Hon. James McCrae (Government House Leader): Madam Speaker, I wish to obtain the unanimous consent of the House, notwithstanding the sequence for consideration of Estimates as outlined in Sessional Paper 142 tabled on March 24, 1998, and subsequently amended, to consider in the House the Estimates of Sustainable Development followed by those of Highways and Transportation, with the Estimates of the Department of Agriculture being set aside.
Madam Speaker, these changes are to apply until further notice.
Madam Speaker: Is there unanimous consent of the House to change the sequence of Estimates in the Chamber to deal with Sustainable Development followed by Highways and Transportation, with the Estimates of the Department of Agriculture being set aside? These changes to apply until further notice. [agreed]
Mr. McCrae: I move, seconded by the honourable Minister of Energy and Mines (Mr. Newman), that Madam Speaker do now leave the Chair--oh, yes, I just about got one through here without--I wonder if honourable members would be of a disposition to waive private members' hour.
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Madam Speaker: Is there unanimous consent of the House to waive private members' hour today? [agreed]
Mr. McCrae: I move that Madam Speaker do now leave the Chair and that the House do now resolve itself into a committee to consider of the Supply to be granted to Her Majesty.
Motion agreed to.
Mr. Chairperson (Gerry McAlpine): Would the Committee of Supply please come to order. This afternoon this section of the Committee of Supply meeting in Room 254 will resume consideration of Estimates of the Department of Government Services.
When the committee last sat, unanimous consent had been granted to have all questions and answers considered under line 8.1.(e) Information Technology Services (1) Salaries and Employee Benefits.
Mr. Jim Maloway (Elmwood): Mr. Chairman, I would like to ask the minister some more questions about the point system that was employed in the selection of the hardware supplier. I would like to know who designed this point system that was used.
Hon. Frank Pitura (Minister of Government Services): I am advised that Systemhouse designed the evaluation criteria.
Mr. Maloway: Would the minister provide us with a copy of that criteria?
Mr. Pitura: I believe, for the member, that the evaluation criteria were outlined in the letter that was sent to him not long ago.
Mr. Maloway: Well, that letter is actually the source of the problem. The criteria are not spelled out the way I am wanting them to be spelled out. I would like it to be more specific as to what the definitions of these terms are. For example, I would like him to give me a definition, perhaps he has a written definition here, of what Systemhouse, how they defined vendor presence.
Mr. Pitura: I am advised that vendor presence primarily refers to a company's strength in the marketplace, their ability to support their product, and their ability to service the product.
Mr. Maloway: So how many points then were attached to this vendor presence category?
Mr. Pitura: Well, I think in the area of the evaluation that the general qualifications area, which amounts to 25 percent of the weighting with regard to the evaluation, what portion of that was taken up with vendor presence I am not sure, but I will see if I can find out for you.
Mr. Maloway: I will give the minister some time to get an answer.
Mr. Pitura: I am advised that we will have to have some discussion with probably Systemhouse to find out how it was broken down within that category.
Mr. Maloway: I have asked this question several times several weeks ago. So I am wondering why it is taking so long to get this information. I mean, surely we could stop our proceedings here for five minutes and phone Systemhouse and get all this information, but this is nothing new. I have asked several times in the House weeks ago. Why does it take so long?
Mr. Pitura: Mr. Chairman, just to advise the honourable member that the questions with regard to the evaluation criteria that the member asked about were that for probably the majority of people the way it is listed in terms of the evaluation criteria would probably be appropriate, but if the member wants to see a detailed breakdown within each category as to how the evaluation was done, I hope that he can bear with me in terms of being able to supply him with that minute detail, because in some of these areas I am sure that taking a look at factors such as vendor stability and presence, level of technological investment in R & D delivery capabilities, and commitments and performance bonding, I am sure that he is quite aware that a lot of these areas may not be supported with the appropriate data. It basically comes down to the point where the evaluation team takes a look at each one of these areas and determines in terms of the presentation and the RFP by the company, what these areas are and, therefore, would tend to score them on that basis.
When you take an everyday example, the fact that you might take a look at purchasing General Motors cars, General Motors cars in terms of vendor stability and presence probably yield a fairly high score. This cannot be substantiated with raw data, but I think that everybody in this country and the North American continent would agree that General Motors does have vendor stability and does have a good presence in the marketplace. So it is somewhat of a subjective, maybe, scoring, but we will endeavour to find out the details if there are any under those areas for the member.
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Mr. Maloway: Well, the minister is submitting that it is totally subjective, and I guess the question is why would you make a decision on such a huge contract, $150-million minimum over 66 months? Why would you give such a subjective category such as vendor presence such a huge weighting of 25 percent? Why would you do that and give price of the product only 15 percent?
Mr. Pitura: The member is suggesting that this contract is worth $150 million. I would just like to advise him that the actual contract to Systemhouse is pegged at $124.5 million with an additional $18.6 million being paid to other contractors for a wide area network and for operations and cost of the desktop unit.
I would also advise the member that with regard to the contract for the supplying of computers, that the pricing for the IBM workstations ranges between $1,921 for a base PC to $2,929 for a Power PC. The contract is estimated at $13 million over four years.
Mr. Maloway: Once again, I did not ask that question. I asked why and how and who determined that vendor presence would count for 25 percent in this criteria that was set up and price would only count for 15 percent. How, why and who?
Mr. Pitura: I would just like to remind the honourable member that he refers to cost as being 15 percent and general qualifications as being 25 percent. I wish to advise him that the cost is 35 percent in total of the evaluation criteria and not 15 percent as he has indicated, so that cost is the most major part of the evaluation criteria.
Mr. Maloway: Again, the minister did not answer the question. Current costs, costs of acquisition of hardware provided was only 15 percent, and the vendor presence was a category that got a 25 percent weighting. Again, why and who came up with that split? Why did they do it and who did it?
Mr. Pitura: I would just share with the honourable member that it is not vendor presence that is accounting for 25 percent of the evaluation criteria but vendor stability and presence as well as level of technological investment and research and development, the delivery capabilities and commitments and performance bonding. Those all form part of that 25 percent evaluation and criteria for general qualifications.
Mr. Maloway: Well then, as a group, why did this group of criteria get 25 percent in the weighting and price only 15 percent?
Mr. Pitura: Well, if you take this whole group as being 25 percent and if you take a look at each area, there are, I believe, six areas in there that would share the 25 percent. So if you were to take that, each one of those areas would probably account for four percent. I would again like to remind the honourable member that cost current and cost ongoing is 35 percent which accounts for, by far, the highest amount of weighting within that evaluation category.
Mr. Maloway: Then, Mr. Chairman, could the minister tell me who from his department approved this criteria?
Mr. Pitura: I am advised that, in terms of establishing the evaluation criteria, at the outset of the process that discussion took place with Systemhouse with regard to the global type of request that was being taken into account, that the Desktop Management Unit in terms of the entire government needed to have in place. When the evaluation criteria were put together by Systemhouse, they were brought back to the Desktop Management Unit that then looked at the way the evaluation criteria were laid out and subsequently approved that prior to the RFP being put out.
Mr. Maloway: So what the minister is saying, then, is that Systemhouse developed all of the criteria, that is to say, the definitions of the criteria and all of the criteria that were set up here, and they presented it to the DMU that approved it. That is what he is telling me?
Mr. Pitura: I am advised that the overall selection process was approved by the DMU.
Mr. Maloway: So the government, then, relied on Systemhouse to come up with the definitions of this product or vendor stability and presence and level of technological investment. They allowed Systemhouse to be the sole source of these definitions.
Mr. Pitura: When it got down to the detail of the definitions, Mr. Chairman, Systemhouse was responsible for putting them together. Ultimately, it was a Systemhouse contract with the provincial government to supply the hardware, so ultimately the bottom line is that Systemhouse had to go through the selection process for the procurement of hardware as part of their contract because they had to have set certain performance standards with the provincial government that they had to honour in their contract. Basically, it came back to them in terms of their putting the criteria together and ultimately making a selection.
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Mr. Maloway: Can the minister also confirm, though, that Systemhouse is also an agent or a reseller of IBM products?
Mr. Pitura: I am advised that Systemhouse handles a number of computer products and not just those from IBM.
Mr. Maloway: But in this case what the DMU did, because it sounds like they did not have a very strong role in this process, they allowed Systemhouse to come up with criteria of which at this point the DMU does not even have a definition, a lot of it very nebulous about presence in the market and stuff like that. They allowed them to make these decisions, and they chose a supplier that they, in fact, are resellers for. They, in essence, gave the contract to themselves, from an outside bidder making a bid on this contract. I mean, does it not appear to you as though they could possibly see this as being a bit of an inside job here?
Mr. Pitura: Although Systemhouse can, I guess, be marked as a dealer for IBM, at the same time when the RFPs went out, the RFP went to IBM Ltd. who responded to the request for a proposal, just like any other company that was responding to the proposal based on the criteria that were laid out in the RFP. So, from that standpoint, everybody who requested RFP papers and documents and then proceeded to submit a proposal was under the same type of criteria that even IBM got. It was not a case of Systemhouse dealing with itself.
Mr. Maloway: Well, Mr. Chairman, if Systemhouse is a reseller for IBM--they are the successful bidders in this case--there automatically is a built-in incentive or built-in commission, I would think, for SHL to choose a company that itself is a reseller for. Other companies--the 11 other bidders were quoting companies, in some cases, for sure, companies that Systemhouse did not represent as a reseller. Was there not a commission here that IBM would pay for the sale for handling the product?
Mr. Pitura: I have the list of the 39 vendor inquiries and the 11 vendor proposals. I am advised that Systemhouse is also a reseller for Hewlett-Packard, which was one of the vendors that made a proposal with regard to the RFP. So, from that standpoint, if they are handling a number of these companies' computers, then the same thing would apply to all of them. Therefore, they would have to--with regard to the RFP, they were dealing straight away with the companies involved.
Mr. David Faurschou, Acting Chairperson, in the Chair
Mr. Maloway: I wonder if the minister could provide me with a copy of the list. We could take a minute to get it copied. The member for Wolseley (Ms. Friesen)--actually this is quite timely--has a few questions, and I would like her to be able to ask them now.
Mr. Pitura: I am prepared to table the Government of Manitoba Desktop Initiative with respect to RFP inquiries and proposals by vendor, where there are 39 vendor inquiries and 11 vendor proposals.
An Honourable Member: And you would not give me that on Thursday.
