Federal government flouted rules when awarding McKinsey contracts: AG report – MASHAHER

ISLAM GAMAL4 June 2024Last Update :
Federal government flouted rules when awarding McKinsey contracts: AG report – MASHAHER


The Auditor General of Canada says the federal government flouted proper contracting policies and was unable to show it got value for money when awarding $209 million in contracts to consulting firm McKinsey & Company.

“Across the 97 contracts awarded to McKinsey & Company, we found frequent disregard for procurement policies and guidance and that contracting practices often did not demonstrate value for money,” Auditor General Karen Hogan said in her spring report. 

Hogan’s office looked at all of the contracts awarded to the American consulting company by federal departments, agencies and Crown corporations between Jan. 1, 2011, and Feb. 7, 2023.   

Last year, a Radio-Canada investigation found that the amount of money McKinsey & Company earns from federal contracts exploded since Prime Minister Justin Trudeau came to power. 

The audit of those contracts by Hogan’s office found that from 2011-12 until 2014-14, the company was awarded less than $5 million a year for professional services. That started rising in 2015-16, when it hit $10 million, before steadily increasing to more than $55 million a year by 2021-22. 

Line graph showing an increase in the value of contracts from below $5 million pre 2015/16 to about $55 million by 2021/22.
The value of contracts awarded to McKinsey & Company between Jan. 1, 2022, and Feb. 7, 2023. (OAG spring report #5 2024)

When the audit strips out the contracts awarded by Crown corporations to focus solely on government departments and federal agencies, the value of contracts given to the U.S. consulting firm in 2021-22 is just above $32 million a year.

Fraction of government spending on contracting

While that number is still dramatically larger than what the company received before the Liberal government came to power, it represents a tiny fraction of the total spending on government contracting. 

In 2015-16, when the Liberals came to office, federal agencies and departments awarded about $4.5 billion in professional service contracts, but by 2021-22 that had risen to more than $8.4 billion. 

Line graph showing an increase in the value of all professional service contracts awarded by federal government departments and federal agencies from below $5 billion pre 2015/16 to more than $8 billion 2021/22.
The increase in the value of all professional service contracts awarded by federal government departments and agencies went from below $5 billion prior to 2015-2016 to more than $8 billion in 2021/22. (OAG spring report #5 2024)

The audit says that nine out of 10 departments and agencies and eight out of 10 Crown corporations failed to properly follow proper procurement policies on at least one of the contracts they awarded. 

The audit looked closely at a sample of 28 contracts and found that the bid evaluations did not properly support the reasoning for awarding them to McKinsey & Company for 10 of the contracts. 

Hogan’s office also looked at a sample of 33 contracts in an effort to determine whether the government got value for money. The audit found that in 19 of those contracts, there were issues preventing Hogan’s office from working out whether the federal government got what it paid for. 

The audit said issues preventing Hogan’s office from determining whether the federal government got value for money include: a failure to show why a contract was necessary; no clear statement of what the contract would deliver; and a lack of confirmation the government received all expected deliverables.

“Federal contracting and procurement policies exist to ensure fairness, transparency and value for Canadians — but they only work if they are followed,” Hogan said in a statement.


Source Agencies

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