EDS has paid off Her Majesty's Revenue and Customs for its failure to provide a working tax credit system. EDS worked on the system from 1994 to 2004. The launch in 2003 was a disaster and led to over-payments totalling £2bn to almost two million people. Attempts by the Revenue to claw this money back led to even worse problems …
They have been let off lightly. Let's hope their failure is remembered when they try to bid for other Gov't or Local Authority work.
"Frequently changing the spec of the project"
Nothing new here, this is standard practice in all government projects, sadly.
Only an idiot bids for large government projects these days.
Why do I need a title?
This just confirms that EDS are utter shite...
And next year...
...EDS will be back with the snout in the trough, HMRC having learnt nothing. Almost every major government IT contract fails, runs late or costs w-a-y more than planned. One has to wonder why they keep hiring the same groups of incompetents.
Semi-serious: HMRC would be better off clubbing together with a few foreign tax entities and running the next system under open source rules.
100% refund plus damages
If they failed to do their job it should be a 100% refund plus damages.
Computers are 100% man made, if the computer can do it, then the programmer can write it and if EDS's programmers can't write it then it's EDS's problem.
Future EDS contracts should have a penalty weighting based on previous failed projects, so that no matter what they quote the estimated REAL cost is the one used. The REAL cost being the cost they quote plus the overruns needed to fix their broken software based on past experience.
Can't uk.gov just create a nice big consulting company for all their internal needs? Now with all those people being let off, it would be even quite cheap.
But at the end gravy train needs to roll, doesn't it?
"presumably for less...
... than the total of £71.25m had they chosen to pay it off over time"
That'll be made up by the rest of us then!
Frequently changing the spec of the project is one of the worst things you can do.
At some point it needs to be finalised. It's basic project management.
I worked on a telecoms project which more than tripled in value because of changing requirements and it almost sunk the company with the loss of 200 people's jobs.
Having worked in the civil service as a contractor, I can well believe that the HMRC are probably responsible for a major part of the project failure.
I was around for both when EDS and Capgemini were doing it. The staff never changed, literally.
Both times the whole place was staffed with the lowest quality, and lowest paid workers imaginable.
Its not their fault, if you only offer absolute minimum wage then the only people who can take such jobs are teenagers still living at home, and the almost unemployable forced into the job by New Deal. Apart from the desperate like me, but when you get £160 take home pay a week, and can be let go at any time without warning, you barely give two shits about quality of work.
Thats the problem with outsourcing, the lowest tenders are the lowest quality by their very nature.
I thought it was a success
Tax Credits put people into debt and made their lives worse. Surely that's the aim of government?
Ah, the fail train was rolling well around that project
I worked on Tax Credits for some time and there was enough blame to spread around every party. The detail policy was flawed (e.g. follow the PAYE system, overpay and then claw back later), the development wasn't great (EDS have a large part of the blame), there were many muppets working on it but some good people as well (including me :) ) and things kept changing right up until the end.
However, to the AC saying that "...Almost every major government IT contract fails..." is rubbish. You just never hear about the successes. I recently finished working on a successful 100,000 man day multiple IT system implementation for a large government dept - its not in the news because its worked well and delivered on time. Despite its size and it being the biggest implementation this particular dept has done in over 10 years, I bet no one has heard of it!
Is this the final straw...
EDS should have been given the bums rush as soon as Thatcher left power. It was her cosying up to Ross Perot that got EDS in the doors of Government, and pretty much allowed them to monopolise major IT projects during those dark years of Tory government. Government has changed, but the ability of such an outfit to keep their foot in the door obviously hasn't.
Central and local governments don't learn from experiences such as this, that's why their IT spend is so high. Generally decisions on IT budgets, from which hardware to buy to major projects are organised by semi-IT-literate employees. Requirements are unclear, poor project teams develop even poorer specifications which ends in software that is far from fit-for-purpose. They all scratch their heads, blame each other and then start from scratch again...employ a new "consultancy", and then circle of life is complete.
