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FOI Reveals a Problem-Plagued BC $8.9-Million Tech Project

Plan to overhaul BC Bid system is three years late and forced government into extra spending.

Andrew MacLeod 17 Feb 2022TheTyee.ca

Andrew MacLeod is The Tyee's Legislative Bureau Chief in Victoria and the author of All Together Healthy (Douglas & McIntyre, 2018). Find him on Twitter or reach him at .

More than four years after the British Columbia government announced it was replacing the outdated BC Bid website, and three years after it was supposed to be ready, the $8.9-million project remains unfinished.

Citizens’ Services Minister Lisa Beare has given public assurances the project is on track and on budget, saying last April that despite delays the new BC Bid site would be live by the end of 2021.

But documents obtained by The Tyee show the challenges facing the project, being managed by large Canadian tech firm CGI Information Systems and Management Consultants Inc., are significant and go back years.

They include a consultant’s report critical of CGI that found “The fundamental objectives of the existing contract have not been met.”

The replacement of the three-decade old BC Bid website was supposed to be completed in 2019 as a first step towards overhauling the provincial government’s approach to procurement.

Public bodies including the province, Crown corporations, health authorities and municipalities make some 9,000 purchases through the system each year for goods and services worth about $7 billion.

The records released to The Tyee tell the story of budget pressures, scaled-back expectations and a government facing a tough decision as the three-year contract for an “off the shelf” software product came to an end without the project being completed.

The government has since entered an interim agreement with CGI that goes until the end of March and is in the process of negotiating a further two-year extension with the company, a Citizens’ Services Ministry spokesperson said.

The FOI records include a June 3, 2021, report by the consulting firm Deetken Insight that looked at what went wrong and laid out a range of options for the government as the contract’s Dec. 31, 2021, end date approached.

While they were critical of CGI’s performance and found the contract’s objectives had not been met, they acknowledged extending it was likely unavoidable.

“The BC Bid project has experienced significant delays,” they found. “Some form of contract extension is needed to assure stabilization, resolution of defects and operational continuity.”

Based on research and interviews with people involved in the project, the consultants found “the performance under the existing agreement has been poor and suggests significant changes to service delivery model, roles/expectations, resourcing (and agreement) would be needed to achieve expectations.”

In particular the contract had failed to deliver on the province’s goals for “risk transfer” and “solution delivery,” they said, meaning there had been no solution delivered and managing the project remained the government’s problem.

The contract goes back to a 2018 request for proposals process that resulted in the province signing an agreement with CGI that would see the company paid $8.9 million to manage the project. Five companies had bid on the contract and CGI’s proposal scored second highest, documents show.

Headquartered in Montreal, CGI is a publicly traded company worth nearly $24 billion and had some $12 billion in revenue last year.

For the BC Bid replacement, it is working with Ivalua Inc., using its “procure-to-pay” application and customizing it for the province’s needs. Ivalua has offices around the world and is headquartered in Redwood City, California.

CGI referred questions about the troubled project to the province.

The consultants from Deetken found the contract was generally appropriate, but questioned whether CGI had the strength needed to manage the project and detailed how the company’s shortcomings had added costs for the province as government officials were forced to take on a greater role than they should have.

The province was paying for CGI to act as a system integrator, or SI, with overall responsibility for the project, but the company had fallen short, the review found. “CGI’s perception and behaviour is more akin to a subcontractor relationship as opposed to an SI,” the Deetken review said.

“Gaps in performance — quality, leadership, innovation, Ivalua expertise and relationship — suggest CGI’s processes, tools and/or resources are immature relative to that necessary,” it said. “Significant scope will remain incomplete at time of contract expiry.”

The original budget had grown by a relatively small amount, but it was also clear that the government would get less than expected for the $9 million it spent.

The government was also paying more than it should have to manage the project, with about five extra full-time staff assigned to the project for a year to make up for CGI’s shortcomings, Deetken said.

Nor had setting up milestone payments succeeded in protecting the government. Where payments had been tied to CGI meeting particular goals, a series of change requests relaxed those requirements and “shifted the incentive structure towards a time and materials type contract and diluted the tension that was initially in place.”

One dated Jan. 27, 2020, extended the core group at CGI working on the project for five months at a cost of $265,000, which appears to be balanced by another that delays the paying of operational support fees.

