"An initial assessment of this interruption shows an estimated pretax profit impact of $15 million - $20 million."
The story goes on to say that the company will be "actively pursuing all avenues to recover this cost."
While Virgin Blue has been very vocal in its intention to pursue compensation, in Virginia, things have gone very quiet. As you may recall, in late August into early September, the Virginia Information Technologies Agency (VITA) suffered a server failure that knocked some 26 state agencies off-line for nearly a week. Northrop Grumman is the prime contractor responsible for providing IT services to the state.
At the time, there was much talk about sending a bill to Northrop Grumman for the cost of the outage. Samuel A. Nixon Jr., head of VITA, indicated that Northrop Grumman would face a fine of at least $100,000 for lost work and productivity, and Northrop Grumman did agree in mid-September to pay $250,000 towards a study of what went wrong and why.
But in late September, after an estimate of the outage cost to Virginia's Department of Motor Vehicles (DMV) alone came to some $1.2 million, talk of seeking compensation from Northrop Grumman has disappeared.
I wonder why.
Contributing Editor Robert N. Charette is an acknowledged international authority on information technology and systems risk management. A self-described “risk ecologist,” he is interested in the intersections of business, political, technological, and societal risks. Along with being editor for IEEE Spectrum’s Risk Factor blog, Charette is an award-winning author of multiple books and numerous articles on the subjects of risk management, project and program management, innovation, and entrepreneurship. A Life Senior Member of the IEEE, Charette was a recipient of the IEEE Computer Society’s Golden Core Award in 2008.