UPDATE - New FBI management system could cost $500M

A new case management system being implemented by the U.S. Federal Bureau of Investigation to help fight terrorism could cost as much as US$500 million, blowing away the $170 million it sank into a previous project that was abandoned a year ago, according to a government watchdog group.

In a 91-page audit report released Tuesday by the inspector general's office in the U.S. Department of Justice ( PDF available at http://www.usdoj.gov/oig/reports/FBI/a0614/final.pdf), cost estimates for the new FBI IT system range from $400 million to $500 million, based on information provided by the FBI to congressional inquiries. An exact figure for the project is expected when the FBI finalizes a contract for the system, called Sentinel.

That contract award is officially expected sometime in the next 30 days, but Tuesday an FBI spokeswoman said that it will come shortly.

"The FBI has completed the vendor evaluations in the Sentinel contract award process," FBI spokeswoman Catherine Milhoan said in a statement. "We are currently in negotiations with one of the vendors and have advised the other vendor that their proposal was not within the competitive range. We cannot disclose the identity of either vendor at this point."

Milhoan said the number of bidders that pursued the contract and related details will also be made public when the contract matters are settled.

The inspector general's office, which was previously highly critical of the FBI's earlier failed attempts to upgrade its technology systems as a result of "poorly defined design requirements, lack of mature Information Technology Investment Management processes, and poor management continuity and oversight," was much more upbeat about the proposed Sentinel system and its planned oversight.