MoD defends tech project costs

The computer project is said to be "suspended"

The Ministry of Defence has hit back at claims a £120m overspend was to blame for the suspension of a major computer project.

The Defence Stores Management Solution (DSMS) was meant to replace separate Army, Royal Navy and RAF systems with a single application for maintaining supplies.

It was hoped it would save £650m over 10 years, but the project was temporarily axed after £140m was spent on it.

An MoD spokesman rejected a Liberal Democrat claim the cost was £120m more than originally estimated.

Ingram: project has been suspended

He said the estimated cost of the system in 2000 was between £470m and £620m, which included running DSMS for 10 years and £139m of government money over two years.

He added: "At the end of 2001 a decision was made to suspend the project on grounds of affordability.

"Currently the MoD is reviewing its requirements as part of the Defence Logistics Organisation's Change Programme and long term decisions based on that review are expected next year."

The new system was aimed at providing an accurate, up-to-date database of stock and parts - avoiding duplication and allowing quicker decisions.

The spiralling costs of this suspended project gives great cause for concern

Paul Keetch
Lib Dem defence spokesman

But Armed Forces Minister Adam Ingram admitted in a written Parliamentary answer the project had been suspended.

Mr Ingram added: "Expenditure on DSMS to date totals £140m and estimated net savings of £650m over a 10 year period were anticipated from its implementation."

Liberal Democrat defence spokesman Paul Keetch said: "The spiralling costs of this suspended project gives great cause for concern.

"In the long run this computer system was supposed to save money but has ended up costing £120m more than planned and still is not in place.

"There is no fat in the MoD budget to soak up this sort of waste."

Mr Keetch said money wasted on "cock-ups" like DSMS could pull scarce resources from important programmes.

He added: "The government must now explain how this project got so out of control and provide a full breakdown of costs."