Hertz sues Accenture
The legal complaint in this cases is unbelieveable and should be read by all of those that are hiring teams for "digital transformation" Great lessons....very clear and to the point
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
THE HERTZ CORPORATION,
1. The Hertz Corporation (“Hertz” or the “Plaintiff”) is one of the world’s largest
and most familiar vehicle rental companies. In early 2016, Hertz began an ambitious project to
transform its digital identity. The primary objective of the project is to redefine the customer
experience on Hertz’s digital platforms, by developing a market-leading website at Hertz.com
and a complementary suite of mobile applications, all based on a platform that Hertz could
readily extend to its other rental brands, including Dollar and Thrifty.
2. Hertz spent months planning the project. It assessed the current state of its ecommerce
activities, defined the goals and strategy for its digital business, and developed a
roadmap that would allow Hertz to realize its vision.
3. Hertz did not have the internal expertise or resources to execute such a massive
undertaking; it needed to partner with a world-class technology services firm. After considering
proposals from several top-tier candidates, Hertz narrowed the field of vendors to Accenture and
4. After Accenture put on an impressive, one-day presentation for the Hertz team
that included a demonstration of the transformed Hertz digital experience, Hertz selected
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Accenture to design, build, test, and deploy Hertz’s new website and mobile applications (or
5. Because of Hertz’s work with Accenture in the initial planning phases, Hertz
trusted Accenture to lead the project and deliver website and apps that met Hertz’s business
6. Hertz relied on Accenture’s claimed expertise in implementing such a digital
transformation. Accenture served as the overall project manager. Accenture gathered Hertz’s
requirements and then developed a design to implement those requirements. Accenture served as
the product owner, and Accenture, not Hertz, decided whether the design met Hertz’s
7. Accenture committed to delivering an updated, redesigned, and re-engineered
website and mobile apps that were ready to “go-live” by December 2017.
8. Accenture began working on the execution phase of the project in August 2016
and it continued to work until its services were terminated in May 2018. During that time, Hertz
paid Accenture more than $32 million in fees and expenses. Accenture never delivered a
functional website or mobile app. Because Accenture failed to properly manage and perform the
services, the go-live date was postponed twice, first until January 2018, and then until April
2018. By that point, Hertz no longer had any confidence that Accenture was capable of
completing the project, and Hertz terminated Accenture.
9. In fact, Accenture’s work was seriously deficient in multiple respects.
10. For instance, the contract documents required Accenture to develop a responsive
website – one that automatically scales content and elements to match the screen size of the
device on which the website is viewed – with breakpoints for small (phone), medium (tablet),
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and large (desktop) displays. Accenture ignored the specification that called for a medium-sized
layout and developed the website for only small and large breakpoints, and demanded hundreds
of thousands of dollars in additional fees to deliver the promised medium-sized layout.
11. As another example, the Architecture Specifications for the Project expressly
specified that a fundamental principle of the design of the website was its extensibility – that is,
the use of a common core of libraries that could be extended across the websites and mobile apps
for each of Hertz’s brands. Without Hertz’s knowledge or approval, Accenture deliberately
disregarded the extensibility requirement and wrote the code so that it was specific to the Hertz
brand in North America and could not be used for the Hertz global brand or for the Dollar and
12. The quality of Accenture’s programming was deficient as well. Accenture’s
developers wrote the code for the customer-facing ecommerce website (the “front-end
development” or “FED” code) in a way that created serious security vulnerabilities and
performance problems. The defects in the FED code were so pervasive that all of Accenture’s
work on that component had to be scrapped. For other components of the system, substantial
portions of the code were also unusable.
13. In addition, Accenture failed to perform proper testing of the software that it
developed. Accenture did not perform tests on many components of the system. When
Accenture did perform tests, they were seriously inadequate, to the point of being misleading.
14. Despite having received tens of millions of dollars in fees, Accenture never
delivered a usable website or mobile apps. To the contrary, simply completing the project –
which required identifying and remediating the defects in Accenture’s work and the development
of functionality that Accenture was supposed to deliver but could not – required Hertz to expend
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more than $10 million in additional fees. Worse, Accenture’s failure to timely deliver the
website and apps for which it was so generously paid has caused Hertz to lose millions of dollars
in revenue in a tremendously competitive industry.
15. Hertz now brings this action to recover the fees that it paid to Accenture and the
damages that it has suffered and continues to suffer as a result of Accenture’s breaches.
