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IBM tries to block opponent's offer

IBM, already under investigation for its dealings with the state, tried to get the governor's office to kill a rival's proposal for computer business with Florida's social services agency.

Tom Herndon, the governor's chief of staff, turned IBM down, and Lt. Gov. Buddy MacKay, who also heads the Department of Health and Rehabilitative Services, was angry about IBM's appeal, the Palm Beach Post reported Saturday.

The appeal came during a grand jury investigation of IBM's relationship with the agency, the largest state agency in the nation. About $260-million in errors have piled up since the computer upgraded by IBM began handling welfare cases two years ago.

"It's unusual," Herndon said of the IBM request. "I can't recall it ever being done before."

Still, IBM got part of what it wanted last week when a state committee that approves computer purchases turned down the offer by EMC Corp. of Massachusetts to trade $4-million worth of computer storage banks to the department for the agency's IBM units valued at about $2.5-million.

The Information Resource and Technology Procurement Advisory Council insisted the contract be put out for bid even if it costs the state more.

In a June 2 letter, IBM branch manager David White asked Herndon to put EMC's offer on hold and let IBM test the department's problem-plagued computer system and make recommendations on how to improve it.

Herndon refused, writing back that the most fair and open review of the controversy would be to take it before the council.

IBM says it had only the state's interests at heart and was trying to keep HRS from making a mistake.

"It was not in HRS' best interests," said IBM spokesman Don Harrison. "When we were asking the governor's office to intervene, we were merely doing anything we could to defer that action."

A spokesman for EMC said the company has had problems like this before with IBM, but this is "a little more drastic than usual."

In January, HRS sought bids for additional storage for its welfare computer system, which used all IBM storage units. EMC won the bid for additional units.