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HP Government The Almighty Buck The Courts

Michigan Sues HP Over Decade Long, $49 Million Incomplete Project 203

Posted by samzenpus from the almost-done dept.
itwbennett writes: On Friday, embattled HP was hit with a new lawsuit filed by the state of Michigan over a 10-year-old, $49 million project that called for HP to replace a legacy mainframe-based system built in the 1960s. Through the suit filed in Kent County Circuit Court, the state seeks $11 million in damages along with attorney's fees and the funds needed to rebid and re-procure the contract.
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Michigan Sues HP Over Decade Long, $49 Million Incomplete Project More

Michigan Sues HP Over Decade Long, $49 Million Incomplete Project

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  • I cheer when I read stories like this (Score:3, Funny)

    by Anonymous Coward on Monday September 21, 2015 @06:17PM (#50570583)
    I love it when sales folks write checks that their ass's can't cash.

    • Re:I cheer when I read stories like this (Score:5, Funny)

      by Frosty Piss ( 770223 ) * on Monday September 21, 2015 @06:19PM (#50570593)

      I love it when sales folks write checks that their ass's can't cash.

      What does that even mean?

    • Re:I cheer when I read stories like this (Score:5, Insightful)

      by TWX ( 665546 ) on Monday September 21, 2015 @06:21PM (#50570607)
      I'm sure that the salesmen have long-since cashed any bonuses they received from landing the contract and moved on to other companies.

      • This. For sure.

      • Re: (Score:3, Interesting)

        by Anonymous Coward
        This is part of why my company pays only half of sales commissions up front and the rest on project completion. 100% at the end would be better, but then nobody would work for us.

        • This is EDS we're talking about. Their salespeople would quit.

          They don't believe their own bullshit. Know that the people trotted out during contract negotiation will be nowhere near the project, which will be staffed by recent college graduates with low GPAs in liberal arts.

      • At a decade after contract award this has moved so so so far from sales into delivery & PM that it's not funny.

        Where does the idea of "Keep the customer happy" fit in to this arrangement? Michigan are looking for 11m to rebid & re-procure meaning that somewhere along the line the projects required budget dropped by $38 million....

      • I'm sure that the salesmen have long-since cashed any bonuses they received from landing the contract and moved on to other companies.

        And their CEO now wants to be President of the United States.

        • And their CEO now wants to be President of the United States.

          You mean the one who says marijuana can't be legalized, because she buried a child due to drugs [ibtimes.com], except that the child was her 35 year old step-daughter, was an alcoholic and was addicted to prescription drugs? Age and cause of death don't make it any less tragic, but it also doesn't support her opposition to drug legalization.

  • NGEN is next (Score:2, Interesting)

    by Anonymous Coward

    Posting AC because I'm not fired yet. The Navy just moved up the recompete on NGEN, and the deal was one base year, 4 option years... what a joke. Meg knows this contract is losing money and wants to lose it to let go of all the US Citizens and their expensive security clearances. I'd be surprised if they even bother making a realistic bid for the USAF contract.

    • "Meg knows this contract is losing money and wants to lose it to let go of all the US Citizens and their expensive security clearances."

      What an antipatriotical act! Wait... unless Meg doesn't give a damn about US Citizens and it's simply the case about going out of a contract that's losing money! That would be pure capitalism in action, the soul of USA and therefor the most patriotical act anyone could take!

      Oh... I feel a bit confused now...

  • Just another $20 billion and it'll be done, we swear!

  • In all fairness (Score:5, Interesting)

    by roc97007 ( 608802 ) on Monday September 21, 2015 @07:25PM (#50570985) Journal

    Wow, the LAST thing I want to do is take HP's side in ANY argument. But (reluctantly...) in all fairness, getting off the mainframe is very VERY difficult, for a large number of reasons, not the least of which IBM's commitment to preventing that from happening.

    In the decades I've been in IT, I've seen three fairly large companies make a concerted effort to get off the mainframe. All failed. One ended up upgrading the mainframe. One ended up renting mainframe time from ISSC. One is still trying, years later.

    I don't know what happened in this particular case; maybe HP saw this as a cash cow they could milk for several years, due to the fact that the industry expectation of success is so low. But there is a possibility that HP saw this as a genuine business opportunity, and didn't realize until later that it just wasn't possible.

    • in all fairness, getting off the mainframe is very VERY difficult, for a large number of reasons.

      you would expect that companies that do this for a living would understand this problem and bill appopriately

    • Re: (Score:3)

      by Tablizer ( 95088 )

      in all fairness, getting off the mainframe is very VERY difficult

      True, but HP should have known this based on experience with other mainframe projects or via research on similar projects by other companies. The contract should be public info, and they can hire industrial spies. They have no excuse for not knowing that off-mainframe projects in general are difficult. A start-up, I can understand.

      But in general any line-of-business platform that has decades of domain logic built into it will be difficult to m

      • Scope of the task is *LARGE* (Score:5, Informative)

        by tlambert ( 566799 ) on Monday September 21, 2015 @10:18PM (#50571775)

        in all fairness, getting off the mainframe is very VERY difficult

        True, but HP should have known this based on experience with other mainframe projects or via research on similar projects by other companies.

