Embarrassed firm ‘did not take own advice’
BearingPoint has been awarded State contracts totalling more than €40 million, including the development of a automated passport system and a key role in delivering the €26m flagship e-government project Reach.
Formerly known as KPMG Consulting, BearingPoint this week again failed to file its quarterly financial report and has yet to file any from 2004. The problem lies with its internal financial and auditing systems.
Spokesman Steve Lunceford said: “We had an issue where we had an internal system at the company and quite frankly we did not train our staff properly.
“It’s an embarrassment, we basically did not take our own advice.”
The company is now manually checking and hand auditing its North American contracts. It has no plans to extend this beyond the US and Canada.
“The system had not been rolled out and the volume is so different,” said Mr Lunceford of its contracts elsewhere.
Despite the failure to file, a Security and Exchanges Commission investigation and threatened legal action by bond and shareholders, the company continues to win contracts and forecasts 2006 revenues of €3bn.
Among the contracts managed by its Irish branch were the automated passport system (APS) and the development of Reach, aimed at creating a one-stop-shop for people to carry out transactions - like paying tax or renewing passports - over the internet, telephone or main street information offices.
It was originally estimated the hi-tech APS would cost €13.5m, half the final total of €27.7m at the end of 2004, the latest report from the Comptroller and Auditor General John Purcell showed. The recurring cost of running the system went from €1.8m to €7.7m.
BearingPoint were appointed by the Department of Foreign Affairs in 1998 and 2000 to review the old system. Following an open tender, it won the bid to develop the APS.
The department said the 2000 estimate was an outline cost giving a general overview of developing the system and that by 2002 the costing was more detailed and included technology not available in 200.
This was echoed by BearingPoint, which said huge changes can be expected between when a project is first envisaged to when the contract is signed.
An independent review of the Reach programme criticised the €26m project - which included €18m in consultancy fees - for failing to deliver on its original promise and for being too focused on technology.
The review concluded the project would be “highly disappointing” unless there were changes to its management. The report accused senior government officials of failing to appreciate the role of IT and public servants of not understanding e-government.
