Governor Tom Corbett's state Department of Labor and Industry is ending a multi-year contract with IBM Corp. to modernize Pennsylvania's unemployment compensation computer system after dedicating close to $170 million to the project.
Labor and Industry Secretary Julia Hearthway says the seven-year-old project is 42 months behind schedule and $60 million over budget. She says it has problems that cannot be solved.
The original contract was for $106.9 million in 2006 and it expires September 30th after no-cost extensions were allowed to assess the program. It was designed to calculate and provide unemployment compensation benefit payments in Pennsylvania.
Carnegie Mellon University's Software Engineering Institute says it identified numerous problems with the design and implementation of the system.
Its study was commissioned by the department last year.
An IBM spokesman, Scott Cook, said the company was surprised by Hearthway's announcement and that the decision is based on "a third-party report that we have not seen." He said IBM has repeatedly asked to review the report with department officials.
"In complex information technology implementations, there is accountability on both sides for system performance and service delivery," Cook said.