Jul 16, 2010, By
Steve Towns, EditorThe Texas Department of Information Resources (DIR) warned IBM on Friday that its $863 million data center outsourcing contract with the state is in jeopardy. A seven-page "notice to cure" from Texas CIO Karen Robinson asserts that IBM has repeatedly underperformed and undelivered on the seven-year contract
in 2006. The notice gives the company 30 days to fix the problems.
"IBM promised an investment in people, processes and technology to bring the benefits of data center consolidation to the state of Texas. We have had continual problems with basic service delivery and IBM has failed to deliver on their promises," said Robinson, in a statement released by the DIR Friday.
The DIR says IBM failed to deliver on the centerpiece of the agreement: moving IT operations for 27 Texas state agencies into two new consolidated data centers that would be operated by the vendor. The notice gives IBM 10 days to come up with an acceptable plan for solving the problems and 30 days to implement the fixes. If not, the state could begin proceedings to cancel the contract, which is one of the largest state government IT outsourcing deals in the nation.
IBM denied the allegations.
"IBM has fulfilled its obligations under the contract and today's action by DIR was unnecessary and unjustified," said company spokesman Jeff Tieszen. "IBM has worked in cooperation and good faith with DIR to provide benefits and improvements to all citizens of Texas. IBM very much regrets the state's action and will aggressively protect its interests going forward."
