North Carolina halts IBM school database project

North Carolina terminated for cause Wednesday a contract with IBM Corp. for a massive student records database system that would support academic initiatives such as No Child Left Behind.

The move could not come soon enough for Big Blue. The Armonk, N.Y., integrator asked the state's Department of Public Instruction Feb. 2 to dissolve the contract for the North Carolina Window of Information on Student Education project, known as NCWISE.

The development comes after the two parties reached an impasse in discussions over the troubled system. The project was conceived seven years ago to create an integrated information system that would consolidate and update several obsolete systems.

The contract was awarded to PricewaterhouseCoopers in 1999, according to state documents posted on the Web. When IBM subsequently purchased the consultancy in 2003, the contract was transferred to it. The amended contract called for a three-phase rollout to be completed either by 2006 or 2007, and included post-deployment and ancillary transition services, an IBM spokesman said. The six-year contract was valued at $78 million, he said.

At this time, IBM has received $27 million for its work on the project, he said.

Both sides have pointed fingers at each other for delays and glitches in the system, according to the Raleigh News & Observer. And educators have been frustrated by long waits in issuing report cards and in completing needed analysis of student data.

The state terminated the project after one-third of the state's public schools were converted to the new system. The state itself plans to convert the remaining two-thirds of its public schools to the system, the newspaper reported.

IBM has agreed to provide transition assistance, but has declined to make additional changes to the software and architecture unless it is compensated for the work, the spokesman said.

In his Feb. 2 letter requesting that the state dissolve the contract, IBM vice president for Business Transformation Outsourcing William Brown wrote: "The state owes IBM a significant amount for work already completed, and requests from the state for IBM to perform additional work without payment fall outside of our contractual agreement."