Canadian government purchasing system terminated

The Government of Canada Marketplace (GoCM), a $47.73 million end-to-end government-wide online goods and services procurement system, was designed to save the government $127 million. But because of high costs and complexity, the project has been quietly shelved by the government.

Five years ago, IBM, along with AMS, SAP, CGI, National Bank and Ariba, won a $1.5 million contract to build an electronic supply chain for the Canadian government, which would later be known as the GoCM. The contract was slated for five and a half years, with the possibility of prolonging the contract with five one-year extensions.

The e-government initiative was designed to be an electronic catalogue which would automate and simplify commonly purchased goods and services across departments and agencies within the Canadian government. The goal was to initiate “better and faster” buying through standing offers, supply arrangements and order forms in an online fashion.

The GoCM was designed with the intention of saving the government 10 per cent on the cost of its goods and services and 50 per cent on the administrative costs as a result of purchasing.

Four organizations were listed as pilots for the electronic marketplace service. These included Public Works and Government Services Canada (PWGSC), RCMP, Transport Canada and the Transportation Safety Board of Canada. The pilot program was to initially include 1,300 users, with the potential of eventually reaching up to 10,000 users if the service were expanded to all 157 government departments and agencies.

In a previous interview with CDN , Marc Trépanier, director general of the electronic acquisitions program sector in the federal government, said “The government (was) not putting money into (the) project other than funding the initial business case. After that, if the marketplace doesn’t fund itself out of savings, it won’t continue.”

On the Treasury Board of Canada Secretariat’s Web site, the total funds allocated to the project by the federal government were listed at $47.73 million. The initiative was scheduled to begin in December 2002 and finish by Mar. 31, 2008.

CDN received confirmation from Céline Tremblay, a spokesperson for the PWGSC, based in Gatineau, Que., that the GoCM e-catalogue was made available in December 2006, but that the service was shut down.

“The GoCM initiative was terminated on April 24, 2009,” Tremblay said. “The e-catalogue was launched in December 2006; however it was a partial tool, providing departments with a catalogue that was not linked to their financial systems. Therefore departments couldn’t purchase items directly from the catalogue nor process and pay for purchases as was originally intended.”

As a result of the system’s limited functionality, Tremblay said when the system became available, voluntary user participation was low.

In 2006, Tremblay said PWGSC realized the end-to-end government-wide procurement system project was just “too expensive and complex” to be undertaken all at once. It was also decided that the GoCM would not meet the “future needs of the government,” she added.

“After extensive review and consultations with departments, it was determined that one centralized system such as the GoCM was no longer the way to proceed,” Tremblay explained. “This was for a number of reasons, notably, cost, evolving technologies and the decentralized nature of procurement in government. We decided that a better approach would be … procuring instruments and making them easily accessible via the Internet, and leaving departments to decide how best to process and pay for items purchased.”

When the GoCM operations were terminated in April, approximately 700 government employees, which were mostly purchasing officers were using the e-catalogue tool to search through the government’s 8,500 standing offers and supply arrangements for goods and services, Tremblay explained.

In June 2006, PWGSC obtained Treasury Board of Canada approval for an initial phase to develop and implement an electronic catalogue of goods and services for its departments. This would be made available through PWGSC’s standing offers and supply arrangements.

The Standing Offer Index was created over 10 years ago, Tremblay said, to provide government employees with electronic access to standing offers. A standing offer is an offer from a potential supplier who wants to provide goods or services at pre-arranged prices under set terms and agreements, if required. These offers are used to help meet recurring purchasing needs within the government and can include things like stationary supplies, food and more.

CDN attempted to reach IBM for a comment relating to the termination of the project; however we received this e-mail statement from Kim Devooght, vice-president of public sector at IBM instead.

“IBM Canada has fulfilled all of its contractual obligations with Public Works and the Government of Canada during the contract period, which has now expired. It would be inappropriate for IBM to comment on behalf of the Government of Canada, or a Government of Canada project.”

Herman Yeh, a member of the board of the Canadian Information Technology Providers Association (CITPA) and president of Ottawa-based systems integrator, Northern Micro, said as a computer reseller, he’s please that he no longer has to “deal with the GoCM anymore.”

“As the supplier, we supplied the (product) information and we had to update prices every three months,” Yeh said. “When we talked to the government, GoCM wasn’t a flexible tool for them and it was complicated. Different government departments or agencies use different financial systems to put through sales and they handle purchasing differently so there’s no standard way to issue an electronic order.”

Tremblay noted that the GoCM e-catalogue was only one of a number of electronic procurement tools which are currently available and in use by the government today.

Yeh says from a reseller perspective, he believes a Web site should not replace a sales team.

“Otherwise we would have all been out of business a long time ago,” he added. “From Northern Micro’s point of view, it’s really up to the government in how they want to do business and if they’re not ready to do e-commerce, than why do it? We’re doing our business just fine now.”

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Jim Love, Chief Content Officer, IT World Canada

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Maxine Cheung
Maxine Cheung
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