It is a good maxim when watching the government not to attribute to malice those decisions that can be explained by stupidity.
It’s likely that nobody in the government of Canada really wanted to award a state-owned Chinese company the contract to supply sensitive security equipment to 170 embassies and consulates around the world, especially when a competent Canadian company had also submitted a bid.
But the rules are the rules – and the rules say the contract should go to the lowest bidder, so that’s what happened.
On Thursday, Beijing-based Nuctech was made what the Canadian government called “a standing offer” to supply X-ray equipment for 170 embassies and consulates around the world.
The decision has left the chief executive of Montreal-based VOTIDetection “angry and upset” on three fronts.
Firstly, Rory Olson said there are security risks in handing the contract to a company owned by a country with a history of cyber-espionage. Even though the contract did not stipulate the walk-through X-ray machines be connected to embassy networks, Olson said hard-drives will be accessible, and data downloadable, when the machines are serviced.
A Wall Street Journal article last month said the U.S. National Security Council has targeted Nuctech as a threat to western security because of its extensive presence at ports, border crossings and airports across Europe.
Secondly, Olson said his company submitted a “solid bid” and has a history of being able to compete on a level playing field, winning contracts from Amazon, the U.S. Air Force and the UN Refugee Agency. “We’re not asking for charity, we’re asking for a fair shake,” he said. “We know the components they (Nuctech) are using and it doesn’t make sense that they could come in at a price 20-25 per cent lower.”
Thirdly, he said his company employs 80 people in Montreal in well-paying, high-tech jobs. “Do you think my company would have any opportunity to bid on contracts for Chinese consulates? Impossible.
“I’m told I have to frame my discussion points – that no procurement rules were broken – or it sounds like sour grapes. But I’m upset,” he said.
François-Philippe Champagne, the Global Affairs Minister, said on Friday he is reviewing Ottawa’s procurement of security equipment, after the National Post publicized details of the contract, worth an estimated $6.8 million.
Champagne attended the opening of VOTIDetection’s new factory two years ago, rubbing salt in Olson’s wound.
The chief executive said his experience is that countries all over the world award extra points to local companies during the tender process. The World Trade Organization agreement on government procurement outlaws such practices but China is not a signatory, which means the government could have directed the contract to a North American company.
Ottawa does have a contract security program and potential bidders are obliged to seek clearance from the Canadian Industrial Security Directorate. Calls and emails to Public Services and Procurement Canada to find out if Nuctech underwent the security screening process were not returned by press time. As an aside, it is getting tiresome to keep stating that calls went out and did not come back, thanks to Ottawa’s deliberately cumbersome internal approval process. Henceforth, it should be assumed.
The bottom line is that Nuctech, viewed by the U.S. security establishment as the “Huawei of airport security”, has won five contracts supplying sensitive equipment to the Canadian government (Global News reported on Friday that it has also secured four border security and customs warehouse contracts valued at $6.5 million to supply the Canadian Border Services Agency).
Nuctech is wholly owned by a government that we know spies on us. If it is not our enemy, it is certainly not our friend.
The contracts were won on price alone, under-cutting local companies that are employing Canadians in good jobs at a time of high unemployment. It seems highly likely that the low bidding price was subsidized by the Chinese government as part of a deliberate strategy to buy market share and put western competitors out of business.
One government apologist online suggested taxpayers got the lowest price and we should all be delighted.
That’s the kind of short-sightedness astronaut John Glenn worried about as he hurtled though space – “every part of this rocket was supplied by the lowest bidder,” he said.
This newspaper has always been an advocate of free trade but this is unfair trade. Champagne’s review should reach two conclusions – one, that the security screening process around state-owned Chinese enterprises must be tightened, and two, that bids should be evaluated according to price and a commodity that was conspicuous by its absence in the original decision – common sense.
Copyright Postmedia Network Inc., 2020