COURT FILE NO.: 14-G30171

DATE: 2018/06/11

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

HER MAJESTY THE QUEEN

– and –

BARNEY SHUM

Accused

Narissa Somji and Ernesto Caceres, for the Crown

John H. Hale, for the Accused

HEARD: January 8, 10-12, 15-19, 22-26, 29-31, February 1-2, March 5, 7-9, 12-13, April 5-6, 2018

REASONS FOR JUDGMENT

Aitken J.

Table of Contents

Nature of the Proceedings. 4

The Context 4

The Players. 5

The Relationships among the Players. 7

The TBIPS Procurement System.. 9

The Relationship between Client Departments and Vendors. 11

Joint Ventures, Subcontracting, Pass-throughs, and Incumbency. 13

Summary of LAC TBIPS Tenders Summer 2009. 14

The Chronology of Events During 2009. 15

Funding under the 280 Contract 15

Microtime/LAC Discussions in March/April 2009. 16

Lunch at the Baton Rouge and the Aftermath. 17

John Parsons and Adam Murray. 18

TESTING Spreadsheet 20

Preparation of the TBIPS 086 TBSF. 22

Ongoing Communications between Microtime and Sylvie Béland. 27

ADRM/Microtime Teaming Agreement 27

TBIPS 086 Awarded. 29

June 17, 2009 Meeting. 30

Preparation of the TBIPS 137 TBSF. 31

TBIPS 137 Awarded. 34

Microtime’s Continued Presence at LAC.. 37

Internal Investigation at the ITB.. 38

Criminal Investigations and Charges. 40

Issues of Credibility and Reliability. 40

Passage of Time. 40

Crown Witnesses. 41

Defence Witnesses. 43

R. v. W.D. 44

Allegations Regarding Barney Shum.. 44

Receiving Gifts, Hospitality and Other Benefits. 44

Sharing General Information with Vendors. 45

Communicating with Microtime regarding Particular Consultants. 45

Communicating with Microtime about TBIPS Details. 45

Sharing the TESTING Spreadsheet 46

Sharing Information about Categories for Consultants. 46

Providing Advance Information regarding Categories. 48

Crafting TBIPS Tenders in a Restrictive Fashion. 48

Providing Advance Information regarding Mandatory and Rated Criteria. 48

Communicating with Microtime during the Procurement Process. 48

Not Reporting Microtime/ADRM Arrangement 50

Essential Elements of the Offence under the Financial Administration Act, s. 80(1)(b) 52

Offences and Punishment under the FAA.. 52

Statutory Interpretation. 53

Legislative History. 54

Legislative Context 58

Competition Act 59

First Essential Element: Category of Person. 60

Second Essential Element: “Make Opportunity to Defraud Her Majesty”. 61

Vagueness of Concept 61

Meaning of Fraud. 62

“Making Opportunity” Allegations. 67

(a) TBIPS 086 and TBIPS 137 and Evidence of Deceit/Falsehood/Fraudulent Behaviour 67

(b) TBIPS 086 and Evidence of Deprivation. 68

(c) TBIPS 137 and Evidence of Deprivation. 70

Third Essential Element: Mens Rea. 71

Disposition. 75

Nature of the Proceedings

[1] Barney Shum is charged that, between February 9 and July 29, 2009, being a person acting in employment connected with the management or disbursement of public money, he made opportunity for Microtime Inc., Linda Graham, Stephen Forgie, or John Cassandra to defraud the Crown in relation to the supply of Information Technology (“IT”) services to Library and Archives Canada under a government solicitation known as TBIPS 086, thereby committing the offence of making opportunity for a person to defraud the Crown, under s. 80(1)(b) of the Financial Administration Act, R.S.C. 1985, c. F-11 (“FAA”).

[2] Mr. Shum is also charged that, between February 9 and September 29, 2009, he committed the same offence in regard to the solicitation known as TBIPS 137.

[3] The Crown alleges that Barney Shum’s communications with Linda Graham at Microtime Inc. gave Microtime Inc. an unfair competitive advantage over other potential bidders on TBIPS 086 and TBIPS 137 and enabled Microtime Inc. and another supplier of consultant services, ADRM Technologies Consulting Group Corp., to defraud the government through bid-rigging in regard to both TBIPS 086 and TBIPS 137. There is no allegation that anything done by Mr. Shum was done for the personal gain or benefit of himself or any member of his family. There is no allegation that Mr. Shum received any personal gain or benefit of any significance from Microtime, and/or any of the other named individuals named in the charges. The overwhelming evidence is that the motive behind Mr. Shum’s conduct in the spring, summer, and fall of 2009 was to maintain the momentum on key IT projects at Library and Archives Canada by giving incumbent consultants the opportunity to continue with their work at LAC when new contracts were put out to tender.

The Context

[4] This case evolved in a context of overwhelming change, stress, and uncertainty at Library and Archives Canada between 2007 and 2009.

[5] In 2004, the National Library and National Archives of Canada had been amalgamated into Library and Archives Canada (“LAC”). This amalgamation led to the goal of developing one IT system (“AMICAN”) to modernize a fleet of applications to manage both the library and archival holdings at LAC. The idea was for AMICAN to replace the AMICUS system previously used by the National Library and the MIKAN system previously used by the National Archives. At the same time, a second project called Trusted Digital Repository (“TDR”) was underway to modernize the way LAC managed digital objects. By 2009, a third project called High Density Shelving (“HDS”) was also being considered. The IT branch (“the ITB”) at LAC did not have the internal resources necessary to develop these new IT applications. Consequently, it had to rely heavily on outside consulting firms to provide the personnel necessary to develop these very complicated systems. In the spring of 2009, there were a total of 45 consultants devoted to work on the AMICAN, TDR and HDS projects, with no discernible end-date in sight for any of them. At the same time, funding for all of these projects was problematic.

[6] From the fall of 2005 to the summer of 2009, the procurement vehicle used to obtain consulting services was the Government Online Supply Arrangement (“GOLSA”), which was managed by Public Works and Government Services Canada (“PWGSC”). In January 2008, Microtime Inc. (“Microtime”) was awarded a contract under RFP[^1] Solicitation No. 5Z011-070280/A (“the 280 Contract”), issued under the GOLSA framework, to provide $10 million worth of IT consulting services to LAC over a two-year period. ITNet Ottawa Inc. (“ITNet”), in a joint venture with CGI Information Systems and Management Consultants Inc. (“CGI”), was awarded another part of the 280 Contract worth $6 million. By June 2009, Microtime had 20 consultants working on the AMICAN project at LAC and ultimately reporting to Sylvie Béland and Barney Shum, and 13 consultants working on the TDR project or for Applications Services, ultimately reporting to Marie-Claude Renaud and/or Guy Lalonde. At the same time, ITNet had five consultants working on the AMICAN project and seven consultants working on the TDR project. By the spring of 2009, it was clear to everyone that Microtime was quickly approaching the cap of $10 million that it could receive from LAC under the 280 Contract, whereas ITNet still had approximately $4 million that could be used if called upon by LAC. Decisions had to be taken at LAC as to how to best support the AMICAN and TDR projects on a go-forward basis so that they could reach their goals.

[7] Meanwhile, in 2007, PWGSC introduced a new system for the procurement of task-based informatics professional services (“TBIPS”) by government departments from vendor companies (“vendors”). Thus, when the ITB at LAC wanted to issue a new RFP in 2009 to ensure that it continued to have the services of consultants to complete the AMICAN, TDR, and HDS projects after the 280 Contract came to an end, it had to make use of the new TBIPS procurement system, rather than the old, familiar, GOLSA system. In early 2009, not all members of the contracting branch at LAC had been trained in regard to TBIPS. Certainly, neither Barney Shum nor Sylvie Béland had benefitted from any such training.

[8] What compounded the challenges that were faced by the ITB at LAC was turn-over at the highest ranks within the branch during 2008 and 2009, with a concomitant change in priorities, management style, and financial accountability. Morale within the branch deteriorated dramatically and, by the fall of 2009, the environment at the ITB had become toxic.

The Players

[9] Barney Shum, a career civil servant in the rank of CS-5, was the Director, Applications Management, at the ITB at LAC. He oversaw Application Development and Maintenance within the ITB and the AMICAN project. Sylvie Béland, another career civil servant in an acting CS-4 position, was Acting Manager for Applications Development and Maintenance and the AMICAN project. She reported directly to Mr. Shum. Ms. Béland had the onerous task of overseeing multiple IT applications that made up the AMICAN project and ensuring that the various teams of employees and consultants were interacting and communicating effectively so that progress was being achieved. Mr. Shum focused more on budgeting and higher level meetings with upper management at the ITB.

[10] Barney Shum had worked at the National Library, and then LAC, since 1978, and Sylvie Béland had worked there since the early 1980s. From approximately 2002, Mr. Shum had been Ms. Béland’s supervisor. Mr. Shum and Ms. Béland had a close, and trusting, working relationship. They occasionally went out to lunch together with other colleagues and, at times, with representatives from Microtime. Ms. Béland occasionally attended large celebrations at Mr. Shum’s home. In 2009, both felt stressed, overworked, and unsupported by higher management.

[11] Guy Lalonde, another CS-5 in the ITB at LAC, was responsible for Client Portfolio Management and Applications Development and Services and the TDR project. Reporting to him were Marie-Claude Renaud, a CS-4 who was the Manager of the TDR project, and Charles Davis, a CS-4 who was the Manager of Application Services. When Mr. Lalonde arrived at the ITB in the spring of 2009 on the recommendation of Sylvain Richard, the TDR project was removed from Barney Shum and placed under Mr. Lalonde’s management. At the same time, Charles Davis, who had been assisting Mr. Shum in the unfolding of the TBIPS procurement process, became manager of Application Services under Mr. Lalonde.

[12] Barney Shum and Guy Lalonde reported to the Deputy Chief Technology Officer at the ITB. Zahra Pourjafar-Ziaei occupied this position from approximately 2008 to April 2009. At the end of April, 2009, after Ms. Pourjafar-Ziaei was promoted, Sylvan Richard, who had previously been the Director of Infrastructure Management Services at LAC, became Acting Deputy Chief Technology Officer and IT Security Coordinator. He reported to Ms. Pourjafar-Ziaei.

[13] Sylvain Richard brought with him a new, more assertive, management style with a focus on financial management and a tighter control of human resources. He had serious concerns about the number of consultants, compared to employees, working in the ITB; the rapid rate at which Microtime’s funds under the 280 Contract were being used up; and the missing of delivery dates on services. Mr. Richard was particularly concerned about consultants not working the full amount of time for which they were billing, consultants claiming excessive overtime, and consultants doing private business during working hours. In short, Mr. Richard had a very low regard for consultants – particularly those then working on the AMICAN and TDR projects. He also had a low regard for Barney Shum, believing that he mismanaged AMICAN funding and mismanaged the consultants working on AMICAN. Sylvain Richard did not trust Mr. Shum and was highly skeptical of any information Mr. Shum provided to him.

[14] Mr. Shum and Ms. Béland described the ITB as a small, closely-knit, and supportive place in which to work prior to Ms. Pourjafar-Ziaei taking the helm in 2008. After her arrival, and then even more so under Sylvain Richard’s reign, the morale in the ITB deteriorated significantly. Mr. Richard did not come from an IT development background. The impression of both Mr. Shum and Ms. Béland was that he did not understand how difficult and complicated the AMICAN project was. He certainly did not understand why the ITB needed so many consultants to work on the development of software applications.

[15] LAC had its own section responsible for contracting and procurement. Anne-Josée L'Écuyer was the Manager of Contracts and Material Management and reported to Mark Melanson, the Director General of Finance. Ginette Périard, a Senior Contracting Officer, was Ms. L'Écuyer’s second-in-command. Josée Francoeur was the contracting officer who worked most closely with Barney Shum and Sylvie Béland. These three public servants handled the RFPs, tenders, and bids that LAC had the authority to manage without the outside involvement of PWGSC. One or more of them was usually listed as the “contracting authority” for any contracts awarded to consultants directly by LAC (when PWGSC did not have to be involved). Josée Francoeur and Ginette Périard were listed as the contracting authorities for all three TBIPS issued by LAC in the summer of 2009, with Ms. Francoeur having primary responsibility. She received the technical specifications from Barney Shum or Sylvie Béland, she included them in the formal tender documents, she supplied the information to vendors, and she handled any questions that the vendors raised during the solicitation period.

[16] Réal Benoit has worked in the field of supply management and procurement with PWGSC since 2006. He was not specifically involved in any of the LAC procurements in the spring and summer of 2009 that are the subject matter of this case, but he was a resource person who could answer questions emanating from the contracting authorities at LAC. He provided evidence as to standard procurement practices at PWGSC both before and after the introduction of TBIPS.

[17] Microtime, a subsidiary of TCA Consulting Group in Connecticut, was a company supplying IT consultants to the federal government. John and Dorothy Cassandra, residents of the United States, owned TCA Consulting Group. Linda Graham was the Branch Manager and Director of Business Development at Microtime’s Ottawa office from 2004 until October 7, 2009. She reported directly to John Cassandra. Stephen Forgie, who had been at Microtime since January 2005, was the Recruitment and Proposal Manager until Ms. Graham’s departure from Microtime, at which point Mr. Forgie took over Ms. Graham’s role as Branch Manager.

[18] Microtime had had a significant presence at LAC since 1997. The company was owned at that time by Paul Margerum, who had been a public servant at the ITB at LAC from 1988 to 1996, when he purchased Microtime and continued his work at LAC as a consultant. Mr. Margerum grew Microtime over the course of seven years, before selling it to TCA Consulting Group. In its successful proposal in regard to a major LAC solicitation in 2007 (“the 280 Contract”), Microtime held itself out as having a specialty in providing library and archival services in the area of technology through the work of its consultants on major LAC projects, including the AMICAN project, over the previous 10 years.

[19] ADRM Technologies Consulting Group Corp. (“ADRM”) was another company in Ottawa supplying consultants to the federal government. It was owned by Nehman Hokayem and Philippe Bisson, both of whom actively worked in the company. Due to the aboriginal status of Mr. Bisson, a majority shareholder in ADRM, the company qualified as an aboriginal company for the purpose of bidding on government contracts. ADRM had no consultants placed at LAC prior to 2009.

[20] ITNet was another Ottawa company supplying consultants to the federal government. It was Microtime’s chief competitor in regard to LAC contracts. It had also been successful in its proposal under the 280 Contract at LAC in 2007. As a result, both ITNet and Microtime had several consultants at LAC during 2008 and 2009.

The Relationships among the Players

[21] The contracts Microtime had at LAC under the various procurement vehicles in place in the early 2000s provided Microtime with most of its revenue. It is doubtful that Microtime could have survived without its LAC contracts. As a result, Linda Graham spent an inordinate amount of time staying in touch with Barney Shum, Sylvie Béland, and Marie-Claude Renaud, not only to ensure that they were satisfied with the Microtime consultants working at LAC, but also to ensure that when those consultants’ contracts came to an end, LAC looked to Microtime for extensions or renewals of contracts or for new contracts.

[22] Ms. Graham employed standard marketing strategies at LAC. She would try to touch base regularly with Mr. Shum and Ms. Béland either through telephone calls or through scheduled and unscheduled meetings at LAC. She personally would bring over task authorizations (“TAs”) for the signature of Mr. Shum in the hope of speaking briefly with him or Ms. Béland.

[23] Ms. Graham would invite Mr. Shum, Ms. Béland, and others working with them out to lunch from time to time to talk about the current work of Microtime consultants and any other consulting opportunities that might be coming in the future. These lunches also served to deepen the friendly relationship Ms. Graham had with Mr. Shum and Ms. Béland. The relationship was close enough that Ms. Graham had Ms. Béland’s cell number. Ms. Graham gave small promotional items to Mr. Shum and Ms. Béland. Mr. Shum and his wife, as well as other senior managers at LAC, were invited to Microtime’s Christmas parties. At one such party in December 2008, Mr. Shum was given a bottle of Amarone. Ms. Béland was also given a gift that year. When John and Dorothy Cassandra were in Ottawa, on occasion, they invited Mr. Shum and his wife out for dinner. Stephen Forgie was usually present at the lunches and dinners that Mr. Shum had with Microtime representatives, and he was often present at scheduled meetings that Ms. Graham had with Mr. Shum and/or Ms. Béland at the LAC offices.

[24] Ms. Graham was in the habit of sending consultant resumés to Barney Shum and Sylvie Béland and encouraging them to interview potential Microtime consultants with a view to placing them at LAC at some point in the future. When Microtime consultants left LAC, Ms. Graham worked closely with Mr. Shum and Ms. Béland to find suitable replacements.

[25] Ms. Graham had meetings from time to time with Mr. Shum’s supervisors. In January 2009, Ms. Graham met with Ms. Pourjafar-Ziaei who advised her that Barney Shum was going to be more involved with projects, which Ms. Graham interpreted as a good thing. Ms. Pourjafar-Ziaei gave Ms. Graham her husband’s resumé to see if Ms. Graham could find a consultant position for him with the federal government. Ms. Graham was going to invite Ms. Pourjafar-Ziaei and her husband to a hockey game and regularly invited them to Microtime’s Christmas party. Ms. Pourjafar-Ziaei attended the party on at least one occasion. There was no evidence that anyone at LAC raised any concerns about Microtime’s marketing measures in this regard.

[26] In June 9, 2009, just days prior to the issuance of the TBSF for TBIPS 086, Sylvain Richard met with ITNet’s sales representative, Christine Collyer, as a meet-and-greet exercise. On July 14, 2009, after the closing of bids for TBIPS 086 but before the contract had been awarded, Mr. Richard met with Linda Graham, Microtime’s sales representative, again as a meet-and-greet exercise. Mr. Richard likely discussed with both sales representatives the fact that LAC would be using the TBIPS procurement system in the future to fill some of LAC’s resource needs. It is also likely that Mr. Richard took the opportunity to express to both sales representatives the concerns he had about their consultants’ productivity, behaviour, and appearance.

[27] There is no question that Mr. Shum and Ms. Béland had a much closer relationship with Linda Graham than they did with sales representatives from other vendors of IT services.

The TBIPS Procurement System

[28] Under the TBIPS procurement system, vendors wanting to bid under an RFP under TBIPS had to be pre-qualified by entering into a supply arrangement (“SA”) with PWGSC in which the vendor set out the category and level of consultant that it could propose in any bid, plus the ceiling rate that it could charge for such category and level of consultant. Ceiling rates were confidential, with only PWGSC and the contracting authority in each department being able to access them. It was anticipated that ceiling rates would be adjusted annually; however, the first refresh only happened in 2010. Each vendor could seek pre-qualification with a request for SA (“RFSA”) under its own name or as part of a single joint venture with another company or companies. No company could have more than two SAs in total. By December 2007, there were over 200 vendors who had pre-qualified under TBIPS.

[29] In the SAs issued by PWGSC, TBIPS was described as:

“TBIPS” are Services related to a particular activity or initiative that are required to address a specific Information Technology (IT) need, which are usually associated with a specified set of responsibilities. The tasks involved are finite work assignments which require one or more consultants to complete. A task involved a specific start date, a specific end date, and set deliverables. Tasks are usually not large projects, although they may be subsets of a larger project. Tasks may require highly specialized work to be performed requiring a rare or unique skill or knowledge for a short period of time.

[30] TBIPS categories, levels of experience, and accompanying skill requirements for consultants were published online so that prospective vendors knew the categories in regard to which they could seek to be pre-qualified. TBIPS provided for 69 categories of personnel with three levels of experience (less than five years, five to nine years, ten years and more). There were some differences between the categories, levels of experience, and accompanying skill requirements stipulated under the TBIPS procurement vehicle and those previously stipulated under the GOLSA framework (covering the 280 Contract).

[31] For each TBIPS RFP and ultimate contract, there were three “authorities”. The technical authority was responsible for preparing the technical requirements for the tasks to be accomplished. The project authority oversaw management of the project as a whole. The contracting authority actually prepared the RFP (with input on the technical requirements from the technical authority), determined which SA holders would be invited to bid, answered any questions from the SA holders, and ultimately determined which SA holder would be successful on the bid. The contracting authorities had access to the ceiling rates of all SA holders; the technical and project authorities did not have this information. A strict division of responsibilities was maintained between the project/technical authorities and the contracting authority, with the former involved with the technical requirements for the tasks to be done and the latter focusing on the procurement process and financial matters. Once a TBIPS contract had been awarded, and TAs were being issued for specific consultants, the project or technical authority signing the TAs would become aware of the per diem rates of the consultants.

