Report 1: Procurement Complex Information Technology Solutions—Overview: Standing Committee on Public Accounts—May 27, 2021

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Public Services and Procurement Canada detailed action plan

Table 1: Response to the recommendations from the audit on the procurement of complex information technology (IT) solutions for the federal government (Auditor General of Canada: Spring Report 2021)
Report Reference Number Office of the Auditor General recommendation Departmental response Description of final expected outcome and result Expected final completion date Key planned milestones (description and dates) Responsible organization/ point of contact (Name, position, telephone number) Indicator of achievement  
Paragraph 47 Recommendation 1   To further support the government’s modernization of procurement:  
  • the Treasury Board of Canada Secretariat (TBS), Public Services and Procurement Canada (PSPC), and Shared Services Canada (SSC) should develop more comprehensive guidance and training for employees to improve understanding of agile procurement and how to apply collaborative methods
  • TBS, with input from PSPC and SSC, should also assess what skills, competencies, and experience procurement officers need to support agile approaches to complex IT procurements
Agreed   TBS, PSPC, and SSC are working closely together to successfully implement transformational IT procurements and fostering a common understanding of agile procurements. Work on agile procurement has been done in close partnership, in addition to engaging with other government departments that are procurement clients.   PSPC will work in collaboration with the secretariat with respect to assessing the skills and competencies needed to support agile approaches to complex IT procurement. In addition, the department has a robust general procurement training regime in place for its procurement officers. The department has also undertaken significant efforts to further develop and launch guidance specific to agile procurement, as well as establishing a centre of expertise to support procurement officers in implementing this approach for public procurement. Guidance for procurement officers will continue to be refined and evolve, and as more procurements are undertaken using the agile procurement approach, opportunities will be identified to enhance training and other supporting tools. The department will complete this work by the fourth quarter of the 2022 to 2023 fiscal year. More comprehensive guidance and training is available to employees to improve their understanding of agile procurement and how to apply collaborative methods. March 31, 2023 Immediate actions (2021 to 2022):
  • PSPC will develop a formal agile procurement training plan and supporting documentation for PSPC. This work will be led by the Innovation and Agile Procurement Centre within the Procurement Branch, building on PSPC’s response to recommendations contained in the Standing Committee on Government Operations and Estimates (OGGO) Modernizing Federal Procurement For Small And Medium Enterprises, Women-Owned And Indigenous Businesses report
  [March 31, 2022]   Following actions (2022 to 2023):
  • 1.2 Develop additional agile guidance documents, to support procurement officers in conducting agile procurement. These guidance documents will support the Agile Playbook and the Agile 101 presentation that were launched in 2020 and are used to inform procurement officers, client departments, and suppliers on how to co-design procurement processes and project management methodology. For example, PSPC will be developing a request for information template and a questionnaire to help determine whether a procurement project is a good candidate to leverage agile procurement methodologies based on client feedback
  [March 31, 2023]  
  • 1.3 The Department will build on experiences to date with delivering agile training and symposiums and continue to expand training opportunities as well as other agile tools to the procurement community in PSPC. In addition, once the formal agile training plan has been developed, it will be included as part of the mandatory training provided to participants in the Procurement Intern Officer Program of the PB in order to raise awareness on agile procurement
  [March 31, 2023]  
Lorenzo Ieraci, Acting Assistant Deputy Minister (A/ADM), Procurement Branch (PB)   613-325-3791   For committee use only
Paragraph 63 Recommendation 3   PSPC should continue to advance its use of data analytics so that it can identify procurement integrity issues.   Agreed   PSPC will continue its implementation of using data analytics to identify potential procurement integrity issues by establishing a formal plan to operationalize data analytics and data mining by the end of the 2021 to 2022 fiscal year. Data analytics is an important component of PSPC’s fraud risk management framework, contributing to procurement integrity by mitigating the risk of fraud through detection and prevention. March 31, 2022 Immediate actions (2021 to 2022):  
  • 3.1 Establish a formal plan to operationalize the existing data analytics and data mining function to strengthen procurement integrity within PSPC
  [December 2021]  
  • 3.2 Consult with stakeholders to develop and implement guidelines on prioritizing and addressing anomalies detected through the use of data analytics
  [March 31, 2022]
Johanne Bray, ADM, Departmental Oversight Branch   819-420-5341 For committee use only
Paragraph 68 Recommendation 5   Public Services and Procurement Canada and Shared Services Canada should improve their information management practices to help contracting authorities better demonstrate that procurement processes are fair. The departments should ensure that procurement records include, at minimum, file histories, explanations of problems that arise (and how they were resolved), and all relevant decisions and communications with implicated parties. Agreed   Public Services and Procurement Canada is updating its information management procedures and best practices in terms of maintaining proper documentation related to its procurement files. Existing policies and procedures support a paper-based process, but with procurement moving to a paperless environment, work is underway to update policies and procedures to reflect the use of an electronic filing system. Further, tools and training on managing procurement files within the electronic filing system are also being developed. In addition to these efforts, the department is in the process of implementing the electronic procurement solution, which will further improve the capture of procurement data and information associated with decision making. The department will implement the updated policies, procedures, tools, and training by the fourth quarter of the 2022 to 2023 fiscal year. The phased implementation of the electronic procurement solution is underway. Improved information management practices to help contracting authorities better demonstrate that procurement processes are fair. March 31, 2023 Immediate actions (2021 to 2022):  
  • 5.1 Provide reminders of procurement information management best practices through branch-wide activities and communications. For example, virtual events on procurement information management have been held for procurement officers starting in February 2021. In addition, information management was also recently added as a standing item in the monthly Acquisitions Program Newsfeed, which reaches 1,500 Acquisitions Program employees across the department
  [October 31, 2021]   Following actions (2022 to 2023):  
  • 5.2 PSPC will update information management policies and practices for procurement files to reflect the move to a paperless operating environment. Through the development and launch of the electronic procurement solution, information management, including audit trails has been incorporated into how procurements will be managed in the future. Onboarding of the electronic procurement solution has begun, and it is expected that all officers will be using the system by end of 2021. To date, over 525 officers and 3,600 suppliers have been onboarded
  [March 31, 2022]  
  • 5.3 Update the Supply Manual to reflect new policies and processes related to information management for procurement files through the development of a procurement information management classification system and naming convention which will be implemented throughout the Acquisitions Program
  [May 31, 2022]  
  • 5.4 Update the Procurement Intern Officer Program curriculum to include information management best practices for procurement files, once the work on the changes to the Supply Manual have been completed
  [March 31, 2023]  
  • 5.5 PSPC will develop procurement electronic information management guides with an emphasis on long-term complex procurements that will support the work undertaken through the launch of the electronic procurement solution. Through the solution, information management, including file histories, approvals, correspondence with suppliers, and audit trails have been incorporated into how procurements will be managed in the future. Further, the new CanadaBuys service desk logs communications with implicated parties, including explanations of technical problems that arise and how they were resolved. These guides will form part of a procurement information management strategy being developed that will include guidance for complex procurements that occur over several years and involve agile approaches that focusses on how to ensure that various types of records are maintained in order to demonstrate fairness
  [March 31, 2023]  
  Lorenzo Ieraci A/ADM, PB   613-325-3791   For committee use only

