(WEB HOST INDUSTRY REVIEW) — The state of Texas has began searching for new companies to complete a massive data center consolidation project that IBM (www.ibm.com) is currently the lead contractor for, in the midst of an ongoing dispute between the two sides.
The move could potentially bring an end to the seven-year deal IBM and Texas’ Department of Information Resources signed in 2006, which aimed to consolidate 28 state agencies into two data centers.
Last month, the DIR alleged that IBM had not followed through on the terms of the $863 million contract.
The contract has undergone a rocky road since 2008 , when a server crash at the state attorney general’s office, caused by faulty data backup systems, brought the project to a temporary halt.
Since then, the state has issued several warnings to IBM, including last December when the DIR claimed that IBM had only come so far as completing less than 12 percent of the task at the time of the deadline.
It highlighted 15 contract breaches on IBM’s part, including insufficient staffing, poor service, and multiple server outages.
On July 16, the DIR threatened to end the deal if IBM did not fix these alleged shortcomings within 30 days.
IBM responded by stating that DIR’s own mismanagement were responsible for the shortcomings. Despite this, IBM said it was willing to cooperate with the state to resolve these issues and complete the project.
On Tuesday, DIR executive director Karen Robinson delivered a letter to IBM stating that while it was not in the state’s best interest to terminate the agreement at this point, it maintains the right to do so in the future.
Robinson also said in the letter that IBM did not offer a cohesive resolution plan for the project, stating that the solutions IBM offered were “little more than a reiteration of inconsistent and incomplete ideas that IBM had previously expressed.”
IBM spokesman Jeff Tieszen said the company disagrees with the state’s “accusations of material contract breaches or DIR’s ability to terminate the contract for cause,” adding that the company is “hoping to continue a constructive dialogue.”
Tieszen also stated that “as of today, the status of the contract hasn’t changed,” and that “IBM is the lead contractor.”
Meanwhile, DIR spokesman Thomas Johnson said that “while IBM’s day-to-day obligations under the contract have not changed, the state is now taking the lead,” and “has taken full control over the contract and will proceed to re-procure all of the services within the contract.”
The state now plans to disassemble the project into smaller jobs to be awarded to new bidders for completion, with the DIR to assume a direct management role.
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