:
Good afternoon, Madam Chair.
Thank you for inviting us to appear before your committee to discuss the Treasury Board Secretariat’s role in providing guidance and oversight to institutions on the management of large IT projects.
Allow me to introduce myself. My name is Corinne Charette. I’m the Chief Information Officer of the Government of Canada. As you know, I am responsible for setting direction and policies and standards for Information Technology and Information Management as well as Security, Privacy and Access to Information in the government. I’ve been on the job since last May. I bring to the table over 30 years of experience in the private and public sectors.
My role includes supporting the government in its commitment to continue improving public service management and to ensure value for money for taxpayers.
[English]
With me today is Val Wutti, the executive director of the IT project review and oversight division at the Treasury Board Secretariat.
In November 2006, the Auditor General examined the management of large IT projects and issued her recommendations on the overall management of these projects. Since then, I'm pleased to say that we have acted on those recommendations. We have implemented a series of measures that strengthen our challenge and oversight functions to ensure that departments' IT projects succeed.
Before going into detail, let's discuss what constitutes an IT project. It's an important point. There are essentially two types. First, there is the kind that deals with basic infrastructure such as data centres or telecommunications networks that computer systems rely upon. Infrastructure projects usually involve the purchasing of the equipment, computers, software, other devices, and telecommunications facilities and services.
The second type of IT project is at least as complex as the first. In this type, IT is used to create a system that is going to be actively in use by any department or agency in support of their program. These projects typically change business processes or implement new legislative requirements in order to improve delivery of government programs. They support programs such as processing tax returns, issuing employment insurance cheques, protecting our borders, etc. These are application systems in support of government programs.
The Auditor General focused on this latter type of project in the 2006 report.
[Translation]
The Secretariat has similarly focussed on strengthening the management of these large IT projects. We are talking mainly about this type of project.
We have published a new Policy on the Management of Projects in 2007 and are progressively implementing it. We have also developed tools and guidance documents which the community is already using. These tools will help departments improve the management of their projects. The government is a very large organization with accountability for program delivery resting with deputy ministers.
The Treasury Board Policy on the Management of Projects reinforces deputy ministers’ responsibility for monitoring adherence to this policy within their organization and taking action when compliance issues arise. In the case of IT projects, each department has a delegated project authority and is only required to go to Treasury Board to seek approval for projects that are higher than that authority.
[English]
When the rollout of the new policy on the management of projects is complete in April 2011, we expect that Treasury Board ministers will see fewer projects requiring their approval. There are two reasons for this. Currently, most delegated project authorities are based on the dollar value of the project. We are moving to an approach that considers the department’s capacity to manage projects and the risk and complexity of a proposed project. Only projects that are riskier and more complex than the department’s capacity to manage them or projects that require amendments to what had previously been approved will require Treasury Board approval.
We are also challenging departments to reduce the size of their projects to help reduce the risk. Instead of having one large project that takes many years to complete, we are encouraging departments to break them up into fewer, smaller projects that deliver value for the investment faster. This will result in smaller, lower-risk projects that are more likely to be successful. This approach would also help departments make better informed decisions on the implementation of the overall project based on outcomes to date. They would also allow deputies to stop investing further if the outcomes are not satisfactory. Clearly, we are steering departments away from an all-or-nothing approach to IT projects.
Once a department has received Treasury Board approval, the secretariat expects that departments will apply the appropriate project management and oversight processes, as prescribed by the policy and related instruments. This is not to suggest that TBS takes a hands-off approach. In fact, the secretariat continues to monitor higher-risk, more complex IT projects. We have taken additional steps to guide organizations and to ensure, or contribute to, the success of their IT projects.
In particular, we have improved templates and guidance and expectations for preparing business cases and for preparing project charters and management plans. We have created an executive dashboard that highlights the five key performance indicators of a project: cost, schedule, risk, scope, and issues.
Last, we have established an independent review program to help project executives gain useful insights at key points or gates in their projects. This will allow them to make appropriate course corrections, including terminating projects if they no longer meet the expected outcomes.
[Translation]
The use of these products is not mandatory, but they guide deputy heads in managing the implementation and risks of their projects, within the spirit of Public Service renewal, by reducing the “web of rules”, by providing appropriate guidance and tools and by establishing clear accountabilities on management practices.