[32] When the TBIPS procurement system was introduced, PWGSC took steps to train the procurement officers in the various departments through the use of CDs and online communiqués and, later, specific courses. It was the responsibility of the procurement officers to provide whatever training they could to the project and technical authorities within their department. In the spring and summer of 2009, LAC procurement officers were in the process of learning how to function under TBIPS, and not all of them had yet taken a course on TBIPS. In 2009, Anne-Josée L'Écuyer, Ginette Périard, and Josée Francoeur were able to offer Barney Shum and Sylvie Béland only minimal guidance regarding practices and procedures under a TBIPS tender.

[33] Under the TBIPS procurement system, there were two categories of tenders. Tier 1 tenders were for an amount up to and including $2 million and were generally managed by the client department, such as LAC. For Tier 1 tenders up to and including $1 million, a minimum of three Tier 1 SA holders had to be invited to submit a proposal, including at least one of the three Tier 1 SA holders offering the lowest per diem ceiling rates and one random SA holder. For Tier 1 tenders greater than $1 million and up to and including $2 million, a minimum of five Tier 1 SA holders had to be invited to submit a proposal, including at least two of the three Tier 1 SA holders offering the lowest ceiling per diem rates and two random Tier 1 SA holders. There was no limit as to the maximum number of Tier 1 SA holders that could be invited to submit a proposal. The minimum period to submit a proposal stipulated in the Tier 1 RFPs ranged from five to twenty days depending on the value of the contract. Despite TBIPS requiring only a limited number of SA holders to be invited to bid, depending on the value of the contract, government departments were encouraged to invite additional SA holders to bid to enhance the competitive aspect of the procurement process.

[34] Tier 2 contracts were for an amount greater than $2 million. PWGSC acted as the contracting authority for all of them, regardless of the department involved. PWGSC was obliged to invite all Tier 2 SA holders to submit a proposal. The minimum period for submitting a proposal was twenty days.

[35] To commence the procurement process, the contracting authority issued to the chosen SA holders a task-based services form (“TBSF”) with all relevant information regarding the proposed contract. Those SA holders wanting to submit a bid would then complete the necessary sections of the TBSF and submit it to the contracting authority within the stipulated timeframe. The contracting authority would arrange for the project/technical authorities to complete a technical evaluation of all submitted bids through reference to the mandatory requirements and the rated requirements (point rated evaluation criteria) set out in the TBSF. The contracting authority would then complete a financial evaluation of the submitted bids to ensure that the per diem rates stipulated in the completed TBSF for the categories and level of personnel being proposed by the SA holder did not exceed the ceiling rates contained in the SA of the vendor and also to compare the proposed prices with those previously paid to ensure that the rates charged were reasonable. The contracting authority would then determine the winner of the bid after applying the selection criteria set out in the TBSF. In the case of both TBIPS 086 and TBIPS 137, the bids were rated with 60% of the points going to the technical evaluation and 40% going to the financial evaluation.

[36] Microtime had a SA with PWGSC pursuant to which it was qualified to provide Tier 1 services to the federal government within the National Capital Region. Microtime, Trillys Systems Inc. – Les Systèmes Trillys Inc., Promaxis Systems Inc., and Holonics Inc. in joint venture, had a SA to provide Tier 2 services in the National Capital Region.

[37] ADRM had a SA with PWGSC pursuant to which it was qualified to provide Tier 1 services to the federal government throughout Canada. ADRM also qualified as an aboriginal SA holder, which gave it access to TBIPS proposals that were open only to aboriginal vendors under a special program initiated by Indian and Northern Affairs to increase procurement opportunities for aboriginal businesses.

[38] ADRM and CNC Global Limited (“CNC”)[^2], as a joint venture (“ADRM/CNC”), had a SA with PWGSC pursuant to which it was qualified to provide Tier 1 and Tier 2 services to the federal government throughout Canada. It also qualified as an aboriginal SA holder. CNC subsequently changed its name to Sapphire.

The Relationship between Client Departments and Vendors

[39] It was up to the project and technical authorities within the client department to conceptualize and describe the tasks for which the department required consultants. Under TBIPS, the project and technical authorities were entitled to choose one vendor, pre-qualified on the appropriate TBIPS’ list of vendors, to be invited to submit a bid for any given TBIPS. According to Mr. Benoit, project and technical authorities were encouraged to meet with various vendors to learn what type of resources those vendors could propose for future contracts. These interactions assisted the project and technical authorities when crafting the evaluation criteria for upcoming tenders. In that the TBIPS Tier 1 tendering process contemplated the client department choosing one vendor to invite, it made sense for the project and technical authorities to invite a vendor whom they believed had the capacity to provide the type of resources required for the project in question. For the project and technical authorities to make this determination, they had to provide some information to a prospective vendor about the requirements in the anticipated TBIPS tender to learn if that vendor had the potential to provide the needed resources.

[40] Mr. Benoit considered nothing wrong with such meetings occurring in the months and weeks leading up to the issue of a TBIPS tender. However, once a TBIPS TBSF had been issued, project and technical authorities were not allowed to communicate with vendors about the tender. They could only communicate with a vendor in regard to ongoing operational issues relating to the work being done by consultants that the vendor already had working in the department.

[41] Of course, the presence of consultants within the department gave the project and technical authorities another source of information about the capacity of various vendors to provide the type of resources required by the department. This was especially so when the TBIPS tender was for the continuation of an existing project or task. The project and technical authorities, through their interactions with the incumbent consultants, could assess whether those resources were the type needed by the department to move the project or task forward. That was the case at LAC, where Microtime and ITNet consultants had been working alongside Marie-Claude Renaud and Sylvie Béland on the TDR and AMICAN projects for years prior to any TBIPS being issued in the summer of 2009.

[42] Mr. Benoit did his best to distinguish the scope of conversations that a project or technical authority could have with a vendor in the months and weeks leading up to a TBIPS tender from the scope of those that were unacceptable because they undermined the competitive heart of the procurement process. According to Mr. Benoit, it was acceptable for a project or technical authority to discuss with a vendor that a TBIPS procurement was anticipated in the near future, and to discuss the scope and objective of the project and how the department wanted to manage it. The project or technical authority, however, was not to discuss the number of resources that would be required, the specific categories of consultants or experience level that would be required, or the mandatory or rated criteria that would apply to such consultants. Such level of detail in conversations with vendors suggested the project or technical authority was trying to identify specific resources or consultants for the new contract. To provide any of this type of information to a vendor could result in the vendor having an unfair advantage over competitors. Each vendor had to wait until the TBIPS TBSF was issued to learn the details concerning the number, category, and experience level of the required resources and the mandatory and rated criteria against which all submitted bids would be assessed. That being said, it cannot be debated that a vendor already providing resources for a particular project would already have virtually all of this information if the anticipated TBIPS tender was for the continuation of the project. This gave the incumbent vendor a huge advantage over other bidders mandated to be invited under the TBIPS framework.

[43] That was the case here prior to the issuance of the TBIPS 137 TBSF, the purpose of which was to provide the necessary consultants to continue the AMICAN project. In the summer of 2009, when this TBSF was issued, Microtime already had 17 consultants on the floor working on the AMICAN project. Microtime knew exactly what LAC required to continue the project – the only challenge was reclassifying consultants into the category and experience framework in the TBIPS SA to the extent those categories and levels of experience differed from their counterparts under the 280 Contract. Microtime also had the stable of consultants required for the project, because they were already working on it.

[44] Mr. Benoit was not aware of any formal communications from PWGSC to individual departments regarding the edict for project and technical authorities not to communicate with vendors about the tender, once a TBIPS TBSF had been issued, and to minimize operational communications with any vendor who, at the time, had consultants placed within the department. Mr. Benoit allowed that, although this policy applied across all departments, the way this policy was implemented from department to department could vary. There was no evidence that Barney Shum and Sylvie Béland had been specifically told by PWGSC or the contracting authorities within LAC not to have discussions with Linda Graham or Stephen Forgie in regard to a TBIPS procurement in the period leading up to the issuance of a TBSF and while the tender was outstanding. That being said, Barney Shum was aware that, while any TBSF was outstanding and until the contract had been awarded, it was improper for him to have any communications about the TBSF with a vendor who had been invited to bid on it.

Joint Ventures, Subcontracting, Pass-throughs, and Incumbency

[45] Joint ventures were contemplated under the TBIPS procurement vehicle. Two or more vendors could come together to create a joint venture that could then rely on the vendors’ collective qualifications to become pre-qualified under TBIPS for Tier 1 and/or Tier 2 contracts. A vendor could be a member of only one such joint venture for the purpose of being pre-qualified under TBIPS, in addition to the vendor being pre-qualified under its own name. In addition to joining forces so as to meet the necessary qualifications under TBIPS, a vendor might form a joint venture with a vendor designated as an aboriginal company by Indian and Northern Affairs to gain access to any tenders set aside for aboriginal vendors. For example, ADRM and ADRM’s joint venture with CNC (subsequently renamed Sapphire) were both listed as aboriginal vendors in addition to being listed on the general list of vendors.

[46] Subcontracting is a business arrangement distinct from a joint venture. Réal Benoit explained the meaning of subcontracting in the context of a TBIPS procurement. A pre-qualified vendor who wins a government tender is the prime contractor and has 100% of the responsibility to deliver services under the contract. However, as often is the case, that pre-qualified vendor may not have access to all of the consultants required under the contract and may enter an arrangement with another vendor to use some of the consultants available to that vendor. After a pre-qualified vendor wins a tender, if that vendor is using a subcontractor to supply any of the required contracting services, the prime contractor is obliged to advise the Commercial and Industrial Security Directorate of the existence of the subcontractor. The Directorate verifies that the subcontractor has the appropriate security clearance. This has nothing to do with the project, technical, or contracting authority. No obligation is placed on the project or technical authority to notify anyone else within the government if that authority is aware that the vendor being proposed likely will enter a subcontracting agreement with another vendor.

[47] Under the title “Security” in the TBSFs issued for both TBIPS 086 and TBIPS 137 was the following statement:

4. Subcontracts, which contain security requirements, are NOT to be awarded without the prior written permission of CIISD/PWGSC.

Otherwise, the government considers the subcontract a business arrangement between the prime contractor and the subcontractor that does not involve or impact the government. According to Mr. Benoit, in 2009, there was nothing improper about a subcontract arrangement of this nature and, in fact, it was a common occurrence with vendors in the professional services field.

[48] The term “pass-through” came up repeatedly in the oral and documentary evidence at the trial. None of the current or former public servants who testified offered a definition of the term that fit with the apparent usage of the term by vendors. The way Réal Benoit described how PWGSC used the term “pass-through” was not relevant to the circumstances of this case.

[49] Vendors such as Microtime, ITNet, ADRM, and Trillys used the term to describe an arrangement between two pre-qualified vendors whereby one vendor contracted with the federal government to provide consulting services under a procurement vehicle, such as TBIPS, but that vendor had entered a side agreement to obtain the consultants from another vendor. Most of the payments from the government to the vendor who won the tender would be passed through to the second vendor who was actually providing and paying the consultants, with the first vendor maintaining a small portion of the payments to cover administrative expenses.

[50] A pass-through can be seen as an example of a subcontracting arrangement where the entire contract between the government and the prime contractor is performed by the subcontractor. I find that, in 2009, uncertainty existed within the consulting profession as to whether companies entering a pass-through arrangement for the purpose of bidding on a government contract had to inform PWGSC or the contracting authority in the client department of the existence of the pass-through arrangement prior to or at the time of submitting a bid. The evidence was that pass-through arrangements were common in the IT consulting industry and had been used for years prior to the introduction of TBIPS. They were still in active use in the industry in the summer of 2009. The evidence tendered at this trial left many questions unanswered as to how pass-through arrangements were to be treated under the TBIPS procurement system and what training or information was provided to client departments and vendors in this regard. No evidence was tendered as to how these arrangements in the IT consulting industry had been handled historically under the Competition Act.

[51] From their own SAs under TBIPS, vendors knew what categories and associated level of experience they qualified for, the ceiling rates associated with each, and the ranking for each in terms of their rate being compared to the rates of other vendors who pre-qualified for that category and level of experience. The vendors were not told of the rates charged by other vendors, though there was nothing precluding vendors sharing this information among themselves, for example, if they were negotiating a subcontract or pass-through agreement.

[52] In regard to the issue of incumbency, it was anticipated that when TBIPS tenders were issued for the continuation of work on a particular project, if the project/technical authority was pleased with the work being done by the incumbent consultants, he or she likely would choose to invite the vendor who was supplying those resources. That simply made sense and, in practical terms, saved the government the cost of knowledge transfer or training the new consultants from scratch, and the administrative costs of integrating new consultants into the environment within the department. According to Josée Francoeur, it was normal for the client (here the ITB) to choose the incumbent vendor to invite to bid on an upcoming tender. According to Réal Benoit, it was also not uncommon for the incumbent vendor to be the only vendor to bid on the contract.

Summary of LAC TBIPS Tenders Summer 2009

[53] Over the spring and summer of 2009, three TBIPS tenders were issued by LAC so that the ITB at LAC could continue its work on the AMICAN and TDR projects and start work on the HDS project.

[54] The first such tender, TBIPS 086, was for a project manager and six web developers to participate in LAC meetings dealing with HDS, though the initial requirement was only for one project manager and one web developer. At the time, LAC was exploring the possibility of purchasing a large warehouse where it would store its holdings using a new high density shelving system. The TBSF for TBIPS 086 was issued on June 12, 2009 and closed on June 22, 2009. Barney Shum was the project authority, Sylvie Béland was the technical authority, and Josée Francoeur and Ginette Périard were the contracting authorities. The technical evaluations were done by Barney Shum, Sylvie Béland, and Daniel Simard. Josée Francoeur did the financial evaluation and ultimately applied the stated criteria to determine which bidder would be successful. ADRM was the only bidder. The contract was awarded to ADRM on July 29, 2009.

[55] The second tender, TBIPS 121, was for a variety of consultants to continue the ITB’s work on TDR. This was an ongoing project under the direction of Marie-Claude Renaud with incumbent Microtime and ITNet consultants who had been working on TDR for a number of years. The TBSF for TBIPS 121 was issued on August 11, 2009 and closed on August 31, 2009. Marie-Claude Renaud was both the project authority and the technical authority and Josée Francoeur and Ginette Périard were the contracting authorities. ADRM/CNC joint venture was the only bidder. The contract was eventually awarded to ADRM/Sapphire joint venture on October 5, 2009, CNC having changed its name to Sapphire. The charge against Mr. Shum in regard to TBIPS 121 was withdrawn at the commencement of trial. Very little will be said about TBIPS 121 in these Reasons. At the time of trial, there were outstanding charges against Ms. Renaud in regard to TBIPS 121.

[56] The third tender, TBIPS 137, was for a variety of consultants to continue the ITB’s work on the AMICAN project. The TBSF for TBIPS 137 was issued on August 17, 2009 and closed on September 8, 2009. Barney Shum was the project authority, Sylvie Béland was the technical authority, and Josée Francoeur and Ginette Périard were the contracting authorities. ADRM/CNC joint venture was the only bidder. The technical evaluations were done by Barney Shum, Sylvie Béland, and Daniel Simard. The contract was awarded to ADRM/Sapphire joint venture on September 29, 2009.

The Chronology of Events During 2009

Funding under the 280 Contract

[57] In early 2009, everyone involved with AMICAN and TDR was aware that Microtime’s funding under the 280 Contract would be running out later in the year. On March 18, 2009, Josée Francoeur advised that, after taking into account 11 new TAs for 2009-2010 that had been issued to Microtime consultants working on the TDR project, the remaining balance of funds allotted to Microtime under the 280 Contract was $1,076,768.83. In regard to ITNet, there was $1,173,845.25 remaining, with a further $3 million becoming available once an amendment to the 280 Contract was received from PWGSC.

[58] From April through to July 2009, the issue of how remaining funds under the 280 Contract would be divided between the AMICAN and TDR projects was a sore point within the ITB at LAC. Guy Lalonde and Marie-Claude Renaud wanted the remaining Microtime funding divided equally between the AMICAN and TDR projects. Barney Shum and Sylvie Béland wanted a larger portion of the remaining funds assigned to the AMICAN consultants because AMICAN had 19 Microtime consultants and TDR had only 11 Microtime consultants. Mr. Shum’s solution was to provide adequate funding for both the AMICAN and TDR Microtime consultants to remain in place over the ensuing six months until further funding options could be considered for the continuation of both projects.

[59] One option was for LAC to use up all of the available funding under the 280 Contract by shifting work being done by Microtime consultants to new consultants provided by ITNet. This option was not appealing to Mr. Shum because it would have led to a delay on both projects, and therefore increased costs, as the new consultants got up to speed in regard to the very complex and challenging IT applications being developed – particularly with the AMICAN project. Instead, Mr. Shum’s preferred course of action was to move quickly to have one or more TBSFs issued under the new TBIPS procurement system so as to create an opportunity for the incumbent Microtime consultants to be proposed as resources. It is clear from the evidence that, assuming existing consultants were doing a good job, the preferred outcome from the point of view of senior LAC managers (including Barney Shum) was for those consultants to stay on the project until the project was completed. This made sense from the perspective of efficiency and cost savings. Engaging new consultants in the middle of an ongoing project – especially one as complex as AMICAN with its highly specialized and interrelated applications – inevitably involved a delay while the new consultants caught up to where the previous consultants had left off.

Microtime/LAC Discussions in March/April 2009

[60] During March and April 2009, Linda Graham was in close contact with Barney Shum and Sylvie Béland dealing with routine matters like getting TAs signed and discussing issues relating to specific consultants, as they arose. During some of those discussions, Ms. Graham volunteered information regarding some financial constraints faced by Microtime in dealing with the financial demands of its consultants.

[61] There is no question that, in the spring of 2009, Ms. Graham, Mr. Forgie, Mr. Shum, and Ms. Béland were in a learning mode in regard to the TBIPS procurement system, and they were trying to understand how the new categories and levels for consultants under TBIPS related to the old ones under GOLSA and the 280 Contract. I see nothing inappropriate about these individuals sharing general information and insights into how the new procurement system differed from the previous one.

[62] I accept Linda Graham’s evidence that, throughout the spring of 2009, in addition to general conversations with Mr. Shum regarding the TBIPS procurement system, she had more specific conversations with him about his thoughts on the issuance of one or more TBIPS tenders in regard to the AMICAN, TDR, and HDS projects. Ms. Graham started to prepare for the issuance of the TBIPS tenders by creating a folder where she and Stephen Forgie could collect the grids and resumés they would use in completing the TBIPS TBSFs. The fact that Mr. Shum was sharing his thought processes with Ms. Graham about future procurement vehicles gave Microtime a slight leg up in preparing for LAC’s next round of tenders; however, the main advantage to Microtime in preparing for the future came from its having so many incumbents at LAC working on continuing projects.

[63] In the spring of 2009, Ms. Graham was also in regular communications with Charles Davis, who encouraged Microtime to speak with ITNet to see if they could agree to a suitable pass-through agreement that would allow Microtime consultants to remain working at LAC, using the funding under the 280 Contract. These interactions showed that, as of April 2009, it was not entirely clear how Microtime’s incumbent consultants at LAC might have the opportunity to continue working there. These interactions also reinforce just how common and, from the point of view of project and technical authorities, how acceptable pass-through agreements between vendors were at the time. Finally, these interactions show that Ms. Graham was receiving information regarding procurement issues at LAC not only from Mr. Shum and Ms. Béland, but also from Mr. Davis, and possibly others at LAC.

[64] On April 15, 2009, in the normal course of Linda Graham introducing new potential consultants to LAC, Ms. Graham proposed Adam Murray for the position of project manager. Barney Shum and Sylvie Béland interviewed Mr. Murray on April 20, 2009, and Ms. Béland advised Ms. Graham on April 21, 2009 that they wished to offer Mr. Murray a contract. The only hold up was figuring out how to finance the contract since all of Microtime’s funds under the 280 Contract had been allotted. Mr. Shum moved quickly to hire Mr. Murray because Mr. Shum was under significant pressure from upper management at LAC to start the HDS project. Mr. Shum needed someone right away who would be able to attend initial, high-level discussions regarding the conceptualization of this project so that the ITB would know what would be expected of it to support the project. There was nothing inappropriate about Microtime putting forward proposed consultants that may have been required by LAC under the 280 Contract and with Mr. Shum and Ms. Béland interviewing those candidates to confirm their qualifications and suitability for a needed resource.

