HARRISBURG, Pa. _ The administration of Pennsylvania Gov. Tom Wolf filed a lawsuit Thursday against technology company IBM over delays and cost overruns in an upgrade of the state's unemployment compensation system.
In a statement, IBM disputed the lawsuit and said it will "vigorously" defend itself.
The question of how to deal with problems in the software overhaul has become a high-profile political dispute at the state Capitol.
After Senate Republicans declined to renew funding for the system, the Department of Labor and Industry in December laid off hundreds of employees and closed three call centers.
In a statement, the governor's office said the contract with IBM to modernize the unemployment compensation system was allowed to lapse in 2013, with the project more than three years behind schedule and $60 million over budget.
"All told, Pennsylvania taxpayers paid IBM nearly $170 million for what was supposed to be a comprehensive, integrated, and modern system that it never got," Wolf said in a statement. "Instead, the Department of Labor and Industry has been forced to continue to support many of its UC program activities through a collection of aging, costly legacy systems, incurring tens of millions of dollars in server, support and maintenance costs."
The lawsuit, filed in Dauphin County court, raises claims of breach of contract and fraud, the governor's office said.
IBM spokesman Clint Roswell said in a statement: "The Commonwealth of Pennsylvania's claims have no merit, and IBM will vigorously defend this suit."
