Fourteen months after most U.S. businesses dodged the Y2K computer bug, an Eden Prairie maker of ceramic items and a Chicago consulting firm are suffering legal side effects.

Department 56, in a counterlawsuit, is suing Arthur Andersen Worldwide for $6 billion, accusing it of botching a consulting project to help the firm install a new computer system and avoid possible Y2K problems.

In a statement Friday, Department 56 alleged that Andersen's consulting work created numerous computer problems that crippled its business operations, from processing orders to sending out bills.

Arthur Andersen denied any wrongdoing, insisting it was qualified to handle the Department 56 project ``and did so in a professional manner.'' Andersen said Department 56's lawsuit was retaliatory, noting that it recently sued the manufacturer in Hennepin County District Court for nonpayment of fees.

Department 56 general counsel David Weiser denied the accusation, saying his company paid most of Andersen's fees ``as they billed us.'' Weiser countered that Andersen's lawsuit was meant to discourage Department 56 from pursuing its claims.

``When we embarked on this project in 1996, Y2K was an important consideration,'' Weiser said. ``But we also wanted a (computer) system that was robust enough to handle our growth. When we hired Arthur Andersen, we thought we had hired the best.''

Instead, Department 56 alleges that starting in January 1999, it had so many problems with a computer software system recommended by Andersen that it had to hire dozens of other consultants to get the system fully working. The suit alleges, among other things, that Department 56 ultimately paid more than $12 million for the new computer system, four times the original $3 million estimate. Department 56 also alleges it suffered lost revenue and at least $18 million in charges against earnings in 1999 and 2000 because of Andersen's ineffectiveness.

Department 56's suit is one of only about a dozen cases pending in federal courts across the country that have some Y2K tie-in. While the Y2K computer bug turned out mainly to be a bust a year ago Jan. 1, about 60 state and federal cases with Y2K issues were filed and settled, according to a Twin Cities law firm.

Department 56, best known for its Snow Babies and Original Snow Village items, is seeking $1 billion in contract damages and $5 billion in punitive damages. Its accusations against Andersen include fraud, negligent misrepresentation and civil conspiracy.

Pioneer Planet

-- Anonymous, March 03, 2001

Answers

WALL STREET JOURNAL
03/02/01

FIRM CITES ANDERSON QUARRELS IN LAWSUIT

Six months after the breakup of Arthur
Andersen LLP and Andersen Consulting, a
Minnesolate collectibles company has suit
Arthur Andersen's parent, characterizing
itself as a casualty of the two firms' feuding
and claiming that it nearly collapsed as a
result of a botched computer-consulting job.

AIACPA

-- Anonymous, March 04, 2001

Ohio Works doesn’t for job seekers

COLUMBUS - State officials are reluctantly resurrecting a scrapped job-matching system due to chronic problems with Ohio Works, the online system that already has cost taxpayers $53 million.

In response to numerous complaints about Ohio Works from job seekers and employers, the Ohio Department of Job & Family Services will re-launch the Internet version of Ohio Job Net, department spokesman Dennis Evans said yesterday. He said Job Net would remain available to the public on the department’s Web site "until we are sure that Ohio Works is user-friendly and people are able to use it."

"As we know, it is still a work in progress," Evans said of Ohio Works. "We won’t drop Ohio Job Net until Ohio Works is working. That’s our insurance policy.

"This is just temporary," he added. "This is not a signal that Ohio Works is being scrapped."

Job seekers and employers complain that Ohio Works often kicks users off shortly after they sign on, demands too much personal information, doesn’t allow searchers to browse job listings and has an overly complicated resume-writing function.

Although the $17 million Ohio Job Net system has not been available to the public since Dec. 4, the department’s job-matching specialists still use Job Net when helping out-of-work Ohioans find employment because Ohio Works is so difficult to use, said Melissa L. DeLisio, deputy director of Job & Family Services’ office of unemployment compensation.

State Inspector General Thomas P. Charles is investigating the awarding of nearly $63 million in unbid contracts to Andersen Consulting (now Accenture) to help implement welfare reform in Ohio and construct Ohio Works. The contracts were awarded by former human services directors Arnold R. Tompkins and Jacqueline Romer-Sensky.

Tompkins and Romer-Sensky were briefly in a consulting partnership together, and Andersen later gave Tompkins a $10,000-a-month consulting contract.

Last month, the department requested bids on the next phase of Ohio Works, telling more than 300 computer contractors who attended a bid conference at the Ohio State Fair that the state expects to spend up to $28 million more on Ohio Works in the next two years.

Asked why the department was budgeting so much money for a system that is already built, Evans said, "That's a liberal figure. We don't expect it to exceed that."

Ohio Works was intended to be one of the centerpieces of Gov. Bob Taft's merger last year of the Ohio Bureau of Employment Services and Department of Human Services into the Department of Job & Family Services.

In an Oct. 12 memo to Taft's chief policy adviser, Paolo DeMaria, Romer-Sensky predicted that the replacement of Ohio Job Net, favored by many OBES employees, with Ohio Works would be "a positive, concrete symbol of the merger's progress."

As the complaints about Ohio Works have mounted, however, it has been anything but.

Critics of Andersen and Ohio Works have accused department officials of allowing the $10 billion management and technology firm to use the state as a virtual training ground for its development of Ohio Works.

The Plain Dealer

-- Anonymous, March 11, 2001

Maryland Computer system mars accounts

GICC

-- Anonymous, March 13, 2001

ANDERSEN AIMS TO REFOCUS ON NICHE MARKETS

Andersen, the professional services firm is to
focus on fewer services and target some smaller
regional markets in recognition that it cannot
compete on size with its main rivals.

AICPA

-- Anonymous, April 06, 2001