An Honourable Member: I did not have it.
Ms. Jean Friesen (Wolseley): I wanted to ask some questions about a new building which the Department of Education is renting on Dublin. I wonder if the minister has the information with him that he can give me some responses on that.
Mr. David Faurschou, Acting Chairperson, in the Chair
Mr. Pitura: Mr. Chairman, I am advised that the Department of Education has moved into the premises at 1577 Dublin which was formerly occupied by Natural Resources. This space was created as a result of the Natural Resources staff being consolidated into one unit in the Murray Industrial Park. So with regard to Education moving into this space at Dublin, the lease was an existing lease, and this was what we call as a backfill into a leased building.
Ms. Friesen: Could the minister tell me who owns the building and how long the existing lease will run?
Mr. Pitura: Mr. Chairman, sorry for that delay. The length of the lease for this existing lease is January 31, 2002. We are not sure exactly who the owner of the property is. We are guesstimating that it is Morguard Investments, but we will confirm that with the member and advise her of that.
Ms. Friesen: I have made a note that the minister will be confirming the ownership. Could the minister tell me when that lease began? It is to end in 2002. Could he tell me what the square footage is that is being rented and what the cost per square foot is?
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Mr. Pitura: The exact start date of the lease is unknown, but I would advise the member that, in 1992, the lease was renewed for another 10 years. So in order to make it to the point where it was renewed for 10 years, the occupancy of the building had to occur quite some time before that. I personally can remember going to those offices back quite a few years ago, so I am sure that they have been there in the early '80s. The total square footage that was under the lease is 44,000 square feet, and the gross rate I am advised is somewhere between $9 and $10 a square foot.
Ms. Friesen: Could the minister tell me how many employees will be occupying the 44,000 square feet?
Mr. Pitura: I do not have that number but will endeavour to get it for the member in terms of the employees moving over with Education.
Ms. Friesen: Mr. Chairman, I believe that there are renovation costs being incurred in the changeover from Natural Resources to Education. Can the minister tell me what the estimate is for those renovation costs?
Mr. Pitura: I am advised that the renovation costs for that building to support Education is around $900,000.
Ms. Friesen: Can the minister tell me whether those renovation costs were tendered, and can he tell me what the specifications are for renovation?
Mr. Pitura: I am advised that the contract for renovations will be tendered, and they are in the process of, I believe, going through that now. Once the contract is let for the renovations, the specifications in the contract are that the renovations are done to government standard which are standards that have been used throughout government.
Ms. Friesen: Could the minister tell me what the purpose of the renovations is? Natural Resources has used it, as I remember from visiting it. It was for office space. What are the purposes for which education will be using this, and how have the specifications been drawn up?
Mr. Pitura: I am advised that within the Department of Government Services there are space planners, people who work with individual departments in determining, with those departments, their program needs when they occupy space. So it is not uncommon for any type of move that takes place within government to go through renovation costs in order to construct a facility such that it meets the needs of that particular department.
I am also advised that in the case of the Department of Education going in to backfill the space at 1577 Dublin, that a certain amount of space had to be allocated and designed for the marking of exams. So this, in terms of the space planner working with the department, put this into the configuration within the office, their office requirements.
Ms. Friesen: The minister is essentially giving me a process answer to what was actually a content question. I was asking the minister how the space is to be allocated. The minister did not know how many employees were going in, but he does have a method for allocating function, the space planner. Could he tell me how the functions of this department, or this section of the building are going to be allocated? What proportion of space is going to offices? What proportion of space is going to the marking of exams?
Mr. Pitura: I am advised we do not have that level of detail with us here today, but we could get that level of detail for the member.
Ms. Friesen: I look forward to having that detail on the allocation of proportions.
Could the minister also tell me, in the development of planning for the space, what security issues have been taken into consideration, and how is that being dealt with in the preparation of specifications for bids? For example, is that a separate bid, or is that going to be included in one single contract on which you are inviting bids?
Mr. Pitura: I am advised that with regard to the overall $900,000 as used with regard to the renovations in the building, that it is a series of contracts. So, it will be let over time as the work progresses. As well, it includes the backfilling, some aspects to backfilling at 1181 Portage.
With regard to the security, our security staff work with each department at each building and work with them in regard to what their needs are with regard to security and endeavour to work with them to meet those needs that they require.
Ms. Friesen: Can the minister tell me, in this series of contracts that are to be let, what is the timetable on that? Will all contracts be let during this year? Will all contracts be let before the end of the summer? My understanding was that the department anticipated they would move into the new building in September.
Mr. Pitura: Mr. Chairman, I am advised that the member is correct, that the contracts will be let over the summer period and the occupancy date is set at September 15.
Ms. Friesen: Just a comment. The timing seems rather tight to me. If you have not let the contracts yet, we are into then presumably at least mid-June before anything could begin at the very earliest. Yet, September 15 is the move date. Does that minister have any reflections on that? Does that seem extraordinarily tight to him for several contracts?
Mr. Pitura: I am advised that in a lot of the buildings where one government department is moving from one building to another building, with regard to the timetable, it may seem to be tight, but it is a timetable that a lot of contractors do not have any difficulty adhering to in terms of their own time lines to get the job done.
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Ms. Friesen: The minister has advised that this is close to a million-dollar renovation, $900,000, right? I just wanted to confirm the actual rental that the minister was telling me, because it seems to me to be a lot less than the rental that the Department of Education was estimating. Are we looking at additional building beyond 1577 Dublin? Is there additional space being taken over by the Department of Education?
Mr. Pitura: With regard to Education moving, when they move from 1181 Portage, they are also moving a unit from Taylor Avenue into 1577 Dublin as well. The costs that the member might be referring to may take into account the fact that they have the costs at 1181 Portage and Taylor for the first part of this fiscal year, and then they move into the premises and begin the payment for the square footage at the last part of the second half of the fiscal year. I am not sure if maybe that is where their numbers were coming from.
Ms. Friesen: I will go back and check my notes, but I do not think it was. I think that was exactly one of the questions I asked. Their number seemed to be considerably higher than yours, so I am wondering if 1577 is the only new building. We are looking essentially at the rental accommodation for the newly expanded Assessment branch. I think the minister indicated that it was almost twice what you are telling me. Now, I have not got the figures in front of me so I am speaking off the top of my head here, but it is an important number of dollars being allocated to Education. I just want to check with the minister that, as far as he is concerned, we are looking at 44,000 square feet at essentially $10 a square foot.
Mr. Pitura: Just to advise the honourable member, the number that we quoted--and I presume that we have a--do we have an accurate number yet? It is estimated between $9 and $10 dollars a square foot, which, if you take a look at the cost of rental space within the city of Winnipeg, it would fall into the bottom area of costs per square foot. So, from that standpoint, overall, as a Government Services department, we seek out to get the best possible value for the space that is there. So the opportunity for Education to move into 1577 Dublin only occurred as the opportunity for Natural Resources occurred to go into the Murray Park area. Before Natural Resources could move into Murray Park, of course, the need for the backfill was there at 1577 Dublin because we had a lease till 2002. If we did not have a backfill, chances are Natural Resources would not have been consolidated when they were, because we are not prepared to pay for space that we were not going to use. The price of this space, I think, was very reasonable.
So, with regard to moving Education in there, to backfill that space, it seemed like a logical approach. Then, what it did was created two smaller spaces at 1181 Portage and Taylor Avenue. In terms of us being able to handle those as Government Services, it made our job a little easier because we could look after backfilling those with smaller units--or in fact the leases may have been up, I am not sure.
Ms. Friesen: In the whole process of moving people within government departments and on across leases like that, is there any attempt made to give some priority to the downtown area? Does that enter as a factor into the allocation of space?
Mr. Pitura: To answer that question, as deliberately looking at space downtown, I do not know if I would go as far as to say that. But we have certainly taken a look at the downtown area. In fact, many of the government locations have occurred in the downtown area. The two examples I can cite is the co-location of our Environment department and the federal Environment department at the CN Station on Main Street, as well as the co-location of the Western Diversification and the Industry, Trade and Tourism groups in the Cargill Building on Graham. As well, they are looking at some of the other buildings downtown for location of departments. In fact, I think the Department of Health is now giving a look at the old Free Press building as a possible location for Manitoba Health.
With regard to the new development along Main Street from Portage Avenue to Higgins, as well, there is some space that is available there. Certainly, from the standpoint of the provincial government with regard to obtaining space, of course, we try to get first the best value for the taxpayers dollar. Secondly, we will not overlook any opportunity for space that may arise, if it is suitable for our requirements and it is at a good value for our dollar.
Ms. Friesen: The $10 per square foot at this building on Dublin, could the minister tell me how that--the minister gave me the argument that basically this is a good, low price for Winnipeg. Does the minister have information on differential rates in different parts of the city, say, parts of downtown for example compared to the $10 per square foot in the, I guess, inner suburb you might call it?
Mr. Pitura: With regard to the space and the relative cost, if you look at space that is located downtown, it can be variable between a level of about $14 a square foot to as high as $19 a square foot depending on the location of that space in the downtown area. The building at 1577 Dublin falling into the $9- to $10-range is probably because of the length of time we have been in the building. It is a price that has held fairly firm with that. I am guesstimating on this for the member. Prices have increased over time, but that would fall into probably our low level of rental space costs.
Mr. Maloway: Mr. Chairman, can the minister tell us whether there were any advantages to SHL by dealing within its stable of companies that had acted as a reseller for?
Mr. Pitura: I would just advise the member that, no, there was no advantage that we can see that SHL would have dealing with these companies on the vendor proposals. As you know, SHL I do not think has any cross-ownership with these companies that would give them that advantage. They may in fact be retailing their product, but to my knowledge, I do not believe there is any cross-ownership with these companies.
Also, what I would share with the member too is that with regard to the overall contract for desktop management, in fact, IBM was one of the competitors with SHL to get that business. So I do not think there was any kind of advantage for SHL to deal with some particular vendors in that proposal.
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Mr. Maloway: So is the minister then confirming that there are absolutely no inducements, no commissions, no side agreements, no advantages whatsoever to SHL to provide the contract to one of its own in-house resellers--pardon me, it was acting in its capacity as a reseller for these companies?
Mr. Pitura: There is none that we are aware of.
Mr. Maloway: This nebulous criteria that was set up for this event, can the minister confirm that this is a one-time-only criteria, or is this a standard off-the-shelf criteria used in contracts such as this?
