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The Most Expensive Spreadsheet Ever Written?

Posted on 13. Apr, 2009 by ScotRobinson.

I recently came across a Twitter post on the most expensive spreadsheet blunders of all time. You can see the article here and here (I couldn’t find a next page on the first article — go figure!).  Some of these mistakes are quite amazing such as a simple error costing $24 million!  Can you believe that?  Well I could!

Way back in the mid-1980’s when I was an investment banking associate for Dillon Read it was my job to run the analysis for all of our bond transactions.  Many of these deals were several hundred million dollars each.  I was trusted to develop the spreadsheets which were the basis for computing all of the particulars on many of the deals.  I can remember having Managing Directors breathing down my back demanding that I give the okay that the deal could close.  It was a high pressure position, and luckily, I had the guts to ask my superiors “Do you want it now, or do you want it done right?”  Well, I never made a major mistake, but I did witness several mistakes which cost our firm over a million dollars!

The Most Expensive Spreadsheet Ever Written

The article got me thinking about the most expensive spreadsheet ever written, or in other words; what is the most that a spreadsheet ever sold for? Back while I was at Dillon Read my largest client was the New York Metropolitan Transportation Authority. The MTA is responsible for all of the subways, buses and toll bridges in NY along with Metro North and the Long Island Railroad. Dillon Read was one of three investment banks workiing for the MTA at the time, and the Finance Director wanted to have a competition among the three firms to build a financial model to manage their eight billion capital plan. They were planning to sell dozens of bond issues over several years and this model would have to keep track of everything. I won’t bore you on specifics here, but I built the model in Lotus 123 and translated it to Excel a few years later. MTA selected the model and paid us $400,000 for it! What’s more, we received more than our normal share of bond deals because of this spreadsheet. I don’t have specific details on our increase in fees, but I would guess that my firm received at least another $2-3 million because of the spreadsheet.
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