EDS may be fined over Revenue IT

EDS could face financial penalties for its role in the Inland Revenue's troubled Tax Credits system.

Revenue chairman Sir Nick Montagu says the computer systems EDS supplied have not lived up to promises made by the vendor, and have contributed to thousands of families being without vital financial support.

Montagu says EDS is 'accountable' for its role in the delays in processing claims.

'The systems they supplied did not deliver what they were expected to deliver and we are going to have to have some uncomfortable conversations with them,' Sir Nick told Computing's sister paper Accountancy Age.

'I don't want to say yes [financial penalties will be imposed on EDS] but it certainly is not out of the question.'

Government spending watchdog, the National Audit Office (NAO), will look into the tax credit fiasco as part of its Autumn report on the department and a spokesman says it will investigate everything that 'affected what the government department did'.

EDS is in the final stages of bidding for the renewal of its £4bn outsourcing contract with the Revenue, in competition with consortia led by BT, and Cap Gemini Ernst & Young.

EDS declined to comment.