Citing massive turnover among IBM employees, failure to back up data appropriately, and a high-profile server crash that is jeopardizing the state's ability to pursue several fraud investigations, the state of Texas has put IBM on 30-day notice of possible termination of their $863 million services contract. Texas claims 16 separate instances where IBM has defaulted on its obligations, says dallasnews.com.From the news article under the headline, "Texas gives IBM 30 days to address its failings in computer contract":

Texas Department of Information Resources head Karen Robinson sent IBM a sternly worded "notice to cure" letter that cited a wider range of alleged failings than the first such notice, sent in late 2008.

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She alleged 16 separate breaches of the deal, ranging from inadequate staffing to poor service to rising numbers of server outages. Though Robinson said the state could terminate the contract now, she gave the company 30 days to make fixes.

"We have had continual problems with basic service delivery, and IBM has failed to deliver on their promises," she said in a prepared statement.

IBM said it couldn't comment on specifics because it had just received Robinson's letter, but a spokesman quoted in the article said the company would "aggressively protect its interests going forward."

This marks the second legal clash IBM has encountered with a state over a huge services deal. In May, Indiana claimed that IBM failed to live up to some terms of their $1.34 billion deal and took steps to break the deal, while IBM said Indiana still owes it $125 million.