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The problem was with Groupwise settings, when the error came up it was looking for first name first, the settings within Groupwise were set to search last name first. I switched the setting All set.. Thank You for your input.
No the error has never occured on another PC since we have started using Formativ about a year ago.
Yes GW is checked in the IE settings, I did however upgrade to the newest ver of GW but still having the same issue. : (