OTTAWA -- A contractor that worked on ArriveCan is defending its integrity after Ottawa suspended its federal contracts following a report that its founder was a government employee.

Dalian Enterprises Inc. says steps were taken to address conflict-of-interest concerns before its founder, David Yeo, went to work for the Department of National Defence.

A spokesperson for the company says Yeo made the appropriate conflict-of-interest filing, resigned as a director and officer of Dalian and put his company shares in a blind trust.

The spokesperson also says Yeo agreed not to participate in any direct or indirect work the company was doing for the Defence Department.

And the company says Yeo began working for the department in September, "long after" Dalian completed its work on the ArriveCan app, which has fallen under intense scrutiny for its bloated cost.

The department said last week it was suspending Yeo and launching an internal investigation, after a media report noted his employment status and his company's past work on the app.

Federal auditor general Karen Hogan says disclosure from a public servant is important, especially if they have other employment income coming their way.

She told a House of Commons committee earlier this week that disclosure is essential so that a supervisor can assess if any outside work is incompatible with the person's job.

Treasury Board President Anita Anand also said recently when asked about Yeo that the government has rules in place to prevent conflicts of interest.

Dalian's spokesperson said Yeo would not be available for an interview.

This report by The Canadian Press was first published March 8, 2024.