IBM trades legal suits with Philippine govt agency

The local unit of US computer giant IBM has filed a libel suit against a Philippine government agency after being accused of selling it faulty software, court records showed Friday.

IBM Philippines filed against the Government Service Insurance System (GSIS) after an advertising campaign in which it claimed the US giant had sold it faulty software.

IBM Philippines said the GSIS ads in local newspapers "were not only false and misleading, but were motivated by ill will and malice."

The computer firm is demanding P205 million (US$4.33 million) in damages and legal expenses.

IBM said GSIS had acquired the faulty software from a local joint venture of three local firms that IBM Philippines was not a party to.

"IBM was not involved in the design, supply, installation and maintenance," of the systems, it said in a statement.

GSIS filed a civil suit against IBM Philippines on Wednesday and its US parent over the alleged failure of its software system, demanding more than 100 million pesos in damages and litigation expenses.

GSIS officials also said they had filed suits against the president of Questonix Corp., the firm contracted to install the IBM database management software. Agence France-Presse

GSIS files libel case against IT contractor

By Alexander Villafania - INQUIRER.net

The Government Service Insurance System (GSIS) filed on Thursday a libel case against the head of IT systems integration company Questronix.

The government agency alleged that Questronix President Alex Aloba discredited the government agency through statements published in two major dailies last May 31.

GSIS and Questronix, along with IT services company IBM, are in a bitter dispute over the problematic implementation of a massive GSIS database project.

The libel case against Questronix would be the second against the company, with the first being a breach of contract case that was filed by the GSIS on June 3.

IBM Philippines and its US-based parent company IBM Corporation are also respondents in the first tort and breach of contract case by the GSIS.

GSIS blamed IBM Corporation and Questronix for the constant crashes suffered by its main database infrastructure collectively called ILMAAAMS (Integrated Loans, Membership, Acquired Assets and Accounts Management System), which processes nearly all of the transactions of the GSIS and its more than 1.5 million members.

Questronix is the main contractor to implement ILMAAAMS in 2006.

The project cost was P80 million at that time.

Problems started on March 30 when ILMAAAMS suffered a major crash, resulting in a halt of all transactions for that day.

GSIS Chief Information Officer Helen Macasaet said it had earlier requested Questronix to identify the cause. Questronix later reported alleging problems with the IBM’s DB2 database software were to be blamed.

Macasaet argued that IBM continued to fail in providing a solution despite repeated calls, leading to the decision by the government agency to file a civil case against IBM and Questronix.

The GSIS is also seeking P100 million in damages against the respondents.

In retaliation IBM on June 3 said it is filing a libel case against the GSIS, seeking P200 million in damages. The company accused GSIS of unwarranted public attacks against them.

Prior to the filing of their cases, IBM Philippines insisted that it had no contractual relationship with the GSIS on the ILMAAAMS project, thus it was not present when DB2 was being installed and maintained.

The company also said it has already been working on solving the GSIS problem at their expense.

In a press conference, GSIS Chief Legal Counsel Estrella Elamparo said Aloba imputed that GSIS was to blame for the massive system crashes, despite reporting earlier to GSIS that software bugs in the database software were the culprit.

“He made it look like GSIS was at fault but it was GSIS who wasthe victim because many of our members are relying on this system to process their transactions,” Elamparo said.

Mitigating measures

With the cases already in court, GSIS officials said they are implementing mitigating measures to prevent crashes of the DB2 software, which they continue to use.

Macasaet said that some of the electronic processes that should have been done through ILMAAAMS are now being handled manually.

They are also prioritizing certain daily transactions, such as online queries, loans and membership updates.

Macasaet also stressed that the agency might be forced to shift to different database software if problems persist. “We might fast track another project that’s not even supposed to be implemented yet just to make sure we don’t encounter these problems.”

Nevertheless, Elamparo said that is still open to discussions with the respondents to try and fix the problem. “We’re open to settle this because it’s not just us who are suffering but the GSIS members.”