Liability. If the project fails, it is not your fault. I cynically suspect that whoever drafts these contracts might even believe that by agreeing on an excess

Liability. If the project fails, it is not your fault. I cynically suspect that whoever drafts these contracts might even believe that by agreeing on an excessively expensive failure clause, failure will thus not occur — after all, it is legally covered. We see this in The Netherlands as well (and I suspect it is a global phenomenon). Government needs software, big-name consultancy firm gets the job, builds stuff that won't work or barely functions, project implodes or is delivered in a half-baked state. Repeat ad nauseam. These companies (Cap Gemini comes to mind) thrive by these projects, even though most seem to fail or end up underwhelming. There appears to be some degree of corruption there on the side of these contractors — investigative journalism has uncovered several questionable practices. Some part of my wonders if having a well-funded government department dedicated to these projects that creates and maintains the (free!) software needed is not a more tenable (and cheaper) approach. On the other hand, large government-driven software projects may just be impossible to deliver at this point; we simply lack the know-how to prevent the inevitable implosion of such complex projects.