‘Dishonest’ EDS deceived BSkyB to win £48m deal – judge

EDS won its ill-fated contract with BSkyB through “deceit”, the judge in the case has ruled.

Without this deception, the judge ruled that BSkyB would have engaged PricewaterhouseCoopers to build a customer relationship management system.

The judge found that in 1999-2000, when EDS pitched for the contract, its head of customer relationship management software had “dishonestly” represented the time required to complete the work. EDS had not conducted any “proper analysis” of time, the judge said. The then EDS head of CRM software, making the time representation, “knew it to be false,” the ruling found.

The judge also highlighted serious concerns over EDS’ planning and ways of working as the project began to hit obstacles a year into the work.

HP, the new owner of EDS, yesterday said it would appeal the judgement against it, maintaining strongly that it had not deceived Sky. Meanwhile, it was found not liable for misrepresenting its resources, cost, technology or methodology.

Sky claims it will win over £200 million in damages as a result of the judgement, in a case that focused around EDS’ representations of what it could deliver, made at various meetings and in emails and phone conversations, as it worked to win the bid for the deal.

It is expected to take a substantial amount of time for exact damages to be judged and awarded. Sky had tried to claim £709 million, for problems and lost benefits around the delayed £48 million system.

The broadcaster successfully proved in court that it could circumvent clauses, aimed at excluding those representations, in the contract and in a later Letter of Intent. This was achieved on the basis of negligence by EDS and the seriousness of the allegations.

The judgement is likely to cause serious embarrassment to HP, two years after acquiring EDS to bolster its services business. Judge Mr Justice Ramsey heavily criticised EDS for ways it had worked, and singled out particular individuals for poor conduct.

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