The Department for Transport(DfT)showed "stupendous incompetence" when implementing its shared services project, according to an influential group of MPs.
The Public Accounts Committee, which oversees government spending, said the implementation was "one of the worst cases of project management" it had seen.
Officials did not hold a competitive tender, did not specify the project's requirements clearly, managed suppliers poorly, and did not leave enough time for testing.
The committee said Department for Transport staff do not trust the system. "This was hardly surprising when we hear that on occasion it took to issuing messages in German," their report said.
The MPs said a tight timetable led to a "lamentable" result, describing the computer system as "unstable" because of a lack of testing.
While the project was supposed to save £57m by 2015, it will now cost the taxpayer £81m after costs soared from an expected £55m to £121m.
And in keeping with other recent large-scale failures, senior management have not been properly held to account, according to the PAC.
The original plan was for the central part of the Department for Transport and its seven agencies to be sharing corporate services by April 2008, but only the central department and two of its agencies are currently using the system. The way forward, MPs said, is for the DfT to overhaul its project management capabilities, set up systems that will rigorously challenge future projects like this, and establish penalties for failure.
The Cabinet Office has estimated that the government could save £4.1bn annually through greater sharing of corporate services. But to do this, departments need to avoid three major pitfalls: delay in introducing planned developments increased cost or poorer services. According to the committee, the DfT suffered all three in its shared services implementation.
The report said, "In an attempt to meet its original timetable, the department took shortcuts which subsequently caused problems. For example, it did not subject its IT support arrangements to full competitive tender, specify its requirements precisely enough or manage its suppliers sufficiently closely. It also reduced the time available for testing which meant that the system was unstable when it was switched on."