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6/1/2011
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Oracle Lobs $5.3 Million Countersuit At University

Montclair State's April lawsuit against the vendor alleges the school was left holding the bag for a failed PeopleSoft ERP implementation.

With no project tracking in place, distrust between the university and Oracle grew. An issues and risks log was also a source of contention, with the university charging that Oracle neither kept it up to date nor hesitated to unilaterally delete its contents. "Instead, Oracle chose to embed issues and risks in weekly status reports, causing major issues and risks to be lost with simple project problems that required minor fixes."

Oracle denied the allegation in its response.

The university created a status report that showed the FMS coded red because it was so far behind schedule. Oracle project manager Christian Kim agreed with the coding, but Oracle lead project manager Robert Kohler changed the coding to yellow at a project meeting and issued Oracle's official report with the same coding, according to the complaint. The university needed the FMS part of the project to go live July 1, 2010, but had to delay its launch date, due to setbacks in its progress. What the university called the "high-level project plan" called for it to be completed June 30, 2010.

Oracle denied the allegation. All in all, the Oracle response in 73 instances repeats the phrase, "defendant denies each and every allegation," says previous denials apply in two items, and adds "denies the allegations" in two others over the course of 78 paragraphs.

The lack of project status reports created "constant uncertainty for the University regarding where they were in the Bell Tower Initiative, what tasks were to be done next and who was responsible for what tasks," the school's complaint said.

"The University was left without critical project-related information to ensure BTI was being implemented on time and within budget," it added.

University participants in the project were often given one week's notice of what they needed to supply, even though they were engaged in a regular job over and above the project. "Oracle sequenced project tasks to align with payment milestones," the complaint charged.

Oracle denied the charges.

"Oracle treated the project planning report as a nuisance rather than the critically important tool it is..." the complaint continued.

Oracle also asked the university to use the vendor's proprietary Compass implementation methodologies, then employed "subcontractors who had no knowledge of [Oracle's] Compass Methodologies." The university pointed out that Oracle's own implementation methodologies required proper status reports. "Certain Oracle employees finally admitted they were not familiar with Oracle Methodologies and were implementing the project the way they thought they should."

The complaint also contains the charge that Oracle "continually rotated staff in and out of the BTI project, creating confusion on task and project duration..." Over the course of 12 months, 129 different people worked on the project, some offshore. Offshore staff "often confused BTI with other projects they were working on for other clients," the complaint said.

As relations deteriorated, a series of meetings took place between July and September 2010, with the school issuing an ultimatum at an Oct. 25 meeting to address the project's shortcomings. The meeting ended with the school concluding the conflict was unlikely to find "an amicable resolution."

In its response, Oracle charges that the university engaged in "scorched earth litigation strategy as a pretext to blame Oracle for its own leadership failures."

"Oracle complied with, performed and satisfied its obligations under the Contract," it said. It also performed "additional work" outside the contract for which it has not received payment.

As a footnote to the dispute, there's confusion over Oracle's name and place of charter. Oracle's response said the correct party to sue was Oracle America. It says Oracle merged with and into Sun Microsystems on Feb. 15, 2010, with Sun "the surviving corporation," which then changed its name to Oracle America, a Delaware-chartered firm. Montclair State named Oracle USA as the target of its suit, a Colorado-chartered corporation.

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