FIREARMS FACTS UPDATE

UPDATE ON THE $273 MILLION
GUN REGISTRY CONTRACT AMENDMENT

WITHOUT MENTIONING THE $273 MILLION CONTRACT AMENDMENT, HERE'S WHAT THE CFC SAID ABOUT THE CONTRACT ON PAGE 37, 38 & 43 OF THEIR 2004-2005 PERFORMANCE REPORT RELEASED MONDAY, OCTOBER 31, 2005!

Canadian Firearms Information System (CFIS) Renewal Project:

The original estimated cost of the CFIS Renewal Project (formerly referred to as Alternative Service Delivery) was made up of three components: a) development of the CFIS renewal solution realization system required to implement administrative and technical changes included in Bill C-10A, an Act to Amend the Criminal Code (firearms) and the Firearms Act; b) ongoing business operations costs; and, c) anticipated solution enhancement requirements over the life of the ongoing operations.

As previously reported, since the original estimates were made, the CFIS Renewal Project
encountered delays and Team CENTRA incurred significant costs outside of the formal contract. A delay of more than two years in the passage of Bill C-10A and its regulations as well as numerous and significant scope changes (e.g., infrastructure changes as a result of CAFC becoming a stand-alone department, the making of final forms, accommodating additional users and sites, additional requirements for the new solution to meet enhanced RCMP security standards for the provision of, and access to, protected data, and changes to the Firearms Program fee structure) were encountered. During this time, CAFC gained valuable experience in the detailed business solution requirements in future program volumetrics, and other aspects of program operations that impacted on the original cost estimates of the system renewal initiative.

Extensive analysis and negotiation occurred throughout 2004-2005 that culminated in a
restructured contract and a redefined project. On February 14, 2005, Treasury Board provided Effective Project Approval for a redefined Canadian Firearms Information System Redesign (CFIS II). The contract was transformed into a future-oriented service provision arrangement wherein Team CENTRA committed that the annual operating costs would not exceed $15 million per year over the 15-year life of the agreement based on the current number of users, transaction volumes and service levels. The procurement strategy includes the technology provision and maintenance support of the system post implementation.

As part of the transformed service contract arrangement, Team CENTRA received payment of $73.9 million in development and delay costs incurred up to the signing of the contract amendment. The project is in the final phase of system development and will be entering a period of integration testing, user acceptance, certification and implementation. It is anticipated that the system will be implemented December 2005, after which a three to six month post implementation system normalization period is anticipated.

Estimated MCP project implementation costs of $16.5 million includes $11.5 million to complete system development and $5.0 million of operating costs during the initial period of operation (December 2005 through March 2006). As of March 31, 2005, of the $16.5 million MCP implementation costs, $0.4 million were paid to Team CENTRA for equipment, warehousing and delivery. Consistent with the transformed service contract arrangement, Team CENTRA will receive payment for remaining development work through its monthly service fee. CAFC will submit a project evaluation and closeout report before the end of the 2006-2007 fiscal year.

[PAGE 43]

Table 14: Alternative Service Delivery
Treasury Board Ministers approved the continuation by the Canada Firearms Centre of the
Central Processing Site (CPS) operations in Miramichi, New Brunswick to allow a period of
normalized program operations following the implementation of the CFIS II system solution
expected in December 2005. The decision to outsource the business operations of the CPS as
an Alternative Service Delivery (ASD) will be assessed in the 2008-2009 fiscal year.

OCTOBER 31, 2005 - CANADA FIREARMS CENTRE DEPARTMENTAL PERFORMANCE REPORT FOR 2004-2005
http://www.tbs-sct.gc.ca/rma/dpr1/04-05/CFC-CAFC/CFC-CAFCd45_e.pdf

OCTOBER 31, 2005 - Auditor General Letter Re: $273 Million CFC Contract Amendment with Two Private Companies
http://www.cssa-cila.org/garryb/publications/2005_new/19.pdf

OCTOBER 19, 2005 - $273 MILLION GUN REGISTRY CONTRACT: WHAT’S THE BIG SECRET?
“After the Auditor General told them not to, why are the Liberals still keeping Parliament in the dark about the true cost of the firearms program?"
http://www.cssa-cila.org/garryb/breitkreuzgpress/2005_oct_19.htm