Initiatives examined in the audit

Next generation, human resources and pay


In 2018, the Government of Canada (GC) announced its intention to move away from the current pay system and identify options for a long-term and sustainable next generation pay system alternative. As a result, the Treasury Board of Canada Secretariat was allocated $16M over 2 years to examine alternative solutions. Understanding that a new approach to testing was required before implementation of a new pay system, it was requested that TBS work with experts, federal public sector unions, and technology providers on a way forward for a new pay system. This initiative, known as next generation human resources and pay (NextGen HR and Pay), was transferred from TBS to Shared Services Canada on April 1, 2020.

Public Services and Procurement Canada (PSPC) as the contracting authority launched an agile procurement process for this important initiative which resulted in 3 contracts and 2 active task authorizations (TA) to pilot the HR and Pay Next Generation Solution.

Key messages


In September 2018, multiple industry engagement activities were held to reduce the risks and gather information on the requirement and the agile procurement:

The extensive industry and stakeholders engagement was followed by an extensive fully competitive, fair, transparent and open gated ITQ:

After Gate 3 and following approval from the Government Operations Sector (GOS) on June 11, 2020, PSPC awarded 3 contracts based on this process on June 21, 2020 to SAP Canada, Workday Canada and Ceridian.

Under this agile competitive procurement process, the 3 winning suppliers were awarded a contract with a minimum work guarantee of $5,000. Clients’ requirements that are within the scope of the contracts are allocated competitively through TA. As such, as work packages are identified, the 3 contract holders compete amongst each other for a TA using a fair and transparent competition.

