The State of Texas' Department of Information Resources (DIR) has announced it would be taking over the multi-year project’s management and re-soliciting bids for completing parts of the project from other companies.

Last month, representatives of the DIR sent an eight-page letter to IBM expressing its discontentment and citing its various reasons and giving the contractor 30 days to come up with a plan to address the issues.

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Last week DIR sent another letter to IBM stating the contractor had failed to produce a an suitable plan; also informing IBM that it would be taking over the project management while launching re-soliciting tender.

The seven-year project aims to consolidate the IT infrastructure of 28 state agencies into two data centres.

Texas will be searching for new bidders to complete each of the smaller tasks into which the four-year-old IBM contract will be broken into.

The legal battle continues as IBM is disputing Texas DIR right to terminate the master service agreement.