Practical Guide on Databases for Managers

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Part I: Introduction

This Guide

This document is designed to give federal government managers basic guidance in disseminating information electronically. It provides a background to the current legislative, policy and administrative framework for electronic dissemination. It outlines the typical steps and options available for electronic dissemination. It discusses some of the key factors and issues involved in typical electronic dissemination initiatives and it gives advice on how to deal with some of the typical obstacles and how to approach some of the key decisions.

After reading this material you can expect to be able to:

1. appreciate the general flow of events in putting an electronic dissemination initiative into place; and
2. have an understanding of the major options, factors and issues involved in implementing such an initiative.

You cannot expect to be a "practising expert" on the strength of reading this material alone. To help you and those assisting you in the practical work associated with implementing an electronic dissemination initiative, references to relevant policy, practices, case studies, samples and other documents are provided where appropriate. These are no substitutes, however, for the expertise that legal, procurement, information management and other services in your department, elsewhere in the government or outside can provide you on a case-by-case basis.

For purposes of this document, the term private sector is used to describe any business partner that is non-government in nature. For example, non-profit institutions and associations might be possible partners.

There are two parts to this document - this introduction Part (I) and a set of guidelines Part (II). Also available is a more concise document entitled Information Management: A Primer on Databases for Managers." Both documents were prepared by the Interdepartmental Working Group on Database Industry Support (IWGDIS) for use by federal government managers and their potential electronic dissemination partners in the private sector.

THE IWGDIS

Chaired by the Department of Communications, the IWGDIS was formed in December 1988 in response to a number of requests for the federal government to rationalize its dealings with industry in releasing federal government-owned data. The working group is made up of representatives of 14 departments and agencies. Its purpose is to examine and then implement means by which concerted government action can positively influence the growth of the database industry in Canada. This can be accomplished by increasing the availability of federal government information while improving government operations through increased use of electronic database services. The industry, through the Information Industry Committee of ITAC (Information Technology Association of Canada, formerly CADAPSO), continues to be consulted by the IWGDIS.

This Guide was prepared by the IWGDIS to serve two purposes:

1. to respond to the demand from the information industry for improved access to government data and more consistency in the way that federal government departments make their information holdings available to the private sector; and
2. to provide guidance to federal government managers in dealing with the private sector information industry.

Why Guidance is Needed and What it Will Achieve

The government-wide legal, policy and administrative requirements affecting the way the government collects, manages and disseminates information may seem irrelevant to the manager who is preoccupied with delivering programs and services. Yet, as information becomes the "currency" of an increasingly "information-based" economy, program managers also have to take on the role of information managers. In that role, they need to deal with such issues as life-cycle management of the information as a corporate resource, attention to public access, security, preservation of "corporate memory" and disseminating in many forms and media.

As the move toward the information economy accelerates, the program manager will want to explore and benefit from the relationship between information dissemination - and electronic dissemination in particular - and program delivery and service to the public. Continuous restraint in government spending will contribute additional incentives.

Having the information in electronic form does not automatically make it appropriate for electronic dissemination. Wanting to publish it does not make it happen. The information itself may be unsuitable; there may be insufficient demand for it; or the technical requirements or legislative, policy or economic considerations may make such an initiative unfeasible. Having decided to disseminate the information, the manager takes on important responsibilities: for one thing, to ensure a reliable supply of information to the partner - both on a one-time basis and possibly on an ongoing basis.

What makes the information suitable for electronic dissemination? What are the options available? What are the steps to take? What new responsibilities are inherent in a decision to publish electronically? Guidance is necessary to ensure that managers are able to deal with these and other emerging issues effectively, while remaining focused on their operational needs and priorities.

In particular, this document aims to ensure that managers are sufficiently comfortable with the key factors and issues, process requirements and decisions associated with electronic dissemination of their information such that their initiatives:

1. lead to effective partnerships with the private sector;
2. ensure that legislation and government policy are applied;
3. contribute to departmental and program objectives and help improve service to the public;
4. enhance access by Canadians to government information;
5. assist in developing a more viable, competitive Canadian information industry; and
6. create opportunities for developing value-added products and services.

This document should also help the private sector gain a better appreciation of the issues and procedures involved in dealing with government-held information.

Information services is a notion frequently mentioned in the course of the document. It is broader in scope than, but includes, electronic dissemination. A working definition for information services is "those services which create, gather, organize, convert, process, analyse, manipulate, customize, distribute, communicate or make available information using electronic means".

Electronic publishing or dissemination does not always meet the full legal requirements of publication as stated in some departmental statutes.

Electronic Dissemination Can Improve Service to the Public

Clients of many government programs receive services whose "information content" is very high; indeed, many "transactions" between a department and its clients involve exclusively exchanges of information. Thus, inevitably, quality, timeliness, accessibility and reliability of the information become key determinants in the public's perception of service. In this context, better and more "user-friendly" ways of delivering quality information to clients hold substantial potential in improving both the quality of service and the public perception of the institution or program. Combined with continuous restraint in government spending, managers have new incentives to use electronic dissemination to increase the efficiency and effectiveness of service delivery to the public creatively and with modest outlays.

In addition, electronic dissemination has the potential to help federal government managers:

1. comply with the information dissemination requirements of the program or institution in a potentially cost-effective way;
2. reduce the burden associated with responding to Access to Information and Privacy (ATIP) requests;
3. contribute to the government deficit-reduction effort; the government relies increasingly on revenues from external user fees and charges (now exceeding $3 billion); and
4. possibly retain a portion of these revenues or receive incentives recognizing the greater revenue contribution and the increased costs associated with the activity.

The Value of Information

Information is a commodity. It has value; it can be bought and sold. Yet few things, it appears, are more difficult to achieve than attempting to measure the value of information. Typically, characteristics that determine how valuable the information is include:

1. need, i.e., is the information needed by somebody?
2. timeliness, i.e., when is the information available in relation to when it is most needed? For example, today's forecast is of value to someone planning a trip for today, whereas yesterday's forecast.... When the information is critical to the mission of the organization, there is usually a need for a high degree of timeliness;
3. quality/accuracy, i.e., how accurate is the data in relation to the degree of accuracy required? For instance, if the information is used for statistical purposes, it doesn't need to be accurate as if it is used for legal purposes;
4. reliability, i.e., can the information be generally relied on for the type of applications contemplated?
5. completeness, i.e., how complete is the data in relation to what is required? For example, a complete database on all incorporations is far more valuable than an incomplete one;
6. relevancy, i.e., how relevant is the information provided in relation to the specific client requirement for information?
7. presentation, i.e., is the data presented/presentable in a way that makes it more useful for the ways clients intend to use it?
8. added value, i.e., what additional relevant information, analysis, flexibility or convenience is provided to enhance the usefulness and relevancy of the information?
9. affordability, i.e., is access to the information affordable to those who are in most need or who are most dependent on the information?
10. delivery, i.e., are the delivery vehicles or methods chosen for the information compatible with the modus operandi, training and expectations of the clients? and
11. availability, i.e., is the information available elsewhere, from another government department or another commercial source?

Adding Value to Information

Information - and government information in particular - can be valuable to categories of users, many of whom are both willing and able to pay for it. As well, the value of government information can be enhanced in many ways. In particular, information as raw material can be manipulated, displayed, linked to other relevant information or structured in such a way as to be more useful to its various users and clients. Examples of value added to information include:

1. accessibility; the application of information technology and telecommunications can make previously inaccessible information (and products and service based on the information) broadly available;
2. convenience; this relates primarily to the concept of "one-stop shopping" - the equivalent of the "electronic supermarket" - where clients can search a wide range of topics and subjects of interest within one system, using a consistent user interface and the same command set regardless of topic, subject of interest or physical database searched;
3. linkages; information can increase in usefulness - and thus value - by its linkage or proximity to other information. For instance, a database on investment opportunities would benefit from linkages to such related information as intellectual property (patents and trademarks) held, subsidiary companies, stock history, and real property owned;
4. structure and tools; value can also be added to the information by the way it is structured and stored and by the refinements and capabilities in the software used to retrieve it;
5. transacting electronically; in some instances, information gains value through its use in commercial activities. Information critical to the mission of the organization - information supporting decision-making or a trading activity - will be in most demand, and users will to pay premium prices for it; and
6. re-utilization; information collected for one purpose can often acquire a different value in another context. For instance, information collected when a company incorporates could be useful to a corporate lawyer searching for similar names or looking for the head office address of a corporation.

The points above do not exhaust the ways to add value to information; they all share, however, reliance upon information technology. Hard-copy information, while valuable in its own (limited) right, is not nearly this versatile. Electronically, however, the same information can acquire almost incredible "chameleonic" qualities.

The Policy Framework on Electronic Dissemination

Providing information - and thus disseminating government information holdings not exempt or excluded under the ATIP Acts - is inseparable from the nature and functions of representative government. Adequate information is essential so the public may understand, respond to and influence the development and implementation of government policies and programs. This information must be accurate, complete, objective, timely, relevant and understandable.

