(Bloomberg) -- In August, the EU’s Home Affairs Commissioner Ylva Johansson gave a rousing speech about a soon-to-launch “smart” border system that would track the movements of hundreds of millions of travelers in and out of the bloc using fingerprints and facial recognition.
“Soon, we will switch on the most modern digital border management system in the world,” said Johansson, announcing a Nov. 10 launch date for the so-called Entry/Exit System.
But a month before the scheduled debut, Johansson announced that EES wouldn’t be operational until 2025. It was the fourth time the project had been delayed in five years. And, according to internal correspondence between EU officials and contractors viewed by Bloomberg, a trio of companies with Atos at the center was largely responsible.
The French IT firm, in consortium with International Business Machines Corp. and Leonardo SpA, won the €142 million contract in 2019 to build EES, but Atos was in charge of the bulk of the work — and at the center of many of the problems, according to hundreds of pages of documents seen by Bloomberg and investigative newsroom Lighthouse Reports as well as people familiar with the matter.
The documents, whose contents haven’t been previously reported, represent years of internal reports and emails from EU-Lisa, the EU agency that oversees large-scale information technology projects, as well as communication between the agency and the companies in the consortium. They show how Atos effectively slowed work by only partially installing equipment, misplacing parts, taking weeks to fix bugs and often sending teams lacking in experience, leading to missed deadlines and millions in additional maintenance costs. These claims were corroborated by three people involved in the project.
Representatives for Atos, IBM and Leonardo said they couldn’t comment due to confidentiality obligations.
The EES is intended to radically change the EU’s approach to policing its borders. By integrating the immigration systems of the 29 countries in the Schengen area under a common technological umbrella for the first time, it will transform border control from a national to a European issue. Yet at a moment in which migration is upending the bloc’s political landscape, the documents raise questions about whether the EU will be able to introduce a unified border system effective enough to keep countries from implementing their own protectionist policies.
The problems with EES have already had knock-on effects. One hundred and thirty staffers hired by EU border management agency Frontex to work on the European Travel Information and Authorization System, a €200 million visa waiver system built on the same underlying technology, had to be reassigned because of delays, according to two people familiar with the matter.
EU-Lisa declined to comment on the setbacks, or any of the findings of the investigation. It said it did not “currently have access” to the documents or its communications with the consortium.
Publicly, the EU has blamed the holdup on technical issues and contractor delays. Yet the documents paint a much more tense and chaotic picture, corroborated by people involved with the contract, who asked not to be identified discussing private business matters.
A key supplier to both the French nuclear industry and the recent Paris Olympic Games, Atos has been on the brink of bankruptcy after a series of setbacks and profit warnings sent its market value from €8.2 billion euros ($8.6 billion) at the end of 2020 to about €74 million today. The company has cycled through seven CEOs since 2021 as it has grappled with debt and failed rescue plans. Last month, a French commercial court approved a restructuring strategy that will see its creditors take control of the troubled business and wipe out existing shareholders.
Grand Ambitions
Currently, the EU has no automated way of tracking how long non-EU citizens without visas stay inside the bloc. Individual countries stamp visitors’ passports when they arrive, but have no way of knowing whether people travel to other EU countries, and when — or if — they leave.
“No one has the faintest idea what the irregular or illegal population of third-country nationals in the EU is,” said Jacob Funk Kirkegaard, a senior fellow at Bruegel, a Brussels-based economic think tank. “If you are a government, this is a deeply dissatisfying state of affairs and one that provides political ammunition for far-right anti-immigration parties.”
The European parliament moved to establish the EES in 2017, describing it as a “priority initiative” with a planned launch date in 2022. The plan was to replace border agents stamping passports with an automated biometric system that uses self-service kiosks to capture faces and fingerprints, and which connects to a central registry that tracks cross-border movement.
The consortium’s inability to meet deadlines became clear early on. Central and back-up data centers were completed eight months after a July 2020 deadline, according to an EU-Lisa letter addressed to the companies dated April 11, 2022.
After that, the consortium “missed all milestones,” EU-Lisa’s Executive Director Krum Garkov wrote in that letter, even after a new timeline was established.
While IBM developed some of the system’s overall architecture and managed the project, Atos was tasked with building EES’s hardware and software. A former senior executive at Atos, who asked not to be identified discussing a private matter, said the French IT company was responsible for the core part of the project, which represented about two-thirds of the work. Leonardo provided cybersecurity.
In the April 11 letter, EU-Lisa complained that the consortium often sent “young teams with no experience to perform complex tasks,” and that the companies had regularly been “unable to mobilize the necessary resources to provide fixes within the agreed schedules.”