Two more orders extended the team for another 13 months after that. While both say that “for clarity, there will be no increase to the total fixed fees payable by the Province under the Agreement,” in total they repurposed more than $1 million that was supposed to be spent at a later stage in the project.

It’s unclear whether more funding will be required to make up for the higher than expected spending on the project to date.

Asked whether the scope of the project had changed, a Citizens’ Services Ministry spokesperson didn’t answer directly. Instead they gave a list of what the system will be able to do when launched. “We will be launching the new BC Bid in phases, with the first phase including high-priority functions,” it said.

Last May, BC Liberal Citizens’ Services critic Bruce Banman, the MLA for Abbotsford South, asked a similar question during budget debate, wanting to know whether there had been any changes to the contract after it had been signed and what those changes cost.

Beare responded at the time that the contract was for $8.9 million over three years, but failed to say whether there had been any changes. “The budget does remain [within] one per cent of that original $8.9 [million], adding $73,000 for unforeseen technical requirements,” she said.

However the FOI response released to The Tyee includes a series of 34 change requests, with the first dated March 1, 2019. All together they involved more than $2.5 million that was either added or repurposed.

Deetken’s report referred to the relationship between the province and CGI as “inefficient and strained” and said it was difficult for the government to know what was happening with the project.

It was up to the province to protect its own interests by enforcing CGI’s obligation to provide robust reports on what it was doing, Deetken said.

An appendix included with the review shows that the contract with CGI set the rates for various staff at levels that generally exceeded industry averages and that for some roles was more than double the going rate.

Despite the poor performance and many concerns, the government shouldn’t necessarily immediately fire CGI, the reviewers said. Continuing with CGI in some capacity would “provide future flexibility” compared to bringing the job in-house, a decision that could lead to additional costs later for the province.

The consultants laid out four near-term options for the project, all of which included extending CGI’s contract, and offered three options for the medium term, recommending that the province take on a greater role in BC Bid as the project is completed.

The details of all of the options were censored from the records under the section of the FOI act that allows public bodies to withhold information that could harm their financial or economic interests.

A spokesperson for the Citizens’ Services Ministry confirmed that CGI’s contract ended in December and that the province has extended it for two months and is negotiating with the company to keep working on the project for another two years, a possibility allowed for in the original contract. “The cost details of the two-year extension term will not be available until negotiations are complete,” they said.

The contract, released with the FOI response, allowed for $4.6 million for two years of “potential extension” after the initial three years.

In total the ministry released 504 pages of records, large sections of which were redacted, more than a year after The Tyee requested them. Some of the delay was based on extensions requested by the government, and some related to a dispute over the ministry’s refusal to waive processing fees.

The records also include a presentation subtitled “Project Reset and Critical Messaging Considerations” dated March 23, 2020. It’s unclear who produced the briefing, but it says its purpose was to “gain approval for a project reset, new timelines and go forward budget” and it includes recommendations for both the minister and her deputy.

“Project success will require acceptance of a new timeline and deferral of scope to post go-live,” it said, meaning that the new BC Bid wouldn’t be ready by deadline and some features would have to be added later.

“The upgraded portal will add needed accessibility features, however will remain simple in look and feel and will not meet expectations that have been set publicly,” it said.

It also said there was a need to “strengthen governance structure, processes, reporting and decision-making.”

Plus the project was going to need an extra $1.5 million, it said, half of which would be spent with CGI and Ivalua and half of which would be used to add capacity within the government to better manage the project.

Asked about the delay, the ministry statement said “Replacing BC Bid is a major change that will impact all of core government, the broader public sector and the supplier communities. We are taking the time we need to get it right.”

There have been various causes of the delay, including the complexity of adapting the system to fit all the different ways ministries procure goods and services. A test of an early version in September 2019 showed that much more would need to be done before it went live.

Beare explained it last May in the legislature. “Government procurement is not centralized. It means procurement processes aren’t the same across government in those 22 ministries. Moving to a standard approach to procurement impacted each ministry in a different way, so the project team has had to consider all those different ways that procurement is managed.”

And while the delays predate the COVID-19 pandemic, the pandemic has added delays as well, the spokesperson said.

“We’re taking the time needed to test the application thoroughly and train our users before announcing our go live date,” the spokesperson said. “The work is progressing well, and a more precise launch date can be provided once the project team has finished that piece of work.”

Having been first promised for 2019, then 2020, then the end of 2021, now there’s no saying when it will be done.  [Tyee]

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