Mr. Pitura: I think I would like to spend a little bit of time in discussion with the honourable member. The provincial government goes through many areas of procurement on behalf of the taxpayers of Manitoba and for various government departments. When you are putting together a request for a proposal, whether it be the addition of the maximum security unit at Headingley, the building of a new court house in Brandon, the procurement of computer hardware, or purchase of office furniture--because I think the honourable member would well understand that if it were just to put out a request for a proposal for office furniture, if we did not make a specification or set up the criteria as to whether we wanted a large top desk, a small top desk, wood desks or metal desks, what kind of wood desks and what kind of finish we wanted on a desk, we would probably end up with a product that probably we would end up buying that we did not want.
So through many of these processes, this type of a criteria is put into place; not always the same, but a criteria is put into place whereby the product is able to be evaluated or the vendor is able to be evaluated to some extent. So that we know that on behalf of the taxpayers of Manitoba, when we make a contract to procure whatever, that we are able to have some satisfaction from our standpoint that what we have purchased is, indeed, a product that will last the length of time we want it to last; it will perform the functions that we want it to perform and if service is required to be able to keep the machine functioning or whatever we are doing, then it would be in place as well. So it is important to put these criteria in place for these RFPs as we go along.
Mr. Maloway: It is hard for me to believe that in the case of Fleet Vehicles, it is decided, I believe, just solely on price that vendor presence and vendor stability does not, in those cases, take up a whopping 25 percent of the criteria, and price only accounts for 15 percent.
Can you imagine if you were looking at buying vehicles and you said, well, we are only going to give 15 percent on price and we are going to put 25 percent on vendor presence, what kind of a reaction that would get from the both the industry and the public? But, once again, that was not the question I was asking. I was asking the minister whether the criteria that was employed here is an off-the-shelf, commonplace criteria or was this specifically devised this time only by SHL and the idea sold to the DMU and approved by the DMU?
Mr. Pitura: I am advised that this evaluating criteria, the way it was established and the way it is put forward is to meet the industry standards that are present out there. So you will see this criteria being used by other corporations, other governments in terms of procurement for computer hardware, would use an evaluation process similar to this for their procurement.
Mr. Maloway: So, the minister is indicating then this is a more or less off-the-shelf, evaluation-type proposal then that was applicable in this case, that this is normal. If I looked more deeply into this, I would find that other jurisdictions would use the same criteria: 15 percent on the price of the product and 25 percent for vendor presence. That is what he seems to be telling me.
Mr. Pitura: The actual breakdown in terms of the percentage might not always be the same for every RFP that is put out. I would just remind the member that looking at product quality and general qualifications of the product versus the weighting given to the actual cost of the asset, once you purchase the asset, if you are going to have a large high ongoing cost of ownership, then you may not want to purchase that asset in the first place. So purchasing the asset and the ongoing cost of ownership of that asset over time are two very important areas to take a look at, because I think the member would well agree that you do not want to buy hardware that--going back to automobiles as an example, you are not going to buy an automobile that has a very poor track record and ongoing cost. You might get it for a cheap price up front, but the annual cost of operation might far exceed that of any other vehicle. In terms of the economics of the whole deal, are you, in fact, getting the best value for your dollar?
Mr. Maloway: Can the minister confirm that Seanix of Vancouver was in fact the lowest priced bidder in the hardware component?
Mr. Pitura: Mr. Chairman, with regard to trying to answer the honourable member's question, I think that from the standpoint of giving the specifics on the answer, I cannot do that, and I would not like to do that from the standpoint that many of these companies that responded to the RFP are companies that may, in fact, in terms of future RFPs and future business, it is important that some of this information that they have given to us in terms of the RFP is kept confidential. Overall, IBM was chosen for the supplier of hardware, and I would like to reinforce again that the provincial government has a contract with Systemhouse.
Systemhouse, under that contract, is supposed to supply and manage a desktop system environment. Systemhouse has to meet certain performance standards for the provincial government, i.e., we want to be able to address Y2K properly, on time. We also want to be able to transfer data across government through a seamless environment. So our main supplier for services to the provincial government is Systemhouse.
Systemhouse has decided that they will go with IBM hardware. Now, they have made that choice based on the evaluation criteria that is in this book, that I have sent to you over by letter. Once they have done that, then they are saying: we have made the choice of Systemhouse to have IBM hardware because we think and we know and feel that we can supply the kind of service that the provincial government of Manitoba wants to have from Systemhouse, because Systemhouse has got to answer to the provincial government if it does not meet performance standards. So they have to use their best judgment and their skills to be able to select a supplier of hardware that is going to do the job that they have indicated to the provincial government that they will perform and guarantee.
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So I think that the important part of this whole discussion is the fact that our contract is with Systemhouse, and they have to meet certain performance standards for the provincial government for us to be able to get our job done as a corporate policy to get desktop managed environment. If they do that without any downtime or without any major problems, we will be a satisfied customer. If they do not, we will be an unsatisfied customer, and Systemhouse will have to pay or own up to the various areas under the contract they have with the provincial government for nonperformance.
Mr. Maloway: Can the minister confirm that IBM, while perhaps not the highest priced equipment supplier, was in fact at the upper end of the pricing component?
Mr. Pitura: Mr. Chairman, I say to the member that I have given you the prices of the IBM workstations at $1,921 and a Power PC at $2,929. I think the honourable member has enough knowledge about computers to determine whether that is an exorbitantly high price or a medium price or a very low price.
Mr. Maloway: The minister, while refusing to release the government's contract with SHL, alludes occasionally to performance requirements that are required of SHL by the government. Would the minister now provide me with a copy of the performance requirements that Systemhouse is required to meet?
Mr. Pitura: I am advised at the present time there is a document being prepared that is being put together into a booklet form with the performance criteria that Systemhouse must adhere to with the province. Once that is available I will be glad to share it with the honourable member.
Mr. Maloway: When would the minister be able to provide that booklet?
Mr. Pitura: I am advised that it should be available in two weeks, but, as well, it could be three weeks, two to three weeks.
Mr. Maloway: If we are still in the Legislature at the time still asking questions, then perhaps the minister can just give it to me in person. I would like to ask the minister whether there is any provisions of this contract that allows Systemhouse to make money if it saves the government money in certain areas. The minister is probably familiar with performance incentives and so on that have been given to civil servants over the years, particularly in the last 10 years by different governments, and it has been of interest to me to find out whether Systemhouse has any such requirements and incentives I guess in its contract, and if it saves the government so much money in a certain department, they would get a percentage of it.
Mr. Pitura: No, there are not any incentives in place.
Mr. Maloway: I would like to ask the minister about the financing of this contract in this whole area. I understand the government has some sort of a new SOA, I believe, or something that is similar to an SOA set up to handle the financing. I would like him to provide us with a thorough explanation of how this is working.
Mr. Pitura: Just to advise the member that there is a corporation established to accommodate the requirement for desktop, or our major computer initiatives. The corporation is called the Government Information System Management Organization, and it comes under the responsibility of the Minister of Finance (Mr. Stefanson). I guess what I could suggest for the member is that--we do not believe Finance is through the Estimates process yet--the questions with regard to the flowing of dollars through that corporation might be best done at that time.
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Mr. Maloway: Well, I am aware of that information, but I just naturally assumed that you would have that information available to you with your staff. I would like to know when this Government Information System Management Corporation was set up, and who the shareholders are on it, who controls the flow of money here, and how it works.
Mr. Chairperson in the Chair
Mr. Pitura: Other than having the knowledge that it is a corporation established under the Minister of Finance and responsible for the capital dollars that are necessary for desktop to take place, I do not have any further information on the workings of it, and I think you would be best to ask that question of the Minister of Finance. Because from the standpoint of Government Services, our role with the Desktop Management Unit is to ensure that the contract that the provincial government has with Systemhouse is carried out and fulfilled by Systemhouse. Government Services always operates on a cost recovery, so that when with the desktop function coming into place and the allocation of funding through each of the departments, that again has occurred through the Minister of Finance, not through Government Services. We are a service provider within the sole area of Desktop. We are not the financiers.
Mr. Maloway: Well, Mr. Chairman, that may well be. I have to take the minister's word, but it seems very difficult for me to understand that no one at this table would have any information on this SOA that has been set up to manage the flow of the money. It seems difficult to believe that nobody here would know who was in charge of it.
Mr. Pitura: Mr. Chairman, I just wondered if the member might elaborate on his definition of the SOA, because maybe we are on two different paths here with regard to this whole process.
Mr. Maloway: The minister mentioned the name of the government information management group, I believe it is, as the organization that is handling the flow of money. Whether it is an SOA or not, I am not a hundred percent sure. I have been told it was an SOA, but whether it is or not, I just wanted to know some details about it as to who was in charge of it, who set it up, when it was set up, who the board directors are, and just what is happening with it. I just assumed that someone here would know something about it.
Mr. Pitura: No, unfortunately I do not, because, like I said, our main purpose is to ensure that the desktop process took place for Systemhouse.
Mr. Maloway: I would like to ask the minister once again to provide us with the names of the four individuals who made the selection, the names of the individuals and their qualifications over at SHL? He has already told me that from his shop I believe Dave Primmer was the sole decision maker with regard to this contract. I believe that is what he told me the other day. Perhaps you could confirm that.
Mr. Pitura: Mr. Chairman, we did have contact with Systemhouse and asked for their permission to release the names of the specific individuals involved with the evaluation process. They have responded to us and indicated that they will not release the names of those members on the evaluation team, but they did share what the evaluation team consisted of with regard to the individuals and the responsibilities that they had. One, a person had the expertise in outsourcing, another one in deployment services, product sales and in management. As well, other individuals within SHL were also consulted for specific aspects of the evaluation, and this included individuals with experience in the area of technical services, the technical architecture, the finance administration and vendor management.
Once the evaluation was done, and it was reviewed with senior management, we then approved the recommendations. Systemhouse indicated to us that all evaluators have several years' experience in the business and were highly qualified for the task.
Mr. Maloway: I would be interested to know how many points IBM got for the delivery capabilities part of the evaluation criteria.
