DND suspends contracts with ArriveCan contractor after learning CEO is a DND employee

CTV National News: DND employees speak out Department of National Defence employees testified Tuesday before a parliamentary committee on the ArriveCan scandal.

Just a day after the federal government announced a review of its program to support Indigenous contractors, CTV News has learned the CEO of a company that prompted the review is an employee of the Department of National Defence (DND).

David Yeo is the CEO of Dalian Enterprises, which received $7.9 million for its work on the ArriveCan app.

The Defence Department confirmed Yeo is currently employed with them but has been suspended.

"Due to the serious nature of the concerns raised, DND is launching an internal investigation into the matter," a departmental spokesperson told CTV News in an email.

"The individual has been suspended while this investigation is underway. We are in the process of suspending contracts with Dalian."

The spokesperson also told CTV News the investigation would be completed in a timely manner but didn't specify how long that would be.

"We take these concerns very seriously and the internal investigation will be thorough…," she wrote.

The Globe and Mail first reported that the company presents itself as Indigenous-owned and together with another company, Coradix, worked on the ArriveCan app. According to the Globe, the two companies are in receipt of $400 million in government contracts.

Indigenous Services Minister Patty Hajdu yesterday announced a review of how it awards contracts to Indigenous-owned businesses. The government's policy is that five percent of the total value of government contracts go to Indigenous businesses by 2024.

Two sources told CTV News that Yeo is employed on the civilian side of DND as a member of the Materiel group.

Dalian Enterprises has received multiple contracts from DND, as well as the Canada Border Services Agency, the RCMP and a number of other departments.

CTV News reached out to Yeo but did not receive a response by the time of publication. A statement issued by Dalian on March 7 states in part:

"From 2002 until September 2023, Mr. Yeo was not an employee of the Government of Canada in any capacity, but only provided IT professional services on a contract basis through Dalian to the Department of National Defence... In late September 2023, long after completion of all work on the ArriveCan app by Dalian, Mr. Yeo's professional relationship with the Department of National Defence changed from that of IT professional services consultant to employee.

"Due to this change of Mr. Yeo's status, he took steps to address any conflict of interest concerns by entering into a Confidentiality, Non-Disclosure and No Access Agreement with Dalian in which he agreed to refrain from participating in any Dalian proposal, project, contract, venture or other activity relating, directly or indirectly, to the Department of National Defence. Since becoming an employee of the Department of National Defence, Mr. Yeo has honoured that agreement, has had no involvement in the management or operations of Dalian, and has not had access to Dalian confidential information of any kind.

"Mr. Yeo has also made the appropriate conflict of interest filing with the Department of National Defence, has resigned as a director and officer of Dalian, and has put his shares in Dalian in a blind trust."