Procuring Complex Information Technology Solutions

Opening Statement to the Standing Committee on Public Accounts

Procuring Complex Information Technology Solutions

(Report 1—2021 Reports of the Auditor General of Canada)

27 May 2021

Karen Hogan, Chartered Professional AccountantCPA, Chartered AccountantCA
Auditor General of Canada

Madam Chair, thank you for this opportunity to present the results of our audit report on procuring complex Information TechnologyIT solutions. Joining me is Carol McCalla and Joanna Murphy, the principal and the director responsible for the audit.

Procurement is often a key component of major IT initiatives. It is inherently complex because of the frequent changes in technology and business needs, the ambitious timelines, and the need for technical expertise. The government must engage with end users and suppliers to determine their needs while also being fair and transparent. The government currently has about 21 large IT procurements underway, valued at over $6.6 billion.

Our audit examined the procurement practices for 3 complex IT initiatives involving the Treasury Board of Canada Secretariat, Public Services and Procurement Canada, Employment and Social Development Canada, and Shared Services Canada. We looked at whether they were on track to support the achievement of business outcomes and whether they upheld fairness, openness, and transparency in these procurement processes.

Overall, we found that the organizations made progress toward adopting agile procurement practices for large IT systems. For example, they applied new approaches, such as testing prototypes before committing to long-term contracts. They also engaged with end users and private sector suppliers early and often to define business needs. By engaging more closely with those who will ultimately use the system, the procurement teams can better understand whether a proposed system will be effective before awarding any contracts.

However, to pave the way for further improvements, the organizations will need to build on this progress. They will need to better train procurement officers, especially on how to apply new agile procurement practices. We found that the guidance and training on these approaches was limited or non-existent. We noted that other jurisdictions—such as the United StatesUS and the United KingdomUK—provided their employees with more comprehensive guidance when rolling out their new agile approaches in procurements.

In 2018, we examined the implementation of the Phoenix pay system. Following its hearing on the matter, this committee recommended that all IT transformation projects should have independent external oversight and that senior management should consider the interests of key stakeholders. In the current audit, we found that the governance mechanisms for the 3 complex IT procurements could be strengthened. At the end of our audit, we saw that the Treasury Board of Canada Secretariat set up a new governance committee to support the departmental deputy heads who are responsible for modernizing core services. This continued engagement and oversight of senior representatives will be essential for these initiatives.

As the government increases its collaboration with suppliers when applying agile practices, it will need more robust tools to promote fairness and transparency. We found that Public Services and Procurement Canada and Shared Services Canada made limited use of data analytics to identify potential procurement integrity issues.

Finally, we found that it was not always clear how potential fairness issues were resolved. There was also a missed opportunity to better use the Fairness Monitoring Program to uphold openness and transparency within procurements.

We made 5 recommendations. The organizations have agreed with all of them.

Madam Chair, this concludes my opening remarks. We would be pleased to answer any questions the committee may have. Thank you.