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By Natasha Lomas, 15 January 2009 15:40

NEWS

An MoD project to replace hundreds of legacy computer systems is not only behind schedule and overbudget but it's also failing to impress users, according to the government's spending watchdog.

The £7.1bn Defence Information Infrastructure (DII) programme was intended to provide a single information infrastructure serving the army, navy, airforce and central MoD command but the project is now 18 months late and at least £182m overbudget, a Public Accounts Committee (PAC) report warned today.

If fully implemented the system will support 150,000 terminals and 300,000 users at more than 2,000 sites, as well as troops on operations and Royal Navy ships. The EDS-led Atlas consortium won the contract to design, install and run the DII back in 2005.

According to the PAC, 62,800 terminals for the DII system should have been installed by the end of July 2007, but only 45,600 were in place at the end of September 2008.

As well as problems with software delivery, the PAC blames "totally inadequate research" in assessing the buildings where terminals would be installed - many of which were subsequently found to contain asbestos - for causing delays to the project.

The rollout methodology, proposed by Atlas, was too inflexible to cope with the challenging reality on the ground, according to the PAC.

"It was only at the beginning of 2007, almost two years after the start of the programme, that a more sensible rollout methodology was adopted," the report notes.

It also warned rollout delays mean the MoD is being forced to rely on legacy systems for longer than intended so there is an increased risk of system failure. The PAC recommends existing systems are monitored by Atlas and that contingency plans are drawn up for any work needed to keep these older systems viable.

The committee also said the MoD has secured sufficient funding to deploy 140,000 terminals but warns it will need to make efficiency savings to fund the remaining 10,000 terminals required by the programme - which could mean cutting payments to suppliers.

"An important way of achieving savings will be…