Murray Brewster · CBC News
A SNC-Lavalin contract with the Department of National Defence (DND) worth half a billion dollars comes up for renewal next year — when the Montreal-based engineering giant is expected to be on trial over corruption charges.
The pending expiry of the $507 million contract to support the servicing of minor warships and auxiliary vessels, signed in 2011, sharpens the debate over what a guilty verdict would mean for the Quebec-based engineering giant and whether a conviction actually would mean subjecting the company to a 10-year ban on bidding for federal contracts.
The stakes are high for DND. In addition to holding an important defence contract, SNC-Lavalin has access to a range of secret military drawings, equipment and intellectual property. Although its agreements are periodically reopened to new bids, the embattled corporation has been a reliable contractor for National Defence.
A survey of active federal government contracts shows DND and Public Services and Procurement Canada (PSPC) were the two biggest users of SNC-Lavalin services and construction during the current fiscal year.
Across the whole of the federal government, SNC-Lavalin holds 53 'active' federal government contracts — 25 of them with DND — with a combined value of $670 million.
The firm signed roughly $68 million in new or renewed agreements with the federal government ($23.7 million with DND and PSPC alone) in the current budget year up to the end of December.
That figure excludes what could be a large number of smaller contracts worth less than $25,000 — contracts the federal government can award without competition.
An inventory of those agreements is extremely difficult to track down, but PSPC acknowledged it awarded $146,522 in minor work to SNC-Lavalin in the current fiscal year.
The RCMP laid corruption charges against SNC-Lavalin and some of its units in February 2015. All the charges relate to the company's operations in Libya. The charges allege that the company offered officials in that country $47 million in bribes and accuse SNC-Lavalin and two of its subsidiaries of defrauding various Libyan public agencies of approximately $129.8 million over 10 years, starting in 2001.
The company has been at the centre of a political firestorm since early February, when The Globe and Mail reported that former justice minister Jody Wilson-Raybould felt pressured by the Prime Minister's Office to grant the company a deferred prosecution agreement (DPA) — a legal tool which would have allowed the company to avoid a criminal trial by acknowledging fault and paying a fine, among other conditions.
In defending their interest in a DPA for SNC-Lavalin, Prime Minister Justin Trudeau and others in his government have pointed to the scale of the engineering firm's business, the possibility it could be banned from federal government work and the number of people it employs.
Scott Newark, a former Crown prosecutor who teaches at Simon Fraser University, said it's been clear from the outset that avoiding the federal contract ban has been SNC-Lavalin's main objective.
The question of what would happen to those federal contracts should the company be convicted is a subject of debate, however.
There are policy provisions that allow federal officials to cancel existing contracts and ban future bids from a company convicted of serious crimes, such as bribery.
PSPC would only say the federal government would "assess the situation" if "a supplier becomes ineligible during the life of a contract" due to a conviction.
The power to terminate or suspend a contract rests with federal bureaucrats, according to PSPC's Ineligibility and Suspension Policy.
A company convicted of serious crimes can avoid being fired by the feds by signing an undertaking stating "that it will conduct business with Canada in an ethical and responsible manner." But there's never a guarantee that such an undertaking will be offered to a convicted company.
Just three companies are currently banned from carrying on business with the federal government — all relatively small firms in Ontario, Quebec and Newfoundland.
A spokesman for DND said there's nothing stopping SNC-Lavalin from continuing to bid on federal contracts as they appear, even during its trial.
"These contracts were issued pursuant to Government of Canada contracting regulations, particularly as it concerns open, fair and transparent competitions," said Dan Le Bouthillier in an email. "Those regulations also stipulate that any company eligible to bid on Government of Canada contracts may continue to do so, so long as they meet the necessary requirements for the work."
In an analysis piece for the Macdonald-Laurier Institute, Newark said PSPC is working on a revision of its 'integrity regime' policy to give federal officials more discretion to waive bans of individual companies contracting with the federal government.
Public Services Minister Carla Qualtrough has said her department is looking at eliminating fixed bidding disqualification periods and replacing them with a wholly discretionary determination — which would include the option of imposing no contracting ban at all.
Even under the current system, Newark said, an order cancelling a company's federal contracts and banning it from future contracts following a conviction is far from a slam-dunk.
"I checked on the Criminal Code and the Corruption of Public Foreign Officials Act and, of course, it's not in those statutes. It's not a mandatory consequence." he said.
The integrity regime review has been underway in Qualtrough's department since 2017. Newark said he's amazed that nobody with the company or the federal government seems to have realized that a conviction for SNC-Lavalin could lead to something other than a 10-year contracting ban.
"Why didn't anybody say, 'Hey wait a minute. We know what about this. We're changing our policy,'" he said.
The head of procurement at DND attempted to reassure members of the all-party House of Commons defence committee during a hearing last month that SNC-Lavalin's "secret" work for the federal government does not pose an unacceptable risk.