[65] On April 22, 2009, John Parsons, a Microtime consultant who had been working in the capacity of a senior web developer at LAC since January 2008, inquired of Linda Graham whether his contract at LAC, scheduled to end on April 30, 2009, would be extended. Ms. Graham discussed the issue with Mr. Shum. Clearly, Mr. Shum wanted to keep Mr. Parsons at LAC and was willing to work with Ms. Graham to ensure that this was a possibility.

Lunch at the Baton Rouge and the Aftermath

[66] In March 2009, after further TAs had been issued to Microtime to allow most of its consultants to continue their work at LAC until September 2009, Linda Graham tried to arrange a lunch with Barney Shum, Sylvie Béland, and others from LAC. After much back and forth, April 23, 2009 was chosen as the date and Baton Rouge as the locale. Linda Graham and Stephen Forgie treated Barney Shum, Sylvie Béland, and Stephen Sekerak to lunch at a total cost of $364.30.

[67] According to Ms. Béland, she barely spoke to Ms. Graham during the lunch. Ms. Béland was seated close to her colleague, Stephen Sekerak, who was on French language training at the time, and she spent most of the lunch speaking with him. She also shared some small talk with Mr. Forgie. Ms. Béland and Mr. Sekerak left the lunch early.

[68] Mr. Shum’s evidence was that, at the Baton Rouge lunch, he and Ms. Graham spoke only in general terms about the 280 Contract funding coming to an end and about TBIPS being the next procurement vehicle that LAC would have to use in hiring consultants. In regard to the communications that occurred between Ms. Graham and Mr. Shum at the Baton Rouge lunch, I prefer the evidence of Ms. Graham.

[69] According to Linda Graham, at the Baton Rouge lunch, Barney Shum advised her that all of the Microtime funds under the 280 Contract had been allocated to the end of September, 2009. ITNet still had approximately $4 million in unused funds. Mr. Shum thought that using ITNet’s funds under the 280 Contract might be the only way to proceed until a TBIPS TFSA could be issued. I do not see this communication as being problematic in that LAC and Microtime had an ongoing contractual relationship, and Microtime was entitled to know if further TAs were going to be issued to their consultants under their existing contract. As a result of this conversation, Ms. Graham, with considerable trepidation, pursued discussions with ITNet as to the percentage it would charge if it had a pass-through agreement with Microtime to bid Microtime’s LAC consultants in the upcoming TBIPS tender.

[70] According to Ms. Graham, at the Baton Rouge lunch, she told Mr. Shum that Microtime’s ceiling rates were too low under TBIPS for Microtime to bid on a TBIPS Tier 1 contract. This was not information that Mr. Shum required because financial issues were the purview of the contracting authority, not the project or technical authority. Nevertheless, it was information that was relevant to him in regard to which pre-qualified vendor to choose to invite to bid on upcoming TBIPS tenders.

[71] Mr. Shum asked Ms. Graham to let him know if Microtime’s consultants would be bid through another vendor, in other words, using a pass-through arrangement, and, if so, to let him know the name of the vendor. In my view, there was nothing wrong with Mr. Shum making this request of Ms. Graham. As project manager, Mr. Shum was entitled to choose one pre-qualified vendor to be invited to submit a bid on a TBIPS tender. That choice was within his discretion. It was totally appropriate for him to choose the vendor who was able to supply the incumbent consultants who had been working for a considerable period of time under Mr. Shum’s direction and supervision, assuming Mr. Shum valued those consultants and considered them well-suited for the task at hand. Presumably, project managers were given the right to choose one of the vendors to be invited to tender because the project managers understood the requirements of the project better than anyone and knew whether incumbent consultants were up to the task.

John Parsons and Adam Murray

[72] By April 23, 2009, Adam Murray had been accepted as a consultant at LAC with an anticipated starting date in early May pursuant to a TA under the 280 Contract. Mr. Parsons was working as a senior web developer pursuant to a TA under the 280 Contract terminating at the end of April. I accept Ms. Graham’s evidence that, at the Baton Rouge lunch, she discussed with Mr. Shum the future of both consultants. Mr. Shum wanted to keep both at LAC but was unsure how that could best be accomplished.

[73] According to Linda Graham, Barney Shum asked her what category she could put John Parsons through on a TBIPS proposal. From Microtime’s perspective, it was preferable if Mr. Parsons could qualify as an application architect rather than a web developer because Microtime’s ceiling rate for the former under their TBIPS Tier 1 SA was higher than their ceiling rate for the latter. On April 24, 2009, Ms. Graham asked John Parsons if he was doing any application architecture and to include references to that when he updated his resumé.

[74] On April 24, 2009, Ms. Graham advised Mr. Shum by email that Adam Murray could be put through Microtime’s Tier 1 TBIPS SA as a project manager level 3 at a per diem of $825; however, that rate was, in fact, the rate that ADRM could charge under TBIPS Tier 1 for a project manager. Microtime’s TBIPS Tier 1 rate was $750. Ms. Graham also advised that she was exploring whether John Parsons could be put through as an application/software architect category level 2 at $625. If that was not possible, Microtime could put him through as a web developer level 3 at $600. In the summer of 2009, Mr. Murray, as a senior project manager, had a per diem rate of $850, and Mr. Parsons, as a senior web developer, had a per diem rate of $650. Clearly, Microtime would have been out-of-pocket to have submitted a proposal for these two consultants using its own Tier 1 SA under TBIPS.

[75] The language in Ms. Graham’s April 24, 2009 email to Mr. Shum supports the finding that Ms. Graham and Mr. Shum had had specific discussions about Messrs. Murray and Parsons the previous day at Baton Rouge. This is beyond the scope of what should have been discussed between a project manager and a potential vendor when a specific tender is in the planning stage. This level of discussion never happened with any other vendor in the community.

[76] On April 27, 2009, Mr. Shum emailed Ms. Graham to ask how they should proceed with John Parsons as they only had approximately a week before his existing contract expired. In response, Ms. Graham emailed that it looked like Mr. Parsons would qualify as an application/software architect level 2 at $625, so Mr. Shum could go ahead with a TBIPS. Mr. Shum responded later that day that a TBIPS tender could take a while; therefore, Microtime should investigate a pass-through agreement with ITNet for the short-term. Ms. Graham asked Mr. Shum to give her a day before taking any steps as her preference was to bid Mr. Parsons through one of Microtime’s TBIPS Tier 1 partners, rather than using a pass-through agreement with ITNet.

[77] After confirming with Annie Gauthier that Mr. Parsons’ contract allowed him to work for approximately one more week, Mr. Shum advised Ms. Graham accordingly, saying “this buys us a little bit of time but not much” – presumably to come up with another mechanism to keep Mr. Parsons working at LAC. In the end, Mr. Parsons’ TA under the 280 Contract was extended until July 31, 2009, which afforded LAC additional time to issue a TBIPS Tier 1 tender without losing the services of Mr. Parsons.

[78] At the end of April, Ms. Graham was struggling to determine how Messrs. Murray and Parsons could be bid on an up-coming TBIPS. Microtime’s Tier 1 TBIPS rates were too low for Microtime to generate a profit, considering what Messrs. Murray and Parsons expected to be paid. ITNet was demanding too high a pass-through fee to make a collaboration with that company acceptable to Microtime. Ms. Graham was exploring a pass-through agreement with other vendors that she trusted, but nothing had yet been finalized. On April 28, 2009, Ms. Graham advised Mr. Shum that Microtime might have to use its own Tier 1 SA for Messrs. Murray and Parsons on a temporary basis, but that was not a final decision. Ms. Graham kept Mr. Shum abreast of her efforts to find a way to propose Messrs. Murray and Parsons as resources in a TBIPS TBSF without Microtime losing money in the process.

[79] There was nothing inappropriate about Mr. Shum discussing Mr. Parsons’ future at LAC with Ms. Graham and with Mr. Shum extending Mr. Parsons’ TAs for as long as possible under the 280 Contract. However, the line was crossed when Mr. Shum let Ms. Graham share information with him about Microtime’s rates for different categories of consultants, and when Mr. Shum adjusted the timing of issuing a TBIPS to accommodate Microtime’s efforts to find a partner with whom it could submit a bid under TBIPS.

[80] Mr. Shum was not the only person with whom Ms. Graham was communicating at LAC regarding upcoming TBIPS tenders. She was also led to believe through communications with Charles Davis that LAC would be issuing separate TBIPS TBSFs for the AMICAN and TDR projects, and that LAC might be able to get another Tier 1 TBIPS tender issued quickly to assist Microtime in keeping Messrs. Murray and Parsons at LAC.

[81] On April 29, 2009, two days after Mr. Shum had been communicating with Linda Graham about an appropriate category for John Parsons, Mr. Shum advised Sylvie Béland that they had to get a vehicle in place quickly for one or two resources, to be followed by a larger vehicle for the remainder of the fiscal year. He stated that they had an immediate requirement for an A.1 application/software architect level 2 and a project manager level 3 (the exact categories that Linda Graham had advised Mr. Shum would be possible for John Parsons and Adam Murray under TBIPS Tier 1). That being said, in the TBSF for TBIPS 086, Mr. Shum did not seek an application architect, as Ms. Graham had initially requested. Instead, he sought consultants in the web developer category which, he had been led to believe by Ms. Graham, had a lower per diem rate.

[82] There can be no doubt that TBIPS 086 was issued to maintain Adam Murray and John Parsons in their positions at LAC. Although, ultimately, TBIPS 086 called for one project manager level 2 and six web developers level 3, none of the web developers aside from John Parsons was ever called up under TBIPS 086.

TESTING Spreadsheet

[83] On April 30, 3009, Sylvie Béland arranged for a meeting with Barney Shum at noon to discuss TBIPS. At that meeting, they discussed that the contracts for 18 of Microtime’s consultants working on AMICAN would expire at the end of September 2009 with no further funding available under the 280 Contract. They discussed how to secure 18 resources under TBIPS so that the AMICAN project could continue.

[84] On March 2, 2009, Ms. Béland had prepared a spreadsheet showing Microtime and ITNet consultants working at LAC entitled TESTING_TBIPS.xls (the “TESTING spreadsheet”). She modified the document to show what it would cost at then current rates for Microtime and ITNet consultants (including Messrs. Murray and Parsons) to be extended until March 31, 2010 to see if the total cost of the contract could come in at no more than $2 million – the ceiling for a Tier 1 TBIPS tender. It was understood at the time that a Tier 1 TBIPS tender would be the fastest way to proceed so as to minimize any disruption in the work being done on the AMICAN project.

[85] Ms. Béland took that spreadsheet to the April 30, 2009 meeting with Mr. Shum. Shortly after the meeting, Ms. Béland made further modifications to the document.

[86] On April 30, 2009, at 2:49 p.m., Sylvie Béland emailed to Linda Graham that portion of the TESTING spreadsheet relating to Microtime consultants. Ms. Graham, in turn, shared the document with Stephen Forgie. The document showed all of the Microtime consultants then working at LAC under the direction of Barney Shum and Sylvie Béland, Adam Murray (who had yet to start at LAC), and an additional two developers. The document included the TA numbers for each consultant then at LAC, their category under the 280 Contract, their per diem rate under the 280 Contract, the proposed number of days of work for each consultant to get them to the end of the fiscal year (125), the total cost of that work without taxes, the accompanying GST, and the total cost with GST. The grand total came to $2,060,362.50.

[87] The TESTING spreadsheet was a planning or budgeting document for the ITB. It was also a nice summary for Ms. Graham and Mr. Forgie to use as they strategized for a transition from the 280 Contract to TBIPS. Both Ms. Graham and Mr. Forgie used this document to assist in their preparation of bids under TBIPS 086 and TBIPS 137 by changing the categories used under the 280 Contract to the comparable categories under TBIPS, and trying out various scenarios in terms of pass-through arrangements with other interested vendors. The TESTING spreadsheet, however, did not provide Microtime with any information that it did not already have.

[88] It was Ms. Béland’s evidence during examination-in-chief that she would not have sent this document to Ms. Graham without Mr. Shum’s approval. She thought that she suggested to Mr. Shum that they send this document to Linda Graham and he gave his permission, but she was not sure of that. Under cross-examination, Ms. Béland stated more assuredly that, during their meeting on April 30, 2009, she asked Mr. Shum if she could send Linda Graham a copy of that portion of the TESTING spreadsheet dealing with Microtime consultants, and Mr. Shum said “sure”. For his part, Mr. Shum was certain that Ms. Béland had never asked him if she could send the TESTING spreadsheet to Ms. Graham, and he had never given his permission in this regard. That being said, Mr. Shum was also of the view that Ms. Béland had done nothing wrong in providing this document to Ms. Graham because it did not contain any information that Ms. Graham did not already have.

[89] The evidence is not strong enough to convince me that Mr. Shum consented to Ms. Béland sending to Ms. Graham that portion of the TESTING spreadsheet dealing with Microtime consultants or even that he was aware that she had sent it to Ms. Graham. But this act of sharing the work product at LAC with Microtime exemplifies the close working relationship that Ms. Béland had with Ms. Graham and the preferential treatment given to Microtime as a vendor. However, the act in and of itself did not provide Microtime with any real benefit, advantage, or opportunity. It would have been very simple for Ms. Graham or Mr. Forgie to have prepared their own spreadsheet with the same data, as they already had in their own files all of the information on the spreadsheet.

[90] Subsequently, at an unspecified date, Ms. Béland prepared a second spreadsheet with the same Microtime consultants (aside from Dean Keough, John Parsons, Adam Murray, and the two unnamed web developers) but showing their per diem rates if they were bid through ITNet, using ITNet’s rates under the 280 Contract. The grand total on that spreadsheet came to $1,985,156.25 but would have been much higher than the total using Microtime’s rates under the 280 Contract had all of the consultants been included. This confirmed that issuing TAs to ITNet consultants under the 280 Contract (whether incumbent Microtime consultants accessed through a pass-through arrangement or completely new resources available to ITNet) would have been a significantly more expensive proposition than the arrangement LAC then had with Microtime under the 280 Contract.

[91] On March 27, 2010, investigators seized a document from a file entitled TBIPS-HDS in the top drawer of Mr. Shum’s old filing cabinet in his former office that was a copy of the TESTING spreadsheet, as modified by Linda Graham on June 16, 2009. The document had some handwritten notes of Ms. Graham proving that, at some point, it had been in her possession. This document was entitled “(ADRM Technology Consulting Group Corp. and CNC Global Limited)”. It listed Microtime’s incumbent consultants working on the AMICAN project with the categories in which they could be assigned under TBIPS and with per diem rates at which they could be billed under the ADRM/CNC joint venture under its Tier 1 TBIPS SA.

[92] During her examination-in-chief, Ms. Graham testified that, during a meeting with Mr. Shum and Ms. Béland at the LAC offices on some unspecified date, she had provided them with a chart, based on Ms. Béland’s TESTING spreadsheet, showing new categories for consultants under TBIPS and the rates at which they could be billed using the ADRM/CNC joint venture under its TBIPS Tier 1 SA. However, Ms. Graham could not identify the document entitled “(ADRM Technology Consulting Group Corp. and CNC Global Limited)” as the document in question. Both Ms. Béland and Mr. Shum denied previously seeing the document. The document was misfiled in Mr. Shum’s filing system under HDS (TBIPS 086) even though it related to AMICAN (TBIPS 137). The document was seized several weeks after Mr. Shum had been escorted out of the LAC offices. I cannot make a finding as to when and by whom the document was placed in the filing cabinet.

[93] I do find that, at some point prior to June 22, 2009, the chart entitled “(ADRM Technology Consulting Group Corp. and CNC Global Limited)” was provided to Sylvie Béland by Ms. Graham for her use in the preparation of the TBIPS 137 TBSF. It dovetails perfectly with a document prepared by Sylvie Béland on or before June 22, 2009 entitled “TBIPS Tier1 for AMICAN”, showing how many consultants at various categories and levels under the TBIPS classification system were required for the AMICAN project. It is possible that Ms. Graham provided the chart to Ms. Béland when they met in the lobby of the LAC building on June 17, 2009, but that has not been proven.

Preparation of the TBIPS 086 TBSF

[94] On May 1, 2009, Mr. Shum emailed Anne-Josée L'Écuyer, Ginette Périard, and Josée Francoeur, the contracting personnel at LAC, advising that he had an immediate need for a small software development team, probably one project manager and two to four application architects, for the HDS system development. He wanted the project to start immediately and asked how long it would take for a TBIPS Tier 1 procurement process to be undertaken. Ms. L'Écuyer responded that the process could be undertaken within a month or so following the contracting department receiving a bilingual statement of work (“SOW”) and evaluation criteria from Mr. Shum. Ms. L'Écuyer outlined the steps to be taken with a TBIPS procurement.

[95] Between April 30 and May 6, 2009, Barney Shum prepared a word document containing the statement of work, the mandatory criteria, and the rated criteria to include in a TBSF for a project manager and six web developers to work on the AMICAN project at LAC.

[96] On May 6, 2009, Mr. Shum circulated his first draft of portions of the TBSF to Anne-Josée L'Écuyer, Josée Francoeur, Ginette Périard, Sylvie Béland, and Charles Davis, seeking feedback. A meeting was scheduled for the following morning. Early on May 7, 2009, Mr. Shum changed the timing of the meeting that day to 1:00 p.m. and attached the same draft portions of the TBSF that he had circulated the previous day. By 1:41 p.m. that day, Josée Francoeur had prepared a TBIPS TBSF form with a statement of the background, scope of work, technical environment, and the mandatory and rated criteria for the two consultant categories being sought under TBIPS 086, as provided by Mr. Shum and Ms. Béland.

[97] On May 8, 2009 at 9:30 a.m., Barney Shum and Sylvie Béland met in a boardroom right beside Mr. Shum’s office to discuss TBIPS 086. Ms. Graham had a meeting scheduled with Barney Shum for 10:00 a.m. that morning to drop off TAs for Adam Murray and John Parsons under the 280 Contract. According to Ms. Béland, while she and Mr. Shum were still in their meeting, Ms. Graham entered the boardroom uninvited. She then started to discuss TBIPS 086, to Ms. Béland’s discomfort, volunteering which categories two particular consultants would be in under TBIPS – information that Mr. Shum and Ms. Béland could independently determine through reference to the TBIPS categories posted by PWGSC. Mr. Shum did not ask Ms. Graham to leave. Ms. Graham spoke about the efforts she was making to revise Microtime’s per diem ceiling rates under TBIPS, but PWGSC would not let her do that. She claimed to have spoken with ITNet about the possibility of a pass-through so that Microtime could access some of the funds assigned to ITNet under the 280 Contract, but ITNet was asking for too much money. Ms. Graham said that Microtime would try to partner with another vendor who was pre-qualified under TBIPS, but she did not mention any names. As Ms. Graham was spewing all of this information, Mr. Shum and Ms. Béland said very little. When Ms. Béland left the meeting, Mr. Shum remained with Ms. Graham. Ms. Graham had no specific memory of a meeting on May 8, 2009, though she did recall a meeting when she had told Mr. Shum that Microtime’s Tier 1 TBIPS rates were too low to allow Microtime to bid.

[98] By 11:45 a.m. on May 8, 2009, Mr. Shum had modified the TBSF template for TBIPS 086 that must have been provided to him by Ms. Francoeur the previous day. On the afternoon of May 8, 2009, Mr. Shum forwarded to Josée Francoeur (with a copy to Ms. Périard, Ms. L'Écuyer, Mr. Davis, and Ms. Béland) the revised statement of work, mandatory criteria, and rated criteria for TBIPS 086 within the TBSF template, saying that he was still working on simplifying the rated requirements and that he would welcome feedback as to what might be missing or still required in the document. The document Mr. Shum sent was housed on the Z drive to which all CS4s and higher categories had access.

[99] This document, in electronic format, found its way into the possession of Stephen Forgie at Microtime. It is identical to the TBSP for TBIPS 086, as issued, subject to the final document having some minor editing changes and reducing the number of project managers sought from two to one.

