Software company wants $14.3M in Wisconsin contract fight

MADISON, Wis. (AP) — A software company on Monday tried to persuade the Wisconsin Claims Board to hand over $14.3 million for extra work building a new system to track state employee retirement benefits.

The Department of Employee Trust Funds entered into a $27.1 million contract with Vitech Systems Group, Inc., in 2014, according to a summary of the company’s claim that board staff compiled. But the agency kept changing the system’s design after the contract was finalized.

The company stopped work in March 2018 and the agency terminated the contract with no notice a month later. The company argues that the department owes it $14.3 million for work to implement the changes.

Department officials say they paid Vitech $14.3 million between 2014 and 2018 for a system that is only 7 percent functional. They say Vitech wanted more pay for work outside the scope of the contract that it chose to undertake, and that it abandoned the project.

Vitech attorney Aaron Aizenberg told the board that the issue was that the department couldn’t commit to its own design conditions. The company kept incurring more costs as it tried to meet the agency’s demands, he said.

“The problem here was ETF frequently changed its mind and demanded changes to specifications on the program after work had commenced to the scope that had been agreed upon or after the work had been completed,” Aizenberg said. “We had to cut it off. We were losing money.”

Assistant Attorney General Brian Keenan argued that the agency agreed to pay Vitech an additional $4 million for changes and the company had no right to abandon the project. Taken with the $14.3 million claim, the company now wants to be paid more than what the parties originally agreed to for a project it didn’t deliver, Keenan said.

The state sued Vitech this past March in Dane County Circuit Court for breach of contract. Aizenberg suggested to the board that the company wants to file a countersuit but can’t do so until the board rejects its claim.

The board listened in silence. Republican state Sen. Luther Olsen was the only board member who commented, saying he’s seen projects get out of hand because too many people want different things. He asked Aizenberg what Vitech was supposed to do if department employees ask for changes, even without an official change order.

“We should have quit the project immediately,” Aizenberg said.

The board isn’t expected to issue a decision for several weeks.

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