SAP accepts offer of nearly $333,500 from Palo Alto city council to settle
Earlier this month, in a closed council session, it was agreed that Palo Alto will settle out of court with SAP Public Services Inc. for the sum of $333,481.
The council have been using SAP since 2002, for functions such as payroll, accounts receivable, and online utility bill payments.
The recent case centres around claims from that the council increased usage of SAP’s software, originally purchased in 2002, without paying for a corresponding number of licenses. The end-user license agreement provided the company with the right to invoice the city for additional usage.
Based on an audit conducted in March, SAP initially claimed the city owed roughly $1.13m in fees for ramping up its use of the software, according to a copy of the settlement agreement provided by the city.
The city disputed that figure and hired a consultant to perform a second review. The consultant determined the usage was far less and the city owed just $333,481, the settlement agreement amount. SAP accepted that figure without protest, City Attorney Molly Stump said.
The outside review cost the city about $8,000, Stump said. The matter was otherwise handled by the city attorney's office. The settlement agreement will be paid out of the IT budgets of the various city departments that use the software, Stump said.