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Consultant calls $863 million state contract with IBM defective

In addition to the agency's complaints, IBM has endured a public flogging for many problems it attributes to poor conditions inherited from the state.

Morale is low. Turnover is high. And the relationship was dysfunctional from the start, the consultant found.

"State agencies, DIR and IBM team members involved in using, managing and delivering the services are exhausted and highly stressed," according to the consultant's report.

"This combination of low morale and intractable issues ... has resulted in the emergence of hostile and sometime aggressive behaviors by team members from all sides."

IBM has been under the gun for over a year to fix the problems.

Last year, Gov. Rick Perry temporarily halted work on the project after a significant loss of data at the attorney general's office. IBM was warned at the time that its contract could be in jeopardy if the problems were not remedied.

The problems persisted and a 13-day server outage at the secretary of state's office in August prompted officials to pull the elections system out of the consolidation because of fears that a similar outage could compromise an election.

Robinson, who worked for Perry until taking the interim director position in September, said she would not lay the blame for the problems solely at the feet of IBM or any other participant.

"I'm not going to fingerpoint," she said.

These kinds of problems are not uncommon for big information technology projects. About two-thirds of such projects fail to meet the stated objectives, bust the budget or miss the deadline, according to oft-cited industry research by the Standish Group called the Chaos Report.

That is true for public and private projects alike, but public sector stumbles tend to happen in the glare of the spotlight.

John Miri, a technology consultant who was previously an executive at the Department of Information Resources, said state technology officials across the country are watching Texas right now.

None of the facts or conclusions in the EquaTerra report is particularly new to anyone who has been working on this problem, and the report acknowledges as much, Miri said.

"What is bold about this report is that DIR is speaking so directly and candidly with the public," Miri said. "Sharing this type of information with the wider community is going to get people engaged, and that's a big part of solving this problem."

What is next for Texas' $863 million contract with IBM?

Negotiate a new final agreement by February 2010. The scope and timing of the contract will change but not the price tag.

Complete consolidation of the data centers by December 2010. 

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