Question

A Disastrous Development project

In 2004, Marin country in California decided to replace its ageing financial management, payroll, and Human Resources systems with a modern SAP enterprise resources planning system. The country solicited proposals from various companies to act as software consultants on the implementation. Thirteen companies, including oracle, PeopleSoft, and SAP, submitted proposals. In April 2005 the country selected Deloitte consulting based on the firms representations concerning its in- depth knowledge of SAP systems and the extensive experience of its consultants.

From 2005 to 2009, Marin Country paid increasing consulting fees to Deloitte as its staff grappled with serious fiscal problems. Essentially, the staff could not program the SAP system to perform even routine financial functions such as payroll and accounts receivable. A grand jury probe concluded that the system had cost taxpayers $28.6 million as of April 2009.

At that time, Marin Country voted to stop the ongoing SAP project acknowledging that it had wasted some $30 million on software and related implementation services from Deloitte.

The Marin Country information systems and technology group conclude that fixing the Deloitte-instlled SAP system would cost nearly 25 percent more over a 10 year period than implementing a new system.

In 2010, Marin country filed a complaint alleging that Deloitte's representations were fraudulent. The complaint accused Deloitte of using the country SAP project as a training ground to provide young consultant with public sector SAP experience, at the country's expense. It further charged that Deloitte intentionally failed to disclose its lack of SAP and public sector skills; withheld information about critical project risks: falsely represented to the country that SAP system was ready to "go live" as originally planned: conducted inadequate testing; and concealed the fact that ist had failed to perform necessary testing , thereby ensuring that system defects would remain hidden prior to the go-live date.Finally, the country maintained that, although it had paid substantial consulting fees to Deloitte, the system continued to have crippling problems.

Deloitte filed a counterclaim over the country failure to pay more than $550000 in fees and interest. The company maintained that it had fulfilled all of its obligations under the contract, as evidenced by the fact that all of Deloitte's work was approved by the country officials who were responsible for overseeing the project.

In December 2010, Marin Country sued Deloitte and two SAP subsidiaries, alleging that Deloitte had "engaged in a pattern of racketeering activity designed to designed to defraud the country of more than $20 million, The country lawsuit also names as defendant Ernest Culver, a former country employee who served as director on the SAP project. The country alleged that Culver interviewed for jobs at Deloitte and SAP, where he now works in SAP's public services division, It further claimed that during the SAP project, Culver "was approving Deloitte's deficient work on the project, approving payment, and causing Marin Country to enter into new contracts with Deloitte and SAP public services, Inc.

In late December 2011, a judge ruled that Marin Country failed to allege sufficient facts to bring a racketeering claim against SAP under the terms of the federal Racketeer Influenced and corrupt organisations Act ( RICO). However, he also ruled that Marin Country could fly an amended complaint. The judge further found that Marin Country hd alleged sufficient facts to bring a "plausible" bribery claim against SAP with aspect to Culver. Finally, the judge denied SAP's motion to dismiss claims against against its SAP America division.

In mid January 2012, Marin Country filed an amended complaint in federal court related to its actions against SAP, Deloitte Consulting, and Ernest Culver. The president of. the Main Country Board of supervisors stated that the board is committed to ensuring accountability for its taxpayers.

1- debate the lawsuit from the point of view of Deloitte and SAP.

2- Debate the lawsuit from the point of view of Marin Country.

Answer 1

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