It appears to be the latter. The spec is available
here.
NCSA negotiated a system with IBM, proposed it to NSF under the above linked RFP, went through a peer-reviewed awards process, negotiated an award with NSF, and started working on the delivery and other aspects with IBM and NCSA's other partners. Something went wrong in the last several months, and IBM's pull out was the result. I doubt that there is any more money to be found, and all parties knew what was asked of them in order for the project to be successful.