Mr. Pitura: We do not have that level of detail. I guess, what I would also like to say to the member is that whenever government does--and in this case the member is referring to IBM which is nongovernment, but, for example, the contract with Systemhouse, the fact remains that the contract in specific detail is kept confidential for reasons being that it takes two parties to consent to releasing the information. If the provincial government was willing to release the information, Systemhouse may decide--and have decided--they do not want to have this shared in the public domain because of the fact that certain aspects of the contract in terms of the competition, in terms of their ability to perform and do things in a certain way which they would specify in the contract, might compromise their ability to compete. So I hope the honourable member can appreciate that.
So with the point system, what the member is asking me now to do is to share the details of the contract that IBM has with Systemhouse and in terms of how they were selected. I do not have that information. I would very much doubt whether Systemhouse would share that information.
Mr. Maloway: I can fully understand why Systemhouse would not want to provide the information on delivery capabilities, because I was part of the criteria that made up the 25 percent of the points for the contract. I believe, in the original request for tender, one of the requirements was that over 500 systems had to be delivered in a week.
My understanding is that the delivery is I would not say in shambles, but it is certainly behind time. So IBM got a certain amount of points here for its delivery capabilities, and it evidently did not meet its delivery promises. So you can see where or you can probably understand why this particular aspect might rankle some of the unsuccessful bidders, because IBM did not meet the delivery requirements.
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Mr. Pitura: Well, the point that the honourable member makes is something that, of course, when one enters into a contract for any vendor to supply a certain commodity, you do so on the basis of going through the evaluation criteria. Having said that, if there are some glitches in the system, and I could probably name or think of a number of instances where even myself as a one time agricultural consultant and losing out to another agricultural consultant, finding out that the other agricultural consultant ran into some difficulties delivering a product, I could have put my hand up and said, aha, I would have done better. But hindsight is a good teacher in this respect, and certainly there may have been some difficulties in making the initial deliveries.
I am advised that the rollout is going along fine. We are expecting to meet our target date of March 31, 1999, for our rollout, so we are on schedule there. So as such, the member says that, because of the way you used the evaluation criteria, they were supposed to perform in that area and they did not perform and they should not have had them. Well, that goes without saying, that anybody--you could take your best company that has always delivered specifically on time to the hour, and, as soon as you sign a contract with them, something goes wrong and they get late. So there is always that possibility that exists in any contract.
Mr. Maloway: Well, I would like to ask the minister then: was there any penalty for IBM missing its agreed deadline for providing this equipment?
Mr. Pitura: Although I may have indicated that there may have been some problems, I am advised that there was no problem with IBM meeting their delivery dates. The one case that there was a problem was with the power units, and the reason that was delayed was the fact that the government specs on those computers exceeded our requirements in that particular case, but that has all been fixed up now, and everything is back on schedule.
As far as the penalties for IBM if they do not deliver, I presume that is part of the contract that is between SHL and IBM with respect to any penalties that may be invoked as part of IBM not performing up to standards. But other than that I do not think I can comment.
Mr. Maloway: I would like to ask where we are with the rollout currently. I believe, according to the department's plans, it was to have in the neighbourhood of almost 2,400 machines in place by July 1. So how many do we have installed at this point?
Mr. Pitura: I am advised that there are 1,000 units that are installed at the present time, approximately 30 days behind in the desktop rollout schedule. I am also advised that over the summer months this gap will be closed and Systemhouse will be able to catch up on the rollout of the desktop hardware.
One of the things that also occurred too is the fact that initially there were some pilot projects that were picked out within the provincial government for the desktop rollout to begin. That was specifically designed so that we knew what we were doing and knew what to look for with regard to a rollout, what the potential problems could be, and, if there were any glitches, what they would be. So as a result of that initial pilot, we were able to then take the next step, and that is to go through the rollout in serious fashion. That did cause us to get a bit behind in our rollout schedule. But that schedule should be brought up to date over the summer months, and we should be able to meet our targeted date of March 31, 1999.
Mr. Maloway: Well, then, could the minister explain exactly why it is that we are less than 50 percent of what was targeted at this point? What were the reasons why it is only 50 percent of where it should be?
Mr. Pitura: As a result of running some of the pilot projects, I believe, I do not know, it was two or three departments that we started with, that it did cause some delays to the overall rollout. But if the member is taking a look at strictly percentages, I do not think that is a fair way of evaluating how the rollout is going, because the way that the rollout is geared to take place is building by building with regards to the computers so that everything is put in place. So in effect it may look and appear as though it is 50 percent, but in a couple of weeks that figure can change dramatically if a couple of entire buildings go out on rollout and are hooked up.
So my main concern as Minister of Government Services is that magic date of March 31, 1999, and as we approach closer to that date where all of rollout has to be completed and we are all to be into the managed environment, then I will start to have some concerns. Right now, the ability of the system to perform the rollout, I am confident that it is there. Our Desktop Management Unit, under the able direction of Dave Primmer, is looking after the Desktop Management Unit and ensuring that the rollout does take place, will take place, and will meet the schedule that we are trying to shoot for.
Mr. Maloway: Mr. Chairman, I am trying to understand why it is we are behind. Are we behind because the computers have not showed up, or are we behind because the computers have showed up but the SHL people have not been able to install them, or is it a combination of the two of them?
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Mr. Pitura: I think that overall, if one is to put together a proposed schedule of a time line where certain functions are to be carried out, and if an individual has set his own personal or her own personal time line, it is probably not insurmountable for them to meet those time lines. When you are undertaking a large project, such as the desktop rollout within government, that when you put out the schedule of time lines for all the desktop rollouts to take place, that indeed one can overestimate the amount of time that may be required to, No. 1, run the pilot projects; and two, assimilate the information that was gleaned out of the pilot projects. So you do not know what the outcomes of those pilot projects were. So, in effect, once you know that, then you pretty well have an idea of what your rollout schedule is going to be and you adjust it accordingly.
So it is not a definitive target that says by June 8, 1998, there will be 2,401 computers installed, ready to go, but what it does say is that by March 31, 1999, the entire provincial government will have had desktop rollout and will be under a managed environment. That is what we are going to shoot for because that is the important date that we have to worry about.
Mr. Maloway: I agree that there is a deadline here. I am assuming the pretty strong motivation in this replacement in the first place was the Y2K problem, and so our absolute deadline is January 1, year 2000, or certainly earlier than that in the case of the Motor Vehicle Branch and places like that. But the point is that we are still projected to have 2,329 of these things installed and working by July 1, and right now, we have only a thousand of them. So obviously, something did not go right. Either the equipment is not here, or if it is here, it is not hooked up yet. So which is it?
Mr. Pitura: I am advised that I guess the major issue that is identifying itself in terms of retarding the process--if I might use that expression--is the changeover of the applications themselves into the new environment, and from that standpoint, it is creating more pressure on time. But the member also has to remember that this is June 8, and July 1 is another 23 days. So we do have the work cut out for the Desktop Management Unit, but I think that they will come to the fore and will probably do a lot of catchup during this period of time, because once the application changeover is consistent and it goes through the process several times, it becomes much easier.
Mr. Maloway: Mr. Chairman, that is not my question. The minister has obviously learned quickly by his friends and colleagues in government here, ex-Finance ministers who just refuse to answer questions.
The question was: why are we behind? Is it because the hardware is not here, and if the hardware is here, then is it because it is not installed, or is it installed and not working?
Mr. Pitura: As I tried just a few moments ago to share with the member is that it is not a case of the hardware not being here, it is not a case of the hardware not being installed, and it not a case of the hardware not working, but it is the case of when the hardware is installed and is put on the desk and is set up to go is when we do the changeover in the applications from one database to another database. That is taking more time than was earlier projected. So it is taking a longer period of time to switch over from the old unit to the new unit and utilize the new database. I think the member is well aware that we are using a different software base for all our programs within government. That takes time to switch that over.
Mr. Maloway: So, Mr. Chairman, then the minister is stating the machines that have been here, that the equipment has been delivered on time and is onsite.
Mr. Pitura: The total number of computers are not here, but they are brought in as the rollout is scheduled. So each time there is a scheduled rollout for a particular building that is earmarked, the computers are delivered for that particular building so that we do not have a warehouse full of 5,000 computers sitting there ready to go. They are coming in as the rollout occurs.
Now, the member might say, well, that is not very astute. But I also remind the member, too, that over that period of time, any kind of enhancements to the computers that would occur as a result of new hardware technology would be in those computers, say, at the end of the rollout.
Mr. Maloway: That is, in fact, where I was headed with this. One of the requirements here originally was on the pricing side, the companies were only quoting the first 1,000 systems. So presumably we are beyond that now. You have a thousand units installed, we are now into a different regime, a different pricing structure. I would like to know whether we could have a copy of that pricing structure.
Mr. Pitura: I am advised that there is a list that is available with the ongoing costs of computers beyond the first 1,000 computers. The price that I shared with the honourable member for a Power PC of $2,929, I understand, is the price that is being charged now for a computer that far exceeded the requirements that we needed at the outset. So as the time goes by, there could be some changes in the price, but we will share that information with the member.
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Mr. Maloway: When will the minister provide us with a copy of the pricing schedule?
Mr. Pitura: I am advised that we should be able to supply the member with the price list for the ongoing purchase of computers within a week.
Mr. Maloway: I will thank the minister when I get a copy of this pricing agreement. I would like to ask the minister where IBM is sourcing this equipment? Where is it coming from? Where is it manufactured? Where is it assembled, and where is it transported from?
Mr. Pitura: I would just like to advise the member that over 95 percent of all work station computer components are manufactured in Asia and the United States. The assembly of the IBM work stations is being done at three locations: Mexico, Japan and North Carolina. But it is not known if I could share with the member or be able to tell the member where the majority of the Manitoba computers are assembled.
Mr. Maloway: Are they being shipped here from Toronto, from a warehouse in Toronto?
Mr. Pitura: I am advised that the computers are shipped to Mississauga and the images are being burnt into the computers at that point. Then they are being shipped to Manitoba.
Mr. Maloway: I would like to know what enhancements, then, are going to be included in this next group. I understand that the first thousand were under the initial pricing structure, and the second thousand or the second allotment, I do not know if that is a thousand or 500 or what it is, have some enhancements. What are these enhancements and how many machines will they be included on?
Mr. Pitura: I would like to share with my honourable friend that one of the enhancements, as an example, would be the faster speed of the CPU within the machine, and I do not have the numbers, specifics to share with the member, but, when we supply him with the ongoing price list probably at the beginning of next week that we will also show him, indicate on that what the enhancements are.
Mr. Maloway: I would like to know how often this pricing structure changes.
