'Systems are going to start going down' say IT contractors, as Alberta government stops renewing contracts

CBC News has spoken to four IT contractors who say the Alberta government's decision to stop renewing contingent labour contracts two months ago is hurting small business. They say it's likely taking money out of the province and could have major service impacts for Albertans.

The information technology contractors say some online services — like the provincial scholarship system — are already breaking down, and other websites and applications likely will soon.

But, the government says those contracts are under review as part of regular business practice and Albertans won't notice any service issues.

Contractors say they feel betrayed

Some of the contractors are part of a group of companies that reached out to the province to request a meeting about the issue weeks ago and have yet to receive a response.

"It feels like a betrayal," said Daryle Niedermayer, a senior project manager who is working on a contingent contract labour position with the province. "Systems are going to start going down and Albertans are going to start feeling the pain … apart from a few exceptions, as a rule, no contractor is getting a renewal regardless of how important their work is."

CBC News has agreed to not name the other three contractors, who have decades of service combined in government contracts, as they are concerned speaking out publicly could impact their current and/or future employment. 

All four say the province largely stopped posting IT contracts for small businesses on its procurement website Flextrack at the beginning of June.

Typically, they said, dozens of contracts are posted each month, for one- or two-year terms.

The first big impact Albertans noticed was to scholarship delivery, the contractors said.

At the beginning of August, parents and students noticed work was underway on a technology upgrade on the website, which would delay access to scholarship applications for months.

• Rutherford Scholarship applications open, but other scholarships still on hold until late fall

The government worked to reopen its most popular scholarship, the Rutherford, but dozens of others remain on hold. 

A contractor with knowledge of that project said approximately 30 per cent of the team behind the scholarship upgrade didn't have their contracts renewed over the past few months.

Contractors said other affected services, especially in the ministries of advanced education, labour and education, will likely start to manifest after Sept. 1, when the new academic year starts, which triggers a number of business processes. 

One example given was a machine-learning project that calculates the number of seats that need to be made available for apprenticeship training each year.

It calculates the seats based on current and prospective students and economic indicators — and it has a huge return on investment, because the project results in a smaller number of empty seats paid for by the government at institutions around the province.

There will be 'no service gaps,' says minister

Service Alberta Minister Nate Glubish, who oversees government procurement, said in an emailed statement that existing and proposed contracts are under review and will be posted as required.

"Contracts come due all the time, and in the time leading up to the end of a contract, some analysis is done to determine whether or not there is a need to renew or extend a contract," Glubish said.

"I cannot comment on specific contracts, but what I can say is that our government is going to balance the needs of Albertans with the need to ensure our fiscal house is in order. Albertans can be assured there will be no service gaps."

CBC News also reached out to the ministers for advanced education and finance, whose spokespersons deferred comment to Glubish's office.

Small businesses feeling the pinch

One contractor, who said he voted for the UCP, is voicing concern that the lack of renewals is a sign the government plans to move toward single-sourcing, leaving small businesses in the dust — including his, as he's now looking for full-time employment.

He pointed to publicly available data on government sole-source contracts showing that three large players have seen their revenue from the province increase by millions each year.

"The thing that really makes me upset as an Albertan is CGI is headquartered in Montreal, Fujitsu is headquarted in Japan, IBM is headquartered in New York.… All we're doing as Albertans is giving these huge companies huge profits that go elsewhere," he said. 

"You're putting my company out of business."

This was a concern all three contractors echoed, that whether the reason is a move to sole-sourcing, a focus on smaller government, or a way to reduce expenses, the result is the same: small businesses are being hurt.

"I know a lot of people who are looking for jobs elsewhere outside of government. I know a lot who are starting to consider another career," Niedermayer said.

"We rely on IT systems … some of these projects are providing great value to the province but they're not being continued under this model."