Oracle Sued For 'Extortion, Lies' By Montclair State University

angry tapir writes "Montclair State University is suing Oracle in connection with a troubled ERP (enterprise resource planning) project. Montclair's complaint, filed Tuesday in U.S. District Court for the District of New Jersey, states that Oracle made an array of 'intentionally false statements' regarding the functionality of its base ERP system, the amount of customization that would be required, and the amount of 'time, resources, and personnel that the University would have to devote.' 'Ultimately, after missing a critical go-live deadline for the University's finance system, Oracle sought to extort millions of dollars from the University by advising the University that it would not complete the implementation of the ... project unless the University agreed to pay millions of dollars more than the fixed fee the University and Oracle had previously agreed to,' it adds."

Comments

It's not lying

[s_p_oneil]

It's not lying, it's marketing and/or sales.

Re:It's not lying

[fsckmnky]

It's not lying, it's marketing and/or sales.

Right. Just like how the universities tell everyone how much better their lives will be, if we all just go $60,000 in debt and sign up for classes.

I find it ironic that the institutions that aggressively market themselves, seem to be highly susceptible to the marketing of like institutions.

That said, if Oracle did indeed promise, under contract, to complete project X for Y amount of money, and it's not complete, then good for Montclair. Get the funds back, or make Oracle finish the job. Otherwise, it'll be the students or the taxpayers paying for it, at some point, after the risk transfer process trickles down.

Re:It's not lying

[v1]

That's why you have lawyers on retainer to hand these to for review before signing anything. They either hand it back to you and say "looks good" or they tear it up and toss it in their bin and say "we need to talk".

Any decent lawyer can spot BS in a contract. Longer contracts just take longer to examine, they don't add a lot of risk of missing something if the lawyer is any good.

I think it's safe to assume that a university has and uses intelligent lawyers and that they have a case. But time will tell.

Re:It's not lying

[BLKMGK]

If you had bothered to read the source article it sounds like the University did just that. Their documentation appears solid as to failures, they had a pretty extensive list of requirements, they used real-life use cases tests for bidding companies to demo against, they documented ALL interaction with Oracle, and it looks like this was a FFP contract that Oracle may have simply underestimated. It's interesting that Oracle stated they had a similar project ongoing for another school that was going well - with FOUR times the resources being applied than this university had available but that this fact wasn't revealed to them. Oracle supposedly demonstrated an applicant management process during their demos and apparently represented this as part of their base capability - then at implementation revealed that it was 3rd party code or libraries that would have to be purchased. Gee, no vendor would ever do that right?

What it will be to a court to decide is if the issues that were run into were as a result of the university or Oracle but the university certainly seems to have documented their case well. Your conclusion that they somehow simply believed and trusted Oracle on this doesn't appear to match up with the source article - perhaps you didn't bother to read it and simply read the sparse /. summary?

Re:It's not lying

[Dishevel]

perhaps you didn't bother to read it and simply read the sparse /. summary?

Perhaps you forgot where you were? :)

Re:It's not lying

[Ex-Softie]

In the late 90's I was CTO for a major company. We had to upgrade Oracle DB and Financials due to Y2K requirements. The upgrade repeatedly failed in testing. All work was done by Oracle Consulting. The cost overrun was almost $500k, and it was subsequently uncovered that the problem was an Oracle bug that stomped its own memory, causing database corruption. They refused to refund the costs despite its being Oracle's fault. So I can well believe that the university in this case was duped.

It's Oracle.

[Anonymous Coward]

Seriously... what did they expect?

This is why...

[dremspider]

When you purchase something like professional services of a new system, you need to make sure that throughout the process you are receiving and own all the code and documentation and have at least a high level overview of what is going on. Too many people just say "Make this XYZ system for me, heres money to do it" and then expect to be barely involved with the process from there on until the product is done.

You have angered the Larry

[Megaweapon]

Pray you do not anger Him further.

Other side?

[Aladrin]

Of course, we're only hearing 1 side of this. I can easily imagine how this could come to be:

Oracle gives a quote that requires the University do things Oracle's way, on Oracle's timeline. University doesn't. Oracle then quotes a price to fix all the University's mistakes.

I can't for a minute imagine that Oracle wrote a contract for a fixed price that didn't outline exactly what the duties of each side were, and exactly what was covered.

However, I also can't imagine a University engaging in frivolous lawsuits.