In this context, the current government policy framework on disseminating government information holdings electronically is based on the following principles:

1. government institutions must account for and describe their information holdings, electronic or otherwise, published or unpublished and index these holdings to facilitate public reference and enhance public access;
2. ongoing provision of information is expensive and should be undertaken only when:

(1) there is clear duty to inform e.g. to satisfy program objectives or to comply with a statutory requirement; or

(2) users are willing to pay i.e., there is market demand and willingness to pay) for the information;

3. the full costs of providing information to satisfy proprietary interests of individuals should not be borne (i.e., subsidized) by taxpayers at large. Where appropriate, there should be external user fees and charges for providing of information and related services;
4. external user fees and charges may be reduced or waived where appropriate (e.g., where health and safety issues are involved);
5. private sector (rather than government) facilities should be given priority consideration in selecting who will supply electronic information, on demand, to external users;
6. programs and institutions can partially retain increased revenues achieved through the electronic dissemination of government information.

Typical Distribution Media and Vehicles

Typical distribution vehicles and media used in electronic information disseminating include:

On-line databases. The information on these systems is updated frequently, which requires fast and continual maintenance of accurate and efficient indexes to help retrieve information and "navigate" through the database. On-line databases are best suited for distribution and access to volatile, up-to-the-minute information, i.e., where a premium is put on currency and timeliness. Relatively high costs of communications lines, relatively slow speed of data retrieval and expensive shared computer time demand a fast and efficient search method.

A government manager could consider (1) using the departmental computer to "host" the on-line databases for public use or (2) making arrangements with an electronic dissemination partner (other federal government agency or private sector organization).

CD-ROM products. The information is usually bundled with the retrieval software. These systems cannot match the information currency of on-line systems, but surpass them in the areas of speed, sophistication of retrieval techniques and tools used and in the ability to use images and provide access to multimedia databases involving text, sound and images. Fast data retrieval and transfer speeds from CD-ROM and the fact that the user generally has full access to the CD-ROM workstation (microcomputer) makes it possible to use the text "browsing" tools and sophisticated links between text and images.

Bulk data distribution. Diskettes, tapes and telecommunications are the typical delivery vehicles for bulk data distribution. The choice is usually based on the volumes involved, the type of system on which the data will be used (e.g., diskettes, rather than tapes, if the data will be used on microcomputers), the frequency of distribution and cost-effectiveness considerations. It may be more economical, faster and convenient to "broadcast" (via telecommunications) the information according to a pre-defined schedule, rather than duplicating the information on diskettes and mailing them to a large client base.

Who Uses the Information and How?

Traditionally, electronic products - particularly those delivered through on-line databases - have been used by intermediaries (librarians, information specialists); these are experienced searchers who are very effective at retrieving the information requested by their clients. More recently, the advent of user-friendly interfaces to on-line services and CD-ROMs and increased computer literacy of the general population have created a growing end-user market for electronic products. End-users more frequently bypass intermediaries and access information directly.

Secondary Information Services

Secondary information services, i.e., services built around an electronic database, are an area of growth. These services can increase the value, acceptance, usage, usefulness and market penetration of the electronic service. Typical secondary services associated with electronic databases include:

1. access retrieval intermediary services (e.g., as provided by many departmental libraries);
2. book or publication ordering and delivery services (e.g., at National Research Council's Canada Institute for Scientific and Technical Information) associated with a bibliographic or public access catalogue system; and
3. paper documentation ordering and delivery service, such as that associated with Supply and Services' electronic Procurement Opportunities Board available on-line through Net 2000.

The Process of Setting Up an Electronic Dissemination Initiative

The eight steps shown below outline the usual progression into putting in place and maintaining an electronic dissemination initiative. A more comprehensive presentation of the process and relevant factors and issues for consideration is provided in Part II of this document:

1. Identify and locate the information for electronic dissemination;
2. Determine the market demand or market potential for the information;
3. Prepare a business case (or business plan) for the electronic dissemination initiative;
4. Determine appropriate vehicles and arrangements for the electronic dissemination initiative;
5. Secure the rights to charge for the information;
6. Select the appropriate disseminating partner(s);
7. Conclude contract or licence agreement; and
8. Manage the ongoing arrangement.

Dissemination Options Available to Government Managers

Disseminating information electronically can be initiated by a government department or by the private sector.

When initiated by the private sector:

When initiated by a department:

the private sector presents the department or program with an unsolicited proposal to disseminate specific database information.

select a private sector contractor to operate an electronic dissemination service on contract; make the database available to the private sector via licensing agreements; publish the database using departmental (in-house) facilities and operations; use Canada Communications Group -Publishing (CCG-P) as an intermediary; or publish through a working arrangement with another government department or agency

Part II of this document presents a more comprehensive outline of these options and relevant issues associated with them.

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Part II: Practical Guidelines

Organization of the Practical Guidelines

These practical Guidelines are organized into three major sections:

1. the Legislation and Policies: describes the relevant legislation and administrative policies most likely to affect the implementation of an electronic disseminating (electronic dissemination) initiative;
2. the Main Options: describes the main options available in concluding arrangements for an electronic dissemination initiative; and
3. the Key Factors and Issues: elaborates on the key factors and issues identified in The Main Options. To facilitate access to and use of the information, the key factors and issues are organized and presented in relation to the typical steps of the process to implement an electronic dissemination initiative.

The Legislation and Policies

Electronic dissemination of government information holdings is subject to a number of statutes and administrative policies. A brief overview follows.

Statutory Framework: Relevant Acts and Statutes

A. Access to Information and Privacy (ATIP) Acts:

(1) information contained in the databases is subject to the provisions of the Acts;

(2) database information that is available to the public electronically (e.g., through a private sector vendor) is considered published and is thus excluded from the provision of the Access to Information Act;

(3) published information is subject to market fees; ATIP information is subject to prescribed fees; and

(4) electronic dissemination initiatives are means to making information available via desirable informal, rather than legal, means; (a clue to when this should be considered is when repeated ATIP requests involving the same or the same type of information).

B. The Copyright Act:

(1) for any work prepared under the direction or control of Her Majesty (including electronic databases), the copyright belongs to the Crown for 50 years from the date of publication. The Crown has exclusive right to use the work in any manner or to authorize others to copy it;

(2) commercializing databases that are Crown works can be achieved through (a) donation, (b) assignment, (c) loan, (d) licence (note: a donation or assignment involve an assignment of rights and require Treasury Board approval and an Order in Council a licence does not require prior approval as long as Crown copyright and ownership of the data are protected in the loan or licensing agreement); and

(3) the responsibility to administer Crown copyright rests with Canada Communication Group-Publishing (CCG-P). Before initiating an electronic dissemination initiative, manager's should consult with CCG-P about Crown copyright. As well, CCG-P has developed standard clauses and complete pro-forma licensing agreements that departments can use as models.

C. The Official Languages Act:

(1) published databases, just like any other publications, are perceived as a "service" under Section 25 of the Act, which provides that such disseminating is to be in both official languages; and

(2) provisions related to the presentation of the information on screens and paper reports will apply.

D. The Financial Administration Act (FAA):

(1) is the overall statutory framework for financial transactions including those related to information dissemination;

(2) legal authority to impose charges for database dissemination can be derived, where not otherwise available, from the general provisions of Section 19 dealing with services and the use of facilities;

(3) when using the general provisions of Section 19, the new or amended regulation will be enacted via an Order in Council "on the recommendation of the Treasury Board" (i.e., prior approval from TB is required); and

(4) N.B. Section 19 applies only where the fees and charges do not exceed the cost to the department of providing the information or related services. Where fees and charges exceed the cost of providing the service, a specific decision by the government (i.e., a Cabinet Directive) may be required.

E. Other Acts and Statutes:

(1) departmental or program Acts and Statutes may contain specific direction (and implicitly authority) for disseminating information. In some cases, specific references to information products in specific media (paper) are made. In other cases, the references are more generic both as they relate to information products and services and the medium of distribution;

(2) the same legislation may already provide the legal authority to charge for the information product or service. Where references to information products and services are sufficiently generic, the existing authority may be used in relation to electronic products and related services; an

(3) where legal authority to charge exists, amendments to regulations under the specific Acts and Statutes under which the program is delivered may be necessary to establish new products and services and set the fees to be charged. The process is similar to amending regulations under Section 19 of the FAA described above.

Administrative Framework: Treasury Board Policies and Practices

A. Policy on Government Communications (formerly Chapter 480 of the Administrative Policy Manual):

(1) providing information is expensive and should be undertaken only when (a) there is clear duty to inform (publish) or (b) users are willing to pay for the information;

(2) the full costs of providing information to satisfy proprietary interests of individuals should not be borne (i.e. subsidized) by taxpayers at large;

(3) the price of information available to the public for purchase should reflect the full cost of collecting, compiling, preparing, producing and disseminating information (i.e., not just the "marginal" cost of dissemination); and

(4) fees and charges may be reduced or waived where appropriate (e.g. where health and safety issues are involved).