16. Hertz Corporation is incorporated under the laws of Delaware with a principal
place of business at 8501 Williams Road, Estero, FL 33928.
17. Upon information and belief, defendant Accenture LLP is an Illinois partnership
with a principal place of business at 161 North Clark Street, Chicago, Illinois 60601.
NATURE OF THE ACTION
18. This is an action for breach of contract, specifically the Consulting Services
Agreement by and between Hertz Corporation and Accenture LLP dated July 14, 2004, which is
governed by the laws of the State of New York.
JURISDICTION AND VENUE
19. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §
1332(a)(1) because there is complete diversity between the parties. Hertz is a citizen of
Delaware and Florida, whereas Accenture is a citizen of Illinois. Moreover, Hertz has suffered
damages many times greater than $75,000, exclusive of interests and costs, as a result of
20. Accenture is subject to personal jurisdiction in this judicial district because many
of the letters of intent and statements of work that comprise the contract between Hertz and
Accenture were executed with Accenture’s Manhattan office and specify that they are governed
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by New York law. Moreover, Accenture’s contacts with the Southern District of New York are
continuous and systematic. Accenture is registered to do business in New York and has
appointed an agent for service of process. The Accenture office in Manhattan, at 1345 Avenue
of the Americas, New York, New York 10105, is one of Accenture’s largest offices and
contributes a substantial portion of its revenue.
21. Venue is proper in this Court under 28 U.S.C. § 1391 (b) and 1391(c) because
Accenture is physically present in this district, is subject to personal jurisdiction here, and
regularly conducts business here.
Hertz Undertakes a Digital Transformation Program
22. Hertz operates the Hertz, Dollar, and Thrifty vehicle rental brands in
approximately 10,200 corporate and franchisee locations throughout North America, Europe, the
Caribbean, Latin America, Africa, the Middle East, Asia, Australia, and New Zealand.
23. In early 2016, after conducting an internal review of its website and mobile
applications, Hertz conceived and undertook an initiative to transform and redefine the customer
experience on Hertz’s digital platforms (the “Project”).
24. A central objective of the Project was to develop a new, market-leading Hertzbrand
website and suite of mobile applications, all based on a platform that Hertz could readily
extend to create new websites and mobile applications for each of Hertz’s other brands,
including Dollar and Thrifty.
25. In March 2016, Hertz engaged Accenture to assist Hertz in validating its strategy
and planning for the Project. The engagement was governed by a Consulting Services
Agreement (the “Agreement”) between Hertz and Accenture that had been in place since 2004.
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Hertz Selects Accenture To Design and Build Its Website And Mobile Applications
26. In the summer of 2016, Hertz requested proposals from several of the leading
technology services providers. Hertz provided information, reviewed the proposals, and met
with candidates. Hertz eventually selected Accenture, relying on Accenture’s claimed worldclass
expertise in website and mobile application development.
27. The Project was conducted in phases, with the scope of services and the
deliverables for each phase specified in executed letters of intent and/or statements of work.
Each of the letters of intent and statements of work was governed by the Agreement.
28. Between August 2016 and November 2016, Hertz and Accenture entered into four
statements of work and letters of intent for Phase 1 of the Project. These statements of work and
letters of intent covered a range of project planning services, included gathering requirements,
evaluating Hertz’s existing technology, understanding the user experience, and ultimately
developing a “Solution Blueprint” that would describe the functionality, business processes,
technology, and security aspects that were to be incorporated into the solution.
29. During the course of Phase 1, Hertz provided Accenture with detailed information
about Hertz’s existing IT systems’ business requirements. The work product created during
Phase 1 included the Solution Blueprint, a “Delivery Plan,” and “Architecture Specifications”
that were intended to structure Accenture’s subsequent development and deployment of the new
technology platform, website, and suite of mobile applications. Hertz paid Accenture nearly $7
million for these services and deliverables.
30. Effective January 30, 2017, Accenture and Hertz entered into a Letter of Intent
(“Phase 2 LOI”) to document specific design, build, test, validate, and deploy the website,
mobile applications, and other deliverables. The parties later replaced the Phase 2 LOI with a
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statement of work (“Phase 2 SOW”), effective September 1, 2017. Hertz ultimately paid
Accenture more than $26 million in connection with Phase 2 of the Project.
