Cost Overruns, delays and terminations in 105 outsourced public sector ICT contracts

The report identifies 105 outsourced public sector ICT contracts in central government, NHS, local authorities, public bodies and agencies with significant cost overruns, delays and terminations. The summary of findings:

• 105 outsourced public sector ICT projects with significant cost overruns, delays and terminations.

• Total value of contracts is £29.5 billion.

• Cost overruns totaled £9.0 billion.

• 57% of contracts experienced cost overruns.

• The average percentage cost overrun is 30.5%.

• 33% of contracts suffered major delays.

• 30% of contracts were terminated.

• 12.5% of Strategic Service Delivery Partnerships have failed.

The main ICT companies with contract cost overruns, delays and terminations are:

• EDS – 13 contracts

• Liberata – 8 contracts

• Fujitsu and IBM – 6 contracts each

• Accenture, Atos Origin, Capita, ITNET (now Serco) and Siemens – 5 contracts each

• BT – 4 contracts

Dexter Whitfield, author of the report and ESSU Director stated: “The scope of the failures is shocking. The remedies do not lie in tinkering with the procurement process but with root and branch change in the modernisation of public services. The government’s commitment to commissioning and contestability does not address any of the fundamental causes and will only make matters worse for ICT projects in the next decade.”

Download report

Download a copy of the Press Release:

See Review of the report by Michael Krigsman, ZDNet.com, (USA)

See Public Sector ICT Projects – Delays and Cost Overruns: A Constructive Analysis in eGov Monitor, 17 December 2007. Explains why ICT projects have gone wrong and what changes are required.

The Report findings were also covered by Computer Weekly (21 December 2007), The Register (27 December 2007), UKauthorITy.com (31 December 2007) and Kablenet.com (24 December 2007).