In 2005, the Sacramento County Board of Supervisors approved a plan to spend $4.5 million to build a custom computer system to collect debts such as court fines and hospital bills, with the project expected to be completed within two years.
Fast forward to 2011, when costs have surpassed $10 million, and the system still isn't running.
To make matters worse, The Sacramento Bee reported that "the bulk of that money, nearly $8 million, has been earmarked for a no-bid contract with a consultant who at one time had a personal, undisclosed relationship with a longtime analyst for the county." The employee who managed the project and had co-written a report calling for a custom-built system instead of cheaper off-the-shelf software had previously lived with the software designer who was given the lucrative contract.
At one point, the director of the county's Revenue Recovery Department had argued that the county would own the intellectual property rights for the customized software, and could sell the product to other counties to recover some of its costs. However, the no-bid contract with the software designed was subsequently amended to give him ownership of the property rights. (Source: The Sacramento Bee, January 13.)