B. Policy on Management of Government Information Holdings (MGIH) August 1989

(1) departments are to manage their information holdings throughout their life-cycle regardless of the form or medium in which the information is held;

(2) departments are to ensure that information holdings (including databases) are identified and described (listed and indexed) in the appropriate public reference sources. They must also ensure that the information is effectively disseminated where there is a duty to inform the public. The inventory requirement of the policy applies to all information, published or unpublished;

(3) departments are to make their information holdings available for purchase by the public, where appropriate and there is a significant public demand;

(4) departments are to make information available within the government to ensure optimal use, non-duplication of effort and a minimal response burden on the public. Information-sharing within the government is subject to appropriate legal and policy constraints (e.g., Privacy Act and the Government Security Policy); and

(5) departments are to ensure that material that is published (including published electronically) is easily accessible within the institution and to the public on request.

C. Policy on External User Charges, December 1989:

(1) aims to (a) increase fairness, by shifting the burden of full cost-recovery from taxpayers at large to direct beneficiaries of services where appropriate, (b) reduce the deficit, e.g., by reducing the dependence of such services on appropriations from general tax revenues and (c) improve the allocation and management of government resources, by creating a greater focus on cost and the bottom-line;

(2) full cost-recovery is the starting point for establishing external user charges. From this starting point, partial cost-recovery (i.e., implicit subsidy) or even waiving all charges (full subsidy) can be justified on policy and program grounds. A rigorous review of the need for and the amount of the subsidy is required;

(3) the policy sets out how to determine appropriate charges, taking into account the impact of charges on program objectives, broad public benefits and the users of services.

Determining external charges is a three step process:

(a) calculate full cost of providing the service regardless of program or public benefits;

(b) determine if departures from full cost-recovery are justified and, if so, by how much, documenting the rationale; and

(c) determine the most appropriate charges and how to recover them.

(4) where authorities in place are insufficient to impose appropriate charges, departments should proceed as far as possible within the existing constraints, while actively seeking to establish an appropriate legislative framework (i.e., authority to charge) at the earliest opportunity;

(5) Treasury Board will consider a variety of "incentives" on a case-by-case basis, preferably at the macro level of initiatives, which will include the department's track record and total revenue plan. Incentives can include start-up funds, allowing a portion of revenue to be retained and applied to improve services, allowing expenditures to be reallocated internally, and providing a performance bonus; and

(6) the private sector (rather than government) facilities are to be given priority when choosing who will supply electronic information, on demand, to external users.

D. Policy on the Retention of Royalties and Fees from the Licensing of Crown-Owned Intellectual Property, June 1993:

(1) the policy authorizes departments and agencies to receive, through Supplementary Estimates, an annual appropriation equal to all revenues arising from the licensing of Crown-owned intellectual property which the department or agency remitted to the Consolidated Revenue Fund in the previous fiscal year;

(2) the Multi-Year Operational Plan (MYOP) will be used as the mechanism for reporting on the previous year's actual revenues and seeking authority to include an item in Final Supplementary Estimates in the current fiscal year;

(3) this process will begin as part of the 1994-95 MYOP review, which will provide authority for 1993-94 Final Supplementary Estimates, based on qualifying 1992-93 revenues;

(4) these amounts are intended to be used toward the costs associated with incentive awards for technology transfer and other technology transfer activities undertaken by the department or agency.

E. Government Security Policy (June 1986):

(1) the policy sets out a new system for classifying and designating sensitive information;

(2) the new system is linked to the legal authority to deny access under the ATIP Acts; and

(3) each department has a Classification and Designation Guide, which is the sole source of authority for classifying and designating sensitive information. This guide is tied into the inventory of information holdings created and maintained by departments.

F. Various Chapters of the Treasury Board Manual -the Information and Administrative Management Component:

(1) various chapters of the Treasury Board Manual contain elements that are relevant or touch on electronic dissemination initiatives. Such policies may relate to managing information technology, procurement, contracting, unsolicited proposals, and other related topics; and

(2) references to specific chapters of the manual are provided in the course of this document, where appropriate.

G. Increased Ministerial Authority and Accountability (IMAA):

(1) is a framework for departments under which they may negotiate with Treasury Board arrangements tailored to the unique circumstances in each department; and

(2) provides the department with more options and flexibilities including the potential to retain revenues in electronic disseminating initiatives.

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The Main Options

Main options available to government managers

Electronic dissemination of information can be initiated by a government department or by the private sector.

When initiated by the private sector:

A. the private sector can present a government institution with an unsolicited proposal to disseminate specific information electronically. In most cases, the successful outcome is a licensing agreement for the information.

When initiated by the government department:

A. the Department selects a private sector partner(s) or contractor(s) to operate an electronic dissemination service on contract (e.g. on a fee for service basis); or

B. the Department makes the databases available to the private sector via licensing agreement(s); or

C. the Department provides direct (e.g., on-line) access to users of the electronic information using in-house facilities and operations; or

D. the Department uses the process facilitator, brokerage, co-publishing and contract management services provided by CCG-P; or

E. the Department develops a working arrangement with a lead government institution or common services agency to use their facilities and services or to disseminate the information as an add-on to potentially related services that are already available.

Discussion of the main options

When the private sector is the initiator:

1. The private sector presents you with an unsolicited proposal to disseminate your information electronically.

Key considerations:

A. you would treat this situation in a manner similar to any other unsolicited proposal (check departmental guidelines regarding unsolicited proposals. As well, the Key Factors and Issues section later on includes a brief discussion on issues associated with unsolicited proposals);

B. you would want the organization making the proposal to satisfy you that it has done its homework and understands the information, the market, the process of getting the information to the market, as well as servicing and developing the market. As a minimum, the organization should be able to show you a basic "opportunity assessment" for what it is proposing to do;

C. you would also want to be satisfied that the organization will not misuse or misrepresent your information should it be given the opportunity to disseminate it electronically;

D. the organization may not have all the information available and may wish to conduct an opportunity assessment (which involves a market demand assessment). As well, the organization may wish to obtain assistance and information from you in order to develop a business plan. You are encouraged to cooperate and help in any reasonable way you can;

E. despite the fact that many of the steps in the process outlined in the previous section will be done by your potential partner, you will still have to ensure that you have the authority to disseminate the information, to impose charges (if they are to be imposed), and that you have a basis on which to establish these charges; and

F. be prepared, for often an unsolicited proposal presents you with difficult choices. Requests for exclusive or sole licences for 5 to 10 years are not uncommon, on grounds that the market is small, risks are large and the entry costs to be borne by the licensee are substantial. In your decisions, the challenge will be to balance the interests and responsibilities involved: the organization's, your program's and institution's, and the government's public policy interests and responsibilities.

When the government is the initiator:

2. Select a private sector partner(s) or contractor(s) to operate an electronic dissemination service on contract (e.g. on a fee-for-service basis)

Situations that typically lead to choosing this course of action include:

A. there is clear duty on the part of your institution or program to inform or disseminate this information (e.g., statutory requirement) and disseminating this information electronically has been identified as both cost-effective and able to fulfil this objective;

B. the service has to reach a specific audience in a certain way and within relatively well-defined parameters (hence, a contract for services);

C. the service responds to - and has to satisfy - certain legal, legislative or regulatory requirements;

D. the program is a direct beneficiary and user of such an electronic dissemination service; and

E. electronic publication is an accepted alternative or complement to an existing information distribution method (e.g., paper). It displaces, improves, adds value and/or lowers the cost of the existing distribution method.

The selection of the private sector contractor(s) should follow the normal procurement practices that are in force in the government and in your department. Typically, competitive procurement, through Supply and Services (GSC), will be the route chosen.

3. Make the databases available to the private sector via licensing agreements

This option usually applies to databases that are already in use by the federal institution as it carries out of its mandate. Licensing is a good way to place the information where the public can conveniently access and use it. It is not uncommon for the originating institution itself to become a client of the licensee, particularly where sophisticated access methods and value-added information are also available. Licensing can result from a process that typically starts as:

A. an unsolicited proposal (or proposals) from a private sector information industry organization(s);

B. a request from a contractor (e.g., a service bureau) to use the information in a service to the public; or

C. a competitive process to select a suitable licensee (or licensees) for a government database and associated services.

You can license a database:

A. through an agreement between your department and the licensee(s); or

B. by going through an intermediary that has a legislated mandate to enter into licensing agreements on behalf of federal government institutions i.e., (CCG-P).

Unlike a contract for services (as in option 2) which usually sets a very precise and specific role for the contractor, a licence typically gives the licensee the right to use the information within relatively broad parameters. A portion of a licence agreement may, however, direct the licensee to provide very specific services. You may wish to consider licensing when:

A. the information is frequently featured in ATIP requests and disseminating it electronically relieves the burden and costs on both requesters and ATIP personnel;

B. there is indication of demand and willingness to pay for the information in the marketplace; or

C. the database is available internally, to government users and there are indications that opportunities exist to add value to the information, create related products and services and develop a market outside the government.