Deputy heads are accountable for ensuring that IT projects contribute to program outcomes and support the government’s objectives.
[English]
The Treasury Board continues to work closely with departments by providing the advice they need to make sound management decisions. Departments are aware of available IT project management guidance and tools. This is reinforced regularly through our meetings with the community of CIOs. Their adoption remains a departmental responsibility and decision. However, we are very pleased to see that even though the policy will be fully deployed in April 2011, many departments have anticipated it and have already taken up a lot of these practices.
In closing, in cases of higher-risk, more complex IT projects, the secretariat closely monitors progress and performance and continues to work with departments in optimizing ultimate project outcomes.
Madam Chair, this concludes my opening remarks. I would be very pleased to answer any questions.
:
Thank you, Madam Chair.
There are two questions: what has changed, and what are we doing differently going forward?
First, in terms of what has changed, Secure Channel was originally conceived as a project going back to roughly 1999-2000. Nine years later, 2009, many things have indeed changed, both on the technology front and the experience front, in terms of understanding of the broad IM/IT community in Canada, and in fact worldwide, in terms of IM/IT, cyber security, and so on. Within government, certainly our policies, management frameworks, and oversight have also changed.
First of all, let me say from a policy perspective that in 2007 we came out with the enhanced project management framework policy, which I think is a key step in equipping the government going forward to be more effective and a better manager of large and complex IT projects--and IT projects across government are bound to be large.
I mentioned a couple of strategies in my opening remarks, but I would stress them again. Whereas Secure Channel was targeted as one large project, going forward in our new project management framework we are stressing the segmentation of large projects into what we call a program of discrete and independent projects that can be launched, followed, and monitored independently. They can individually contribute benefits that can be followed, if successful, by different projects that can continue to build on their initial success and continue to refine, expand, or roll out the solution further. So that's an important step forward.
Over the last 10 years, I think projects have become very large for many reasons, and this is true with my experience in the private sector as well in government. The demand for IM/IT is quite strong. Departments, in fact all organizations, rely on services, so there is always a requirement for more automated support. Nevertheless, it is the challenge of the IM/IT organizations across government, and Treasury Board is working actively with them to properly segment these programs into manageable projects. Each one will come up with a business case that will allow for the evaluation of success. Clear project charters on these individual projects will indicate roles, responsibilities, and the governance that the departments and their deputies are going to exercise. As well, project gating stages at regular intervals will report on status, success, or any issues that might arise and allow for corrective action, including such things as bringing in independent project reviewers to get a different heads-up and so on.
The project management framework has gone a long way to help, and I think will, over the next number of years, contribute significantly to improving project outcomes. That is the number one element that we are proposing to do differently.
In terms of general guidance to the community of CIOs that I have provided and will continue to provide going forward, we are being very careful not to be too ambitious with unproven approaches. We are pushing the community to work initially with smaller projects that can pilot outcomes. Once these approaches are tested, then we can build sound business cases that reflect better cost because a pilot has come back with some results, and we can better plan for future rollouts given that it's not as abstract a problem.
Certainly our guidance is to decompose programs into projects, pilot approaches, to conduct rigorous business cases, monitor a lot more closely and regularly, and in this way improve outcomes.
:
As I said, our strategy consists mainly of this: we have improved or updated our project management policy so that it better reflects what are called best management practices for project management. This is based on various strategies, including preliminary studies, but mainly on techniques like project charters, where results are very clearly described, the scope of the project is clearly defined, the role of the sponsor and business representatives from various parts of the country are clearly depicted, and the ultimate objectives are described and measured. So there is that, for one thing. Another is that there is also the entire independent project review program, which is very much encouraged.
So in any project there is the project team that works closely with its business sector. Best practices refer to the fact that independent reviews, which are sometimes done every six months, sometimes yearly, by experienced outside consultants who may come from the outside and take an independent look and offer the project team objective feedback, both for the sponsor and for the team members, are extremely beneficial. We have used that technique successfully several times recently, and we have also put in place a whole program with the community to encourage and facilitate the adoption of this technique.
