Texas fines IBM for 'crucial back-ups' failure

Texas Governor Rick Perry has suspended the transfer of state files to IBM IT systems and fined the company $900,000 for data lost through back-up failures.

In 2005, Texas began an $863m, seven-year outsourcing contact with IBM. Currently, 27 agencies are managed by IBM or transitioning to IBM control.

In July a server crash in the state Attorney General's Tyler Medicaid fraud unit caused the loss of half the records generated during an eight-month investigation and put many prosecutions at risk. The data had not been backed up properly, Texas says. More than ten other agencies have complained of inadequate back-ups and server malfunctions in IBM-managed systems, according to local reports.

In all, Governor Perry wrote in a letter, IBM failed to back-up data properly at more than 20 agencies.

An IBM spokesman told the Dallas Morning News: "IBM takes very seriously the issues that have been reported. We are committed to helping the state to better serve its citizens through the innovative use of information technology.” ®