Sunday, May 28, 2006

Sprint Files Lawsuit against IBM

BusinessWeek has reported that Sprint is suing IBM, saying Big Blue did not live up to its claims three years ago that it would save the telecommunications company money by taking over some of its computer programming.
Instead, Sprint said the deal ended up costing the company. It claims IBM Corp. now owes Sprint at least $6.4 million for 119,000 hours of uncompleted work - or 57 years for a single employee.
In a lawsuit filed this week in U.S. District Court in Kansas, Sprint/United Management Co. - a subsidiary of Sprint Nextel Corp. - said IBM didn't provide "contractually promised productivity improvements for 2005."
BusinessWeek reports that IBM, according to court documents, said Sprint is using an incomplete formula for measuring productivity and the amount of hours owed.
The suit focuses on a five-year, $400 million contract that went into effect in 2004. The deal, which was extended by a year, called for IBM to develop and oversee software applications for the Overland Park-based company.
Sprint transferred around 1,000 of its computer workers to IBM as part of the outsourcing agreement.

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