The House of Commons Public Accounts Committee was told that payments to the public went badly awry when release two of the new tax credits system was rolled out in April 2003.
The hearing heard that the system was unstable and it emerged that EDS and the Revenue knew that it had been incompletely tested but went ahead with the roll-out nevertheless.
The main witnesses were Nicholas Montague, principal secretary at the Inland Revenue, and Bill Thomas, European president of EDS Europe, Middle East and Asia.
Under intense questioning from MPs Montague accepted that the Revenue had never had a rigorous external IT expert review of the status of the project.
Such proper independent scrutiny could have identified the potential for national insurance numbers to be mismatched - a problem that fatally wounded the system's testing plan and its quality-assurance processes. A glowing Gateway review from the Office of Government Commerce had not picked this up.
"We were totally reliant on EDS and we accepted their advice," said Montague. "We do not duplicate the expertise which EDS supplies as our partner. I expected them to provide a stable and fit-for-purpose system."
The public roll-out of new tax credits should have been delayed. The hearing revealed that the EDS-Inland Revenue partnership did not recognise the enormity of the "new data rectification sub-project" that emerged when they identified the national insurance mismatch problem and, in an attempt to fix it, decided to pull resources from vital performance testing of the system.
Someone should have called a halt and substantially re-planned the whole project at that point. Someone should have blown a whistle, and made it clear to the chancellor that new tax credits could not go live in a stable, quality-assured condition on the target date of April 2003.
The important question is, did the Revenue and EDS senior managers go live with the public roll-out of a system that is crucial to the daily lives of more than six million UK citizens in the knowledge that the system would not necessarily be stable and error-free?
If the answer to that is "yes" - and some MPs seemed to suggest that it is - then the matter is very serious and it should not end there.
For whatever reason, good or bad, it seems the Revenue cannot get forensic-level IT expert examination of projects from the National Audit Office or the Office of Government Commerce. Parliament should give the Public Accounts Committee wide powers to appoint its own truly independent and forensically-experienced IT expert teams.
I cannot be the only taxpaying IT practitioner who is disgusted with the relentless waste of our money on dud public projects, when we know that there are reliable, proven, professional ways of doing software engineering that can avoid such disasters.
If the senior civil servants who run the departments are not themselves experienced IT practitioners and are totally dependent on the advice given to them by their commercial IT outsourcing partners, they cannot be blamed.
But if nothing changes and we leave our massive tax revenues, which are to be spent on critical public IT procurement, in the hands of well-meaning IT innocents, what hope have we that this appalling state of affairs should ever end?
Power to the Public Accounts Committee - urgently, please.
Stephen Castell is chairman of Castell Consulting
Castell's expert credentials
Stephen Castell, an expert witness in computer litigation, attended a hearing of the House of Commons Public Accounts Committee on 3 December.
The committee was investigating the chaos that accompanied the introduction of new tax credits in April 2003. Millions of claimants received delayed notices of their claims, many were paid the wrong amounts and helplines were jammed.
Here Castell, who has acted in more than 100 disputes in the past 15 years, explains what went wrong and recommends actions that could prevent a similar outcome for future public service implementations.