Armstrong In Dispute With Website Designer

Lancaster, PA, May 14--Armstrong World Industries Inc. is balking at paying another $2.5 million to the developer of its Web site, saying the developer's work was late, incomplete and defective, according to the Lancaster New Era. In a filing Friday with the U.S. Bankruptcy Court, Armstrong contends it already has fulfilled its contractual obligations with the developer, Proxicom Inc., by paying $2.3 million for the work. Armstrong wants the court to throw out Proxicom's claim for the additional money and to award Armstrong unspecified damages caused by Proxicom allegedly breaking the contract. The 15-page filing says Armstrong hired the Reston, Va., company in 1999 to consolidate Armstrong's 11 Web sites into a single "umbrella" site featuring "the full family of Armstrong products." Armstrong agreed to pay up to $2.9 million to Proxicom in fees and expenses, with caps on billable hours and expenses. The site was to be operational in August 2000. However, despite Proxicom's assurances during the summer of 2000 that the work was proceeding under budget and on schedule, the site was not completed until November 2000, said Armstrong. Even then, the Web site did not meet the design specifications promised to Armstrong, forcing Armstrong "to expend significant resources to properly finish the work," the filing says. For instance, the site's "Room Viewer" feature, which allows a customer to select an Armstrong product and place it in a room setting, would slow or crash if more than six customers accessed it simultaneously, says Armstrong. Other shortcomings by Proxicom have made the site difficult for Internet users overseas to access, Armstrong adds. Proxicom's own quality audit of the project's status, performed in August 2000 "after repeated requests" by Armstrong, concedes that Proxicom failed to meet the contract's requirements, the filing says. The audit acknowledges that Proxicom failed to provide the reports, technology, tests, plans and Web site features required in the contract, says Armstrong. Now, despite these shortcomings, Proxicom is seeking more money -- by billing work hours and expenses that exceed the caps contained in the contract, says Armstrong. Furthermore, the Proxicom claim includes reimbursement for expenses that aren't specified, billing for finance charges that Armstrong does not owe and recovery of discounts that Armstrong deserves, says Armstrong. Armstrong filed for bankrupty protection in December 2000 to resolve a flood of lawsuits alleging personal injury from its asbestos insulation. As part of the bankruptcy reorganization process, Armstrong's creditors filed claims seeking payment for various products and services. Armstrong is entitled to object to the claims. Whether claims get paid or thrown out will be determined by a bankruptcy court judge.

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