In a suit filed in state court in Delaware, Gore executives contend consultants from Deloitte, the world's fifth-largest accounting and consulting firm, and officials of PeopleSoft, the world's No. 2 business-management software maker, gulled them into buying the human resources software program with empty promises that it could be easily installed and operated.
Instead, Deloitte consultants--touted as experts on the software package--had to rely on PeopleSoft's customer service hotline to set up the program, which ran into major problems when it was activated, Gore officials contend.
"Gore paid D&T more than $2.5 million for the software implementation--more than twice D&T's estimate--and Gore did not receive all the services D&T had contracted to provide," officials of Newark, Delaware-based Gore said in the suit.
"Gore also has been forced to spend millions of dollars more to get the system working properly," the company's lawyers added in the suit, filed October 22 in Delaware Superior Court.
Officials of Wilton, Connecticut-based Deloitte & Touche and Pleasanton, California-based PeopleSoft weren't immediately available to comment on Gore's suit.
Officials of closely held Gore said they bought Peoplesoft's software in 1996 to launch a major overhaul of the manufacturer's human resources system, including its payroll, benefits, and personnel systems.
Deloitte paid fees to PeopleSoft for referrals
PeopleSoft officials pushed Gore to hire Deloitte consultants, certified by the software company as experts in the system, to oversee its installation and start-up, the suit said. Deloitte paid fees to PeopleSoft for such referrals, the suit contends.
Deloitte consultants ran up millions of dollars in fees getting the system in place only to have it fail when it went into operation in July 1997, Gore's lawyer, Wilmington litigator Jay Eisenhofer, said in the suit.
"Within a very short time of going live, Gore's human resources, benefits, and payroll administration functions were in chaos," Eisenhofer said in the suit. "Gore associates were not getting paid and Gore could not track vacation time or benefits."
The company, maker of clothes and other goods out of a waterproof, Teflon-based fiber, was forced to hire another set of consultants to reinstall the software properly, the suit said.
"Little did Gore know that D&T lacked the expertise which PeopleSoft and D&T represented it had," the suit said.
"Gore seeks compensation in the millions of dollars for damages it suffered because of PeopleSoft's and D&T's scheme to defraud and failure to perform as promised," the suit added.
Wilbert Gore, a former DuPont chemist, founded his company in 1958 to market goods made out of the Teflon-based fiber. The company now has $1.4 billion in annual sales. Gore-Tex material, once used in NASA space suits, now is found in outdoor wear sold under the North Face and Patagonia lines and Timberland boots.
PeopleSoft's shares rose 0.13 to 14.63 today.
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