Work on the Basis2 implementation began Dec. 11, according to a press release issued by Prophecy. Phillis said that the software is already running in test mode and that he expects a proof-of-concept bill for an average customer to be produced within four months or so. He added that the billing system should be up and running by December -- which would meet a goal of having the system in place before Mayor John Street leaves office next January.

In signing its amended contract, Oracle admitted no wrongdoing but agreed to the $6.9 million in payments and givebacks, Phillis said. Among other things, the deal includes $1.5 million to cover the cost of Prophecy's software, a payback of $1 million for prior consulting services and a promise not to charge the city for another $1.6 million worth of work done by the company.

Altogether, the expected cost of Project Ocean has reached about $25 million with Oracle's givebacks included. But Phillis said the city's expenses have been capped at less than $19 million.

Oracle officials wouldn't discuss the amended agreement, beyond a statement from Stephen Holdridge, vice president of the company's Oracle Consulting unit. "Oracle and the city have reached agreement on an amendment to the current contract that defines a revised go-forward plan to achieve the city's objectives," Holdridge said.

Project Ocean is designed to replace a 30-year-old, Cobol-based mainframe application that still relies on punch cards. The project was run by Philadelphia's Finance Department when it was initially launched in 2003, and later was taken over by the Mayor's Office of Information Services. Now it is being jointly overseen by the IT unit and the city's separate Water and Water Revenue departments, Phillis said.