An initial contract period of 10 years with up to 20 options years was chosen to allow for multiple separate requirements within the hire-to-retire spectrum to be satisfied by multiple government department as required. The risk associated with these long-term contracts is minimal since they do not commit the Government of Canada to any work other than a $5,000 minimum work guarantee if a task authorization is not issued in the first 5 years after contract award. To date, only Ceridian has not yet received a task authorization and can still possibly receive its $5,000. The current value of the contract with SAP is $6,500,000

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

The agile procurement approach allows the Government of Canada to quickly realign its strategy should the winning company be unable to undertake the work, or should the Government of Canada determine that it is unable to perform the tasks successfully. If this situation occurs, the work can be reassigned to the next ranked qualified company or re-competed among the vendors.

PSPC issued its first competitive TA bid request on March 6, 2020, to the 3 contract holders to compete for the human resources and pay system for the Federal Core Public Administration. The TA bid request closed on January 24, 2020. The 3 contract holders submitted a bid. Being the highest ranked, SAP Canada was issued the first TA (TA1).

TA1 was set up to be an agile initiative using a phase approach with go/no-go decision points. This agile phased project allows Canada to quickly realign its strategy should the winning company be unable to undertake the work. Canada is able to stop the work and the implementation of a solution at any moment if premised under legitimate operational requirements or concerns for example accessibility, official language, advance time and management, etc.

TA1 includes 3 phases:

Under TA1, the only firm obligation of Canada was to commence a discovery phase (phase 1 of a 3 phase initiative). The discovery phase was launched in October 2020 and continued through May 2021. During this phase, the Next Generation HR and Pay Team worked with Canadian Heritage and SAP to determine how a future HR and pay solution can integrate information from multiple compensation-related HR systems to deliver pay accurately. The discovery phase also aimed at articulating the challenges with the existing HR and pay processes and systems across the GC, identifying and defining the root cause of these challenges, assessing and validating software as a service (SaaS) adoption, modern platform, best practices, and standardization and defining and proposing the architecture, solution, processes and approach for the GC to resolve the challenges and move forward with an eventual recommendation.

Canada is currently negotiating phase 2 with SAP, the design and experimentation phase of the proposed solution. During the design and experimentation phase, the Next Gen HR and Pay Team will build a pilot with Canadian Heritage (the first pilot) and additional pilots afterward (with other departments). The first pilot with Heritage Canada is estimated to be 18 months. The pilot will test the proposed solution against the real complexities of the current system. It will occur in a controlled testing environment, separate from the Phoenix Pay System. Canadian Heritage employees will continue to be paid through the Phoenix Pay System while testing is completed. Throughout this process, the Next Gen Team, SAP and Canadian Heritage will engage with employees and HR advisors who use the system, as well as collaborate with bargaining agents in the development of a user-centric HR and Pay solution. The pilots will try to prove or disprove that the proposed architecture, a SaaS solution, the proposed streamlined processes and approach will resolve the challenges and illustrate the scalability and flexibility of a new solution.

Following the completion of all the pilots under the design and experimentation phase, SSC and PSPC are to return to TB to provide ministers with recommendations for the selection of a modern and flexible HR and pay solution that meets the Government of Canada’s current and future needs and to seek approval for phase 3: implementation.

Next steps

Following a successful conclusion to the discovery phase, estimated to be completed in May 2021, the NextGen HR and Pay Team will be proceeding to the design and experimentation phase to learn how a future HR and pay solution can integrate information from multiple compensation-related HR systems.

The team is currently negotiating the cost of the work required by SAP and once this is complete will be amending the current TA to include the phase 2 requirements for design and experimentation.

[Redacted]. It will seek to release funds for the next phase of the program for SSC as well as obtain the necessary authorities to amend the current contract with SAP.

During the design and experimentation phase, the NextGen HR and Pay Team will build the first pilot with Canadian Heritage and additional pilots afterward with other departments to test the potential solution.

If everything proceeds well, SSC and PSPC will go back to TB to seek approval for the implementation phase of the project, which will be getting us close to a new solution.

Benefits delivery modernization


The Benefits Delivery Modernization (BDM) Program was created by Employment and Social Development Canada (ESDC) as a long-term program of change that will transform service delivery of employment insurance (EI), Canada Pension Plan (CPP) and Old Age Security (OAS) which currently serve 9.5 million clients for an estimated $122 billion in payments annually. BDM aligns with, and responds to, Government of Canada-wide priorities and plans, particularly with respect to digital government, updating legacy IT systems and ensuring benefits delivery for Canadians.

The target end state solution will be comprised of multiple Information Management/Information Technology (IM/IT) components such as common benefits processing technology, a digital channel, integrity features and modernized business processes.

