Government Operations Committee on Feb. 13th, 2018

[Majid Jowhari, Liberal, Richmond Hill, ON]

Mr. Leduc, you wanted to add something.

[André Leduc]

There's a perception that industry is constantly trying to milk the public sector for funding. Vendor performance allows you to evaluate based on performance in past projects, and that should be taken into account when you're doing an assessment of a future project. The way we go about it now is that there is no vendor performance evaluation, so the same company that has potentially milked the government six or seven times gets a fair chance at bidding for the next one. If he has the lowest price, he wins.

[Majid Jowhari, Liberal, Richmond Hill, ON]

One thing I can say, having actually implemented source to procure to pay, is that a lot of the discussion we're having is more on the sourcing side, on making sure that we are really doing our due diligence during the sourcing. The procurement is actually the act of cutting a purchase requisition or purchase order and then measuring the outcome. Most of our challenges are on the sourcing side at the outset, making sure that we are ready to take on the initiative as a government, as well as making sure that we find the right partner through the proper sourcing. This could lead to the strategic fitness assessment and also an internal look at how we do it. Do we have the culture already? Do we have the talent? Is our process streamlined? What do we have as key performance indicators, or do we have a milestone with clear deliverables that we could measure?

[Kirsten Tisdale]

The teams should be lined up so that the incentives for your vendors should also be lined up with the incentives for your internal team. You're right that the sourcing piece is important. However, the stewardship after the deal is signed is where your value is either going to be created or lost. It's probably 40:60 or 20:80 in terms of effort, but very little effort goes into the stewardship of the relationship and the management of it.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Mr. Murphy, would you like to add something?

[The Chair, Conservative, Tom Lukiwski]

Give a very brief answer, Dan, if you could. We only have a few seconds.

[Dan Murphy]

Sure. I'd just say that the most important thing in the evaluation process is that if you're doing an outcome-based bid, you can certainly derive a short list from that, based on evaluation criteria. After that, the most important thing is to implement it, especially in technology projects. Implementation is the validation. It validates everything—architecture, capability of the vendor, finances. The way we do contracts now is that the contract is signed and the validation is after contract award. That's like buying a house and then inviting the inspector in the day after to tell you that your foundation is broken.

If you have a short list of four or five vendors and you have a very small.... If you take a payroll system, for example, take three or four small instances of a payroll system and put them in with three or four different vendors and see what happens, see what the performance is.

[The Chair, Conservative, Tom Lukiwski]

Go ahead, Mr. McCauley.

[Kelly McCauley, Conservative, Edmonton West, AB]

Ms. Tisdale, I want to get back to your work with that secretariat. Is there anything you would have done differently on how it was formed and how they attacked the projects? As a follow-up, if you were to apply something similar to the federal government, which of course is a much larger beast, how would you do it? Would you break it up into separate secretariats—one for PSPC, one for DND—or would you have an overall one?

[Kirsten Tisdale]

That was 10-plus years ago, so I think now I would have applied a little more of the agile approach in making the contracts smaller, because we had billion-dollar deals going on. That was the thing of the day.

[Kelly McCauley, Conservative, Edmonton West, AB]

You'd have smaller contracts working up to larger ones?

[Kirsten Tisdale]

Exactly—scalable, the same without having to go back, but more flexible; rather than winner takes all, I'd have several. If you're doing workstation support, for example, have several vendors involved so you have the ability to move work back and forth, depending on performance. I would try to have a bigger ecosystem of suppliers.

I tried very hard to get government to continue to invest in its ongoing institutionalization. They chose not to, at the end of the day, and I think they're paying for that decision, because they have to restart everything now. Make sure you're taking that knowledge and embedding it inside a government over time. Working on that stream is critically important.

If I were going to look at the federal government now, and I think it's an enormous opportunity, I wouldn't try to replicate it. I would still start with a central group. Defence might have its own just because of its size, and then everyone else would have a centralized group.

There's a co-accountability between the leader of that group and whatever deputy minister's running a project. If it's health, if it's tax, whatever, it's a dual accountability, so that both parties are dependent on each other for delivering it and getting it done.

I would start with one central group for most of core government and I would make its use mandatory and I would give them veto power over the enterprise, because if it becomes voluntary, it won't get used. They need to be funded; they need to be free for the departments so that they're adding value to those departments, but the departments shouldn't have to be taxed to do it right. Then over time you become greatly in demand, but at the beginning, I wouldn't make it a tax on projects. I would fund it centrally, but I would make it mandatory.

