The State of Texas and IBM have reached an agreement to address an $863 million data center project that has fallen behind schedule, state officials announced.

The State and IBM have been in negotiations over the last several months to find a way to make progress on the mammoth data center project. The project, launched in 2006, was awarded to IBM to consolidate the State’s 31 data centers into two facilities in San Angelo and Austin.

As a result of the consolidation, the State estimated it could save about $178 million by 2013. IBM has completed some of the work, but has fallen behind in a number of areas, according to a report that was released by Texas State Auditor John Keel in August of 2009.

In November of 2008, the Texas Department of Information Resources (DIR), which oversees the contract, issued a Notice to Cure to IBM. The notice stated that IBM must correct “deficiencies in contract performance” particularly related to deficiencies in data back-up. The notice went on to say that issues regarding data back-up and resulting data loss at participating agencies prompted the action.

An independent report on the project by consulting firms EquaTerra and Sierra Systems Group, which was released a year later, in November 2009, recommended that the parties go back to the negotiating table and draw up a better thought out plan of attack. The report concluded that the main fault for the deficiencies was a misalignment between “the original business intent of the project, and the organizational, financial and operational realities of the State’s complex operating environment.”

State officials said an agreement in principle had been reached for a restructuring of the contract. The agreement essentially provides a framework to hammer out a new deal by late February.

As part of a joint statement issued by the Department of Information Resources and IBM, the parties said the framework should provide a means to expedite the project.

“To ensure the Data Center Consolidation Project’s success, we are tailoring data center consolidation around the needs of state agencies, rather than using a one-size-fits-all program,” Karen Robinson, the department’s interim executive director said in the statement.

Brian Whitfield, public sector general manager for IBM’s Global Technology Services, said in the statement that IBM remains committed to the project and will work in partnership with the state to reach a new deal.

IBM began running the State’s mainframe computers and servers in April of 2007 as part of the original contract. Mainframe, server, print and mail operations for various State agencies are being consolidated into a newly built data center in Austin and an existing facility in San Angelo.




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