General items: Standing Committee on Public Accounts—May 27, 2021

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Opening remarks

Thank you, Madam Chair, and members of the committee.

I am pleased to be here to discuss how Public Services and Procurement Canada (PSPC) is responding to the Auditor General of Canada’s audit of the procurement of complex information technology solutions, tabled this past winter.

Joining me today is Acting Associate Assistant Deputy Minister (ADM) of Procurement, Lorenzo Ieraci.

Madam Chair, as the Government of Canada’s purchaser of goods and services, our department is committed to ensuring our procurement processes achieve the desired results while also being fair, open and transparent. We are also modernizing our procurement practices so that they are more efficient and effective—both for our clients and those we do business with.

This approach is particularly important when it comes to complex information technology (IT) solutions such as those cited in the report, namely the next generation pay system, the modernization of benefits delivery, and the government’s telecommunications network.

It should be noted that the Auditor General made 3 recommendations in the report that relate to our work. We accept all 3 recommendations and we are following through on them.

Madam Chair, I will start with a brief explanation of what agile procurement is and how it relates to complex IT projects in government.

Unlike traditional procurement processes, which are linear and result in awarding 1 large contract, the agile procurement process is iterative, meaning that there are opportunities to make course corrections in various phases of the process, and can potentially result in working with multiple vendors on 1 project.

Agile procurement involves establishing close collaborations between procurement experts, private sector suppliers and end users, and maintaining this collaboration throughout the process. This is especially important in complex projects when it’s not clear at the beginning what kind of solution will address business needs.

The first of the Auditor General’s recommendations is for our department to work with the Treasury Board of Canada Secretariat and Shared Services Canada to develop more comprehensive guidance and training for employees on agile procurement for complex IT projects.

To respond to this recommendation, PSPC has established an Innovation and Agile Procurement Centre to support contracting officers and their clients in delivering agile procurement processes.

Furthermore, we established a working group to lead work on creating training and guidance documents. This has led to the publishing of a playbook that explains agile procurement principles and collaborative methods of procurement, as well as when and how to use them.

As to the third recommendation of the Auditor General on data analytics, PSPC has already committed to finalizing a formal plan to operationalize the existing data analytics and data mining function by the end of December 2021.

We also intend to consult with stakeholders to develop and implement guidelines for addressing anomalies detected through data analytics by the end of this fiscal year. This will help us to strengthen procurement integrity within PSPC by identifying, and therefore preventing, potential issues.

Madam Chair, to help fulfill the fifth recommendation from the Auditor General on improving our information management practices, PSPC has held virtual events on procurement information management for procurement officers. We are also continuing to update our existing guidance on information management.

In the longer term, as we move to our electronic procurement solution, we have been updating the Supply Manual to provide guidance on how to maintain electronic files for contracts, and this content will be part of mandatory training for procurement officers. We are also developing a strategy on information management for long-term complex procurements, to ensure that the records we keep can demonstrate the fairness of our procurement processes.

Madam Chair, fulfilling these recommendations will be made easier as we transition to our electronic procurement solution, called CanadaBuys.

This paperless and cloud-based system allows registered businesses to bid more easily on tender opportunities and manage contracts and orders for goods and services from the government.

This will help eliminate barriers faced by small and medium-sized businesses and those led by underrepresented groups.

PSPC has already been using this solution for procurements related to COVID-19, such as gowns and cloth masks.

The transition to CanadaBuys has been iterative and gradual, so that we can make adjustments as needed. The project remains on scope and within budget to be fully implemented by the fall of 2022.

To conclude, Madam Chair, the Auditor General found that we have made good progress toward adopting agile procurement for large IT systems.

By focusing on areas where we can make improvements, PSPC will be well positioned to increase the use of agile procurement to advance complex and transformational IT projects.

Thank you.

Media scan


Coverage was moderate following the tabling in Parliament on February 25, 2021, of the Auditor General (AG) of Canada’s Report on Procuring Complex Information Technology IT Solutions. Coverage was mainly factual and balanced and highlighted that following multiple procurement failures such as for the Phoenix pay system, the single email system and the modernization of data centres, the federal government has learned from its mistakes, but must commit to doing more to improve its procurement processes. Several articles noted that the federal government is applying a new approach called agile procurement which subdivides megaprojects into smaller ones and consults with end users and private sector suppliers to gather input on IT solutions before rolling out projects. 

Phoenix pay system

The Hill Times reported on the AG report, specifically in regards to the Phoenix pay system. The article noted that Phoenix has been a procurement issue launched in 2016, which was meant to save about $70 million annually; instead, it has cost more than $1.2 billion. The article mentioned that the system was not properly tested before it was rollout, one of the main reasons for its failure. The article also noted that following the outcome of the Phoenix pay system, Public Services and Procurement Canada adopted an agile procurement approach, which promised to collaborate with procurement experts, suppliers, and the people who would end up using the system. In addition, PSPC released its Better Buying Plan to ensure a simpler, more responsive and accessible procurement system. The article highlighted that these new best practices would help prevent and ensure major issues like the ones faced with the rollout of the Phoenix pay system would no longer arise.

Agile procurement

Several outlets reported factually on the key findings contained in the AG report. Articles noted that 4 federal departments, one of them being PSPC, have adopted agile procurement models that involve a significant amount of consultations with potential vendors, but noted that employees are not always equipped or properly trained. Articles also outlined that the report states that more data analytics should be used in order to help spot cases of potential bid-rigging, which would help ensure purchasing processes are fair. After looking at 3 IT projects: Benefits Delivery Modernization, Next Generation Human Resources and Pay (NextGen), and workplace Communication Services, Karen Hogan, the AG, noted that the federal government’s IT managers have generally made “good progress”, but highlighted that that there is a “puzzling failure by managers” at Shared Services Canada (SSC) and PSPC to use widely available software to check for patterns of fraud among government suppliers (Canadian Press, Hill Times, Ottawa Citizen, iPolitics).

The Ottawa Citizen reported in a neutral tone on the same subject, but noted that “Hogan gave the benefits-delivery project high marks for conducting multiple pilots and consulting people who would actually use the new system. The procurement team at PSPC, for instance, recruited a couple of hundred government employees to test the self-serve features of the new system for ease of use, and consulted suppliers widely.” 


Karen Hogan, Auditor General of Canada

Quote from The Hill Times article: 

"I saw some lessons learned but there is still the opportunity to keep continued pressure, and now they probably should develop some better training guides"

Joyce Murray, Minister of Digital Government

Quotes from The Hill Times article: 

"In the former way, a department might spend years with the initial procurement and all of the policy hoops you have to jump through internally—mapping out the whole project, what's the budget for this entire thing—and it may be that by the time was completed, the technology may have moved on"

"So the idea here is to do it through an agile process, which means you bite off chunks, you work through it, and you use that to understand whether to move forward on the next chunk with that vendor"

"Part of this agile approach is to avoid locking into a single vendor right at the front, so that's why we took the time to go from what were multiple potential vendors and involve them in discussions around the reality of serving the Government of Canada's human resources (HR) [and] pay needs, and gradually over a set of engagements, we narrowed down to Ceridian, Workday and SAP"

Quote from The Hill Times article:

"They will further support our efforts to bring increased governance and fairness to our procurement processes and to make them even more open and transparent, and I aim to keep honestly assessing whether our processes are working"

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