31. The Phase 2 SOW incorporated the Phase 2 LOI by reference and specified in
further detail the Services that Accenture agreed to provide to support the Project. During Phase
2, Accenture agreed to take responsibility for completing all of the most significant tasks
required to deploy new Hertz-branded North American website and mobile applications and the
supporting infrastructure; Hertz was responsible for only a limited set of tasks necessary to
support Accenture’s work.
32. Pursuant to the Phase 2 LOI and SOW, Accenture was requiredx to provide
“Project Management” Services, including Accenture’s obligation to “[p]lan, control, and lead
the execution of Accenture’s scope of services.”
33. Accenture committed to a December 2017 “go-live” date for the website and
mobile apps. In the Phase 2 SOW Accenture expressly acknowledged that Hertz’s “priority
outcomes” included Accenture’s commitment to “a focused objective of launching the [website
and mobile applications] platforms and experience in December 2017.”
Accenture Delivers Seriously Deficient Work Product
34. Accenture never delivered a usable website and mobile applications.
35. First, in September 2017, Accenture reported that it would not be able to meet the
promised go-live date of December 2017 and requested that it be pushed back to January 2018.
Not long afterward, Accenture recognized that it had been overly optimistic about its ability to
perform, and requested that the go-live date be further postponed, until April 2018.
36. One of the primary reasons for these delays was Accenture’s difficulty in
developing the “integration layer,” which allowed the customer-facing FED code to
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communicate with Hertz’s back-end systems (e.g., the systems for making and changing
reservations, and the systems for Hertz’s rewards program). Accenture’s team struggled to
understand the back-end systems and apparently had difficulty programming the software used
for the integration layer.
37. In addition, Accenture was unable to properly develop the FED code. Accenture
expressly acknowledged its failure in a slide presentation it prepared for a January 2018 status
meeting, stating that “Front End Technology (Angular2) has been a challenge for us to deliver.”
38. Accenture severely understated its problems with the FED code. After Hertz
replaced Accenture, an assessment of that code revealed that Accenture’s FED code was so
badly written that it could not be remediated. Accenture’s replacement discarded it entirely.
39. Accenture’s code for the AEM component (the content management system that
allows Hertz to create, edit, and change the content on its websites) was seriously flawed as well.
The coding and file structure were not based upon the Adobe AEM archetype, which made the
application unreliable and difficult to maintain, as well as making future updates challenging and
40. Accenture’s Java code did not follow the Java standard, displayed poor logic, and
was poorly written and difficult to maintain.
41. Accenture’s team also recommended that Hertz purchase licenses to a technology
called RAPID that was supposed to streamline the development of the content management
system for Hertz’s new websites. Hertz followed this recommendation and acquired the
technology, but Accenture was unable to implement it. As Accenture’s project leaders
acknowledged, Accenture “spent a good deal of time” “fighting through integration of RAPID”
into Hertz’s environment.
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42. These technical struggles were worsened by Accenture’s project management
failures. In the midst of Phase 2 of the Project, for instance, Accenture removed some of the
most significant team members, including the product owner and the microservices architect.
They were replaced, but their replacements did not have the same level of experience, and a good
deal of knowledge was lost in the transition. Accenture acknowledged that its delays and
difficulties resulted, at least in part, from the departure of “key resources” during the Project.
43. In or about December 2017, Accenture promised that Hertz would not be
responsible for the added cost associated with the delays in go-live, but Accenture later sought to
charge Hertz for those costs.
Accenture Failed and Refused To Deliver What It Had Promised
44. Other problems on the Project were caused by Accenture’s failure or refusal to
deliver what it had committed to deliver.
45. For instance, one of the most fundamental requirements that Accenture
understood and agreed to deliver from the outset on the Project was that Accenture would
develop a code base for the website and mobile applications that was extensible to multiple
brands and markets, including the Hertz brand outside of North America and the Dollar and
Thrifty brands globally.
46. This fundamental requirement appears throughout the Project documents. The
Architecture Specifications and Phase 2 Statement of Work, for example, expressly declared that
“[a] core tenet of the application is its extensibility” and “[e]ach brand will be supported by the
parent-child app architecture and codebase, with variation only in component configuration,
content authoring, and aesthetic branding via CSS.”
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47. Similarly, the Solution Blueprint specified that Accenture would “[a]utomate and
integrate where possible to scale across brands and globally both in terms of a platform as well
as products and services,” that the Project “solution will be architected to support multiple
brands within the Hertz family (Hertz, Dollar, Thrifty, Sales) and multiple geographies,” and that
“the program will create an underlying platform that will be used to support all of Hertz’s brands
and digital channels in the future.”
