Watchdog talking with minister’s office about changes to Indigenous procurement strategy

A November 2024 file photo of Alexander Jeglic, Procurement Ombud for the federal government. Photo by Tony Caldwell /Postmedia

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The federal procurement watchdog says he’s in talks with the office of Public Works Minister Joël Lightbound about fixing a longstanding problem with a federal strategy meant to help Indigenous businesses.

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Procurement ombud Alexander Jeglic says he is working “behind the scenes” with the minister’s office, including “several communications” with Lightbound’s chief of staff, to address a recommendation from his recent damning report into “cascading failures” in the federal Procurement Strategy for Indigenous Businesses (PSIB).

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Jeglic’s goal is to establish his Office of the Procurement Ombudsman as the temporary avenue for hearing complaints about contracts awarded under the PSIB until Indigenous Services Canada can get its own solution off the ground.

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Speaking at a meeting of the House of Commons committee on government operations on Thursday, April 16, Jeglic said the change would help his office address a “blind spot.”

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“We know that we weren’t aware of some issues in a timely manner because we didn’t have the jurisdiction to review certain complaints,” he said, adding that, since he went public with the report, his office has received twice as many notices from Indigenous communities about problems with the program.

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“Which indicates to me the problems were there, (communities) just didn’t know where to go,” he said.

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Businesses have a couple of options for lodging formal complaints over mistreatment in federal procurement, but neither of them can hear complaints from Indigenous businesses about the award of contracts under PSIB.

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The recommendation to fix the problem arose from the ombud’s recent report detailing failures in how the government was administering the program.

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The PSIB has been around for 30 years and is intended to address systemic barriers facing Indigenous businesses by helping them access federal procurement opportunities.

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It works by labelling some government contracts as “set-asides” and reserving them for Indigenous businesses. To qualify, businesses must be at least 51 per cent Indigenous-owned and listed on the federal government’s Indigenous Business Directory (IBD).

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Indigenous groups have long complained about “shell companies” that funnel money spent through the program to non-Indigenous businesses.

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Jeglic said it was the belief of his office that the objectives of the PSIB were fundamentally good, but the execution of the policy was sorely lacking — and has been since it came into effect in 1996.

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“It’s the implementation that’s the failure point,” Jeglic said Thursday. “It’s not the Indigenous supplier who is to blame for any of this.”

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In his report, Jeglic wrote that the lack of a coherent government-wide policy on Indigenous procurement had confused departments, hampered oversight and caused errors “that risk undermining the integrity” of the system.