Telecommunications company Sprint Nextel is suing IBM
for $6.4m, claiming that its outsourcing deal has not delivered
what was promised.
Under the $400m 2004 five-year deal, later extended by a year,
IBM was to develop and oversee software applications for the
company. About 1,000 IT staff were transferred to IBM under the
outsourcing arrangement.
Sprint has now filed a lawsuit in the US courts, claiming the
deal has cost it money. IBM failed to provide “contractually
promised productivity improvements for 2005”, it claims. A target
to improve productivity by 6.4% was missed “by a wide margin”.
In papers filed with the Kansas district court, Sprint says IBM
owes it at least $6.4m, to cover 119,000 hours’ work, under the
provisions of the contract.
But IBM says Sprint is using an incomplete formula to measure
productivity and the amount of hours owed, court papers show.
Sprint is understood to have brought some IT functions back
in-house, while IBM continues to manage others. IBM is also
managing Sprint’s customer services under a separate £2bn five-year
deal, also dating from 2004.