International Business Machines Corp has filed a suit challenging the state of Texas' awarding of a services contract to rival Accenture Ltd, citing irregularities in the state's process of awarding such contracts, IBM said on Sunday. IBM filed suit on Friday, asking a judge to declare that the state's Health and Human Services Commission unfairly awarded the contract to process applications for Medicaid, food stamps and other social services programs to Accenture.
"It came to our attention that there were some irregularities," IBM spokesman Ian Colley said. "This suit was the only way to get a hearing on these irregularities." He declined to be more specific.
The Associated Press reported over the weekend that observers estimated the contract is worth more than $1 billion over five years.
The suit alleged conflict of interest and that the state disregarded an IBM offer to reduce its project price by $107 million, according to a source familiar with the matter. It also questions the commission's internal process for companies that want to challenge the award.
Officials from the Health and Human Services Commission was not immediately available to comment. Accenture officials could not be reached immediately.
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