The Dallas Morning News reported that the state of Texas is fining IBM $900,000 for failing to make timely backups as part of an $863 million outsourcing contract. Gov. Rick Perry also suspended the transfer of additional state records into the IBM system, claiming the new system puts state agency data at risk.The matter came to light as The Morning News reported that a server failure in July caused the loss of 50% or more of the data related to Medicaid fraud investigations in the Tyler, Texas, office. Data related to 8 months work on 81 cases of fraud was lost due to a lack of a backup for the 27-GB of data on the server.

IBM spokesman report they hired data-recovery specialists and have recovered more than 80% of the data, but state officials continue to estimate 50% of the data is lost.

"In spite of earlier assurances, the destruction of critical data has, in fact, occurred," First Assistant Attorney General Kent Sullivan wrote Monday in an e-mail to Brian Rawson, chief of the Department of Information Resources. Attorney General Greg Abbott's office "cannot afford to risk a re-occurrence of this event."

Backup issues have been reported in other agencies, including the Department of Transportation and the Texas Workforce Commission.

The Texas Legislature ordered the outsourcing of state agency IT functions in 2005 and they're apparently having a few growing pains.

Links to The Morning News articles:

"Crash hinders AD case" here

"Critical data at risk" here

"Perry halts data transfer" here