United Way Reaches Settlement in Dispute on Software Deal

United Way of America has reached a settlement with a technology company over a $12-million software system that the organization scrapped because of what it said were irreparable defects.

The charity said it reached “an amicable settlement” through non-binding mediation with Cap Gemini America, an information-technology company.

Cap Gemini was under contract to provide software that could streamline the processing of donations from millions of corporate employees who participate in local United Way drives.

United Way declined to disclose the settlement terms. In a memo to federation officials, Chris Amundsen, chief administrative officer of United Way, said that the agreement averted the potential of a “lengthy legal battle” with Cap Gemini.

United Way of America hired Cap Gemini in 1997 to design the software, but United Way said a review of the software revealed 400 problems that kept it from operating properly (The Chronicle, December 16).

Mr. Amundsen said in an interview that United Way spent more than $12-million on development of the system but that “significantly less” than that amount was paid directly to Cap Gemini. He declined to specify how much Cap Gemini received or how much of that sum United Way recovered in the settlement.

Some local United Way officials have complained that the national federation failed to exercise proper oversight over the technology deal, a charge that United Way has denied.