Phoenix: Standing Committee on Government Operations and Estimates—March 4, 2022

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Phoenix dashboard (February 2022)

Financial transactions beyond normal workload

Details on financial transactions beyond normal workload

The number of financial transactions beyond the normal workload for February decreased by 2,000 from January 19 to February 16, 2022. While we expect the general downward trend of the last 4 years to continue, the number of transactions processed each month varies based on a variety of factors, which may result in slower progress or even increases.

It is estimated that almost half of public servants have an outstanding transaction in progress that may or may not have a financial impact on their pay (including those served by the Pay Centre as well as non-pay centre departments). There are currently approximately 322,000 transactions ready to be processed at the Pay Centre, including:

Public Service Pay Centre workflow

Percentage of transactions processed within services standards

Details on the percentage of transactions processed within services standards

A total of 84% of non-collective bargaining transactions that were finalized between January 19 and February 16 met service standards. The Pay Centre me service standards 80% of the time on average in 2021, compared to 72% on average in 2020.

Public Services and Procurement Canada (PSPC) prioritizes cased that have a large impact on an employee’s pay. For example, in 2021, parental and disability leaves were processed within service standards 99% of the time on average.

Phoenix IBM and pay stabilization procurement initiatives

Key messages

Key data points


IBM contract and amendments

In June 2011, IBM was awarded the contract for the new pay system through an open and transparent bidding process with a fairness monitor. Since then, there have been 50 amendments to the original contract, for a total contract value of $545M (taxes included). The most recent amendment was in December 2020 and was required to exercise the option year to extend the current contract end date from April 2021 to March 2022 to ensure ongoing application managed services for 24/7 operational (functional and technical) support for pay. This includes software maintenance and support services essential for pay stabilization, including the upgrade of the Phoenix PeopleSoft software to version 9.2.

In May 2019, Public Services and Procurement Canada launched a competitive procurement process seeking suppliers to provide ongoing operational support for the Phoenix pay system, once the contract with IBM Canada Limited ends in March 2022.

Three firms responded to the invitation to qualify (ITQ) but only IBM met the mandatory requirements. PSPC negotiated a contract with IBM for the period of April 1, 2022 to March 31, 2023, with a value of $106.6M, including taxes and contingency. It will provide support for functional, technical, and payroll processing functions via an application managed services model for the Phoenix pay system and contains additional 1-year options that will be exercised as needed. An independent fairness monitor observed the procurement process and has not raised any fairness concerns.

Robotic process automation: Request for proposal

Robotic process automation (RPA) is one of several ongoing initiatives to help reduce the backlog and stabilize the pay system. PSPC is using RPA services to process manual transactions so that compensation employees can focus on complex cases and address more transactions in the backlog. Following a competitive process, a contract was awarded to IBM on January 19, 2021, which will allow PSPC to build on the RPA work completed to date and accelerate the automation of pay processing.

Accelerator services contract amendment

The objective of the accelerator services project is to streamline processes and standardize work at the Public Service Pay Centre to increase efficiency and reduce processing times for pay transactions. McKinsey & Company was awarded a contract in February 2020 as a result of a competitive procurement process. On May 31, 2021, PSPC amended this contract to improve process and performance across more Pay Centre teams. On December 10, 2021, PSPC amended the contract again to complete the deployment of accelerator services across more Pay Centre teams and expand the services to a new sector. Total contract value is now to $27,699,266.00 (taxes included).

Under this contract, McKinsey & Company is providing consulting services to transform ways of working, including management practices and tools, to improve both productivity and the experience of our clients and client organizations. They are also implementing strategies to increase efficiency and reduce errors, which will lead to decreased wait time for employees’ pay issues to be processed.

Phoenix overpayments

Key messages

Key data points


Recovery of overpayments supports the Government of Canada’s mandate to resolve outstanding Phoenix pay system issues for public servants once and for all. Salary overpayments impact current and former public service employees across departments and agencies, and across the country.

In collaboration with the Office of the Comptroller General, Public Services and Procurement Canada has established recovery strategies:

In order to protect the Crown’s right to recover overpayments within the 6-year statutory restriction, active employees must first acknowledge their overpayments to access repayment flexibilities put in place by the Office of the Chief Human Resources Officer—Employee Relations and Total Compensation. These repayment flexibilities allow employees to delay recovery of their overpayments until their pay file is reconciled and they have received their correct pay for 3 consecutive pay periods.

