Government Operations Committee on Oct. 20th, 2009

[Maurice Chénier]

The plan is to reduce our exposure on aging networks. Our method is to work with departments, with the CIO of Canada, to look at the ones at risk first, to take care of what is at risk of impacting government programs first. There is no plan to go to one single network. It would be putting all of our eggs into one very vulnerable basket. Where we have a building location that is serving five government departments, which have five entries into that building for five telecommunications services, and they're all used at 10% each, we could do fewer than five, definitely. We are going to work with departments and their topology, one by one, to actually achieve a streamlining.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

We'll go to the second round.

Five minutes, Madam Coady.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Thank you very much. I appreciate the time you've taken and the candour you're giving in your responses this afternoon. I appreciate the three of you being here.

I have a couple of quick questions. First of all, I'm sure you've prepared a business case with the development of GENS. So there had to be a business case for your department becoming involved with GENS. What was your business case in bringing this forward? How is this helpful to Public Works and Government Services Canada?

[Maurice Chénier]

We have done what we call a strategic framework, which is called the business rationale. We are not committing upfront any liability of the Government of Canada for this. What we have done so far, which has been distributed to this committee and to the public accounts committee, is the framework on how we're going to proceed and the benefit that will lead to the completion of scanning the market so we will know the price of the market. Then we can complete the business case with our first client department, which is HRSDC.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Just for clarity purposes, it wasn't what the business case would be for HRDC; it is what your business case is. For example, are you getting a fee for service rendered to the various departments? How does this benefit Public Works and Government Services Canada? What was your business case for offering GENS to all the other departments?

[Maurice Chénier]

That's a very good question. We were getting bombarded with a lot of requests to renew various parts of contracts and to try to help departments to figure out how to modernize their network. HRSDC came to us a couple of years ago. They told us they were in 450 locations across Canada and they wanted to modernize. So for Public Works, the business reason to do this is to have fewer fragmented contracts out there in the long term.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

So the benefit to you is that you have fewer contracts to administer. So there's no fee for service between you and HRSDC for monitoring and developing the GENS or anything of that nature.

[Maurice Chénier]

When we broker a service with a department, we use a financial mechanism called a “revolving fund” for the Government of Canada. There are minimal full-costing policy charges for the contract management.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

I have a question about the organizational capacity, which you referred to as one of your pillars. Did you have to hire additional people for this project? Are you using contractual employees? Is there a renewal process?

[Maurice Chénier]

We have a group in Public Works and Government Services Canada called Service Transitions and Major Projects. The group is headed by a director general. We have a number of highly experienced public servants from Public Works in HRSDC coming to help us. We also have third-party contracted professional services to help us with research, putting documents together, and all that.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

So the third-party contractors are part of the organizational capacity for this project. How are their contracts renewed?

[Maurice Chénier]

We are using the Government of Canada mechanisms that we have in place today, such as Task-Based Informatics Professional Services (TBIPS), which is a pre-qualified set of 150 to 200 suppliers. We ask for a service and we get the best candidates from there.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Is there a renewal process? You have all this expertise and this third-party contractor is now working with you....

[Maurice Chénier]

We have reduced the burn rate and the slow-down of that project until we hit the next milestone, which is beyond the analysis of the feedback from the industry.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

So what has been the cost to date for the development of the GENS project, if I can use that term? You've hired third-party contractors. You've been working in this service transformation. What's been the cost of developing?

[Maurice Chénier]

I don't have those exact numbers with me today. I can definitely forward them to you.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Would you mind tabling it for the committee?

[Maurice Chénier]

Certainly.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Thank you.

[The Chair, Liberal, Yasmin Ratansi]

Madame Bourgeois, cinq minutes.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Thank you, Madam Chair.

It is my prerogative, as a member of this committee, to make a comment rather than ask questions. It may be lengthy, but it is for the benefit of my colleagues, and I do this with all due respect for Mr. Chénier and the people at the table.

On May 7, 2009, Public Works submitted a business rationale to the committee, which is not a business case. A business rationale does not define the scope of the project, does not contain an analysis of options, does not have criteria for measuring success, and most importantly does not contain costs, in resources or work hours. It therefore cannot be considered to be a business case.

The Deputy Minister of Public Works, François Guimont, appeared before the Government Operations Committee on May 24, 2009. He said that the business rationale was not a business case. He also said there were no tables with figures.