"We hold the intellectual property, the drawings and everything," Pat Finn testified on Feb. 28. "Irrespective of the circumstances in which the contract is terminated, we hold the material."
June 25, 2024 | Local, Land
The Honourable Bill Blair, Minister of National Defence, will visit Halifax from June 27 to June 28, 2024 to discuss Canada’s defence policy update, Our North, Strong and Free, launch construction on the Canadian Surface Combatant project
May 5, 2020 | Local, Aerospace
“Le rapport de l'industrie comprend également l'impact de COVID-19 sur le marché mondial. Restez à la maison | Restez en sécurité Avions militaires Marché Dans les avions militaires, les segments d'avions multirôles et de transport devraient représenter 59,3% et 23% du marché. L'industrie Avions militaires a connu un taux de croissance solide au cours de la décennie précédente et devrait beaucoup progresser au cours des prochaines décennies. Il est donc essentiel d'identifier toutes les opportunités d'investissement, les menaces à venir du marché, les facteurs limitants, les défis, la dynamique du marché et les avancées technologiques pour renforcer la présence dans Avions militaires industries. La recherche proposée a analysé tous les éléments ci-dessus afin de présenter au lecteur une analyse détaillée qui inspire la croissance attendue de ses activités. 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Accéder à la description complète du rapport, à la table des matières, à la figure, au graphique, etc. @ https://garnerinsights.com/Avions militaires Marché La croissance de ce marché à l'échelle mondiale est soumise à divers facteurs, dont la consommation de Avions militaires produits, les modèles de croissance des sociétés inorganiques, la volatilité des prix des matières premières, l'innovation des produits et les perspectives économiques des pays producteurs et consommateurs. En conclusion, ce rapport vous fournira une vue claire de chaque fait du marché sans qu'il soit nécessaire de vous référer à un autre rapport de recherche ou à une source de données. Notre rapport vous fournira tous les faits sur le passé, le présent et l'avenir du marché concerné. Contactez-nous: Mr. Kevin Thomas +1 513 549 5911 (US) +44 203 318 2846 (UK) Email: sales@garnerinsights.com“
November 11, 2019 | Local, Naval
HALIFAX, Nova Scotia, Nov. 10, 2019 (GLOBE NEWSWIRE) -- The Royal Canadian Navy's second Arctic and Offshore Patrol Ship (AOPS), the future HMCS Margaret Brooke, was launched today, Nov. 10, 2019, at Halifax Shipyard. The launch of the second of six AOPS for the Royal Canadian Navy, marks a significant milestone for Canada's National Shipbuilding Strategy (NSS) and the revitalization of the Royal Canadian Navy's combatant fleet. The 103-metre future HMCS Margaret Brooke transitioned from Halifax Shipyard's land level facility to a submersible barge on Nov. 8, 2019 and launched in the Bedford Basin today. The ship is now pier side at Halifax Shipyard where work continues to prepare the ship for sea trials and handover to the Royal Canadian Navy late next year. The future HMCS Margaret Brooke joins Canada's lead AOPS, the future HMCS Harry DeWolf, pier side at Halifax Shipyard. The future HMCS Harry DeWolf is in the final stages of construction and is preparing for initial builder sea trials at the end of November. Inside Halifax Shipyard's facilities, the Royal Canadian Navy's third and fourth AOPS, the future HMCS Max Bernay and the future HMCS William Hall, are under construction. The first two major sections of the future HMCS Max Bernay are scheduled to be moved outside in spring 2020. Canada's NSS was created to replace the current surface fleets of the Royal Canadian Navy and the Canadian Coast Guard. Over the next few decades, Halifax Shipyard will build six AOPS for the Royal Canadian Navy, two AOPS for the Canadian Coast Guard, and 15 Canadian Surface Combatants for the Royal Canadian Navy. As a result of the NSS, Irving Shipbuilding has become one of Atlantic Canada's largest regional employers, with thousands of Canadians now working in skilled, well-paying jobs. Halifax Shipyard, long at the centre of Canadian shipbuilding, is now home to the most modern, innovative shipbuilding facilities, equipment, and processes in North America. Halifax Shipyard is also continuing its legacy as the Halifax-class In-Service Support Centre of Excellence, with HMCS Charlottetown currently in the graving dock for an extensive docking work period. Quote Kevin McCoy, President, Irving Shipbuilding “Congratulations to our more than 2,000 shipbuilders on today's successful launch of the future HMCS Margaret Brooke. It is exciting to have two Arctic and Offshore Patrol Ships in the water and closer to being in use by the Royal Canadian Navy's sailors.” Media Contact: Sean Lewis Director of Communications Irving Shipbuilding Inc. T: 902-484-4595 E: Lewis.Sean@IrvingShipbuilding.com https://www.globenewswire.com/news-release/2019/11/10/1944417/0/en/Halifax-Shipyard-launches-Canada-s-second-Arctic-and-Offshore-Patrol-Ship.html