Mr. Pitura: The price list, I guess it would be best to say that it is not static for a definitive period of time. It is related to the products and whether there is a new product coming out, because I think, as my honourable friend knows, this is a revolutionary, changing technology area that we are in with computers. So it is possible over a matter of a couple of weeks to have some major product changes, but, for example, the pricing could change on the base station or it could change on the power unit or it could change on the notebook computers. Each time these change it would change the price list as well.
Mr. Maloway: My understanding is that Dell computers are in, I believe, the top five manufacturers. They would be right up there with IBM in terms of numbers produced and sold. I would think they evidently go through their inventory in, I think, an 11-day cycle. I could be wrong about that, but it is very close to that, so therefore you are looking at price changes with them almost every couple of weeks. I am curious to know how often IBM change their pricing. I mean, IBM has never been known as a low-cost seller of computers, but, still, I would think that they would have to produce a sort of a price change list fairly often. I would like to know what kind of a price change list this is. Is it a common one to all the resellers or just for SHL Manitoba? How does this list work?
Mr. Pitura: I think, as the honourable member so aptly pointed out, the inventory with the one computer company that he was referring to changes every 11 days, and so you get new products to replace that existing inventory. I guess, in this particular instance, IBM is no different than that company the honourable member was referring to. I would advise that with IBM, at least, one of the three products that they are producing changes on a monthly basis in terms of product upgrade.
Another point I would like to make with the member is that, in effect, we could probably describe the price changes as an incremental cost to the base, based on the fact that they are always going to be enhanced, whether it be enhanced processing ability or some other enhancement in the hardware that allows the system to function more efficiently. So that as long as you are getting a more superior product, you can argue that a slight increase in the amount of dollars that you are going to pay--and, in fact, in some of the cases the product could actually show a slight price decline, but in most cases it does enhance one's ability to operate in that environment.
Mr. Maloway: I guess, what I am trying to get at is whether IBM has a list of price reductions to their suppliers or resellers or whoever they send this thing to--and they have one list that goes to everybody throughout their system--whether they have just a special one for contracts such as this. I want to be assured that we are getting a competitive price for these final computers. IBM really has no major incentive to give us any special deals here. They have a locked-in contract. They can charge whatever they like. So what assurances does the minister have that these so-called price lists that he is getting from them for every 10 or 11 days or a month, or whenever they come in, are not just simply designed for him and sent in, and he has no way of comparing them? How does he know that they are part of their price listing that goes out to the whole country from IBM?
Mr. Pitura: Of course, that is why in the evaluation criteria that cost as an ongoing requirement was given a 20 percent weighting just for that purpose, so that Systemhouse was able to assure itself that IBM was going to continue to supply them a product and not end up at such a point as Systemhouse can no longer afford to utilize their services because of the high costs. So that is why that evaluation is in the criteria.
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Mr. Maloway: What I want to know is: how do we know that we are getting the price list that everyone else is getting from IBM? Companies have different divisions. They have the business division and they have the home user division. If there is some price pressure in the home division, they can lower the price of their product for that home division. I would assume you are in sort of an elite position here being with a government contract. I would just like to know what assurances we have that we are getting the best price. Just because they tell you that they are going to charge you a different price for the next 1,000 machines is no assurance that we are getting the lowest possible price from IBM. How do we know that what we are getting are the prices that they would sell to anybody else for?
Mr. Pitura: I am advised that in the contract between Systemhouse and IBM, they are utilizing benchmarking within their contract to ensure that the value of the product that they are purchasing from IBM is consistent with the whole industry, so that there are not some major changes that can take place. I think the honourable member makes a good point of them coming back and saying, well, here is your first 1,000 computers, I am sorry, but your next 1,000 computers are going to be 25 percent more. That is why the benchmarking is put into place to ensure that, like, if it is going to be 25 percent more, then the entire industry has to go up 25 percent in order to justify that kind of a price increase. The benchmarking is put in place to say that, yes, you are going to have a Pentium II machine with--I am not sure if you can get a speed as high as 300 megahertz, but--
An Honourable Member: Four-hundred.
Mr. Pitura: Four-hundred? Well, 400 megahertz, which is probably an advancement, that if there was a price increase on that, it is within the standards of the industry in terms of an acceptable increase. So that is what they have in place.
Mr. Maloway: Now who is in charge of monitoring that to make certain that we are getting the best possible pricing from them?
Mr. Pitura: Mr. Chairman, as I indicated to the honourable member, Systemhouse had some benchmarking controls in place with whom they deal with. Likewise, the provincial government, in order to protect the provincial government's position in this whole contract, we also got a contract with a company called Compass. They are constantly working on the whole contract as a benchmarking analyst to ensure that we are getting the best value provincially for the dollars that we spend. This is a very high tech field, and with all the changes that are taking place within this industry, we felt that it was necessary to protect the provincial government's interest to have this company in place.
Mr. Maloway: So is the minister saying then a Compass survey will determine what the next thousand machines will sell for?
Mr. Pitura: No, that is not what I am saying. What I am indicating to the honourable member is that this group called Compass is constantly taking a look at the entire performance under the contract, the values of the contract, the pricing of components. Their role is to identify that here is the benchmark--and that is why they are called that--and then any changes off that benchmark, they would identify to the provincial government as something that we should be questioning. If everything is within the benchmark area, then everything is proceeding normally.
So to answer the question about whether they are going to control the costs of the next 1,000 computers, that is of course between Systemhouse and IBM. The benchmarking that Systemhouse has in place to ensure that they are going to get--certainly there may be an increased cost, but there is also an enhancement in the processor. So that is under their purview to carry out and manage. Our responsibility is to ensure that Systemhouse delivers on its contract to the provincial government.
Mr. Maloway: Well, who wins out then if the Compass survey shows that IBM prices are too high? Which do you take? Do you take the contracted prices from IBM, or what good is the Compass survey if IBM does not want to listen to the results of it?
Mr. Pitura: Mr. Chairman, I think the honourable member is aware that the contract for the supplying of IBM computers is between Systemhouse and IBM. If IBM chooses to increase its prices inordinately on the next 1,000 computers and Systemhouse says, hey, you know, that is way too high according to what the industry is doing, that is an issue for Systemhouse and IBM to work out. Systemhouse still has to provide the provincial government with hardware. If they decide under their own authority that IBM can no longer deliver that service, or should not, then it is up to Systemhouse to make that change. We expect the hardware to be rolled out, ready to go March 31, 1999. That is what we are after. Systemhouse, I suppose if they had to, they could switch. But it is within their domain to be able to monitor the prices of their suppliers that are giving them the product.
Mr. Maloway: So, is the minister saying that Systemhouse can, mid-term in this contract, decide to switch from IBM equipment over to some other manufacturer's equipment?
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Mr. Pitura: Just to clarify that for the member, I think this is a 66-month contract that the provincial government has with Systemhouse. I am sure that Systemhouse has turned around and issued a 66-month contract for the rollout of hardware. What I am saying to the member is that if there was a breach of contract, I guess, that those two corporations had between them, then certainly there must be something in their contract which allows either one to give notice. In the provincial government, we always do the same thing as well with the contracts, there is a clause for lack of service or lack of performance that the contract can be altered.
Mr. David Faurschou, Acting Chairperson, in the Chair
Mr. Maloway: Has the minister actually got a copy of the hardware contract, and has he read it over?
Mr. Pitura: No, I have not.
Mr. Maloway: Has not what? Has not got a copy or has not read it?
Mr. Pitura: No, I do not have a copy; and, no, I have not read it.
Mr. Maloway: Then dealing with the agreement between SHL and the government, does the minister have a copy of that agreement and has he read it?
Mr. Pitura: I was trying to determine whether I had actually received a copy of the contract, but I am advised that I did not receive an actual copy of the contract. I have gone through a briefing session on it. As it is very complex contract and highly technical, I did not receive a copy of it.
Mr. Maloway: The minister refused the other day to provide us a copy of the contract. What I would like to know, though, is there any potential for him to sift through it and give us some details that are not of a proprietary nature, that we could have a sort of a summary of the contract, so that we could get a better handle on some of the provisions of the contract, the penalties, the incentives and stuff like that?
Mr. Pitura: The specifics of what my honourable friend is asking for, it would take a great deal of time on the part of staff to go through the contract and pull out the details that the member is looking for that are not of a "proprietary" nature. What I will share with the member is, and if he has got his pen out, the total costs--and I know that the member has had some difficulty just getting this total cost for this contract straightened out, but the total cost to Systemhouse that we are looking at is about roughly $125 million for the total contract. Pardon me--[interjection] No, it is $124.5 million, the cost of the total project for the desktop management area and that includes installing a wide area network and it includes salaries and expenses for the Desktop Management Unit. Gosh, they are getting paid a lot, but anyway, $143 million here for the cost of the total project.
Now here is where we get into these other little semantics here. Within the provincial government this year, if nothing else had happened, $15 million would have been spent by the provincial government for each department to go their own information technology route. Over the cost of the next five and a half years, it is estimated that as we get closer to the Y2K that of course a lot of departments would have been scrambling to get themselves prepared for Y2K, so the annual costs would have come up.
So we estimated that the annual average cost over the 66 months, per year, would have been about $17.5 million, per year, the departments would have spent anyway. So if we take that and multiply that over five and a half years, that approximately comes out to $96 million that we would have spent had we done nothing, absolutely nothing, but go the course that we are on now or prior to the desktop. If we take a look at the total cost of 124.5 that we have agreed to with Systemhouse, we are looking at a difference or the incremental costs of approximately $30 million to the government over the 66-month period. So that is what we are saying in terms of the incremental cost.
Now for the member's benefit, we have some one-time costs, and we have some ongoing costs with desktop management. If we are going to take a look at the one-time costs, we have estimated that approximately $30 million would be used to do the desktop base and infrastructure capital of the capital purchase of 7,000 desktop work stations, switches, printers and initial base fee, okay?
Then we go into the transition service costs, and that includes labour costs, planning, design and implementation of technology infrastructure required to transition to the managed environment. We have an interim transition, and then we go into the managed environment. That is roughly $9.9 million or the round number is $10 million.
Then we have the interim services costs that we need: deskside support staff, we need help desk assistants; interim on-site support staff required, as well, in the first two fiscal years of the contract. That is estimated at about $5.7 million. So the total for that is about $45.7 million for one-time costs. If we go into ongoing costs, now we are taking a look at the managed environment costs which is the ability to have Systemhouse manage the total environment within the government. That is the major cost of the package with them, and that is $59 million.
