Lawyers for Electronic Data Systems will on Monday hit back at charges by BSkyBBritish Sky Broadcasting that the big US IT outsourcing company deceived the pay-TV broadcaster when it put in an ill-fated bid to build a "world class" customer-care centre to look after its subscribers
BSkyB alleges that EDS misrepresented its capabilities in order to secure the ?48m deal in July 2000. But, in one of the largest legal fights played out in London's specialist technology and construction court, the US group's lawyers will claim that BSkyB didn't know what it wanted - but was determined to force down the cost in any event.
As if to underscore the broadcaster's lack of realism, they will point out that it took BSkyB six years to complete the project, and that the bill ultimately ran to more than ?265m.
A good deal is riding on this bitter legal battle. The reputations of the companies are at stake, as well as those of other members of the EDS consortium, such as Lucent and Chordiant Software.
Also involved is financial consultancy PwC, which made an unsuccessful rival bid for the project and then advised Sky on EDS's progress.
The original deal between Sky and EDS contained a ?30m liability cap for any breach of contract. But this has been overridden because Sky is claiming that the Texas-based group acted dishonestly. The broadcaster is asking for ?709m in damages.
That figure, it claims, reflects the additional costs which had to be incurred to complete the project, compared with the likely bill had PwC handled the work, and the lost business benefits.
This legal fight, which began its court hearing last Monday, is a far cry from the stock market's gleeful reaction to the clutch of announcements made by BSkyB six years ago.
At the time, Sky said it planned to spend ?250m on new media ventures. It also promised a ?50m outlay on its new customers to monitor subscribers' needs.
"We want to put blue water between us and [the competition] in customer service," said Tony Ball, Sky's chief executive. Shares in the satellite broadcaster rose sharply.
But, as court papers show, there were difficulties from the outset. EDS claims Sky took more than five months to make its selection of prime contractor - and that it then took another four months to conclude a contract. Even then, it says, there was only a "preliminary specification" for what Sky required - and, as more details began to emerge, the complexity of the system multiplied.
Sky acknowledges that the decision to appoint EDS was "not straightforward" and that top executives were split over whether to go with the US company or PwC.
The choice of EDS, it says, was ultimately Mr Ball's, on the recommendation of Richard Freudenstein, Sky's chief operating officer. But Geoff Walters, its chief technical officer, was in favour of PwC.
But Sky alleges that the US company deliberately stressed its resources and capabilities so that the broadcaster was encouraged to think that work could and would push ahead.
"EDS knew that timing was important to Sky so represented that their resources were reserved for the project and ready to start 'now'. It was a calculated and dishonest play to secure the contact. The strategy succeeded," Sky said in court papers.
By April 2001, the project was being reviewed, and the court has already been shown an e-mail from an EDS project manager headed "BSkyB Programme Crisis". It talked of "poor initial customer expectation management as to EDS delivery capability"; "lack of required and requested resources across the programme"; and "lack of experienced software developers within the CRM practice who have a successful track record of large scale integration programmes".
In July 2001, there were efforts to renegotiate the arrangement.
However, within eight months, EDS had handed over the systems integrator role to Sky - and in January 2003 it quit the contract altogether. ( FT )