Phoenix IBM and systems upgrades: Committee of the Whole—July 8, 2020
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Context
This note focuses on vendor support on the Phoenix file (IBM / Innovation challenge) as well as the Phoenix pay system software upgrade (PeopleSoft 9.2).
Note
All questions related to next generation human resources and pay solution should be directed to the minister of Digital Government.
Suggested response
- The Government of Canada is committed to supporting employees and resolving public service pay issues as quickly as possible
- We are reaching out to experts, federal public sector unions and the private sector for innovative solutions to help stabilize the pay system
- The government has also launched a procurement process to engage the private sector in innovative solutions to further help stabilize the pay system
If pressed on the invitation to qualify for pay system in-service support / application managed services contract:
- on May 8, 2020, Public Services and Procurement Canada (PSPC) issued an invitation to qualify for operational support for the pay system
- this procurement process is required to ensure Phoenix is supported after the current contract with IBM ends in March 2022 (if option is exercised)
- an independent fairness monitor has been engaged to observe and report on the procurement process to ensure its integrity, results of the invitation to qualify are expected later in July 2020
- we will continue to ensure employees are supported and that we are well prepared to transition to a new pay system when the time comes
If pressed on the upgrade to the Phoenix system:
- as part of its continued efforts to stabilize the pay system, the department is proceeding with a Phoenix pay system software upgrade from PeopleSoft 9.1 to 9.2
- the upgrade is needed to ensure ongoing vendor support and updates which are required to calculate pay accurately and on time
- we have an extensive implementation plan in place, based on the lessons learned from the Phoenix rollout, so that employees are not affected by this upgrade
- this upgrade, expected to go live in spring 2021, will not affect or require upgrades to the 30+ human resources (HR) systems that feed into Phoenix
Background
IBM contract and amendments
In June 2011, IBM was awarded the contract for the new pay system through an open and transparent bidding process. Since then, there have been 48 amendments to the original contract, for a total contract value of $447 million (taxes included). Amendments are a regular part of the contract management process and were anticipated at the time of contract award.
The most recent amendment was issued in March 2020, and was required to exercise options for software maintenance and to continue support services essential for pay stabilization and PeopleSoft version 9.2.
In service support: Re-procurement
The current application managed service contract with IBM Canada Ltd. will end on March 31, 2021. It has an option year until March 31, 2022, which provides the Government of Canada a transition period towards a future state.
Application managed services is an outcomes-based agreement where the contractor is responsible for delivering services based on our requirements, and ensuring the Government of Canada receives what it needs for a fixed price.
On May 8, 2020, PSPC issued an invitation to qualify (ITQ) on Buyandsell.gc.ca to qualify suppliers interested in providing the application managed services for 24/7 operational (functional and technical) support for pay, once the current contract with IBM Canada Limited ends. An independent fairness monitor has been engaged to observe and report on the procurement process to ensure its integrity.
We will need to rely on Phoenix until we are ready to transition to a new pay system, which could take a few years. The backlog of existing pay issues must also be addressed to allow for a smooth transition to any new pay system. This is the main reason why the Government of Canada is still investing in Phoenix—so that employees continue to be supported and to ensure that we are well prepared to transition to a new pay system when the time comes.
Notice of proposed procurement
PSPC launched a procurement process in August 2018 to engage the private sector in innovative solutions to help stabilize the pay system.
Industry has been consulted in several areas identified as key to reaching stabilization. These are:
- robotic process automation: Two contracts were awarded in March 2019 for phase I. A contract was awarded to KPMG on November 8, 2019 for phase II work. This involves implementing the solutions that KPMG proposed under phase I to automate manual pay processes. An extension was awarded to KPMG on June 30 to continue phase II work
- HR processes
- lowering the queue: Two contracts were awarded in May 2019
- improving user experience
- enhanced user access management
- training
- accelerator services: A contract was awarded in February 2020
- PSPC is currently re-evaluating the remaining challenge categories against current and future requirements
Phoenix system upgrade (PeopleSoft 9.2)
The upgrade to PeopleSoft 9.2 will ensure that PSPC continues to receive software patches, fixes, and tax rate updates that Phoenix requires to generate payroll accurately.
The PeopleSoft 9.2 upgrade consists of implementing a new version of the PeopleSoft application with limited impact and disruption to operations and users. The scope of the project is limited to the pay system (Phoenix) and does not include upgrading the departmental HR systems. Extensive testing is currently being performed with departments and agencies to ensure that employees’ pay is not impacted when the upgrade is launched.
- PSPC estimates that the overall upgrade is expected to take approximately 24 months (including the planning phase) with a target go live in spring 2021. Through budget 2018, the department has secured $22.1 million in funding for the upgrade to PeopleSoft 9.2
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