The cash strapped Ministry of Defence (MoD) has halted work on the £20m development phase of the largest asset management system in Europe.
Work began in 2000 on the five-year contract to build a new Defence Stores Management System (DSMS) that would bring together the disparate logistics operations of the Army, Navy and Air Force.
But pressure on resources has forced work to be suspended, and the MoD has admitted that the project could be abandoned altogether.
"We have suspended DSMS at the moment and are taking stock of the situation. At the MoD we have to be quite flexible about our planning and we'll be making a decision in the coming months. We will consider all options, including stopping the project completely," an MoD spokesman told vnunet.com.
The MoD's Defence Logistics Organisation (DLO) had selected IBM Global Services to lead a consortium of system integrators, including KPMG and EDS, to implement DSMS, and £20m had been committed to the development of the system by last October.
It was originally planned that the full system would then be deployed in stages around various MoD operations worldwide over five years.
The DLO was set up in 1999 to streamline operations and cut 20 per cent off the MoD's £4.6bn annual purchasing and logistics budget by 2005.
DSMS would have covered 88 systems and 40,000 users and allowed the MoD to save money by managing a single defence inventory for all the armed forces.
The decision will not affect the £45m Defence Electronics Commerce Services e-procurement system rolled out last year, the spokesman confirmed.
IBM Global Services declined to comment on the situation, saying that it did not want to get into a "public spat" with the MoD.
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