We are told that each department will do its business case. That is what we have been hearing since 3:30. On January 15, in a meeting with Industry, Peter De Souza, who was the director of technology strategies at the Treasury Board of Canada, said he did not know whether there were potential savings, but he assumed it would be about 20%. Tests were planned, but it was not known what would be saved, because no business case had been done.

We are told that research has been done with private firms and there are indicators that will show whether savings have been made. I don't think that research can be tabled with the committee, because there is none. Since the beginning of the meeting, we have been told things that can't be proved.

We are also told that there has been a consultation with small and medium enterprises. In fact, there was a consultation, and there was the draft solicitation of interest and qualification. On May 28, the Minister of Public Works told us clearly that professional services were completely excluded from that draft. And yet those same professional services appear in this draft solicitation of interest and qualification, but this time they are under the rubric of managed services. In the draft, they are called managed services.

Madam Chair, with all due respect to the witnesses, we have to get back to the subject. I have the impression we are being set up to be the fall guys. I do not like being told things that are not exactly true. So I would like it if our researchers could check everything that has been said today, both by Treasury Board Secretariat and by PWGSC. If there is in fact a business case, I would like to be able to see it. Even though we expect the departments to be able to do it, why spend $600 million when there is no business case? For fun?

It is shocking, Madam Chair.

Thank you very much.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

As you can appreciate, we, the flip side of public accounts, have to be accountable, and I was wondering if you have a step-by-step process, or a Gantt chart, that will say, here is why GENS was created--not the verbiage--the reason GENS was created, how much it cost. It is a work in progress, yes, we know, but the step-by-step process and how consultation has taken place.... What was the business case, and could we see the business case? I think that has been demanded by people.

We will remind you, we will send you a note, but I think that's the general feel. It's the frustration of the members, because we're here to protect the public purse.

Thank you.

We'll now go to Mr. Holder for five minutes.

[Ed Holder, Conservative, London West, ON]

Thank you, Madam Chair.

And I'd like to thank our guests for being here today to help us better understand the project and the spirit behind it.

I came from a business background before entering this political world a year ago. In my 30-plus years of business, I've certainly understood the need to rationalize, where you can, to provide services where you can, and, in your words, if I may, Monsieur Chénier, to lower the cost of operations and exposures. I understand shelf life is associated with all the various networks out there, so to do that makes good sense.

You did not have an opportunity to respond to the prior comment. My sense in business is that while you can't always specifically and materially know, to the percent, what the savings might be, I would say that you do have some sense as to the rationale behind it. May I ask you to respond to the comments made by the prior speaker, because you deserve an opportunity to be heard on that.

[Maurice Chénier]

Thank you.

When I reflect on the information Madame Corinne Charette has provided, first I want to reiterate the fundamental difference Madame Sheila Fraser stated in terms of the two types of information technology projects.

The type of information we have in terms of our targets or our performance indicators.... As we know, this started with the federal expenditure management review in 2003. This concluded that actual savings realized by enterprises have done what we wanted to do: yielded a gradual savings of 15% to 30% depending on the speed of the execution once they were put in place.

We have also definitely indicated that we do have targets. Once we know the industry landscape and how it plays out, it can lead to achievable benefits and savings. I will not deny we have targets that vary between 15% to 20%, and I am not surprised to hear people like Mr. Peter de Souza quoted that in their consultation we're not so sure where we're going to be between the 10% or the 20%. It depends on how the industry will respond to us.

We do have a very good example, in our experience, and it's very important. I did not have a chance to comment on that. Our communication services, which have been in place for many years, have delivered economies of scale and cost savings ranging from 10% to 50%. And we have all that evidence. We've achieved 40% to 50% savings by streamlining procurement approaches for the mobile wireless product and services. Our government teleconferencing services have achieved a savings of 30% over the lifetime of those streamlined contracts. Our converged network services contract, which is in place today, has also led to some interesting savings of 15% to 20%. The long distance service savings we have achieved through the same approach...we have confirmed savings of up to 54% over the long term.

So the approach we're using is sound, and the indication here is that we are trying to find the answers to all those affinity and accuracy questions. This is why our approach is to confirm that step by step, without committing the Government of Canada to a large expenditure.

[Ed Holder, Conservative, London West, ON]

I'm absolutely delighted you came here today. Thank you very much.