One thing we have is a training program for people who want to be independent project reviewers. We have a manual that has helped reviewers and teams to prepare better. We also have a procurement tool that is used to establish a list of experienced, accredited reviewers who have met the criteria.
So there is a whole set of tools and monitoring methods. As well, we also work closely with the community and we are often invited to sit on project review advisory committees where we regularly take part in determining status and make recommendations as necessary. We are also in frequent contact with the departments, and we encourage them in various ways to share their experience, and so on.
:
I won't pre-empt my colleagues from Public Works and Government Services Canada, but GENS, as I understand it, is not yet a project. It is currently being discussed as a supply arrangement for the provision of services and facilities to a number of government departments in the area of telecommunications.
Once procurement is finished, the next logical step is a series of projects. Government departments rely on telecommunication services of many types. A lot of government departments are using telecommunication facilities and services, some of which are right at the end of their technology life. They've been around for a long time, so there is a high likelihood that there are newer, more efficient, and probably more cost-effective solutions. Once a procurement arrangement is in place, departments have to step forward and initiate projects that will move them from what they are using today to the next generation.
GENS procurement may lead to much more than one contract. In fact, it might lead to a number of projects, depending on how many government departments and agencies participate. Right now, there are 124 separate networks across government. Many will move toward replacement, because their business cases indicate that it's more cost-effective to move and incur the migration cost. This way they benefit from improved technology and reduced operating costs going forward. Any IM/IT decision for investment is going to look at these factors.
:
Okay. So the whole oversight process you have—even though we talked about it at the very beginning. There's an oversight function by the Treasury Board?
Ms. Corinne Charette: Yes.
Ms. Siobhan Coady: You're clearly saying that the utilization of the template of tools and the accountability function rests solely with the deputy ministers. That's what I'm hearing you say.
I'm going to turn to Service Canada, who handles tens of millions of transactions, as you know, from CPP to employment insurance. They stopped using Secure Channel. As you know, they had several series of crashes; they had a lot of problems and issues. One of the concerns around this is, who covered the cost of these problems? They actually had to go out and do some additional work, as you know, under Secure Channel, but we're not quite clear on who covered the cost.
I'm sure the deputy minister was quite involved in this from that oversight and accountability process, but we're not quite sure: was the administration drawn from the EI fund, or how were they actually covered?
:
Thank you very much. I appreciate the time.
I appreciate the witnesses' time as well this afternoon and the testimony given thus far.
There are a number of things I want to talk about. I think we're looking for a little bit of additional clarification with regard to Secure Channel. I think there have been some discussions here in terms of when this happened, but the history might be important for us.
My understanding is that by March 2006, over $600 million had been spent. At that point, the overruns had taken place. It was some time ago.
In the review by the Auditor General, a number of things were identified as concerns, and concerns that she had relating to any program that was to be developed. She said that prior to this going forward, there had never been an agreement among the different departments as to what types of benefits would be provided by Secure Channel, to whom, and at what cost that would come forward. There was no indication as to what the budget would be in terms of the full life cycle costs of the program and how the departments would split those up. Also, there was no business case to identify the source of funds that would be used to sustain the ongoing provision of the service.
I know that when we came into government there were large concerns amongst many people in the House of Commons. We'd seen a number of different boondoggles related to large technology projects. Secure Channel was one, but that wasn't the biggest. I think the long-gun registry was something that a lot of people hearkened to, and a lot of folks out there were very concerned to see the escalation of that particular program and how the technology just got completely out of hand.
In 2007, our government announced something called “the executive dashboard”, which had a number of different components. I think members of this committee would be very interested in understanding a little more about how the executive dashboard ensures that these types of things don't happen any more and about what you and your department are able to do as a result of these new tools to ensure that these questions are answered, such as who's going to pay and what benefits are being provided.
We look at GENS, which is being proposed right now. It is going to be a program that many different departments will have an option to utilize. Are these questions going to be answered before the execution of this, and do these tools ensure that?
:
Absolutely. That is a very good question. Thank you.
The executive dashboard is definitely a key tool in oversight and monitoring. We are in the process of really consolidating information so that in the spring of 2010 we can have a first view of a number of projects across government on the same consistent basis, and certainly the ones that we would consider bigger and more risky. There is a lot of activity going on.
