Information technology (IT) has always promised connectivity, agility and productivity, but large IT implementations are among the riskiest projects any organization can undertake. In Canada, the federal government is the largest consumer of IT, with annual spending that has touched $5 billion. Within the government, the Canadian Forces and the Department of National Defence (CF/DND) spend about $1 billion of that total while managing about $4 billion in information technology assets. From satellites to submarines, the Canadian Forces has high expectations of its computer and communications information systems.
Today, a new majority government holds the promise of sustained support for projects aimed not only at operational efficiencies, but also some combination of cost savings and productivity. Like any other government organization, the CF is competing for scarce personnel resources against the relentless demographic drain from retiring personnel, and fighting for its share of taxpayers’ money.
On the supply side, Moore’s Law, which states that computing power of microchips will double every two years, has shown no signs of slowing down, and innovative companies like Apple and RIM demonstrate how to send a steady flow of innovation to the marketplace. New recruits, on both the public service and military sides, will expect software and networking tools equal to or better than the civilian equipment and services they take for granted.
CF/DND will undoubtedly benefit from a government-wide push to rationalized informatics resources. Among other drivers of change, cloud computing offers the chance of radical change by delivering functionality over networks to practically any end user device. That said, there are large questions about the ability of the current procurement process to keep pace.
“We’ve become too process-bound,” said Howard Grant, a leading procurement specialist and president of PPI Consulting. “I suppose in a military context, you could argue you need some process. But it’s taken over from common sense. We’ve moved so far away from getting the business outcome, in a number of ways.”
As Michel Brazau, a Deloitte Consulting technology partner recently wrote, “current procurement often favours the lowest-cost option for very well defined requirements, leaving little room for businesses to bring innovative best practices to government in a timely manner.”
In the current environment, simple common sense may look like radical innovation. Kamel Shaath is chief technology officer of Kanata-based secure storage vendor KOM Networks. Government purchasing strategies have not kept pace with technology innovation, Shaath believes. “You cannot just go ahead and take bits and pieces across the board from different products and solutions, put it together and say ‘here is what we want to be able to do,’ because it doesn’t match. It doesn’t work like that, so their system of procurement even is inhibiting innovation at times because they are not able to take advantage of new technology.”
New technology products offer more advantages than simply better prices, but Shaath does not see government taking sufficient advantage of the opportunities. “Better foot print, greener, faster, more reliable – but they don’t take that into consideration. They don’t apply common sense. With data you have to apply common sense. If you fail to do so, then you run into a cycle of endless resources and endless time,” he said. “We need to foster innovation and to have procurement processes that allow the government agencies to embrace and adopt new technologies on a much more rapid pace, which will enable them to support their customers such as other agencies and taxpayers with better services.”
Grant even advocates sole sourcing, a magnet for critics of federal government procurement. If Canada’s allies have already selected equipment through a competitive process, he says, this country should capture the value in synergy, cooperation and collaboration. “Competition makes sense where it’s appropriate, but the reality is we have gotten to the stage now where we are compromising the outcome we want for what we believe is a fair process,” he said. “But is the process fair to the taxpayer and fair to the military personnel? The answer is, clearly it isn’t.”
Grant also believes that IT projects suffer from DND’s practice of cycling in serving officers from the Forces for two or three years, who sometimes cannot remain to see the whole project through. “The people I’ve met at DND are really bright people,” Grant said. “There is value in having officers in the process, but what we have to do is create methodologies that recognize that. In other words, not just call officers’ assignments a fact of life, we have to develop some agility to build some processes that support that.”
People have advocated a defence procurement agency as the solution to Canada’s military procurement woes, on the assumption that the acquisition triad of DND, Public Works and Government Services Canada and Industry Canada collectively constitute a large part of the problem. Grant does not agree.
“What that suggests is that if we remove Industry Canada and Public Works from the equation, everything is going to be rosy in the garden. That is not true. What we have to do is have procurement methodologies that recognize the system is broken,” he insists. “If DND goes ahead and uses the same methodologies, but with reduced timeframes because it is in charge, it is going to have a rude awakening because it’s not going to work like that.”
Developing dialogue
Grant has seen first hand the great divide that springs up between industry and government the closer a procurement approaches. “There is reluctance to dialogue with industry while an RFP process is ongoing – I mean, conversations as opposed to standard questions and answers. We’re hurting ourselves – again.”
He points out that other jurisdictions are successfully bringing buyers and sellers together. “In fact, PPI Consulting were the architects for the first ones in Ontario. We called them ‘vendor one-on-ones’ and now we’re calling them ‘commercially confidential meetings’. There is an established protocol, bidders like it and they respect it.”
There is real value for buyers because they may decide to revise the RFP as a result of the discussion. Making conversations available to every bidder eliminates unfairness. “What you’re trying to do from a risk management point of view, from an outcome point of view, is create a process that really starts to minimize misunderstandings once you’ve selected somebody. It’s verboten by Public Works,” he said.
As another executive close to federal government IT procurement put it, “if you are choosing a direction which is one hundred percent different from what industry is telling you, it should be an indication that the industry is probably not going to deliver what you’re expecting.” But the same person said that in some cases, industry is getting to the table for a dialogue. “The example I use is the shipbuilding one, which I think is a good one for them, but they can do that for pretty much every procurement. The shipbuilding program brought all the vendors together and they figured out how to make it work.”
Today, the emphasis in federal government procurement is on inputs, with detailed specifications of what, in IT, are constantly moving targets. Advocates of acquisition process reform say that outcome-based procurement can build in agility without losing accountability. Industry wants incentive to bring innovation and new technology. As one corporate manager put it, the overriding question should be, “how can I bring the best of our R&D to every project we do?”