SAAQclic: Witness says suppliers were focused on getting SAAQ funds

The consortium of firms behind the development of the SAAQclic platform “was hungry and wanted to be well-fed” by the Société de l’assurance automobile du Québec (SAAQ).

This is the conclusion reached by a former financial controller at the crown corporation, Jérôme Verreault, regarding the actions of the alliance formed by suppliers LGS, IBM, and SAP.

Verreault testified Thursday before the Gallant Commission, which is investigating the SAAQ’s failed digital transformation.

In notes dated 2018 and 2019 and submitted to the commission, the controller detected certain gaps and lax documentation regarding the alliance’s invoicing. He made observations that, according to him, demonstrate “the alliance’s appetite for its money.”

He noted, in particular, the failure to comply with a clause in the contract stipulating a 10 per cent withholding on the fees charged by external firms. The consortium did not include these deductions in its invoices, which were nevertheless properly applied by the SAAQ’s IT project office, Verreault pointed out.

This clause was used to withhold a certain amount in the event of dissatisfaction with the project.

“This fact allowed me to see that the alliance was hungry and wanted to be very well fed by the SAAQ’s funds,” Verreault told Commissioner Denis Gallant.

He also cited a clause regarding the availability of external resources to resolve anomalies during the testing and deployment phases. A fee of $100 per “availability window” was stipulated.

Verreault emphasized that the alliance was responsible for delivering a working solution. The clause therefore implies having to pay the suppliers a second time in the event of problems, he analyzed.

“My plumber came, he didn’t do the job, I called him back, and he still charged me this much per hour,” Commissioner Gallant explained.

Verreault said he never found any document mentioning or approving this rate by the alliance or the crown corporation. He also criticized the SAAQ for the lack of verification to ensure compliance with the contract and billing compliance.

“It wasn’t Voldemort”

As revealed by a former internal auditor last week, the hourly rate for certain resources increased from $82 to $350 per hour. Verreault concluded that this change affected 26 consultants and could result in additional costs of $14 million annually.

To this day, the reasons for this increase in the hourly rate remain “obscure” to Verreault. The tasks or expertise of these resources were the same, he said.

In Verreault’s eyes, it was clear that the alliance would not work at zero cost, contrary to what SAAQ management might have suggested, brandishing the “risk-sharing” clause initially included in the contract.

“The risk-sharing clause wasn’t Voldemort. It was bandied about. It was practically written on the walls at the Société assurance automobile,” declared Verreault.

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

Verreault was in office when the first phase of the CASA project was launched. It targeted the SAAQ’s financial and human resources.

The controller described the start of this delivery as a “catastrophe.” Several problems arose and ultimately irritated him. “Sometimes, I didn’t have kind words, which exasperated my colleagues. Sometimes, I told them it was a damned mess,” he said.

Verreault left the Crown corporation a few months after the first delivery began. He explained his departure primarily because of senior management’s attitude toward his work.

“My notes weren’t taken seriously. (…) My role was precisely to help the corporation prevent (problems). But it was like a monkey: I don’t want to hear anything, I don’t want to see anything, I don’t want to say anything,” said Verreault.

“Appearance of favoritism”

Thursday afternoon, an SAAQ executive came to describe part of the tendering process. Nicolas Vincent explained the various stages leading to the consortium’s selection in 2017.

He acted as compliance coordinator for the 21 advisory committees, whose objective was to advise the selection committee on specific aspects of the submissions received.

His testimony highlighted that there was “an appearance of favoritism” among some advisory committee members and “a perception of favoritism toward an alliance,” at a stage when three consortia were still in the running, according to a report from an advisory committee presented to the commission.

This seemed to be leaning “in the direction” of the SAP integrator, which belonged to two alliances at the time, Vincent indicated.

“We had a perception that some of those who had prepared the call for tenders had a real bias toward an SAP solution,” he added.

Some of these external consultants had led a project using an SAP solution at Hydro-Québec with Karl Malenfant, the SAAQ’s vice-president of information technology at the time, Vincent noted.

While the selection committee remains independent, its thinking could be influenced by the notes from the advisory committees, Vincent mentioned.

Publication ban

Earlier Thursday, IT specialist Vincent Poirier, formerly an auditor at the SAAQ, continued his testimony. He was asked to comment on an information security audit report he produced in June 2023.

However, the contents of the report and Poirirer’s comments are subject to a publication ban for the next few days. It concerns “any information or technical data identifying the cybersecurity and data protection architecture.”

According to the SAAQ, “at this stage, the publication ban is necessary to ensure that information likely to jeopardize the security and data protection of Quebecers is not disseminated in the public sphere,” the order states.

–This report by La Presse Canadienne was translated by CityNews