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The State of Texas versus IBM: IBM responds

In July, the state gave IBM thirty days to respond to various charges relating to its ability to fulfill outsourcing contract obligations. IBM has now given its response.

In a letter released [last] Friday, IBM executive Cynthia McLean defended the company’s performance and said it will continue to meet with the agency to resolve issues in the 7 ½ -year, $863 million contract with the Texas Department of Information Resources.


Instead of a formal response, McLean said IBM would meet with state officials and attempt to hammer out a plan.

“As you know, we do not agree that IBM is responsible for the problems that you outline in that letter,” McLean wrote, adding that the company nevertheless recognizes that the information resources department, “is dissatisfied with the current state of the project.”

IBM said earlier that the department delivered too few of the state IT experts it promised and has balked at pushing 27 leery state agencies into consolidating their computer, Internet, printing and mailing services into two privately managed data centers.

Once again, we have to wonder if this marriage can be saved. And perhaps if it’s worth the bother.

In 2005, the Legislature forced more state agencies into the privately serviced IT pool. The new effort was supposed to save the state $178 million from April 2007, when IBM took over from previous vendor Northrop Grumman, to August 2014.

However, last year Grant Thornton, a consultant hired by the department, estimated that the state saved only about $10 million during the contract’s first two years.

Our Republican leadership in this state fervently believes that the private sector can always do better than government. I guess that’s true if you use government run by them as the basis for comparison. It’s certainly a low enough bar to clear.

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