Evidence of meeting #36 for Government Operations and Estimates in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was smes.
A recording is available from Parliament.
9:35 a.m.
Chair, Canadian Business Information Technology Network
He is fairly new to PWGSC. He did come from Immigration prior to that, as far as we know. He was responsible for the global case management system, which is another large IT project that is not delivering what it should for the department and its clients.
The first time I met Mr. Poole was when he was working for Innovapost many, many years ago. I was trying to sell the services of my resources to him, but we never got any business there.
9:35 a.m.
Bloc
Diane Bourgeois Bloc Terrebonne—Blainville, QC
You say this gentleman has considerable IT experience and is familiar with your operations. He regularly does business with you. What I'm getting at is that this represents a radical change for you. When someone is not familiar with the work you do, then they make some radical changes and throw everything out. However, when is familiar with the work and the implications... I'm anxious to meet this Mr. Poole.
How do you feel about this gentleman? I know I'm putting you on the spot, but I'm curious to know what you think about him.
9:35 a.m.
Liberal
The Chair Liberal Diane Marleau
Mr. Bourgeois, Mr. Poole is here in this room and will be testifying later.
9:35 a.m.
Bloc
Diane Bourgeois Bloc Terrebonne—Blainville, QC
I realize that, but I would still like to hear their views, because this is such an incredible story.
9:35 a.m.
Liberal
The Chair Liberal Diane Marleau
Thank you, Ms. Bourgeois. You have already gone over your allotted time.
Mr. Kramp.
9:35 a.m.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
Thank you, Madam Chair.
Welcome.
Most of my history has been as a small business individual, so I well recognize your concerns and anxieties over either perceived or potential unfairness.
While I state that, I think as a government we have an obvious obligation. We're not here to pick winners and losers, whether it is a large corporation or SMEs. We're here to deliver product, service, and price to and on behalf of the Canadian taxpayer.
Should you have a strong case, and it appears obviously you have both the track record and the history of doing so, I believe that.... Quite frankly, I'm not stuck on your focus. It's sounding more like whining than giving solutions. I would like to see your focus have more teeth in it. I'd like you to be able to say, we are more cost effective because of this reason--bang, bang, bang.
I believe much more specific information has to come out. I think we need that. I think we need that cost comparison. And I might give you an example. Mr. O'Neil, you pointed out on the question that was put forward with shared services.... I think your response was very, very good, but I'd like to put it in a bit more context now.
A number of years ago we had a great deal of difficulty with a number of our competing departments with IT technology, particularly with communication. Whether it was the armed forces, the police forces, or public safety forces, they didn't have shared data. In other words, one branch or industry of protection or safety didn't even communicate well with the other. They seemed to be operating different systems with different levels of communication, so the efficiency and effectiveness was not there.
A proposal was brought forward to integrate so they would be able to more effectively communicate. That idea was brought forward, and I think the transition is in process. The Auditor General has informed us that significant progress has been made. This was an example of a shared service working well.
Are you suggesting that you're not opposed to the efficiency and the effectiveness of it, but when it gets into servicing and/or being able to bid effectively, you're being shut out? Is that what you're saying?
9:40 a.m.
Chair, Canadian Business Information Technology Network
What we're saying is that we're not opposed to the government saving money by consolidating networks and data centres where it makes sense. What we are opposed to is the procurement model that's being used here, which basically shuts out all companies except the four winning companies for billion-dollar contracts annually for a period of 15 to 20 years.
So it doesn't affect just SMEs; it affects every other company that may be able to bid but loses.
9:40 a.m.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
Let's just take it five years ago versus today. Has there been any difference in the percentage of contracts awarded to SMEs? Did they get 60% or 70% and now it's 40%, or was it the other way around? Is there an inversion there? Where have we been traditionally moving?
I just want a little idea of the pattern and the flow here.
9:40 a.m.
Chair, Canadian Business Information Technology Network
If this procurement model is allowed to proceed, it will be moving into a flip-flop arrangement whereby we would have 65% or 70% of the IT professional services contracts, because of the bundling of professional services and software products, under one contract--winner take all, 15 to 20 years--for networks in the government. It would be a loss of jobs and a loss of access to these opportunities.
We want to be able to get the same number and value of contracts that we have today--if anything, we want to improve on that--and at the end of the day help the government achieve even further savings than what they're going to achieve through a shared service.
9:40 a.m.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
Yes, and I think that's the point. Have you been able to clearly identify and/or do you have a difference of opinion with Public Works on the efficiency and the effectiveness? In other words, which way are we going to get better bang for the buck definitively? Has a full projection process been brought forward on any of these? Or do you even have the capacity to do that, if it's too large?
9:40 a.m.
Chair, Canadian Business Information Technology Network
This is all about contract bundling. The opportunity for a large integrator to deliver a shared service is obviously an opportunity for the government to save money by consolidation of networks and mainframe computers. Our issue is that we have not been consulted on this--at all--in what is usually described as industry consultation. There has been no independently reviewed business case for this, or not that we've seen. I don't know whether you people have seen it, but we certainly haven't. It's not available. Now we're at the point where we're going to be issuing an RFP for these services. Once that goes and hits the street, that's the end of it for us in terms of bidding for this opportunity.
The large integrators are not going to engage us for any longer than they have to as subcontractors and then they're going to basically throw us away.
9:45 a.m.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
Traditionally through the years....
How many years have you gentlemen been in this business?
9:45 a.m.
Chair, Canadian Business Information Technology Network
I've been in this business 35 years.
9:45 a.m.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
Have you consistently seen a similar pattern here? You mentioned that there was a bit of a flip-flop in concentration. Has there been a focus on the large enterprise to the small, or back to the small? In other words, has there been a cycle involved with any of this in the past?
9:45 a.m.
Chair, Canadian Business Information Technology Network
It seems that every couple of years the government comes out with another of these large initiatives.
CABiNET came together as an entity in the early nineties because of the procurement model back then, which was called “common purpose” procurement. It was basically lining up a business partner, for each department, that could be no other than a large integrator just because of the nature of the project references you would need. So once the large integrator basically has the contract for that department, SMEs are not involved any more.
9:45 a.m.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
Have you or your associated group of companies been able to grow in the past five years?
9:45 a.m.
Chair, Canadian Business Information Technology Network
Yes. We've been able to bid on contracts by forming consortiums. Mr. Marshall indicated in his presentation to OCRI in March that consortiums could be put together to bid on this. But with the latest MERX update awarding points to companies for engaging SMEs as subcontractors, that is not, to us, a consortium approach. Basically we're being shut out.
9:45 a.m.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
Have you had an opportunity to discuss that particular element with Public Works? And what has been their response, from your perspective?
9:45 a.m.
Chair, Canadian Business Information Technology Network
With the latest issue that they put out on June 6?
9:45 a.m.
Chair, Canadian Business Information Technology Network
We were told that no further consultation was going to be done on this opportunity, that this was the way it was going to be, and that they would come out with the RFP in the fall.
9:45 a.m.
NDP
Charlie Angus NDP Timmins—James Bay, ON
Thank you, Madam Chair.
Thank you for coming this morning on short notice. I think this is a very important issue, and we really need to get a clear picture of it.
To help us along here, you said there were about three players in the game. Could you tell us who stands to benefit?
9:45 a.m.
Chair, Canadian Business Information Technology Network
In the federal government environment, we suspect only three or four players could possibly play. CGI is one, IBM is another, and HP and EDS--since HP recently bought EDS. That would be another opportunity. Possibly Accenture, but they would have to find a telecommunications partner, and obviously there are only a few telecom partners.