Feds seeking $1.6M from IT subcontractor for 'unjust enrichment'

The federal government is suing an IT subcontractor and companies that employed him over questionable billing practices.

The government is seeking $1.6 million from the Ottawa-based IT professional for "unjust enrichment," according to court documents filed last Friday. They allege that the contractor billed the civil service for hours he didn't actually work.

The suit, which also names seven companies, comes as government procurement practices and contracting are facing increased scrutiny since last year's damning auditor general report on the ArriveCan app.

CBC News reached out to the IT contractor for comment but did not receive a reply. CBC News is not naming the contractor because he hasn't filed a defence and the allegations have not been tested in court.

Between 2018 and 2022, the contractor had been hired by several companies that had contracts with the federal government, the documents state.

The government alleges the IT professional submitted timesheets with overlapping work hours.

"In numerous instances, [the defendant] submitted timesheets on multiple contracts where the cumulative total exceeded 24 hours in a single day," the government's statement of claim reads.

"As it is not possible for the defendant … to have actually worked the number of hours, this called into question the validity and reliability of all the timesheets."

Public Services and Procurement Canada (PSPC) interviewed the contractor as part of an internal investigation, the court documents say. The contractor told PSPC that he had been billing companies for "standby time" where he was available to perform work but didn't do any tasks set out in the contracts between himself and the companies, the documents say.

"None of the entries on his timesheets reviewed actually referred to standby time, either directly or indirectly," the government's claim reads.

"In all cases, the entries on [the defendant's] timesheets reviewed were made to look like he was carrying out work under the terms of the contracts."

ArriveCan contractor named in lawsuit

The government is also seeking various amounts — totalling  $1.6 million — from companies that subcontracted work out to the IT professional, alleging that they are "liable for breach of contract" and submitted inaccurate information to the government.

The statement of claim alleges that the companies all lacked an independent system "to verify the accuracy of [the defendant's] timesheets."

"The corporate defendants … each failed to ensure that their resource, [the defendant], was available for work, and to have a system in place to monitor, oversee and verify that [the defendant] submitted timesheets which accurately recorded the time he actually worked," the government's statement of claim says. 

The final PSPC report on the contractor's timesheets was submitted in April 2023, the documents say. 

Last year's auditor general report on the ArriveCan app flagged significant concerns regarding the project's procurement process. It noted that the final cost was "impossible to determine" due to poor record keeping.

GC Strategies, the main contractor involved in ArriveCan, is one of the companies named in the suit filed last week. The government is seeking $198,000 from that company in this case.

The court documents list a number of contracts in the lawsuit, but none of them suggest they are related to ArriveCan.

CBC News reached out to GC Strategies' lawyer for comment on this lawsuit but did not receive a reply.

The RCMP has been investigating GC Strategies, but one of the owners has said that investigation is unrelated to ArriveCan.

At the request of a House of Commons committee, the auditor general launched a full audit of all government contracts awarded to GC Strategies. The company has previously denied any wrongdoing in its work with the federal government.

In the wake of the auditor general's report on ArriveCan, the government referred three cases of suspected contractor fraud to the RCMP last March.

In June, the RCMP charged a consultant for overbilling the government by roughly $250,000. Those cases were not related to ArriveCan.