Motorola sues H-P in NYPD deal

(Crain’s) — Motorola Inc. is suing
Hewlett-Packard Co., its partner in a
multimillion computer-aided dispatch system for
the New York City police and fire departments, in
contract dispute over the deal.

Motorola wants unspecified damages from H-P,
which it claims wrongfully terminated its
subcontract to provide software for the system.
H-P also tried to collect on a $10-million
performance bond issued to ensure that Motorola
would complete the software work, according to the suit.

Motorola is asking a judge to rule that it did
not default on the contract and to stop H-P’s
from claiming the $10-million bond.

The suit seems more about principle and
reputation than money. Although it has been paid
about $4.5 million by H-P, Motorola said its cost
to develop the software already exceeds the $14.1
million value of the deal to Motorola.

The original contract was between NYPD and Compaq
Computer Corp., which H-P acquired in 2002, and
Printrak International Inc., which Motorola acquired a year earlier.

Motorola said it determined the original software
product involved in the deal couldn’t be
customized to meet the NYPD’s requirements and it
developed a new generation of the software.

In the lawsuit, filed this month in Cook County
Circuit Court, Motorola says H-P found that the
new software met the contract requirements. But
NYPD balked, claiming Motorola’s product wasn’t
an off-the-shelf solution called for in the
agreement, and said it wanted to go with software from a Motorola competitor.

NYPD rejected Motorola’s product, even though
Motorola claims in the lawsuit that the
competitor’s product is three times as expensive
and can’t be installed until six months later.

Motorola says in the suit that it tried to
resolve the dispute and filed the lawsuit after
it was unable to. The company declined to comment beyond the lawsuit.

"We are puzzled and disappointed by Motorola’s
lawsuit," an H-P spokesman said in an e-mailed
statement. He said in the statement that H-P has
been trying to work with Motorola to resolve the dispute.

“We are confident that when this matter is
resolved, a court will find that Motorola
breached its obligations both to H-P and to the
city of New York,” he said in the statement.