Waste Management spokeswoman Lynn Brown said Wednesday that her company is suing SAP, the German-based company that sold it the system, seeking all its expenses plus punitive damages.
The No. 1 U.S. trash hauler, which reported $309 million in fourth-quarter net income, has yet to determine whether it will take a charge for its investment in the failed system.
"It depends on what SAP's response is to the lawsuit," Brown said in an e-mail. "We need to assess their response."
SAP spokesman Andy Kendzie declined comment.
The software maker sold Waste Management computer programs that were supposed to be designed to manage tasks unique to U.S. companies that haul waste and handle recycling, with no customization required, the lawsuit said.
Those programs handle tasks including billing, waste logistics, container management, and on-board computing, according to a December 2005 press release from SAP America.
"Unknown to Waste Management, this 'United States' version of the Waste and Recycling Software was undeveloped, untested, and defective," the suit says.
Texas-based Waste Management filed its lawsuit on March 20 in the district court of Harris County, Texas.