Phoenix payroll system contract ballooned to $187 M, CBC reports

Since IBM Corp. was hired to implement the Phoenix payroll system for the federal government in June 2011, the contract has been amended 39 times and increased in cost to $189 million, according to a CBC News investigation.

The public broadcaster reports that while the original bid price from IBM was not revealed by its Access to Information request, the contract started at $5.7 million for its first stage. It’s expected that the project will continue to 2019 to define, implement, and maintain the system.

CBC reports that IBM was instructed to use Oracle’s PeopleSoft software to create the pay system. Since launching in February 2016, there have been numerous problems in federal employees receiving their pay as expected. More than 1,000 glitches in the system required that 28 computer scientists be shifted to the Phoenix program to help IBM address those.

Experts interviewed by CBC said IBM wasn’t at fault for the contract’s problems. Instead, the original scope of the contract as written by Public Works and Government Services is to blame.

In March 2014, the government department took back responsibility for training design and execution for Phoenix, because it disagreed with IBM’s recommended approach.

In February 2016, in anticipation of the start of the Phoenix system rolling out, the government laid off 2,700 payroll clerks serving 120,000 employees.

IT World Canada has requested comment from IBM and Oracle in regards to the Phoneix project.

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Brian Jackson
Brian Jackson
Former editorial director of IT World Canada. Current research director at Info-Tech

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