4. Provide direct (e.g. on-line) access to users of the electronic information using in-house facilities and operations.

In choosing this course of action, you would want to be particularly mindful that you have available within your program or institution:

A. the technical environment, the capacity and support capabilities to accommodate the projected user population;

B. adequate software, expertise and development capabilities;

C. sufficient excess capacity to accommodate growth in demand;

D. appropriate administration, billing and other procedures normally associated with supporting external users;

E. appropriate security, information integrity and other procedures in place to prevent unauthorized access to or destruction of the information;

F. market development skills and capabilities, if market growth or diversification are among the objectives of the initiative; and

G. the means to provide secondary services related to the information contained in the databases. Such secondary services (e.g., publication ordering, and retrieving information through an expert intermediary), increasingly make a difference in the success of an electronic dissemination venture.

It would also be advisable, before proceeding with this alternative, to determine whether a private sector partner or another government department or agency could provide the information products and services more appropriately or cost-effectively. In particular, you may wish to look carefully to options involving a disseminating partner before deciding to provide the service yourself.

5. Use the facilitation, brokerage, licensing, co-publishing and contract management services provided by CCG-P

The CCG, in particular its Publishing Division, provides on a fee-for-service basis, a variety of facilitation and brokerage services to client departments and the private sector. Such services include expert assistance, project management services for both print and electronic projects, Crown copyright administration, licensing arrangements, co-publishing and complete (end-to-end) management of electronic disseminating initiatives.

The CCG-P negotiates royalties on behalf of the Crown, manages the financial and contractual arrangements and collects revenues. It also provides a means of crediting departments from revenues collected.

The latter may be particularly attractive for a manager who has neither the time nor expertise available in-house to get an electronic dissemination venture off the ground or to manage its outcome - the ongoing relationship with the disseminating "partner(s)".

6. Develop a working arrangement with a lead government institution or common services agency to use their facilities or to disseminate the information as an add-on to potentially related services that are already available

A number of well-developed, specialized electronic dissemination channels are currently in place among government departments and agencies. For example, Statistics Canada disseminates electronically a variety of numerical and statistical information. The Canada Institute for Scientific and Technical Information (CISTI) maintains and disseminates electronically scientific, technical and technological and medical information, both bibliographic and project (stand-alone). Both could be - and currently are - the lead institution or agency in consortia involving electronic dissemination of such information. Both organizations provide a number of services associated with delivering information products. General criteria to determine if this option is appropriate include:

A. the information to be disseminated is of the same type, is compatible with, or is complementary to, information handled by the lead department or agency;

B. the target clientele for the information products and services is largely the same as, or overlaps with, the current clientele of the lead department or agency; and

C. the delivery and services infrastructure already available in the lead department or agency are suitable and can be used to support delivering the information products contemplated.

Managers can appreciate that the costs of establishing new infrastructures for delivering information and services are very high. The costs associated with tapping the market and becoming known and established in the marketplace, training, assistance, support and other services to users are high as well. Therefore, you will want to establish that no existing government or external infrastructure can do the job for you before you proceed on your own.

"Mixed" approaches in electronic disseminating

You could also consider mixed approaches, involving a combination of two or more of the above. For instance, a reasonable approach could be (1) selecting a private sector partner to operate a defined set of electronic dissemination services and (2) granting a licence to the same private sector organization to further exploit the information and expand the market. A tangible benefit of this approach is that some of the licensing proceeds (such as royalties) could be used to help offset the costs of the services provided by the private sector company.

The approach ultimately chosen must reflect the objectives of the originating department or program organization. Two examples are provided below.

Case 1: a program organization wants to ensure (1) that the commercial potential of its information is maximized and (2) that the users of the information (who are both within and outside the federal government) enjoy the benefit of the information through a variety of related value-added products and services. In this case, issuing non-exclusive licence(s) for the information seems the most appropriate route.

Case 2: the same program organization has a number of objectives in addition to the two outlined in Case 1, namely (3) that is can rely on "core" (basic) information services being available at pre-determined price levels to government (internal) clients and (4) that the Crown must be in a position to switch suppliers or take delivery of the service in-house without delay if the supplier does not perform. In this case, a more sensible route to meet the objectives appears to be a combination of:

• a contract to provide "core" services to government (internal) clients at pre-determined price levels; the Crown retains rights to all software developed by contractor and
• a non-exclusive licence(s) for "non-core" (non-basic and value-added) services to all clients. It usually makes sense to include the contractor among the licensees. As well, where there is a lot of uncertainty with regard to market size or demand, the contractor could be the only holder of a non-exclusive licence for a set period of time. This provides the licensee with a fair chance to achieve a presence in the market and to recoup its investment.

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The Key Factors and Issues

This section elaborates on the key factors and issues identified or touched on within the previous section. To make it easier to access and use the information, the key factors and issues are organized and presented in relation to the main steps of the process associated with implementing an electronic dissemination initiative.

Step 1: Identify and Locate Information

Identifying information, i.e., what information to disseminate?

Departments may have information that could be disseminated but exploiting that opportunity depends, first of all, on identifying what is available. This can be a problem for both the government manager and the private sector. The following considerations can assist both the government manager and the private sector in determining what information is available for electronic publication:

A. information management planning (IMP) exercises in departments and program areas identify the types of information relevant to the business of the organization. Many such exercises actually perform an "information assessment or audit", establishing what information is collected for what purposes and for what business "outcome". The result of such exercises at the program or departmental level would give a reasonable indication of what might be available for dissemination;

B. program managers provide the key linkage between business objectives and electronic dissemination exercises - they generally have a good idea of what information would be useful to their clients. Program managers can help the private sector prepare a successful business case for disseminating the information electronically;

C. departmental coordinators handle all requests received under ATIP. They are in a position to provide an indication of the most frequent requests for information, which are often natural candidates for electronic dissemination. The departmental coordinators are also familiar with what types of information are included and exempted under the ATIP legislation; accordingly, they can provide you with useful guidelines regarding disclosure of information;

D. the MGIH policy requires that all government information holdings - both published and unpublished - be catalogued and indexed in a Corporate Inventory of Information Holdings to facilitate public access. The Corporate Inventory is a useful tool to help identify and locate what other departmental or program information may be available to include in an electronic dissemination exercise;

E. each department is required, pursuant to the Government Security policy, to prepare a detailed Information Classification Guide to ensure there is effective security for information that is collected, created and disseminated by departments. This guide provides a perspective on what information is available, as well as whether the information is public or non-sensitive and thus appropriate for electronic publication; and

F. Information Management Services areas in each department can assist both in identifying the information and exploring technical issues associated with exploiting it.

Locating the information sources

The following sources of government information should be considered in a search for information that can be disseminated electronically:

A. Info Source; a complete listing of federal government:

B. on-line databases,

C. published material, and

D. organizations, information holdings and access procedures.

Info Source is available in print and will soon be available in electronic form. For more information on Info Source, you can contact your ATIP Coordinator or the Treasury Board Secretariat (613-957-2480);

B. departmental MGIH Corporate Inventory of Information Holdings

C. departmental Information Classification Guide (for each department);

D. Information Management Plan's for departments and program areas;

E. ATIP coordinators in departments;

F. departmental Information Management Services; and

G. program managers.

Authority to disseminate electronically; privacy, access and security considerations

Authority

In many cases, authority to disseminate the information (which is not the same as that required to charge for information) can be derived from provisions of departmental or program legislation or be delegated from CCG-P. Often, however, such legislation will not specifically exclude or include specific information derived from delivering or administering a program. Guidance on whether specific authority to disseminate exists can be sought from the following sources:

A. your departmental legal counsel; or

B. Appendix D, "Definitions", of the TB policy on the Management of Government Information Holdings. Under government information collection, this appendix lists types of information collection that are specifically exempted from the requirements of the MGIH policy. These exemptions may pertain to all of the policy's collection requirements or only to review and registration. If the information you are thinking about disseminating electronically falls within the types of information listed there, you should consult with legal services. Chances are you either do not have the authority to disseminate such information or if you do, you may be in violation of a statute, policy or agreement governing the collection, use and disposition of the information.

Privacy and Access

In consulting with the departmental ATIP coordinator, you will be able to establish whether the information you plan to disseminate electronically is excluded or exemptible under the ATIP Acts.

Security

Each department has a Classification and Designation Guide, which is the sole source of authority for classifying and designating sensitive information in the department. This guide is to be tied into the inventory of information holdings created and maintained by departments - a requirement of the TB policy on Management of Government Information Holdings. You are urged to consult the guide to ensure the information is not subject to a designation that makes it inappropriate for electronic dissemination (i.e., a designation other than public or non-sensitive).

Suitability for electronic disseminating

Information that is available in electronic form without restrictions on its use is not automatically suitable for electronic publication. With few exceptions, electronic dissemination involves a one-time and an ongoing process of clean-up, conversion and "staging" of the information in the appropriate format before it is made available for use (one-time when the service starts and ongoing to handle new information and updates). The cost and effort associated with this process is almost always very substantial and has a bearing on the viability of the entire initiative. Ideally, this process should be automated as completely as possible. If, there is, however, the data is such that the process cannot be automated (e.g., no predictable pattern for clean-up), the expense associated with a largely manual one-time and ongoing effort may make the project uneconomical.