Certainly following projects from a risk, scope, schedule, and budget perspective are all key elements on the dashboard. In IT, there's an old adage, that what gets inspected gets corrected. Really, the dashboards have already proven successful for that reason, because those dashboards will highlight to people outside the project team, within the department, at Treasury Board, and so on, the status of the project.
So there's no question about it; that is something important that we are spending a lot of time on. In fact, Val's team is spending a lot of time on that area.
Considering the number of questions we've had, there seems to be an issue around simplicity. We had asked that you provide us with a flow chart, and I was looking at what the Auditor General had asked for.
You stated that the accountability was really the departments' accountability. But the Auditor General believes it is the Treasury Board's accountability. As it says, “Before recommending that the Treasury Board approve an IT project....” Since you do approve it, it would be helpful for us, when you're presenting your flow chart, to show us where, at what portion, you approve or disapprove or challenge the department, to make us familiar with how that flow takes place, what template you use for a business case, and how well that business case is there.
I know it's the departments' job to do it, but how well do you challenge them that they have the capacity, the human resources, etc., to do it? As Ms. Coady and Madame Bourgeois were asking, where is that accountability? What are we doing? How are we following that bouncing ball?
So it would really help us to have that, and I hope we can get something from you.
You have 30 seconds to say a final word, if you have one, before I go to our next set of witnesses.
:
Thank you, Madam Chair.
Members of the committee, my name is Maurice Chénier. I am accompanied by Mr. John Rath-Wilson, Chief Operating Officer, Information Technology Services Branch, and Renée Jolicoeur, Assistant Deputy Minister, Accounting, Banking and Compensation Branch, who is leading our department's pension transformation project.
We are pleased to be here to discuss the department's management of large IT projects and the service delivery approach for the GENS initiative.
Members of the committee may be familiar with some of PWGSC's large IT projects, such as SIGMA and the pension transformation project. In every large IT project, we are guided by the four criteria for success outlined in the 2006 audit by the Auditor General, Ms. Fraser: good governance, sufficient organizational capacity, effective project management and strong analysis leading to sound business cases.
For example, last year PWGSC successfully implemented SIGMA, a new financial and materiel management system. The SIGMA initiative adopted the Auditor General's four criteria and delivered the project on time and within budget.
Our pension transformation project will replace 40-year-old technology with state-of-the-art, commercially-available software products, streamline business processes, and centralize pension services within PWGSC. This initiative is also currently on budget and on schedule to meet its 2012 completion date.
[English]
I will now turn to Government Enterprise Network Services, a key initiative under the government's plan to modernize its data and voice networks. Our role at Public Works and Government Services Canada is to enable departments to use the GENS-related service and to assure quality performance and service delivery compliance.
GENS is a procurement vehicle that will permit departments, on a totally optional basis, and based on a validated business case in their own departments, to contract and consume readily available services from the industry.
The Auditor General, at the March 24, 2009, meeting of the Standing Committee on Public Accounts, stated that GENS is not a major information technology project. Rather, it is a contract for services. However, in developing GENS, we have been guided by industry best practices and are mindful of the Auditor General's recommendations. A dedicated, multi-departmental team has been set up to develop and deliver on GENS. We have implemented effective project management practices. We have put in place a sound governance structure, which is led by a multi-departmental steering committee.
Currently, each department is responsible for its own cabling, wiring, network, and communications services. Naturally, this has led to multiple service contracts, a duplication of resources and services, and excessive costs in the long run.
The long-term goal of GENS is to rationalize 124 separate government networks into fewer shared networks. The gradual standardization and use of shared telecommunications capability and capacity will yield benefits. IT security will be enhanced for the Government of Canada. Collaboration among departments will be easier. The government will be faster and more agile in deploying new applications. And there will be overall savings to the Government of Canada.
GENS' first partner is Human Resources and Skills Development Canada, which has more than 450 sites across Canada and requires urgent modernization of its telecommunications services. No other department will be migrated to GENS until it has developed its own business case and a cost-benefit analysis.
To engage private sector companies in the process and to hear their views, we have consulted broadly and will continue to do so. Three separate requests for information were conducted between 2006 and 2008. We held formal industry consultations between December 2008 and February 2009. In May of this year we released our operational justification business rationale and summary report on the findings to date. The draft solicitation of interest and qualification document, which sought more industry comment, was released in July and August.