In one case, the consortium took more than six weeks to “deploy a single bug fixing release team,” illustrating its “lack of competence” in critical moments.
“Despite all the efforts deployed by EU-Lisa and member states,” the letter continued, the consortium “still repeatedly missed deadlines, performed partial installations and/or mixed delivery sites.” It cited “missing cables, misconfigured devices, transportation returned from border for missing delivery documentation” and having hardware retained by border police as among the problems. Two people with direct knowledge of the matter said these issues were Atos's responsibility.
Excluding ESS, the EU has stumbled on several ambitious tech infrastructure projects in recent years. A 2020 initiative to modernize the bloc’s customs operations was beset by financial and logistical problems. Gaia-X, a cloud computing platform for Europe intended to challenge the market dominance of US companies such as Microsoft, Google and Amazon, never managed to gain momentum. (Gaia-X’s Chief Executive Officer Ulrich Ahle said that his organization’s core mission was to enhance data sovereignty, not compete directly with cloud companies.)
Maegan Hendow, a senior researcher at International Centre for Migration Policy Development, a Vienna-based think tank, noted that the EES delays were perhaps not surprising given the system’s complexity. It not only has to seamlessly integrate the immigration systems of all member states, but also be able to cross-reference other biometric databases such as Eurodac, which monitors asylum seekers.
“If any of those elements don’t function across any member state,” she said, “the whole thing doesn’t function.”
Troubled Start
In the early months of 2022, the situation became so dire that EU-Lisa established daily “war room” meetings to troubleshoot EES problems, according to the documents. Those highlighted tensions as IBM, Atos and Leonardo would argue amongst themselves in front of their client. Meetings devolved into EU representatives adjudicating disputes between companies, rather than working on the project together. In its April 11 letter to the consortium, EU-Lisa accused the trio of having “failed completely in its role.”
By June, the consortium proposed cutting corners on testing parts of the system in order to meet a 2023 launch date, according to a letter it sent EU-Lisa that month.
Overall, the former Atos executive said, the company badly managed the EES project. He added that it was flagged to the chief executive that year as one that needed more careful supervision.
Two EU-Lisa officials affirmed this view, saying they held Atos mostly responsible.
Atos declined to comment.
Still, two EU officials who asked not to be named discussing private matters said that EU-Lisa needs to shoulder some of the blame. While building an incredibly complex database system does require outsourcing, they noted that the small agency outsourced everything, even project management.
EU-Lisa and the consortium were also under pressure from outgoing Home Affairs Commissioner Johansson to complete and implement the entire system before her tenure was up. Johansson delivered her speech announcing the Nov. 10 launch date against the objections of members states, according to an EU official, as they were concerned that the system was still too buggy and should be introduced country-by-country.
A representative for Johansson declined to comment.
Responding to a public information request about the delays, Garkov, who left EU-Lisa in late 2022, declined to single any company out. However, he wrote in a public letter that the consortium “substantially underestimated the complexity of the work for development and implementation of EES,” and that the “quality of key deliverables did not meet requirements.”
Payment Disputes
After missing the first few milestones, the consortium asked the EU to waive penalties on late deliveries, while also requesting an early payment of about €2.5 million. Although EU-Lisa described the demand as “outrageous” in annotations on the request letter from the consortium that was shared internally, the EU did agree to allow the companies to pay their late fees at the end of the project in order to ensure that work on the system wouldn’t be interrupted.
In a report published earlier this year on the spending practices of EU agencies in 2023, the European Court of Auditors noted that the three members of the consortium “refused to cover the extra cost of maintenance for certain IT products.” That added about €20 million in additional costs for EU-Lisa, according to internal documents seen by this investigation.
By the end of 2023, a rollout the following year was looking plausible. But as the November launch date loomed, new problems emerged.
A system set up over the summer to allow member states to test EES couldn’t handle more than one country using it at a time, two of the people said. Member states had to book slots to test it. An October dress rehearsal for the launch of EES was chaotic, with some member states struggling to connect to the central database. The November deadline was missed a month later after France, the Netherlands and Germany said the technology wasn’t ready.
The project, still overseen by the consortium, has now been postponed to 2025, with no fixed launch date. A spokesperson for the European Commission said that despite initial plans to simultaneously launch EES across all member states, it would now take a progressive approach to allow for a “period of adjustment for authorities and travelers.”
“The EU can’t afford to get this wrong, for obvious political reasons,” Kirkegaard said. “Nobody wants chaos at the airports or external borders.”
--With assistance from Gian Volpicelli and Benoit Berthelot.
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