[100] When the tender for TBIPS 086 was issued, vendors were given only 10 days in which to submit a bid. Microtime had, in effect, 40 days in which to perfect theirs. There can be no doubt that the expanded timeframe afforded to Microtime to prepare a bid for TBIPS 086 gave Microtime a significant advantage over any other potential competitors. That being said, I reject Mr. Forgie’s evidence that, without having access to the mandatory and rated criteria contained in the draft TBSF, Microtime would not have been able to screen its consultants and complete a bid by the closing date. TBIPS 086 was a small contract, involving only two categories of consultants, and Microtime already had a consultant in each category on the job doing the required tasks. Furthermore, Ms. Graham and Mr. Forgie had been actively preparing for TBIPS 086 for months before it was issued.

[101] Despite all of the evidence that was tendered, it has not been proven how and when the draft TBSF arrived in Mr. Forgie’s possession. All that has been proven is that the document was provided to either Linda Graham or Stephen Forgie by someone at LAC sometime after 11:45 a.m. on May 8, 2009.

[102] In examination-in-chief, Mr. Forgie claimed that, at a meeting attended by him, Barney Shum, and Linda Graham, Mr. Shum had given Mr. Forgie a thumb drive with the partially completed TBSF for TBIPS 086. Mr. Forgie estimated that this meeting took place three weeks to a month prior to the issuance of the TBSF for TBIPS 086 on June 12, 2009. According to Mr. Forgie, when he got back to the office, he discovered what the USB stick contained. He told Linda Graham. According to Mr. Forgie, from that time forward, he used this document to assist in his recruiting consultants for TBIPS 086. For example, on May 28, 2009, he sent excerpts from the document to John Parsons when asking him to update his resumé. That being said, it must be noted that the tasks, mandatory criteria and rated criteria that Mr. Forgie subsequently shared with consultants were, in places, an exact match to the comparable sections in the RFP for the 280 Contract.

[103] In cross-examination, Mr. Forgie first stated that, at a meeting attended by him, Barney Shum, and Linda Graham, Mr. Shum gave Linda Graham the thumb drive with information regarding TBIPS 086. At some point, Ms. Graham gave the thumb drive to Mr. Forgie, who opened it on his office computer. He claimed to have been shocked by the extent of the information – it was almost the full TBIPS document. Under further questioning, Mr. Forgie admitted that, currently, he has no clear memory of any of these events. He was relying on a statement he prepared in 2014, shortly after he was charged with bid-rigging under the Competition Act, R.S.C. 1985, c. C-34, but five years after the events in question. In that statement, in addition to this version of events, Mr. Forgie estimated that the meeting with Mr. Shum had occurred on May 7, 8, or 11, 2009. Mr. Forgie went on to acknowledge that he could not remember whether Ms. Graham was given a piece of paper and an envelope and he wondered whether his vague memory of a thumb drive being given related to information provided about TBIPS 137 and not TBIPS 086. During an unannounced interrogation by Competition Bureau investigators at his home on September 27, 2016, and without having the benefit of referring to his earlier statement or notes, Mr. Forgie could not remember how the mandatory and rated criteria for the two categories of consultant required under the TBSF for TBIPS 086 had come into his possession prior to the issuance of the TBSF. He thought it possible that it had been given to Linda Graham in hard copy – possibly at a restaurant.

[104] The meeting between Linda Graham, Barney Shum and Sylvie Béland on May 8, 2009 cannot be the meeting referred to by Mr. Forgie where he claimed that he or Linda Graham received a thumb drive from Mr. Shum. First, no one else recalled Mr. Forgie attending this meeting. Second, the file properties of the document subsequently in Mr. Forgie’s possession indicated that it had last been modified by Mr. Shum at 11:45 a.m. on May 8, 2009 – well after Mr. Shum’s scheduled meeting with Linda Graham.

[105] Ms. Béland recalled another time in May or June, prior to the issuance of TBIPS 086, when both Ms. Graham and Mr. Forgie showed up unannounced at the door of the small boardroom at the LAC offices where Mr. Shum and Ms. Béland were meeting. Mr. Shum was annoyed that they were there. He escorted them elsewhere and Ms. Béland returned to her desk. Ms. Béland did not observe any exchange of a USB drive or anything else that day between Mr. Shum, Ms. Graham, and Mr. Forgie. This meeting could not have occurred between May14 and 24, 2009, because Mr. Shum was in Vancouver at that time. This evidence does nothing to answer the question as to when and how a draft TBSF for TBIPS 086 ended up in Mr. Forgie’s possession.

[106] During her examination-in-chief, Ms. Graham at first recollected that Microtime had been provided the rated criteria (but not the mandatory criteria) for TBIPS 086 well before the TBSF was issued. Later, she said that was not right and that she had never received any advance notice from Mr. Shum about the mandatory or rated criteria for TBIPS 086. Instead, she recalled receiving an envelope from Sylvie Béland at LAC on June 17, 2009 that contained one typed sheet with one rated criterion relating to TBIPS 137. Ms. Graham had gone to LAC to give Mr. Shum TA amendments relating to the extension of work by Messrs. Murray and Parsons under the 280 Contract. She understood that Mr. Shum had something to give her at the same time. According to Ms. Graham, when she arrived at LAC, she learned that Mr. Shum was at home recovering from dental surgery. Ms. Béland met Ms. Graham in the lobby, gave her the envelope, and took the TA amendments. Ms. Graham had no memory of the particular rated criterion described on the sheet of paper she was given. Ms. Graham claimed that, after she returned to her office, Mr. Forgie took the sheet of paper and forwarded it to consultants. There is no documentary evidence supporting this version of events, and Mr. Forgie had no recollection of this having occurred. Ms. Béland denied that she ever gave Ms. Graham any such envelope or document on June 17, 2009. Mr. Shum denied that he had ever left any such envelope or document with Ms. Béland to give to Ms. Graham.

[107] When asked whether he had ever given Linda Graham a thumb drive, as alleged by Mr. Forgie, Mr. Shum hesitated. He then responded that Ms. Graham had provided him with thumb drives containing the resumés of potential consultants, and he may have given her a thumb drive at some time with information, but he did not remember. He was confident that he had never given Linda Graham a thumb drive containing technical information regarding TBIPS 086.

[108] Despite the best efforts of Mr. Forgie and Ms. Graham to remember how, when, and to what extent they had received in advance information regarding the mandatory and rated criteria under TBIPS 086, their evidence was unreliable. This is not surprising, since the events they were trying to remember and put into context occurred nine years ago.

[109] On May 11, 2009, Linda Graham advised Stephen Forgie that she needed to know if some of Microtime’s consultants at LAC would qualify under the web developer level 3 or the applications architect level 2 categories under TBIPS so that she could provide Mr. Shum with a grid later that day. Mr. Forgie immediately sent out emails to various consultants who might qualify under either of these categories in which he included the rated requirements for both level 3 web developers and level 2 application architects. The rated requirements he described for the level 3 web developers were the same as the rated requirements for a senior web developer under the 280 Contract. Attached to Mr. Forgie’s email to Victor Neufeld on May 12, 2009 at 6:22 a.m. was the list of mandatory and rated requirements for web developers level 3 identical in form and substance to those portions of the draft TBSF for TBIPS 086 that ended up in Mr. Forgie’s possession at some point – suggesting that Mr. Forgie had that document in his possession by that time. Attached to Mr. Forgie’s email to Shane Bryson on May 12, 2009 at 6:46 a.m. was a document different in form and substance to the one minutes earlier he had sent to Mr. Neufeld. No explanation was provided for these differences.

[110] At this time, Ms. Graham and Mr. Forgie were attempting to get a head start on the work to be done primarily in regard to TBIPS 137, as the chart that Mr. Forgie provided to Ms. Graham on May 12, 2009 updating their information on the categories in which some of their consultants could be slotted, listed the first 14 consultants from the TESTING spreadsheet that Sylvie Béland had provided to Microtime on April 30, 2009. Microtime was planning to bid all of those consultants, aside from John Parsons, on the next TBIPS for the AMICAN project (TBIPS 137).

[111] Mr. Shum arranged a meeting with Ms. Francoeur, Ms. Béland, and Mr. Davis on May 12, 2009 to review the TBSF form for TBIPS 086 that Ms. Francoeur had populated with the information supplied by Mr. Shum. Following the meeting, Mr. Shum forwarded to Ms. Francoeur (with a copy to Ms. Béland, Mr. Davis, Ms. L'Écuyer, and Ms. Périard) the TBSF form that had been prepared by Ms. Francoeur with some minor clarifications to the rating criteria. Later in the day, Ms. Béland sent Josée Francoeur an amended SOW and some additional definitions to include in the TBSF for TBIPS 086. Ms. Béland’s role in regard to the preparation of the TBSF for TBIPS 086 related to preparation of the glossary of terms, providing long forms for acronyms, and arranging for the translation of the technical portions of the document. Those changes were not included in the draft TBSF in the possession of Microtime – leading credence to the assertion that that document had likely been provided to Microtime prior to May 12, 2009.

[112] Although there is evidence that the draft TBSF was in Mr. Forgie’s possession before May 12, 2009, the emails between Ms. Graham and Mr. Forgie on May 15, 2009 suggest that neither had seen the document by that date, though Ms. Graham had an inkling from her conversations with Mr. Shum as to what they could expect in an upcoming TBIPS – such as the number of project managers and web developers likely to be included. Had both Ms. Graham and Mr. Forgie seen the draft TBSF by that date, Ms. Graham would not have been wording her email to Mr. Forgie as she did, namely surmising as to what might be included in a future TBIPS 086 TBSF. They both would have had the actual draft TBSF in front of them.

[113] The email exchange between Ms. Graham and Mr. Forgie on May 15, 2009 makes it clear that Ms. Graham already had a good understanding of what Mr. Shum hoped to accomplish with TBIPS 086. Ms. Graham understood that Adam Murray would be getting one of the project manager positions under TBIPS 086, and she was content that his rate would be $825. Ms. Graham was worried that, if John Parsons got the position for web developer, his rate would only be $600. Ms. Graham also understood at that time that it was unlikely that all six web developers would be required right away. This was very specific information that could only have come from Mr. Shum during one of their numerous conversations.

[114] On May 25, 2009, after his return from Vancouver, Mr. Shum told Ms. Graham that a TBIPS TBSF would be issued shortly for two project managers level 2 and six web developers with the goal of keeping both Adam Murray and John Parsons working at LAC. Mr. Shum denied providing Ms. Graham with that information, but I am confident that he did. Ms. Béland confirmed that it was her understanding at the time that the TBIPS 086 TBSF was issued so that Adam Murray could continue his work on the HDS project at LAC and John Parsons could be retained at LAC following the termination of his contract under the 280 Contract. Ms. Graham subsequently told Mr. Forgie that she was unsure as to the level for the web developers but was planning on confirming that. Ms. Graham spoke as if she had an open channel of communication with both Barney Shum and Sylvie Béland. This is something that both Mr. Shum and Ms. Béland vigorously denied, claiming that Ms. Graham made things up. I reject their claim in this regard. There is ample evidence that Ms. Graham was able to glean from both Mr. Shum and Ms. Béland much useful information regarding the upcoming TBIPS tenders.

Ongoing Communications between Microtime and Sylvie Béland

[115] To the knowledge of those at Microtime, when Barney Shum was in Vancouver in May 2009, Sylvie Béland was working on the upcoming TBIPS tenders. Both Mr. Forgie and Ms. Graham were in regular contact with Ms. Béland, exchanging information on how Microtime’s incumbents at LAC could fit into the new categories and levels of consultants to be used under TBIPS. It was no secret that Mr. Shum and Ms. Béland wanted to ensure that, after the TBIPS tenders were issued, LAC would still have the opportunity of keeping Microtime’s incumbent consultants working on the AMICAN and HDS projects (just as Marie-Claude Renaud wanted them to have the opportunity to continue working on the TDR project) so as to keep those projects moving forward with no unnecessary delay. Therefore, they were open to discussions with Ms. Graham and Mr. Forgie regarding the scope of work, technical requirements, and category designations to be included in the various TBIPS tenders. My interpretation of the evidence is that it was open to debate as to where the line had to be drawn between permissible and impermissible discussions between project/technical authorities and vendor representatives all of whom were trying to understand how incumbent consultants on ongoing projects fit into the new procurement framework. In this regard, neither Mr. Shum nor Ms. Béland were given any specific guidance, at this stage, as to how to navigate the perilous course in the pressure cooker environment that then existed at LAC.

[116] During this period of time, Stephen Forgie was frantically working at getting all of Microtime’s consultants at LAC to update their resumés and to confirm how their credentials matched the requirements under different TBIPS categories and levels. On May 28, 2009, Mr. Forgie sent to John Parsons a summary of the tasks, mandatory criteria and rated criteria that applied to a web developer level 3. He asked Mr. Parsons to update his resumé to ensure that it highlighted how he could meet these criteria. Around the same time, Mr. Forgie asked Adam Murray to update his resumé to highlight how he met the criteria for project manager to be required under the upcoming TBIPS 086.

[117] At the same time, Linda Graham was trying to figure out with which other pre-qualified vendor Microtime should partner so that placing its consultants at LAC would be financially feasible. To this end, Ms. Graham was having discussions with Trillys, Mergis, and ADRM. She kept Ms. Béland abreast of those discussions. Ms. Béland and, after his return from Vancouver, Mr. Shum, were not going to proceed with any TBIPS tender until it was clear with which company Microtime would have a pass-through agreement for its consultants.

ADRM/Microtime Teaming Agreement

[118] According to Stephen Forgie, on May 21, 2009, he had a conversation with Sylvie Béland in which she advised that LAC was almost finished their draft TBSF (presumably for the TBIPS 086), and they wanted to know which company Microtime would be working with – “ADRM Tech or Mergis”. I am satisfied that, in earlier conversations between Ms. Béland and Ms. Graham or Mr. Forgie, she learned that Microtime was negotiating with ADRM and Mergis in regard to a pass-through arrangement for TBIPS 086. According to Mr. Forgie, Ms. Béland also said that it would be appropriate for a company representative from either of those firms to meet with “them” (which I interpret as meaning Ms. Béland and Mr. Shum), and Mr. Forgie suggested that she discuss that directly with Linda Graham. Mr. Forgie said that Ms. Béland was waiting for Ms. Graham to call her on her cell. At this time, Barney Shum was in Vancouver.

[119] Linda Graham successfully negotiated a pass-through arrangement on behalf of Microtime with ADRM. She prepared a Teaming Agreement that was signed by ADRM on May 27, 2009 and by Microtime on June 1, 2009. It applied to all of the upcoming Tier 1 TBIPS tenders at LAC and provided for Microtime’s consultants to be bid on those tenders through ADRM/CNC joint venture. ADRM was considered the prime contractor vis-à-vis the contracts to be entered with LAC, and Microtime was considered the subcontractor. It was Microtime’s responsibility to prepare the responses to tenders issued by LAC and ADRM’s responsibility to submit those responses. The responses would be based on ADRM/CNC joint venture rates under its TBIPS SA, with Microtime having the ability to discount such rates as deemed necessary to be competitive. The Teaming Agreement included a schedule of consultant categories and levels with the concomitant rates that could be charged under ADRM/CNC joint venture’s SA under TBIPS. ADRM had disclosed these rates previously to Microtime during negotiations relating to the Teaming Agreement. Of the amount billed to LAC, ADRM was to receive 2% as a pass-through fee and Microtime was to receive the rest. ADRM agreed not to submit an independent bid to LAC in regard to any TBIPS tenders on which Microtime was bidding through ADRM.

[120] On or after May 29, 2009, Ms. Graham advised Mr. Shum of the name of the company that Microtime would use to bid their consultants. Ms. Graham’s evidence was that she advised Mr. Shum that the company was ADRM Technology Consulting Group Corp. and CNC Global Limited (a joint venture), not just ADRM Technology Consulting Group Corp. The Teaming Agreement that Microtime and ADRM had finalized on May 27, 2009 had specifically stated that the joint venture was to be invited to bid on LAC tenders. It is impossible to say at this point whether the error was that of Mr. Shum or Ms. Graham. In any event, on June 2, 2009, Mr. Shum advised Josée Francoeur that the ITB was proposing ADRM Technology Consulting Group Corp. as its choice of vendor.

[121] Mr. Shum provided ADRM’s name to Ms. Francoeur because he knew that Microtime’s consultants would be bid on the TBIPS 086 tender through ADRM and Mr. Shum wanted those consultants to have the opportunity to continue their work at LAC. I totally reject Mr. Shum’s evidence that he chose ADRM for other reasons. His evidence in this regard was contrived and nonsensical.

[122] Mr. Shum claimed that, during his interactions with staff at PWGSC while preparing the RFP for the 280 Contract, he had learned about the existence of ADRM and the fact that it was an aboriginal company. He claimed that, when he was considering which vendor to choose for TBIPS 086, he recalled that conversation regarding ADRM, and he recalled that ADRM had done some work for Indian and Northern Affairs Canada (“INAC”), a department that used some technologies similar to those used at LAC. He claimed that he researched ADRM on the Internet and spoke to a consultant who had worked at INAC. That consultant confirmed that ADRM was a good vendor. Therefore, Mr. Shum gave ADRM’s name to Ms. Francoeur for use in the TBSF for TBIPS 086. He claimed not to have cared whether any incumbents were bid for TBIPS 086 because HDS was a new project. I reject this assertion. Although Adam Murray had just started work on the HDS project, Mr. Shum wanted to retain him, as well as John Parsons, who had worked with Mr. Shum over a longer period of time.

[123] The following chain of events totally contradicts Mr. Shum’s explanation. Ms. Graham finalized the teaming agreement with ADRM on May 27, 2009 and, at the same time, decided that Microtime would not be entering a pass-through agreement with either of the other vendors with whom she had been negotiating. By May 29, 2009, she had told Mr. Shum about ADRM because she was able to warn Mr. Bisson that Mr. Shum would be calling him. Mr. Shum in fact spoke with Mr. Bisson by telephone on June 1, 2009 and later that day sent him an email inviting him to a meeting on June 4, 2009. This is consistent with Ms. Béland having advised Mr. Forgie on an earlier occasion that she and Mr. Shum should meet ADRM’s representatives. On June 2, 2009, Mr. Bisson confirmed with Mr. Shum that he and Mr. Hokayem would be attending the meeting on June 4, 2009 and that Mr. Hokayem would be the contact person for ADRM on a go forward basis. On June 2, 2009, Mr. Shum advised Josée Francoeur that ADRM was the company that the ITB wanted to invite on the TBIPS 086 tender and that Mr. Hokayem was the contact person. On June 4, 2009, Mr. Shum had a meet-and-greet meeting with Messrs. Bisson and Hokayem.

[124] The evidence is inadequate to support a finding that, at any time, Mr. Shum was made aware of the existence of the formal Teaming Agreement between Microtime and ADRM or made aware of any of its specific terms. Mr. Shum knew that ADRM would be able to propose incumbent Microtime consultants on the upcoming TBIPS tenders and that Microtime would be benefitting financially from this arrangement. He also knew that, from the perspective of Microtime and its incumbent consultants, the consultants were still in Microtime’s stable. This perception did not change after the award of the TBIPS contracts. Microtime celebrated when ADRM was awarded each TBIPS contract. Initially, time sheets were filled out by the consultants on Microtime’s forms. Linda Graham and Stephen Forgie were still on site at the LAC offices visiting their consultants and dealing with issues as they arose after ADRM was awarded each contract. ADRM had no presence at LAC, and neither Mr. Shum nor Ms. Béland had any ongoing relationship or communications with Messrs. Bisson and Hokayem. After Ms. Graham’s departure from Microtime in October 2009, Stephen Forgie continued to market Microtime at LAC in the way he and Ms. Graham had always done.

TBIPS 086 Awarded

[125] Ms. Francoeur issued TBIPS 086 on June 12, 2009 with a closing date set for June 22, 2009. Five pre-qualified vendors were invited to bid, which was more than technically required under the Tier 1 TBIPS protocol. One of the invited vendors was ADRM Technologies Consulting Group Corp.

[126] On June 12, 2009, Mr. Shum made the following entry in his diary: “ADRM Tech. Consult Group Corp. & C&C Global Limited”. I find that Mr. Shum made this note because he was informed on that date by Linda Graham that this was the name of the company that should have been invited to bid instead of ADRM Technology Group Corp. As soon as Philippe Bisson had received the TBSF for TBIPS 086 on June 12, 2009, he had notified Ms. Graham that the invitation had been issued to ADRM alone, and not the joint venture. I find that Ms. Graham immediately called Mr. Shum to advise him of the error.

