Thursday, February 05, 2009

Two Remarkable Mini-Computer Contracts:

In the 1970's, I worked at a company that sold specialized mini-computers and software for process control, mostly to refineries and power companies. I've already blogged many of my experiences at this company, but recently one more story popped into my mind. Here are two of the strangest contracts I have ever worked on.

We developed a process control computer for a small group at Westinghouse. One programmer at our company did the entire thing, and it was expected to be about a three month job. But the manager at Westinghouse kept finding fault and requesting changes. Some of these were bugs that our company had to fix. We made some of the changes free, for the goodwill we expected to get when the system was up and running. And the customer paid for a few of the changes, I believe.

After an entire year, the manager at Westinghouse accepted the system. Westinghouse immediately fired him and his entire group. Our directors ruefully post-mortemed with our customer. He explained that he had always known his group would be canned the moment the computer was delivered; he kept the project going as long as he could to save his job. If only we had known! We could have made the requested changes in a much more trivial fashion, if the computer system was never going to be used. (If this story doesn't make much sense to you ... well, it never made much sense to us, either.)

The second contract is even stranger. (I've updated this blog entry to make it clearer. I hope.) My company had a customizable product, a computer system that analyzed Electrocardiograms and sent reports back to cardiologists. Salesman 'A', who worked for a medical company I will not name, did a “middleman sale” for his company. That is, he sold our system to a customer, and hired our company to customize and deliver it. My company always worked on fixed price contracts. That means that we guesstimated all hardware and development costs, and made a bid we guessed we could profit from. We delivered this machine, and salesman A's company paid us for it. I think we made a modest profit on delivery. I'm sure that at this point, A's company also profited from what the customer paid them. Shortly thereafter, salesman A disappeared, and the medical company sent salesman B to talk to us.

Mr. B had a problem. Or rather, the customer who had bought the electrocardiogram analysis system had many problems. They wanted a lot of unpaid changes to the computer system, and the medical company was prepared to pay us to make every one of these unexpected changes. Mr. B explained that salesman A had nailed down this deal by adding a remarkable clause that should never have gotten past the company's lawyers. The contract said that the system would be modified in any way the customer desired, until they were entirely satisfied. I'm not making this up! Salesman B was not expecting to make money on this contract. He was just hoping the work would not go on forever. His company paid us for a lot of additional work, before the customer ran out of changes to request.

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