Standing Committee on Public Accounts: December 14, 2023

Date: Thursday December 14, 2023, 11:00 am to 1:00 pm

Location: In-person

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General items

Opening remarks

Arianne Reza, Deputy Minister

Public Services and Procurement Canada (PSPC)

Standing Committee on Public Accounts (PACP)

Benefits Delivery Modernization programme

2023 Report 8 of the Auditor General of Canada

December 14, 2023

Opening

Thank you, Mr. Chair, for the opportunity to discuss the role of Public Services and Procurement Canada (PSPC) in relation to the Benefits Delivery Modernization programme.

Before I begin, I would like to acknowledge that we are gathered on the traditional, unceded territory of the Algonquin Anishinaabe People.

Mr. Chair, all Canadians should expect to receive accurate and timely benefits, regardless of how those benefits are managed from an IT infrastructure perspective.

They trust that the government departments responsible for Old Age Security (OAS), Employment Insurance (EI) and the Canada Pension Plan (CPP) can preserve the continuity of payments, even during large-scale information technology (IT) transformation projects.

The Benefits Delivery Modernization programme is the largest IT transformation initiative ever undertaken by the Government of Canada.

It will replace outdated and complicated legacy systems with a streamlined and secure software platform to access benefits for Old Age Security, Employment Insurance and the Canada Pension Plan.

Canada requires the skill and expertise to execute transformations of this magnitude and complexity. Consequently, PSPC, on behalf of Employment and Social Development Canada (ESDC), has contracted external vendors with a proven record of success in large IT transformation projects.

In her Fall Reports, the Auditor General concluded a study as to whether the Program was progressing in a way that supports the continuous delivery of critical benefits for Canadians.

This included an examination of the various processes, including procurement, that are engaged during the transition of IT systems and business processes.

The study did not result in any recommendations directed at PSPC, but our role in the Program is important and we will continue to support ESDC as it responds to the recommendations stemming from the report.

Public Services and Procurement Canada role

Mr. Chair, as a common service provider, PSPC provides support to ESDC for major procurements related to the Benefit Delivery Modernization Program, including all professional services contracts.

These contracts ensure that Canada has access to the strategic advice and specialized expertise of System Integrators that are critical to the success of the Program.

In early 2021, following a competitive procurement process, PSPC awarded 4 contracts to qualified Systems Integrators to provide integration services to onboard the 3 large benefits onto the new technology platform, which involves hundreds of different technologies. The Systems Integrators also provide strategic advice and some technologies as needed. Specifically, as a result of a competitive process, contracts were awarded to Accenture, CGI Information Systems, Deloitte, and Fujitsu Consulting.

These 4 qualified suppliers usually compete for work packages. In some instances, and where appropriate, the work is allocated among all 4 suppliers, who then work collaboratively to advance the Program.

The combined cumulative value of contracts awarded to the 4 System Integrators is currently $409.7 million. I will note that PSPC is currently supporting ESDC in designing the procurement to replace the Employment Insurance System, which will result in additional work via these contracts.

Mr. Chair, the department has also awarded a contract on behalf of ESDC, as a result of a competitive process, for the Core Technology Platform to IBM Canada, currently valued at $70.5 million. Each of the benefit programs will be onboarded and integrated onto this platform. PSPC also issued a large competitive contract for strategic transformation advice, as well a project management services, to PricewaterhouseCoopers, currently valued at $147 million.

Finally, work has begun with ESDC to prepare for the re-tendering of the strategic transformation advice contract, and it is estimated the contract will be valued at approximately $70 million.

Mr. Chair, PSPC is integrated into all levels of Benefit Delivery Modernization governance in order to provide guidance on the procurement elements of this complex transformation Program.

Given the size and scope of the Program, we have a team of procurement experts working full-time on this file to support ESDC in ensuring that it meets the needs of Canadians across the country.

Closing

For this project, as with everything we do, PSPC is committed to ensuring procurements are conducted in a fair, open, and transparent manner.

At the same time, we are ensuring that procurements are undertaken in accordance with relevant policies, guidelines, regulations, trade agreements and procedures, while meeting the requirements outlined by client departments.

