MoD Computer Issues Cost Taxpayers £1 billion

The Commons' Public Accounts Committee (PAC) has lambasted a £7 billion computer system project led by under-pressure computer firm EDS and commissioned by the Minister of Defence (MoD).

The report delivered a damning account of the shortcomings in the planning procedure that led to a series of delays and overspending that could end up costing £1 billion to the taxpayers.

The catalogue of problems include the fact that the 10-year IT overhaul started 18 months late, in 2005 and failed short of delivering the 150,000 computers across 2000 military sites.

Instead only 45600 were in place by September 2008 and costs had shot up by £182 million, upping the estimated cost from £6.2 billion to £7.1 billion. This also means that only 140,000 terminals can be installed.

The project called Defence Information Infrastructure was also plagued by what the PAC called "entirely inadequate research" and "major miscalculations".

One example given was that many old, almost derelict Army buildings, had large amounts of asbestos problems that required extra work.

More worrying is the conclusion that the system is not capable of handling "secret material" given its current state and the issues associated with maintaining the smooth running of an intricate structure of old and new computers.

Commenting on the report, the Committee chairman Edward Leigh delivered a crushing assessment of EDS's handling of the project, saying, "The ATLAS consortium implementing the project - led by EDS, a company whose track record of delivering government IT projects has not been exemplary - underestimated the complexity of the software it had agreed to create"

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Our Comments

It is not the first time that EDS has been in trouble when it comes to a governmental project. Nomis, a prisons project, saw its cost more than double, from £234m to £690m even when its scope has been cut. In 2005, EDS was forced to settle a claim for compensation with HD Revenue and Customs after their IT systems ran in trouble. And in 2004, the NHS rescinded its contract with EDS.

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