Hector Amezcua / hamezcua@sacbee.com

California Controller John Chiang speaks at the Bee Capitol Bureau in 2011.

Chiang sues over faulty state payroll system failure

Published: Friday, Nov. 22, 2013 - 12:00 am

After months of finger-pointing over who is to blame for a failed state government payroll system upgrade, California Controller John Chiang is taking global tech firm SAP Public Services Inc. to court for breach of contract.

The complaint filed in Sacramento Superior Court seeks an unspecified amount of money for damages incurred by the state. It opens a new round in the months-long fight between Chiang and the Pennsylvania-based company over a $89.7million contract to implement the MyCalPays/21st Century project software that SAP developed.

Glitches plagued test runs of the program. Chiang finally ended the effort in February after a small rollout of its payroll program failed – and government officials learned of the failures from affected employees, not SAP. The mistakes included everything from child-support payments incorrectly withheld to outright pay miscalculations.

The lawsuit contends that, among other things, SAP failed to transfer knowledge to state employees, failed to adequately test the system, concealed problems and, when bidding on the project, “overstated its track record and the talent, abilities and experience of its team on the ground to deliver a functioning system.”

Andy Kendzie, spokesman for SAP, said this morning that the company wouldn’t comment on specifics of the lawsuit, which its lawyers are reviewing.

“SAP software is not the culprit here. Our software works exactly as it’s designed to work,” he said. “We stand behind our software and our actions.”

– Jon Ortiz, Bee Capitol Bureau

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