Central/Local authorities need to open their eyes and stop placing major projects with companies that can't show a pedigree of delivering projects on time and within reasonable margins of set budgets (given that it's almost impossible to be spot on with budgets 100% of the time).
Even Paris wouldn't let EDS manage her assets.
@AC - 100% plus damages...
You know that thing where Albert Einstein said things should be made as simple as possible, but no simpler? Well your analysis was way too simple.
I am not suggesting that EDS are angels, far from it, but I'd be amazed if you'd ever run anything more complex than a bath.
EDS. Ha ha ha.
I used to do software support for a large Unix type company, and I can honestly say that with the exception of the US military grunts, EDS sysadmin were the most useless bunch of twazzocks I ever had to deal with.
CapGem usually seemed to at least know what a computer is, so maybe there's hope.
Posting anonymously, 'cause I work for The Man. Outsourced, of course.
Never-ending trough expected?
Little ex-EDS birdie told me some people in EDS were (alledgedly) happy at the idea of moving goalposts as they saw the whole project as a never-ending source of revenue. Unfortunately for them, it seems someone saw that the whole project was a dumper and killed it off for them.
Some large IT consultancies (at least one I know anyway) have a deliberate policy of producing a system specification of a system which they know will not work.
The project commences and as the problems are found, new requirements have to be devised, change requests raised and the final project costs considerably more than the original planned price; and this is how the IT consultancy makes its money.
I worked for one large IT consultancy where this did *not* happen but we all knew who did it.
"Can't uk.gov just create a nice big consulting company for all their internal needs? Now with all those people being let off, it would be even quite cheap."
Nice thought, but then who would be able to offer highly-paid directorial sinecures to recently retired KCMGs?
Who is to blame?
IIRC the original damages filed by HMRC against EDS were for around £525m. In the end HMRC settled out of court for an offer of just £75m. If one assumes that the settlement in these cases is representative of "blame for the cockup" then one should assume the cockup was 85% HMRC and only around 15% EDS.
And as someone who worked at EDS at that time that concurs with my understanding of the situation at that time. EDS might not have been the hottest supplier on the market at the time but HMRC was regarded internally (and is regarded across the wider industry) as a legendarily shit client.
The system which was mentioned in the article was implemented against the advice of EDS because it just wasn't ready because of earlier delays caused by HMRC's floundering management of it's own requirements. There was a story that large sections of the requirements weren't signed off by HMRC 5-6 weeks before go-live. Immense pressure to implement anyway was then applied to EDS by HMRC, who then sued them after the cockup occurred.
EDS may be crap to many people, but this was for the most part just another Government IT cockup, and the financial settlement reflects that.
Regardless of EDS implementation HMRC wanted a system that estimated payments then adjusted at a future date that was a requirement - basically it had disaster written over it before anyone laid a finger on it. And let's not even get on to the cultural change required for an organisation that primarily collected money having to now pay it out. Another one of Gordon's clever idea's I seem to remember.
Referring back to the Einstein quote that should apply to the whole tax system, I've known tax inspectors who readily admit the system is so complex in some area that they would be more surprised not to find errors.
so how much was it?
I'm sure the government can do with as much money as it can get, as quickly as possible.
It's a shame EDS are not around any more as there's a few projects on the horizon that could with their forward looking process orientation management infrastructure actualization....
Response to Joe K (or JoKe)
In response to your comments : By Joe K Posted Wednesday 7th January 2009 11:25 GMT
" I was around for both when EDS and Capgemini were doing it. The staff never changed, literally. Both times the whole place was staffed with the lowest quality, and lowest paid workers imaginable."
I would just like to Disagree, Clearly you weren't good enough, How is the road sweeping going! The staff that are left from the EDS days are very knowledgeable, Joining after the EDS Leaving party i cannot really comment on their performance (clearly not very good, or they may have kept the contract) but the system put in place now runs smoothly and well. oooh and may i add im quite well paid!)