[Translation]
While industry reaction has been generally positive, some concerns have been raised. In response, the department has incorporated changes to its procurement approach. Notably, general professional services have been removed from the statement of work, as requested by some small and medium enterprises.
While we are still analyzing the most recent input, we anticipate further changes to the procurement approach before going forward.
As we move forward in modernizing the government's IT environment, PWGSC will continue to engage industry in an open dialogue. We will also ensure balance between meeting the government's operational needs and the interests of suppliers, while providing best value to Canadians.
We would be happy to answer your questions.
:
That's a very, very good question, and I will do my best to clarify the method that has been put in place to actually go forward with the GENS initiative.
Madame Corinne Charette, the CIO of Canada, made the same distinction as Madam Sheila Fraser made about large IT projects. There are two types of IT projects in the Government of Canada. The first type is to acquire a set of pieces of technology and to build a new solution for the Government of Canada, which is what we are doing with the pension modernization project, where we are building a business solution that requires Treasury Board approval and funding, etc.
The second type of IT project, which is very important, establishes a set of procurement vehicles for departments to use these services on an as-needed basis, if these procurement vehicles make economic sense when they reach the end of the life cycle of their IT infrastructure.
Going back to GENS, to be very clear, GENS' first client is HRSDC. We have consulted with the industry on how many contracts we will do—and we're not done. We have changed the approach so that HRSDC, upon the result of the next step in the procurement of GENS-related services, will update their business case and make the final determination if the pricing obtained from the competition of the GENS service is indeed yielding the return on investment and the cost/economic benefits associated with the GENS service.
We are not seeking Treasury Board approval for $1 billion in the sense of putting accountability on the Government of Canada for $1 billion. The contract that will go out for GENS will be a no-revenue guaranteed contract, meaning that it will cost zero dollars if the departments who are building their business cases one by one don't think it makes sense when their contracts expire. So if it doesn't make sense, they will use other vehicles and GENS will be totally optional.
So in working with Madame Corinne Charette, the real importance of this is when we engage government liabilities up-front, locking in a huge investment, and there are governance and take-up issues later. This is why GENS has been broken into.... The approach is to look at what the industry has to offer, to look at the market pricing in each department, starting with HRSDC, and no other department, on a scale of probably not more than $5 million to $10 million—if they go with the first chunk of services. HRSDC will proceed as the first client of GENS, and after that, departments will send business cases to Public Works and Government Services Canada and we will make the calculation whether the pricing of GENS is indeed better than their own method of running their network when it's at the end of its life cycle.
:
Okay. The concern, first of all, has been around trying to make sure everyone understands—and we have been doing consultation to hopefully try to alleviate and put clarity in those technology dialogues, which is not always easy.
There is no such thing as a pre-committed $1 billion contract on GENS, first of all. It is optional. All of the departments have their own money to run their networks. They don't need new money to replace their networks. It's an ongoing operation. They need a vehicle to do so.
The small and medium enterprises have been rightfully concerned that maybe one contract would commit everything in one chunk of work to one industry player and that there's no other option or everything is locked.
There is still residual concern that GENS, the way it is packaged today, had some pieces of professional services still embedded in it that could be procured separately. We have issued a draft statement of interest for qualification this past July-August.
We have received a fair amount of very good feedback from large, medium, and small firms, and we are doing the analysis now to see what residual components of those concerns are still there, to see if more changes will be brought in.
:
Thank you for your question.
Yes, undoubtedly. The importance of learning in these large projects is to have a good repertory so it can be referred to at any time.
[English]
Madam Fraser has really focused on four elements. First, have good governance.
If we look at what we're doing now with Madame Charette and her multi-project management framework, we now involve multiple departments with good governance. We're not alone at the table making decisions.
Second, make sure that you have the organizational capacity. Don't take on something that you will figure out later is harder than you thought it would be to manage and for which you don't have the right skills or people. In my own organization, I have created a body of knowledge, which is major projects, and we now have certified project managers.
Third, Madam Fraser said to make sure that you do good business analysis and set good business requirements and that you apply them going forward. We are applying that, Madame Bourgeois, as part of our best practice in the ongoing improvement mandate for managing IT projects. I am a certified project expert myself.
