You like magic tricks? See this claim that IBM bungled an Obamacare IT project? Whoosh, now it's a $15m check

Big Blue hands over spare change to make allegations against subsidiary vanish

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IBM will cough up $15m to settle a major gripe over its development, or lack thereof, of software for a health insurance website for the US state of Maryland.

US federal prosecutors announced Friday they had struck a deal with Big Blue and its subsidiary Cúram Software to end a False Claims Act lawsuit against the pair, with the tech titan shelling out $14.8m to make it all go away. Maryland will pocket $2.8m of that, with Uncle Sam getting the rest.

The settlement [PDF] ends legal action officials brought against IBM and Cúram, the Irish developer Big Blue acquired in 2011, over their roles in the deployment of the Maryland Health Benefit Exchange, a web portal designed to help residents of the state sign up for plans under President Obama's Affordable Care Act.

The online health exchange project was awarded to Cúram as a subcontractor in 2012 shortly after it was acquired by IBM, a move that was supposed to boost the IT giant's Smarter Cities push. Cúram had agreed to provide software for the Health Insurance Exchange website.


However, IBM-Cúram was subsequently accused of lying about the project's progress and its capabilities during the contract bidding process and during the development of the portal itself. This led to a series of deployment delays, and culminated with Maryland pulling the plug on the whole portal in October 2013.

Noridian, the main contractor who oversaw the entire project, paid a $45m settlement in July of 2015.

"When companies misrepresent their products and capabilities in order to win government contracts, they enrich themselves at taxpayers’ expense," said US Attorney Robert Hur said of the deal.

"Today’s resolution demonstrates our continuing commitment to hold companies accountable for their actions."

IBM, meanwhile, said the settlement had nothing to do with its culpability in the matter, but rather was a business decision to avoid a messy legal battle.

"We deny the government's claims of wrongdoing," a spokesperson for Big Blue (2018 profit: $8.7bn) told The Register, "and we have agreed to the settlement to avoid further delay and the expense of protracted litigation in this six-year dispute." ®


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