(WEB HOST INDUSTRY REVIEW) — IBM has just over two weeks left to respond to a “notice to cure” issued by the Texas IT department in regards to alleged problems involving the state’s $863 million data center outsourcing deal, according to a report by Government Technology.
Texan officials sent the notice to IBM on July 16 stating that the company had not followed through on its obligations of a massive seven-year data center consolidation and privatization deal signed back in 2006.
The deal aimed to consolidate 27 Texas state agencies’ IT operations into two new IBM-operated facilities, with the migration of the agencies’ servers to IBM to be completed by December 2009.
However, the DIR says that IBM has completed less than 12 percent of this task, with only five agencies being completely consolidated and an additional five undergoing consolidation, so far.
The government threatened it would potentially terminate the deal if IBM did not resolve these alleged shortcomings within 30 days.
Texas CIO Karen Robinson and a government deputy told Government Technology last week that they are hopeful that the state and IBM will be able to arrive at a resolution.
In the event that IBM does not make good with its agreement terms, the Texas Department of Information Resources will potentially disassemble parts of the services that are being offered and market them through different vendors.
Although, the department is quick to state that it has not yet made a final decision on this and will give IBM a full chance to fulfill its terms of the deal.
IBM spokesman Jeff Tieszen said on Tuesday that the company would respond to the notice “in an appropriate and timely manner.”
He emphasized that IBM has met all of the contract’s obligations and believes the allegations to be “unfounded accusations of material contract breaches” that fail to provide just cause for terminating the contract.
The DIR alleges that IBM has failed to make key deadlines due to poor performance and underinvestment in the project, as well as removing some of its staff from the project and withdrawing consolidation duties all together since last fall.
IBM says that the consolidation project has been slowed down by the state’s poor management by the state, alleging that the DIR lacks the authority to centrally manage the plan.
The company says these issues have hindered server modernization and consolidation while significantly increasing IBM’s costs.