Procurements related to this program are complex and are anticipated to be in the range of $1.5 to 2 billion over 10 years; where the bulk of the procurements will likely be conducted in the first 3 to 5 years (such as 2021 to 2026).


The procurement approach adopted for BDM, which is based on public and private sector best practices, is designed to reduce the high risk of failure of major IM/IT projects. It consists of multiple phases and off ramps/gates, extensive consultations, qualified suppliers, prototyping and government oversight/control throughout the process. To that end, the BDM Program is being broken into 4 tranches, which may be rearranged as necessary:

One core technology vendor has been chosen, supported by 4 system integrators to work on this project. Throughout the implementation of each tranche, the system integrators will bid on various task authorizations containing work packages for the integration of the technology into the BDM solution.


The industry engagement and major procurement milestones to date are outlined below in the table.

Table 2: Competitive procurement process for the benefits delivery modernization initiative
Date Type of engagement
September 13, 2016 Letter of interest: A letter of interest was posted on, seeking interest and feedback from potential suppliers. Following amendments, it closed on October 1, 2018.
May 29, 2018 Industry Day: An Industry Day was attended by 55 firms, associations and government departments. An overview of the BDM Program was presented, with time for industry feedback. 21 attendees also participated in one-on-one meetings.
September 27, 2018 Request for information (RFI): A request for information was posted on, seeking industry feedback on the draft BDM ITQ solicitation documents. The RFI closed on October 24, 2018. Several comments from 14 firms were received.
December 6, 2018 Invitation to Qualify: An ITQ was posted on for both streams of the BDM Program: the system integrators (SIs) and the core technology suppliers. The ITQ closed on January 31, 2019. Six firms submitted bids for the SIs stream and 5 firms submitted bids for the core technology stream.
April 15, 2019 Results of the ITQ: A notice of proposed procurement was posted on announcing the firms that qualified under the BDM ITQ. For the system integrator stream, the following firms qualified:
  • Accenture Inc.
  • CGI Information Systems and Management Consultants Inc.
  • Deloitte Inc.
  • Fujitsu Consulting Canada Inc
For the Core Technology Stream, the following firms qualified:
  • IBM Canada Limited
  • Microsoft Corporation, Microsoft Canada Inc. and InRule Technology Inc.
  • SAP Canada Inc.
October 18, 2019 Request for proposal (RFP): An RFP for the core technology was sent to the 3 qualified core technology suppliers. All 3 suppliers submitted proposals in response. The RFP closed on November 13, 2019. Following the bid evaluation, IBM Canada Limited was selected as the core technology supplier for its social enterprise management software named Cùram.
January 2020 to March 2021 Prototyping phase: Canada conducted a proof of proposal on the selected core technology, followed by the development of prototypes of the BDM solution with the support of the qualified system integrators.
April 30, 2021 Implementation contracts awarded: Following a successful proof of performance and prototyping phase, the core technology contract was awarded to IBM Canada Limited. A master system integration contract was also awarded to each of the 4 system integrators.

Next steps

Budgetary spend to date

Multiple contracts have been issued to date by PSPC on behalf of ESDC for the BDM initiative:

Report 1: Procuring Complex Information Technology Solutions

The full version of Report 1: Procuring Complex Information Technology Solutions is available online.

Government made progress in implementing modern procurement for complex information technology solutions

Ottawa, 25 February 2021—A report from Auditor General Karen Hogan tabled today in the House of Commons found that Treasury Board of Canada Secretariat, Public Services and Procurement Canada, Employment and Social Development Canada, and Shared Services Canada made good progress toward modernizing procurement practices for large IT systems, with room for further improvement in a number of areas.

The government has about 21 large IT procurements underway, valued at over $6.6 billion. The Auditor General audited 3 of them, including the Next Generation human resources HR and pay initiative, an IT project meant to eventually replace the Phoenix pay system.

The audit concluded that TBS, PSPC, ESDC and SSC introduced new agile procurement practices, subdivided megaprojects into smaller ones and consulted early and often with end users and suppliers to design solutions. However, PSPC and SSC did not provide sufficient guidance or training to employees on how to conduct agile procurement, including how to address suppliers’ questions. Improvements are also needed to detect and prevent integrity risks in procurement processes, including using data analytics and improving the tracking of fairness issues.

“I am encouraged by the openness to explore new ways of doing business that we’ve noted in this audit”, said Ms. Hogan. “To pave the way for further progress, these organizations will need to build on what they’ve learned so far to continue modernizing their procurement approaches to maximize services and support for Canadians.”

The 2021 Reports of the Auditor General of Canada, Report 1: Procuring complex information technology solutions is available online.

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