State educators drop IBM contract

Officials say they will complete work on costly, complex schools database

North Carolina education leaders are dropping IBM as the contractor for an elaborate computer network intended to manage student and school data statewide and will instead complete the costly project themselves.

After a weeks-long impasse between the state and IBM, the State Board of Education sent notice Wednesday to IBM that it was canceling a contract that would have totaled $78 million by the completion of the network in 2007-08. The move followed word from the company several days ago that it also wanted out of the agreement.

IBM and the state Department of Public Instruction have been at odds for months over the development of a complex computer system, known as NC WISE, that will replace a data management system in place since the mid-1980s.

The project was already behind schedule, but completion was expected in 2006-07. That was delayed another year by problems with a software revision.

When complete, the system is supposed to give every teacher and administrator in the state immediate access to a wealth of information about their students and will be a desktop tool for keeping grades, attendance and lesson planning.

IBM and the state have blamed each other for delays and troubling glitches in the system. Educators have been frustrated by long waits in issuing report cards and in completing needed analysis of student data.

The state has withheld $4.5 million in payments to IBM, saying the company has failed to correct problems and provide promised computer applications. The company didn't respond to a request in December from the state to fix what it said were problems and says it has lived up to its obligations.

Despite the impasse, education leaders told legislators at a committee meeting Wednesday that they won't lose time in linking all schools in the state. And they said they hope to complete the project for less than the $52 million remaining that IBM would have received for the balance of the work.

Philip Price, state associate superintendent for business and finance, assured legislators that the state will resolve problems that have haunted the system since it was introduced several years ago in a small number of schools.

"It will be extremely user-friendly," he said. And with the old system quickly losing its effectiveness, he said, the state has no choice but to push ahead with NC WISE.

Price told legislators that state-run management of the project will require additional personnel but that the extra costs should save money in the long run. The total tab for the project, including costs to local school districts, has been estimated at $250 million.

Howard Lee, chairman of the state board, said he is confident that the state can complete the project on its own. The state would subcontract with the current software developer already involved with the project, along with such firms as SAS and Oracle.

"I'm confident that we know enough now that we can move forwards and get this project back on schedule," Lee said in an interview. "We don't have a lot of time to waste."

About a third of the state's schools -- 870 schools in 40 districts -- are using the computer network, as are 20 charter schools. A second third of the schools should have been brought online this year, but the software problem forced a year's delay.

IBM officials said that the delay was the state's decision and that the company has lived up to its end of the deal.

"IBM was prepared to deploy [the second third of schools], but the state decided to delay and then cancel that second deployment," said IBM Vice President William C. Brown in a letter to Lee last week.

Alise McNeill, an IBM spokeswoman, said the company fulfilled its obligation. "Over the course of the work, the state has continued to ask IBM to perform work outside the contract and without payment," McNeill said. "The state owes IBM a significant amount, in the millions, for work that has already been completed."