Fujitsu ordered to pay $3.9 million to Department of Corrections

In a recent decision, the Wellington High Court has ruled in favor of the New Zealand Department of Corrections in its protracted legal dispute with technology company Fujitsu.

Justice Cooke has ordered Fujitsu to pay Corrections $3.9 million after finding that the company misrepresented the software proposed for prison guard rostering, according to Radio New Zealand (RNZ).

The dispute dates back to 2018 when Fujitsu initially quoted $716,000 for technology, suggesting that Corrections could use an "out-of-the-box" product without customization. However, six months later, the company boosted the price to more than $5 million, leading to the legal battle.

Justice Cooke's decision underscores the misrepresentation by Fujitsu, stating that the company provided warranties to the department, including a warranty that what had been said in the Request for Proposal (RFP) response was accurate and had not changed adversely, according to RNZ.

Misrepresentation of scheduling software

The court ruling also highlighted Fujitsu's successful pursuit of $1.8 million for the license fee it paid to subcontractor Dassault, the provider of the software, after discovering inaccuracies in the initial proposal, said RNZ. The decision revealed that Dassault chose not to correct the misrepresentation, fearing potential risks to the contract and the significant license fee associated with it.

Fujitsu sought damages based on warranties provided by Dassault, and the court acknowledged the entitlement of the department to recover costs against Fujitsu, while Fujitsu is entitled to recover against Dassault, according to the news outlet.

The legal battle has exposed the complexities and challenges in managing contractual relationships and ensuring accuracy and transparency in procurement processes. The ruling emphasizes the importance of accountability and accurate representation in vendor-client engagements.

The legal proceedings also shed light on the destruction of email evidence by Dassault, according to RNZ, leading to concerns about the preservation of relevant information for litigation purposes. Justice Cooke described the destruction of evidence as "significant and serious" but noted that it was not a deliberate act by Dassault.

‘Making Shifts Work’ project

The misrepresentation by Fujitsu and the subsequent legal dispute have not significantly impacted Corrections' frontline operations. The rostering technology, a part of the 'Making Shifts Work' project, was implemented to introduce new shift patterns in prisons, aiming to enhance work-life balance for staff and improve safety by addressing fatigue issues, according to Radio New Zealand.

Corrections Association president Floyd du Plessis noted that the legal issues arose during the original design phase of the rostering solution and were addressed early in the process.

Despite challenges, the 'Making Shifts Work' project was successfully rolled out to 11 prisons and roughly 4000 custodial staff between July 2019 and June 2022, with a new provider stepping in, said RNZ.