we work with employ veterans.

Senator Manning: My understanding is that for last year you have expressed it as being around 62 per cent. Do you have any numbers for the previous three or four years to see what type of trend we are hitting there? I know there is a new five-year agreement that was signed in 2011. Were there any national averages before that?

Mr. Robitaille: Yes, the average decreased slightly since 2006-07. It was 73 per cent then, and it is now 62 per cent. There has been a growth in the number of commissionaires’ contracts, so it does not mean the absolute number of veterans working under the contract decreased; it is just the proportion of all the hours decreased.

Senator Manning: The hours may have decreased, and therefore the numbers would decrease. Is that correct?

The Chair: I believe the point is that there have been more contracts allotted and so they have employed more veterans hours.

Senator Manning: My understanding is that we recently renegotiated a new five-year contract to 2015-16. Is that correct?

Mr. Robitaille: Yes. We do sign a national standing offer on an annual basis because we negotiate the price annually. We have authority and we will sign those annually up to 2016.

Senator Manning: When you are negotiating the rates with the corps, how is that done? Can you explain when and how it is done? Is it based on national averages?

Mr. Sobrino: When we entered the negotiations, we had negotiated a rate structure every year based on wages and corporate overhead, and we have agreement on what the costing principles are. We also carry out those negotiations on a division-by-division basis with the corps, so different regions of the country would have different levels.

The review of the corporate overhead includes things like employee benefits, training and administrative overhead. Any increases for wages for commissionaires are based on the consumer price index or the annual provincial average wage increase for that particular year.

In some cases, in places where there is a market where the CPI does not properly reflect the increase, we consider that as well. It is done annually, division by division, and negotiated with the corps using some agreed principles in the standing offer.

Senator Manning: I agree with my colleagues. It is a wonderful program and gives an opportunity for our veterans that they may not otherwise have. It seems that apart from what they are pretty well guaranteed they also do well even on competitive contracts, so we are very pleased to hear that.

Senator Wallin: As I recall from earlier testimony, there are other preferential hiring programs in government for veterans. Is that correct?

The Chair: Yes, it is.

Senator Wallin: I mean separate from this, nothing to do with the corps.

Mr. Sobrino: The only thing I am aware of is through priorities to enter into the public service. That is direct hiring as employees coming from their National Defence work into the public service of Canada.

Senator Manning: To be clear on the contract that is now in place, it is renewed annually. Is that in place for five years? The agreement that you have presently is until 2015-16, but it is renewed annually. I want to clarify that.

Mr. Sobrino: The value or the contract amounts that you pay for hourly wages, et cetera, are negotiated annually, but it is in the frame of something that will continue. Its terms and conditions will continue until 2015-16.

Senator Plett: Further to the negotiations of rates, if it is security services, obviously, other security companies would provide similar services. I understand that the corps has the first right of refusal, but when you negotiate the rate for those services, would you take into account what other private companies would be charging for that same service, so that we have something comparable to what we would be paying private companies?

Mr. Robitaille: It is based on the contract cost principle that we have agreed to. It is based on the cost that the commissionaires incur in providing the services, so we are focusing on that. Our understanding is that the cost is approximately 15 per cent more than what the private sector provides.

The Chair: It is interesting because it is a non-profit outfit. I am finding that difficult to understand.

Do spouses and children of the veterans count in the figure for veterans?

Second, could they not do tasks, for example, as part of guarding or security, such as security clearances that the Royal Canadian Mounted Police are doing now, which is a real drain on RCMP resources?

Third, with respect to the expansion of security, can they do contracts where the security requirements require the carrying of weapons?

Is there anything in particular about injured veterans in regard to that requirement that goes beyond purely the term "guarding" or the strict definition of "guarding"?

Mr. O'Sullivan: First, under the Common Services Policy, a Canadian Forces veteran is defined as a former member of the Canadian Forces who has qualified in his or her military occupation and is honourably discharged. Therefore, that would not apply to spouses and children.

The Chair: If we are building policies, however, that are including the families more and more, including, for example, the New Veterans Charter, and if we wanted to include the families within those contexts, would it need a requirement to change the policy?

Mr. O'Sullivan: You would need a requirement to change the policy. The public interest aspect of that would have to be considered. You have to have a link between your public-interest objective, namely, the employment of veterans, and the contract that you are awarding. There has to be a rationale for saying why you are awarding this contract without competition to an organization that is employing veterans.