An electronic dissemination initiative will require ongoing effort, commitment and responsibility. The government manager will have to supply information to the disseminating partner - or directly to the clients -continuously and with due regard for quality, timeliness and appropriate formats and standards. This, too, should enter into the picture when "suitability" is assessed.

Value-added information

Key questions in any electronic dissemination initiative are:

A. what other (related) information would complement (add value to) the information provided?

B. what other information and related services could increase the value of what is already being provided (i.e., what would the clients be willing to pay more for, what may be of interest to more clients, what would achieve a broader range of program delivery objectives?

C. what products (packaging) and ways to deliver to clients (delivery methods) would enhance the value and usefulness of the information?

While most of these answers can be determined only after a market demand assessment, potential information that could play a role in adding value could be identified up-front. The following could be considered in identifying and establishing the potential of such information:

A. program and departmental corporate managers could provide indications as to "natural linkages" between their information and other information held by a program, department;

B. frequent ATIP requests could point to related information that could be included; and

C. a profile of potential clients could also point to related information that may be useful.

The market assessment could include information holdings that are thus identified to establish if sufficient demand for them also exists.

Step 2: Determine Market Demand/Market Potential

Potential users

The key relevant questions are:

A. is anybody interested in the information?

B. if yes, who?

The following considerations may help in answering these questions:

A. many databases that are licensed from government departments or agencies have what can best be described as "captive" users - that is, a group that originally collected and supplied the data to the government department. Typically, captive users are program clients who want to use the information for purposes related to compliance, information or transacting electronically with the program area;

B. such "captive" users may use the services of industrial or professional groups such as lawyers, accountants, or engineers. It is not unusual that some of these groups - particularly when they specialize in the topic e.g., bankruptcy, corporate, construction, etc. - would want access to the information in order to be able to help their clients;

C. information brokers, libraries and universities may have an interest in the information and should be considered as potential users;

D. the program or government department itself is often a potential user of the information and related services; and

E. whether you intend to conduct a market study yourself or help the private sector establish the market potential, you will want to see if the results of previous market surveys or studies may be available to help you. Check your departmental corporate information inventory and ensure that the information collected is described and registered.

Potential uses

At least two questions are particularly relevant in establishing potential uses for the information:

A. why do potential users need the information and what will they use it for?

B. how does electronic dissemination of the information relate to the objectives of the program and, in particular the service-to-the-public objectives?

Linking the two questions will create an opportunity to explore and develop approaches that accommodate both the motivations of users and the objectives of program delivery, where appropriate.

Some of the typical uses for the information are:

A. to comply with statutory program requirements,

B. to comply with legal requirements,

C. for information ("mission-critical" or otherwise) purposes,

D. to avoid duplication in collecting or storing information,

E. for general research purposes,

F. for bibliographic research purposes,

G. to help provide services to clients,

H. to order a printed publication, or

I. to conduct transactions electronically.

Market segments

Determining the main market segments answers the question: "what are the main groups among those interested in the information and what differentiates them?". Market segments will be different based on segmentation criteria used. For instance, from a technical standpoint, two segments may be relevant: "the computer-literates" and "the others". However, from a marketing standpoint, relevant segments are "those easy to reach" and "the others", while from an ability to pay perspective, you may find "those who can pay commercial rates" and "those who cannot".

Segmenting the market helps identify the key characteristics of the client markets; this facilitates a better-focused, client-driven approach in all activities. Otherwise, the temptation is to adopt a "one-size fits all" or "supplier-driven" approach.

Market worth/value to users

Having determined the demand, users, uses and market segments, it would be extremely useful to now establish what the information is likely to be worth to the main user groups. This would provide a useful basis for planning the pricing strategy, developing and targeting the products and services, and prioritizing the market for these products. In practice, however, the difficulty in determining with precision what the information is worth to the main user groups is directly proportional to its usefulness. Reliable quantitative information on the value of information to users is best obtained through market surveys. However, more qualitative information on the relative position of various user groups on the "value ladder" is available through informal means (e.g., contacts with user group members).

Market willingness and ability to pay

Market worth (value) of the information to the user groups provides an indication of how important it is to them. However, what these groups can obtain for the products and services based on this information is more closely related to what they are likely to be able and/or willing to pay. However precious the information is to a user, the ability to pay for it will have a limiting effect on the pricing and return potential of the information. Depending on what the information is worth to them and their economic standing, different user groups will vary in their willingness and ability to pay.

Information on the market willingness and ability to pay can be obtained through:

A. market surveys,

B. informal contacts with potential key user groups,

C. a review of rates paid for similar or like information services, and

D. discussions with information industry representatives.

"Safety-net" requirements

The market assessment will often reveal situations where (1) the information has substantial value to user group(s) with limited ability to pay the types of charges that a regular business user can afford or (2) the information fulfils an important government, department or program objective. This may include information that universities and students could benefit from or information which a debtor in bankruptcy finds extremely useful. As well, some types of information (e.g., information about toxic releases in the workplace, and drug recall alerts) are sufficiently important to society that they should be broadly made available at the least cost to users.

The situations described above fall in the "safety-net" category, i.e., the need to ensure that important information reaches its target where (1) there are compelling reasons to get the information to its users or (2) there is evidence that this would not occur without special provisions. Such "special provisions" for special user groups may include:

A. negotiating lower rates for special user groups (even lower rates could apply to non-prime time or delayed services);

B. providing a subsidy to a private sector supplier (licensee) in exchange for lower rates to special user groups;

C. providing services to special groups under contract - rather than providing a licence. The department or program may have to pay a fee for service if the pre-set rates established do not generate sufficient revenues for the contractor;

D. utilizing the Depository Services Programme (through CCG-depository libraries);

E. making information available to special user groups through lower-priced information services or suppliers typically utilized by such groups; and

F. waiving royalties on revenues from special user groups.

Appropriate delivery methods to client groups

A key component of the market assessment is determining how the target user groups identified want the information to get to them, i.e. in what form, by what means and through what types of products and user interfaces. Knowing the preferences and "habits" of the user groups is critical to targeting and delivering the information products and services to them. Prime sources of information are:

A. market survey;

B. informal contacts with target user groups to determine what similar or like information services are currently made available, through what means and how; and

C. informal contacts with the information industry.

Step 3: Prepare a Business Case

Products and services involved

The combination of (1) the market assessment, (2) department and program objectives, (3) objectives of the disseminating partner(s), will typically help determine what specific products and services are created and delivered from the information made available by the department or program. Often electronic dissemination starts with one or a small core of products and services; in time, others are developed in response to market demands, new clients and changing user needs, habits and expectations. It is natural that only a few products and services are known or can be anticipated at the time the business case is prepared. In describing the products and services anticipated, it is useful to provide as much information as possible to permit you to determine at least (1) what type of demand and program objective the product or service responds to, (2) how the products and services are to be produced and delivered, and (3) what resources are needed to produce and deliver these products and services.

Resources needed to produce and deliver the products and services

This exercise will identify the resources and activities that are involved in producing and distributing the products and services (outputs) of the electronic dissemination initiative. The objective is to determine and list or catalogue the resources involved, in turn, this resource inventory will be used to determine the full cost of the most efficient way of delivering the service in-house. Once this is done, delivery alternatives are examined and costed.

The Office of the Comptroller General (OCG) Guide to the Costing of Outputs in the Government of Canada should be used as guidance in costing exercises. The document sets out a six-step costing process (refer to page 5 of the OCG Guide):

A. define the purpose of the cost analysis;

B. define the outputs to be costed (products, services,);

C. determine the cost base;

D. determine the cost-allocation processes required;

E. select the allocation bases; and

F. perform the relevant calculations.

Basis for allocating and calculating costs

The OCG Guide provides guidance on determining a cost base and allocation processes and gives a basis for costing typical outputs. Managers will find this guide helpful when calculating the costs of the products and services contemplated.

Managers will frequently encounter situations where a database currently used in program delivery activities will need to be evaluated (costed) to establish a pricing policy for products and services based on the information it contains. At first glance, it would seem that if the database is used in delivering a program, enforcing legislation or running a government facility - and is thus paid for from general tax revenues - it would be a 100 per cent "public good", whose commercial value is zero. However, the argument can also be made that if specific (rather than across-the-board) external demand exists for the information, a database should be looked at for valuation purposes as a combination of "public good" and "commercial value". Under this scenario, the "commercial" portion only of the database could be used in calculating the value of the database.

It is impossible to provide hard and fast rules for determining an appropriate split; each case has different circumstances. Precedent exists, however, for using a 50-50 split between the "public good" and commercial value of a database.

