One of Whitehall's biggest IT projects, the Defence Information Infrastructure (DII), is to cost £4.5bn more than parliament was told in 2006.
The difference between the announced cost in 2006 of £2.3bn and the new figure of £7.09bn is because the Ministry of Defence, the department responsible for DII, did not disclose the whole-life programme costs.
The full figures have been released for the first time because of a report published today by public spending watchdog the National Audit Office.
MP Richard Bacon of the Public Accounts Committee criticised the MoD, and will question officials at a forthcoming hearing on the DII.
Although the National Audit Office found that the MoD had the costs of its DII contracts with the Atlas consortium, led by EDS, under firm control, the Atlas contracts represent only a part of the total expected cost of the DII.
The DII project also has to finance DII-related programmes such as wide-area support services, funds set aside to manage future risks, and work not yet contracted for (for example, to supply systems at 'top secret' security level).
None of this was explained to parliament. The MoD gave only the contract costs of the initial phase of the DII even though it had known for a year before that the projected total cost of the DII would be at least £5.8bn.
The £5.8bn figure has subsequently risen to £7bn, in part to pay for "additional capabilities for the deployed environment which were not in the original scope of DII".
The concealment of the full expected cost of the DII contract shows how difficult it is for parliament to get clear and open answers to even simple questions about Whitehall's most high-risk IT projects and programmes.
Computer Weekly has campaigned for the publication of Gateway reviews - independent internal assessments of IT projects - to shed light on the progress of risky programmes, but the government has gone to the High Court to keep them secret.
The DII is designed to replace more than 300 different legacy systems used by the armed services. The aim is to deliver 150,000 terminals to 300,000 users at 2,000 sites, including ships and submarines, and front-line forces in Iraq and Afghanistan.
The NAO said: "The DII has delivered important benefits, but has run into implementation difficulties, and key elements are running significantly late.
"When planning the system, the MoD did considerable work to understand and mitigate risk, by learning from other large computer projects, and devised robust commercial, governance and decision-making structures.
"The programme has delivered a number of improvements to the existing IT systems within the MoD, such as improved user support and reliability. Where DII has been introduced, it has generally been available when it should be.
"The programme has also helped the department develop and install at short notice two systems supporting front-line troops on operations in Afghanistan. But, throughout 2005 and early 2006, problems emerged with two key elements of the programme: the roll-out of hardware and the creation of software.
"62,800 computer terminals were due to be in place at permanent defence sites by the end of July 2007. At the end of April 2008, only 29,000 had been delivered. The completion date for the installation of the first increment of the programme is 18 months late."
A big ask
Tim Burr, head of the National Audit Office, said, "It was always going to be a demanding task for the Ministry of Defence to replace its diverse information technology with a single, high-quality system."
He added, "The programme has run into difficulties and further concerted action will be needed to increase the rate of roll-out of terminals and to deliver the remaining software."
The MoD has paid EDS less than originally expected because of the roll-out delays. Payments to Atlas are based largely on the rate at which DII terminals are rolled out.
See also: MoD DII Project could cost £7bn on Tony Collins' IT projects blog
DII: progress, problems and lessons >>