Pennsylvania Ends Unemployment Compensation System Lawsuit Against IBM



Gov. Tom Wolf’s administration ends legal action against IBM after suing the company four years ago and accusing it of breaching a contract to produce an updated system for processing unemployment compensation claims.


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Associated Press

HARRISBURG, Pa. (AP) – Gov. Tom Wolf’s administration on Tuesday dropped a lawsuit against IBM after suing the company four years ago, accusing it of breaching a contract to produce a system updated for processing unemployment benefit claims.

However, the Wolf administration declined to provide a copy of any agreement with IBM, or to describe all of its terms.

In a brief statement, Wolf’s Department of Labor and Industry said it had settled and resolved the lawsuit “after a long period of discovery and an exchange of reports and expert opinions,” and did not reveal no other term than to say that IBM “did not admit any responsibility or wrongdoing”.

The ministry did not file any sort of settlement document in Dauphin County Court, where the lawsuit was brought. All he filed was a waiver of a sentence Tuesday morning, court records show.

A ministry spokesperson would only quote “the regulations” by refusing to provide information beyond the four-sentence statement the ministry released.

Private lawyers argued the case for the state, and the department did not answer questions on Tuesday about the cost of the case in legal bills.

The lawsuit, originally filed in 2017, said the Armonk, New York-based tech and consulting giant was paid $ 170 million on a 2006 contract, but delivered a failed project by the time the State let the contract expire in 2013, four years behind schedule and $ 60 million over budget.

At the time, IBM said the state’s claims had no basis. He declined to comment on Tuesday.

Before the contract ended, the state commissioned the Software Engineering Institute at Carnegie Mellon University to review the project. Its 2013 report identified problems in the design and implementation of the system and recommended that the state not do so.

At the time, an IBM spokesperson suggested that the blame lay on the state.

The Carnegie Mellon report highlighted the state’s failures, saying no one in the Department of Labor and Industry “was responsible or responsible for administering the program” until 2011.

Meanwhile, the state has invested more than $ 100 million in the system since 2013 to improve its operations.

Pennsylvania has come under fierce criticism for handling record levels of jobless claims during the pandemic.

It instituted a new claims filing system in June, created by Palm Harbor, Fla.-Based Geographic Solutions Inc. on a $ 30.2 million contract, plus some incidental costs, department officials said. .

The ministry had promised that the new system would make filing applications much faster and easier, using modern software to replace an “old, obsolete 40-year-old mainframe system.”

But that hasn’t done much to stem criticism of unanswered phones, long wait times, unpaid complaints, and difficulty getting help.

The department said Friday there were 191,000 claims awaiting action, up from around 325,000 in early June, with some people complaining that they waited weeks or months to hear their claim or be paid.

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