Look up DIMHRS for merely one example. http://en.wikipedia.org/wiki/Defense_Integrated_Military_Hum...
One of my favorite quotes in the "Issues" section is the trouble the Army was having trying to adapt their personnel policies into standard PeopleSoft actions, with a contractor developer eventually claiming to the Army "you guys (Army SMEs) just don't know how to properly manage people...".
Perhaps, but somehow I doubt that the same exact methods suitable for personnel management for civilians is always applicable to the Army.
That was by far not the only problem; the Navy actually uses PeopleSoft for its military personnel management nowadays (presumably they found developers more willing to modify PeopleSoft).
This is a great way of making sure only EDS (sorry, HP), IBM, and the other usual suspects are the only ones who can do work. Not the best use of my tax dollars.