Germany’s Federal IT: A Decade of Failure – Billions Wasted, Goals Missed

Ten years after Germany launched two flagship projects — the “Federal IT Consolidation” (IT-Konsolidierung Bund) and the “Federal Networks” (Netze des Bundes) — the country’s Federal Audit Office (Bundesrechnungshof, BRH) has published a devastating report. The initiative, meant to digitise and secure the German federal administration, is described as still being “a long way off.” What was intended as a blueprint for a modern, efficient, and sovereign digital state has instead become a monument to weak strategy, political stalemate, and the systematic squandering of billions in taxpayers’ money.

Perhaps the most shocking revelation for an international audience is that the German government still lacks a clear plan. The auditors write: “So far the federal government lacks a complete target picture of federal IT.” A new IT strategy process was launched in 2022, but nine out of ten key action areas — including digital sovereignty, resilience and security, and digital infrastructure — remain undefined.

Even worse, “13 out of 18 ministries could not present their own IT strategy.” Some ministries operate without any strategic framework at all; others rely on outdated concepts from 2017. In the words of the BRH: “There is a danger that ministries will set different priorities than those envisaged by the federal IT strategy.” For a G7 economy that prides itself on engineering and efficiency, this admission illustrates how fragmented and incoherent Germany’s digital governance has become.

In 2015, Berlin pledged to reduce the country’s sprawling IT infrastructure — more than 1,300 federal data centres and server rooms — to a handful of consolidated sites. But this never materialised. The report states bluntly: “The original target […] will no longer be achieved by the government.” Instead of centralisation, ministries are allowed to “self-assess” whether their IT systems can be consolidated.

The outcome: billions are spent while inefficiency persists. By 2019, costs had already spiralled from €1 billion to over €3 billion. Today, after more than a decade, the auditors conclude: “Even after more than ten years of IT Consolidation Bund, the federal government lacks the basis to measure the success of consolidation so far.” For international observers, it is astonishing that Europe’s largest economy cannot even deliver on basic IT infrastructure consolidation.

The “Federal Networks” (Netze des Bundes) were meant to be the secure backbone for communications across Germany’s ministries and agencies. Instead, they have become a liability. The BRH notes: “Key components of the Federal Networks are outdated and receive no further security updates.”

The situation is worse than many would expect in a country that promotes itself as a leader in cybersecurity: as of 2025, 52 out of 106 connected agencies still fail to meet minimum security standards. Despite this, they remain connected. The auditors warn: “The government has so far failed to ensure compliance with user obligations across all authorities.”

The consequences are not only national but potentially international, since insecure federal networks can be exploited in the broader European and transatlantic security context. Fixing the problem will require yet another €1.3 billion by 2030 — a staggering price tag to repair what was supposed to be the very foundation of Germany’s digital state.

Germany’s administrative culture is often characterised by complexity, but here it has reached new heights. To manage federal IT, Berlin created several committees — the IT Council, a CIO Board, and multiple steering groups. But instead of streamlining decision-making, these structures have paralysed it. The BRH observes: “Under the requirement of unanimity, paralysing or delaying stalemates threaten.”

An example: in 2019, the ministries agreed to establish a Demand Management Organisation (NMO) to centralise IT procurement. Yet for years, they fought over its mandate. Only in 2024 — five years later — was a formal rulebook adopted. The auditors’ conclusion: “The current structure risks failing to identify dependencies, failing to make timely decisions, and failing to resolve conflicts of objectives.” In short, Germany’s insistence on consensus has left its digital core unable to act.

Financial controlling is another glaring weakness. Germany’s parliament demanded a central IT controlling system back in 2014. Yet, as the auditors underline, “The government has so far failed to establish effective and efficient central IT controlling.”

Even where data exists — for example, on procurement contracts — it is ignored. Key performance indicators were watered down, so that instead of measuring actual user adoption, the Interior Ministry now merely counts how many rollouts occurred. The BRH warns: “After more than ten years, the federal government lacks the basis to measure the success of IT Consolidation.” For Germany — a country known for precision and accountability in other policy areas — this is nothing less than a structural failure.

From an international perspective, perhaps the most surprising revelation is the extent of Germany’s reliance on external consultants. Between 2018 and 2022, the Interior Ministry spent almost €28 million on consultancy services, with daily rates reaching €1,100. Even financial controlling, arguably the most sensitive and integrity-critical task of all, was outsourced.

The BRH explicitly warns: “This can endanger the integrity of public administration.” Instead of cultivating its own cadre of IT specialists, the German state has entrenched a system where private firms both advise and profit — while taxpayers carry the risk.

The financial dimension of this failure is staggering. For 2025 alone, Germany’s federal IT projects face a shortfall of €116.6 million, plus another €11.8 million for the new procurement organisation. Stopgap projects are draining funds: “GS/Ex,” a temporary system for agencies that cannot meet security standards, has already consumed over €50 million — without producing a single usable solution. The BRH concludes: “GS/Ex risks becoming an investment ruin.”

Meanwhile, dependence on a private general contractor for operating the Federal Networks continues, even though €250 million has already been spent on a so-called transition. As the auditors state: “The federal government has not succeeded in ending this dependency.”

The Federal Audit Office leaves no doubt: “The government intended the IT Consolidation and Federal Networks to create powerful, secure, economical, and future-proof central IT. To this day it has not managed to fully adjust the necessary levers.”

For Germany, a country that brands itself as Europe’s industrial powerhouse and technological leader, this is more than a domestic policy failure. It is a warning signal to international partners, investors, and allies: the German state is digitally unprepared, bureaucratically paralysed, and financially wasteful. What began as a bold modernisation project has become a symbol of digital stagnation, administrative inertia, and structural incompetence. Unless a radical course correction is made, Germany’s federal administration will remain a costly, insecure, and inefficient digital construction site — with consequences far beyond its borders.

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