The Natural Environment Research Council (NERC) is suing software company GC McKeown for over £4m following the failed implementation of an accounting system in the run-up to Y2K.
The NERC, which is responsible for the British Antarctic Survey and the British Geological Survey, alleged that McKeown repeatedly failed to honour its commitments when installing an Integra financial accounting package between 1997 and 1999.
According to the High Court writ, the £300,000 project for a GUI client-server-based system was due to be completed by 31 October 1997. Subsequent setbacks eventually forced the NERC to invest nearly £4.5m in an alternative system from Oracle in order to become Y2K compliant, it said.
The NERC is also claiming £175,000 for the costs of remaining on its existing mainframe throughout 1999 as a result of the software supplier's alleged breaches of contract.
McKeown is disputing the action. A company spokesman said, "From our perspective it is disappointing. This is the first time that it has happened in our 25-year history. We dispute the claim totally and are entering a full defence in respect of this. We are currently deciding on the best course of action with our legal advisors."
The NERC alleged there were serious problems on all of the accounting packages it received from McKeown as early as July 1997 and that development of the client-server versions of cash management, assets and time recording are still incomplete.
In March 1998 the NERC informed McKeown that the software that it had installed was producing incorrect accounting entries.
The writ says that by November 1998 the position was critical. Neither contractually agreed requirements for installation times, nor revised timetables had been met and the contract was eventually terminated in January 1999.
However, McKeown said, "Most of the timescales were laid down and if they had to be adjusted they were done so with the agreement of the client."