Poor IT System Costs EDS $166 Million
Poor IT System Costs EDS $166 Million
Nov 28, 2005: IT services behemoth Electronic Data Services (EDS) has agreed to pay £71.25 million, (AU$166.3 million) to the British Revenue and Customs department in compensation for a problematic IT system launched in 2003.
The system experienced early problems with tax credits, eventually overpaying thousands of families and leaving the Revenue and Customs department with a £2 billion recovery job. It has so far spent £24m fixing the tax credit issues.
EDS argued that it had asked for additional time for testing before the system was implemented, however Doug Hoover, EDS’s Managing director for the UK, Ireland and Africa said that it was pleased to “settle this dispute without incurring the costs and uncertainties of what would have been a lengthy and complex legal case.”
EDS ran the British government’s tax and national insurance systems until 2003 when rival Cap Gemini snatched its contract worth £3 billion over 10 years.
EDS is a major player in the Australian market with clients such as the ATO, Westpac, Australia Post, the Commonwealth Bank and the South Australian Government.
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