The state of Michigan has filed a $US49 million lawsuit against HP because, it says, after 10 years of work to replace an ageing computer system, HP still hasn’t finished the project.
“I inherited a stalled project when I came into office in 2011 and, despite our aggressive approach to hold HP accountable and ensure they delivered, they failed,” Secretary of State Ruth Johnson said in a press release about the lawsuit issued on Friday.
HP won a contract in 2005 to replace the Secretary of State’s mainframe computer from the late 1960s with more modern technology.
HP had five years to finish the project by 2010. But by 2011, HP had been paid $US27.5 million, and “not delivered a single function to the state,”Johnson accuses in the press release accuses.
Johnson says she renegotiated the project and HP continued to work on it and the state has now paid HP about $US33 million, according to Computerworld.
HP worked on it for a decade until last month, and that ancient mainframe is still being used by all the Secretary of State’s 131 offices.
So on Friday, August 28, Johnson pulled the plug and fired HP.
Low and behold, the following Monday, none of the HP employees on the project returned to work and they haven’t been back since, according to the Secretary of State. This also aggravated Johnson because she says the contract she renegotiated requires HP to continue to provide support, even if terminated.
This is an old story in the enterprise computer world. Massive computer projects like this frequently fail. Half of IT projects with budgets of over $US15 million run 45% over budget and are 7% behind schedule, according to research from McKinsey.
That’s one of the big reasons enterprise companies want to ditch this old style of IT and adopt cloud computing instead.
IT companies often say they aren’t always 100% to blame, either. When Bridgestone sued IBM for $US600 million in 2013, IBM told Business Insider that it was the customer’s mismanagement of the project that cause issues. Oracle says the same about Oregon.
An HP spokesperson us, “It’s unfortunate that the state of Michigan chose to terminate the contract, but HP looks forward to a favourable resolution in court.”
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