Combating Fraudulent Activities Announcement

Wednesday, March 20, 2024

Public Services and Procurement Canada is taking action to combat fraud in the Government of Canada

Public Services and Procurement Canada (PSPC) has a framework of laws, regulations, policies, programs and services in place to prevent, detect and respond to potential wrongdoing, in order to safeguard the integrity of the federal procurement system. When we detect issues or receive allegations that the Government of Canada is being defrauded either in a specific contract or on a broader scale, we respond.

Today, PSPC announced that it has detected several fraudulent billing schemes undertaken by subcontractors (individuals) working on federal contracts awarded to prime contractors (suppliers). These individuals submitted timesheets  and billed multiple departments under separate contracts. This was detected as a result of the department’s ongoing efforts to strengthen its approach to detecting fraudulent activities and other types of wrongdoing.

As part of today’s announcement, investigations have found that 3 information technology subcontractors fraudulently billed on contract work across a number of separate federal departments, agencies and Crown corporations between 2018 and 2022. These illegitimate payments are estimated to total nearly $5 million. Today’s announcement is the first wave of fraudulent billing cases the department has identified, with more expected to be announced in the coming months. Consistent with Budget 2018 commitment to strengthen our approach to addressing corporate wrongdoing, these cases are the result of departmental investigatory efforts supported by data analytics.

In response to these founded investigations, PSPC has taken action to revoke or suspend the security status of the subcontractors in question. Following administrative investigations, the department has referred the cases to the Royal Canadian Mounted Police (RCMP). The RCMP is investigating. As such, we cannot release the names of the individuals or the list of suppliers as a subset of suppliers could be subject to the RCMP investigation. In order to protect the integrity of ongoing investigations, further details cannot be provided at this time.

The department is also moving forward to recover these illegitimate payments on behalf of the Government of Canada.

We encourage people who suspect illegal, illicit or unethical activities in Government of Canada contracting to report these activities directly to our Special Investigations and Internal Disclosure Directorate, at spac.dgsdivulgationinterne-dobinternaldisclosure.pspc@tpsgc-pwgsc.gc.ca, or to the Federal Contracting Fraud Tip Line.

PSPC has effective methods to detect and respond to instances of fraudulent activity, as today’s announcement demonstrates. We will continue to refine and expand the use of our tools, including data analytics, to better detect and address wrongdoing, and to ensure that individuals or entities engaging in fraud or other illegal activities are held accountable for their misconduct, while seeking restitution to the Crown. In addition, PSPC is regularly exploring lessons learned from identified schemes and cases of wrongdoing to further refine its prevention (including training) and detection measures, in order to better respond to future potential instances of misconduct.