The federal government sought advice from Cisco Systems on how it should justify a sole-sourced contract it was planning to award the company in 2019, emails obtained by The Logic show.

The exchange underscores what some critics have called a too-cozy relationship between Ottawa and the Silicon Valley IT giant, and a government approach to buying technology that often shuts out domestic companies and other competing bidders.

In response to questions from The Logic about the emails, the government’s IT procurement body, Shared Services Canada (SSC), initially said it had cancelled the 2019 contract with Cisco, acknowledging that it was “not appropriate” for the government to discuss its communication strategy with a company to which it was planning to award the contract. However, following further questions from The Logic about when the contract was cancelled, SSC then offered a different version of events, saying it had in fact awarded the contract after some delay. The agency said “adjustments were made” to the contract, but did not specify what they were before publication time.

In the emails, which The Logic obtained under federal access-to-information law, an official at SSC described “pushback” the agency received from several competing companies after it publicized in August 2019 a contract valued at $13.2 million to Cisco for “hardware and maintenance services.” 

The contract, a copy of which was obtained by The Logic, shows Ottawa was primarily buying a number of Cisco’s “Catalyst 9300” family of switches, which are used to connect various devices within a given network. 

According to the emails, SSC faced blowback from other would-be vendors after awarding the contract. Rather than provide its critics with its own reasoning for sole-sourcing to Cisco, an SSC official contacted Faris Matani, an account manager at the technology company.

“We have received a large number of industry questions and challenges regarding the Cisco inventory purchase,” reads the email.

Those challenges specifically called into question the “interchangeability issues” Ottawa used to justify the procurement, according to the email, asking the government to “please identify the integration requirements that would preclude an open and fair multi-OEM competitive process.” The SSC official in turn asked Cisco for “strong technical justification” that would help explain its decision to sole-source the contract, saying SSC did not have “sufficient context” to do so themselves.

The federal agency has long attributed its widespread use of Cisco equipment to those interoperability challenges, meaning that when existing technology is replaced, buyers sometimes prefer to use the same original equipment manufacturer (OEM) to ensure their systems remain properly integrated. 

In a written response to The Logic’s questions, SSC spokesperson Denis Schryburt said the agency “regularly consults with vendors and third-party experts,” but said those discussions “are not to be used to justify a planned procurement.”

“It is not appropriate to discuss the rationale for any OEM-specific procurement with the vendor in question,” Schryburt said in an emailed response. “This is why Shared Services Canada cancelled this procurement and coached the employee on the correct course of action.” 

Days later, however, following questions from The Logic seeking further details, SSC said it had actually awarded the contract on Sept. 26, 2019, 43 days after the sole-sourced bid was first made public. 

“The procurement process was in fact put on hold due to increased consultations following questions received by the vendor community,” the agency said. “Adjustments were made in the solicitation as a result of the aforementioned consultations.” None of the information it received from Cisco was used to justify the contract, it said. 

Briar Wells, a Cisco spokesperson, said the company “routinely provides technical information and education about its products to help our customers make buying decisions.” Wells said Cisco does not comment on customer procurement processes, and asked that questions about the bid be referred to SSC.

The debate over SSC’s contracts with Cisco is part of a wider discussion about whether the federal government is too dependent on a select group of foreign suppliers for its digital technologies. The government spends roughly $23 billion annually on overall goods and services, and the country’s innovative businesses have long pushed for the government to spend more of that money domestically. In the last election, advocacy groups like Technation and the Council of Canadian Innovators tried to make government procurement practices a campaign issue. 

Ottawa has previously acknowledged its heavy reliance on Cisco specifically—SSC has purchased hundreds of millions of dollars worth of the company’s technology in recent years—and Parliament investigated the issue in a series of committee meetings last year. Network technology is primarily purchased by SSC through its Networks, Security, and Digital Services division. 

“We have a lot of their equipment,” SSC president Paul Glover said in testimony before the House of Commons standing committee on government operations and estimates (OGGO). “People would like us to open that up. Moving forward, we will.”

SSC has emphasized that 87 per cent of its procurements are competitive, and that it awards sole-sourced contracts only when a single supplier is deemed to be capable of delivering what it needs. However, critics say that is strictly a rhetorical defence by SSC, arguing that the agency awards many contracts to third-party resellers that ultimately purchase and install Cisco equipment. 

In an April 2021 testimony before the OGGO committee, Glover said requests for specific technologies, including Cisco technology, often come from the departments themselves, usually due to concerns that the adoption of new equipment could interfere with system integration. He said the agency is now seeking to push back on those requests in an effort to draw from a larger pool of vendors. 

“We used to—not all the time but mostly—just accept those,” Glover said. “We now review and challenge those requirements to make sure that there is an operational imperative, and that we cannot move to a more open and transparent process.” 

In testimony before the same committee in May, Glover said competing technologies have often been presented as interoperable with Cisco systems, but later prove not to be. Sometimes the introduction of new technologies can create the need for updated training and other requirements that can increase costs, he said. 

On Monday, Glover announced that he is stepping down as head of SSC next month for a “new adventure.” 

SSC’s dependence on a few select manufacturers is not confined to the area of network systems. Microsoft, for example, is a preferred supplier for the federal government’s collaborative cloud tools, while it often taps other American tech giants like Unisys and IBM for mainframe technologies. 

But Cisco’s technology has become especially integrated in government network systems. The company makes up 98 per cent of all “wide-area network” (WAN) routing installed across government departments and agencies, according to an internal SSC document. It also makes up 100 per cent of WAN core routing; 93 per cent of installed DC network switching; and 99 per cent of “customer-edge” routing. 

Established in 2011, SSC operates under the guidance of Procurement Minister Filomena Tassi, and serves as a central body in Ottawa’s efforts to digitize public services. Spokespeople for Tassi did not respond to questions from The Logic.

The government is in the middle of a major network overhaul. In its latest budget, the Liberal government set aside $300 million over three years for SSC to “repair and replace critical IT infrastructure.” In its 2020 throne speech, Ottawa said it would “make generational investments in updating outdated IT systems” to improve government services.