What Can We Learn From Federal Government Contracts Data?

Some preliminary thoughts on 25 years of government outsourcing

A lot of what governments do isn’t done by government at all. Instead, outside vendors are hired to execute government policies. So there’s nothing intrinsically scandalous about the fact that, between January 1999 and March 2024, nearly $750 billion was paid out to around 192,000 individual vendors for contract work.

But the numbers are nevertheless huge. And for a data geek like me, the data - available through the federal government’s Open Government site - is irresistible. Naturally, I downloaded the 500 MB data file containing key information for each of the more than a million contracts from the past 25 years. The first thing I learned is that desktop spreadsheet software isn’t very efficient at working with so many records, but Python data tools handle it without breaking into a sweat. So Python data tools it is, then.

The first thing I did was focus on just the contracts opened since 2015. That brought the total value down to $450 billion.

The first specific vendor I examined was McKinsey, who are rumored to have charged Canadians countless millions while dominating decision-making processes that should have been the role of internal teams. For now I can tell you that the millions McKinsey has billed us haven’t been countless at all: Since 2015, they actually add up to exactly $122,382,861.34. Which, in federal contracting terms, is pocket change.

The vendor sweepstakes front runners are largely dominated by IT services (IBM: $20 billion, Microsoft: $12 billion); infrastructure construction (PCL: $12 billion, EllisDon: $5 billion); and military engineering (General Dynamics: $10 billion, Airbus: $8 billion). Those are task categories you’d expect a government to outsource. There may well be thick layers of lard mixed in, but I’m not equipped to find it.

The vendors with the highest numbers of contracts include McKesson Canada Corp., and Canadian Corps of Commissionaires.

McKesson is interesting. They’re an American company that distributes pharmaceuticals and medical supplies and provides health information technology. Kind of like Shoppers Drug Mart, but invisible. Since 2020, McKesson has billed us for more than $153 million. By far, their largest purchasing agency is Correctional Service of Canada. Which suggests that they’re managing healthcare through Canadian prisons. They also contract for National Defence and Indigenous Services Canada.

Canadian Corps of Commissionaires is a venerable private, not-for-profit organization that, historically, has mostly employed military and RCMP veterans. They provide a range of civilian security services. Since just 2020, the Commissionaires have billed $1.5 billion for 4,500 separate contracts on behalf of more than 50 government departments and agencies.

The Commissionaires’ largest customers are National Defence and the RCMP. Now here’s something that’s mildly curious: why would a police force and an army need to spend $145 million and $328 million (respectively) on outsourced security? I mean, isn’t security supposed to be what they do for a living?

I’ve got just one more example for now. The recruitment and staffing services company Randstad have charged $695 million for services rendered since 2015. I’m not sure what those services were, but Randstad is supposed to be focused primarily on short term hiring solutions. In other words, they’ll find you staff to fill a sick day or a maternity leave.

Randstad’s major customers include CRA, Global Affairs Canada, and the Canadian Border Services Agency. Besides temp staffing, they do also provide some longer-term managed services and “recruitment process outsourcing” (RPO). So some of their people will remain employed by Randstad even while working for a government agency.

One obvious question is: why not bring as many employees as possible in-house to reduce costs? Another: why on earth did we give them $695 million? And considering that they’re mostly about short term hires, how did their average contract hit $323,236? (Also, where do I sign up for a piece of that action?)

I haven’t got even a hint of a suspicion that there’s anything improper happening here, but I am curious as to what it’s all about. Transparency. You can never have too much of it.