Evidence of meeting #105 for Public Accounts in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was phoenix.
A video is available from Parliament.
Associate Deputy Minister, Department of Public Works and Government Services
A significant portion of the funding we have this year is to maintain and increase our staff augmentation.
Conservative
Associate Deputy Minister, Department of Public Works and Government Services
Yes.
It's particularly for the HR capacity that we continue to grow. We also have expenses for technology, including for the vendor, IBM.
Associate Deputy Minister, Department of Public Works and Government Services
I don't have the specifics with me, but we can provide them to the clerk in writing.
Deputy Minister, Department of Public Works and Government Services
I don't have it with me. I'm sorry.
Conservative
Kelly McCauley Conservative Edmonton West, AB
I'd like to clear up something. An access to information came back from your department clearly identifying not clearing the backlog as the main problem with Phoenix. We have other testimony that says the slow transformation and the difficulty in tackling the new software was underestimated. Your own department, in the advice of the minister, said...blamed for not clearing the backlog, but then we're hearing all these other issues from Mr. Ferguson and you.
Mr. Ferguson identified a lack of public trust. How can we have a sense of trust when items we've accessed on our access to information say one thing from your department, but then publicly we're hearing other things?
Deputy Minister, Department of Public Works and Government Services
I think one thing that is absolutely clear is that not one single thing made this thing go wrong. There are a number of elements. That's why I keep talking about the multiple points of failure.
Conservative
Kelly McCauley Conservative Edmonton West, AB
The access to information identified that and one other as the main things.
Conservative
The Chair Conservative Kevin Sorenson
Thanks, Mr. McCauley. We'll come back to you.
We'll now move to Mr. Chen. You have five minutes.
Liberal
Shaun Chen Liberal Scarborough North, ON
Thank you, Mr. Chair.
First I want to acknowledge that it is National Public Service Week, and it is a time for all Canadians to express their thanks for the hard work of our public servants. As Ms. Lemay alluded, great work is being done such as pension modernization and a long-term plan for our parliamentary precinct, all within Public Services and Procurement Canada, which of course now takes me to Phoenix.
I agree that Phoenix was a complex undertaking from the start. As has been pointed out today, getting together on one new system, a 40-year-old legacy system, 290,000 federal employees, 101 departments and agencies, all with different pay systems and functions is a tremendous undertaking. But it seems to me that basic project management best practices were simply ignored.
Four officials, including the project director and three executives from PSPC, as Mr. Deltell had inquired about, were in charge of the Phoenix project. The Auditor General, in his report—paragraph 1.32—wrote:
...Phoenix executives scaled back the project’s functions to save money or time. In the spring of 2012, after the planning phase of Phoenix, IBM told Public Services and Procurement Canada that Phoenix would cost $274 million to build and implement. The Treasury Board had approved a Phoenix building and implementation budget of $155 million in 2009. We found that Public Services and Procurement Canada did not consider asking the Treasury Board for more money to build and implement Phoenix. Instead, Phoenix executives decided to work with IBM to find ways to reduce the scope of work to fit the approved budget.
How could that have happened? How could a team of four people, without considering the vast array of functionality that was required and set out through the various departments that were going to be using this new system, in the presence of IBM, which was there to customize and build the software to specific project requirements, and PeopleSoft, which had developed the software platform to process the pay that was going to be customized by IBM...? With the people involved at the table, somebody must have said this system is not being tested properly, that this system will not work because functionality is being removed and the entire purpose of standardizing and bringing forward a new modernized system of pay is to ensure that it provides the functionality that is needed.
How could this have happened? How did that team of four people make that decision without anyone noticing?
Deputy Minister, Department of Public Works and Government Services
I will point to a couple of other points of failure, I believe. One of the things that I think was really missed was that there was no holistic view of this implementation from one end to the other, including the HR processes.
When decisions were made, they felt that they had the appropriate workarounds, but always looked into.... This is my assessment of it. I'm trying to help you understand this, because that's what I understand from it and my assessment of it. That holistic view was not there. They didn't do these workarounds, and they mitigated, in their minds, the risk, but risks were not looked at cumulatively and holistically.
Another example is that you have departments that did not let go of their compensation advisers. If you look today at those departments, they are doing much better than the ones that lost their compensation advisers. In fact, 20% of their transactions.... Our queue is about 20% over 30 days, whereas the other departments were at 70%, so it's a combination of a number of things that really lent to—to use the words of the clerk—the perfect storm of this failure.
Liberal
Shaun Chen Liberal Scarborough North, ON
I'm trying to understand if it's incompetence or bad planning and a lack of proper judgment, because, if there were risks, and those risks were mitigated, when you reduce or remove functionality from a new system that is supposed to be mirroring requirements that have been met through the various legacy systems that were in place in the departments....
What was the plan? How were you going to restore those functionalities? Were they taken offline? Was there a contingency plan to address that functionality that was removed?
Deputy Minister, Department of Public Works and Government Services
Obviously, the decision in hindsight was not the right one, but there were mitigation measures. These retroactive of acting, for example, were implemented later.
They weren't the right decisions, clearly, but again, when you ask how they made these decisions, the only thing I can see is that it was that everyone was looking at this in isolation and not at the end of this. There was no global oversight.
Conservative
The Chair Conservative Kevin Sorenson
Thank you, Mr. Chen. You're already way over.
We'll now move back to Mr. Deltell, please.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
Thank you so much, Mr. Chair.
I want to get back to the conversation we had earlier with Madame Lemay.
Ms. Lemay, you said that the three people in question did not share the same vision as Mr. Ferguson. Can you tell us more about that?
Deputy Minister, Department of Public Works and Government Services
Please understand that, with human resources, there is still a part that is private.
I had to evaluate these people. Remember that we delayed the evaluation, because we wanted to have the reports from Goss Gilroy Inc. and the Auditor General's first reports. I did my evaluation with the information I had at the time. I found that these people did not deserve to receive their performance pay, and had to be moved.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
Okay.
I should have clarified my question. I didn't want to know whether or not they deserved their bonuses—I think the answer is obvious.
Mr. Ferguson wrote in his report that three people hadn't mentioned the serious problems they were aware of. Do these three people agree with Mr. Ferguson's statement that they knew things but didn't speak out? Do these three people agree with that, yes or no?
Deputy Minister, Department of Public Works and Government Services
We talk through an intermediary, but I don't think they agree. You'd have to ask Mr. Ferguson because I didn't have that conversation.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
Thank you, Ms. Lemay. You took the words right out of my mouth.
Mr. Ferguson, the situation is quite serious. Have you spoken to these three people? Do you have any documents showing that they withheld information?
Auditor General of Canada, Office of the Auditor General
Of course, we talked to these three people. We asked them questions about each of their decisions. We also reviewed the background documents that were discussed with the deputy minister.
I'll ask Mr. Goulet if he has any details on each of these conversations.
Jean Goulet Principal, Office of the Auditor General
We spoke with each of these people, and they told us that they believed that the system was working as intended. They had a certain vision of how the system should work and were basically sticking to it.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
We aren't talking about a vision here, but about a problem
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
Mr. Ferguson, in your remarks, you said that the executives responsible for Phoenix hadn't mentioned any serious problems they were aware of. You are now telling me that these people didn't have the same vision of how the system works, but that isn't what I'm asking you.
Did these people withhold information that revealed serious problems, yes or no?