Houston-based Waste Management is alleging that SAP sold it revenue management software that was inadequate and untested, and is accusing the provider of fraud and false representations. The company, which boasts more than 22 million commercial and residential customers, is seeking to recover more than US$ 100 million in expenses, plus unspecified punitive damages.

According to the lawsuit, SAP claimed its waste and recycling software was a 'tested, proven, out-of-the-box solution' that could be rapidly implemented without the need for any customisation. These representations were false, alleges the court filing, because a 'US version' of the software had never been tested at a US company. Before 2005, it said, the software had been licensed to 'a limited number' of small European firms.

Despite SAP's claims that the software would save 'hundreds of millions of dollars in increased efficiencies and revenue', it was 'nothing more than beta software - software still in development and utterly incapable of running the operations of an American waste and recycling company', according to the lawsuit. Waste Management is contending that SAP presented 'fake mock-up simulations' although the demonstrations were represented to be the actual software.

SAP is the world's largest business software company with an American division that employs more than 2000 people in Delaware County. As regards the lawsuit, a spokesman has stated: 'As a matter of policy, SAP does not comment on litigation.'