SSC is building an IT Infrastructure Roundtable (ITIR). These preliminary discussions documents support the creation of such.

1. Summary of Discussions:
SSC ICT Sector Engagement Process
Context
The following is a summary of the major points made during Shared Services Canada’s
(SSC) engagement exercise with various information and communications technology
private sector associations. Associations were asked eight questions divided into three
categories. In general, there was significant agreement among the associations on
each of the issues discussed. Possible differences are noted. Questions posed to
associations are in bold. Association responses follow the questions.
A) Establishing a Sustainable, Substantive Relationship
1) Both the Government of Canada (GOC) and the private sector must be satisfied
that they are in a “win-win” IT relationship. Do you believe this win/win
relationship has existed in the past? How do we ensure it exists in the future?
In general, both the government and the private sector have enjoyed a “win-win” IT
relationship. However, this relationship is not without its challenges:
• Many managers in the GOC continue to build their own IT processes as the
procurement process makes it onerous to buy something. This produces the
unintended but critical consequence of the government hiring good employees away
from the private sector.
• The procurement process makes it costly to do business with the GOC. The
process has become focused on process rather than on outcomes. Very detailed
and prescriptive contracting makes it difficult to provide added value or be innovative
in terms of people, process and/or technology. The evaluation process is typically
lowest cost as opposed to value-for-money.
• One way communication with industry contributes to the perception that
specifications are wired to achieve a specific outcome (supplier).
• Buying behaviour is sporadic, leading to periods of feast or famine.
• As a result, many small businesses won’t sell to the GOC given the complexity and
cost. SMEs must spend a lot of time understanding the rules of the game. This
represents a large investment for a small firm.
In terms of maintaining good relationships between the GOC and the private sector,
several points were made:
• Procurement must shift from its focus on process to one based on achieving
outcomes. This does not preclude adherence to mandatory policies and processes,
but the culture must be driven by a focus on successful outcomes.

2. 2
• Early, open and ongoing consultation between industry and government is key for a
“win-win” relationship. Government tends to engage industry after decisions have
been made, with a view to providing information about those decisions.
Relationships with industry can be more effective if meaningful consultation occurs
early enough in the process to affect the outcome. Reporting back on the outcome,
and/or decisions taken based on industry input, is essential.
• One specific idea put forward was to create an advisory body of current CEOs and
entrepreneurs to offer industry perspective on how to best maintain an effective
private sector-government relationship.
• Many existing government-wide procurement vehicles are effective and should be
maintained.
• The government can promote innovation within the sector. This will benefit not only
the government but individual firms as they compete globally.
• SMEs often want to maintain and/or build their own relationships with the GOC,
rather than being forced to deal “through the big guys.”
B) Building a Lower Cost, More Effective Technology Platform
2) How can SSC balance reducing costs and ending waste and duplication with
the objective of spurring innovation in the sector, as suggested in the Jenkins
report? Should government strive to be both a first-user and a model-user? If
so, what measures could SSC take to achieve these goals?
It will be important to identify when it is appropriate to promote innovation as part of
individual procurements. There will be procurements where measures to spur
innovation will produce benefits, and others where a standardized approach, consistent
with current industry practices, will be more cost effective.
The government should partner with industry advisors to identify areas where SSC can
be a first-user and a model-user to spur innovation while reducing overall costs. In
addition to technology solutions, SSC has the opportunity to be innovative in how it
delivers services (process efficiencies), how it steers the transformation, how it is
governed, how it leverages its resources, and how it procures.
Government being a first-user is critical to companies attempting to sell products in
other countries. Unfortunately, Canada does not have a good record in this regard.
The government should be finding companies that are doing innovative things and
support them. Outlook conferences would allow SSC management to exchange
knowledge of best practices and current needs. It could also hold industry technology
days where companies could share their new innovations.

