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IBM Denies Facility Contract Breach

IBM Denies Facility Contract Breach

IBM (www.ibm.com) denied Friday that the technology giant had violated its $863 million outsourcing contract with the State of Texas to consolidate the 27 agencies' data centers into its Austin and San Angelo facilities.

Earlier this month, the Texas government ordered IBM to resolve key service issues involving the backing up of data on some agencies' servers or it would terminate the seven-year contract.

Kenneth Weiss, IBM vice president for the data center project, submitted a letter denying the accusations, which marks the latest development in the ongoing dialogue between IBM and the Texas government.

Last month, Gov. Rick Perry put the contract work to a halt after officials discovered the significant state data loss.

On November 4, the state's officials warned IBM that the company had violated its contract, giving the company 30 days to resolve the backup issues or it would terminate the contract.

In the letter, Weiss wrote that the company has been working to devise a plan to resolve these problems, but maintains that the company has "fulfilled its contractual duties and obligations to the State of Texas and has worked diligently."

Brian Rawson, the state's chief technology officer, wrote a response letter that reaffirms the state's position that IBM breached the contract relating to data backup.

The two parties have reached an agreement to resolve the issues through an informal process allowed by the contract by the December 4 deadline.

As of April 2007, IBM managed the servers and mainframes at 1,300 locations across the state in an effort to consolidate the 27 agencies' data centers into its Austin and San Angelo facilties.

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