ACS, Delta, Settle, Outsourcing, Contract

ACS to pay Delta over $7.5 million to settle outsourcing contract dispute

Outsourcing firm Affiliated Computer Services (ACS) has agreed to pay Delta Air Lines more than $7.5 million dollars in cash to settle disputes arising from ACS's performance on a contract to provide the bankrupt airline with human resource support, according to a court document.

"The settlement is a result of past issues that arose during the implementation of the contract that have since been resolved," says an ACS spokesman. The spokesman says ACS's relationship with Delta "is now progressing smoothly."

In addition to the cash settlement, the document also indicates that Delta and ACS have agreed to scale back their $120 million, seven-year HR outsourcing deal originally signed in February, 2005, prior to Delta's bankruptcy. The deal initially called for ACS to provide the airline with a broad range of HR services, including compensation and benefits administration, relocation services, recruiting, learning, payroll, and employee call center services.

The revised agreement eliminates recruiting, absence plan administration, and employee travel call center support from the deal. The fees paid to ACS "will be concomitantly reduced," according to the document, which does not provide a specific figure. An attached document indicates that the court has approved the amended contract.

Source: InformationWeek