Full costs to the government of providing the products and/or services

Again, the OCG Guide is the recommended source for guidance on determining the cost of providing the product or service (output) and the unit cost based on projected output volumes. Pages 13-14 of the Guide provide a useful recommended costing procedure and pages 15-16 provide definitions of key terms and concepts. A case study is also provided in the document. The result of the calculations should be the full cost - and the full unit costs, to achieve full cost-recovery - to provide the products and services using the government's own resources. In a "make-or-buy" assessment, this is the full "make" cost. The full cost is the sum of all direct and indirect cash and person-year costs incurred by the government, including services provided without charge by other departments, depreciation, cost of financing, and other relevant costs. For a more precise definition, refer to page 16 of the OCG Guide.

"In-house vs. external" analysis

Once the full cost of the "in-house" option is determined, it is possible to formulate and cost alternatives. The objective is to assess whether the delivery of a service or product (in this case disseminating information electronically) can be delivered to users more efficiently by the government or an outside contractor, disseminating partner or licensee. For these decisions, the relevant costs are those which change depending on which option is selected. This analysis is sometimes also referred to as "determination of the most efficient organization". For more information and guidance on the topic, refer to the Treasury Board's draft guide "An Approach to the Most Efficient Organization".

The pricing policy

Charges for the information product or service must bear a direct relationship to the full cost of providing them. The policy on External User Charges stipulates that charges for using public facilities, services provided by the government, or limited rights or privileges must be for the full cost, subject to the exemptions in Appendix A of the policy. As well, when the value of the right or privilege to the user is more than the full cost of making it available, it may be desirable to charge more than the full cost. In establishing charges and developing a pricing policy for an electronic dissemination initiative, the following elements need to be taken into account:

A. the full cost of making the information or the service available; refer to the considerations presented under the heading "Full cost to the government of providing the products and/or services". The full cost will reflect the expenses associated with producing them;

B. the value of the information or service to the users. This should come out of the market assessment;

C. departing from full cost recovery, i.e., there may be reasons for charging less than full cost (as per Appendix A of the External User Charge policy or the provisions of the Communication policy). These should reflect conscious decisions based on specific objectives of the program or institution. Considerations provided under the heading "Safety-net requirements" are also relevant in this context;

D. information provided in Section 1 of the Guidelines associated with the External User Charge policy on Appropriate Charges; and

E. information provided in Section 2 of the Guidelines on Pricing Considerations.

ANNEX A is a recommended Table of Contents for a business case.

Revenue forecast, resource and organizational implications

Over the time horizon of the electronic dissemination initiative (or at least for the first three years), the implications of the initiative can be summarized in terms of:

A. revenues; compare revenues based on the new charges to revenues based on existing charges (if applicable);

B. expenditures; this applies to out-of-pocket dollar and person-year-related disbursements (one-time and ongoing) to implement the initiative;

C. organization; how will the initiative affect the organization (e.g., it may require creating a new group, or changes to the current structure and classification levels);

D. savings and service level adjustments; what actual and potential cost savings are expected to accrue; and

E. net out-of-pocket cost recovery; how and over what period of time the net out-of-pocket costs (disbursements minus actual savings) will be recovered through the revenue stream.

Savings and service level adjustments

You will want to emphasize the value of the initiative in at least two areas:

A. savings; what dollar and person-year cost savings from efficiency gains or arrangements made through the electronic dissemination initiative are expected to accrue; how the savings compare to the (out-of-pocket) expenditures necessary. This figure represents the actual cost savings achieved; and

B. service-level adjustments; how the service to the public is affected by the initiative to be put in place; where enhancing service levels is desirable and the electronic dissemination initiative demonstrably achieves that, it would be useful to establish what other means to achieve similar service level enhancements would cost. This figure would provide an indication of the potential cost savings the initiative would provide.

The method of charging

Methods of administering charges in electronic dissemination initiatives fall into two general categories:

A. system-wide or uniform charges; such charges are usually simpler and less expensive to determine and administer. They typically include:

• licence fees,
• royalties, and
• permits;

B. specific charges based on unit cost; such charges are generally more complex and expensive to determine and administer. They may include:

• a per-transaction fee or
• a daily, monthly or annual user fee.

Section 2 of the Guidelines associated with the policy on External User Charges provides guidance on the methods of administering charges. You will want to consider the following when trying to choose the appropriate method of charging:

A. there may be a trade-off between promoting economic efficiency and the ease and expense of administering charges. Uniform or system-wide charges are simpler and cheaper to determine and administer. Such charges are more appropriate when the market is unknown, the volume is small, the costs to the clients are small compared to other costs incurred by them or the costs of providing the various services do not differ substantially; and

B. uniform or system-wide charges may blur the relationship to costs. This could result in some users of the service subsidizing others, making the charges inequitable. Specific charges based on unit costs are usually more appropriate in situations where there are substantial variations in the costs of providing various services.

Step 4: Determine Appropriate Delivery Vehicles and Arrangements

Exclusivity vs. non-exclusivity

A federal institution would usually want to retain the right to access or distribute its own database. This implies that the preferred approach is one involving non-exclusivity in the arrangements made with the private sector. Where an exclusive arrangement appears, however, to be the most effective way to further the objectives of the institution, the competitive process should be used.

If the option chosen is licensing a database to the private sector, the institution has three basic alternatives:

A. grant "non-exclusive" licences to more than one licensee and retain the right to access and distribute its database through other licensees;

B. grant a "sole" licence, which permits it to access and use its own database, but not to license additional licensees;

C. grant an "exclusive" licence, which means only the licensee can provide access to the database. In this case, the institution would become a client.

The most frequent licences granted are "sole" and "non-exclusive". In deciding on an approach, you will want to take into account that:

A. competitive licensing of several parties for the same information may not allow anyone to achieve reasonable returns on what may be considerable investments. As a result, both the service to clients and the possible returns to the department may suffer;

B. a more reasonable approach is a licence arrangement with one vendor over a period of time (e.g.,two to five years, depending on the size of the investment) sufficient to allow the vendor to recoup its investment and establish a foothold in a market. Arrangements to speed up and help the vendor recoup its investment could also involve waiving fees or royalties for a period of time; and

C. it may be important to preserve the freedom to re-license the same data to another vendor, possibly in a different market and for different purposes.

Intellectual property/Crown copyright

Intellectual property includes (1) copyright, (2) industrial design, (3) trade-marks, (4) patents and (5) trade secrets. The Copyright Act protects all forms of expression recorded in some tangible form. Copyright protection extends to disseminating, producing, reproducing, translating, broadcasting, adapting or publicly performing a work.

Role of and arrangements with the disseminating "partner(s)"

The role of the disseminating partner(s) - be it private sector or another government department or agency - will need to accommodate the specific circumstances of each initiative. The brief discussion on distribution media and vehicles in Part I will help the manager ask the right questions and seek advice in defining a role for the disseminating partner(s) in delivering the information and establishing a suitable arrangement. There are a few related considerations that a manager may wish to take into account, however:

A. disseminating the information establishes a (typically one-way) "bridge" between a program organization and users. It may be possible to effectively use the bridge and services provided by the partner(s) for other related purposes, which may include:

• collecting the information (effectively using the "bridge" as a two-way channel);
• disseminating other program or departmental information; or
• providing services to program clients which are currently delivered by the program organization or the department;

B. often the partner(s) establish very sophisticated information systems to support a dissemination initiative. Frequently these systems rival - and sometimes even exceed - the sophistication of the program or departmental systems that originate the information. This is particularly true in the case of on-line database services.

Accordingly, the critical mass and sophisticated capabilities of the partner(s) may sometimes be used to:

• provide information services to the originating program organization or department, or
• supplant or complement some of the program's or department's own information processing and delivery capabilities; and

C. it often turns out that the partner(s) are providing - or are in a position to provide - needed services to the originating department or program. Accordingly, in structuring the exchange of consideration (fees, charges, royalties), you may wish to consider receiving services in lieu of consideration on a partial basis (quid pro quo). For purposes of auditing and maintaining accountability, both service and consideration will need to be expressed in financial terms; proper records of transactions will also need to be kept. There are "live" situations right now where the amount of royalties to be received as a result of a licensing agreement is deducted from the invoices for services received through a contract during the same time period. Effectively, the department pays the difference between contract costs and licensing proceeds.

In summary, there may be opportunities where the strengths and capabilities of the partner(s) can be applied to benefit the program organization's operations, resources and service delivery. It pays to be on the lookout for these opportunities.

The appropriate disseminating partner(s)

Typically, three levels of decisions are involved in determining the appropriate partner:

A. first level -whether the appropriate partner is (1) another government department or agency, (2) a private sector organization or an (3) in-house service. This decision will also help you narrow down the range of options available (as per The Main Options discussed earlier). Relevant elements in making decisions include: composition of the market, demand dynamics (i.e., stable or fast-growing), market development requirements, product delivery and associated service needs, the expertise required, revenue collection, support and other necessary services;

B. second level -with which type of private sector partner are your objectives most likely to be compatible? This will help you establish the vendor category(ies) that seem to match your requirements. In turn, this knowledge will help you better structure and target the selection vehicle -usually a Request for Proposals (RFP) through GSC; and

C. third level -what are the mandatory and desirable criteria to help you choose among the potential partners in the target categories? These are the specific criteria you will use to actually choose the partner based on the proposals you receive.

