Montclair State University Sues Oracle, Cites Failed IT Project

Montclair State University has recently filed a lawsuit against California-based ERP giant Oracle, citing, among other things, gross negligence and a breach of contract. The New Jersey public university signed a deal with Oracle in 2009 to update their 25-year-old campus computer system and is now claiming that Oracle’s mismanagement of the project and failure to deliver results is costing the university upwards of $15 million in unnecessary and unplanned fees.

The process of implementing Oracle’s software, PeopleSoft, throughout Montclair’s campus computers was initially set to take 25 months; however the university claims that after months of repeatedly missing deadlines and sending unqualified workers to lay down the system, Oracle’s computer contractors abruptly walked off the job on November 1st, 2010.

Following a series of uncooperative encounters with Oracle, Montclair State University ended their contract on November 11th and hired an alternate company to finish the job. The university claims that Oracle made it unreasonably difficult to transfer the job over to the alternate company, forcing the university to pay for the “deliverables” related to the project that were required to finish it. Although Oracle could have given Montclair the resources to finish the project, the university was allegedly made to pay the company about $370,000 for deliverables that eventually turned out to be subpar.

Shortly thereafter, Montclair State University filed a lawsuit against the software company, citing the company’s failure to implement the system and costing the university millions in overrun costs.

Oracle came back at Montclair with a countersuit, filing a notice that the company is after $5.3 million for the partly finished work on the university’s campus, for which the university had allegedly never paid. Oracle denies Montclair’s accusations that the company breached its contract and mismanaged the project, claiming that the leaders of the project on the university’s end were neither knowledgeable of the planning nor prepared for the implementation of the system, and had allegedly hired subcontractors that had no understanding of Oracle’s software .

While Montclair State University is accusing Oracle of negligent managing and blaming them for the failure of the massive updating project, Oracle is essentially accusing Montclair of falsely blaming the software company for a failure that was caused by the shortcomings of its own leadership.

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