State terminates contract with contractor over tax software system

North Carolina has already paid CGI $63.8 million for the tax-collection system

Public relations woes for contractor CGI continue to mount, as North Carolina has decided to terminate its contract with the systems integrator for a new tax-collection software system.

While the two sides say the termination was mutually agreed upon, in a press release CGI pointed out that North Carolina was able to collect an additional US$320 million in taxes from using the parts of the system, which is called TIMS (Tax Information Management System) that were already completed.

"TIMS is the result of a long-term information technology initiative that spanned multiple administrations," CGI said. "The project has returned more than three times its cost to the State in just over five years."

North Carolina has paid CGI roughly $63.8 million so far, and under the termination agreement will also give it another $5 million, said state Department of Revenue spokesman Trevor Johnson.

TIMS in its current form handles 28 of North Carolina's 34 tax types. The next project phase was supposed to add the remaining ones, which include major types such as individual income, Johnson said.

Originally, the next phase was supposed to be finished in October, but that deadline was missed and no new one has been set, according to Johnson. The state plans to use a legacy system to handle this tax filing season, he said.

The decision to cancel CGI's contract was a "tough" one, Johnson said. "Over the past year we've been looking at the project in detail, and the progress we were hoping for was not met."

Nothing has been finalized regarding the future direction of TIMS, he said.

CGI served as one of the main contractors for, the site where U.S. residents can shop for health insurance under the Obama administration's health care overhaul. The site was beset by performance woes upon its launch on Oct. 1, although it has since been stabilized.

Administration officials have come under heavy fire from lawmakers, who say they ignored warnings, including from CGI itself, that the site wasn't going to be ready for the Oct. 1 launch.

CGI's contract for won't be renewed after it ends in February.

A number of state-level health care exchanges developed by CGI have also experienced problems.

CGI's role in developing the health care sites and the subsequent fallout had nothing to do with North Carolina's decision to end the TIMS contract, according to Johnson.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags IT managementCIO roleservicessoftwareit strategyCGI

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Chris Kanaracus

IDG News Service
Show Comments



Sansai 6-Outlet Power Board + 4-Port USB Charging Station

Learn more >

Victorinox Werks Professional Executive 17 Laptop Case

Learn more >



Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?