[Kelly McCauley, Conservative, Edmonton West, AB]

Mr. Murphy or any of you, how does agile survive a world of political interference with procurement projects? This is not necessarily directed at the Liberals, because our government was probably just as guilty as the current government. The only one not guilty, of course, is the NDP, because they won't be in government.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

We haven't been.

[Kelly McCauley, Conservative, Edmonton West, AB]

But whether it's shipbuilding or other issues, can agile survive in that world where this is a reality, unfortunately? I wish it weren't.

[Dan Murphy]

There's a choice. No, the political interference, if you call it that, creates a lack of clarity in the goal and creates confusion. That distorts collaboration. It doesn't matter whether you continue with the current state or you go to agile; if you don't have clarity around that, if you don't maintain it and have it consistent, it will end up being a problem.

[Kelly McCauley, Conservative, Edmonton West, AB]

Of course, this goes back to the Ross rifle issue 100 years ago, and we still see it.

Okay, that's all I have.

[The Chair, Conservative, Tom Lukiwski]

We'll have time for a brief question from Madam Ratansi.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Thank you.

Thank you for being here.

I've been listening carefully, and all of you have been talking about a cultural change. That's an interesting concept, because change management requires leadership to drive that change and then using change champions.

As a deputy minister when you did the joint venture, what were some of the challenges you faced? How did you overcome them, and what are some of the lessons you learned that could be applicable to a larger environment like the government?

[Kirsten Tisdale]

There are probably three things.

First of all, the first people to get on board were cabinet and Treasury Board. The leadership needed to be backstopped and supported there, because there was going to be learning going on, so I spent a lot of time educating and getting them engaged and getting them comfortable with the concept. Then at the next level down were my deputy colleagues. We spent a lot of time as a leadership team, and every one of those deputy ministers had performance measures tied to the success of that group.

Again, it would have been very hard for me to do my job without the political support and without their being incented and committed to doing it.

Then it was blocking and tackling, quite frankly. You would start in areas where you thought you could get some wins, and you would prove it out. There's nothing like success to get other people interested, right? So we carefully picked the first four or five projects or the programs that we went after, and we worked exceedingly hard to get them right. We got some wins and we got a lot of public support, and then it got easier to do.

Some of the people who just weren't getting it got moved on, quite frankly. The clerk was 100% committed to it, and he was clear with his deputies what his expectations were. If people won't play ball or try to sabotage it, you have to make some examples.

It was a bit of “We're going to try this, we're going to do it together, and we're going to support each other.” Then you work at people one at a time.

That's the only way I've ever seen it done, with lots of support across the board.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Normally when you do change management, the leadership is the top, but was there any instance when bottom-up ideas came? You talked about not everybody being bright and not everybody owning the ideas. If bottom-up ideas come in a public sector, how are they treated in a culture where the bureaucracy—deputy ministers and ADMs—are risk-averse?

[Kirsten Tisdale]

I think you have to get the right people in charge of the program, right? Alex Benay, for example, is working very hard at trying to get some things going on around innovative procurement. He needs some support and airtime. Involve people up and down the chain so you have some of those bright young sparks as part of the program, because the ideas can come from anywhere.

If you put systems in place that allow you to capture them, and then you have some listening posts, that's how I would see it happening. However, it does require good, strong leadership that is open to the ideas, wherever they come from, and you need some processes to harness them. Cross-pollinate the teams from top to bottom, not just senior folks.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Was there any poaching of your teams by anybody?

[Kirsten Tisdale]

Oh, yes. The teams were poached continuously. They were poached by other departments. They were poached by industry. They've gone on and they've worked for governments across the country. I'm not there anymore. We were all poached eventually, right?

[Yasmin Ratansi, Liberal, Don Valley East, ON]

There's a reason I did it. There was a program that Anderson Consulting was doing with the provincial government in trying to get their shared services. Then they started poaching people, so there was no transference of knowledge. When there's no transference of knowledge, then bureaucrats.... You have to see where they are resisting change, because then bureaucrats say, “Okay, fine.” They're taking away our people and making us reliant on the IBMs or the Andersons of the world, or whatever.