[127] Ms. Graham and Mr. Forgie completed the TBSF form for ADRM to submit on TBIPS 086. According to Ms. Graham, in a conversation she had with Mr. Shum on June 20, 2009, Mr. Shum confirmed that the requirement in the TBSF was for 1000 days in total for all web developers over two years, which amounted to 83 days per developer. Ms. Graham instructed Mr. Forgie to complete the TBSF form accordingly. Any inquiry from Linda Graham requiring clarification of the TBIPS 086 requirement should have been made through Josée Francoeur. This question and answer between Ms. Graham and Mr. Shum is further evidence that Mr. Shum’s version of events regarding his choice of ADRM is untrue – he knew that Microtime was bidding its consultants through ADRM and that is why he chose ADRM.

[128] The contract period for TBIPS 086 was from August 4, 2009 to July 31, 2010. The contract was for one project manager level 2 and six web developers level 3. ADRM was the only vendor to bid. Its bid was evaluated for technical compliance by Barney Shum, Sylvie Béland, and Daniel Simard. That evaluation was made easier than otherwise would have been the case because ADRM’s bid, which had been prepared in its entirety by Linda Graham and Stephen Forgie at Microtime, included, at Mr. Shum’s request, summary grids confirming the proposed consultant’s qualifications. The bid was evaluated for financial compliance by Ms. Francoeur. It was Ms. Francoeur, on behalf of the contracting authorities at LAC, who ultimately decided that ADRM’s bid would succeed. TBIPS 086 was formally awarded to ADRM on July 29, 2009, allowing both Adam Murray and John Parsons to continue in their roles at LAC.

[129] I find that Mr. Shum included a request for six web developers in TBIPS 086, instead of just the one that he actually required, to camouflage the reality that he was issuing this TBIPS for the sole purpose of securing the continuation of Adam Murray and John Parsons as consultants at LAC. If the contracting authorities at LAC had realized that Mr. Shum needed only one project manager and one web developer for the new HDS project, they would have exerted even more pressure on him to issue a TA under ITNet’s portion of the 280 Contract to fill those needs, rather than going to the trouble of issuing a TBIPS tender. Furthermore, by expressing the need for six web developers in a TBSF that had a short 10-day solicitation period, Mr. Shum made it more difficult for other vendors to submit a bid. Microtime had been given advance warning that six web developers would be required in the TBSF. It had no difficulty preparing ADRM’s bid within that short timeframe, using Microtime consultants.

June 17, 2009 Meeting

[130] Despite the TBIPS 086 TBSF being outstanding, Barney Shum and Linda Graham had a meeting scheduled for June 17, 2009 to discuss the categories Mr. Shum might be seeking on the next TBSF to be issued for LAC. Mr. Shum did not see anything wrong with his having a discussion of that nature with Ms. Graham at that time. The discussion would not involve TBIPS 086, which was then outstanding. It would relate to a future procurement, which Mr. Shum and Ms. Béland were still trying to conceptualize in terms of scope and approach.

[131] In the end, Mr. Shum could not meet with Ms. Graham because he was away ill. Mr. Shum asked Ms. Béland to meet with Ms. Graham in his stead “given the urgency of the other TBIPS RFPs”.

[132] Ms. Graham’s evidence about what occurred on June 17, 2009 was unreliable. Her assertion that, on that occasion, Ms. Béland provided her with an envelope containing one of the rated criteria for the TBIPS 137 does not fit with other evidence. Mr. Shum was still trying to figure out how to put out to tender the work that had to continue on the AMICAN and TDR projects, and whether there should be a number of tenders, each dealing with one category of consultant. It was only later in July that the decision was taken to issue separate TBIPS for the TDR and AMICAN projects, with all categories and level of consultants required for each being bundled together under that project’s tender. Ms. Béland’s evidence was that, during June and into July, she and Mr. Shum were still working on drafting the mandatory and rated criteria for all of the resources that would be required to continue the AMICAN project, relying heavily on those descriptions in the 280 Contract. In fact, it appears that it was only on June 22, 2009 that Ms. Béland had determined what categories under a Tier 1 TBIPS the resources currently working on AMICAN under the 280 Contract would fall.

[133] Mr. Shum denied that he had prepared a document with rated criteria under TBIPS 137 to give to Ms. Graham on June 17, 2009, and since it was Ms. Béland, more than Mr. Shum, working on this task, it seems unlikely that he would have had such a document to provide to Ms. Graham. Ms. Béland denied that she had given any such document to Ms. Graham on that date. On June 17, 2009, Ms. Béland initially met with Ms. Graham in the lobby and received the signed TA extensions for Messrs. Murray and Parsons. Ms. Béland acknowledged letting Ms. Graham up to the ITB floor where Microtime’s consultants were located; however, she denied having any further meeting with Ms. Graham once she was in the LAC offices. In regard to this issue, I accept Ms. Béland’s evidence.

Preparation of the TBIPS 137 TBSF

[134] What is clear is that, at the end of June and throughout July, Linda Graham was in close communication with Barney Shum and Sylvie Béland to discuss what categories and levels Microtime’s consultants then working on the AMICAN project would fit into under the TBIPS Tier 1 categories and levels. The three of them approached this task as a joint effort. By June 22, 2009, Ms. Béland had prepared a document entitled “TBIPS Tier1 for AMICAN” showing the category and level of consultants required and the estimated cost of such consultants based on the rates being paid under the 280 Contract. As I indicated earlier, this document dovetailed with a chart prepared by Ms. Graham entitled “(ADRM Technology Consulting Group Corp. and CNC Global Limited)” and provided to Ms. Béland at some point prior to June 22, 2009. Ms. Béland’s document listed the same number of consultants in the same categories and levels and in virtually the same order.

[135] By June 30, 2009, Mr. Shum had provided Ms. Béland with the mandatory and rated criteria for these categories and levels of consultants for the purpose of translation. He had taken most of those from the comparable sections in the TBSF for TBIPS 086. He tasked Ms. Béland with completing the SOW for TBIPS 137. Mr. Shum was then away on vacation from June 30 to July 13, 2009.

[136] On July 21, 2009, Barney Shum had a meeting of some kind with Ms. Graham. That same day, Ms. Graham confirmed for Stephen Forgie that there were going to be no changes from the list of consultants, categories, and levels that she had provided him earlier in regard to the upcoming TBIPS, and that the TBIPS to be issued would be Tier 1, not Tier 2. She also advised that if there were any further changes, Barney Shum would notify her accordingly. It is clear that Ms. Graham was keeping in very close contact with Mr. Shum and Ms. Béland during this period, with Ms. Graham receiving regular updates from Mr. Shum about the status of the TBSF for TBIPS 137. No other prospective vendor was receiving these regular updates. Despite what Ms. Graham said about plans being firm for TBIPS 137, the inter-office emails at LAC in early August show that a final decision had not yet been taken on how to procure the necessary consultant services to keep the AMICAN project going.

[137] On August 4, 2009, Ms. Graham advised Mr. Cassandra that, at a meeting on July 31, 2009, Mr. Shum and Ms. Béland told her to seek additional companies for pass-throughs for the upcoming TBIPS, as they thought there could be problems with putting the bid through ADRM. Despite receiving this advice, Ms. Graham had Microtime partner with ADRM for both TBIPS 137 and TBIPS 121.

[138] Although Ms. Graham’s memory was cloudy in regard to the chain of events, she thought that during the July 31, 2009 meeting, Mr. Shum instructed her and Ms. Béland to exchange information about the category and level of consultants for TBIPS 137 by using their personal email addresses.

[139] Ms. Béland had no memory of meeting with Mr. Shum and Ms. Graham on July 31, 2009. She was adamant that, at no time, had Mr. Shum ever told her to use her private email address to communicate with Ms. Graham.

[140] Ms. Béland recalled that on Monday, August 3, 2009, at the end of the day, Ms. Graham called her on her cell phone and asked her for the categories that would be used for TBIPS 137. Ms. Béland claimed to have been taken aback, as she thought that she should not do that. Nevertheless, she felt pressured and she, as much as Mr. Shum and Ms. Graham, wanted the incumbent consultants to have their contracts renewed for the sake of the project. As a result, later that evening, she emailed Ms. Graham a document that: (1) broke down the AMICAN project into four sub-projects; (2) listed the category and level of consultants required for each sub-project; and (3) assigned the names of incumbent Microtime consultants to each required consultant category. Ms. Béland realized as soon as she had sent the email that she should not have done so and she has regretted it ever since. According to Ms. Béland, she never told anyone at LAC that she had sent this document to Ms. Graham. Ms. Graham used this document in the preparation of the TBSF response for TBIPS 137 submitted by ADRM/CNC joint venture.

[141] The date and time shown on Ms. Béland’s email to Ms. Graham’s home email address, namely “August 3, 2009 at 7:40:07 AM”, does not accord with Ms. Béland’s recollection of the timing of the email, but I do not consider that significant. The important point is that Ms. Graham asked Ms. Béland to send her this information, and Ms. Béland did so.

[142] Ms. Graham described how, at this time, she and Sylvie Béland were exchanging documents in regard to how Microtime’s incumbents at LAC could be categorized under TBIPS. Stephen Forgie had been busy going through the consultants’ updated resumés to ensure that they could meet the requirements under various TBIPS categories. Ms. Graham shared some of his worksheets in that regard with Ms. Béland. The document Ms. Béland sent to Ms. Graham on August 3, 2009 showed Ms. Béland’s conclusion as to the categories that the incumbents could fill and the sub-projects under AMICAN where they would fit.

[143] Mr. Shum had no recollection of any meeting with Ms. Béland and Ms. Graham on July 31, 2009, and he denied that he had ever instructed Ms. Béland and Ms. Graham to use their private email addresses. Mr. Shum denied that he had ever instructed Ms. Béland to forward to Ms. Graham a list of Microtime consultants with the categories that they could fill under TBIPS. That being said, it was his view that Ms. Béland had done nothing wrong in sharing this document with Ms. Graham. He explained that it was common practice for project and technical authorities to discuss with vendors the type of resource that was needed from time to time within a department. This was done so that the vendors could submit resumés to the project and technical authorities and so that the project and technical authorities could make informed choices as to who to invite when a RFP was being issued. It would have been a waste of the project and technical authorities’ ability to choose a vendor so as to improve the chances of getting the resources they needed if the vendor they chose had no chance of filling the categories being sought.

[144] Mr. Shum allowed how it would have been inappropriate for he or Ms. Béland to have shared mandatory and rated criteria with any vendor leading up to the issuance of a TBIPS.

[145] Both Mr. Shum and Ms. Béland described how, at the time, there was an unexpressed understanding by all those associated with AMICAN that it would be best for the project if the consultants working on AMICAN were allowed to continue their work. AMICAN was a huge project in the middle of being developed. Many of the consultants had been working on the project for years. They were very experienced and knowledgeable. Losing those contractors would have brought the project to a halt, with significant costs being associated in getting new consultants up to speed so to continue with the systems development.

[146] On August 4, 2009, Mr. Shum and Ms. Béland met with Anne-Josée L'Écuyer to discuss how to move forward to ensure the AMICAN project could continue. In a follow-up email to Mr. Shum (with a copy to Ms. Béland, Ms. Francoeur, Ms. Périard, and Mr. Melanson), Ms. L'Écuyer outlined the procurement options available for informatics professional services requirements for the ITB as follows:

• ITNet contract. Assuming ITNet was capable of providing the required skill sets, Ms. L'Écuyer highly recommended the use of the existing 280 contract because ITNet had approximately $2.8 million still available to be tapped.

• TBIPS – SA Tier 1. Upon receipt of a statement of work and evaluation criteria from Ms. Béland, Ms. L'Écuyer’s department would launch a TBIPS procurement to secure the necessary consultants from October 1, 2009 to March 31, 2010 for a total value of under $2 million, on certain terms, which included:

o “ITB will provide written confirmation that the available skill sets can be obtained via a fair competitive process using TBIPS suppliers (materiel management and PWGSC will determine the total number of bidders to be invited as per TBIPS SA conditions and further recommendations received from PWGSC on July 16, 2009).”

• TBIPS – SO. [standing offer]

• TBIPS SA Tier 2 Procurement via PWGSC

[147] Mr. Shum chose the option of a TBIPS Tier 1 solicitation. By August 4, 2009, Sylvie Béland had prepared the SOW. On August 5, 2009, Ms. Béland advised Ms. Francoeur that ITB’s choice for a supplier was ADRM/CNC joint venture. By August 7, 2009, Josée Francoeur was working on the TBSF to issue for TBIPS 137. On that date, Anne-Josée L'Écuyer sent an email to Ms. Francoeur, Ms. Béland, Ms. Périard, and Mr. Melanson stipulating certain requirements in regard to TBIPS 137 to ensure the solicitation process was fair and transparent:

A) Respect the TBIPS SA regulations by inviting a min of 5 suppliers which must include:

• 2 of the 3 firms offering the lowest firm per diem rates

• 2 firms chosen at random by PWGSC

• Must invite IT Net

• Must invite MicroTime

• Option: invite firm already suggested by ITB

• Option: invite 3 additional firms as chosen by procurement and/or ITB (I personally recommend inviting more firms than strictly the minimum required)

B) The solicitation must absolutely include a ‘bid rigging certification’ which must be signed by bidders before a contract can be awarded.

C) Evaluation criteria must be generic to the skill sets required and not the individuals currently providing the services.

D) The solicitation must be posted for a minimum of 20 days as per the terms of the TBIPS SA Tier 1.

Ms. Béland forwarded this email to Mr. Shum, as she was going to be on holidays for three weeks.

[148] On August 13, 2009, Mr. Shum responded to Mark Melanson and the other recipients of Ms. L'Écuyer’s email asking about the status of the TBSA for TBIPS 137. He advised that he had no issues with any of the requirements set out by Ms. L'Écuyer, though he suggested that inviting seven vendors would be sufficient. Ms. Francoeur responded that the TBSF was ready to be posted on MERX that afternoon and should be sent out to vendors the following week.

TBIPS 137 Awarded

[149] The TBSF for TBIPS 137 was issued on August 17, 2009 with a closing date of September 8, 2009. Seven pre-qualified vendors were invited to bid, including Microtime, ITNet, and ADRM/CNC joint venture – the latter being the ITB’s choice. I reject outright Mr. Shum’s assertion that he chose to invite ADRM/CNC on his own initiative without any input from Linda Graham. The only reason Mr. Shum invited ADRM/CNC was because Ms. Graham had told him that Microtime’s incumbent consultants would be bid through that vendor.

[150] ADRM/CNC joint venture was the only vendor to submit a bid. Its response to the TBSF was prepared by Microtime. All of Microtime’s incumbent consultants working on AMICAN were proposed in the bid. Due to all of the advance notice that Microtime had received from Barney Shum and Sylvie Béland regarding the number, category, and level of consultant required for TBIPS 137, and due to the inherent advantage Microtime had of already having consultants on site doing the tasks in question, Microtime had no difficulty getting a bid submitted on time through ADRM.

[151] Barney Shum, Sylvie Béland, and Daniel Simard completed the technical evaluation of the ADRM/CNC joint venture bid. In light of (1) the communications that Mr. Shum and Ms. Béland had had with Linda Graham during the spring and summer of 2009 to ensure an appropriate transfer of categories from the 280 Contract to the TBIPS framework; (2) the documents that Ms. Béland had forwarded to Ms. Graham regarding the categories of Microtime incumbents under the 280 Contract and under the TBIPS framework; and (3) the knowledge of Mr. Shum and Ms. Béland that Microtime was behind the ADRM/CNC joint venture bid for TBIPS 137, neither Mr. Shum nor Ms. Béland should have been technical evaluators under TBIPS 137. Their assuming this role amounted to a conflict of interest. That being said, there was no evidence of any impropriety in how Mr. Shum and Ms. Béland conducted the technical evaluation, and there was no evidence to the effect that the consultants proposed under TBIPS 137 were not qualified or did not have the necessary technical qualifications or experience to tackle the stipulated tasks.

[152] On September 4, 2009, Stephen Forgie advised Josée Francoeur by email that Microtime would not be submitting a bid in regard to TBIPS 137 because Microtime’s TBIPS rates were too low.

[153] On September 8, 2009, Alex Beraskow, the President of ITNet wrote a detailed letter to Sylvain Richard in which he complained of the following: (1) that the ITB was using TBIPS to obtain consultants for the AMICAN and TDR projects instead of making use of the remaining funds available for ITNet under the 280 Contract; (2) that each of TBIPS 121 and TBIPS 137 allowed for only one successful bidder; and (3) that each of TBIPS 121 and TBIPS 137 was sufficiently detailed in terms of technical and experience requirements to bring into doubt whether the procurement process was truly competitive. In response to this letter of complaint, PWGSC, LAC contracting, Sylvain Richard, Barney Shum, Marie-Claude Renaud and others were brought into discussions regarding an appropriate response. On September 10, 2009, Mr. Shum asked Sylvie Béland to confirm how the requirements from the 280 Contract had been changed in the TBSF for TBIPS 137. Her response was not included in the evidence.

[154] At the same time, Anne-Josée L'Écuyer was concerned that there was an irregularity in regard to ADRM’s proposal for TBIPS 121. She referred the matter to PWGSC and, at the same time, questioned Philippe Bisson, of ADRM, regarding ADRM’s pricing for the second optional year. On September 18, 2009, while waiting for further guidance from PWGSC, and prior to either TBIPS 121 or TBIPS 137 being formally awarded, Ms. L'Écuyer sent an email to Sylvain Richard, with a copy to Guy Lalonde, Barney Shum, and Mark Melanson, asking for written confirmation as follows:

• the procurement integrity process was not jeopardized in any way (such as possible prior negotiations between ITB and the firms who submitted proposals); and

• you are of the opinion that the evaluation criteria stated in the solicitation documents were not restrictive to the incumbents but to the skill sets required for the successful advancement of the projects?

[155] On September 18, 2009, Barney Shum responded to Sylvain Richard in regard to the TBIPS 137 solicitation. From his perspective, the procurement process was not jeopardized in any way and the evaluation criteria stated in the solicitation documents were not restrictive to the incumbents but to the skill sets required for the successful advancement of the projects.

[156] It was not proven at this trial that the evaluation criteria stated in the TBSFs for either TBIPS 086 or TBIPS 137 were restrictive to the Microtime incumbents then in the positions in question. Although the mandatory and rated criteria under both TBIPS tenders were such that there could have been other consultants in the National Capital Region capable of meeting the requirements under either tender, the evidence was that AMICAN, in particular, was a very complex project involving specific IT knowledge and experience relating to the applications being developed at LAC. The evidence was that the number of consultants available in the National Capital Region who could meet those requirements was limited due to the nature of the required skills and not due to any tampering with mandatory or rated requirements to ensure that only a particular incumbent would qualify. There is no question that the incumbents had a huge advantage; some had been working on the project for a couple of years. But that is just a fact of life. That reality does not undermine the fairness of the procurement process. I find that Mr. Shum gave an honest response to the second question posed by Ms. L'Écuyer.

[157] It is to be noted that, despite ITNet having advance warning through Sylvain Richard on June 8, 2009 that LAC would be using the TBIPS procurement process to continue its major projects, and despite ITNet having consultants at LAC working on both the AMICAN and TDR projects and therefore knowing the nature of the work to be done and the categories of Microtime’s consultants whose contracts were coming to an end, ITNet was unable to mount a proposal under either TBIPS 121 or TBIPS 137 using its own stable of consultants. ITNet tried unsuccessfully to have TBIPS 137 broken into smaller parts so that it could bid consultants it did have available. In the alternative, if TBIPS 137 remained as issued, ITNET was interested in partnering with Microtime so that it could bid some of Microtime’s consultants.

[158] So the situation existed where, despite having three weeks in which to do so, neither ITNet, Microtime’s major competitor at LAC, nor any of the other invited vendors, could muster the necessary consultants to submit a bid under TBIPS 137. This fact reinforces the importance of Microtime’s incumbents to the continuation of the AMICAN project and helps to explain why Mr. Shum and Ms. Béland were so anxious to keep them at LAC.

