IT procurement rules likely to cause more ArriveCan-like debacles: study

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OTTAWA — The federal government’s IT procurement rules are so bad that they violate nearly every globally accepted best practice and will likely lead to more scandals like ArriveCan, according to a new research paper.

The study found overly long and costly contracts, a lack of variety in suppliers, the failure to prioritize open-source software options, the granting to companies intellectual property (IP) over products they develop for the government and a “dearth of in-house competency.”

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“The federal government breaks almost all globally accepted best practice for modern public sector IT procurement, a reality which we argue helps explain why we have scandals like the ArriveCAN debacle that’s still unfolding,” Carleton associate professor and digital government expert Amanda Clarke wrote in the new paper.

“More importantly, we argue that unless we reform federal IT procurement so that it gets up to speed with widely accepted best practice in the field, any attempts to drive forward meaningful digital reform in the Government of Canada are bound to fail.”

In the new research paper, co-written with former federal public servant and government IT policy whiz Sean Boots, the authors found that nearly a quarter of the government’s nearly $20 billion spent since 2017-2018 on IT contracts has gone to three firms: IBM Canada, Bell Canada and Microsoft Canada.

They also found that government keeps making the same mistakes with IT contracting that has led it to debacle after debacle, like the Phoenix pay system, the Canada.ca project and likely the ongoing Benefits Delivery Modernization program.

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“I haven’t heard anything concrete about whether or not we’re going to see mandated open source, whether or not we’re going to change rules that right now favour vendor ownership of IP… we haven’t heard anything about an interest in bringing in concrete IT spend controls,” Clarke said in an interview.

“You’re probably going to see more ArriveCan-type debacles, certainly you’re going to see more of these bound-to-fail projects,” Clarke added.

Ukraine has better (digital) services than Canada does, and they’re fighting a war

She noted that Canada lags significantly behind other countries when it comes to online service delivery. For example, despite a promise last year that it would be possible now, Canadians still can’t apply for a passport online.

“Ukraine is a great example of a country that’s put tons of money into building smart digital infrastructure by working with local firms and using the state’s levers to infuse demand and competition into their local IT services market,” she said.

“Ukraine has better (digital) services than Canada does, and they’re fighting a war. That’s kind of crazy.”

Government spending on IT services have also exploded between 2017-2018 and 2021-2022, the authors noted. Spending on software licensing jumped 50 per cent to $1.08 billion, whereas expenditures for IT consulting services leapt from $1.17 billion to $1.82 billion.

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The study, which is undergoing peer review, estimates that some federal departments are so reliant on IT consultants that they employ more of them than in-house IT staff.

For example, the study estimated for 2021-2022 that the ratio of IT contractors to in-house IT staff was up to 151 per cent at Public Services and Procurement Canada, up to 131 per cent at the Canada Border Services Agency and as much as 109 per cent at Immigration, Refugees and Citizenship Canada.

Those numbers suggest a “striking imbalance” and an over-reliance on external IT services by multiple government departments, the authors wrote.

“Such a ratio would be unimaginable in other core public sector job categories, such as policy analysis, program evaluation, or communications, and is particularly striking given the central role that the IT function plays in delivering key public services in the digital age,” reads the report.

Clarke also noted public service IT salaries are “laughably off” compared to the private sector.

In the paper, the authors propose multiple solutions to begin fixing federal government IT services and procurement, though a fix would still be years away.

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In the interview, Clarke emphasized two pressing changes that need to be made as quickly as possible.

The first is that the government should impose a maximum IT contract threshold of $2 million per year and a maximum length of three years, with no possible extensions.

“One of the most immediate things that we need in Canada right now to whip us into shape is hard spend controls,” she said. “Rules for Treasury Board that say you cannot get the money for that project if it goes beyond our thresholds that we put in place.”

The second is that the public service hire “proven technology leaders” who have successfully designed, developed and shipped a product within a set time and budget and promote them immediately to senior leadership.

“If you don’t give them power, they’re just going to get ushered away with the other government house elves, and they’re going to leave because they’ll be completely unfulfilled, and they could make much more money elsewhere,” she said.

Clarke also warned that overly simplistic solutions like cutting all IT consulting spending suddenly would land the government in similar hot water.

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cnardi@postmedia.com
National Post

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