Federal Bureau of Investigation
FBI Virtual Case File System ($170M Abandoned)
Estimated impact: $170M+ wasted; 5 years lost; intelligence sharing gaps persisted
The FBI spent $170 million on the Virtual Case File (VCF) system between 2000-2005 before abandoning it entirely. The system was meant to modernize FBI case management after 9/11 exposed critical intelligence-sharing failures. Sunk cost fallacy kept the project alive for years despite repeated failures. The project suffered from constantly changing requirements, no clear technical leadership, and a culture that punished bearers of bad news. The replacement system, Sentinel, took another 6 years and $451 million.
Decision context
Whether to continue investing in the failing VCF system or cut losses, given that $100M+ had already been spent and the FBI desperately needed modernized case management.
Biases present in the decision
Toxic combinations
- The Sunk Ship
Reference class base rates
Across all 146 curated case studies in our library:
Lessons learned
- Sunk cost fallacy in government projects is amplified by political accountability — admitting failure invites congressional scrutiny.
- Post-9/11 urgency created extreme time pressure that led to planning fallacy, with the FBI committing to unrealistic delivery timelines.
- The absence of external technical oversight (no independent review board) allowed authority bias to dominate decision-making.
Source: DOJ Office of Inspector General Report 05-07 (2005); GAO Report GAO-06-1003 (2006); IEEE Spectrum investigation "Who Killed the Virtual Case File?" (2005) (Post Mortem)
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