We will continue to provide contracting services and work with ESDC and other partners to deliver the Benefits Delivery Modernization programme, with a shared goal of ensuring that the Government delivers benefits for Canadians with an emphasis on efficiency, accuracy and accessibility.

Thank you, Mr. Chair. I would be pleased to answer the committee’s questions.

Human Resources and Pay

The Benefits Delivery Modernization programme

Issue

PSPC’s Deputy Minister has been requested to attend Standing Committee on Public Accounts in view of its study on the Auditor General report related to modernizing information technology systems (Report 7) and the Benefits Delivery Modernization programme (Report 8).

Key facts

Key messages

Background

In order to ensure that Canadians have timely benefits and a modern delivery system for OAS, EI, and CPP benefits, BDM will replace aging and complex legacy systems with a single, modern, easy to use, and secure platform. ESDC was initially granted BDM project authority of $1.8 billion in 2017. Project authority has since been increased to $2.2 billion and further authority will be sought in December 2023. Given the transformative nature of the program, individual benefits will be onboarded to the platform in stages to reduce risks. This includes the following tranches:

Through a competitive procurement process, PSPC awarded 4 Master Systems Integrator Contracts (MSIC) to 4 qualified Systems Integrators in Spring 2021. A third-party fairness monitor was engaged to ensure that the process was fair, open and transparent. 6 bids were received and evaluated by representatives from ESDC. Following the evaluation, 4 bids were found compliant.

The MSIC work packages are either competed amongst these 4 qualified suppliers, or if appropriate, the work is allocated amongst all 4 suppliers who work collaboratively in advancing a project. The current cumulative value of these 4 contracts is $409.7 million

The department also awarded a competitive contract for the Core Technology Platform to IBM Canada valued at $70.5 million. A third party fairness monitor was engaged for this procurement.

A large competitive contract for strategic transformation advice was awarded to PriceWaterhouse Coopers in 2017 valued at $147 million. Work has begun with ESDC to prepare for the re-tendering of the strategic transformation advice contract, which is estimated at approximately $70 million .

In June 2022, the Government of Canada’s Chief Information Officer (GCCIO) conducted a Strategic Assessment of the BDM programme. This practice is common for large and complex transformations and positions the programme for success. Following the Strategic Assessment, the GCCIO announced 22 recommendations with a focus on improved leadership, alignment, transparency, vendor relations, and program integration. ESDC and its partner departments implemented all of the recommendations on schedule by June 30, 2023.

Partly as a result of the changes brought forward through the Strategic Assessment, BDM successfully launched the first release of OAS onto its new benefits delivery platform in June 2023, and the OAS project remains on track for the full migration by December 2024.

In November 2023, 2 independent reviews of ESDC’s Strategic Assessment response confirmed that BDM is better positioned to succeed, but there remains work to be done in the areas of scope and prioritization, governance, communication, talent and capacity, and financial planning. BDM is currently evaluating the findings of these reviews to identify the most appropriate response.

In summer 2023, the OAG audited the BDM program and reported its findings to Parliament in October. The audit recognized the program's progress and adaptability in handling challenges but raised concerns about potential risks from cost overruns and delays. The OAG recommended enhancing the accuracy in program estimates and reporting, a suggestion agreed upon and committed to by the involved departments. The BDM programme will review practices from other large-scale initiatives to leverage lessons learned and strengthen costing capacity. ESDC will continue to work closely with TBS to develop improved costing approaches and methodologies, and implement best practices.

A competitive task authorization (TA) was issued to implement OAS on BDM in May 2022.The current TA value is $265 million. OAS was the first benefit to be added to the new BDM Platform. The first release of 3 technical releases (Release 1) was successfully completed on June 10th. This release provides a new system and experience for all users working on OAS International Agreements and Foreign Benefits.

With phased implementation of OAS now underway, PSPC is working with ESDC to design the procurement to replace the EI system. Lessons learned from the OAS procurement and vendor consultations will inform the procurement strategy for EI replacement.

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