
Defence Billing Under Review Toronto Star \|\| February 06, 2006 OTTAWA—Federal auditors are targeting some of the biggest names in corporate Canada for allegedly overcharging millions of dollars in their contracts with government, newly released documents show. Most of the problems are at National Defence, which is still recovering from a massive $146 million contract fraud uncovered in 2003. There were 62 contracts in dispute as of Aug. 31 last year, with auditors alleging some corporations have claimed for ineligible costs, excess profits, overpriced goods, incorrect wage rates and a dozen other problems altogether worth about $9.5 million. Another 21 contract issues were resolved in the first eight months of last year, with the federal government recouping $2.9 million. The overpayment disputes are with a who's who of Canadian firms, including Air Canada, Boeing Canada Technology, Bristol Aerospace Ltd., IBM Canada Ltd., Lockheed Martin Canada and Spar Aerospace Ltd., although there is no evidence these companies have done anything wrong. Heavily censored documents outlining the alleged problems were obtained under the Access to Information Act from the Public Works Department, the clearing house for virtually all federal contracts. The released material blacks out key information, such as the dollar value in individual disputes and the audit issue in each case. But the latest list of problem contracts shows that most are with National Defence, the federal government's largest purchaser of goods and services. Article Posted at www.KnowledgeDrivenRevolution.com National Defence was the target of a computer-maintenance fraud from 1996 to 2003 that eventually drained $146 million from government coffers through an alleged phony invoice scheme. No charges have been laid and the RCMP is still investigating. A computer company eventually repaid the government the $146 million, saying there was no evidence its own employees were involved in the scheme. The incident highlighted lax oversight at Public Works, where employees failed to act on four years of auditor warnings for fear of undermining relations with National Defence. Public Works was also a central player in the sponsorship scandal, allowing bogus advertising deals to be hatched while some staff turned a blind eye. The department has since tightened the reporting of problems uncovered in its contract audit program, and is following up more aggressively when money is owed. The audit program can examine only a small fraction of the contracts signed with the private sector — just 1,120 over the last decade. The most recent list of problem audits includes 41 at National Defence and 10 at the Canadian Space Agency. Six of the suspect contracts are worth more than $100 million. Public Works issues about 60,000 contracts or contract amendments each year, worth about $10 billion. About KDR \| \| Home \| \| Weekly Features Archive	Weekly Weekly Features Archive
In Depth The Number 1 Reason YOU became a Slave Knowledge Driven Look at Your Favourite Canadian Political Parties
Archive December January February 2006 29 30 31 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 01 02 03 04 Weekly Features

Defence Billing Under Review

Toronto Star || February 06, 2006

OTTAWA—Federal auditors are targeting some of the biggest names in corporate Canada for allegedly overcharging millions of dollars in their contracts with government, newly released documents show.

Most of the problems are at National Defence, which is still recovering from a massive $146 million contract fraud uncovered in 2003.

There were 62 contracts in dispute as of Aug. 31 last year, with auditors alleging some corporations have claimed for ineligible costs, excess profits, overpriced goods, incorrect wage rates and a dozen other problems altogether worth about $9.5 million.

Another 21 contract issues were resolved in the first eight months of last year, with the federal government recouping $2.9 million.

The overpayment disputes are with a who's who of Canadian firms, including Air Canada, Boeing Canada Technology, Bristol Aerospace Ltd., IBM Canada Ltd., Lockheed Martin Canada and Spar Aerospace Ltd., although there is no evidence these companies have done anything wrong.

Heavily censored documents outlining the alleged problems were obtained under the Access to Information Act from the Public Works Department, the clearing house for virtually all federal contracts.

The released material blacks out key information, such as the dollar value in individual disputes and the audit issue in each case. But the latest list of problem contracts shows that most are with National Defence, the federal government's largest purchaser of goods and services.

Article Posted at www.KnowledgeDrivenRevolution.com

National Defence was the target of a computer-maintenance fraud from 1996 to 2003 that eventually drained $146 million from government coffers through an alleged phony invoice scheme.

No charges have been laid and the RCMP is still investigating.

A computer company eventually repaid the government the $146 million, saying there was no evidence its own employees were involved in the scheme.

The incident highlighted lax oversight at Public Works, where employees failed to act on four years of auditor warnings for fear of undermining relations with National Defence.

Public Works was also a central player in the sponsorship scandal, allowing bogus advertising deals to be hatched while some staff turned a blind eye.

The department has since tightened the reporting of problems uncovered in its contract audit program, and is following up more aggressively when money is owed.

The audit program can examine only a small fraction of the contracts signed with the private sector — just 1,120 over the last decade.

The most recent list of problem audits includes 41 at National Defence and 10 at the Canadian Space Agency. Six of the suspect contracts are worth more than $100 million.

Public Works issues about 60,000 contracts or contract amendments each year, worth about $10 billion.

About KDR | | Home | | Weekly Features Archive

Weekly

Weekly Features Archive

In Depth

The Number 1 Reason YOU became a Slave

Knowledge Driven Look at Your Favourite Canadian Political Parties