> The system was working on Windows XP. I am thinking there might be ACL issues > but I'm unsure.
Are you aware that on XP it was still possible to use named pipes for connection, while in Vista and higher (including Server2012) you *must* use TCP/IP and need to qualify an IP-Adress (alternatively "localhost")? This at least is the solution in some 90% of all cases where other Firebird users are asking me.