BSkyB v EDS Presentation to SCL 8 March 2010

Jeremy Storey QC

Key Dates
June 2000: EDS Presentation, Response to ITT, Bid July 2000: EDS selected, Work began 9 August 2000: Letter of Intent signed (binding) 30 November 2000: Prime Contract signed (Time and Materials) 16 July 2001: Letter of Agreement (compromise)

31 July 2001: Contractual date for Live in One Hall

6 March 2002: EDs removed as SI and Sky took over 26 March 2002: Memorandum of Understanding (non-binding)

Summary of Claims
Damages for deceit (alternatively negligent misrepresentation) inducing Sky to select EDS and subsequently enter into the Letter of Intent (August 2000) and Prime Contract (November 2000) Damages for negligent misrepresentation inducing Sky to enter into the Letter of Agreement (July 2001) Damages for Breach of Contract

Deceit The Representation Proved

EDS represented: that they had carried out a proper analysis of the amount of elapsed time needed to complete the initial delivery and go live of the contact centre. EDS represented: that they held the opinion that, and had reasonable grounds for holding the opinion that, they could and would deliver the project within the timescales referred to in the Response and subsequently the Contract.

What the Judge Found EDS Caveats

The ITT Response was based on what it knew at the time The plan was high level and would be refined after further analysis Project planning was on-going and timescales were indicative Events between ITT Response and Contract made previous representations immaterial

What the Judge Found - Estimating

Four stages of estimating:
Scope: What work has to be done Effort: Calculation of resources needed to perform the work Resourcing: Number of resources required in the period Availability of Resources

Ramsey J at # 699: there is surprisingly little documentation relating to the process by which EDS prepared its Response

What the Judge Found - Falsity

Plans were produced to fit the 9 month timescale Sky desired No attempt was made to identify work required or to sort out the resourcing implications EDS costing spreadsheet showed 18 developers working on the GUI for 320 days i.e. 5,760 man days The 9 month plan allowed 80 days for the work i.e. 76 developers EDS admitted falsity (no proper analysis, no reasonable grounds)

What the Judge Found - Dishonesty

Not relevant:
Consortium Partners views Previous experience on other projects Other bids: AA and PWC

Relevant:
Internal Risk Lists by the Project Manager Red Team Review - evidence of lack of resources Chopping the Plan for presentation to Client in October: The Plan and resources will be artificially manipulated...

The Corporate Mind

Who is the fraudster? Are they the directing mind and will of Corporation? The individual with the relevant knowledge need not make the representation it is enough that he/she knows that the representation is made.

Joe Galloway
Mastermind for EDS Response MD of EDS CRM Practice (part of eSolutions) Reported to UK Head of eSolutions, Barry Yard (not called) Yard reported to EMEA Head of eSolutions, Steve Leonard eSolutions: 1 of EDS 4 practice areas, providing consulting services in process and technology solutions (implementation, integration and project management)

Themes and Conclusions

No change to the law of deceit no need to panic! Having bid procedures is one thing; following them is another Check employee CVs Review recruitment procedures Re-train Sales Team Dont let Sales act independently of Business Documentation preservation (especially analysis of time planning, sequencing, resourcing and cost)