Thank you, Mr. Chair and committee members, for the invitation to be here before this committee today.
Microsoft is one of the world's leading public cloud providers. It is also a long-standing technology partner and trusted vendor to the Government of Canada. We are very proud of our social and economic impact in Canada over the past 40 years. Microsoft is built on trust. Integrity and accountability are part of our core company values. We don't just follow and comply with global rules and regulations applicable to us as a service provider; we believe it's our responsibility to establish and model the highest ethical and reporting standards.
We believe we are here today because you are interested in understanding our role as a contractor, as referenced in the 2024 Auditor General's Report 1 on the ArriveCAN app.
Let me be clear: Microsoft Canada was not engaged in the development, deployment or maintenance of the ArriveCAN app. In May 2021, CBSA wanted to build a mobile app for their border security officers to verify vaccination information using a QR code on a mobile phone. We referred to this app as the “BSO app”. This app is separate from the ArriveCAN app. The BSO app was intended to process travellers at primary points of entry into Canada, to display and authenticate traveller data for officers, and to connect that information to the ArriveCAN app.
Think of it this way: The BSO app was intended for border services agents. That's one island. The ArriveCAN app is citizen-facing on another island. Microsoft was contracted to help CBSA build that bridge between the two islands—or apps, in this case. CBSA licensed Microsoft cloud computing services and engaged Microsoft to provide related technical advisory services to support CBSA's development of that bridge, which is a connector between the BSO app and the ArriveCAN app.
The documentation we have regarding service orders specifically attributed to the BSO app does not align with the $3.8 million reflected in the AG's report. Our thorough review of our internal documentation estimates the service orders total approximately $1.3 million. This amount is more in line with the figures reflected in the Office of the Procurement Ombudsman report—otherwise known as the OPO report—rather than the $3.8 million identified in the Auditor General's report. Microsoft has not had access to the documents reviewed by the Auditor General to understand how this overall figure was calculated.
CBSA procured the cloud computing and related cloud advisory services directly from Microsoft using a Government of Canada cloud framework agreement. No part of this work was subcontracted.
Allow me to explain this process.
Microsoft provides limited cloud computing and cloud advisory services to the Government of Canada under a Government of Canada cloud framework agreement. We are one of eight providers that qualified through a competitive procurement process to enter into one of these agreements. Shared Services Canada is the contracting and technical authority for the cloud framework agreement. Government departments and agencies can then select from a catalogue of approved cloud computing services and related advisory services available for purchase, pursuant to a cloud provider's cloud framework agreement. To execute the purchase, the department submits a service order that specifies the quantity and scope of service chosen from the Shared Services catalogue for approval. Once approved, the order is sent to the service provider. The service provider fulfills that order according to the terms and conditions of the GC cloud framework agreement.
Microsoft followed this established process with respect to the cloud computing and related advisory services required by CBSA for the BSO app.
Regarding Government of Canada procurement processes more generally, we feel there's an opportunity to better align with market offerings and evolve alongside technological advancements, in order to deliver on-demand digital services to Canadians. Industry, including Microsoft, has been working in collaboration with Government of Canada officials in Public Services and Procurement Canada, the Treasury Board Secretariat and Shared Services Canada to help modernize procurement practices, especially where they pertain to procurement of cloud services and complex IT solutions. Shared Services Canada is currently working on maturing the GC cloud framework agreement. We are encouraged that it is progressing.
Modernizing procurement isn't just a choice. It's essential for achieving the government's digital ambition securely, as well as for being competitive and interoperable globally.
Thank you, and I welcome your questions.