48. Inexplicably, Accenture chose not to follow this key principle. Instead of
delivering an architecture and code that was extensible, Accenture tailored the Project codebase
to support only a single brand in a single market – the Hertz brand in North America.
49. When Hertz first attempted to build out Dollar and Thrifty sites using Accenture’s
code base, it discovered that Accenture’s code base was specific to the Hertz brand in North
America and that if it wanted to add a new site, the components of the site would have to be
duplicated, resulting in significant additional cost and effort that Hertz contracted to avoid.
50. Hertz raised this issue directly with Accenture. In response, Accenture’s project
leader replied that “we felt that creating a generic base and extending Hertz from that would have
been less useful and less productive.”
51. Put simply, Accenture decided, of its own accord and without telling Hertz, that it
would disregard the fundamental requirements and specifications of the Project. Accenture
developed an architecture and code that deliberately was not extensible.
52. Another of Hertz’s core requirements for the Project was the development of a
responsive website – that is, one that automatically scales content and elements to match the
screen size of the device on which the website is viewed.
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53. The statements of work and Solution Blueprint expressly required Accenture to
provide a “responsive website and native mobile app site map, wireframes and visual designs”;
“responsive templates based on the approved user stories, wireframes and visual designs
provided in each sprint”; a “Responsive Grid Structure” with small, medium, and large
breakpoints; and to support “Medium (Tablet) browsers. . . .”
54. The designs that Accenture delivered did not conform to these specifications;
Accenture created only two sizes: small and large.
55. Accenture acknowledged that its design did not work for many devices, including
tablets. Hertz specifically pointed out this defect on many occasions, but Accenture refused to
fix it unless Hertz paid it hundreds of thousands of dollars in additional fees.
56. Accenture also failed to develop a usable Visual Style Guide in the format
specified by Hertz.
57. The purpose of the Visual Style Guide was to ensure consistency for developers
across all of the pages of the website. The Visual Style Guide was supposed to “[e]stablish rules
governing the look and feel of all pages in the product[, d]ocument all the decisions made on the
user interface design from the other tasks[, and p]rovide guidelines for prototype developers to
ensure consistency across the site/application.”
58. Accenture agreed to develop the “structure and format of this key Deliverable” as
specified by Hertz.
59. Hertz specified that the Visual Style Guide must be developed in an interactive
format—not a static PDF format – because a static format would quickly become stale and
would make it more difficult for developers to build consistent visual elements across the
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platform. An interactive style guide would allow developers to cut and paste visual elements and
60. The requirement for an interactive format was clearly set out; Hertz even sent
Accenture interactive style guides to use as exemplars, but Accenture repeatedly produced
iterations of a Visual Style Guide in static PDF format.
61. When Hertz raised this issue with Accenture, Accenture refused to provide an
interactive Visual Style Guide to remedy the defects in its Deliverables unless Hertz paid
hundreds of thousands of dollars in additional fees.
62. Accenture never delivered the Visual Style Guide in the structure and format that
63. In view of these pervasive deficiencies and problems, and following an outside
assessment of the Project, Hertz decided to replace Accenture with a new provider. Hertz
brought the new provider onto the Project in June 2018, and ended Accenture’s engagement
64. After Accenture was removed from the Project, Hertz learned that Accenture had
not properly tested the Deliverables. It had performed only selected tests, which tended to
conceal Accenture’s deficient work.
65. The Phase 2 SOW required Accenture to develop, configure, and execute tests of
the source code and configuration; to conduct performance testing to validate that the system
would support expected usage volumes; and to conduct end-to-end tests to ensure that the system
operated as it was supposed to and integrated properly with Hertz’s back-end systems.
66. Accenture’s testing was incomplete, selective, and, in some cases, deceptive.
Accenture did not test many components. Much of the testing that was performed was “happy
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path” testing, in other words, testing to see whether the website or mobile application performs
as designed under scenarios in which hypothetical customers use the website or mobile
application exactly as they are supposed to. This kind of testing is inadequate because it does not
assess performance under real world scenarios and does not test for error handling.
67. Since it removed Accenture in May 2018, Hertz has invested enormous effort and
resources into getting the Project back on track and mitigating its damages. Hertz has worked
hand-in-hand with Accenture’s replacement to develop the world-class digital experience that
Accenture promised but failed to deliver, and it expects to roll out that new technology shortly.
68. Hertz now bring