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State, ACS Enter Into Settlement Agreement


October 02, 2003
Thursday - 1:00 am

Commissioner of Administration Mike Miller announced Wednesday that the State of Alaska and Alaska Communications Systems (ACS) have reached a business agreement settling any potential litigation that might have been brought concerning the State's September 10, 2003, termination of ACS's $93 million contract (known as the Telecommunications Partnering Agreement (TPA)) with the State.

The parties agreed that as they attempted to implement the TPA it became apparent that it had been fatally flawed from its inception. "The TPA attempted to make a technological leap too far too fast," said ACS CEO Chuck Robinson. "As we attempted to implement the TPA we realized that we were attempting to achieve a result that, although technologically possible, was too complex to implement."

Miller said that the state and ACS were right to recognize that they had a problem and to try to resolve it as a business matter before losses on either side had become too great and resulted in litigation.

The settlement seeks to restore the State of Alaska to the position in which it would have been, if it had never entered the TPA, Miller said. To effect this agreement ACS will pay the State $4.3 million dollars in capital charges which had been pre-billed in accordance with the TPA. The State will also be paid $800,000 for future disentanglement costs attributable to the TPA. Finally, ACS will pay the State $300,000 as a contingency amount to protect the State from costs attributable to the contract not yet identified by the parties. The State will purchase $1.9 million dollars worth of capital equipment installed by ACS.

Thus, said Miller "the net payment to the State in this settlement will be approximately $3,450,000."

"ACS will make the payment in two parts - one half at the time settlement agreement is executed and one half when disentanglement is complete which is slated to occur by the end of the year."

"ACS remains a telecommunications provider in good standing and will be eligible to bid on future State procurement contracts," Miller said.


Source of News Release:

Office of the Governor
Web Site


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