Government IT Projects: How Often is Success Even an Option?

The past few weeks have not been exactly stellar in terms of good examples of government IT project management. The recent announcement of the dismantling of the UK's £12.7 billion NPfIT electronic health record system project and the UK Parliament's Public Accounts Committee postmortem last week on the £469 million plus FiReControl project fiasco are just two of the more egregious ones.

Others that have also made the news lately include the rollout of the California Public Employees' Retirement System (CalPERS) new benefits management system. According to an article in the Sacramento Bee a few weeks ago, the system, called My CalPERS, was originally estimated to cost US $279 million but ended up costing $507 million—and is two years late. The Bee article says that $74 million of the overage is due to features added after the contract start, so the overrun is only $154 million.

A story in the LA Times stated that problems were expected with the My CalPERS rollout, but so far none significant to have made the news—yet. The Times article also said California's 21st Century Project which is meant to revamp the payroll system, is also running late. As I noted last summer, the California State Controller's Office received $131 million in 2005 to revamp the payroll system which was designed in the 1960s and last revamped around 1970. The modernization project finally began in 2006 with an estimated completion date of June 2009 and a cost of $305 million.

For various reasons (including the firing of the 21st Century Project's system integrator Bearing Point in February 2009 for alleged non-performance), the new payroll-system rollout date was estimated last summer to begin late 2012 with a total project cost somewhere around $175 million.

The LA Times article now says that the 21st Century Project's cost so far has been $185 million, and its rollout "is not expected until 2013 at the earliest."

There was also a story in the New York Times this week about the New York City personnel system Nycaps (PDF).  According to the Times, the Nycaps project, which was started in 2002, is still not complete and has cost so far $363 million—or about $297 million over the original cost estimate.

The Times article says New York City contract monitors stated in 2003 that, "No sense of economy, efficiency or value is evident in any area of the project, " whereas in 2011, the Times reported contract monitors stated "'important parts of the personnel system were 'not properly structured and organized,' adding that the project was 'lacking executive leadership.'"

Plus ça change, plus c'est la même chose, I guess.

The Times did note that no one has accused the cost overruns are a result of fraud—like the infamous CityTime project—just of incompetence. There is another fraud story, however, that will bring CityTime back into the foreground.

There is a story in yesterday's Wall Street Journal reporting that a New York City Department of Education technology contractor, Future Technology Associates, is being accused of defrauding the city of some $6.5 million on its IT work performed over a course of a number of years on the DOE's purchase, payroll, and finance systems. The firm is accused of billing DOE $55 and $110 an hour for work it said was being done in Brooklyn while it actually was outsourcing some of the work to Turkey and India at $10 and $14 an hour.

There was also a story in the Finnish paper Turun Sanomat that says that Finland's National Audit Office "...calculates that malfunctioning computer systems have cost taxpayers hundreds of millions of euros in losses over the past few years."

Furthermore, the NAO stated that "...in the recent past, every new major data processing system in the public sector has created chaos during its rollout phase" which the NAO attributed to the "incompetence by the IT companies involved."

Cited was the introduction of a new ticketing system for the State Railways VR that has finally been fixed after two weeks of being crippled.

The companies the paper contacted, however, said that the problems were not entirely their fault, but the fault of the "public sector's inflexible acquisition processes."

Finally, returning to the UK, ComputerWorld reported this week that Fujitsu, one of the four original main suppliers to the NPfIT, signaled that it was still intending to sue the National Health Service for the £700 million the company still thinks it is owed. Fujitsu pulled out of the project in 2008 because it said the NHS demanded changes that it didn't want to pay for, and was withholding payment for work completed to force the company to do the extra work.

In addition, the Financial Times of London also reported this week that the morale at Her Majesty’s Revenue & Customs (HMRC) was lower than that of any other UK governmental department, and that one senior insider called the department as "rudderless." It also stated that:

"Those in the know say HMRC’s 2013 timetable for introducing the new universal credit—a huge joint IT project [called the Real Time Information or RTI project] with the Work and Pensions department—is 'heroic' or, worse, 'adventurous.'"

The FT article went on to say that HMRC chief executive Dame Lesley Strathie the told a Treasury select committee that the RTI project was "high cost and high risk." When the acting director-general in charge of HMRC’s RTI project Stephen Banyard was questioned about this  characterization at a hearing in May, the exchange went something like this:

"Chair: 'Do you agree it is high cost?'"

"Mr Banyard: 'I don't think it is high cost for what we are getting'"

"Chair: 'So Dame Strathie was wrong?'"

"Mr Banyard: 'No, she was not wrong.'"

"Chair: "She said the opposite of what you have said.'"

"Mr Banyard: 'It is a relative judgment, isn't it?'"

So with this little exchange and the other government IT project examples above, any comments/opinions on who gets the majority credit for most governmental IT project overruns, schedule slips and or cancellations, the government or the contractor?

Also, any predictions on how late and over budget the RTI project is going to be?

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