Air Force scraps massive ERP project after racking up $1 billion in costs

The Expeditionary Combat Support System 'has not yielded any significant military capability'

The U.S. Air Force has decided to scrap a major ERP (enterprise resource planning) software project after spending US$1 billion, concluding that finishing it would cost far too much more money for too little gain.

Dubbed the Expeditionary Combat Support System (ECSS), the project has racked up $1.03 billion in costs since 2005, "and has not yielded any significant military capability," an Air Force spokesman said in an emailed statement Wednesday. "We estimate it would require an additional $1.1B for about a quarter of the original scope to continue and fielding would not be until 2020. The Air Force has concluded the ECSS program is no longer a viable option for meeting the FY17 Financial Improvement and Audit Readiness (FIAR) statutory requirement. Therefore, we are cancelling the program and moving forward with other options in order to meet both requirements."

The Air Force will instead need to use its "existing and modified logistics systems for 2017 audit compliance," the statement adds.

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Air Force officials restructured the program three times within the past three years, and ultimately determined the military division "will be better served by developing an entirely new strategy versus revamping the ECSS system of record again," it states.

The system dates back to 2005, when Oracle won an $88.5 million software contract, securing the deal over rival SAP and other vendors. It was supposed to replace more than 200 legacy systems. CSC had served as a systems integrator on the project, until its contract was terminated in March, according to an Air Force spokesman. An Oracle spokeswoman declined comment on Wednesday.

CSC "completed work on the ECSS contract in April," a spokeswoman said in a statement. "The Air Force's recent ECSS program announcement has no impact on CSC or its employees."

ECSS' demise had been foreshadowed for some time, with Air Force officials publicly stating they were assessing their options, and others openly bemoaning the project's failings.

Military officials' decision to stop the project now drew a stinging rebuke from analyst Michael Krigsman, CEO of consulting firm Asuret and an expert on IT project failures.

"This situation raises more questions than answers," Krigsman said. "Why did it take the [Air Force] $1 billion and almost 10 years to realize this project is a disaster? What kind of planning process accepts a billion dollars of waste?"

Krigsman also questioned whether the Air Force will in fact have auditable books by 2017. "How can they achieve such a goal when this program is cancelled?" he said. Instead, it would be wise to revisit the topic in 2017, "at which time I suspect we will see another failure story accompanied by many excuses," Krigsman added.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

Tags applicationscscenterprise resource planningCIO roleit strategysoftwareIT managementOracle

4 Comments

Steve D

1

Ever heard of the "sunk costs" fallacy? You've poured a lot of money into an investment, don't let it "go to waste." Also known as "throwing good money after bad." The USAF tried it, it doesn't work. Cut your losses early.

Perry Layfield

2

Exceptional management teams do constant review and resume exercises throughout the project lifecycle, even those projects as massive as this one. It takes great courage to kill a project especially if significant dollars and effort are already spent. Too many technology projects are the result of very good salesmanship on the part of the vendor and very poor understanding of the projects deliverable payload and total cost of stand up and maintenance on the part of those in charge.

thebruce

3

This kind of announcement is becoming the rule rather than the exception...even after numerous GAO warnings...see also numerous examples of DOD/VA software debacles reaching back for 2 decades. This case, once again, presents many strong arguments for our need to demand transparency, project management and open source methods (in an undiluted use case). Viewed as a pattern, these spectacular contractual failures may actually represent open slush fund transactions for the massive shifting of pubilc money to political insiders...so commonly referred to as "Beltway Bandits". This is at least unethical and probably illegal, yet, to date, there have been few (if any) efforts to pursue accountability on either side of the contracts. It is also likely no one will ultimately be found responsible...which prepares the ground for another round of corruption (if viewed as a pattern). How many times does this have to occur before we are willing to accept the simple truth and change the way the DoD/VA does business? In addition, there are new supersystem changes in the current planning documents (iEHR) that promise similar outcomes for similar outlays of public funds. It is my humble opinion that when these companies report "Net Income" without booking contingent liabilities for failed government projects it coujld be viewed as evidence of criminal activity...or at the very least clear evidence there are contract problems that must be corrected. If a company can't deliver the product after a few years and a BILLION dollars expended...there should at least be a corporate tragedy accompanying this announcement (or possibly an investigation...big hint - "follow the money"). Surely I am not the only one who thinks there may be a flame amid all this smoke.

Ian

4

Couldn't they have just bought SAP software?

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