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Wednesday, November 01, 2006

BearingPoint, Interior in lawsuit over financial system contract

BearingPoint Inc. today confirmed that it is in litigation with the federal government over its aborted contract to provide systems integration services to help build the Interior Department’s new financial-management system.

A BearingPoint spokesman confirmed that the litigation is continuing, but declined to comment on the lawsuit.

The Interior Dept. consistently has declined to comment on its relations with the Mclean, Va., company over the contract termination issue.

Interior ousted BearingPoint as the systems integrator for the Financial Business Modernization System project in mid-2005. Subsequently, the department conducted a competition and chose IBM Corp. to continue the task of installing an enterprise resource planning system provided by SAP America Inc. across all bureaus of the department.

The IBM contract runs for one year, with five option years, and is a transaction valued at about $100 million over the six-year period.

The BearingPoint spokesman noted that his company is continuing to work with Interior via the department’s National Business Center on unspecified tasks.

Industry analysts suggested that Interior could not have terminated BearingPoint’s contract on the grounds of “convenience,” because if the department had done so, it could not have immediately sought to recruit a replacement contractor.

The analysts noted that it is very likely in this case that Interior terminated the contract for “default,” and that BearingPoint’s litigation is a means of clearing its reputation in the field of providing systems integration services for ERP projects.

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