[159] Mr. Shum’s response regarding the procurement process not being jeopardized in any way due to earlier negotiations between the ITB and firms submitting proposals may have been technically correct, in that neither Mr. Shum nor Ms. Béland had any negotiations with ADRM prior to ADRM submitting its bids on TBIPS 137. However, it was not an honest response. Mr. Shum knew that ADRM/CNC’s bid was, in reality, Microtime’s bid. He and Ms. Béland had had numerous discussions with Ms. Graham regarding TBIPS 137 and the categories under TBIPS that could be assigned to Microtime’s consultants. Mr. Shum should have made Ms. L'Écuyer aware of those discussions and of the fact that Microtime was behind ADRM/CNC’s bid on TBIPS 137 pursuant to an arrangement between the two vendors. Had Mr. Shum been honest with Ms. L'Écuyer, ADRM/Sapphire would not have been awarded the TBIPS 137 contract.

[160] On September 29, 2009, TBIPS 137 was awarded to ADRM/Sapphire joint venture, the new name of the joint venture after CNC’s name change. The contract period was from September 30, 2009 to March 31, 2010.

[161] There was one final hiccup in regard to TBIPS 137 before TAs could be issued under it. The security clearance for Jarrod Littlejohn had been deactivated for some reason. It was eventually reinstated, but no TA could be issued for Mr. Littlejohn until that had happened. The exchange of emails, and other documentation relating to security clearances, made it clear that ADRM/Sapphire joint venture was taking all of the steps it required in order to ensure that all of the consultants it was placing at LAC under TBIPS 137 had their security clearances.

[162] At the AMICAN/TDR Financial Governance Sub-Committee meeting of September 22, 2009, it was anticipated that the cost of consultants working on the AMICAN and TDR projects at LAC (i.e. Microtime’s old consultants) would increase by 13% as a result of the increased rates charged for consultants by ADRM/Sapphire joint venture under TBIPS 137 when compared with what was charged by Microtime under the 280 Contract. There was an acknowledgement that the ITB did not have a clear picture of what the AMICAN and TDR projects were actually costing LAC, and the concern was raised that there would be inadequate resources to continue funding these projects to the extent they had been funded in the past. On October 7, 2009, at Mr. Shum’s request, Ms. Béland provided him with a comparison of the cost of having 17 consultants for 125 days from October 9, 2009 to March 31, 2010 depending on whether Microtime or ADRM per diem rates were used. Ms. Béland calculated the additional costs as being $124,687.50. It is not clear which rates she used for either Microtime or ADRM, but suffice to say that LAC was paying more for resources under TBIPS 137 than it would have paid, using Microtime’s rates, under either the 280 Contract or under Microtime’s TBIPS Tier 1 SA. Ms. Béland’s calculation was of no import because Microtime had no funds left under the 280 Contract and would not have bid under its TBIPS Tier 1 SA because its rates were too low to sustain Microtime’s involvement.

Microtime’s Continued Presence at LAC

[163] On October 6, 2009, Ms. Graham reached out to Sylvie Béland and Barney Shum saying that they should have a celebratory lunch together soon, and to include Stephen Sekerak, now that he was back from language training. Mr. Shum’s suggestion that Ms. Graham was proposing the lunch to celebrate the return of Mr. Sekerak and to maintain contact with Mr. Shum and Ms. Béland was not credible. Clearly, Ms. Graham thought all of them should celebrate ADRM/Sapphire joint venture’s win of the TBIPS 137 contract. Mr. Shum and Ms. Béland knew perfectly well that Microtime had bid its consultants for TBIPS 137 through ADRM/Sapphire.

[164] In mid-October, 2009, after Linda Graham had been terminated at Microtime, Stephen Forgie invited Barney Shum for lunch, and Mr. Shum invited Sylvie Béland to come along. They discussed Ms. Graham’s departure, the TBIPS 137 contract, and whether LAC required any other consultants. On October 27, 2009, John Cassandra and his wife treated Mr. Shum and his wife and Stephen Forgie to dinner at Mama Teresa’s. According to Mr. Forgie, Mr. Cassandra was anxious to maintain a relationship with Mr. Shum and to keep Microtime in his line of vision, since Microtime no longer had an official presence at LAC. It is to be noted that, at no time, did Mr. Shum have any comparable social interactions with anyone from ADRM.

[165] On October 29, 2009, Sylvie Béland, in preparing a list of AMICAN consultants for Barney Shum, referred to the TBIPS 137 consultants as Microtime consultants – not ADRM or ADRM/Sapphire consultants. I reject Mr. Shum’s evidence that he did not notice this. As well, on August 31, 2009 and October 5, 2009, Mr. Shum signed Microtime employee time sheets for John Parsons – well after the TBIPS 086 contract had been awarded to ADRM. There is no doubt that Mr. Shum, Ms. Béland, and others working in the ITB department considered the then ADRM consultants to still be Microtime consultants. Stephen Forgie went to the ITB offices on a very regular basis to check on the consultants. The consultants were paid by Microtime and had no contact with ADRM. And no one from ADRM had any involvement with the consultants or with anyone in the ITB department. In that regard, ADRM respected the Teaming Agreement it had with Microtime.

[166] On November 2, 2009, there was an email interchange between Mr. Forgie and Mr. Shum in regard to a meeting that Mr. Shum was organizing with all consultants to discuss their Internet usage. Mr. Shum told Mr. Forgie that he did not need to be there and that he would fill him in later. There would be no reason for Mr. Shum to have any communication with Mr. Forgie about this meeting unless he considered the consultants to still be Microtime consultants. Mr. Shum’s attempt to portray this interchange in another light was shear fabrication.

[167] On November 6, 2009, Ms. Béland sent an email to Mr. Forgie in regard to the termination of Ed Morawski – a former Microtime consultant and then ADRM consultant. Ms. Béland copied Mr. Shum on the email. It was clear that Ms. Béland, to Mr. Shum’s knowledge, and without any questioning on his part, was treating Mr. Morawski as a continuing Microtime consultant. The email was not copied to anyone at ADRM.

Internal Investigation at the ITB

[168] In the spring of 2009, Sylvain Richard initiated an administrative investigation within the ITB as a result of some irregularities with overtime claims within that branch. According to Mr. Richard, during the course of that investigation, much came to light about Mr. Shum’s mismanagement of finances and personnel within the branch. While this investigation was ongoing, numerous consultants and employees were being questioned about a myriad of issues. Mr. Shum was aware of that.

[169] Stephen Forgie’s evidence was that, on the evening of December 2, 2009, Barney Shum called him at home – something that had never happened previously. He explained that there was a security investigation underway at LAC. He asked Mr. Forgie to speak to the principals at ADRM and urge them not to mention Linda Graham’s name should an investigator ask them how they met Mr. Shum and how they managed to capture the TBIPS 137 contract at LAC. Mr. Forgie’s evidence was that he called John Cassandra to get direction. Mr. Cassandra instructed him to speak with Mr. Bisson and Mr. Hokayem. Mr. Forgie did so on December 3, 2009. According to Mr. Forgie, the three men decided that the best course of action for all of them was to tell the truth as to how ADRM was introduced to Mr. Shum. They anticipated that, if Linda Graham were interviewed by the investigators, she would tell the investigators the role she played in introducing ADRM to Mr. Shum.

[170] According to Mr. Hokayem, he and Mr. Bisson had no idea why Mr. Forgie wanted to meet with them on what seemed like an urgent basis. When Mr. Forgie, clearly uncomfortable, tried to discuss with them the investigation at LAC and questions that could be raised about how their meeting with Barney Shum had been set up and what had occurred at that meeting, Mr. Hokayem and Mr. Bisson closed down the conversation – saying that there had been nothing improper with Mr. Shum inviting them to a meeting so that he could learn more about their company. It had been a normal, professional meeting.

[171] Although there were some minor differences in the evidence of these events proffered by Messrs. Forgie, Hokayem, and Bisson, there was consistency in regard to: (1) Mr. Forgie going to the ADRM offices on December 3, 2009 to meet with Messrs. Hokayem and Bisson; (2) Mr. Forgie raising the issue of the introductory meeting that Mr. Shum had had with Messrs. Hokayem and Bisson earlier in the year; and (3) the agreement that if LAC security asked Messrs. Hokayem, Bisson, or Forgie about that meeting, they would tell the truth. The evidence of Messrs. Hokayem, Bisson, and Forgie in this regard dovetailed with contemporary emails and fit with the timing of the security investigation at LAC.

[172] Mr. Shum denied that he ever called Mr. Forgie at home and that he ever had a conversation with him during which he urged him to ask Mr. Bisson and Mr. Hokayem to keep secret Linda Graham’s involvement in introducing ADRM to Mr. Shum. I reject Mr. Shum’s evidence in this regard and accept that of Mr. Forgie. However, before I use this evidence to support a finding of guilt on the part of Mr. Shum, I must be convinced that there is no other explanation for Mr. Shum’s conduct.

[173] Mr. Forgie’s evidence supports a finding that Mr. Shum met with Messrs. Hokayem and Bisson because Linda Graham had asked him to invite ADRM to bid on TBIPS 086. It does not support a finding that Mr. Shum had a guilty mind at the time of the alleged offences or had any knowledge at the time that Microtime and ADRM were engaging in bid-rigging, as that is defined in the Competition Act. An equally plausible explanation was that it was only as a result of the security investigation at LAC, the full significance of which Mr. Shum did not understand until the late fall of 2009, that Mr. Shum worried that he could be implicated in any wrongdoing on the part of Microtime and ADRM as a result of his following Ms. Graham’s request to invite ADRM to bid on TBIPS 086 and TBIPS 137.

[174] On December 14, 2009, Mr. Shum was summoned to an interview on December 17, 2009 by the Departmental Security Officer. The notice said that an administrative investigation was being conducted in the Applications Management division of ITB regarding management of overtime, management of human resources (employees and consultants), conflicts of interest and contracts management. Mr. Shum was advised that he could be accompanied by a person of his choice but was given no time to locate a suitable person. He was advised that his wife was not acceptable as a witness.

[175] On December 16, 2009, ADRM was advised that Sylvain Richard was replacing Barney Shum as the project authority for TBIPS 137 and Gilles Duciaume was replacing Sylvie Béland as the technical authority. A formal amendment followed.

[176] On February 5, 2010, Sylvain Richard gave Mr. Shum the report that was the culmination of the internal security investigation and advised Mr. Shum that he was suspended with pay and had to leave the building within 10 minutes. He was told that he had three days in which to respond to the report. Mr. Shum collected some personal memorabilia from his office and left. He had no time to do anything on his computer or to collect any documentation. He has not been back to his own office since that date.

[177] Mr. Shum retained an employment lawyer. Together they prepared a response to the internal security report and, once they had been provided with relevant documentation from LAC, they prepared further responses. LAC had an independent review conducted of the internal investigation. Following the conclusion of that review, and after months of negotiations, a settlement was reached that included a non-disclosure agreement. Mr. Shum was reinstated, but assigned to an office away from the LAC offices. He was given no LAC work to do. In January 2012, Mr. Shum moved to Health Canada, where he stayed until his retirement six months later. He was hired back as an independent consultant in March 2014, but that career ended with the criminal charges being laid in April 2014.

Criminal Investigations and Charges

[178] A search warrant was executed at the offices of ADRM in the spring of 2010. Subsequently, ADRM entered an agreement with the Public Prosecution Service of Canada for immunity from prosecution under the Competition Act in regard to the three TBIPS contracts with LAC in return for cooperation. Both Philippe Bisson and Nehman Hokayem testified for the Crown at this trial.

[179] Stephen Forgie pled guilty to bid-rigging in the summer of 2015 and testified at this trial as part of his plea agreement with the Crown.

[180] Linda Graham pled guilty to bid-rigging in August 2016 and testified at this trial as part of her plea agreement with the Crown.

[181] Sylvie Béland pled guilty to one count under s. 80(1)(e) of the FAA, for failure to report to a superior officer either a contravention of the FAA or other revenue law of Canada or a fraud against the government.

[182] As of this trial, charges against Microtime and John Cassandra were still outstanding, as were charges against Marie-Claude Renaud in regard to TBIPS 121.

Issues of Credibility and Reliability

Passage of Time

[183] First, let me state the obvious. When a criminal trial occurs nine years after the events in question, the reliability of the oral evidence provided must be carefully considered. This is especially so when the criminal charges are brought five years after the events in question, at a time when most of those charged with criminal conduct no longer have access to the documents that might assist them in remembering events. Instead, they have to wait for the formal disclosure process within the criminal proceedings to gain access to those documents. The reliability of the oral evidence is further put into doubt when the events occur in a pressure cooker of fast-approaching deadlines, stretched budgets, new procurement vehicles, new senior managers, stressed employees, a toxic work environment, and an internal investigation. It was in these circumstances that Barney Shum, and his second in command on the AMICAN project, Sylvie Béland, were scrambling to get resources so that there would be no disruption in the HDS and AMICAN projects while, at the same time, their colleague, Marie-Claude Renaud, was scrambling to secure resources for the continuation of the TDR project. With the frenetic activity at LAC and at Microtime relating to the resources needed at LAC to continue its three major IT projects, it is understandable that memories may be hazy in regard to what interactions occurred on what dates, in what circumstances, and in whose presence. And yet, this was the nature of the questioning to which all of the witnesses were subject.

Crown Witnesses

[184] My assessment is that two key Crown witnesses, Linda Graham and Sylvie Béland – both of whom testified pursuant to their commitment to do so under the terms of their plea agreements – were, on the most part, trying to be truthful during the course of their testimony. I qualify this finding as there were some instances where each tried to downplay his or her personal involvement in wrongdoing. I found Stephen Forgie to be a credible witness, with shortcomings in his testimony being caused by a faulty memory and no attempt on his part to mislead the court.

[185] In regard to Linda Graham, I reject the attempts of both Mr. Shum and Ms. Béland to portray her as someone who fabricated and exaggerated things, who deluded herself into thinking that she had inside information from them, and who was a mere annoyance to them rather than a source of support and assistance. Much of Ms. Graham’s oral evidence was corroborated by contemporaneous email exchanges, and the version of events she recounted made sense, unlike some portions of Mr. Shum’s testimony. I do accept the evidence of Mr. Shum and Ms. Béland that Ms. Graham was a persistent presence at LAC and an assertive salesperson who was forceful and somewhat overbearing in protecting Microtime’s interests in that department. However, Mr. Shum and Ms. Béland also initiated communications with Ms. Graham and relied on her to some extent to assist them with such tasks as figuring out the transition from the 280 Contract to the TBIPS framework. The three of them also shared the same goal of keeping Microtime consultants working at LAC. Ms. Graham was motivated by financial gain. Mr. Shum and Ms. Béland were motivated by their commitment to see the successful completion of the AMICAN project for the benefit of LAC.

[186] In terms of reliability, due to the passage of time, the intricate subject-matter of the case, fading memories, the natural tendency to minimize one’s own wrongdoing, internal contradictions within the witness’s evidence, and material differences in the evidence provided by each of these witnesses, the evidence of Ms. Graham, Mr. Forgie, and Ms. Béland lacked reliability on certain significant points. Ms. Graham stated repeatedly that she simply could not remember certain details. Ms. Béland was in the same position. Mr. Forgie’s evidence was clearer, but he also acknowledged that on some key points he had no present memory of events and was trying to piece together what had happened by referring to documents he had created years earlier – but still years after the events in question. Throughout this decision, I have highlighted specific instances where I considered the evidence of these witnesses unreliable.

[187] Although Anne-Josée L'Écuyer and Josée Francoeur provided their evidence in a straight-forward and clear fashion, in my view, both oversimplified how procurement rules and practices were meant to apply at a practical level, and neither adequately addressed the complexity of the situation which existed in this case where a new procurement vehicle was being used to populate existing projects. In this regard, I preferred the evidence of Réal Benoit and Sylvain Richard, both of whom allowed that there was a range of acceptable behaviour in regard to some of the issues explored at this trial. Life in the procurement world was not always black and white.

[188] Ms. Francoeur testified that she considered it strange that Mr. Shum invited ADRM for TBIPS 086 and ADRM/CNC joint venture for TBIPS 137 because, normally, project managers would invite the company that had incumbent consultants already doing the work. Both Ms. Francoeur and Ms. L'Écuyer testified that they considered it curious that all of Microtime’s incumbent consultants were being bid under ADRM or ADRM/CNC joint venture for all of the TBIPS issued in the summer of 2009 – particularly considering neither ADRM nor CNC was a vendor with any previous visibility at LAC.

[189] Both Ms. L'Écuyer and Ms. Francoeur were very experienced procurement officers. Both would have been aware of the common usage of pass-through agreements and the like to enable vendors to work together on bids. Microtime advised LAC contracting that it would not be submitting a bid under TBIPS 137 because its rates were too low. Both Ms. L'Écuyer and Ms. Francoeur would have seen the red flag in this case – particularly by the time they were considering TBIPS 137 – that suggested that some sort of arrangement likely existed between ADRM and Microtime. Neither specifically discussed this issue with Mr. Shum. Neither approached ADRM or Microtime to inquire whether there was any arrangement between the two in regard to TBIPS 137.

[190] Ms. L'Écuyer testified that weeks earlier, prior to TBIPS 121 and TBIPS 137 being issued, she had raised concerns with her Director General, Mark Melanson, regarding the openness and transparency of the procurement measures being undertaken by the ITB and had suggested that a bid-rigging certification be required from all future bidders. However, there was no evidence that such a certificate was ever required in regard to any of the TBIPS tenders.

[191] Ms. L'Écuyer took a number of steps in regard to specific concerns she had regarding TBIPS 121 and, more particularly, the pricing proposed during the optional period by ADRM/CNC. She contacted ADRM in regard to this specific issue and queried whether there was any bid-rigging going on. However, her inquiries were not made generally in regard to a possible agreement between ADRM and Microtime to work together on all three bids. No one at LAC contracting ever reached out to Mr. Shum and Ms. Béland – both of whom they respected and found professional – to warn that, if they had any knowledge of a pass-through agreement or the like in regard to TBIPS 086 or TBIPS 137, they needed to bring that to the attention of LAC contracting. This would have been an appropriate thing to do based on the evidence at trial that the handling of partnership and teaming agreements was different under the TBIPS framework from what it had been under the GOLSA framework, and that Mr. Shum and Ms. Béland had received no formal training regarding the TBIPS system.

[192] When testifying, Sylvain Richard was vague as to conversations he may have had with Barney Shum during the summer of 2009 regarding ADRM. Prior to that time, Mr. Richard knew nothing about ADRM. He had thought that Microtime and ITNet as vendors with incumbent consultants at LAC would be invited to bid on all of the TBIPS tenders that summer and would have bid on them. Despite this not happening, and despite his lack of knowledge regarding ADRM, Mr. Richard did not delve into why Microtime and ITNet were not invited to bid on TBIPS 086, why Mr. Shum chose ADRM to bid on TBIPS 086 and ADRM/CNC joint venture to bid on TBIPS 137, why Marie-Claude Renaud chose ADRM/CNC joint venture to bid on TBIPS 121, and how ADRM and ADRM/CNC joint venture had the necessary consultants to win all three tenders. Mr. Richard claimed to have had questions about the TBIPS tenders in the summer of 2009, but he did not pursue those with Mr. Shum.

[193] Why Mr. Richard let all three TBIPS tenders proceed as requested by Mr. Shum and Ms. Renaud, despite the concerns he had, the concerns expressed by LAC contracting, and the concerns raised by ITNet, required a more compelling answer than that provided by Mr. Richard. This was particularly so when his evidence was that he did not trust Mr. Shum. He considered him a liar and a manipulator. He considered him someone who believed that the ends justified the means. He did not like working with Mr. Shum, and he disparaged Mr. Shum’s management style. Not only did Mr. Richard’s animosity toward Mr. Shum bring into doubt Mr. Richard’s impartiality when testifying, but also it deepened the question as to why Mr. Richard did not supervise more closely the TBIPS tendering processes under Mr. Shum’s control. Mr. Richard did not even make more in depth inquiries when he learned in the fall of 2009 that some of the former Microtime consultants working at the ITB still considered themselves to be Microtime consultants, even though they had been bid through ADRM. When testifying, Mr. Richard was reluctant to acknowledge that he had any role to play in how events unfolded at LAC regarding Microtime and ADRM.

