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Phoenix payment system can cost as much as $ 2.6B

The troubled Phoenix payment system for Canadian officials needs over a billion dollars to fix once and for all, a process that can take another four years, says a federal watchdog.

Parliamentary Budget Officer Yves Giroux said in a report released on Thursday that the final cost of the system, which has wrongly paid tens of thousands of officials since its inception in 2016, could be as high as $ 2.6 billion.

The government has spent or planning to spend more than $ 1.5 billion so far, according to the latest federal budget.

Giroux said the new payroll system should take $ 57 million to start, which he estimates will not happen until 2023, as Phoenix must first stabilize.

"[If not, it] would put a lot of junk into a new system … [We need] sound, accurate data to input a new system, "he told reporters on Thursday morning.

He said it should take about $ 105 million a year to run the new system, which must be able to handle the complex network of dozens of different federal collective agreements and their benefits, pension and wage quotas.

"It may require very expensive customization," Giroux said.

"The solution cannot be off the shelf. There is no system that can handle that complexity … We do not know how much because when we tried to get that information, [we were told] It's all commercially sensitive. "

5 companies vying to replace the system

The government budgeted $ 16 million from last year to begin replacing Phoenix, but has not yet awarded a contract.

Five companies are about to replace the system, but the government is slowly going through the process to try to ensure that the same mistake is not repeated.

IBM, the company that built Phoenix, did not offer to create the exchange.

What began as a $ 5.7 million contract with IBM to replace the government's previous payroll system has now become balloon to more than $ 393 million.

The system still has a lag of nearly 250,000 cases over what would be considered normal according to the Government's latest update on March 20.

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