Tories mull hardware agency
Central department for bulk purchases seen as saving millions, budget states
One year after creating a super agency to deal with IT issues across the federal government, the Conservatives signalled in their budget Thursday that they may create another agency to handle bulk purchases of hardware for departments to use.
The move could potentially save millions annually — although the government was not able to provide any estimated savings Friday.
“It’s not a bad idea in the sense that it can potentially be cost-effective,” said NDP Treasury Board critic Mathieu Ravignat. “The problem is this was in the last budget and we’ve seen few steps forward. We don’t want it to cost more than the savings it’s going to give us.”
The budget estimated that having one agency buy software used by all government departments was to save federal coffers $8.7 million annually starting in the 201415 fiscal year. A spokesman for Treasury Board President Tony Clement said the government spends about $138 million annually on software.
“By moving away from each department independently managing these activities, there are opportunities to drive economies of scale, achieve savings for taxpayers and improve services,” the budget reads. “Moving forward, the government will explore further whole-of-government approaches to reduce costs in the area of procurement of end-user devices and associated support services.”
That “whole-of-government” approach potentially includes the creation of another government agency to handle hardware purchases, according to a senior government official.
The budget doesn’t specifically say how centralization would occur, but committed the government to consolidate services under an existing or new agency. A spokeswoman for Public Works Minister Rona Ambrose said it was too early to talk about specifics of how or when the government will consolidate hardware purchasing into one department.
Last year, the government took its first step to consolidating much of the IT services, centralizing about 6,700 staff into Shared Services Canada, which has an annual budget of about $1.5 billion. Previously, individual departments had their own IT services that the government argued resulted in duplication and costs “significantly more than the private sector,” according to the 2013 budget.
That meant there were some 300 overlapping networks, 63 email systems for 43 departments, and 300 data centres the government is narrowing to about 20.
Last year’s budget didn’t say that Shared Services Canada would buy equipment, only mentioning that the agency would save the government $150 million annually by the 2014-15 fiscal year. (Currently, Public Works and Government Services Canada negotiate bulk purchases, while individual departments have standing orders to fill needs as they arise.)
Briefing notes prepared for senior officials at Shared Services Canada for the 2012 budget say that the agency was to find the government savings through “leveraging the enterprise buying power for (IT) infrastructure.” An April 24 briefing note for senior Public Works officials, released to Postmedia News under the access-to-information law, says that the legislation creating the agency would give Shared Services Canada “the authority to procure goods directly so it can achieve efficiencies and generate savings for taxpayers.” Giving Shared Services Canada the mandate to buy IT devices for departments may be the best avenue for the government to take because companies have already started dealing with the department, said Linda Oliver, vice-president of the Information Technology Association of Canada. Consolidation, though, should take into account that large contracts would squeeze out smaller companies, Oliver said.