        (1) The contract was made by EDS. HP had nothing to do with it, other than having acquired EDS.

        (2) The migration is not just off the mainframe (a VMS system), it's onto a web-based platform instead, so they can get rid of both the mainframe, and the extra VT320 emulator they have to run to talk to the thing.

        (3) Getting the same functionality and security of of a non-VMS system is a rather difficult endeavor, even if you use FLASK Linux or a similar purportedly secure computing platform, and add a bunch of them together and try to pretend "it's the same as a mainframe". Of all systems one can get off easily, VMS is not one of them, since it's so much better designed than most modern systems.

        Scope of the task is *LARGE*

        It's a doable proposition, but it would likely take (expensive to hire) 40+ year olds with experience in both sets of technology, along with people capable of parsing "business rules" out of languages like COBOL, FORTRAN, BLISS, and VAX (or DEC Alpha) assembly language, and whatever the heck else it was coded in at the time it was first deployed (depends on what they meant by "aging mainframe" in 2005).

        These people would also have to be either very sophisticated in working over a "Chinese Wall" arrangement with another group doing the new systems development (not a development model most younger coders are familiar with, since you mention "interface contracts" and "unit testing" and "branch path analysis" to most of them, and they blink at you as if you've just taken a polyjuice potion and turned into Mad Eye Moody). Alternately, these old farts would need to have *also* kept current on new technology to allow them to be able to do both sides of the task.

        So, you are talking expensive people in their mid 40's to mid 50's to get the job done.

        Guess who were the first people let go or offered early retirement packages, to improve the profit-per-employee ratio for EDS to get the highest valuation in the acquisition by HP? Guess who were let go or offered early retirement as "cost reduction" measures in the four or five rounds of that HP has gone through since then?

        It's a doable job, but I don't know of a company in the EDS (HPE now) or IBM Global Services space right now that wouldn't just start over an "fix business rules problems as they come up", rather than providing an equivalent (but now web based) system. I don't know experienced people in either of those two, since they've jettisoned all their expensive (talented) old people and replaced them with cheap (untalented) recent grads or offshoring.

        If you think that's an unfair comparison on talent ... if you were a talented college grad, would *you* go to work at a company which is in the throes of a 30,000+ person layoff (something IBM did earlier this year, BTW: HP is a "late bloomer"), and in the process of spinning out the division you'd be working in? Or would you take that offer from Uber/Facebook/Twitter/Google/[anyone but IBM or HP] instead?

        They are likely going to have to hire someone and PM it themselves. States are notoriously bad at that (and at spending money on their own people, as opposed to being willing to spend a lot of money on a contractor company) -- look at how Oregon and Oracle are arguing about the [still] nonfunctional Oregon State Healthcare Exchange to see what comes of hiring your own [unqualified] PM and "doing it yourself".

        My cousin, Mark, could do it. Sadly, he is disabled now.

        I could do it; so could a dozen or so people I could name off the top of my head (Wes Peters, for one). Sadly, we are all sane now.

        They are pretty screwed; they are going to have to do a "second system syndrome" version of things, or settle with HP/HPE and pa

        • Maybe if Mark Hurd (aka "That greedy self-serving cunt") hadn't made most of the EDS staffers redundant (or just chased away by the horribly unethical/evil/greedy HR practices of HP) then they'd have still had the EDS staff with the skills to make the transition ?

          EDS was (for all its other faults) quite a good vendor agnostic service provider ... HP isn't .. EDS could have completed the project.

    • I have been involved in several mainframe migrations. It is hard, requires a lot of planning and testing but it is quite doable. Having said that if HP bid a price to do it and failed their is no "in all fairness", they signed up to do, got paid to do it, they are responsible to do it, their is no excuse of it was too hard! If it is too hard for them then they didn't do due diligence or executed poorly.

      • I have been involved in several mainframe migrations. It is hard, requires a lot of planning and testing but it is quite doable. Having said that if HP bid a price to do it and failed their is no "in all fairness", they signed up to do, got paid to do it, they are responsible to do it, their is no excuse of it was too hard! If it is too hard for them then they didn't do due diligence or executed poorly.

        I agree that from a technical standpoint, getting off the mainframe is (or should be) quite doable. The issues I've seen were mostly not technical.

        I'm conflicted, because, --let's face it-- I want to see HP burn in hell. Just pointing out that in my own experience the chances of success in this kind of endeavor are very small.

    • I've never dealt with a mainframe, so I'll take your word that they are very hard to get off of. What that tells me is to, "just say no" to any mainframe salesman. Stay on commodity hardware and Linux to preserve my autonomy.

    • Re:In all fairness (Score:4, Informative)

      by Major Blud ( 789630 ) on Monday September 21, 2015 @09:48PM (#50571663) Homepage

      "At 50 million bucks, why didn't they emulate the old machinery or port the code to an interpreter running on a modern system?"

