The House of Commons' Public Accounts Committee has described the Libra project for magistrates' courts IT as "one of the worst PFI deals" it has ever seen.
The committee's report on Libra, published this week, lists the catalogue of errors that led to the collapse of the £184m project in 2002.
The Lord Chancellor's Department ran a "poor competition" and contract winner ICL, now Fujitsu Services, "took on excessive risk", "underpriced its bid" and "performed poorly throughout", according to the report.
"As a result of these failures the cost of the project has more than doubled in just four years to almost £400m, and magistrates' courts still do not have the IT systems they need to manage their workload properly," said the committee.
A key lesson to be learned is that business processes must be redesigned in parallel with the introduction of new IT systems.
"The department chose to develop IT to support existing processes rather than redesigning business processes in parallel with new IT. This approach contributed to the project's difficulties," said the report.
To avoid a repeat of Libra the government must be ready to terminate contracts where suppliers are not delivering.
"Departments need to make contractors aware that termination is a very real factor, which should not automatically be seen as the most difficult and risky option," the report advised.
It also emphasised that competitive procurements are essential and pointed out that alarm bells should have rung when all potential bidders except ICL dropped out of the bidding for Libra.
Last July the Cabinet Office disregarded earlier advice to this effect from the National Audit Office, when it signed the £83m True North datacentre hosting deal with the only supplier left bidding for the contract.
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