In a situation apparently unprecedented in its history, US technology firm AMS Management Systems Inc says it has failed to reach agreement with UK cellular operator Cellnet Mobile Communications Ltd, and is walking away from a major project to write Cellnet’s new billing system. AMS chairman Charles Rossotti says in his 27 years in the business, he has never before been in a situation where contractual disagreements could not be resolved, but this is the exception that proves the rule. Cellnet claims that the billing system is a year behind schedule and has hundreds of bugs and does not produce bills. Rossotti says this is a silly statement, since the system was not even due to be delivered until the end of this year. It does not yet produce bills, he says, because it is not finished. As to the hundreds of bugs, he maintains the system in question is still only in the testing phase, and as with any software, this is the stage when the bugs are ironed out. AMS apparently started work on the ‘huge system’ in early 1996, and has done what Rossotti calls a vast amount of work on the project, on the strength of a ‘general agreement’ signed with Cellnet initially. The details of individual system requirements within the project, the scope of each party’s responsibility and roles, and standards were all subject to on-going negotiation. Rossotti says AMS continued to work month on month in the expectation of reaching agreement with Cellnet sooner or later, but during more than seven months of negotiations, he claims Cellnet has continued to move the goal posts, and AMS has decided to pull out. Cellnet had told The Times it was giving AMS 30 days to fix the software or present a plan on how it would fix the software, but AMS believes it has already fulfilled all its contractual obligations, and is pulling out. The company had 200 staff working full time on the project since the beginning of this year, but says in anticipation of the breakdown in negotiations, it took a hit in its accounts in March. It therefore does not expect ending the contract will have any further effect on its second half profits. Earlier in the year, Cellnet managing director, who was ultimately responsible for the AMS contract resigned abruptly. There were rumors at the time that the system was proving a failure. Unfortunately, Cellnet also revealed at around the same time that it had recruited only 12,000 customers in the first three months of the year, which is well below the figure quoted by most of its rivals.
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