Public Accounts Committee on May 27th, 2021

[Karen Hogan]

Thank you for that question.

This audit, in fact, was something different even for us. It's not typical that we engage ourselves early on in procurement initiatives, but we felt that it was important to do given that the Next Generation and benefit modernization projects were critical to services for Canadians going forward. We wanted to ensure that departments had built and learned from the lessons from the Phoenix pay system audit.

That's exactly what we saw. They started to build on those lessons learned. They took steps towards trying a different way to go about procurement that involves better engagement with third party vendors to help design out the technical aspects of a system to meet business needs.

In those two IT solutions we looked at, we saw that better engagement with the suppliers. We also saw a consistent engagement with end-users.

What they could build on and improve now is not losing sight of that end-user focus. Now it's about focusing in on governance and making sure that a clear governance mechanism is there, that there's good oversight and continued follow-up. Then build on training.

Training is key for agile procurements because it requires a different set of competencies and skills than traditional procurement. For example, one of the things we noted was that better answers to questions actually help inform the vendor in a clear way so that they can help submit a proposal that might actually meet business needs.

There are many little things that need to be built on, but I would highlight those as the two biggest ones.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

This process involves a closer engagement with your vendors, but at the same time keeping your distance.

How is that monitored?

[Karen Hogan]

That's exactly where that fairness monitor would probably play a very key role. Right now it really isn't designed as a control, but it has the opportunity to be a really effective control.

That's where training will also play a role. You have to be able to tap into the knowledge of vendors, but still remain transparent, fair and open as you go through the process. Making sure that you have those checks and balances is key. The governance and oversight will play a role, but then the fairness monitor will help ensure that matters are resolved in an equitable way. Those are two ways that could be enhanced.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Thank you.

I'd like to direct a similar question to DM Matthews.

We've just talked about allowing room for improvement and how that often results in better deliveries, greater flexibility and value for your investment. I'm wondering about your thoughts on how the workflow has been strengthened or how communications have been made clearer, both to the prospective suppliers and to long-time relationships.

Mr. Matthews.

[Bill Matthews]

Thanks for the question, Madam Chair.

I have a couple of points to make here. Training for procurement officers is always evolving, so agile is the flavour of the day. We're updating our training. We've already started, but there is more to come on that front in terms of making sure that procurement officers are equipped to deal with this new approach.

What I'd highlight there is that this is not just a procurement methodology. It's a whole project management methodology and often involves more outcome-based projects, as opposed to our traditional IT procurements, which are very prescriptive in terms of what we're looking for. It does change the way we engage with industry. It does change the way we structure our requests for proposals, and it would change the way we evaluate those responses, so engagement is more important.

In our discussions with industry, everyone is using the word “agile”. There is a very helpful diagram in the chapter that lays out “agile” at a very high level. I think what we're finding as we discuss with industry is that once you get below, into the details, there are still evolving interpretations of or differences of opinion on what “agile” means. Working with industry to get a common understanding of just what “agile” looks like at a detailed level for each project is a key part of our outreach to industry, both at a theoretical level and also as we launch new procurement opportunities.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Thank you.

With regard to the efforts undertaken to identify and address issues of wrongdoing in the procurement process, what steps have you taken to strengthen the integrity of the process and the outcomes to ensure transparency in both the procurement bidding process and also in fairness? Can you explain how the fairness monitoring program is intended to support the procurement process as you see it, and how this program is being strengthened following the review that was noted in the report?

[The Chair, Conservative, Kelly Block]

Can we have a very short answer, please?

[Bill Matthews]

Okay. Thank you, Madam Chair.

I can come back to this later if it's of interest, but that there are two things. I think improving the sophistication of our analytics is one, and the Auditor General has touched on this. We've had some experience of this in the past, where it was more difficult that we would have liked because of inconsistent information in our data. Our new e-procurement system will help drive more consistent data, which should enhance our analytical ability. On the fairness monitor piece, our expectation is that they get access to the documents and the meetings they need to see or be part of to make sure the process is fair, and that they raise issues on the fly so we can resolve them immediately.

[The Chair, Conservative, Kelly Block]

Thank you.

[Bill Matthews]

I'll come back to that if they wish, Madam Chair.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Matthews and Mr. Van Bynen.

We will now move on to Ms. Vignola for six minutes.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you very much, Madam Chair.

I thank you all for joining us today. We saw some of you just a few hours ago.

Ms. Hogan, I will talk about your recommendations on opportunities to strengthen governance. I am thinking in particular of recommendation 1.48, which says, in short, that senior representatives must communicate better and be better informed. When I look at report 1 from spring 2018, I see that your recommendation 1.105 from 2018 is strangely similar to the one you issued this year.

How can we explain that, after three years, the main obstacle to the optimization of the Phoenix pay system comes from the lack of participation of senior representatives, and that this issue is still not resolved? This is not attributable to COVID-19, as it was not around in 2018.

