The state halts a data center consolidation project by IBM as officials review complaints about data losses, unreliable e-mail and cost increases. IBM's seven-year, $863 million contract took effect in March 2007 after Texas legislature voted to privatize the state's data processing.
Claiming IBM is not delivering on an $863
million contract, Texas Gov. Rick Perry on Oct. 28 suspended state data
transfers to IBM data management systems. IBM
has already been fined $900,000 for failing to complete timely backups under
Perry's actions come after a Dallas
Morning News story reported that a July server malfunction in a Tyler
Medicaid fraud unit destroyed documents the Texas
attorney general's office was compiling. Without backup copies of the files, a
number of fraud cases were compromised.
The newspaper also reported backup problems at the Texas Department of
Transportation, the Department of State Health Services and the Texas Workforce
Perry wrote to Brian Rawson, who supervises the seven-year contract with IBM
for the state's Department of Information Resources, that IBM
has failed to perform "the crucial backup data for more than 20 state
agencies." He added that under the IBM
contract, the Department of Information Resources has "failed to implement
a system of checks and balances that ensures data security, jeopardizing the
ability of state agencies to deliver services to their constituencies."
Rawson admitted to the newspaper that IBM
is "not meeting expectations."
In 2005, the Texas legislature
voted to privatize the state's data management systems. IBM
beat out Northrop Grumman for the contract.
"The problems that have been painfully documented over recent months,
including state agency concerns about unreliable e-mail systems, administrative
cost increases and other breakdowns, have resulted in a loss of confidence in
DIR's ability to provide Texas
agencies with a proper level of service for technology services," Perry
wrote to Rawson.
An IBM spokesman told the Dallas
Morning News the company is working closely with state officials to resolve
issues under the contract.
"IBM takes very seriously the issues
that have been reported," he said. "We are committed to helping the
state better serve its citizens through the innovative use of information