CSC settles dispute

San Diego County and Computer Sciences Corp. have settled a contract dispute that seriously threatened to derail the county's seven-year information technology outsourcing agreement, the county announced.

The county has agreed to release $34 million of a $44 million payment that was due CSC of El Segundo, Calif., in January, but the county will withhold the remaining $10 million until the replacement of desktop personal computers and other equipment is completed.

In addition, the county will withhold $18 million of separate payments for enterprise resource planning until the new payroll and financial systems milestones are successfully completed, the county said.

The county and contractor are in the third year of a seven-year, $644 million outsourcing deal that provides the county with information and telecommunications services, applications, telephones, networks and desktop and data center operations.

The county declared CSC in default in April for failing to meet key milestones and service levels under the contract. Under the settlement, CSC has agreed to provide the services called for in the contract at the price contained in the agreement, the county said. CSC also has agreed to meet all service levels in the original agreement.

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