Belgian government stops work with Unisys on tax project

Unisys failed to deliver, the Belgian Ministry of Finance said

The Belgian Ministry of Finance said Friday that IT services and technology firm Unisys has failed to deliver on a project to modernize the Belgian tax system.

The ministry awarded Unisys a ¬25 million (US$33.1 million) contract six years ago, but has decided not to renew it, said Francis Adyns, a ministry spokesman.

Unisys was working on a project called Stimer that is intended to improve tax collection, but it failed to deliver components of the system, said Adyns. "They did not achieve the target," he said.

The primary issue has been the failure to deliver a system to recover unpaid taxes, Adyns said. The new system was meant to create one electronic file to track all citizens with a tax debt, tracking all steps between sending the first reminder, sending a tax collector to someone's house and eventually seizing the debtors' belongings, he said.

Unisys did deliver on other parts of the system, Adyns said, most notably a module that tracks what a citizen owes the government and vice versa. This system generates an additional income of ¬10 million for the government on a yearly basis, he added.

None of Stimer's unfinished modules has to be rebuilt from the ground up, Adyns said. The ministry decided to finish the Stimer project in-house with the assistance of an existing government IT contractor, he said.

The Ministry of Finance has already paid Unisys ¬19 million and the government is still discussing next steps. In the meantime, the Ministry will not pay the remaining ¬6 million on the contract, nor will it refund Unisys' 5 percent deposit of ¬1.25 million paid when the project started, said Adyns. "That amount could be used to pay for damages," he said.

It is not the first time a Unisys project for the Belgian government has gone wrong. The Ministry of Justice terminated a contract when Unisys failed to deliver, and subsequently claimed ¬28 million in damages, said Margaux Donckier, spokeswoman for that ministry. Unisys has filed a counter-claim also seeking damages and the litigation is still pending, she added.

While the Ministry of Finance was aware of that earlier failure, it was unable to exclude Unisys from bidding on Stimer because of European rules, Adyns said. He declined to comment on possible litigation.

Unisys regrets the ministry's decision, its spokesman Nick Miles said via email. "This project has delivered significant benefits for the government and the taxpayers, including increased efficiency in collection of tax fines and automation of submission of tax returns," he said.

Loek is Amsterdam Correspondent and covers online privacy, intellectual property, open-source and online payment issues for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com

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