November 09, 2010, 2:35 PM — At at time when federal (and local) government spending is under an electron microsope, an examination of the government's worst tech purchases seems in order. If the news that the U.S. Navy may have paid $400 for ashtrays deployed to submarines, or the apocryphal tale that NASA once spent $10,000 on a space toilet got you hopping mad, well, you may want to sit down, because the money that the feds have wasted on failed or substandard technology projects has, over the years, cost taxpayers the equivalent of the GNP of several small nations. Here are some choice examples of goofy federal and state government tech buys in recent history.
The IRS's Customer Account Data Engine (CADE)
Final cost: $400 million
Who's responsible: IRS, Vendor Computer Science Corporation.
The IRS made a $400 million blunder with the Customer Account Data Engine (CADE) in 2004.
If any federal agency should know how to handle massive amounts of paperwork and data, it's the IRS. In the late 1990s, the agency had been struggled for decades with a cobbled-together technology called the Master File System.
In 1998, work began on its successor; and in 2004, when the IRS announced the Customer Account Data Engine (CADE), it was hailed as a revolution in tax-form processing. Of course, it arrived three years late: The original plans for CADE had projected that the system would be up and running by 2001.
In 2007, CADE processed only about 11.2 million tax returns. But by March of the next year, CADE had ramped up significantly, and it processed more than 15 million returns in just the first three months of 2008. Briefly, things looked bright for the system, but in 2009 CADE was processing forms at a rate of about 40 million returns a year--far less than expected. The system suffered from problems with data security, too. The IRS pulled the plug on CADE development in June 2009.
"After over 5 years and $400 million, CADE is only processing about 15 percent of the functionality originally planned for completion by 2012," read a later GAO report, which noted "unexpected complexities" in the system. The IRS continues to use CADE while it works on plans for its successor, CADE 2; but the agency no longer updates the system.
Secure Border Initiative-Network (SBInet)
Final cost: at least $620 million (as of 2008)
Who's responsible: Boeing, Customs & Border Protection division of Homeland Security