Evaluation of the Cost and Profit Assurance Program

Evaluation of the Cost and Profit Assurance Program (PDF, 658KB)

Office of Audit and Evaluation, Public Services and Procurement Canada: September 15, 2016

Initiative description

The Cost and Profit Assurance Program (CPAP) provides assurance services on domestic and international contracts for the Government of Canada and foreign governments. The program provides assurance on the integrity of pricing and payments of government contracting; and, provides advice and analysis to support innovation in procurement policies and practices.

In 2012, the CPAP received a Special Purpose Allotment of $3M per year for five years ($15M in total) to provide cost audit services in support of defence contracting with the Government of Canada (i.e. domestic).

Though the majority of the assurance work conducted by the program is on defence contracts, the program may also conduct assurance work on non-defence contracts on a fee-for-service basis, when requested.

Evaluation scope and methodology

The objectives of the evaluation were to assess the relevance and performance (including the achievement of immediate and intermediate outcomes) of the CPAP's activities through five lines of evidence: program document review; literature review; financial analysis; interviews; and an independent review conducted by Office of Audit and Evaluation auditors.

Evaluation constraints and limitations

There are limitations to social science research, and the program's overall performance could have been measured in a number of other ways. The evaluation was unable to compare the program's performance against an identical program in another jurisdiction.

Program outcomes

Evaluation findings


There is a continuing need to undertake cost audits of defence contracts. The program identified potential overbillings and needed improvements in a number of supplier accounting systems. The program also meets the continuing need to discharge Canada's obligations outlined under the Canada – U.S. Defence Production Sharing Agreement.

The evaluation found that the program aligns with federal priorities and Public Service and Procurement Canada's (PSPC) strategic outcomes. The CPAP's activities related to helping to ensure fair and reasonable cost and profit coincides with federal priorities and PSPC's strategic outcome. The program's activities are consistent with the authorities vested in the Minister of PSP under the Defence Production Act (DPA).

While the authority for conducting cost audits is not explicitly stated in the Department of Public Works and Government Services Act or any other legislation, nor is the current demand for service high, analysis of non-defence contracts indicates the potential risk of overbilling. This potential risk provides a measure of evidence of potential value of cost audit activities in relation to non-defence contracts.


The program is achieving its outcomes related to the conduct of objective and credible assurance engagements, but the timing and timeliness of these engagements could be improved.

The evaluation found assurance engagements undertaken by the program contribute to the identification of potential overbillings.

The CPAP supports Canada in meeting its international obligations although some stakeholders noted a desire for improved timeliness and reporting.

To properly measure performance of the program, a more appropriate performance measurement framework would be of benefit to the program.

With respect to non-core activities of the program related to providing advice and insight to support procurement, the evaluation found that although this work is limited in scope, it did provide value to PSPC's procurement functions.

With respect to program economy, the program has worked towards managing its structural deficit by performing work on a fee for service basis, although the current blended funding model creates a risk of incurring deficits.

The program has worked to produce a similar level of program output compared to its United States equivalent.

With respect to program efficiency, decreased program labour rates over time indicate improvements in resource utilization, but the evaluation was not able to conclude on program efficiency due to a lack of data against which to benchmark the program.

The current delivery model is limiting the program's effectiveness and the department's ability to appropriately manage relationships with stakeholders.

Decisions regarding the program's mandate and who its primary client is are required to inform future funding and best organizational fit and design.


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