North Dakota Workers’ Comp Agency Sues Aon eSolutions

North Dakota’s workers’ compensation agency has sued a Chicago company over a failed $17 million computer system overhaul.

The Workforce Safety and Insurance agency filed its lawsuit last month in state court against Aon eSolutions Inc. to recoup costs associated with the system that was never delivered.

WSI hired Aon eSolutions in 2007 for a software system upgrade. The work was to cost $14 million, but it was plagued by delays and cost overruns and was never finished.

The contract with the company expired in 2012, and WSI did not renew it. The state Legislature last year gave WSI $750,000 for potential litigation.

WSI, which provides coverage for businesses when employees are hurt or killed on the job, alleges, among other things, negligence, fraud and deceit against the company in court papers. The agency has requested a jury trial.

“Aon promised to deliver a state-of-the-art integrated software package that would replace WSI’s existing software system and meet all of the agency’s business needs,” said WSI Director Bryan Klipfel said in a statement. “WSI intends to prove that Aon did not follow through on its promise. We are acting in the best interest of our stakeholders as we try to recover the money that was spent on this desired product.”

Aon said in a statement that it is “disappointed that WSI chose this course. We delivered substantial value to WSI and we did nothing wrong. We look forward to telling our side of the story in court.”

The state lawsuit also names California-based Valley Oak Systems Inc., which was acquired by Aon in 2007.

Workforce Safety and Insurance pays for medical treatment, rehabilitation and lost wages when a worker is injured on the job. It has a monopoly on workers’ compensation coverage, which it sells to about 25,000 North Dakota businesses. The agency covers more than 400,000 employees in the state.

WSI Deputy Director Clare Carlson said the agency continues to use a computer system that was in place before the state spent $17 million with Aon.

“We’re using our preexisting system and internal staff to upgrade it,” he said.