Opening Statement for Pat Breton, Director General of Procurement and Vendor Relations, Shared Services Canada, at the Standing Committee on Government Operations and Estimates on Thursday, February 23, 2017

Thank you, Mr. Chair.

Shared Services Canada was created in 2011 to build a modern, secure and reliable information technology infrastructure for the digital delivery of programs and services to Canadians.

After its creation, the department began reviewing the security requirements that would be necessary to meet its mandate and the needs of its customers.

At the time, Canada`s security and intelligence community had recognized the strategic importance of SSC`s procurements to establish a secure, centralized IT infrastructure for the Government of Canada. 

This includes procurements related to email, data centre infrastructure, and network and telecommunications, systems and services.

Ultimately, the department concluded that these types of procurements are indispensable to national security, and that steps were necessary to protect Canada`s national security interests, including invoking the NSE.

A main justification was that email, networks and data centres play a central role in every aspect of the government’s operations, and that these systems have repeatedly been the target of hostile cyber threats.

I would underline that the decision was taken together with a number of other federal partners, including the Public Services and Procurement Canada, the Canadian Security Intelligence Service, the Communications Security Establishment, the Treasury Board Secretariat, the Department of National Defence and the Privy Council Office.

These organizations all endorsed Shared Services Canada`s request to seek a NSE in support of its mandate.

This endorsement is not normally part of the already rigorous process described by our colleagues today from PSPC. But it was added to ensure that our rationale was supported by the key departments responsible for protecting Canada’s national security.

Canada’s decision to invoke the NSE for all procurements of goods and services related to email, network, and data centre infrastructure was announced on the Government Electronic Tendering Service in May 2012.

Shared Services Canada also invoked the NSE for procurements related to workplace technology devices, software and related services, which were added later to the department’s mandate.

In our notice to suppliers, it was explained that workplace technology devices and software are the gateway to most of the government’s infrastructure and are the means by which employees send and receive email, transmit information across networks, and access information stored in data centres. This therefore makes them attractive targets for those intent on exploiting them.

The invocation related to these types of procurements was announced on the Government Electronic Tendering Service in 2014.

Let me now turn to some of the steps Shared Services Canada is able to take to protect Canada’s national security by invoking the NSE.

This includes applying the supply chain integrity assessment process. This security screening process, which involves analysis by the Communications Security Establishment, is intended to ensure that no equipment, software or services procured by Shared Services Canada, or used in the delivery and support of services, could compromise the security of Canada’s systems, software or information.

Other steps include “in-Canada” requirements for housing data to protect Canada’s sovereignty over its data.

Shared Services Canada is also able to direct the architecture of its network or other systems to ensure the design achieves appropriate security standards and controls.

These are just some examples of how the NSE enables Shared Services Canada to procure the goods and services required to fulfill its mandate in a way that protects national security in the face of increasing cyber threats.

I would also like to reinforce the point my PSPC colleagues made that an invocation of the NSE does not mean that procurements will be non-competitive.

Nor does it mean that procurements will necessarily be sole-sourced or fast-tracked. Typically, a competitive process is held among a group of suppliers to achieve the best value for money.  

To illustrate, for fiscal year 2015-16, Shared Services Canada conducted 725 procurements that were subject to the NSE for a total value of $1 billion. Of that total, $920 million was sourced competitively.

This volume represents 29 percent of all SSC’s procurement transactions for 2015-16. It also represents about 77 percent of the total dollar amount we procured in that fiscal year.

In addition, the invocation of the NSE is not intended to insulate Shared Services Canada from legal challenges. Challenges to the federal courts and to the provincial superior courts remain available with respect to all of the department’s procurements.

Let me close by emphasizing that Shared Services Canada is committed to conducting fair, equitable and competitive procurement processes.

We recognize that market-based competition is the best vehicle to deliver the highest value solutions and best value for Canadian taxpayers. This includes for procurements conducted under a NSE.

Mr. Chair, I would now be pleased to take the committee’s questions.