Despite Phoenix debacle, Canadian government signs new deal with IBM Despite Phoenix debacle, Canadian government signs new deal with IBM

Despite Phoenix debacle, Canadian government signs new deal with IBM
24 May 2018

Canada's Liberal government has signed a controversial CAN$500 million (US$390 million) mainframe contract with IBM Canada despite ongoing problems with the vendor’s Phoenix payroll system.

The new deal, which was awarded without any competitive bidding process having taken place, has been slammed by home-grown technology firms. Signed in November and lasting until 2021, it covers the provision of 16 new mainframes to at least six federal departments as well as maintenance and support for existing mainframe hardware and software.

According to CBC, the CAN$500 million (US$388 million) arrangement consolidates four existing contracts that were set to expire in 2017 and 2018, but also specifies CAN$289 million (US$226 million) in optional additional expenditure, putting the potential total cost of the deal at almost CAN$790 million (US$617 million).

A November 2017 memo to Ron Parker, president of Shared Services Canada (SSC), said about the matter: "Owing to intellectual property issues relating to proprietary hardware and software, IBM is the only supplier capable of performing the work. The proposed contract is a legacy sustainment contract servicing existing infrastructure. SSC anticipates continued use of these products and services for the foreseeable future."

The new arrangement follows more than a year of controversy over the dysfunctional Phoenix payroll system, which was developed through a separate contract with IBM Canada. The applications have been criticised for paying some civil servants too much, some too little and others not at all, as well as mishandling vacation and retirement rolls.

The original Phoenix deal has been amended 44 times and expenditure on it increased by CAN$36.5 million ($28.5 million) this year to CAN$277 million ($216 million).

An IBM spokesperson declined to comment on the latest SSC deal and defended the firm's work on Phoenix. Carrie Bendzsa said: "As the Canadian government has repeatedly acknowledged, IBM is fulfilling its obligations on the Phoenix contract and the software is functioning as specified by the government."

 Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

Canada's Liberal government has signed a controversial CAN$500 million (US$390 million) mainframe contract with IBM Canada despite ongoing problems with the vendor’s Phoenix payroll system.

The new deal, which was awarded without any competitive bidding process having taken place, has been slammed by home-grown technology firms. Signed in November and lasting until 2021, it covers the provision of 16 new mainframes to at least six federal departments as well as maintenance and support for existing mainframe hardware and software.

According to CBC, the CAN$500 million (US$388 million) arrangement consolidates four existing contracts that were set to expire in 2017 and 2018, but also specifies CAN$289 million (US$226 million) in optional additional expenditure, putting the potential total cost of the deal at almost CAN$790 million (US$617 million).

A November 2017 memo to Ron Parker, president of Shared Services Canada (SSC), said about the matter: "Owing to intellectual property issues relating to proprietary hardware and software, IBM is the only supplier capable of performing the work. The proposed contract is a legacy sustainment contract servicing existing infrastructure. SSC anticipates continued use of these products and services for the foreseeable future."

The new arrangement follows more than a year of controversy over the dysfunctional Phoenix payroll system, which was developed through a separate contract with IBM Canada. The applications have been criticised for paying some civil servants too much, some too little and others not at all, as well as mishandling vacation and retirement rolls.

The original Phoenix deal has been amended 44 times and expenditure on it increased by CAN$36.5 million ($28.5 million) this year to CAN$277 million ($216 million).

An IBM spokesperson declined to comment on the latest SSC deal and defended the firm's work on Phoenix. Carrie Bendzsa said: "As the Canadian government has repeatedly acknowledged, IBM is fulfilling its obligations on the Phoenix contract and the software is functioning as specified by the government."

 Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

Leave a Reply

All blog comments are checked prior to publishing