If we go into the contract and project management, the annual base fee for the contract and project administration is about $5.6 million. Then we go into the e-mail training software, the per-seat charges to departments for the software suite as well as setting them up with e-mail, and then going through the training process for staff is set at $14.2 million. You add up all those numbers and you come up to $124.5 million which is the total cost paid to Systemhouse.
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In case of the $143 million, the $13 million is the per-seat charge for government to access the provincial data network. Then there is also the charges for the Desktop Management Unit which is a critical unit, I think, within this whole environment, because there are provincial information technology specialists who are going to ensure looking after our interests as provincial government and taxpayers of Manitoba that we are getting good value from our contract with Systemhouse. So, in a nutshell, that is the kind of costs that I am sharing with the member in terms of the total project costs. That is over the 66-month period of the contract.
Mr. Maloway: The minister previously indicated that the contract was quite involved and complicated. I would like to know who is policing the contract from his side of things?
Mr. Pitura: In terms of looking after the contract from the provincial perspective, it is the Desktop Management Unit.
Mr. Maloway: I would like to ask about the pricing and sourcing on the printers and the servers and the routers and all this other hardware that he has got over there. I am making the assumption here that this equipment will have to be replaced or that some of it is phased in over time. I am wondering about how the pricing structure is set up there. Did they do the same thing with IBM, that is, buy the first quantity at a certain price, and then contract to buy future machines at different pricing structures?
Mr. Pitura: With respect to the question that the member asked getting into some very specific details here, with the servers, I am told that is a part of the per-seat fee that was charged from SHL so that the servers are worked into that per-seat fee. The printers were purchased by Systemhouse at the same time the rest of the hardware was purchased under that proposal time. I am not sure if it is on the same RFP, but it was at the same in terms of purchasing the printers, and that went to Hewlett-Packard as part of that purchase.
If you are looking at hubs and switches, there is a price for each logical unit which would be that here is your building, it is vertical or it is horizontal, and, of course, it takes a different configuration of hubs and switches for each one. So each logical unit is bid on individually in terms of cost.
Mr. Maloway: I would like to ask the minister why in the original request for tender the bids had to be f.o.b. Mississauga, which I saw at the time as certainly a detriment to any Manitoba companies wishing to bid on this contract, because they would be at a competitive disadvantage. They would have to add on the cost of transporting the equipment to Toronto and then back again or, at least, one way. I would like to know what was the thinking involved in coming up with that provision that it be f.o.b. Mississauga in the original bidding process?
Mr. Pitura: The member asked about the prices being f.o.b.'d out of Mississauga. The reason they were f.o.b.'d to Mississauga is because of the fact that Systemhouse had a state-of-the-art facility there that it was more efficient for them to do the burning into the images on the computers at that plant. However, I am advised that had the successful bidder been, say a successful bidder was in Manitoba, it would have been possible for Systemhouse to in fact do some of the temporary image burning here if necessary. But, their comment with respect to the f.o.b.ing out in Mississauga was that there were companies that were willing to participate in the RFP and f.o.b.ing to Mississauga. They did not see that as a disadvantage.
Mr. Maloway: Well, it certainly was a disadvantage because a Manitoba company looking at trying to secure this contract and looking at the first thing that would step out at you would be the fact that you would have to "f.o.b. Mississauga" and that automatically would add to your costs on the contract. If you are in Toronto already, I mean you do not have any transportation costs on that. If you are in Winnipeg, it is a Manitoba contract here, so I guess the expectation was that it would be quoting f.o.b. Winnipeg, I would guess. But as soon as they see f.o.b. Mississauga, they knew their gooses were cooked. There were no illusions about this at all. This was an attempt to cut out the local suppliers, cut them right out of the market, and it was about as transparent as you could get.
Regardless of what the Minister of Finance (Mr. Stefanson) indicated in his nice press releases on that, this was something that stood right out. When the local people here looked at that, they saw that as a disadvantage to them, and they could see the writing on the wall from the beginning. This was given to me by more than one of the bidders at the time.
Mr. Pitura: For the member's benefit, that of the 11 vendor proposals that came back, there were only three that were east of Winnipeg, so if the member is saying definitely that Lexmark Canada and that TTX Canada, Mississauga, and Toshiba Canada, Ottawa, had a distinct advantage over anybody in Winnipeg, then I guess what happened here was that obviously they were not able to compete against those three eastern companies. I say that a bit facetiously because the computers that actually ended up being purchased were being assembled in Mexico, Japan and North Carolina, and I do not think the freight from Winnipeg to Toronto is any more or less than it is from Mexico to Mississauga. With regard to the freight with the RFP, when the proposal went out, f.o.b.'ing the merchandise to Mississauga was, I do not think, a major cost factor in whether a company got the contract or not.
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Mr. Maloway: Well, certainly appearances here probably have some degree of importance. I think that a combination of the fact that it was f.o.b. Mississauga for the Manitoba government that they had to file their bids with that in mind certainly had something to do with it, the belief that it was biased against them. I think the requirement for bonding basically cut little guys out of the system.
The federal government evidently--and I am not that familiar with their arrangements for this, but I understand that they have a system that is fairly neutral, and it allows the little guys to compete with the big guys on a reasonably even playing field. This is what I am told, that no company in Manitoba shrinks away from federal government contracting because they know they can put in their bid and it is for their own little piece of the world that they are quoting, and they get due consideration as a little company, a little supplier, with the big guys. I do not know why the government could not have adopted a similar situation. If it works for the federal government, which is a heck of a lot bigger than the Manitoba government, if it works for them and if it keeps these suppliers happy, then why would you not simply copy the system that is already working?
It has standards, it is a system that these little guys are reasonably happy with, so you come up with a system here that makes these little guys quote f.o.b. Toronto, you come up with a system that essentially eliminates any local participation because of your bonding requirements, you have performance bonding requirements for the amount of the contract.
I think there is only maybe one Manitoba producer of these computers that could, in fact, even get the bonding requirements, so the people got their RFPs and looked at them and threw them in the garbage because they knew. Why would they spend hundreds of hours working on a proposal when they know that they do not have a hope? They know that this thing is biased against them, and that there is no possible way they can compete because they cannot get the bonding requirements they have to "shipping this equipment to Toronto," so, in fact, local participation was basically cut out of the process.
Now, they were kept quiet, and they were kept quiet because they were told by SHL that if they behaved themselves they would get a piece of the pie along the line somewhere, that they would be given consideration for a little bit of equipment here and a little bit of equipment there, and I guess that is what has been happening. There have been some consolation prizes given away here to keep peace in the community.
There are some pretty upset people out there for the way this thing was handled, but they are not prepared to make complaints public for fear of retribution by this government and it emissaries because they have to do business in Manitoba in the future. By complaining, they know that all that will happen to them is that they will be penalized even further. So you are not going to have a lot of people complaining. I mean, you can buy them off with little contracts here and little contracts there, but that does not deny the basic assumption at the beginning that these people were treated unfairly, that there was no intention here whatsoever in giving Manitoba companies a fair shot at this contract. Let us not kid ourselves; there was no pretense here whatsoever.
The fact that you could keep them quiet as long as you did was surprising enough, because it was pretty clear that they were not going to get it. But some of them thought, I guess, maybe there was some fairness in it they could not see. They would go and fill out their applications and send it in, but at the end of the day I guess there was no real surprise even among those people.
So I do not have a lot of sympathy for the way this whole proposal has been handled thus far, as far as the local producers are concerned. I think you could have done it better by following a different approach than you did. Now having said that, you have already decided, you have made your decisions, and so we are collectively having to make the best of it and it is not that it will not work out; it may, in fact, work out in the long run.
I would like to also ask some questions about--I think I asked before about firewalls and so on. Could you give us a bit of an update as to what is happening in that whole area of this proposal?
Mr. Pitura: I would first like to respond to the comments that were made by my honourable friend about Manitoba companies not having a fair shake at the contract to supply computers. I guess what I would like to do is to take him to task on this because a performance bond is posted, and it is done with every government contract that there is a performance bond posted. That is simply, for my honourable friend's information, to protect ultimately the taxpayer of Manitoba from having a contract breach take place and substantially the potential to lose millions of tax dollars.
So putting a performance bond in place is not anything that is new. It is not unprecedented in its level, and in fact I am advised that the performance bond in this particular case was 50 percent of the value of the contract, not 100 percent as some contracts are. So there was a difference with regard to the performance bond with regard to the computer contract.
I would also like to suggest to the member that if he is saying and suggesting here today that Manitoba companies should have the performance bond waived and other companies have to have their performance bond, then I would have to take exception to that as well, because we have worked arduously across this country to try to break down trade barriers between provinces. It has taken decades to arrive at the point where we are today with the agreement on internal trade. We are by no means at a point where we can say that we have free trade in Canada; we do not. We probably have freer trade between Canada and the U.S. than we have between provinces. To have given Manitoba companies a distinct advantage by not having to post a performance bond, there would have been cries of foul right across the country. Yes, there would. There has to be some sort of realm of fairness to the whole system so that whether you are a company in Manitoba, or whether you are a company in the Northwest Territories or on P.E.I. or in Vancouver Island, the contract posted by Systemhouse with regard to the supplying of hardware was fair and equal to everybody to bid on this contract, and everybody knew that they had to post a 50 percent performance bond.
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If a company is going to bid on a contract and says, well, we cannot afford to post a performance bond, then I have to ask myself can we afford to do business with this company because we may have to take over the management in order to get the company to be able to handle its cashflow. So I think that having the performance bond there, it levels out the playing field for everybody involved and everybody gets a chance to bid fairly on the project.
Whether the computers were f.o.b.'d to Mississauga, I say that, again, it is not a relevant point of contention because everybody who was quoting on computers had to f.o.b. them to Mississauga. Now if you can send computers from Mexico to Mississauga as cheaply as you can from Winnipeg to Mississauga, then I would have to say that there is probably something wrong with our transportation system here in Canada, that it is overpriced, but I do not think that that is there, it is competitive.
Now, the RFP went out on the MERX system, the electronic bidding system, so that anybody that was signed up for the on-line system could bid on the contract proposal that was put out. So I will reiterate again and again that the way that the operation was done was consistent with the way government has done all of its contracts with regard to the performance bonds, with regard to the way that the contact was done, so there is very much a consistency.
