The Pennsylvania Department of Labor and

Industry $($DLI$)$ is responsible for the administration and operation of the state$$s unemployment compensation program, which provides

temporary income to replace lost wages for qualified workers. DLI employs over $500$ people and

has approximately $200$ offices statewide to serve

Pennsylvania$$s $6\mathrm{.}4$ million workers and nearly

$300,000$ employers. Unemployment compensation

$($UC$)$ claims are usually filed online or by telephone

or mailed to a UC service center.

DLI had a legacy mainframe system for processing

unemployment benefits that was over $40$ years old.

However, it became increasingly expensive to maintain and difficult to modify, with limited functionality for case management and integrating newer tools

and technologies to enhance productivity.

In June $2006,$ DLI awarded IBM a fixed price contract totaling $$109\mathrm{.}9$ million for the Unemployment

Compensation Modernization System $($UCMS$),$ which

would replace the antiquated mainframe system.

The initial contract with IBM called for more modern

and efficient technology and business processes for

$(1)$ maintaining wage records, $(2)$ processing employer taxes, and $(3)$ claims processing, payment,

and appeals, to be completed by February $2010.$ IBM

won the UCMS contract after a three$-$year bidding

process, claiming to be the only vendor with the type

of proprietary databases capable of supporting a totally integrated computer system.

However, this project experienced significant

delays and cost overruns, ultimately costing nearly

$$180$ million, with much of the system never completed when the contract expired in September $2013.$

By that time, the project was $45$ months behind

schedule and $$60$ million over budget. Pennsylvania

taxpayers had paid IBM nearly $$170$ million for what

was supposed to be a comprehensive, integrated, and

modern system that it never got. IBM$$s contract was

not renewed. In March $2017,$ Pennsylvania sued IBM

for breach of contract, fraudulent and negligent misrepresentation, and charging taxpayers for services

it did not provide. IBM said Pennsylvania$$s claims

had no merit and that it would fight the lawsuit. A

spokesman for the company laid some of the blame

for the project$$s problems on the state, saying that