Active employees who do not access the repayment flexibilities will be subject to recovery, as per the guidelines provided in their overpayment acknowledgement letter. Former employees are not eligible for the repayment flexibilities, and the Crown has the right to recover overpayments from first available funds.

The Receiver General and Pension Branch has resumed the collection of overpayments from pensioners previously employed by departments and agencies served by the Public Service Pay Centre.

Departments and agencies not served by the Public Service Pay Centre are responsible for recovery of funds from their current and former employees, though the Government of Canada Pension Centre does assist with recovery from pension recipients when requested.

Administrative overpayments / true overpayments

Administrative overpayments were a normal part of the pay administration process and used to ensure employees were paid accurately. They would be generated when an employee’s acting assignment was entered late and were automatically recovered at the time of the acting assignment’s retroactive payment. This allowed the pay system to automatically reconcile the difference between the regular salary rate and the acting salary rate in subsequent pay periods without affecting the employee’s pay. As of October 2020, a new process was put in place and these type of overpayments are no longer created for this purpose.

True overpayments usually occur when certain pay transactions are not submitted or processed promptly. Some situations are related to late entry / late processing where timeliness is key. Some situations are related to unforeseen work-life events. This is a normal part of day-to-day compensation operations.

Next generation ruman resources and pay initiative

Key messages

Key data points


Budget 2018 announced the government’s intention to move away from the current pay system and begin the development of a new one that will be better aligned with the complexity of the federal government’s human resources and pay structure.

In September 2019, the government announced a $113.1 million investment to co-design and deliver pilot projects for the Next Generation human resources and pay solution. These pilot projects will test potential solutions against the real complexities of the federal government’s human resources and pay systems. This investment re-affirms the Budget 2019 commitment to move away from the Phoenix pay system, toward one that is better aligned to the current and future needs of Canada’s world-class public service.

The government also announced, at that time that it had selected SAP, Workday and Ceridian as the vendors deemed qualified to deliver a NextGen HR and pay solution for the Government of Canada.

In March 2020, after extensive evaluation, and testing, it was announced that SAP had been selected to work with on a pilot for a new HR and pay solution. SAP was selected through a rigorous evaluation process which was open and transparent and placed users at the centre. The evaluations involved elements such as measuring vendors against digital, privacy and security standards as well as testing of hundreds of HR and pay scenarios, both simple and complex.

Effective April 1, 2020, leadership for NextGen HR and pay was transitioned from Treasury Board of Canada Secretariat (TBS) to Shared Services Canada (SSC). The chief human resources officer at TBS remains the business owner and a key collaborator of the NextGen HR and pay initiative.

On October 14, 2020, the selection of the Department of Canadian Heritage for the exploratory phase of the Next Generation HR and pay initiative was announced. Canadian Heritage was selected as the pilot department for exploratory phase because their organization provides a good representation of the government’s human resources complexities, including multiple occupational groups, regional representation, overtime, and other considerations.

Following successful completion of the exploratory phase in April 2021, the Government of Canada pivoted to a new vendor. On September 14, 2021, the Government of Canada signed a contract amendment with Ceridian for the next 18 months for the design and experimentation phase of the NextGen HR and pay initiative.

On July 27, 2021, the Government of Canada announced the expansion of testing to include the Department of Fisheries and Oceans and the Canadian Coast Guard and Canada Economic Development for Quebec regions.

All 3 vendors remain qualified to work with the government in the future for HR and pay solutions. This affords the government maximum flexibility to access the solutions of multiple, best-in-class vendors which is critical to the NextGen HR and pay approach.

Any testing undertaken will not affect employees’ actual pay. All testing for the NextGen HR and pay initiative will continue to take place in parallel with existing HR and pay systems and all testing has been designed to ensure the protection of privacy and personal information.

Throughout this process, the NextGen HR and Pay Team is engaging with public service employees, leaders, HR advisors and technical specialists, the private sector and other governments, as well as working hand-in-hand with bargaining agents in the development of a user-centric HR and pay solution.

As part of this pilot initiative, the NextGen HR and Pay Team has engaged a broad representation of more than 1400 participants across the Government of Canada, through working and ask me anything sessions. These activities form the basis for the NextGen HR and pay’s exploratory phase, and they will inform the next steps in the initiative.

Ongoing stabilization of the current Government of Canada pay system remains a top priority for the government and is being managed by Public Services and Procurement Canada.

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