Government’s IT Crisis And The Fleecing Of Taxpayers

Government entities at every level fail to modernize critical information technology systems, then blame private contractors when projects collapse. This is not incompetence. It is a racket—a deliberate, systematic fleecing of the American taxpayer while bureaucrats face zero accountability and zero consequences.

The problem is structural and deliberate. Government bureaucracies face no competitive pressure. None. Corporate leaders who fail to modernize lose market share, lose customers, and lose their jobs. Government officials who preside over technological disasters get promoted, retire with fat pensions, or shift blame to vendors. The system does not merely tolerate failure. It rewards failure. It incentivizes failure. It protects the people responsible for failure while punishing the private sector companies hired to fix the mess.

The numbers are damning. The Government Accountability Office reported on March 12, 2025 that the federal government spends more than $100 billion annually on IT systems. The result? As GAO noted, “too frequently, efforts to replace old IT systems fail or are over budget and delayed.”

One hundred billion dollars. Every year.

Let that sink in. The American taxpayer hands over $100 billion annually, and the federal government still can’t modernize its technology efficiently, technology the private sector replaced decades ago.

The GAO found that pilots and air traffic controllers communicate using systems more than 30 years old. The FAA will not finish replacing this infrastructure until 2035. Veterans’ health records, the medical files of Americans who bled for this country, sit in systems three decades old. The State Department processes passports through antiquated legacy systems. Americans trust their lives and their data to technology that belongs in the Smithsonian.

This is not an isolated failure. It is systematic looting of the American taxpayer by a bureaucratic class that cannot be fired, cannot be held accountable, and cannot be bothered to modernize. These are not public servants. They are public parasites feeding on taxpayer dollars while delivering garbage.

State governments run the same racket.

The University of California’s lawsuit against Sagitec Solutions exposes the playbook in devastating detail. The Board of Regents has a documented history of institutional corruption that should disgust every Californian. The San Francisco Chronicle reported on Sept. 25, 2020 that California Democratic Sen. Dianne Feinstein’s husband was “accused in a state audit of improperly using his clout to help an applicant get into the elite public system” by bypassing normal admissions. Auditors found UC Berkeley “improperly admitted at least 55 underqualified, often wealthy, students based on insider connections.” Add reverse discrimination lawsuits to the record. This board is famous for all the wrong reasons, cronyism, corruption, and contempt for the rules that govern ordinary citizens.

Now examine how this corrupt institution treated Sagitec, a Minnesota-based company with more than 40 clients globally, including large public and private sector pension systems. Sagitec’s track record demonstrates competence. The university hired them to modernize a pension system managing over $100 billion, previously run on 30-year-old technology.

What happened? Politico reported on Dec. 4, 2025 that the university introduced “late-stage design claims” that proved “complex, costly and time-consuming.”

Translation: the government changed the requirements after the contract was signed, moved the goalposts, then blamed the contractor for missing targets that did not exist when the deal was struck.

It gets worse. Much worse. Sagitec’s counterclaim reveals the university continued using the company’s software, which distributed more than $28 billion in benefits over six years. The system worked. It delivered. Then the university hired away Sagitec’s own employees to build an in-house replacement, while using litigation to escape the existing contract.

The pattern is clear and infuriating: sign a contract, change the terms, keep using the product, steal the employees, sue to avoid payment. Government gets the benefit. Taxpayers foot the legal bills. The contractor takes the blame. And the bureaucrats responsible? They collect their checks and sleep soundly.

The Founding Fathers built a system to prevent tyranny. That system depends on honest administration and accountability for failure. When government entities waste billions, face no consequences, and destroy private companies through litigation warfare, they betray the public trust that self-governance requires. They spit on the Constitution.

The solution demands structural reform: competitive incentives that punish failure, accountability mechanisms with real teeth, and consequences for bureaucrats who treat contractors as scapegoats and taxpayers as ATMs for endless litigation.

Without such reforms, the racket continues. Government keeps failing. Bureaucrats keep blaming. And Americans keep paying for systems that belong in museums while the people responsible collect their pensions and laugh all the way to the bank.

Leif Larson is a noted strategist with 20 years of experience in PR, public affairs and politics. He has contributed to the success of prominent political, corporate and advocacy groups across the country throughout his career.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.