UK COURT ORDERS HP TO PAY $200M. FOR ' MISREPRESENTATION '

[Anonymous]

http://www.v3.co.uk/v3/news/2257285/hp-faces-200m-bill-eds
UK COURT ORDERS HP TO
PAY  $200M. FOR ‘ MISREPRESENTATION ‘
HP is facing a bill in excess of £200m after the High
Court in London ruled on the ongoing case between BSkyB and HP’s EDS
subsidiary.
The court found that EDS has
made false representations to BSkyB over its abilities in order to win a
£48m contract to build a customer relationship management system for
BSkyB’s operations in 2000.The contract soon became entangled in cost
overruns and delays, and BSkyB sacked EDS and used its own staff to
finish the job, at an eventual cost of £265m.”EDS was not found to have
been systematically negligent, and the ruling centred on the conduct of
one particular employee,” said Patrick O’Brien, a senior analyst at
Ovum.”It is not hard to imagine that there are a number of sales people
at other firms who will say and do anything to get a signature on a
major contract.”

The ruling means that IT vendors will need to
take special care with recruitment policies and make proper background
checks, according to O’Brien.”We doubt that many vendors restrict sales
personnel in terms of what they promise in negotiations. Instead they
have concentrated on making contracts watertight. This attitude will
need to be reassessed in light of BSkyB’s court victory,” he said.

The
High Court has ordered HP to pay £200m for the mistake, and to make an
interim payment by 17 February.”This is a legacy issue dating back to
the EDS business in 2000, which HP inherited when it acquired EDS in
2008,” said HP in a statement.”As the world’s largest technology
company, HP has built a solid reputation based on strong governance and
adherence to the highest ethical standards.”

[Author]

February 8, 2010 at 11:08 AM