Defence Witnesses

[194] Barney Shum was not a credible witness. Some of his evidence was contrived, at times to a glaring extent, in an attempt to undermine the Crown’s allegations of wrongdoing on his part. Most particularly, his evidence regarding why he chose ADRM or ADRM/CNC to bid on a TBIPS tender held no credence, in light of the weight of documentary and oral evidence contradicting his version of events. The same can be said of his evidence as to the reasons for ongoing connections between Microtime representatives and the ITB following the awarding of the three TBIPS contracts to ADRM. What was particularly offensive was Mr. Shum’s tendency to portray Linda Graham as someone who made things up, who engaged in self-aggrandizement, and whose contemporaneous emails and current testimony could not be believed. Finally, throughout his testimony, Mr. Shum tried to stay on safe ground by speaking in generalities – thereby making it difficult for his evidence to be challenged. I have no doubt that Mr. Shum would have been able to be much more specific due to his command of the documentary evidence produced in this case.

R. v. W.D.

[195] From the foregoing, it is obvious that I do not believe all of Mr. Shum’s evidence. Nevertheless, if Mr. Shum’s evidence leaves me in reasonable doubt about an essential element of a charge against him, I must acquit him of that charge. Even if Mr. Shum’s evidence does not leave me in reasonable doubt about an essential element of a charge against him, I must not convict Mr. Shum of that charge unless, on the basis of the evidence which I do accept, I am convinced of his guilt on that charge beyond a reasonable doubt (R. v. W.(D.), 1991 CanLII 93 (SCC), [1991] 1 S.C.R. 742, 3 C.R. (4th) 302, at p. 310.

Allegations Regarding Barney Shum

Receiving Gifts, Hospitality and Other Benefits

[196] In the Values and Ethics Code for the Public Service, published by the Treasury Board of Canada Secretariat, it states at p. 25:

Public servants shall not accept or solicit any gifts, hospitality or other benefits that may have a real or apparent influence on their objectivity in carrying out their official duties or that may place them under obligation to the donor. …

The acceptance of gifts, hospitality and other benefits is permissible if they

a) Are infrequent and of minimal value (low-cost promotional objects, simple meals, souvenirs with no cash value);

b) Arise out of activities or events related to the official duties of the public servant concerned;

c) Are within the normal standards of courtesy, hospitality or protocol; and

d) Do not compromise or appear to compromise in any way the integrity of the public servant concerned or his or her organization.

[197] Microtime paid for the occasional lunch for Barney Shum, Sylvie Béland, Charles Davis, and Stephen Sekerak. There is no evidence that any of these lunches were lavish. Mr. Shum and his wife were also treated to the occasional dinner by John Cassandra and his wife, when the latter were visiting Ottawa. Mr. Shum and his wife attended most of the Christmas parties that Microtime put on for their consultants at LAC. Other members of the senior management at LAC were invited as well and attended on occasion. Mr. Shum received a bottle of wine from Mr. Cassandra as a Christmas present. That was the extent of the gifts, hospitality, and other benefits received by Mr. Shum from Microtime. In accepting these benefits from Microtime, Mr. Shum was not in breach of the code of conduct that applied to him as a public servant. Mr. Shum did not benefit from any meals or other aspects of hospitality bestowed on him by Microtime when the TBIPS in question in this case were issued and outstanding.

[198] The Crown spent time at the trial going over every instance of Microtime providing gifts and hospitality to Mr. Shum over the years when Microtime had a large number of consultants at LAC. This was done to provide “colour” and context in an effort to put Mr. Shum in a bad light; however, the evidence was of no real import and the Crown acknowledged that they were not relying on this evidence to establish the actus reus of the offences charged.

Sharing General Information with Vendors

[199] In late 2008 and early 2009, Linda Graham and, at times, Stephen Forgie, had conversations with Barney Shum, Sylvie Béland, and Marie-Claude Renaud about how much money was left for Microtime under the 280 Contract and how LAC was planning to handle the situation once the Microtime funding ended. There were some general discussions regarding the options available to LAC. One option was for LAC to use the remaining ITNet funds under the 280 Contract to pay for the resources necessary to continue the AMICAN and TDR projects. Another option was for LAC to make use of the TBIPS procurement vehicle and issue either a Tier 1 or Tier 2 TBSF. There was nothing wrong with Mr. Shum and Ms. Béland participating in such initial and general discussions. According to Réal Benoit, such general discussions were normal and to be expected as part of the regular interactions between clients and vendors. It would have been impossible for Mr. Shum to make informed decisions regarding which vendor to invite to bid during a procurement process if he was unreasonably curtailed in his ability to explore what potential resources a vendor could offer, under what procurement vehicle the resources could be offered, and how such resources could support a LAC project.

Communicating with Microtime regarding Particular Consultants

[200] In the spring of 2009, there were numerous discussions between Mr. Shum and Ms. Graham about the different Microtime consultants working under Mr. Shum at the ITB. Mr. Shum let Ms. Graham know that he was satisfied with the work being done by the Microtime consultants and that he hoped that they would be able to continue doing their work after Microtime’s funding under the 280 Contract ran out. There was nothing wrong with this type of communication. Many of the consultants had been working with Mr. Shum for several years on the AMICAN project. It was Mr. Shum’s responsibility to report to Ms. Graham whether or not he was satisfied with their contributions. Assuming he was satisfied, for reasons of efficiency and cost effectiveness, he would want the consultant to continue on the project. His expressing that to Ms. Graham was simply stating the obvious.

Communicating with Microtime about TBIPS Details

[201] I am satisfied, based on contemporaneous emails and on the evidence of Ms. Graham and Mr. Forgie, that Mr. Shum kept Ms. Graham informed orally as to the likely timing of the issuance of the TBSF for TBIPS 137, whether it would be a Tier 1 or Tier 2 tender, whether it would be based on categories of consultants or on projects, how many consultants would be required, and whether the categories of consultant in the TBSF would be consistent with the categories of consultants into which Ms. Graham and Mr. Forgie had placed Microtime’s incumbent consultants at LAC. No other vendor had such frequent and regular access to Mr. Shum, or his plans. This direct channel of communication between Mr. Shum and Ms. Graham improved Microtime’s chance of submitting a successful bid (through ADRM/CNC joint venture) in regard to TBIPS 137 by allowing it to start the necessary legwork to submit a bid well before TBIPS 137 was issued.

[202] I find that Mr. Shum advised Ms. Graham to include in any TBSF she was preparing a grid for each consultant, similar to what Microtime had done in its bid for the 280 Contract, setting out how that consultant met the rated criteria for the category of consultant for which he or she was being proposed. Knowing Mr. Shum’s preference to have a grid of this nature in the TBSF improved Microtime’s chance of submitting a successful bid (through ADRM).

Sharing the TESTING Spreadsheet

[203] The evidence relating to this specific allegation was too unreliable to allow me to find as a fact that Mr. Shum authorized Ms. Béland to send this document to Ms. Graham or consented to it being sent.

[204] Even if I had found as a fact that Mr. Shum did authorize or consent to Ms. Béland sending this document to Ms. Graham, I would not have found that this action created an opportunity for Microtime to defraud the government. The document contained no information that was not already available to Ms. Graham. Microtime had placed all of these consultants at LAC and was well aware of their categories and billing rates under the 280 Contract. The TESTING spreadsheet offered nothing new to Microtime, and created no new opportunities for Microtime.

[205] I reject Crown counsel’s submission that, because Microtime had the TESTING spreadsheet, it was given a leg-up in its preparation for the upcoming TBIPS 137. The TESTING spreadsheet in no way assisted Microtime to assign its consultants to the new categories stipulated under the TBIPS framework. The fact that Ms. Graham and Mr. Forgie found the TESTING spreadsheet a useful template to do their own planning exercises at Microtime from April 30, 2009 forward, and on which to keep track of information from consultants, is neither here nor there. Microtime had a leg-up in terms of its preparation for the upcoming TBIPS 137 in great measure because it had the incumbent consultants on the job at LAC doing the work that was to be continued under TBIPS 137.

[206] As well, there was nothing nefarious about Mr. Shum or Ms. Béland using the TESTING spreadsheet to explain to Microtime why it was not feasible for LAC to use the 280 Contract to fund Microtime consultants at LAC once their existing TAs expired.

Sharing Information about Categories for Consultants

[207] The evidence of the chief Crown witnesses (Linda Graham, Stephen Forgie, and Sylvie Béland) was inconsistent in regard to the extent to which Ms. Graham and Mr. Forgie discussed categories, levels, and rates with Mr. Shum and Ms. Béland prior to the issuance of the TBIPS tenders. The oral evidence of all of these witnesses was, understandably, vague as to the timing of any such discussions.

[208] That being said, there is no question that, in the months leading up to the issuance of TBIPS 137, Ms. Graham and Mr. Forgie were actively trying to determine into which category under TBIPS their incumbent consultants at LAC could be placed. There is no question that both Ms. Graham and Mr. Forgie kept Mr. Shum and Ms. Béland informed of their progress in this regard through frequent emails and phone calls. There is also no question that Mr. Shum and Ms. Béland welcomed this information.

[209] The requirements for each category and level of consultant under the TBIPS framework were detailed and complex. The categories were not an exact match with the categories previously used under the 280 Contract. Mr. Shum and Ms. Béland were overwhelmed with their normal workload of overseeing the AMICAN project and, for Mr. Shum, the HDS project. Having to draft a TBIPS TBSF on top of their normal workload created considerable stress on both of them. Their starting point was that the incumbent Microtime consultants were doing what they were intended to do to move the AMICAN project forward. Understandably, their preference was to have the actual incumbents continue on the job; however, if that did not turn out to be the case when the TBIPS contract was awarded, they at least wanted to have new consultants with comparable skills and experience. Therefore, it made sense to look at the category of consultant that the incumbent consultants had qualified for under the 280 Contract and to translate that into the comparable category under TBIPS. It was very helpful to Mr. Shum and Ms. Béland that Ms. Graham and Mr. Forgie did much of the legwork required to identify the TBIPS categories into which Microtime’s incumbent consultants fell.

[210] I find that the true direction in which information flowed in the spring of 2009 regarding the issue of categorizing consultants for the purpose of TBIPS 137 was from Microtime to LAC. In the context of an ongoing project with, in the opinion of the project manager, incumbent consultants performing satisfactorily, it would make no sense for the project manager not to try and understand the categories to which those consultants should be assigned under the new procurement vehicle that he would be using to continue the project. In saying that, I am not suggesting that it would be appropriate to tailor-make the mandatory and rated requirements under TBIPS 137 so that only the incumbent consultants would be successful. What I am saying is that I have not been persuaded that there would be anything wrong with the project/technical authorities, when crafting a TBSF, to want to understand how incumbent consultants could be categorized under the TBIPS framework. Mr. Shum and Ms. Béland came to that understanding with the assistance of Ms. Graham and Mr. Forgie.

[211] Nevertheless, what was inappropriate because it provided Microtime with an advantage over other potential bidders, was LAC telling Microtime in advance the exact category and level of consultants that would be sought under TBIPS 137. Ms. Béland emailed this information to Ms. Graham on August 3, 2009. At the same time, she divulged to Ms. Graham how Microtime’s existing consultants could be slotted into those categories.

[212] Ms. Graham claimed that Mr. Shum had instructed Ms. Béland to provide Ms. Graham with this information at a meeting that they all attended on July 31, 2009. Both Ms. Béland and Mr. Shum denied that any such instruction had ever been given. Ms. Béland’s evidence was that Ms. Graham had called her on her cell phone and had asked for the information. Although Ms. Béland did not think that she was allowed to do that, she complied with Ms. Graham’s request so as not to create any roadblocks in Microtime’s consultants continuing on the AMICAN project. Ms. Béland regretted her actions as soon as she had sent the email to Ms. Graham. Ms. Béland was clear that Mr. Shum had no knowledge of what she had done, and the Crown does not challenge this evidence. Ms. Béland never divulged to anyone at LAC that she had sent this email to Ms. Graham. The evidence is such that a criminal conviction cannot be founded on this specific allegation relating to the August 3, 2009 email as the conduct was that of Ms. Béland, not Mr. Shum.

Providing Advance Information regarding Categories

[213] The Crown proved that, on an ongoing basis during the spring and summer of 2009, Mr. Shum shared with Ms. Graham his thoughts on the category of consultant that likely would be required in upcoming TBIPS tenders.

[214] The Crown proved that, prior to the issuance of TBIPS 086, Mr. Shum shared with Linda Graham that LAC would likely be issuing a TBSF in which two project managers and six web developers would likely be sought.

[215] The Crown failed to prove that, prior to the issuance of TBIPS 137, Mr. Shum provided specific information to Ms. Graham regarding the category and level of consultant that would be stipulated in the TBSF. Such information was provided to Ms. Graham by Ms. Béland, but the evidence was that Ms. Béland did that of her own accord, not under any direction from Mr. Shum, and Mr. Shum did not know that she had done that.

Crafting TBIPS Tenders in a Restrictive Fashion

[216] The Crown failed to prove that Mr. Shum crafted the mandatory or rated criteria for TBIPS 086 or TBIPS 137 to be so specific that only Microtime’s incumbent consultants at LAC would meet the requirements in the TBSF. In fact, Mr. Shum sought the input of Ms. L'Écuyer, Ms. Périard, and Ms. Francoeur at LAC contracting in regard to the SOW and the mandatory and rated criteria he had included in a draft TBSF for TBIPS 086. It was part of Ms. Francoeur’s role to review the technical requirements on TBIPS 086 and TBIPS 037 to ensure fairness in the procurement process. She did not consider the mandatory and rated requirements for either tender to be unduly restrictive. Ms. Francoeur found Mr. Shum to have been open to her feedback regarding the technical requirements in both tenders and to be cooperative in finalizing the wording of both tenders.

Providing Advance Information regarding Mandatory and Rated Criteria

[217] The Crown failed to prove that Mr. Shum provided Microtime with the mandatory and rated criteria for either TBIPS 086 or TBIPS 137 prior to the issuance of the applicable TBSF for that tender. As well, the Crown failed to prove that Mr. Shum provided to Microtime draft tenders for TBIPS 086 and TBIPS 137 prior to the issuance of the TBSF for each project.

Communicating with Microtime during the Procurement Process

[218] There was no dispute that, once a TBIPS had been issued, and before the contract was actually awarded to the successful vendor, it would have been inappropriate for Barney Shum to have informal dealings with a representative from any vendor who could be bidding on the contract if the interactions related to the TBIPS in question. Thus, it would not have been appropriate for Mr. Shum to meet with Linda Graham or Stephen Forgie, for example for a coffee, lunch, or dinner, while any solicitation was outstanding. Nor would it have been appropriate for Mr. Shum to communicate with Ms. Graham and Mr. Forgie about a TBIPS tender while that TBIPS was outstanding and before it had been awarded to the successful bidder. What was less certain was whether this rule applied to the period prior to the TBIPS being issued.

[219] Sylvain Richard testified that the term “during the bidding process” does not have a fixed definition in terms of a timeframe. The determination as to when someone in Mr. Shum’s position, who was planning on issuing a TBIPS, should cease to have informal dealings with representatives of a potential bidder was a subjective determination and, in Mr. Richard’s view, a matter of common sense. Mr. Richard defined the term “during the bidding process” in a broad way. In his opinion, once Mr. Shum was working on the specifications for a tender, he should have stopped having informal dealings with Ms. Graham and Mr. Forgie. Only in this way would the perception of impartiality of government officers towards vendors be preserved.

[220] Despite Mr. Richard’s assertion that there was zero tolerance for any of his staff to discuss any aspect of an upcoming tender with potential vendors, he did not see anything wrong with his meeting with Christine Collyer, the sales representative from ITNet, on June 8, 2009, and Linda Graham, the sales representative from Microtime, on July 14, 2009, and discussing in some fashion the TBIPS that had or were soon to be issued by the ITB at LAC.

[221] Mr. Richard, like Réal Benoit, allowed that, since Microtime already had consultants on site at LAC working under the direction of Sylvie Béland and Barney Shum, it might be necessary for Ms. Béland and Mr. Shum to interact with representatives from Microtime as part of their management responsibilities in regard to those consultants. However, any such communications should be limited to operational issues and should not touch upon any upcoming tender.

[222] From Josée Francoeur’s perspective, the “tendering process” started as soon as the project or technical authority is contemplating issuing an RFP and commences work on defining what its requirements will be.

[223] Wherever the line is drawn in terms of when project and technical authorities should cease informal communications with vendors pending and during a procurement process, Mr. Shum crossed that line through his meetings, email conversations, and telephone conversations with Linda Graham while he and Ms. Béland were actively working on TBIPS 086 and TBIPS 137. His frequent communications with Ms. Graham throughout the spring, summer, and fall of 2009 cannot be put down to his management of incumbent Microtime consultants in that the purpose of many of these communications was to discuss one or other of the TBIPS tenders. More will be said of this under the specific charges.

[224] Examples of communications that were inappropriate include the following:

• Barney Shum advised Linda Graham to include grids in ADRM’s proposal for TBIPS 086, as it had done in its bid under the 280 Contract.

• In a conversation that Ms. Graham had with Mr. Shum on June 20, 2009, Mr. Shum confirmed that, in the TBIPS 086, the requirement was for 1000 days in total for all web developers over two years, which amounted to 83 days per developer. Ms. Graham instructed Mr. Forgie to complete the TBSF form accordingly. Any inquiry from Linda Graham requiring clarification of the TBIPS 086 requirement should have been made through Josée Francoeur.

Not Reporting Microtime/ADRM Arrangement

[225] The Crown argues that, pursuant to s. 47(1) of the Competition Act, ADRM and Microtime were obliged to notify LAC contracting that they had entered a teaming, or subcontract, agreement pursuant to which Microtime consultants were being placed at LAC under TBIPS 086, 121, and 137 through ADRM or ADRM/CNC joint venture. No one at ADRM or Microtime ever told anyone at LAC contracting about any agreement or arrangement between ADRM and Microtime with respect to any of these contracts.

[226] The evidence was persuasive that, in 2009, it was common for vendors providing consulting services to the federal government in Ottawa to enter agreements with one another known by a variety of names such as partnership agreements, teaming agreements, pass-through agreements, subcontracting agreements and the like, whereby the prime vendor bidding under a government tender could use consultants from another vendor’s stable if the prime vendor did not have a required category of resource to propose in the bid.

[227] Under the old GOLSA procurement vehicle, included in the government-issued forms was a certification as to whether the vendor was working with another vendor when submitting its bid. No such certification was mentioned or required under the standard form TBSF. As well, the information about TBIPS disseminated to vendors by PWGSC when the new procurement system was introduced made no specific mention of teaming agreements or any obligation on the part of vendors to declare them, even though teaming agreements were a very common arrangement at the time. The TBIPS system allowed two or more vendors to form a joint venture and register it under TBIPS. No evidence was tendered at this trial regarding the information given to vendors and government staff by PWGSC regarding the acceptability under the TBIPS procurement system of two vendors working together in an arrangement not amounting to a formal joint venture.

[228] According to Nehman Hokayem, it was very common in the consulting industry in the years leading up to 2009-2010 for vendors to join forces in one form or other in order to be successful on a government tender. The arrangement could be a formal partnership, or it could amount to an ad hoc arrangement enabling a prime bidder to fill a gap in its capacity to supply all resources required to be successful on the tender. Thus, when ADRM entered its Teaming Agreement with Microtime, neither Nehman Hokayem nor Philippe Bisson believed that they were doing anything illegal, and it was not their understanding that the Teaming Agreement needed to be declared with the contracting authority as part of the bidding process. For Mr. Bisson and Mr. Hokayem, ADRM’s Teaming Agreement with Microtime was a form of subcontracting agreement which their TBIPS SA seemed to contemplate as an acceptable way to secure the necessary resources. It was only when the Competition Bureau searched the ADRM offices in April 2010 that Mr. Bisson and Mr. Hokayem realized that the Competition Bureau had concerns about ADRM’s Teaming Agreement with Microtime.

[229] When Microtime wanted to bid on the TBIPS being issued by LAC during the summer of 2009, but realized that its own TBIPS rates could not justify a bid being submitted, Linda Graham explored with a number of companies the possibility of a pass-through agreement. ITNet, Trillys, ADRM and other vendors were prepared to negotiate such an arrangement with Microtime and raised no concerns about any legal impediments. The only vendor that raised concerns about the legality of such an arrangement was Mergis, but its representative did not explain to Ms. Graham the nature of its concerns.

