Canada govt slammed over IBM deal

"This is yet another example of how the government's procurement process favours large, multinational companies and doesn't give highly qualified companies even a fair shot to bid for these projects," said Benjamin Bergen, executive director of the Council of Canadian Innovators.

The massive deal, signed in November and running up to 2021, includes $289 million in optional additional spending, putting the potential total cost at almost $790 million.

Signed by Shared Services Canada, it's the largest sole-source deal ever signed and may be the largest non-competitive contract in federal procurement history.

This deal follows more than a year of controversy over the dysfunctional Phoenix payroll system, which was created through a separate contract with IBM Canada. The system has been criticized for paying some civil servants too much, some too little and others not at all, as well as mishandling vacation and retirement rolls. The original Phoenix deal has been amended 44 times, and increased in value this year by $36.5 million to $277 million.

“Owing to intellectual property issues relating to proprietary hardware and software, IBM is the only supplier capable of performing the work," says a November 2017 memo to Ron Parker, president of Shared Services Canada (SSC).

"The proposed contract is a legacy sustainment contract servicing existing infrastructure. SSC anticipates continued use of these products and services for the foreseeable future."

(Reporting by our Canadian bureau)