New Zealand Sues IBM Over Failed Police Computer Contract

WELLINGTON:The New Zealand government said Aug. 17 it has begun legal action seeking "substantial compensation" against IBM after a deal with the U.S. computer giant to develop a new police computer system collapsed. The INCIS system, which IBM was contracted to develop, ran overtime and overbudget culminating in IBM withdrawing from the project on Aug. 9 after the first of three stages was completed. IBM blamed the New Zealand government, citing its failure to resume negotiations over the project's future in a timely manner. IBM said it had made it clear since May that frequent additions to the crime-fighting system meant the project could not be completed within the already extended NZ$135 million budget (US$71.9 million). The Aug. 9 decision to halt development was taken because the remaining INCIS stages were "far different" from what was originally agreed with the police, IBM Asia Pacific communications director Fred McNeese said. Finance Minister Bill Birch's response last week was: "The Crown has taken the view throughout that a valid contract for that work existed with IBM, and the company should honor it. We have been since May in continuous discussion with IBM seeking to achieve that outcome."