Andersen sues CSC, alleges unpaid invoices

Andersen Consulting sues the giant computer services company, seeking more than $10 million in allegedly unpaid invoices.

2 min read
Andersen Consulting today said it has filed a lawsuit against Computer Sciences, alleging the company repeatedly failed to pay Andersen for $10 million worth of work on a joint outsourcing project.

"We tried to resolve the matter amicably through an informal dispute resolution process, but we failed to reach agreement," Andersen spokeswoman Roxanne Taylor told CNET News.com. "We have taken this action because we were left with no other alternative."

"We have no comment at this time," said a CSC spokesman.

The lawsuit filed against CSC on Monday at the New York State Supreme Court relates to a seven-year outsourcing agreement CSC signed in 1996 to manage JP Morgan's computer systems. CSC led the project, called the Pinnacle Alliance, as the prime contractor while Andersen Consulting, AT&T Solutions, and Bell Atlantic Network Integration worked on the project as subcontractors, according to Taylor.

As part of the deal, Andersen was responsible for delivering application maintenance and development support for parts of JP Morgan's computer systems.

Andersen Consulting filed the lawsuit because CSC has "consistently failed to pay Andersen for work that we've done under this project," said Taylor.

Taylor added: "This action that we have taken against CSC will not affect our relationship with JP Morgan or the services [we provide] JP Morgan."

Andersen's Taylor said the firm has an excellent relationship with JP Morgan and will continue to provide services to the company under the seven-year agreement.

Tom Rodenhauser, an analyst who heads ConsultingInfo.com, said for the most part, huge services contracts that involve the collaboration of competitors generally result in finger pointing and some friction.

"Whenever two competitors have to collaborate [on a contract], 9 times out of 10, you're going to have problems," said Rodenhauser. "The nature of professional services is that you believe you can handle it all [on your own]."

Rodenhauser added that while professional services firms do collaborate in many ways, it's usually a situation where one is providing something very specific to a client that the other doesn't, or a situation where a client chooses a larger services firm to work with a smaller one.

"When you put two large, established [professional services] firms together on the same project, they [end up] bumping into each other...Then, you have a lot of he said, she said [and finger pointing]," added Rodenhauser.