Next month, after more than two years of preparation costing #&163;3.4 million in taxpayers' money, developers will begin creating the largest non-military database in Europe. The customer is the Department of Social Security (DSS). In line with the government's history of IT purchases, the prime contractor is EDS.

Dubbed Accord, Europe's biggest civilian IT project is scheduled to take eight years to implement and will cost hundreds of millions of pounds.

Its goal is to create one database holding the records of every UK benefit claimant, past and present. It will handle about 50 million transactions a week, make payments to 24 million people, and attempt to limit benefit frauds, now running at an estimated #&163;3 billion a year.

Only the very brave would bet on Accord meeting even its primary objectives, let alone coming in on time or within its budget. The project's sheer size, and the history of IT projects at the DSS, point clearly in the other direction.

Although development work hasn't even begun, there are already calls for a Parliamentary inquiry. Key questions about its feasibility remain unanswered, at least until the final contract between the DSS and the EDS-led consortium is signed. Neither side is prepared to discuss the situation while the contract is being negotiated.

Accord will create a new infrastructure to replace DSS systems which were mostly designed in the 1980s and are largely based on pre-relational hierarchical ICL databases, running on VME-based mainframes with not a Windows front end in sight.

Every benefit, such as income support, widows' benefit or the job seekers' allowance, has its own database. Stephen Timms, DSS minister of state responsible for IT, has described these as 'benefit chimneys'. They are poorly linked, making it very difficult for the DSS to prevent fraud by making cross-references between systems. Senior executives in the DSS admit that poor use of technology gives a green light to benefit fraud.

One IT staff member at the DSS blames massive underfunding for the state of IT systems. 'There has been no taxpayer money for new IT work since 1994, only for fixing problems. We've had several releases of VME not implemented since then.'

Problems with the current system include:

• No link between the Child Support Agency (CSA) and child benefit systems

• The income support system cannot detect fraudulent claims until after they have been paid

• Three per cent of job seekers' benefit claims were still being calculated by hand in the financial year of 1997-98, 18 months after the job seekers' payment system was introduced.

The Benefits Agency - the DSS unit which pays out benefits - has other problems. Every year for the last 10 years, its annual accounts have been severely criticised by government auditors. A root problem has been an inability to make cross-references to give even an approximate picture of the cost of fraudulent claims.

Fixing this will not be simple - which is partly why it has taken over two years to establish what Accord will do and who will supply it. The first stage of the project was awarded to an EDS-led consortium in November last year, but the two losing consortia, led by ICL and BT, have been asked to bid for work in later stages.

The DSS hoped to sign a 'framework contract' - a deal confirming the intention to do further deals - with EDS before Christmas. This still has not happened because, according to a DSS spokesman, 'we want to take the time to get this right'.

The crucial first-stage contract - the one which actually involves systems development - has yet to be signed. Under that contract, EDS will create an 'umbrella' infrastructure in which all future benefits systems will work.

It will also rewrite the DSS systems which calculate income support and child support benefits. Eventually, all benefit systems will be rewritten, but these two systems are the first priority as they have proved the most troublesome.

How will EDS be able to do the rewrites? The Texan outsourcer will inevitably struggle to find the resources it will need, unless it calls in the help of the 2,000-odd systems architects and developers at the DSS's IT unit, the Information Technology Services Agency (ITSA).

Trade unions in that organisation say there will be no transfer of staff to EDS or any of its outsourcing partners. Unions expect staff to work under contract to EDS.

That has left EDS rivals wondering what work the outsourcer will actually be doing. Alan Gibson, ICL executive director, asks: 'Just what has EDS won?'

EDS claims that staff transfer remains an option. That could provoke an interesting confrontation with staff on the ground.

Conflict is also possible over EDS' choice of technology platform. The outsourcer usually prefers to build major systems around an IBM mainframe.

This could be cheaper to run than the DSS' current ICL mainframes. IBM is a partner in the EDS consortium. Recently, however, EDS has displayed a new-found conversion to Windows NT, which it used in a 40,000-desktop rollout at the Inland Revenue, its largest UK client.

Shifting the DSS away from ICL may not be simple. EDS' gung-ho efforts to move the Inland Revenue away from its ICL-based infrastructure failed because of an Inland Revenue revolt. Staff insisted that EDS had underestimated the virtues of the ICL system.

The income support and child support agency systems are to be complete by April 2001. Information about the current CSA system is well-documented because of the serious problems that developed shortly after it was installed at breakneck speed.

EDS supplied the existing system to the CSA in 1992 in just 10 months, following pressure from the then Tory government to get the new agency up and running quickly. There was only time to deploy an off-the-shelf system, used by the State of Florida, which had different requirements to the CSA.

The system proved unable to handle changes to the CSA's business process and the CSA now admits 'the task of the IT system (became) almost impossible in terms of tracking cases'.

The problems were compounded by the complex formula used for calculating support payments from absent parents, and by widespread lack of co-operation from those parents. The result was an explosion of inaccurate personal data.

The chairman of the National Association for Child Support Action (NACSA), Andy Farquarson, said: 'The CSA's reliance on its computer system has generated more complaints from our members than almost any other aspect of the agency's operation. NACSA believes IT problems are a significant factor in the CSA's notorious inefficiency.'

The CSA is anxious not to rush ahead and repeat the same mistakes. Government ministers are hoping that a White Paper on reform of government machinery, due in May, will mark the end of years of complaints and criticism of the CSA - including claims that a litany of agency blunders has driven some fathers to suicide.

Arguing that there is no point in computerising a mess, Parliament's Public Accounts Committee (PAC) warned in March last year: 'We are not convinced the agency's strategy of introducing a new computer system is sensible until high levels of error in the underlying information are removed.'

In reply, the CSA was able to assure the committee only that it was 'reasonably confident we can achieve what is being set for us'. By July, the CSA chief executive Faith Boardman and DSS minister Baroness Hollis were again reassuring MPs that the agency was not going to rush into reforms.

The CSA and EDS will have less than two years to install the replacement IT system to support the reforms while also trying to clear a backlog of cases.

The EDS consortium has been handed the task of preparing the plans for correcting or 'cleansing' the CSA's data on benefit claimants and parents.

The plans will be completed by November. How long the actual cleansing will take is not known. If EDS waits to start the system rewrite until the data is ready, it will have little time to complete the job.

So is the CSA biting off more than it can chew? Tory PAC member Geoffrey Clifton-Brown is certainly worried about the project and has now pledged to call for an investigation by the National Audit Office.

He fears that given the size of the data cleansing problem, the agency is taking on 'over-hasty timescales'. He added: 'It seems unfortunate that the PAC should recommend in March that the agency should not rush implementation of the new computer system, and yet in November the agency appears to be ignoring that advice without even knowing the scale of the task of cleansing inaccurate data.'

CSA spokesman Ian Cuddy defended the plans. 'The agency is not ignoring the PAC recommendation. The agency has already identified that it is essential to have accurate data before it is transferred onto a new computer system,' he said.

It will be more than a year before we find out who is right. EDS will certainly need careful project management to ensure that Accord passes off without falling over at the first hurdle.