Government loses millions of euros on failed ICT project benefits

The government is stopping the development of an ICT project for the provision of, among other things, child benefits and old-age and survivor’s pensions. EUR 43.7 million has been invested in the development of the system; stopping will cost another 10.4 million euros.

The Social Insurance Bank, which is responsible for providing benefits, has finally stopped developing the project after experts examined the system. According to them, the introduction of the system, which was carried out by the French company Capgemini, would be ‘very problematic’. The contract with Capgemini is therefore terminated.

The SVB will now continue to use the existing infrastructure and expects it to be sufficient for at least the next five years. In addition, it is being examined whether certain parts of the new system can still be put into use. The SVB does not expect any problems when making payments.

The system should have been put into operation in November 2013, but the Social Insurance Bank decided against it because the system would not work properly. Capgemini maintained that the system was working properly, but an internal government research organization decided it was better to ditch the substandard system, which originally came from Oracle.

In this case, the government has already invested 43.7 million euros in the project; the termination also costs another 10.4 million euros. It’s unclear where that money goes; Capgemini may have to be surrendered to break the contract. A spokesperson for the SVB could not provide any clarity.

It happens more often that failed ICT projects cost the government millions. According to professor Hans Mulder, more than a third of the large ICT projects fail so badly that they are completely scrapped and not put into use. That costs the government 4 to 5 billion euros annually, Mulder says.