It should be interesting to see what the facts are, and how this plays out.

Over-promise, Under-deliver. Standard Oracle...

[Anonymous Coward]

"Instead of cooperating with Oracle and resolving issues through discussions and collaboration, MSU's project leadership, motivated by their own agenda and fearful of being blamed for delays, escalated manageable differences into major disputes."

This certainly reads like code for "We promised more than we could deliver. Instead of giving us more money as we demanded, the university decided to try to force us to deliver on our promises."

Good, bring 'em on

[Rogerborg]

As one of the guys responsible for delivering on salesweasels' promises, I fully support customers being given a realistic appraisal of the time, effort and cost required to get them up and running.

Tuition math lesson

[Anonymous Coward]

A four-year degree at an in-state school should not cost more than $15-20,000 including fees. If you went $60k into debt for school, consider that a $40-45k math lesson. Teach your kids that one at home so they don't have to pay for it again.

Re:Tuition math lesson

[luis_a_espinal]

A four-year degree at an in-state school should not cost more than $15-20,000 including fees. If you went $60k into debt for school, consider that a $40-45k math lesson. Teach your kids that one at home so they don't have to pay for it again.

Bingo. My sister went to a private university (local) all the way to grad school for a STEM degree, and she piled no more than $45K (again, in a private school.) I went to grad school in a in-state university, and my total debt was about $25K. My other sisters went also to in-state schools (biomed, fine-arts, PT) and none racked that much of debt either. The only person I know that justifiably had like $60K in debt was this guy who went to grad school in PT with a lot of specialized training. Medical and law students would be the other camp in which I could see a justification for such an amount of student loan debt.

OTH, people getting into $60K for a degree in History or Social Science is just absolutely retarded. I could understand that debt in those degrees if the student 1) goes to a private Ivy League school, and 2) go all the way for a Ph.D. But for a B.A in those fields?

I mean seriously, I see these shows and interviews with people being burdened with $60K, $80K even $100K and not having a job or a job that pays well to get rid of that debt, and when they get asked what degree they have, we don't hear STEM or law or medicine, we don't hear post-grad education. We hear 4-year degrees in History or Social Sciences. WTF? WTF? WTF??????

Yeah, universities keep racking up the cost of education, but let's not delude ourselves into blaming these institutions when people rack up student loans on 4-year degrees with no market value. There is a difference between a freshman entering school and not knowing what to study, and that same person cruising around for the next 4 years without ever thinking "shit, how is my education going to get me a job with which to repay by debt?" Living life in cruise control is a stupid and costly way of doing things.

Re:Tuition math lesson

[Anonymous Coward]

Tuition and fees? In 2011-12, public four-year colleges charge, on average, $8,244 in tuition and fees for in-state students. Per year

Books? which at four-year public colleges in 2011-12 is $1,168 per year

You mean you have to LIVE too? The national average in 2011-12 for four-year public college students who live on campus is $2,066 (off campus $1,082) These are expenses that a college student has to pay that a non-student doesn't. Per year

Average cost of a four-year degree at an in-state school for someone living off-campus?

(8244+1168+1082)*4 = $41,976

Did you skip the math classes?

Citation: http://www.collegeboard.com/student/pay/add-it-up/4494.html

Re:Tuition math lesson

[Anonymous Coward]

Medical and law students would be the other camp in which I could see a justification for such an amount of student loan debt.

Law school is not worth it. Many recent law graduates are regretting their decision (and their debt) because the legal market dove just as much if not more than the housing market. There aren't jobs. If you want to have >$100,00 of loan debt and work as an insurance agent, go to law school.

In summary, if you are thinking about law school, RUN! RUN AS FAST AS YOU CAN!!! If you are in your first year of law school, and you aren't in a top 10 institution or in the top 10% of your class, cut your losses and RUN! RUN AS FAST AS YOU CAN!!! Student debt can't be discharged in bankruptcy! You will be SCREWED if you stay in!!!!

Re:Tuition math lesson

[Runaway1956]

I'd like to know in what year you managed to complete four years of college for 15 to 20 thousand dollars. That much money wouldn't have paid for basic tuition in several decades. And, that's assuming that your mom and dad lived so close to the university that you could live at home and commute.

http://web.saumag.edu/international/tuition-scholarships/cost/
At SAU, which is your typical "in-state school", 4 years of education is going to cost about $60k. That doesn't include books, of course, or snacks, or any damned thing, except the tuition. Projects, supplies, transportation, a night out once in awhile, toothpaste and soap are all additional.

