EDS pays for tax failure
Final divorce settlement
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 for some of the UK's poorest people.
In 2005 HMRC sacked EDS and installed CapGemini to run the project.
As part of their separation deal EDS agreed to pay a total £71.25m in installments. HMRC said yesterday that EDS had decided to make a one-off payment to settle their dispute - presumably for less than the total of £71.25m had they chosen to pay it off over time.
The two sides blamed each other for the failure of the project. A report from the Parliamentary Ombudsman said: "Indeed, it is difficult to do justice to the sheer range of problems which have affected customers’ awards."
Although EDS got a lot of flack for the failure others were just as quick to blame the Revenue for mismanaging the outsourcing and frequently changing the spec of the project. ®
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!)
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....