A software startup executive explains how hard it is for Canadian innovators to do business with government, because of old procurement rules.

Government digital-services teams are on a mission to make Canada the most advanced digital nation in the world. With leading-edge approaches to user design and experimentation, they’re piloting projects that give citizens high-quality, real-time service at a fraction of the cost. Most exciting for me, these projects are providing data that show within days not decades whether policies are working.

However, far too much of this effort is spent getting permission to buy the software they need. Procurement policies must be more flexible if Canada’s digital government dreams are to become a reality.

Information technology (IT) buying risks need to be managed, of course, but our procurement policies have aged poorly. More than 50 percent of all IT projects are over budget and behind schedule. Cybersecurity threats are coming not just from foreign governments but from teenage hackers. The complexity of managing an exploding number of software applications have led to “rationalization” plans aimed at reducing the number of software applications. “Shared Service” units were created in governments across the country to manage these challenges.

But these risk-management attempts are sucking the potential from our country’s most inspired champions of digital government. Great digital experiences are built through small experiments, released regularly, and adapted iteratively from user feedback. This is the “agile” approach that the federal government says it will use to fix the Phoenix payroll system. These same experimentation approaches grounded in the needs of users must now be unlocked across the whole of government.

Our company, like many other new IT players, has run up against the outdated procurement policies that keep innovations from being adopted quickly and cost effectively into governments.

Here’s a scenario that we have come across: a director of policy in a provincial government is frustrated with important departmental decisions taking place in convoluted email chains tracked by clunky spreadsheets. Frustrated by slow decisions, lost documents, and time-consuming reporting, the director wants to digitize the process with surplus funds from this year’s budget.

The director contacts the government’s new digital-services team for help. The team recommends our company, which has been running pilot programs to improve the decision-making process in other governments. Upon testing our software and learning that we could roll out the solution instantly, the director sets up a meeting with our company and the province’s Shared Services department to discuss next steps. Shared Services laments that before new software can be bought, it will need to verify that none of its current vendors can provide the solution. Given that the province’s current vendors include some of the world’s largest IT providers, IBM, Microsoft, Oracle, and SAP, it is almost certain one of these would be able to provide a solution. Even if the solution is more expensive, or less desired by the client department, it’s a challenge for Shared Services to move beyond players with which it has existing relationships.

To encourage experimentation, we offer the director a pilot at a price lower than the threshold for which a competitive contract bidding process would be required. This approach has been championed in other jurisdictions and provides invaluable feedback on the software needs of government employees. The data analytics collected through this type of pilot would inform next steps in the adoption of new software. Alas, the director of policy is told by a provincial procurement specialist that the pilot can’t be done because it has to be priced as if it will run for five years.

Taking lessons from this other jurisdiction, the director of policy lobbies a central agency to fund this as a flagship project under the banner of innovation. While a working demo has been seen by the director on day one, it takes eight months just to get to the contract negotiation stage on a pilot that is below a procurement threshold designed to enable faster buying.

Knowing that great products are only built with user feedback, at one point we go so far as to propose a $0 pilot. This would help us demonstrate our value and improve our product while gaining credibility that would help us make future sales. We are told this would create unfair advantages for us in a future procurement, and so cannot be allowed.

The federal government launched the Build in Canada Innovation Program (BCIP) in 2013 to help companies gain such feedback and credibility. Designed as a procurement option for early- stage companies, the program aimed to help these companies establish contracts with the federal government within eight weeks of submission.

In April 2018, our team submitted an 8,000-word application. Following up five months later in September, we were informed “there is no way to track the progress of a submission …. Rest assured, the process is underway.” A program officer for the innovation program later told us that the program had been deluged with applications and was a “total dumpster fire.” In November 2018, we received an email stating “we regret to inform you that your proposal has been placed on hold until further notice.”  We learned that some of the companies were able to access funds only after having their Member of Parliament lobby repeatedly on their behalf. Canada recently absorbed this program into a new $100-million Innovative Solutions Canada program. With this new initiative, departments and agencies issue public challenges to come up with specific IT solutions they require.

Our experiences show that innovators and public servants working in these contexts require a lot of perseverance. Government runs through a hodge-podge of antiquated software, massive spreadsheets, reams of paper and confusing email chains. Public servants should be empowered to experiment with tools to solve their problems. Instead, even the most intrepid and inspired public servant will be tempted to give up before acquiring new tools. Digital government will remain a distant reality under these conditions.

Despite these hurdles, we continue to support Canada’s public servants as they push for digital government. If we want Canada to become the most advanced digital nation in the world, we’ll first need to prepare our procurement systems for the journey.

This article is part of the Wiring Public Policy for Digital Government special feature.

Photo: Shutterstock/by SFIO CRACHO


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