Secure-channel deal with the Canadian government
April 9, 2001
Tech firms jump at
e-government opportunity
Billions up for grabs in campaign that could
revive troubled industry
Kathryn May
The Ottawa Citizen
Nearly 650 technology companies and consultants are vying to get into the
running for a piece of the multibillion-dollar pie to launch Canada's
government into cyberspace.
The e-makeover of all federal programs and services by 2004 could pump
billions of dollars of new business into technology firms that have been
wracked by difficult economic news and slow sales over the past six months.
Governments, at all levels, are the next wave in the electronic gold rush for
the battered technology industry. The federal government's recent tender call
for companies interested in working on its massive "government online"
project prompted an unprecedented stampede of firms to qualify for a spot
on the coveted supplier list. So far, 650 companies, large and small, from
across Canada expressed interest.
"This is huge and the response is unbelievable," said Gaylen Duncan,
president of the Information Technology Association of Canada. "It's a sign
that the next untilled field for the industry is government. If you're in the
technology business, now is the time to line up for government business."
Public Works and Government Services, the government's contracting arm,
has been so swamped with questions from the would-be bidders that the
deadline for applications to get on the list has been extended twice. All
applications are now due April 17. They will be evaluated and a list of
qualified bidders will be drawn up. The only way to get a shot at
"government online" business is to get on that list.
"This is the ticket to the dance," said one supplier. "If you get a ticket you get
to go to the dance, but it doesn't mean anyone will ask you to dance. But
without that ticket, you can't even play."
The government is racing against the clock to meet the Chretien
government's promise that by 2004 Canadians will be able to conduct any
government transaction anywhere and at any time by computer. It's
considered the biggest technology project ever undertaken by government
and will cost more than the $1.9 billion the government spent to fix its
computer systems for the Year 2000.
The project faced a major setback when the contract to build a secure
channel for the government online project was delayed nearly a year by a
contract dispute with Canada Post. The secure channel is the backbone of
government online.
It's the secure high-speed network that will allow Canadians to confidentially
carry out any federal transaction, from filing taxes to starting a business.
The government is quietly conducting contract negotiations with a consortium
led by BCE Emergis Inc. for the secure-channel deal, which won't be
announced until May.
The department held information sessions across Canada to attract as many
companies as possible, especially small firms.
Work has also been set aside for aboriginal technology firms and so far 134
have expressed interest in getting on the list.
The cost of the government online project is anyone's guess, but industry has
been tossing around estimates from $5 billion to $20 billion over the next
three to five years. The United States, which has 10 times Canada's
population, has estimated its government online initiative could cost $6.5
billion U.S.
Last year, the government spent about $2.9 billion on information technology
for ongoing operating costs and maintenance and is expected to spend $3.1
billion this year.
It's unclear how much of the government online project will have to be
funded from this existing IT budget.
So far, the government has earmarked $280 million to get its programs and
services online -- including the extra $120 million Treasury Board President
Lucienne Robillard announced last week.
But ITAC's Gaylen Duncan argues $280 million is not enough and the
government will have to at least double its yearly $3 billion IT budget for the
next five years or it will never transform its operations and realize the windfall
savings that could be generated by technology.
"For the suppliers, this is a huge opportunity, but government shouldn't view
this just as a huge expense. It's an investment that will result in huge
reductions in the cost of government."
Government online is considered key to the Liberals economic agenda,
which has pinned Canada's prosperity on technological growth. All countries
are in a race to get their governments online. A recent survey by Accenture
ranked Canada No. 1 among the 22 countries surveyed, overtaking United
States and Singapore.
Accenture's Graeme Gordon said Canada is an "innovative leader" in its
"co-ordinated" strategy with departments to use the Internet to re-engineer
how they do business -- potentially slashing the cost of government and
bringing huge tax savings.
He said the government's new portal is the first to cluster or organize
services the way Canadians want them and use them, not the way
departments are organized. But Mr. Gordon warns the race is in its early
stages and Canada could easily lose its lead. |