[English]
The Government of Canada is powered more and more by IT. For four years in a row we have been number one in online service delivery. Our government service is something to be really proud of. We have more and more information technology delivering government services.
The actual advantage and benefit and the reason behind a government enterprise network service is that we're in 2009 and we do not need 124 networks any more. We can deliver our government programs with fewer networks and enable better security, because 124 networks could easily be 124 interesting back doors. We need to improve the modernization of those aging telecommunication services in every department.
[Translation]
The goal is to create shared capacity so that 100 departments are not doing all the work, year by year, without taking advantage of central or decentralized expertise to modernize our computer systems, particularly when it comes to networking, to ensure that all our departments are well connected, so that electronic services can be delivered to Canadians and businesses.
[English]
My role as chief executive officer at Public Works and Government Services Canada is also the role of service manager. My role with an initiative such as Government Enterprise Network Services is that when departments have confirmed that it makes sense, the price is good, the quality is worth it, and they come to u...I ensure that I keep the industry compliant in terms of quality, delivery performance, and actual agility in deploying the service. I am the one who monitors contractual performance on a monthly basis. I am the one, unfortunately sometimes, who has to negotiate penalties and actually has to hold accountable our suppliers in ensuring that they deliver the service that meets the service-level requirements of every department.
So my role is that of service manager, and I report on a monthly basis, with very rigid discipline on performance. All the contracts we have in GENS will definitely fall into that category, and with our multi-vendor approach we will mitigate putting all our eggs in one basket.
:
The response has been generally positive. We have had a lot of response from the industry. Themes and trends have been conveyed to us very clearly.
[English]
So we had extremely clear themes and trends that came from the consultation.
First of all, the actual consultation highlighted that the telecommunication industry is not a highly fragmented industry. You don't have 200 players that have made huge capital investments in laying down fibre optics from coast to coast; there are really only about four or five in Canada.
The industry told us that the ability to converge those services is indeed ready. I'll use a good example. At home, each one of us, including me, does not need a cable for the Internet any more. I don't need a cable for my telephone and I don't need a cable for my alarm system. Now all the companies offer one service called Internet protocol convergence. The consultation also told us to be careful not to bundle professional services into this, so we have made initial changes to that.
There are still some concerns that we're analyzing. There are some residual pieces in the package of GENS that could be looked at separately; it may not be core to GENS, and this is the analysis we're doing.
Generally speaking, the feedback we have received has been supportive. We have confirmed that the way we were asking to consume the service is the way they can offer that, and that we were not asking for something special that could lead to the industry delivering something just for us that is usually more expensive.
:
Thank you, Madam Chair.
Thank you, witnesses, for being here today. I want to thank you for your opening statements. It really helped me understand what you were going to be speaking to and focus a bit on my questioning.
You talked a bit initially about how you're replacing old software. These are positive things. Bringing in state-of-the-art equipment is positive. The Auditor General also brought forward, as you've outlined here--and you're guiding yourselves by these criteria--good governance, sufficient organizational capacity, effective project management, and strong analysis leading to sound business cases. Again, all of these are positive.
The Auditor General also brought forward the fact that large IT projects aren't always as successful as smaller projects. Has PW considered the concerns of the Auditor General when looking at large IT projects in a design like GENS?
:
Definitely, and with permission, I will use two examples.
The first example is GENS. I want to be very clear: GENS will not commit $1 billion of government funds up front, where we go to Treasury Board to receive authorization to spend it right away. GENS is going to start small, with HRSDC. It's going to set the marker for more departments to come on board if the GENS results give us those price and performance markers, which we don't really have until we test the market.
I will refer to the second aspect in terms of my example about sizeable chunks and how we mitigate that. I have a lot of admiration for my colleague, Madame Renée Jolicoeur. We have worked together for many years, and we have learned the hard way sometimes. The pension modernization project, as an example, has been broken into multiple releases, and I believe we are in our fourth or fifth release right now. It's in production and it's on time. It is a large, complex project. It has been managed in chewable releases of software pieces, which so far is hitting the mark in terms of making sure we have checkpoints before we go to bigger commitments.
:
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.
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.
:
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.
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.