[Karen Hogan]

Yes, the recommendation is very similar to the one we issued in 2018. However, I would say that we have seen a little bit of progress in that regard. Toward the end of our audit, the Deputy Minister Committee on Core Services was created. We have not had an opportunity to really look into how that committee operates. I think it will have a very important role to play.

It is important to note that senior officials need honest and complete information. That is really an aspect we must always keep an eye on, as it is often forgotten. We can always do better.

Yes, it has taken a few years, but I have some hope for that committee and the role it should play in complex IT procurement.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

I am shocked when I hear that there is a lack of communication, transparency, cooperation and consultation.

I used to be a teacher, and all those skills are required in the worlds of work and education. Children are required to have them. We are in 2021, and this has still not been applied in the government world.

What explains that? If those skills are applied everywhere, why are they still not being applied here, where they should rather be the most effective?

[Karen Hogan]

I can tell you with certainty that it is not like this everywhere. I think it is every public servant's responsibility to create an open and safe workplace to encourage honest dialogue.

In the three next-generation pay systems we have audited, there was a great deal of cooperation and exchanges. So there has been an improvement, but not across the board. It is up to senior officials and leaders to ensure that kind of an environment is created, and to ensure that this cooperation, communication and oversight are always part of procurement.

As I said, we carried out our audit at the beginning of those processes, and they are on the right path. However, increased oversight is required to continue along that right path.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

You are talking about the next generation pay system. However, 10 minutes ago, I received an email from a desperate individual who just received, once again, a pay of $0, without any notice. What is interesting is that this person is an employee of National Defence. You will recall that we were talking about procurement issues, the fact that National Defence is not being consulted, the Phoenix pay system, and so on. In fact, both situations concern the same person. That's amazing.

How will the NextGen system ensure that situations like the one described in that email no longer happen? How far along is the assessment of the implementation of the system at Canadian Heritage? Has all that been properly assessed?

[Karen Hogan]

I think Mr. Matthews will probably have comments to add to mine.

The next generation pay system project stakeholders are implementing the lessons learned during the Phoenix implementation. Two pilot projects are underway, and they should integrate those lessons in the future system and its technical aspects.

I recognize that the government is taking its time to find a good solution, and that's a best practice. The project is focusing on end users, although it is only at the beginning of the process. I will follow up on this project. It must be said that Phoenix significantly impacts many public servants. That has had an impact on our office and on our audits. So that is still something I am keeping an eye on.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you very much.

[The Chair, Conservative, Kelly Block]

Thank you very much, Ms. Vignola.

We will now move on to Mr. Green for six minutes.

[Matthew Green, NDP, Hamilton Centre, ON]

Thank you, Madam Chair.

It's great to be here from Hamilton with everybody virtually and to see my friends from the Auditor General's office again.

This subject was, obviously, something we looked at in another committee, OGGO.

To the Auditor General, I didn't get a chance to ask whether, with the amount of money set aside for IT procurement, their office applied gender-based analysis plus to any aspect of this audit. If so, what did it reveal?

[Karen Hogan]

Thank you, Madam Chair.

I knew the member was going to ask me this question. Sadly, I'm going to give him the answer I gave the last time he asked the question.

This was one of those audits that were started even before I was Auditor General. My commitment to the committee to include criteria to assess gender-based analysis plus will be one that I carry out in future audits.

Here, we didn't look at the actual procurement, so I can't tell you that we looked at whether or not the departments themselves did a fulsome analysis as they started their pilot projects. That would be a question better asked to each of the entities. We really focused in this audit on the new method of trying to procure and modernize the procurements rather than on the actual procurements themselves.

I want to offer a last point. We have an audit planned for the benefits modernization project, given its significance and importance to so many Canadians. We expect to table it in the fall, I think, of 2022. We will be looking at gender-based analysis plus in the context of that procurement.

[Matthew Green, NDP, Hamilton Centre, ON]

Then perhaps through you, maybe Mr. Matthews, who has certainly been in the trenches with us over the last couple of studies, could comment on whether or not IT procurement would be subject to the federal contractors program or whether it would be outside of that purview.

[Bill Matthews]

I think I may have to turn to one of my colleagues on this, maybe Mr. Flack, but, if not, I'm happy to get back to the member, Madam Chair, with a follow-up on that front.

Maybe I should let Lorenzo take a shot at that first.

[Matthew Green, NDP, Hamilton Centre, ON]

Can I just ask a personal interest question first? Mr. Matthews, are you familiar with the federal contractors program?

[Bill Matthews]

I am, and we've had questions about this program in the past. It's not a program managed by PSPC. That's why I'm struggling, in fact, with where to direct the question.

I believe ESDC has responsibility for it, but my colleague Mr. Flack may be able to clarify that.