Mr. Chairperson in the Chair
It was not, and I repeat not, an attempt to eliminate Manitoba companies from the process. Manitoba companies should be, I guess, from the standpoint of having that ability to respond. I would point out to the member that there was one, two, three, four, five--five companies that did respond from Winnipeg to that RFP. So the situation is such that, I think, the system has been reasonable or is fair in the whole process.
The member asked about firewalls. Of course, firewalls are an important part of the desktop management rollout, and firewalls are being put into place in those areas where the information is of a sensitive nature, so this is being done. I think the member might recall when we were together going through the Manitoba operation centre at Systemhouse that in terms of the security of data, once the data was in the managed environment that there would be a strict adherence to all the privacy legislation that has been put into place because that is governing the security of information. In fact, there is a firewall between the Province of Manitoba and SHL, so there is even that kind of protection in place. So the security of data should actually be enhanced as to what it is now if there is sensitive data that has to be secured.
Mr. Maloway: Mr. Chairman, how many firewalls does the government have?
Mr. Pitura: Mr. Chairman, I am advised that there are three firewalls in place right now, and that includes the one between SHL and the provincial government, and as the logical units go through the desktop rollout, more firewalls will be put into place as each one of these logical units comes on stream.
Mr. Maloway: What are the costs of these firewalls, and how many does he plan to have at the end of the day?
Mr. Pitura: I am advised that there is really not a standard cost that you can put onto a firewall per se. The general rule of thumb is that they come somewhere between $10,000 and $20,000 per firewall depending on what kind of configuration is needed for the firewall. In terms of the total number, the total number that we will have in place is the total number that we will require. It may sound like a very simplistic answer, but basically to say that we are going to have 10 firewalls in place when we need 15 is not the right answer. So, if we need 15, we will have 15; if we need 20, there will be 20, because the security of the data is paramount to the whole process. If we get down the road and start doing a logical unit and there is a definitive need for a firewall, then one will be put in, even though you may not have anticipated having one at the beginning.
Mr. Maloway: I would like to know what sort of provisions and controls there will be on Internet use in this environment.
Mr. Pitura: I am advised that the access to the Internet for the provincial government will be determined by each department in terms of how they want Internet or if they want Internet, and the control of the Internet will be up to each department. The chief information officer will have the responsibility of putting together the industry-wide standards for government with regard to use of the Internet. Once that is established, then each department can determine whether it wants Internet or has a use for Internet and then a degree of control of that Internet use.
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Mr. Maloway: Well, how much use is being made of the Internet at the current time then under the old system?
Mr. Pitura: I am advised that right now it would be very difficult to determine actual usage of Internet government-wide. We would have to do a survey department by department to see what their usage is with regard to the Internet. But we do know that I guess the ability to use the e-mail system is probably as important as, or probably more important than, access to the Internet.
Mr. Maloway: How many Internet connections exist at the current time then in the government?
Mr. Pitura: I am told that there are about roughly 900 Internet connections.
Mr. Maloway: Is there any monitoring going on of the Internet's connections that we have at the existing time to see what people are using the Internet for and what sites they are visiting?
Mr. Pitura: Mr. Chairman, I am advised that there is no centralized monitoring on the Internet services right now. That would be up to each individual department to determine whether they are going to monitor the Internet usage in their department, but there are difficulties I guess that arise as well. That is why the importance of having the chief information officer establish industry-wide standards for the use of Internet, so that it is not basically up to each department to establish how the Internet is to be used in their department. It is just a case of using it and using it efficiently for the purposes that it was intended. The simple answer, I guess, is that there is really no way to have that control right now, but there probably will be in the future.
Mr. Maloway: So is the minister saying then that of the 900 Internet sites that the government is currently subscribing to, or paying for, that it has no system or software on? I understand there is software available that tracks the sites that people visit to make certain that they are doing things that are associated with their work. There have been problems in other jurisdictions with employees going into the naughty websites and other activities, and the minister is saying that he has no idea what could be going on here with these 900 sites.
Mr. Pitura: The monitoring that is happening right now is at the departmental level, and therefore it would be up to the individual department to determine how much monitoring it wants to do.
Mr. Maloway: I guess what I am asking is: is there any usage made of the programs that are currently available? I do not recall the names of the programs, but there are programs that you can buy that simply do that. They track the visitations to the different websites. I mean, these programs are out there, they are common place. You can buy a program and install it. I would have just made the assumption that it would be just standard practice, given what has been happening in other jurisdictions with the use of the Internet and all the potential abuses that can occur with it.
Mr. Pitura: The present way that Internet has been set up throughout most of the provincial government is that in a small office environment with a couple of computers that are logging on to a centralized source of data through a modem--with an individual modem, of course, it is very difficult to monitor that type of usage of the Internet. I would just like to go back a ways too, because the member is kind of surprised that there is no way of monitoring the use of the Internet, but I think in terms of the evolvement of technology with interprovincial government, as well over the years that as computer technology changed--I can well recall in the agricultural office in Morris when I was there and the Manitoba Agricultural Credit Corporation was going on-line for computer data services, at that time I would dare say that the use of Internet was probably minimal.
Today that same computer, with the availability of Internet so widely available and so widely promoted, that type of computer would have the ability to access the Internet. I guess what I am saying is that because of the evolvement, and I hope that the member will appreciate this, is that is one of the major reasons we have going to a desktop managed environment, because we have reached that point where we need to have consistency and standards established across the entire provincial government corporate community, so that we have this ability. In the future I can certainly see that the ability to monitor the use of the Internet will likely be there as a result of going to the desktop-managed environment. Whether, in terms of the standards, how it is used, how it controls and so on, those are still issues that would have to be addressed, and I am presuming they will be addressed by our chief information officer.
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Mr. Maloway: Of the thousand units that are currently hooked up and running under this new system, are there any procedures in place there to track the Internet usage?
Mr. Pitura: As the rollout takes place, and I am not sure I am going to be able to answer the member's question specifically, it would be converting the individual modems over to the servers, I guess. I am not sure if I have the technological term right. So in terms of access to the Internet, it would be done in large groups having access to the Internet on a constant basis. The ability then to control takes place at that point, I am also told. But then that also leads to the broad policy discussions with regard to what kinds of controls should be put into place with regard to the use of the Net, if any.
I think that there is certainly an argument to be made that, when you are operating the Internet within the domain of the workplace, perhaps the company or the management has control as to what you use the Internet for, but I am not so sure that is the right way to go, because it opens up an area of one's individual rights and freedoms. It could be. I am just saying that this as a hypothetical thing now. Anyway, the ability to control it will be there in the future.
Mr. Maloway: Is the minister then saying that of the 900 sites that the government is currently paying for, has been paying for for the last two, three years or longer, there are absolutely no controls in place on the usage of the Internet and its sites?
Mr. Pitura: In response to the member's question, there are and can be controls, but it is not centralized. It is up to the individual department right now to exercise those controls if they wish to.
Mr. Maloway: Is there any written policy in place in this department with regard to Internet use?
Mr. Pitura: I am advised that there is a policy that is in place within the provincial government with regard to the use of the Internet, and, basically, it is very simplistic. It says that time spent on the Internet should be spent for purposes of government and not for personal use. It is very simplistic, unless I misunderstood that we have a policy or it is just an understanding. It is a general policy. I am told that it applies to all government departments right now.
Mr. Maloway: Is it a written policy, and can I have a copy of it?
Mr. Pitura: I believe there is a written policy, although we are not positive on this. We assume there is one. If there is one available, it should be available through the office of the Information Technology, and we will endeavour to find out if there is a policy of that nature, and we will gladly supply it to the member.
Mr. Maloway: Have there been any reported incidents of abuse as far as the Internet connections are concerned over the last period of time?
Mr. Pitura: I have to say that, basically, if there has been, we are certainly not aware of it, but there have been no events reported, to our knowledge, today.
Mr. Maloway: Does the minister have any idea of the amount of time that might be lost to personal use of the Internet connection?
Mr. Pitura: Again, I would have to say to the honourable member that we are talking hypothetical time use here, and we just do not have that ability to put a handle on it, on that number.
Mr. Maloway: Well, then, what plans does the minister have, given this new environment, to examine and track this whole area? Surely there is something afoot with the 7,000 new computers and the ability to track the use of the Internet. Surely there is something going on in this area. I would like to know what is going on.
Mr. Pitura: As the Desktop Management Unit is being rolled out, the technical capability or the technical ability to monitor Internet usage is certainly going to be in place. Now, what happens is, through the office of the chief information officer, that the global standards can be established for government through the use of the Internet. So the development of a concise, elaborate policy for the use of Internet within the provincial government is therefore possible. It is also possible to monitor it, and I guess it would be possible to enforce it once a policy is written up.
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Mr. Maloway: So when is the minister going to do this? When is he going to develop this policy? You have a thousand units already in the field operating. When is he planning to develop this standard, when will it be developed, and when can we have a copy of it?
Mr. Pitura: I would clarify for the honourable member that the chief information officer is going to be developing the global standards for use of the Internet in the provincial government. The chief information officer is under the purview of the Minister of Finance, and, as such, that is where that direction will come from.
Mr. Maloway: Is SHL planning to do any monitoring of the Internet usage?
Mr. Pitura: No, they are not.
Mr. Maloway: An area that this kind of leads into is the whole area of cookies, and I wonder if the minister has done any studies in this area and has determined that there is any sort of emerging problem in the area with regard to cookies.
Mr. Pitura: At first when the honourable member asked that question, he made me hungry, but, with regard to, I guess it is a program called cookies--[interjection] No. We do have the technical specialists that are familiar with that area of security, and they are looking at it in terms of--and I am not sure in terms of how the security that we are getting or not getting as a result of cookies.
Mr. Maloway: I would like to know just what sort of studies or what sort of work has been done by the department in this whole area.
Mr. Pitura: I have indicated to the member we had the technical resources in place, and they are taking a look at this whole area. We will probably make some recommendations to the chief information officer as to how to handle it, I think, or to David--one of the two.
Mr. Maloway: Based on that response, though, I am just not sure how big a problem it is at this point in time.
Mr. Pitura: That is why, with regard to this whole area of desktop, we have to leave it up to the people that are in the know and technologically competent in that area. When you get into this other area, again, I guess that the argument can be said that that is why we have the technical expertise to take a look at this, to give us some recommendations.