3. 3
Support and promotion of innovative technologies also can be done in a number of
other ways:
• Set asides for early innovators;
• Rated points for primes who demonstrate that they have used (Canadian)
innovation;
• Accepting unsolicited bids from companies with new and innovative offerings;
• Using pilot projects to contain risk by allowing for calibration and ongoing
assessment, before scaling to the enterprise environment (see the Canadian
Innovation and Commercialization Fund administered by OSME in PWGSC);
• Taking advantage of the networks offered by community organizations (e.g.
Communitech, OCRI) in order to make meaningful connections with Canadian
technology companies; and
• Encouraging the use of small scale, innovative solutions in regions and then
applying some of these on a national basis.
3) Various models have been identified regarding SSC’s sourcing of products and
services. These include out-sourcing arrangements such as strategic
partnerships, co-sourcing alliances and transactional relationships. SSC could
also in-source, whereby SSC would design, buy components/services as
commodities, integrate and deploy. What is your opinion of these models?
Generally, industry favours models where government focuses on its core competency,
leaving industry to do what it does best. The use of various models should largely be
driven by business strategy (i.e. keep what is core to the business of government, then
look to partner with industry in areas that are not core but essential).
Industry has a bottom-line imperative that drives efficiency. As well, it can spread the
risks and costs for design, implementation and support of products and services over a
wide customer base. It is, therefore, ideally suited to develop expertise, innovate and
ensure the ever greening of solutions.
Data centres, networks and email services are stable, lower risk services. In an era of
public sector restraint, shrinking access to technology talent, and a renewed focus on
program delivery rather than program support, it makes little sense for the government
to allocate precious resources to these low value-add activities. Rather, the
government should focus on maintaining control of the procurement and business
transformation strategy.

4. 4
SMEs believe that significant outsourcing has several drawbacks, including:
• Limiting rather than fostering innovation;
• Reducing competition through long term contracts;
• Making exit strategies difficult / expensive;
• Accelerating the loss of experienced employees, which among other things may
hinder future project management; and
• Lowering morale of GOC employees.
But conversely, significant in-sourcing can result in government soaking up available
talent. At times, promising internal IT projects could be taken out of the government
and given to companies for further development.
Overall, SSC should partner with industry advisors to:
• Identify the different options open to SSC for “right-sourcing”;
• Consider forming teams of public servants and “best of breed” consulting resources
where appropriate;
• Ensure a clear separation of responsibilities between the client and sourcing
suppliers; and
• Identify effective governance mechanisms.
4) Limiting technology diversity across the government will be essential. What
best practices can guide this consolidation of platforms, technologies and
processes?
Developing a reference architecture is a best practice to limit diversity. But there will
always be exceptions. A second best practice is to develop a realistic business case for
each exception to examine the benefits versus costs of not following the reference
architecture.
The Government of Ontario is a good case study of limiting technology diversity through
the adoption of a product-based reference architecture for its clients. Ontario also is
now modernizing key applications, and has established an Application Modernization
Office to help get applications onto shared platforms and clusters. There also is a push
towards the adoption of “enterprise” applications that can be used across ministries.
Unsuccessful cases, such as the experience in the State of Texas, are also instructive.
In this instance, the lack of a standard reference architecture for use across all clients
led to the proliferation of different solutions and a decrease in standardization. A
thorough analysis of common requirements and standards is a key best practice.
SSC could benefit from engaging industry advisors who have relevant global experience
with other public and private organizations to assess and recommend proven
approaches.

5. 5
Other ideas put forward include:
• Creating detailed long term costing models before commencing specific
consolidation projects;
• Allowing for alternate and backup technologies or performance-tuned technologies
in some situations; and
• Avoid relying too heavily on any one provider.
5) What are the advantages / disadvantages of moving towards more open and
interoperable platforms?
The use of open and interoperable platforms will be essential in the evolution towards
greater consolidation and the achievement of cost savings.
The use of these platforms:
• Promotes competition by providing a level playing field for suppliers;
• Could help promote participation by SMEs;
• Allows for lifecycle management based on needs, not service contracts;
• Ensures the best technology can be selected at all times; and
• Creates an interoperability standard recognized by industry.
Platform continuity, performance and firewall security are critical. Products adopted
should meet thresholds established by SSC based on proven standards.
Some might suggest that the adoption of open and interoperable platforms might limit
innovation. However, the market has shown that this environment leads competitors to
develop more innovative solutions that work within the system.
C) Getting Procurement Right
6) The government procures IT products and services through two primary
means: open tendering for non-security sensitive requirements; and the use of
pre-qualified suppliers for national security requirements. What works well with
these approaches and what can be improved? How can we ensure the principles
of fairness, transparency, security and value for money are being achieved?
Procurement processes could be improved in order to achieve multiple benefits,
including lower costs, fulfillment of requirements, sustained competitiveness and access
to best of breed technologies. But this is not a question of throwing out the current
process and starting all over.