Using a facilitator or "broker"

An experienced facilitator or broker can contribute greatly to the success of an electronic dissemination initiative. One such experienced facilitator available to government managers is CCG-P. Among the services they provide to government managers are:

A. licensing -negotiated authorization to use Crown copyrighted information material for resale or re-distribution purposes;

B. co-publishing -establishing a three-way arrangement for disseminating information involving the originating department or programme, CCG-P and qualified electronic publisher(s);

C. joint-venture -similar to co-publishing, but initiated by CCG-P;

D. distribution -negotiating distribution services in electronic form for government departments and agencies; and

E. project management -expert assistance and professional services. This includes all stages of an electronic dissemination project, from preparing the first management proposal through to tendering and pre-tendering documents (Letters of Interest LOI), RFPs), licence agreements, evaluating proposals, etc.

A manager may consider using an experienced facilitator:

A. to complement existing skills and expertise at various stages of the project. The manager retains overall management of the electronic dissemination initiative or

B. to turn over the management of the entire electronic dissemination initiative -a service which CCG-P is equipped to handle on behalf of the manager.

Step 5: Secure the Right to Charge

Pre-conditions to charging for the information

A number of pre-conditions are relevant:

A. the program or institution has the authority to provide the information, the service or the limited right or privilege that may be involved in the electronic dissemination venture;

B. the information involved is publicly available, with no privacy, confidentiality or other restrictions; and

C. disseminating the information is not inconsistent with, or contrary to, the purpose for which the information was collected.

The discussion under "Authority to disseminate electronically; privacy, access and security considerations" will be useful as well.

Obtaining authorities for imposing charges

In general, an Act of Parliament must provide specific authority to establish user charges. The following authorities or legal vehicles provide a basis for setting and levying charges for the information:

A. the authority of a minister to enter into a contract. In the case of special and specific services, it may be possible to charge on the basis of a negotiated contract entered into voluntarily by a willing purchaser;

B. specific provisions in departmental, program or other relevant legislation;

C. general provisions under Section 19 of the Financial Administration Act (FAA); this authority can be used, provided the charges do not exceed the cost of providing the service or facilities;

D. amendments to existing departmental or program legislation to include new user charges; and

E. new legislation to provide authority for user charges.

User charges are actually established in three ways:

A. regulations prescribed by the Governor in Council directly under the legal authority provided by existing Acts and Statutes (e.g., FAA, Section 19(1)(a); departmental or program legislation);

B. by ministerial order under the authority conferred by FAA Section 19(1)(b);

C. through the terms of voluntary, negotiated contract(s) issued under the authority of the ministers to enter into contracts for goods and services.

In the absence of specific departmental or program legislative authority, you may wish to consider the following ideas when looking into securing authority:

A. in the case of special and specific services with a known clientele, well defined parameters and a relatively high degree of predictability, investigate first the possibility of charging based on contract(s) (using the authority of the minister to enter into contract; you may also include a royalty provision within the contract). This process is faster and usually less tedious than other alternatives;

B. in more general cases, investigate the possibility of using the FAA Section 19 as the authority to charge by characterizing information-related activities or the granting of limited rights and privileges (e.g., licences) as services; bear in mind that under Section 19 charges may not exceed the costs of providing the service. Where what is regarded as "appropriate charges" for limited rights and privileges would exceed their full cost, an explicit policy decision of the government (Cabinet decision) is required; and

C. in more complicated, larger or more controversial cases or where the relationship between charges and the cost of providing the service is not material or appropriate, amendments to or new departmental or program legislation may be more appropriate. Naturally, this route is longer and more tedious. When legislative change is required and where such change is not considered significant or controversial, such procedural shortcuts as "Omnibus Bills" are available (your departmental legal counsel would be the authority on this subject).

Where authority to charge for the information is available in specific departmental or program legislation, consider the following:

A. where the language in the Act or regulations is sufficiently generic as to apply to an electronic product or service and where the fees in the regulations are not unreasonable in the circumstances, consider using the same fees and charges, at least as a starting point. This approach will require no regulatory change; and

B. in situations other than those described above, you will need to initiate a regulatory change process to establish appropriate fees and charges for proposed information products and services. The requirements associated with this process are set out in The Federal Regulatory Process, An interim Procedures Manual for Departments and Agencies (1991), published by the Regulatory Affairs Directorate of the Treasury Board Secretariat, 613-952-3460).

The legal services division of your department should be closely involved. As well, the departmental regulatory affairs coordinator of your department should be familiar with the process.

Process and documentation to set charges

Most user charges will be established through regulations prescribed either by:

A. the Governor in Council (GIC) "on the recommendation of Treasury Board" (under the legal authority provided by an existing Act or Statute, be it departmental, program or the FAA) or

B. by ministerial order (e.g., under the FAA Section 19(b)).

Key requirements include:

A. listing the proposed changes in the Annual Regulatory Plan;

B. preparing a Regulatory Affairs Impact Assessment Statement (RIAS);

C. disseminating the proposed changes in the Canada Gazette at least 30 days before they are implemented; and

D. preparing a submission to seek Treasury Board approval of user charges. Appendix 1 of the TB policy on External User Charges contains a checklist to be consulted when preparing submissions proposing approval of new or amended user charges. The Treasury Board Submissions Guide (issued August 1991) provides additional guidance in cases where an Order in Council or regulation is required. You can also contact your program analyst for more information.

Again, departmental legal services and Treasury Board submission units in departments (where available) are key points of contact for the manager.

Retaining revenues/receiving incentives

The policy on External User Charges (December 1989) sets out ways in which departments can share in the returns generated through electronic dissemination initiatives. Specifically, Treasury Board will consider within the parameters of the proposed Spending Control Act:

A. providing start-up funds to defray the costs of implementing user charges;

B. allowing a portion of increased user fee revenues to be applied to improve services but benefits must be greater than expenditures;

These "incentives" will be less any new expenditures required to generate the additional revenues. Departments can negotiate incentives with Treasury Board to provide start-up funding and other arrangements (see above) to provide existing, new or enhanced levels of activity. Bear in mind, however, that given the current climate of restraint, Treasury Board is reluctant to provide funding for new initiatives; thus, new or enhanced levels of activity should be introduced on full cost-recovery basis. A Treasury Board submission will be required. The same submission that was used to request approval of new or amended user charges (see Process and Documentation to set charges) can be used to request the "incentives" under the External User Charge policy.

C. For details on how departments can retain royalties fees collected from the licensing of Crown-owned intellectual property i.e. databases, refer to Section D of Part II - Treasury Board Policies and Practices.

Step 6: Select Dissemination Partner(s)

Unsolicited Proposals

Unsolicited proposals are defined as "written offers to supply goods or to perform services by suppliers which were not requested to submit such offers". In other words, an unsolicited proposal can be either (1) "out of the blue", i.e., not in response to an RFP or (2) in response to an RFP by a supplier who was not asked to submit a proposal. An "out-of-the-blue" unsolicited proposal in regard to electronic dissemination can result in (1) a sole-source contract for goods and services and, more frequently, in (2) a licence (typically "sole" or "non-exclusive") for the use of the electronic information. When neither is achievable directly as a result of the unsolicited proposal, yet the ideas contained in the proposal are clearly of value to the program or department, an "out-of-the-blue" unsolicited proposal may also result in (3) a competitive tendering situation. Sources of information for handling unsolicited proposals are:

A. your departmental Materiel Management;

B. the Supply Policy Manual (GSC); and

C. the Treasury Board Administrative Policy Manual, Chapter 314, "Science and Technology" - contracting-out.

Acceptance and Funding. The following are some of the principles in accepting and funding unsolicited proposals:

A. the subject of the unsolicited proposal should contribute towards achieving an objective of the department or program;

B. the proposal should be sufficiently unique to warrant a sole-source contract or licence; and

C. unsolicited proposals are always considered a "buy" situation (as opposed to "make").

Selecting the appropriate disseminating partner(s)

Typical disseminating partners are (1) another federal government institution or agency (e.g., CISTI or Statistics Canada) or (2) a private sector organization. When it comes to selecting a private sector partner, you have the choice of managing the selection process yourself or having CCG-P manage it on your behalf.

In most cases where the government department or agency initiates the electronic dissemination venture, selection of the private sector partner(s) will be made through a competitive process. The preferred vehicle for the competitive selection process is the RFP issued through GSC. In cases where there is some uncertainty in terms of (1) interest in the marketplace, (2) availability of suppliers to "partner" such an initiative, or (3) financial and other exposure, a pre-procurement step may be necessary. This could consist of (1) a request for Letter of Interest LOI, (2) a request for Price and Availability (P&A), or (3) a Request for Information (RFI).