Mr. Maloway: Well, Mr. Chairman, I mean, your technical expertise is not taking you anywhere. You have all these Internet sites hooked up right now for several years. You have no monitoring system. You do not know what is going on in there. In other jurisdictions, and I think it was B.C. a couple of years ago, there were uncovered cases of employees into all sorts of sites that they should not be into and all sorts of usage of the Internet. If you are dealing with supposedly confidential and private information here, then I guess it is something that should have been addressed by now, you would think, in the department over the years. I mean, computers and the Internet have been around a long time, so why do not we have some more information about these subjects?
Mr. Pitura: I think, in response to the member's question, that is one of the reasons why, and I explained this a little while ago, in the involvement of computers within the provincial government going from 8086s to Pentium, Pentium IIs and so on, and everything that has happened in between, that building us a managed environment is exactly the way to deal with this type of an issue. I think that the sooner we can get there, to that point, we can then be able to address the issues and have some kind of control on it.
Mr. David Faurschou, Acting Chairperson, in the Chair
Mr. Maloway: I will take it that, if I can read between the lines there, whatever areas we are missing policies in right now with regard to use of the Internet and the whole question of cookies and so on, the matter will be addressed as quickly as possible and the minister will get back to me or keep me informed with what is happening in those areas. All right, so that I will not have to wait till next year to start asking the same questions again.
Mr. Pitura: I think the honourable member knows that I have attempted to keep him informed with regard to the technological changeover here in the provincial government. As such, with regard to the changing developments in the cookies department, then we will keep you apprised of the changes that take place. With regard to the security and firewalls, we will keep the member apprised as much as we possibly can. I just realized that the member must also take the opportunity to ask when he would like to get information as well.
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Mr. Maloway: On a couple of the other departmental Estimates that I attended, the issue of how many computers in the department came up. In two of them--I think it was Education, I think it was Consumer Affairs--the numbers were at variance with the numbers that I have here for the department. For example, in Consumer and Corporate Affairs, the department is supposed to have 178 machines. The minister, when I asked him how many he was going to have, thought there were 148, which meant that we were 30 short. He did not know where those 30 were. He assured me that he did not have them, but we were unable to determine just why he would think he is going to have 148 and we think he is going to have 178.
The problem also occurred in Education, too, and it is the numbers. I do not have it here, but we think they are going to have 747. They think they are going to have a different number. I am just wondering why that variance. In the two departments that we checked so far, there has been a variance.
Mr. Pitura: Mr. Chairman, to try to help the honourable member out here with these numbers, firstly, I believe the numbers that the honourable member has may be outdated by now. I am told that the data compiled for those numbers was compiled about 18 months ago, so that was the original estimate of the rollout with regard to computers. Then you take a look at the so-called discrepancies that you are getting between Consumer and Corporate Affairs with them indicating 178 on your data and in Estimates getting 148. It may well be that at the time when the estimate was given that they estimated the numbers of the computers in the Leg Assembly, and then Leg Assembly was deemed to be out of scope, so that would have resulted in the reduction of computers.
To explain that data there with Education, it could have been a reassessment of their needs, redefining their needs. You have to recall that if we are moving Education into 1577 Dublin and out of 1181 Portage and out of Taylor Avenue, the configuration and needs for computers can change as a result of the move, because instead of an individual work station, you could end up at a shared work station depending on how the use of that work station is done. So that may help you with some explanation as to the variance of the numbers.
Mr. Maloway: I would like to thank the minister for providing me with 18-month-old information here. I wonder if he could give me an update on where we are now with this in terms of the numbers. This information was just given to me a couple--well, a month ago maybe, maybe two months ago, but not long ago.
Mr. Pitura: Mr. Chairman, with regard to that, we will attempt to keep the member updated on it with the new numbers. I indicated earlier that sometimes the member has to ask as well as my coming forward with the information. But as the rollout takes place, fairly accurate numbers are then available with regard to each logical unit as it rolls out. One of the things, of course, is the numbers of units that are estimated in the rollout, when it comes time to do the actual rollout, those should be very hard numbers. Prior to the rollout taking place and you get the estimated number of units being used by that particular department, once they reassess or do the assessment of their needs, they may in fact change that just by having a better understanding of how the new system is going to work and how they can utilize it.
Mr. Maloway: I wonder when I could expect to receive an updated copy of this list.
Mr. Pitura: I am not trying to be facetious, Mr. Chairman, but I think we can have that information for the member probably within about a week.
Mr. Maloway: I would like to ask the minister about any work that has been done in the area of wireless equipment and so on that is becoming quite prevalent these days, whether there is any component to the whole scheme of things here involving wireless equipment.
Mr. Pitura: I am advised that the provincial government has looked at wireless data communication but at the present time are not doing anything with it.
Mr. Maloway: It is my understanding that the Legislative Assembly itself was looking at some wireless equipment as relates to the notebook-type computers and hooking up in a wireless way to outside the Chamber.
Mr. Pitura: The Legislative Assembly is out of scope for the desktop management system, so that would have to be something that the Legislative Assembly Management Commission would address in terms of the ability to do that.
Mr. Maloway: So in terms of what we are talking about here, the 7,000 computers, there is no provisions at this point for any type of wireless equipment, and also this relates to--and I have asked this before about the voice recognition software and so on, which you see is pretty prevalent these days with Dragon Systems. As a matter of fact, IBM has its Via Voice. You know, we talked earlier about the judges, I believe in Saskatchewan and Manitoba, getting on the bandwagon here and getting into some voice recognition. It just seemed to me that it was a logical thing to be looking at because of all of the possible litigation regarding the repetitive stress injuries that people are getting. The voice recognition just makes sense to have if you are dealing with letter writing, which is what a lot of government work is involved with. The price and quality of the voice recognition software is reaching the point now where it is becoming quite attractive. You go into Future Shop and Costco, side by side, they have the Via Voice and the Dragon Systems software.
Mr. Pitura: Mr. Chairman, I would like to advise my honourable friend that we are trying out five voice recognition machines right now in the judges' chambers at the Law Courts. The intent is to possibly move that number up to 15 in terms of utilization. I guess what I am saying to the member is that if voice recognition software appears to be able to do the job for the judges in their chambers, then I think it would be just a matter of time before we adopted it throughout the provincial government, because I think as the member said, the types of repetitive injuries that are occurring from keyboard stroking is something that we have to certainly pay attention to. We have to wait and see what the evaluation is of this software and if it is satisfactory. Then I think we will probably take a look at the next step or else try out some other software.
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Mr. Chairperson in the Chair
Mr. Maloway: Mr. Chairman, I would like to ask the minister a question regarding the Y2K problems. I understand the Y2K committee had an updated report that was to come out, oh, I think maybe a month ago now. There again, I was promised a copy of it, and I have yet to see it. I mean, this has been 10 years of this government doing these kinds of things. You know, you ask them a question and you check your records, years later they still do not respond. It is terrible. You keep getting promises of responses for this, responses for that, and then nothing shows up. So this latest report on the update of the Y2K was out, like I say, about--my guess is about a month ago. I still do not have it. I would like to know where it is and who has it. Can the minister update us as to what the status is of the latest Y2K report?
Mr. Pitura: Again, I guess in response to the honourable member's question, the Y2K is something that is being, the committee on it, is being chaired by the chief information officer and, of course, again I would reiterate that the chief information officer is with the Department of Finance and as such I think that the honourable member might best address his questions in the Finance committee when it is going through the Estimates process.
Mr. Maloway: Does the minister have a copy then of the latest updated Y2K report?
Mr. Pitura: I know that I personally have not seen the report, but, in discussion with staff, they have indicated that there might be a report forthcoming, but I am not sure where it is at, and that again, I think, would be best asked of the Minister of Finance.
Mr. Maloway: I do not understand why the Minister of Finance's department would have active Y2K activities and yet not tell the minister in charge of the whole government computer program. I do not know why he would not have copies of this, at least maybe not the latest report, but have some older reports on Y2K.
Since we will be probably back at this Wednesday afternoon, in the intervening period could the minister use his good offices to pry a copy of that report out of the Finance department and maybe bring it to the committee hearings on Wednesday?
Mr. Pitura: With regard to the Y2K, yes, our department has a responsibility for the desktop management and the rollout of the desktop management and the managed environment. Certainly Y2K is a very important aspect, and one of the major reasons or part of the reason for going to a managed desktop environment, once the chief information officer, who chairs the Y2K committee, of which there is a multidepartmental input into that, once the areas of that committee are identified, I am sure that they work in close concert with the Desktop Management Unit to indicate what direction they want to head with the Y2K, the issues are placed on the table, and then the Desktop Management Unit would look into getting them put into place.
I am just advised that there may be a report coming out. I am not sure where the member has got his information, that there is a report out now, so I cannot get him a report that does not exist.
Mr. Maloway: I think if he checks with the Y2K people there, he will find there is a report and it probably is available. It was going to be out in a week when I last talked to them, which was a good month ago.
I would like to ask him whether he has met with Mr. Desfosses from the SOS-2000 committee. It is Minister Manley's initiative out of Ottawa, and he was in town, oh, once again, two or three weeks ago. I met with him and other people met with him as well, and I wondered if the minister had met with him to get an update as to what is happening with the year 2000 question as far as the task force is concerned.
Mr. Pitura: As far as the Desktop Management Unit is concerned and the rollout of desktop, no connection or no communication has taken place between the federal government and the provincial government for the year 2000, but I am advised that the Y2K provincial committee has probably had some communication with the federal Year 2000 committee. From that standpoint they may indeed have met, but we are not aware of it. We certainly have not met with him at the desktop management level.
Mr. Maloway: Well, could the minister give us an update, then, as to what is happening regarding the Y2K issues and also deal with the whole area of the imbedded chips as it relates to the provincial government at this time?
Mr. Pitura: Again, I wish to advise the honourable member that this whole area of Y2K is within the realm of the chief information officer, who is charged with the responsibility of addressing all the issues with Y2K, including the imbedded chips that the member brings up as an issue. I think that again the question can best be put when the Department of Finance goes through the Estimates process.
Mr. Maloway: Well, Mr. Chairman, that is just more buck passing here. You know, we have people here that are working at the technological leading edge trying to solve problems of this government and in fact the whole economy. You are telling me that they cannot answer these questions. We do not know these answers. We cannot get the answers. Then I go off to the next--did this last year. We went through this whole song and dance in previous years. I went to--
Mr. Chairperson: Order, please. The time is now 6 p.m. Committee rise.