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Yes, most certainly the downturn was due to the Thrift cancellation and lawsuit. TSP project had been troubled for a number of years, but CEO and other top management had taken an active role in overseeing the project.

The day before TSP pulled the plug, AMS delivered a "Design Reconciliation" (needed because of hundreds of substantial functional and technical requirements changes) to the Board essentially forcing the Thrift Board to decide what they really wanted. IMHO TSP grabbed the Design Recon and dumped AMS to defer blame for their own incompetence. Will be watching new contractors very carefully to see how they handle this difficult client.

This is not to say, that AMSY did not make mistakes. They seemed to have learned from Mississippi to more closely pay attention to hostile clients. Unfortunately, Purdy, Seidel, and other top management were a little late on the scene to get constraints on the project, and to at least slow the moving target. Having read parts of the contract and lawsuit, and listened to last conference call, it seems as though TSP has a rather slim chance of winning much of anything.

The real damage is to the reputation of AMS, especially since they have so many Federal clients. It seems unlikely to have much effect on current clients, as they are generally very satisfied with the quality of AMS work (per internal survey). Further, the reputation of the Thrift Board is mixed at best; they are not kindly spoken of by their peers within federal circles. Further, TSP project accounted for about 1% of 2H01 revenue. And current clients account for around 89% of forward revenue, i.e., AMSY gets a lot of repeat business.

That said, what effect will this have on the other 11% of revenue coming from new clients? Bezeq (sp?), Mississippi, and now TSP projects all going south in the past 5 or so years will make the sell that much harder in an already tight IT consulting business.

Anyone out there know where to find stats on what percentage of IT projects typically fail or get cancelled?

How many Accenture or Deloitte projects go down?

Disclaimer: Past employee. Long on AMSY.
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