The notion of providing employment to veterans per se is one thing. Providing employment to veterans and their families is another question, and that would have to be reconsidered. We have to be mindful of not leaving the government vulnerable to legal challenges on this front because there are competitors out there who are looking at this, and if they were to challenge it, we have to be certain that we have a position that is defensible.

The Chair: Thank you for the first answer. I will only mention that our work on future transition, which does include the families, may in fact raise a point on this, including the employment of veterans throughout the public service and Canadian industry.

Thank you again for your first answer. Do you have an answer for my other questions?

Mr. Sobrino: On the second and third points, those would be requirements that a client department looks for. When we issue a new standing offer, if we have to look at whether those requirements can be incorporated, that would be considered. It is really a need that must be expressed by the department needing those services.

From our perspective, we provide the instrument, but it is the client department that must ask for it. This deals with duties, to be more open to the kind of duties they could perform.

In addition, there is nothing explicit that we follow around injured veterans.

Senator Plett: I would like you to explain Regional Master Standing Offers. After you have explained that, I would like to know what other companies hold them.

Mr. Robitaille: I will start with the standing offer. It is not technically a contract. It is an agreement where we have a service provider — in this case, the Corps of Commissioners — that offers to provide certain services at a certain price. It is kind of like a catalogue. When departments tell commissionaires they need to guard the entrance to this building with two security guards 24 hours a day, seven days a week, that request is done through a call-up, which is the actual contract. It is like using a catalogue: I want this. That is the nature of a standing offer.

When we say "national," it means across Canada, and "master" is for every department. In our jargon, that is what "National Master Standing Offer" stands for.

Senator Plett: Are there companies other than the corps that operate that way?

Mr. Robitaille: As we mentioned, there is one Regional Master Standing Offer in each region of Canada — the Atlantic, Quebec, Ontario, Alberta and the Pacific. For the two largest regions, Quebec and Ontario, we have two companies in case the first one cannot meet their obligations. The corps holds all of them, except for Quebec. The first rank is Securitas, and we hold the second rank as well. If the corps cannot meet obligations under the national regime with the 60 per cent right of first refusal, then it goes to Securitas. If Securitas cannot do so, it goes back to the corps.

In Ontario, the corps has the first rank, and the second rank is again Securitas. I hope that helps.

Senator Plett: It certainly explains it. Thank you.

What role does Public Works and Government Services Canada play in the Helmets to Hardhats program commitment in Budget 2011?

Mr. Sobrino: We play no role at all.

Senator Plett: Thank you.

Senator Dawson: How many provinces use the services of the Corps of Commissioners? Do any of the provinces give them the same preferential treatment? Even if it is only by standing offers, do some provinces use them? If so, which ones?

Mr. Robitaille: This question should be put to the Corps of Commissioners. We are aware they provide services to some provinces.

Mr. Sobrino: To be clear, the provinces do not use our standing offer to access that; they use their own.

Senator Dawson: Do they use your model of cost comparison between what they would charge a province versus what they would charge the federal government? Is that part of the process?

Mr. Robitaille: We were not consulted, so we cannot speak on behalf of provinces.

[Translation]

The Chair: There are no further questions, and the answers have been rather complete, but I have one last question anyway. Senator Dawson’s question meant the following: are there any provincial governments that have developed a policy similar to the one the Treasury Board Secretariat established for veterans in terms of security guard needs?

Mr. O’Sullivan: Unfortunately, I do not know that and cannot answer your question.

The Chair: Thank you for your answer. We are very concerned about the future of veterans, their transition, as well as their families.

[English]

One question remains on the role of government when we deploy overseas and contract overseas security requirements as well and whether they receive preferential contractual arrangements for missions overseas, for example in Afghanistan with guarding civilian infrastructure and so on. Does this policy cover guarding requirements not only within Canada but within any of the federal government operations overseas?

Mr. Robitaille: I am aware that we use some commissionaires for services in our embassies abroad, but, unfortunately, I cannot speak to the details as to whether it is a mandatory first step. I do know we use the NMSO.

The Chair: Therefore, it applies?

Mr. Robitaille: Yes.

The Chair: Very good. Ladies and gentlemen, thank you very much for the work you are doing with assisting in advancing a fundamental policy of our country, as well as the application by the government of this social contract to our veterans and the continued work in that regard. We are most appreciative of your candid responses and for appearing before us today. Thank you for that.

For my colleagues, before closing, the steering committee will be reviewing the terms of reference that we will introduce next week regarding the study we are embarking on, which the commissionaires are being rolled into, about the transition of veterans and their families to civilian life. Thank you.

(The committee adjourned.)