Under the deal, ACS was due to complete work on a new system and takeover management duties this month, but the deadline was extended until August 2007, according to an Associated Press report.
In a letter to ACS, the state has now canceled the deal and asked the company to terminate work on the project, according to Local Tech Wire, a publication serving the Southern technology corridor from North Carolina to Atlanta. ACS responded by noting the project was more than halfway done, and that the delays were brought on by the state itself, which owes ACS for past work.
The company also warned that the resulting lawsuit from a termination would be costly, as would the process of re-bidding and awarding a new contract to a different vendor, LTW reported.
North Carolina has turned down proposals from ACS to complete work on the project for an additional $42m, AP reported.