      The hardware isn't an issue with IBM mainframes, even their newest Z-Series implementations are mostly backwards compatible with the 1960's era System/360. I'm pretty sure the cost of new hardware would have been cheaper than porting their software over to a completely new hardware platform and language.
      https://en.wikipedia.org/wiki/... [wikipedia.org]

      " But (reluctantly...) in all fairness, getting off the mainframe is very VERY difficult,"

      Having worked on well over a dozen projects to do just that, this post is 100% on-point, although my success rate has been much better, on projects that span half-a-decade :-) I'm working on one right now to port a COBOL/IMS system over to .NET and SQL Server that has been in the works for over 2 years.

      The hardware platform isn't the biggest hurdle (although expensive, it's bullet-proof reliable). The biggest challenges boil down to three things:

      1) Business rules coded in languages long considered obsolete (COBOL, JCL, IMS databases) by people who either retired or died decades ago.
      2) Data that has been severely polluted over the years, such has having fax numbers in an address field, lookup codes that have been deleted, (although the data remains in place, causing broken referential integrity), etc etc.
      3) Business rules that are done more for tradition. A user may have been instructed to do a process a certain way, but no one is sure what the reasoning is for doing it. It may be a valid reason; but that reason was discovered years ago by someone (either retired or dead), forgotten, and has just been done for traditions sake. In cases like this, it's hard to make a case to carry a process like that over to the new system, but it can't just be ignored either.

      I'm simplifying #3, but you'll probably get the idea. I think that these three problems could crop up in ANY software system that has been in use for 40 years, regardless of the hardware platform or the programming language. As much as we try to mitigate planning for the future use a system, very few people in our industry really expect the software we write to be in use 40+ years from now. I think Y2K is a pretty good example of that too :-)

      • Re:In all fairness (Score:5, Insightful)

        by west ( 39918 ) on Monday September 21, 2015 @10:03PM (#50571727)

        A user may have been instructed to do a process a certain way, but no one is sure what the reasoning is for doing it. It may be a valid reason; but that reason was discovered years ago by someone (either retired or dead), forgotten, and has just been done for traditions sake. In cases like this, it's hard to make a case to carry a process like that over to the new system, but it can't just be ignored either.

        This, a thousand times. Nothing like finding two pieces of completely inexplicable code and cleaning them up. One speeds up processing by 2%, and you're the hero. The other turns out to have most of code flow of Western civilization running through it, and now you've just brought on the Long Night.

    • Re: (Score:2)

      by guruevi ( 827432 )

      IMHO getting off a mainframe in 10 years time isn't all that difficult. The reasons big companies fail at doing this is because they cheap out on hiring competent people or they outsource it.

      Running your business (what mainframes and similar business processing systems like ERP, CMS, CRM etc do) is not something you should leave to another business. The other business has no reason to make it succeed, they don't care about your business processes or your business, they care about repeatability and catering

  • Comment removed based on user account deletion

    • "Large IT companies seem to make most of it's money by taking on customers that nobody in their right mind would take on, basically due to the fines and punishments that come with abject stuff-ups for mission critical system from three-letter agencies and large companies."

      It's a multiple ways venue.

      On one hand, yes, only big names can cover for fines, punishments and guarantees required to bid for some kind of contracts. At the same time, only big firms have the cash for the long term commitment it takes t

    • The head of HP's newly created Enterprise division says they will offshore 60% of their workforce by 2017.

      I'm sure that will fix everything.

    • So the customer eventually sues for this [bad] system that is unfinished and over budget. Large IT company comes back with all the documentation and contract legalese and says "Sorry about your luck"

      Contractors typically have a lot of experience CYA-ing for the kind of work they do, unlike the customers, who are not experts at IT contract writing. It's a lopsided arrangement where the swindler has the experience of a 100 swindles behind them.

  • This may be a talking point during GOP debates. When GOP will start talking about fixing healthcare, they can be countered with Fiorina's success in Michigan HP project.

    It happened during Fiorina's watch.

    It can also be used as a talking point, that private entities operate better. Except private entities always underperform when they operate together with the state entities.

    P.S. Obamacare sucks.

    • UH no.

      As much as I would love to blame this on Carly, it just isn't so. Michigan made the deal with EDS. HP bought EDS (and got stuck with this deal) 3 years AFTER Carly left. Blame Mark Hurd.

    • Re: (Score:2)

      by Tablizer ( 95088 )

      P.S. Obamacare sucks.

      P.S. Death from illness sucks more

    • It happened during Fiorina's watch.

      She hasn't worked at HP for over 10 years now. She can't be blamed for poor oversight of a project when she wasn't employed there.

      P.S. Obamacare sucks.

      Yep.

  • Saber -> EDS -> HP

    HP pays SC $44 million penalty to SC.
    SC pays DC $100 million penalty.

    Taxpayers rejoice.

    http://www.wltx.com/story/news... [wltx.com]
    http://www.channelnomics.com/c... [channelnomics.com]

  • On Friday, embattled HP was hit with a new lawsuit filed by the state of Michigan over a 10-year-old, $49 million project that called for HP to replace a legacy mainframe-based system built in the 1960s.

    $49 million is pretty expensive for a low end PC.

  • If the Federal government would start doing this we could save hundreds or millions or possibly billions in tax payer money.

  • I thought the state would only have one Secretary of State Office. What is the need for 130 of them?

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