Deputation to City of Toronto General Government Committee on PayIt Status— May 30, 2024
Item GG13.16Innovative Partnership to Accelerate Digital Services with Payments
Hello everyone and thank you. It’s nice to have the opportunity to speak with you for a few minutes today. I have three main points here — the first one is I just want to say thank you to City staff for their ongoing proactive and consistent communication on this file. It’s been ongoing — now we’re into our fourth year, and there’s a lot in this topic in terms of procurement and in terms of digital service so they’ve been doing a great job and I just want to acknowledge that off the bat.
Secondly I want to say that the reporting on this file is still pretty hard to parse. I understand and I know it’s a complex topic, to understand the way that this deal was set up and where the money is going. But in terms of the approximately four million on the next two one-year extensions I’d be curious if that’s the entire cost to the City, or if there’s more, and if there’s any way to get historical accounting that’s easy to understand in terms of how much money has gone to PayIt since the beginning of the deal. That would be wonderful, it would also be really great to establish some kind of ongoing transparency in terms of easy to access reporting on how this is shaking out.
The last thing — which is probably the most important one — is about the report reference to another procurement process. There’s a lot here in terms of going out to market, having the vendors come in to be able to understand the problem, doing public engagement etc. All of the steps sound helpful, but I have two very specific prompts.
The first one: how is the City is going to account for the significant competitive advantage that PayIt would have in a secondary procurement? I’m not sure how that’s going to be built into this process, but that was already an issue for anyone who looked at the Swiss challenge. PayIt had been working with the City out of contract for a significant duration, and that makes it a lot easier for the City to award a contract in that direction. So the first point here is that I think that needs to be explicitly understood. I don’t know if there’s any way to put value on it, but it it’s not helpful to pretend it’s not there, this issue of advantage that PayIt will have in future.
And then the second thing is just to say for staff — it is to their benefit to have lots of people respond to whatever the next tender is. But there’s also a moment in time here given that we’re on a two-year trajectory to look at this in different ways — what’s available that’s open source? I’m a big fan of public money public code, is there any opportunity to do this differently than the structure that appears to be leading just in the way this report is written? There’s adequate time to get into those two issues I think in the course of what’s laid out in the plan, so I I will end there and thank everyone for all their work on the file.
Questions
Councillor Cheng: …Thank you for that deputation it’s very insightful and acknowledges the intricate role and therefore advantage that PayIt has had in our in our systems. I’m just wondering, do you have any suggestions on how we could scope a procurement process that would recognize that advantage?
Thank you Councillor Cheng for the question. I think the first thing even before the scoping would be to make sure that everyone understands that there are vendors who are going look at this and immediately say there’s no way I’m going to waste my time. There has to be some sort of explicit acknowledgement of how and why this [procurement] is being done, and how and why one would address that response from the market I don’t have an answer, but I think it’s a great thing that there’s time to think about it.
In terms of scoping, I really appreciate that question because I think in the requirements writing process there’s so much power from the public side, from the City side, and I think even in what is designed as the software requirements — those requirements might speak to the fact that the vendor doesn’t have an existing advantage if those requirements are different than their product, just as a starting point.
I think also some of the things around the business model don’t fall neatly into the scope of standard software. I don’t want to go too far off track here, but just to say a big reason that this deal was attractive to the City was the financial construct that it created in terms of no money upfront, for payment on transaction model. There are a lot of firms that cannot afford to participate in that kind of a model, so I think those are a couple of pieces for consideration in that scoping exercise — to make sure that we all understand that the sort of finance deal that happened here doesn’t nest neatly into what is a standard software procurement so I think we really have to think about that.
Councillor Cheng: What would you see as the potential of actually switching things up completely given that we are so intertwined — I guess we’re extending two years and it will become even more intertwined by then. Because there is innovation happening all the time and sometimes there’s technological leaps that happen — is it possible that something could emerge that would actually be more easily replaceable because of those technological leaps?
It’s a great question because that may be, especially given that we’re talking about two years from now, so it’s a really important piece of the study. I think figuring out which pieces of this are open source or something that’s more of a commodity versus something that would be sold as a competitive advantage or intellectual property kind of pitch matters. So I think looking at the component parts and trying to figure out which pieces of this are interchangeable to avoid the lock-in problem, and how does this get built so some of it might be something that the City itself could manage and maintain?
There’s ways to construct products or service offerings like this that are combinations of things, so I think the best approach is to keep this as open as possible, and to really understan what are the component parts and how might each of them be procured or built or stewarded or you know or or or…
But I think it really goes back to your point — I’ll close there — we can’t see into that two-year time frame, so what are the pieces that we need to keep loose? Because it’s also very dangerous when you’re too tight on requirements and the whole ocean and sea is shifting and staff know that better than anybody. There’s a lot of great experience at the City and the team working on this, I think it’s a matter of making sure that this gets packaged in a way that opens up all the options rather than goes narrow. I think it’s always best to try to figure out how do you make it so you can switch over to something else at any point in the future, because that’s the place we need to get out of the bad habits of how governments get sold software and take some power back there.
