Iowa City ready to sue over software snafu

IOWA CITY - The city is prepared to file a lawsuit to recoup nearly $200,000 from a million-dollar computer software agreement gone awry.

Iowa City's pending legal action comes a year after it ended its relationship with Innoprise Software of Broomfield, Colo., and nearly seven months after it received its first and only $10,000 installment toward a settlement of $196,000.

Iowa City actually paid Innoprise $254,179, but the $196,000 was negotiated as a settlement amount, city officials said. The city spent another $201,302 on expenses like a consultant, site visits and legal expenses, Finance Director Kevin O'Malley said.

That means the city spent $455,481 on the failed project and has gotten $10,000 back.

City Manager Tom Markus, who was hired a year ago and not involved in the Innoprise contract, said people will want to point fingers, but in this case, the company failed.

“You hire companies with the expectation that they'll do things right,” he said.

Innoprise was acquired in April by Harris Computer Systems of Canada. Iowa City officials say Innoprise has been unresponsive since then.

General Manager James Simak of MS Govern, a unit of Harris that is responsible for the Innoprise software, said Wednesday that the company acquired software assets and a number of Innoprise customer contracts and commitments.

“Iowa City was not a contract we acquired, and we were unaware of it,” he said.

Innoprise founder Dennis Harward, who worked with Iowa City officials, could not be reached for comment. Simak said Harris had hired select Innoprise employees but would not say if Harward was one of them.

The city of Port Orange, Fla., sued Innoprise last year, according to a memo on its website, and has since reached a settlement with the company.

Iowa City Assistant City Attorney Eric Goers said he is preparing to file a lawsuit in district court in Iowa, possibly in the next two weeks, over the outstanding $186,000. He said Innoprise will be named, but he's unsure about other parties.

The city signed a contract with Innoprise in October 2009 to supply and implement enterprise resource planning software, or ERP. The plan was to get a new computer system for its human resources and payroll, financial and utility billing functions.

The city budgeted $1.16 million for the project to replace its existing system, which was self-built and dates to the 1980s.

O'Malley said the city did its due diligence on the product, contacting other entities that used it. During testing, the software worked fine, but it developed bugs in Iowa City that Innoprise wouldn't fix right away. After Innoprise started missing deadlines, he said, Iowa City pulled the plug last October and negotiated a settlement.

The city recently requested proposals to find a new provider of ERP software.

The Gazette's John McGlothlen contributed to this report.