A federal agency signed a $15-$month contract for $$445,158$ for a human resources$/$payroll system. After $28$ months and no usable software, the agency canceled the contract and withheld payment for poor performance. A negotiated settlement price of $$970,000$ was agreed on$.$ The project experienced the following problems:

The contractor did notunderstand what software was desired. The RFP did not have fully developed user requirements or system specifications, and user requirements were never adequately defined and frozen. Changes delayed completion schedules and caused disagreements about whether new requirements were included in the original scope of work.

The contract did not specify systems requirements or performance criteria, and the terminology was vague. The contract was amended $13$ times to add or delete requirements and to reimburse the contractor for the extra costs resulting from agency caused delays. The amendments increased the cost of the contract to $$1,037,448.$

What caused the problems? How could the agency have better managed the systems development project? What could the contractor have done differently?