Hourly rate of employees dedicated to the SAAQ’s digital shift has jumped by 326%

The hourly rate of external employees working on the IT modernization of the Société de l’assurance automobile du Québec (SAAQ) increased significantly, from $82 to $350 per hour, during the first year of the project, without justification.

This is revealed by documents presented Thursday morning to the Gallant Commission, which is investigating the failures of the government corporation’s digital transformation, including the SAAQclic platform.

A former SAAQ internal auditor, Martin Després, testified to Commissioner Denis Gallant that he noted a change in the hourly rate charged by external employees as early as 2018, the year following the contract award.

These workers hired by suppliers were paid the lowest rate stipulated in the contract, $82 per hour, which is linked to the technology integration job profile. They saw their hourly rate increase to one of the highest levels, $350/hour, due to “cutting-edge expertise.”

Such a change in salary scale was observed in the same billing period, noted Després, who worked for the SAAQ from 2016 to 2023.

Approximately 10 people went from $82 to $350/hour, out of a possible 400 employees assigned to the modernization project, Després specified when cross-examined by the lawyer representing the SAAQ, Sébastien Laprise.

Després explained that he had not observed any “significant difference” in the tasks that could explain an increase in the hourly rate. Commissioner Gallant asked the SAAQ to provide him, as part of his work, with the justifications behind different billings for the same employee in the same month.

Després estimated in the fall of 2018 that this salary variation could result in additional costs of approximately $2.9 million for the delivery of the first phase of the project.

Initially, the suppliers’ bid anticipated the use of nearly 10,800 hours of “advanced expertise” at $350/hour over five years. Approximately three years after the contract began, in February 2020, the project had consumed nearly 35,000 hours for this type of profile, according to a cost analysis by Després.

“A semblance of an answer”

According to evidence presented to the commission, no request was filed to authorize these hourly rate changes.

Després attempted to find explanations when he discovered this change. The SAAQ’s Financial Control and Operations Department concluded that “the documentation associated with this rate change was weak,” Després stated.

The project office told him that it was a “decision made at the top” between the SAAQ’s IT project manager, the then Vice-President of Information Technology, Karl Malenfant, and his counterpart at the project office, Després said.

Després said he finally received “a semblance of an answer,” a year and a half after raising questions. He was told that, even if the firms were spending faster than expected, the initial contract was capped at $458 million (the initial contract budget), the auditor reported.

“Let them burn every hour imaginable, after that, technically it’s the Alliance (the consortium) that will pay,” Commissioner Gallant summarized.

“Correct, they will work at zero rate after that” to complete the project delivery, continued Després, who said he was “left unsatisfied” with the explanations provided.

It should be remembered that the SAAQ’s technological modernization project, known as CASA, could cost at least $1.1 billion by 2027, or $500 million more than expected, according to the Auditor General (AG).

Difficult relations with rescheduling

Després left the SAAQ exhausted from having to “swim against the tide” in his internal audit role. He laments the time that “stretched out” before receiving answers.

“Often, it took a year, a year and a half, or two years. (…) Ultimately, the company needs better controls to ensure the successful delivery of the project (…) After five years, it was exhausting, it was tiring,” Després testified.

Després, who now works for the Treasury Board, indicated that collaboration between the auditors and the CASA project office became difficult around 2019 and 2020, with rescheduling leading to some delays.

Later Thursday afternoon, internal auditor Martin Lapierre, still at the SAAQ and also assigned to auditing the CASA project, echoed this sentiment.

“From 2014 to 2018, things were going very well, we were even called the project’s guardian angels,” before things became complicated when it came to obtaining information, he said.

Calls for tenders with a single bidder

Lapierre’s testimony also shed light on the awarding of contracts for strategic advisors to assist in the development of the CASA project.

It was revealed that concerns were raised that calls for tenders for strategic resources had been awarded to a single compliant bidder. And the individuals who secured these consulting mandates had professional ties to Malenfant.

Commission prosecutor Alexandre Thériault-Marois presented the case of Madeleine Chagnon. She had worked for several years with Malenfant at Hydro-Québec and R3D. Chagnon won a contract in 2015 while she was already working on another project with the SAAQ.

Of the three bids received, only Chagnon’s was deemed compliant. Lapierre said he noted a specific aspect in the selection criteria for the strategic resource. A master’s degree was required, and the lack of a diploma could not be compensated for by years of relevant experience.

“I haven’t seen this often (…) It was unusual,” he said. Another criterion required in the call for tenders was having completed a project at the SAAQ, Thériault-Marois emphasized.

Following concerns raised by internal auditors, including Lapierre, the person responsible for compliance with contractual rules concluded that the rules “were fully followed.” However, in Lapierre’s view, the situation of a single bidder remains problematic.

“The spirit of the law is to issue a call for tenders and obtain multiple bidders to obtain the best possible price,” he maintained in committee.

Lapierre’s testimony is scheduled to continue Friday morning.

–This report by La Presse Canadienne was translated by CityNews