Maybe you're referring to a vocational / agricultural education, in a local community college? Yeah, you can get by for a whole lot less,

Re:Tuition math lesson

[Dhalka226]

I guess it depends on what we're including in the cost. I went to Illinois State in the early 2000s, an in-state school and not a top-end one. All told it cost me in the area of $10,000 a year, which included the tuition and the various fees, and housing. Looking at the webpage for the current rates*, it looks like about $18,500 for tuition + board (I'm honestly shocked, wow). The breakdown is about $10k tuition + $8k housing.

Obviously if you take housing out, that fee would drop substantially -- but that is a limited opportunity for people who happen to go to a school close enough to commute to. Otherwise the choice is living in an apartment nearby and you're just shifting the housing cost into somebody else's pocket; it's still an expense of attending school.

By comparison, looking at the University of Illinois website right now (which is a good school) tuition/fees run $13,658 for residents, which does not include housing. For a room you share with somebody else and a meal plan, tack on another $9,714 a year for a total of $23,372. Per year.

None of these numbers include books or doing anything other than marching from class to class and back to your dorm with an occasional stop to eat (not that I advocate putting anything else into your debt), by the way. So they are all I'd say around $1,000 a year low for books alone. (And incidentally the stat I was given when I started college was that only something like 20% of students would actually complete their degree in four years.)

I'm sure that location affects things somewhat (Illinois is not a cheap state and I'm sure something like South Dakota would be cheaper), but perhaps the disconnect hinges on "debt." I think it's pretty easily demonstrable that the cost of these educations can very easily reach and exceed $60,000 over a four-year period without going to Harvard or Yale or any such. Whether or not you go into that much debt depends on a lot of things, chief among them whether or not you are also working while you attend college and how much, how much various financial aid you manage to accrue, and of course if you spend a lot of time going out and partying or anything that like that eats into your money and prompts you to let more of the other monies come from debt instead of income.

I'm perfectly willing to assume that prices may be a lot cheaper elsewhere, but unless you attend Bumblefuck Egypt School of Whatever as an in-state student living at home, or are trying to compare the costs of a 1970 education to todays (just look at the comparison from early 2000s to now!), I have an extremely hard time believing something like 15-20k for an entire four year degree is within the realm of feasibility. If you're paying nothing but tuition, yeah, maybe.

There is a difference between a freshman entering school and not knowing what to study, and that same person cruising around for the next 4 years without ever thinking "shit, how is my education going to get me a job with which to repay by debt?"

I don't disagree, but at the same time most colleges are just fucking terrible at teaching you skills needed to get and do well in a job; their reward primarily is the piece of paper at the end and possibly some connections you make in the interim, not what you are actually taught. When this is brought up to people we tend to be told that university isn't job training, it's about getting an education, and that people who want that should go attend a vocational school. There is a disconnect there. People should go tens of thousands into debt to "upgrade" to a four-year degree that doesn't teach them things they're going to use in their job, but still need to make sure they choose a degree that is going to get them a job? It's not logically impossible, but it is clear evidence of a problem (that universities are happy to exploit).

* Here's a good one, and a great example of another problem. I used their "cost estimator" and told them I

Re:Normal for Peoplesoft in higher ed

[gstoddart]

Isn't this standard for their Peoplesoft product? We went through hell with it where I work years ago. Cost around 20 million more than it should have.

I worked on a project several years ago involving some collaborative software from Oracle.

The software was not mature enough to be out of beta, definitely not mature enough to be sold to customers, and in the end required vast amounts of resources over and above what we were told it would.

In effect, they were selling snake oil, and they knew it. And, they wanted more money to deliver.

Not saying this is in any way similar to what is happening at this university, but I know first hand Oracle isn't above selling you a product they haven't finished writing yet. In fact, I think it's part of their business model.

Re:You are part of the problem

[Dishevel]

Well. If you do not want to blame your self for making bad decisions. Then you should maybe according to your scenario you should blame your teachers.
Of course the most important thing I ever learned I did not learn from a teacher.

I learned that when you look anywhere other than to your self to find the problems in your life you remove all power of being able to change it your self.
Blaming others may make you feel good for a moment but never leads to a solution.
Finding your part (How ever small) in bad situation allows you to improve and avoid it next time.