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The Silicon Review Asia

Government of Pennsylvania sues IBM over $170m for breaching contract

Government of Pennsylvania sues IBM over $170m for breaching contract

One of the renowned Big Data Company, IBM, is being sued by the State for breaching trust and contract, thus seeking a hug sum of amount for the damages they have caused.

Pennsylvania sued IBM for a total of $170 million, claiming that the company has failed to deliver a promised upgrade to its out-dated system of mitigating unemployment chains.

The US state’s governor Tom Wolf has apparently sued IBM for under-delivering an over-budget IT upgrade to Pennsylvania’s unemployment compensation systems. The contract between the government and the company was issued in the month of June, 2006; but to utter disappointment the budget went $60m and lagged three years behind in delivering the product.

“All told, Pennsylvania taxpayers paid IBM nearly $170 million for what was supposed to be a comprehensive, integrated, and modern system that it never got,” Wolf said in a statement claiming that IBM had failed to integrate the various data processing systems that is used by the government to handle employers' and the unemployed's tax payments.

“Instead, the Department of Labor & Industry has been forced to continue to support many of its UC program activities through a collection of aging, costly legacy systems, incurring tens of millions of dollars in server, support and maintenance costs.”

IBM received the contract from the State after a rigorous 3-year bidding process was hold, and according to the complaint filed, it was awarded with the contract due to Big blue’s representation that in the market, it was the only vendor specialized with this type of proprietary databases capable of providing a totally integrated computer system.

The suit, filed in the Dauphin County Court of Common Pleas, asserts claims for breach of contract, fraudulent misrepresentation, negligent misrepresentation, constructive fraud, and fraudulent concealment, as mentioned in a report.

Though IBM didn’t immediately react to the suit filed against the company, but a company representative was heard saying that the company shall fight the case that holds no merit and shall defend itself against all the fraud claims of Pennsylvania. 

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