IBM Sues Texas After Losing Contract To Accenture

IBM is suing the state of Texas after failing to win a government contract potentially worth more than $1 billion, a company spokesman said Monday.

The state in February awarded the deal--a five-year pact to process paperwork and run call centers for Texas' Health and Human Services Commission--to IBM rival Accenture.

IBM claims the bidding process was unfair because Gary Gumbert, CIO of the Texas commission, previously worked for Accenture subcontractor Maximus. "We believe that worked to Accenture's advantage," the IBM spokesman says.

In a filing with the District Court for Travis County, IBM says, "HHSC conducted a flawed procurement process that resulted in an unjustifiable award" to Accenture. Among other things, IBM complains in the document that the commission ignored its offer to lower its bid by $107 million, a move "that would result in enormous savings for the taxpayers." The vendor claims it didn't get a fair shake because Gumbert "displayed a clear and demonstrated bias in favor of the Accenture team."

IBM is asking the court to order the state to formally review the contract award. An Accenture spokesman says the company believes IBM's allegations "are without merit." A spokesman for Texas HHSC declined to comment on the case other than to say, "We're confident about the integrity of our [request-for-proposal] processes."