A relatively straightforward RFP typically contains:

(1) GSC "boilerplate", i.e., standard clauses included by GSC in similar types of RFPs;

(2) statement of work, i.e., background and what the contractor or licensee will be required/will be allowed/will not be allowed to do with the information;

(3) the prescribed format of the proposals to be received from the vendors;

(4) the evaluation methodology and criteria to be used in choosing the most effective proposal; and

(5) samples, exhibits and other information supporting the statement of work or the method of evaluating the proposals.

A few useful considerations for the manager contemplating a procurement action follow:

(1) proposals received from vendors are normally broken up into (a) the "technical/managerial" proposal and (b) the "financial" proposal. The manager gets the technical/managerial proposal for technical evaluation, GSC keeps the financial proposal and does the financial evaluation; and

(2) a typical evaluation process has three steps: (a) compliance with mandatory requirements (non-compliance with any mandatory requirement disqualifies the proposal); (b) technical evaluation according to a pre-defined rating system (only desirable requirements are rateable); and (c) financial evaluation.

It is suggested that you contact GSC (directly or through the Materiel Management area in the department) early in the process. They will assign and officer with experience in the type of procurement required. Government Services Canada has already handled a relatively wide variety of procurement actions in electronic information dissemination. As a result, they have developed considerable expertise and a substantial collection of tendering documents and resulting contract and licensing agreements that may be helpful in preparing the RFP documentation. The GSC procurement officer is your best source of advice in (1) developing a tendering strategy, (2) structuring the RFP document, and (3) developing the evaluation methodology.

Step 7: Conclude Agreements

Negotiating a Memorandum of Understanding, contract or license agreement

The following will need to be considered in negotiating a contractual arrangement with your disseminating partner (another government institution or a private sector firm):

A. ownership and control of the data, including protection of Crown copyright;

B. costs involved, including start-up and ongoing costs (where applicable);

C. services to be provided, including services to be provided to your organization or institution (if applicable);

D. payments and royalties;

E. licensing fees;

F. billing and revenue recovery procedures;

G. converting existing data;

H. capturing new or existing non-machine-readable data;

I. associated secondary services, e.g., document delivery services for bibliographic databases;

J. ongoing technical assistance to your partner and his clients;

K. ongoing subject matter assistance to your partner and his clients;

L. ongoing user training;

M. ongoing maintenance of the data; and

N. specific contract, licence or Memorandum of Understanding (MOU) terms and conditions.

MOU, Contract, Licence Agreement

For structuring contracts and other agreements, expertise exists in your department and elsewhere. The following organizations can help you in structuring an appropriate agreement:

A. your Legal Services Unit;

B. CCG-P;

C. GSC;

D. Statistics Canada, the Electronic Data Dissemination Division in Marketing and Information Services; and

E. CISTI, Policy, Planning and Systems.

Step 8: Manage the Ongoing Arrangement

Setup and startup of operations

Your specific role in the setup and startup of the operations of an electronic dissemination initiative will depend on a wide variety of factors according to the circumstances and options chosen for disseminating (e.g., whether the initiative is implemented in-house or there is an external partner; whether it is initiated by the department or the private sector).

Typically - and depending on the specific circumstances - be prepared to:

A. be available for discussions with your disseminating partner;

B. be asked to provide your disseminating partner with any help, information and assistance that may be useful in structuring the way electronic information is accessed by or delivered to users;

C. provide electronic information "samples" to help the disseminating partner test the systems and procedures developed;

D. review and sometimes be a test site for the procedures and systems under development;

E. comment and provide feedback on the systems and procedures developed by your disseminating partner;

F. provide advice on the packaging of the information for delivery (information products), related services and possibly marketing approaches that your disseminating partner can use;

G. provide the one-time electronic information (e.g., complete copy of the electronic database) in the format outlined in the agreement with your disseminating partner;

H. provide ongoing technical, subject matter or training assistance to your disseminating partner; and

I. help your disseminating partner, where appropriate, to provide adequate support to users in both official languages, where and when required.

Manage the agreement (contract/licence/MOU)

The requirements on you and your staff will vary greatly, depending on the specific terms of the agreement and your disseminating partner's role and responsibilities. However, it would not be uncommon for you or your staff to have to:

A. monitor the performance of your disseminating partner in relation to the terms of the agreement; monitor complaints and the quality of support the disseminating partner provides to users;

B. take action to correct situations involving non-performance, misuse of the information or abuses by your disseminating partner;

C. schedule periodic status review meetings with your disseminating partner to review progress, track ongoing and outstanding issues, review changes; and

D. request an audit of the revenues declared by your disseminating partner (e.g., where gross revenues are the basis for calculating royalties due your organization).

Supply the information (ongoing)

In most cases, there is an ongoing component to an electronic dissemination initiative. As such, expect to be required to provide the electronic information in the format and according to the timetable and frequency outlined in the agreement with your disseminating partner. Naturally, an on-line database whose success depends on it being current will have a frequent update cycle (e.g., daily), while for a CD-ROM, updating the information prior to re-mastering a new disc will suffice (e.g., quarterly, semi-annually or annually).

Track revenues (fees and royalties)

You will need to establish procedures to help you track the income received by your organization. If you already track revenues from other sources, this should involve a simple extension of your current procedures. If you do not currently receive revenues, you should consult with your Finance area on how to set up such procedures and what your respective roles will be in the process. This is critical if you intend to request annual appropriations from Treasury Board based on revenues received from the licensing of Crown-owned intellectual property.

Manage the ongoing relationship

A good ongoing relationship with your disseminating partner is important. In order to maintain and improve the relationship, you may wish to consider:

A. agreeing to serve as an ongoing information and services "adviser or mentor" to your disseminating; partner;

B. serving as a quality controller for the information; and

C. assisting your disseminating partner in gaining access to other program, departmental or government information that may add value or increase the usefulness of the information you supply.

MYOP -User Fee Revenue Plan

The revenues you receive through user fees and charges are reported annually through the User Fee Revenue Plan component of the MYOP. Contact your Finance area for information on the format, content and presentation of this component of the MYOP.

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Annex A - Table of Contents - Business Plan

I. Executive Summary

II. The Corporation

A. Introduction

B. Corporate Mission

C. Corporate Goals and Objectives

III. The Business

A. The Business Opportunity

1. Vending of Information

2. Inter-jurisdictional Exchange and Sharing of Information

3. Provision of Information to Other Government Agencies

B. The Market

1. Overview

2. Market Analysis

C. The Competition

D. Distinctive Competence

E. Description of Services

1. Collecting and Enrichment of Jurisdiction Data

2. Marketing and Selling Bulk Electronic Information

3. Providing Transaction-based Information

4. Liaising with Distribution Channels

5. Liaising with Contributing Jurisdictions

6. Assisting in Collecting New Information

7. Providing Access to Extra-Provincial Information

8. Providing Information to the Jurisdictions

9. Helping Jurisdictions

10. Providing Special Services to the Jurisdictions

F. Market Plan

G. Revenue Projections

1. Sources of Revenue

2. Pricing

3. Tentative Revenue Projections

H. Distribution of Profits

IV. Operations

A. General

B. Company Operations

1. Starting Up

2. The Post-Startup Stage

3. Evolution of the Business

C. Operating Components

D. Operating Models

1. Models Available

2. Analysis of the Models

E. Recommendations

V. Management Organization and Personnel

A. Assumptions

B. Management

1. Startup

2. In the Long Run

C. Marketing and Sales

D. Operations

1. Startup

2. In the Long Term

E. Finance, Personnel, Administration and Contract Management Functions

F. Contracting

1. Dealing with the Host

2. Dealing with Clients

VI. Financial Projections

A. Infrastructure Requirements

B. Projected Costs

1. Principles

2. Assumptions

C. Projected Expenses

D. A Tentative Cost and Expense Summary Picture

VII. Benefits

A. Benefits to Stakeholders

B. Benefits to Public Policy Interests

C. Benefits to Established Distribution Channels

D. Benefits to End-Users of Information Products and Services

VIII. Other Considerations

A. Issues

1. Vendors will Differentiate on Products

2. There will be Positive Effects on Competition

IX. Appendices, Tables and Exhibits

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Annex B - Additional Information

Obtaining further information and assistance

To obtain further information or assistance with your needs in the area of disseminating your database information:

A. Contact the Interdepartmental Working Group on Database Industry Support (IWGDIS) at (613) 990-4316.

B. Contact Canada Communication Group - Publishing (CCG-P) Services, Licensing and Crown Copyright Program at 819-956-4680 for queries related to:

• Crown copyright,
• using CCG-P as a facilitator or intermediary,
• co-publishing and licensing agreements,
• dissemination in multiple forms and media, and
• requesting relevant publications.

Contact New Product Development, at (819) 956-5782 for information about:

• assistance with electronic publishing projects, and
• using CCG-P as distributor of electronic publications.

C. Contact the Information, Communications & Security Policy Division of the Treasury Board at (613) 957-2538: for questions regarding information on:

• relevant legislation,
• relevant TBS administrative policies,
• the legislative or regulatory amendment process (e.g. Orders in council), and
• TB submissions (your TBS program analyst is your prime contact).

 

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