It seems kind of simple in a way, if IBM was hired to build X and failed to do so, then there will be a law suit or some form of arbitration and some money will be recovered or something. It's pretty standard breach of contract type stuff. You can audit everything too, maybe IBM was billing for stuff they shouldn't have; I kind of doubt it but maybe there was something really amiss.
On the other hand if IBM was hired to build X, then it changed in to X' and then X'' and 10,000 changes later it turns our, Canada really wanted Y from the start, isn't IBM guiding them along their process to figure that out? It's an insanely expensive way to build and buy stuff.
Is there supposed to be some sort of internal customer's advocate that looks at the project and says "hmm, this is a payroll system, it shouldn't cost a $billion typically, or this was a $100m contract that is already up to $300m, something must be wrong..." Don't get me wrong, in most sales driven organizations, they're high-fiving whoever inked that contract and trying to get invited to the parties he throws on his yacht. The catastrophic failure sucks for everybody, it's hard to see someone else finishing the job more inexpensively that getting IBM to do it though.
What if X wasn't defined to begin, besides a high level of saying "one way or another we'll get you a working result".
Any reasonable firm is hired to map out X to Y as best as possible, or at least be sure they did everything to uncover the possibilities, as much as they may, or may not occur. I have a hard time believing IBM has only experienced this once. I'm not saying IBM would do this, but maybe it happened that certain risks or unknowns didn't get the full attention or support from either side.
Contingencies in contracts are often for when things go to hell, taking up any action or arbitration is still not getting the client the result on top of taking resources away.
Saying we tried when we took a lot of your money isn't exactly a satisfying experience and use of taxpayer dollar. If this had been in the private world, would it have happened as easily?
Your point about competency in procuring digital solutions is a neat one - I don't know of many organizations, be it commercial, government, or academic that are good at this.
I guarantee that "X" wasn't defined when the contract was signed. Not defined as something that could be implemented. It was a problem solving mission.
I also want to clarify, I'm not saying IBM plotted X to Y in the most efficient way or that they did it when others could not in my last sentence. I was saying that now that Canada is a $billion deep. They have 3 choices: 1) kill it all and be $billion poorer and have no solution. 2) Somehow beat IBM in to a better deal and get a solution for like $1.2billion, I think news like this is part of the beating. or 3) Probably spend more than like $1.2b to get someone else to get it across the finish line or start over from scratch. Presumably they need something and at this point IBM is probably the closest to the finish line; change horses midstream and you usually get wet. Hey and let's throw out the other condition, IBM might own the product so switching vendors might be a defacto start from scratch.
It seems kind of simple in a way, if IBM was hired to build X and failed to do so, then there will be a law suit or some form of arbitration and some money will be recovered or something. It's pretty standard breach of contract type stuff. You can audit everything too, maybe IBM was billing for stuff they shouldn't have; I kind of doubt it but maybe there was something really amiss.
On the other hand if IBM was hired to build X, then it changed in to X' and then X'' and 10,000 changes later it turns our, Canada really wanted Y from the start, isn't IBM guiding them along their process to figure that out? It's an insanely expensive way to build and buy stuff.
Is there supposed to be some sort of internal customer's advocate that looks at the project and says "hmm, this is a payroll system, it shouldn't cost a $billion typically, or this was a $100m contract that is already up to $300m, something must be wrong..." Don't get me wrong, in most sales driven organizations, they're high-fiving whoever inked that contract and trying to get invited to the parties he throws on his yacht. The catastrophic failure sucks for everybody, it's hard to see someone else finishing the job more inexpensively that getting IBM to do it though.