Opposition decries ‘Cabinet confidence’ to hide information

Latest example a sole-sourced pact with IT firm

OTTAWA • Opposition members of Parliament are criticizing the federal government for what they call an increased use of “Cabinet confidence” to withhold information, this time surrounding a sole-sourced contract awarded to an American IT giant by Ottawa.

“Cabinet confidence” was used by government officials as justification for redactions to a report tabled before a Parliamentary committee on Wednesday, where members are investigating the procurement practices of Shared Services Canada (SSC), which oversees internal government IT contracts. But an unredacted version of the report, obtained by National Post, points to the seemingly thin basis on which the information was censored.

In one instance highlighted in the report, SSC awarded a contract to California-based Cisco Technologies in 2018 to move certain network technologies from an old data centre in Ottawa to a new facility in Barrie, Ont. The contract was awarded on a sole-source basis, and SSC claims that opening up the bid to Cisco competitors would have required a submission to Treasury Board that “would take up to one year” to complete, according to a document obtained by the National Post.

In committee meetings on Wednesday, SSC president Paul Glover defended his decision to redact portions of the internal study, which was completed earlier this year by Gartner, an industry consultancy group, in order to address concerns raised by parliamentarians and private companies over SSC procurement practices. Glover justified the redactions by saying it would disclose Cabinet confidence because a submission to Treasury Board would have to be discussed at Cabinet meetings.

“It speaks to Cabinet meetings potential existence which is a confidentiality issue, and it’s not to be disclosed,” he said.

However, opposition MPS blasted Glover’s justification, saying SSC’S argument ultimately amounted to a hypothetical Treasury Board submission that was never going to take place. Conservative MP Rachael Harder asked how Glover could cite Cabinet confidence to redact information from the report, all the while sharing the same information with Gartner.

“Why was it shared with Gartner, but the members of Parliament within this committee cannot see it?” Harder asked.

One industry representative, who was granted anonymity due to the sensitivity of the issue, said SSC’S argument is disingenuous because it wrongly assumes a competing bid would necessarily have to be submitted to Treasury Board, thus slowing the procurement process. The person said the argument seemed “fabricated” as a reason to award the contract to a favoured vendor.

Several committee members raised concerns about what they viewed as a willingness by the current government to cite Cabinet confidence liberally, to withhold information, similar to heavy redactions applied to documents last year related to the WE Charity scandal.

“I just want to share my alarm at this new-found proactive, hypothetical rationale for Cabinet confidences,” NDP member Matthew Green told Glover during the Thursday meeting.

Green said the Cabinet confidences argument is “what I consider to be an increasing violation of transparency and open government, from a government that claims to be open by default.”

Questions over the redactions come as SSC faces criticism for its procurement practices, sometimes involving sole-sourced contracts for major IT projects. The House of Commons operations and estimates committee launched an investigation into the issue on Wednesday, targeting the procurement practices within a specific division of SSC called Networks, Security, and Digital Services (NSDS).

In March, the National Post published a report detailing the high frequency with which NSDS has awarded contracts to Cisco, often on a sole-sourced basis, totalling $210 million over a two-year period.

The federal government has been criticized in recent years for repeatedly using the same international vendors for major IT contracts, while ignoring domestic companies who could also carry out the work. Their complaints generally include major U.S. firms like Amazon, IBM, Cisco and Microsoft, who often win major contracts due in part to their sizable market shares.

Representatives of the Canadian tech industry called foul in 2018 when Shared Services Canada awarded a $500-million sole-source contract to IBM as part of its effort to consolidate government servers. IBM was contracted to transfer 16 new mainframes, along with maintenance and support for existing hardware and software across at least six departments.

IBM also won the contract cited in the Gartner report, in which computer servers used by the Canada Revenue Agency and Canada Border Services Agency are to be moved to a new location in Barrie. Cisco won the part of the project involving network systems, worth roughly $18 million, according to one source familiar with the matter.

The federal government in general has been consolidating and modernizing its data centres as part of a digitization effort, with plans to cut the number of facilities from over 400 down to just seven between 2012 and 2020.

Manufacturers who compete against Cisco, IBM and Microsoft have raised concerns with the government in recent years, whether in regard to data centre migrations or other contract types. A reflexive decision to award internal contracts to the same vendors could lead to an inefficient use of taxpayer dollars, they say, as government potentially could overpay for bids that are not open for competition.