6. 6
A distinction may be required between strategic level procurement and tactical level
procurement. With regard to the latter, there is a perception that public service
managers can’t make good IT decisions. This is wrong. They can make good
decisions if given the authority and a workable process. Procurement at this level could
be relaxed to allow for individual managers to buy the lower cost products they need.
More generally, the principles of fairness, transparency, security and value for money
are achievable without writing overly prescriptive requirements or limiting collaboration
with industry. RFPs need to state the “what” and not the “how”, and allow industry to
focus on the “how.” Open tendering for non-security sensitive requirements needs an
increased focus on outcome-based procurement, consultation and consideration for
shared risk, investment and reward.
Procurements for national security requirements, by their very nature, need to be
closed. Opportunities for industry to provide overall capability presentations prior to
going to market for national security requirements would allow SSC to determine market
capabilities and identify who to invite to the procurement process. It is important to
clearly communicate how suppliers can become pre-qualified.
Other suggestions put forward include:
• Naming fairness monitors for larger RFPs;
• Offering face-to-face debriefings for unsuccessful vendors who qualified based on
technical requirements; and
• Interviewing the top three bidders to ensure that vendor proposals are viable.
7) The government is interested in supporting the development of innovative
Canadian SMEs. How can SSC assist in this regard?
There are a number of ways that this can be done. But first, it is important to note that
many SMEs want to have their own relationship with government. They do not want
their relationship to be routed through larger firms.
This can be accomplished by breaking down some procurement projects into chewable
chunks (i.e. not everything needs to be bundled together). SMEs would also benefit
from having somewhere to showcase innovative products (PWGSC noted that they
have such a program). While the Office of Small and Medium Enterprises (OSME) is
considered to be very helpful to those new to government procurement, it is viewed as
less relevant to established firms.
It was also noted that SMEs provide a high percentage of professional IT services.
These SMEs are worried about being relegated “to the bottom” of the procurement
process.

7. 7
Having said this, partnerships between larger firms and SMEs can be helpful. SSC
should encourage highly-skilled, experienced firms and innovative Canadian SMEs to
develop the business and relationship models that support innovation.
Outcomes-based procurement would provide greater latitude for large firms to partner
with innovative SMEs. In addition, large organizations acting as the prime supplier on a
complex procurement could be required to use SMEs by, for example, committing that a
certain percentage of the overall contract value be delivered through Canadian SMEs.
Another option would be to provide rated points for bidders that propose to use SMEs in
the performance of the contract.
Other suggestions include:
• Identifying “test bed” and “first-user” opportunities;
• Making use of small business set asides;
• Organizing local trade shows that could help SMEs/Canadian firms “show their stuff”
and identify possible partnerships with larger firms;
• Encouraging the use of SMEs by assigning rates and reductions if they are included
on RVDs and RFPs as either a fulfillment agent or prime contractor; and
• Taking advantage of the broad experience of SMEs in assisting a broad range of
clients by engaging them as consultants on systemic issues.
In general there was agreement that the government needs to be as aggressive in
supporting Canadian SMEs, as many other countries are supporting their SMEs.
8) The Jenkins report recommended that RFPs should, where appropriate, define
the needs to be met or the problems to be solved, rather than being overly
prescriptive of the solution. Do you agree? Do you have suggestions as to how
this could be implemented?
There was general agreement among associations with this suggestion, with two
caveats:
• At times the client may be challenged to identify precise needs, with the result that
bidders may not offer ideal solutions (of course this is also a problem with very
prescriptive RFPs); and
• Caution should be exercised in accepting claimed results on corporate projects
conducted outside of Canada as conditions may differ in Canada.
But overall, it was agreed that RFPs should be specific and defined while focussed on
outcomes and solutions. SSC should seek to define the desired outcome of a
procurement and allow industries of all sizes to respond with solutions, supported by
recommended performance measures and benefits realization criteria. Moreover, the
evaluation of bids should be based on overall value, and not necessarily the lowest
cost.

8. 8
Industry advisors can help in areas such as:
• Developing the service specifications which set out the outcomes to be achieved
and how these will be measured;
• Ensuring timelines and targets in the specifications are challenging, yet realistic;
• Identifying specific risks associated with the goods or services to be provided; and
• Identifying the wider social, economic and environmental benefits that could be
gained through the process.
The National Shipbuilding Procurement Strategy was often cited as an example of a
procurement model which to-date has demonstrated positive results.