[otoburb]

They most likely did raise this, but when asked to provide a more "competitive" bid, they axed training and who knows what else. This is common in large enterprise sales deals. For professional services deployment engagements, there is always the possibility of an amendment to the services scope (often referred to as a change order or change request).

If the project is estimated to take over a year to deploy, by then you're in a new budget cycle and the vendor has come to an agreement with the procurement department to charge for additional services as required in subsequent phases.

[LifeLiverTransp]

Another nice thing about governments is that they do not deal in monetary damages but in media fallout- so something loud (collapse of a billion dollar project) is worser to them, then silently going over budget because additional points appear on the list.

So biding yourself into a project to low gives you enough leverage when the point of no return is reached to still make a big plus.

[opportune]

This is why it's not accurate to claim that "it's not IBM's fault." They are fully culpable for making a bid that didn't include necessary components of the project priced in.

[foliovision]

Exactly. Based on their track record, IBM clearly knew what was going to happen and even anticipated the extra income as the project spiralled around the drain.