[230] Ms. Graham was inexperienced in preparing teaming agreements. She did her best, but would have preferred that the agreement be reviewed by a lawyer prior to its being finalized with ADRM. Mr. Cassandra would not agree to this expense. Ms. Graham had questions about how to complete the TBSF under TBIPS 086 when both Microtime and ADRM were collaborating to submit the bid. She wondered whether both of their names should appear on the TBSF. She tried to reach someone at PWGSC to have her questions answered, but did not succeed. In the end, she completed the form so that ADRM was the sole signatory. Ms. Graham’s actions were not those of someone who wanted to hide the fact that Microtime was supplying ADRM with consultants to propose in bids it was submitting through TBIPS. She provided the name of ADRM or ADRM/CNC joint venture to Mr. Shum and Ms. Béland. She continued to deal with the incumbent consultants as Microtime consultants after ADRM won the bids. Microtime time sheets continued to be used for the consultants. Ms. Graham and Mr. Forgie continued to hold themselves out as the people to deal with any concerns raised about the consultants.

[231] In the spring and summer of 2009, Charles Davis at LAC encouraged Ms. Graham to consider using a pass-through agreement with ITNet so that Microtime consultants could be bid through the ongoing funding ITNet still had under the 280 Contract. He made this suggestion as if this arrangement was a perfectly legitimate arrangement for ITNet and Microtime to have. At the time, Mr. Davis was tasked with assisting Mr. Shum with the roll-out of TBIPS tenders.

[232] Barney Shum was not an expert in procurement systems. He was untrained in the TBIPS system and relied on the LAC contracting authorities for directions in this regard. Mr. Shum’s role as the project authority on TBIPS 086 and TBIPS 137 was to identify the needs of the ITB, consider what procurement vehicle might best meet those needs, craft the scope of work for a project, refine the mandatory and rated requirements for each required resource, and identify at least one vendor who might be able to supply the necessary resources. In tackling these tasks, he relied heavily on Sylvie Béland as the technical authority for the project in question. No evidence was tendered to the effect that Mr. Shum knew that, under s. 47(1) of the Competition Act, if two or more vendors had a pass-through or teaming agreement in regard to a tender, that agreement had to be made known to the contracting authority at or before the time when the bid was made by a party to the agreement. Ms. Graham, Mr. Bisson, and Mr. Hokayem were unaware of this legislative provision.

[233] If Mr. Shum was ignorant of the law, he likely would not consider the issue of whether Microtime and ADRM had notified or should notify the contracting authority at LAC about the existence of the Teaming Agreement between Microtime and ADRM. It is also possible that Mr. Shum came to realize during the course of the internal security investigation at LAC in the fall of 2009 that notifying the contracting authority of a pass-through agreement was an issue. If that were the case, it would explain why Mr. Shum wanted to distance himself as much as possible from the Microtime/ADRM Teaming Agreement. That could have been the reason why he asked Mr. Forgie to implore Messrs. Bisson and Hokayem not to mention the involvement of Linda Graham in introducing ADRM to Mr. Shum.

Essential Elements of the Offence under the Financial Administration Act, s. 80(1)(b)

Offences and Punishment under the FAA

[234] The following offences and punishment were contained in the FAA in 2009:

Offences and punishment

80(1) Every officer or person acting in any office or employment connected with the collection, management or disbursement of public money who

(a) receives any compensation or reward for the performance of any official duty, except as by law prescribed,

(b) conspires or colludes with any other person to defraud Her Majesty, or makes opportunity for any person to defraud Her Majesty,

(c) designedly permits any contravention of the law by any other person,

(d) wilfully makes or signs any false entry in any book, or wilfully makes or signs any false certificate or return in any case in which it is the duty of that officer or person to make an entry, certificate or return,

(e) having knowledge or information of the contravention of this Act or the regulations or any revenue law of Canada by any person, or of fraud committed by any person against Her Majesty, under this Act or the regulations or any revenue law of Canada, fails to report, in writing, that knowledge or information to a superior officer, or

(f) demands or accepts or attempts to collect, directly or indirectly, as payment or gift or otherwise, any sum of money, or other thing of value, for the compromise, adjustment or settlement of any charge or complaint for any contravention or alleged contravention of law,

is guilty of an indictable offence and liable on conviction to a fine not exceeding five thousand dollars and to imprisonment for a term not exceeding five years.

Fraud against Her Majesty

80(2) Every officer or person acting in any office or employment connected with the collection, management or disbursement of public money who, by deceit, falsehood or other fraudulent means, defrauds Her Majesty of any money, securities, property or service is guilty of an indictable offence and liable on conviction,

(a) if the amount of the money or the value of the securities, property or service does not exceed $5,000, to a fine not exceeding $5,000 and to imprisonment for a term not exceeding five years; or

(b) if the amount of the money or the value of the securities, property or service exceeds $5,000, to a fine not exceeding that amount or that value and to imprisonment for a term not exceeding fourteen years.

Idem, where bribes offered or accepted

81. Every person who

(a) promises, offers or gives any bribe to any officer or any person acting in any office or employment connected with the collection, management or disbursement of public money, with intent

(i) to influence the decision or action of that officer or person on any question or matter that is then pending, or may, by law, be brought before him in his official capacity, or

(ii) to influence that officer or person to commit, or aid or abet in committing any fraud on the revenue, or to connive at, collude in, or allow or permit any opportunity for the commission of any such fraud, or

(b) accepts or receives any such bribe,

is guilty of an indictable offence and liable on conviction to a fine not exceeding three times the amount so offered or accepted and to imprisonment for any term not exceeding five years.

[235] It is interesting to note that the concept of “opportunity” for the commission of fraud appears not only in s. 80(1)(b) but also in s. 81(a)(ii).

Statutory Interpretation

[236] In interpreting legislation, the court must consider the language used in the specific provision in question, the language used in related provisions, the statutory history of the provision, the purpose underlying the provision, the purpose underlying the statute in which it is found, the social context in which the provision was first introduced, and relevant case law (R. v. Chartrand, 1994 CanLII 53 (SCC), [1994] 2 S.C.R. 864, 91 C.C.C. (3d) 396, at paras. 31-37; R. v. Greenwood (1991), 1991 CanLII 2730 (ON CA), 5 O.R. (3d) 71, 51 O.A.C. 133, at para. 22). In this case, unfortunately, there is no jurisprudence directly on point.

[237] When criminal legislation is being interpreted, the court must also be mindful of the following, as expressed by Doherty, J.A., in Greenwood, at para. 23:

The criminal law is essentially a means whereby society seeks to prevent, and failing that, punish blameworthy conduct which strikes at the fundamental values of the community. The criminal law is, however, a weapon of last resort intended for use only in cases where the conduct is so inconsistent with the shared morality of society so as to warrant public condemnation and punishment [authorities deleted]. There must be at least a rough equivalence between what judges say is criminal and what the community regards as morally blameworthy. Judicial interpretation of statutory language so as to declare conduct criminal which members of the community view as innocent or morally neutral does a disservice to the overall operation of the criminal law … [authorities deleted].

[238] In R. v. Boulanger, 2006 SCC 32, [2006] 2 S.C.R. 49, at paras. 47-58, and R. v. Duffy, 2016 ONCJ 220, 131 W.C.B. (2d) 128, at para. 771, in the context of defining the essential elements of breach of trust by a public officer under s. 122 of the Criminal Code, R.S.C. 1985, c. C-46 (“Code”), the courts emphasized the importance of differentiating administrative fault from criminal fault and of not lightly branding someone as a criminal. The criminalized conduct has to be more than mistakes, errors in judgment, or a departure from expected standards. The conduct has to be serious and a marked departure from expected standards and norms. Finally, in regard to the mens rea of the offence, the accused has to act with the intention to use his or her public office for a purpose other than the public good, for example, for a dishonest, partial, corrupt, or oppressive purpose. Although the wording of s. 122 of the Code differs from that of s. 80(1)(b) of the FAA, the caution expressed by the courts in regard to how s. 122 of the Code is to be interpreted should also be applied in interpreting s. 80(1)(b) of the FAA.

Legislative History

[239] The initial precursor of s. 80(1) of the FAA can be found in An Act respecting the Collection and Management of the Revenue, the Auditing of Public Accounts, and the Liability of Public Accountants, S.C. 1867, c. 5, s. 45 that read:

Criminal Liability

45. If any officer or any person acting in any office or employment connected with the collection and management of the Revenue or the accounting for the same, takes or receives directly or indirectly, any fee, perquisite, gratuity or reward, whether pecuniary or of any other sort or description whatever, from any person (not being an officer or person legally authorized to pay or allow the same,) on account of any thing done by him in any way relating to his office or employment, except such as he receives by order or with the permission of the Governor in Council, - every such officer or person so offending shall, on proof to the satisfaction of the Governor, be dismissed from his office or employment; - And if any person (not being an officer duly authorized to pay or allow the same,) gives, offers or promises any such fee, perquisite, gratuity or reward, - such person shall, for every such offence, incur a penalty of four hundred dollars, which shall be recoverable in any Court having jurisdiction in civil cases to a like amount.

[240] By 1871, this provision was considered too weak to prevent bribery and like corruption on the part of civil servants in their handling of public revenues. In the records of the House of Commons Debates for March 3, 1871 can be found the following entry:

Prevention of Bribery

Hon. Mr. Morris introduced an Act for the prevention of corrupt practices in relation to the collection of revenue. He explained that under the present law that the only penalty for bribing a Revenue officer was a civil suit for the collection of 100 pounds. This sum was altogether inadequate, and the bill he now introduced was to provide that such offences should be punishable as misdemeanors, both the officer bribed and the person corrupting him to be liable to punishment.

[241] An Act for the prevention of corrupt practices in relation to the Collection of the Revenue, S.C. 1871, c. 1 was passed in March 1871. The preamble to that legislation read as follows:

Whereas it is expedient to make more stringent enactments in relation to the criminal liability of public officers and other persons guilty of corrupt practices in relation to the Collection and Management of the Revenue; Therefore, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows: …

[242] The legislation went on to repeal s. 45 of the earlier legislation and to replace it with a list of offences virtually identical in wording to those now in s. 80(1) of the FAA. The punishment stipulated in the amendment was that the public servant would be dismissed from office, held guilty of a misdemeanour, and be liable to a fine not exceeding five hundred dollars and to imprisonment for any term not exceeding one year.

[243] Subject to some insignificant wording changes, the description of offences survived all future amendments to An Act respecting the Collection and Management of the Revenue, the Auditing of Public Accounts, and the Liability of Public Accountants, as it changed its name to the Consolidated Revenue and Audit Act, (R.S.C. 1906, c. 24; R.S.C. 1927, c. 178; and S.C. 1931, c. 27) and then the Financial Administration Act (S.C. 1951 (2nd Sess.), c. 12; R.S.C. 1952, c. 116; R.S.C. 1970, c. F-10; and R.S.C. 1985, c. F-11). By 1906, the offence was referred to as an indictable offence, rather than a misdemeanour. Under the 1931 amendments, the maximum period of imprisonment after conviction for any of the offences now listed under s. 80(1) of the FAA was increased to five years. By 1951, the requirement that the public servant be dismissed from office had been dropped. In 1980, the maximum fine for these offences was increased to $5,000 (S.C. 1980-81-82, c. 170, s. 20).

[244] Although no evidence was tendered in regard to the social context in which the precursor to s. 80(1)(b) of the FAA was first introduced, the name of the various statutes, and the brief comments in Parliament in 1871 when the precursor to the current s. 80(1) was introduced, strongly suggest that the aim of the offence and punishment sections of the FAA was to eliminate corruption on the part of public officials in their handling of public revenues and to deter public officials from demanding or accepting bribes.

[245] In 2005, the Treasury Board published a report entitled “The Financial Administration Act: Responding to Non-compliance” (“the Treasury Board Report”) as part of the federal government’s efforts to strengthen oversight, accountability, and management throughout the public sector. The following observations were made in the report at pp. 28-30 regarding the effectiveness of ss. 80 and 81 of the FAA in deterring corrupt practices:

Criminal offences are set out in sections 80 and 81 of the FAA. For the most part, they pertain to corruption of public officials and falsification of records. Section 80 contains one specific offence that is committed when a person who manages funds for the government fails to report to a superior officer, in writing, information about a contravention of the FAA or its regulations.

Despite the long-standing existence of these provisions, a review of reports of judicial decisions rendered in Canada has failed to yield any judgment indicating that they have been used in prosecuting actual or former officials. The Attorney General’s Federal Prosecution Service also advises that it has never been referred any charges for prosecution under the FAA by law enforcement officers.

That is not to say that actual or former employees have not been prosecuted. In fact, over the last two years, as reported in the media, there have been a number of occasions involving the laying of criminal charges related to employees’ actions in the management of public funds. These charges were laid pursuant to provisions of the Criminal Code.

A comparison between the offences contained in the FAA and those set out in the Criminal Code confirms that all of the FAA offences, save one, are found in both statutes. The exception is the failure to report a breach, which was referred to above, for which there is no counterpart in the Criminal Code.

[246] The Treasury Board Report did not specify which offence in the Code was the counterpart to the offence created by the second portion of s. 80(1)(b) of the FAA.

[247] The Treasury Board Report, at p. 30, listed the positive obligations and duties set out in the FAA, the breach of which could conceivably give rise to offences:

• Subsection 9(1): Failure to keep accounts in prescribed form

• Subsections 9(2) and (3): Failure to provide information and any documents required by the Treasury Board

• Subsection 17(1): Failure to deposit public money as required

• Subsection 31(3): Failure to ensure an adequate system of internal control and audit

• Sections 26 and 28: Making payments out of the Consolidated Revenue Fund, except as authorized

• Subsections 24.1(1), (2), and 25(2): Forgiveness of debts or obligations in a way other than as provided

• Section 160: Breaching regulations, prescribed policies, and procedures

[248] As part of the response to the Treasury Board Report, in 2006, the FAA was amended by S.C. 2006, c. 9, s. 261 to include s. 80(2) dealing with fraud against Her Majesty (“the government”). That section is reproduced above.

[249] Section 80(2) of the FAA is very similar to the fraud provisions in s. 380(1) of the Code, which reads:

380(1) Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person whether ascertained or not, of any property, money or valuable security or any service,

(a) is guilty of an indictable offence and liable to a term of imprisonment not exceeding fourteen years, where the subject-matter of the offence is a testamentary instrument or the value of the subject-matter of the offence exceeds five thousand dollars; or

(b) is guilty

(i) of an indictable offence and liable to imprisonment for a term not exceeding two years, or

(ii) of an offence punishable on summary conviction,

where the value of the subject-matter of the offence does not exceed five thousand dollars.

[250] The fraud provision in the FAA has stiffer penalties for fraud involving $5,000 or less, and adds in the potential sanction of a fine. The penalties for fraud in the FAA are particularly stiff to reinforce the importance of public servants not wrongfully taking advantage of their position as public servants to misappropriate public funds or otherwise gain some personal advantage. As stated by L’Heureux-Dubé J. in R. v. Hinchey, 1996 CanLII 157 (SCC), [1996] 3 S.C.R. 1128, 3 C.R. (5th) 187, at para. 18: “given the heavy trust and responsibility taken on by the holding of a public office or employ, it is appropriate that government officials are correspondingly held to codes of conduct which, for an ordinary person, would be quite severe.”

[251] In the same overhaul to the FAA in 2006, when the fraud provisions in s. 80(2) were added, the following sections were also added (S.C. 2006, c. 9, s. 310 and s. 312):

Commitment

40.1 The Government of Canada is committed to taking appropriate measures to promote fairness, openness and transparency in the bidding process for contracts with Her Majesty for the performance of work, the supply of goods or the rendering of services.

Regulations — deemed terms of contracts

42 (1) The Governor in Council may make regulations fixing terms that are deemed to be expressly set out in contracts, or classes of contracts, that provide for the payment of any money by Her Majesty or a Crown corporation — or in documents, or classes of documents, relating to such contracts and their formation — including terms

(a) prohibiting payment of a contingency fee by any party to the contract to a person to whom the Lobbying Actapplies;

(b) respecting corruption and collusion in the bidding process for contracts for the performance of work, the supply of goods or the rendering of services;

(c) requiring that a bidder on a contract for the performance of work, the supply of goods or the rendering of services make a declaration that the bidder has not committed an offence under section 121, 124 or 418 of the Criminal Code;[^3]

(d) respecting the provision of information or records to enable the Auditor General of Canada to inquire into the use of funds provided under funding agreements; and

(e) requiring the public disclosure of basic information on contracts entered into with Her Majesty for the performance of work, the supply of goods or the rendering of services and having a value in excess of $10,000.

[252] The Government Contracts Regulations, SOR/87-402 in effect in 2009 as an adjunct to the FAA applied to all contracts entered into on behalf of the government by a contracting authority. These Regulations applied to the TBIPS contracts entered into by LAC contracting. Topics covered in the Regulations included: situations where a contracting authority was obliged to solicit bids; the process of soliciting bids; the use of advance payments and progress payments; and the use of bid bonds, payment bonds, performance bonds and security deposits. The Regulations at the time spoke to the responsibilities of contracting authorities in regard to the financial aspects of government contracts but did not describe the responsibilities of project or technical authorities. These Regulations have no application to the issues in this case.

Legislative Context

[253] This brief legislative history of the FAA shows that s. 80(1)(b) is embedded in legislation that is all about public money – its collection, management, and disbursement by the government. The name of the precursor statute to the FAA makes that clear, as do the topics dealt with in the FAA. The statute establishes the Treasury Board and sets out its responsibilities, requires the existence of a Department of Finance, sets out requirements for accounting and auditing procedures in regard to public money, provides detailed provisions for how public money is to be collected and disbursed, discusses public property and public debt, and sets out guidelines dealing with Crown corporations that parallel in many respects the financial guidelines provided for the federal government.

[254] The overriding objective of the FAA is to ensure that revenues collected by the government for public purposes are used for such public purposes and are properly accounted for. The goal is for public money not to be diverted to a private purpose when it is being collected, managed, or disbursed by the government. Put another way, the purpose is to avoid any deprivation to the government as a result of the manner in which public servants handle public money.

[255] Although the 2006 amendments to the FAA introduced references to bidding on government contracts, those references were not substantive in nature. Section 40.1 is a statement of intention and commitment. It does not create any obligations on the part of public servants involved in the collection, management, or disbursement of public money. Section 42(1) gives Treasury Board the ability to pass regulations dealing with bidding on government contracts; but the Regulations in effect as of 2009 dealt only with financial matters of interest to contracting authorities. Thus, the FAA remains a statute whose focus is all about the collection, management, and disbursement of public money by the federal government, and the accounting and record keeping practices relating thereto. It is in this context that s. 80(1) must be interpreted.

[256] Sections 80(1), 80(2), and 81 of the FAA all have two key objectives: the protection of public money from misappropriation while being handled by public servants and prohibiting bribery of a public servant whose role involves the collection, management, or disbursement of public money. These goals involve not only protecting the integrity of government but also protecting the appearance of government integrity.

[257] Section 80(1)(a) prohibits public servants involved with the collection, management or disbursement of public money from receiving money or other benefits, aside from the salary package to which they are entitled, simply to do their job. The first part of s. 80(1)(b) prohibits such public servants from being a party to a conspiracy to defraud the government or from colluding with any other person to defraud the government. Collusion means a secret agreement, conspiracy, or level of cooperation, often between parties with differing interests, for an illegal or dishonest purpose such as cheating or deceiving a third party. Section 80(1)(c) is an exceptionally broad provision that likely would not survive constitutional scrutiny or else would be interpreted as simply recognizing the potential for party liability. Section 80(1)(d) prohibits the wilful falsification of official records by the public servants involved with the collection, management, or disbursement of public money. Section 80(1)(e) places a positive obligation on such public servants to advise their superior of any breach of the FAA, its regulations, or other revenue laws in Canada, including fraud. Section 80(1)(f) prohibits such public servants from seeking or accepting any benefit for the purpose of letting a wrongdoer avoid responsibility for breaching the law, including the FAA. Section 80(2) prohibits public servants involved with the collection, management, or disbursement of public money from fraudulently depriving the government of such money. Section 81 prohibits the offering of bribes to such public servants and the acceptance of bribes by those public servants.

[258] In this context, I find that the primary purpose of the second part of s. 80(1)(b) of the FAA, prohibiting a public servant connected with the collection, management, or disbursement of public money from making opportunity for any person to defraud the government, is to protect public money from being fraudulently taken, used, or disbursed. The term “defraud” in that subsection should be interpreted accordingly.

Competition Act

[259] The focus of the Competition Act is very different from that of the FAA. The purpose of the Competition Act, as described in s. 1.1, is as follows:

1.1 The purpose of this Act is to maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy, in order to expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada, in order to ensure that