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Andersen faces millennium suit

An apparel retail firm seeks reimbursement for a computer system installed ten years ago, claiming it is not Y2K-compliant.

2 min read
In one of the first cases related to the Year 2000 problem against a computer consulting firm, a large retail apparel company is seeking reimbursement for the cost of a computer system that Andersen Consulting ordered nearly ten years ago on grounds that the system allegedly will not recognize the year 2000.

The consultancy asked a Massachusetts court Friday to rule that Andersen had met its contractual obligations when it installed the merchandising system for J. Baker back in 1991. Baker owns hundreds of retail stores around the United States, including the Casual Male Big and Tall chain.

Andersen, the world's largest consulting firm, in a written statement said that Baker is arguing that it would have insisted in 1989 that the system be ready for the Year 2000 if the consultants had then brought up possible Y2K-related issues. The firm added such claims by Baker are groundless.

If the case succeeds, it could expose Andersen and other consultants to billions of dollars in liability.

The firm also said that it had repeatedly tried to resolve the matter with J. Baker. The firm decided to ask the court for a judgment after Baker hired a law firm to work on the matter for a fee contingent on any final settlement.

"J. Baker is unreasonably demanding reimbursement for a system they used successfully for nearly a decade. We felt there was no choice left but to ask the court to help resolve the matter," Andersen said in its statement.

Problems may arise in the new century because many older computer systems record dates using only the last two digits of the year. If left uncorrected, such systems could treat the year 2000 as the year 1900, generating errors or system crashes.

According to Andersen, it was hired by Baker to assist in the selection, customization, and implementation of a new merchandising system back in 1989. Through 1991, Andersen consultants worked with Baker senior management to complete the project. At the time, there were only two mainframe software packages available to support Baker's requirements. Neither was Y2K-compliant, the firm said in its statement.

Baker insisted on installing the new system and the company went ahead and approved design documents that "explicitly set out a two-digit year dating format," according to Andersen.

Executives at Baker have not returned phone calls for comment.