The Herald Bulletin

Morning Update

State News

February 13, 2014

Court: State owes IBM nearly $50 million over welfare fight

INDIANAPOLIS — The Indiana Court of Appeals says IBM Corp. failed to deliver its part of a deal to privatize the state’s welfare system, but the company is still entitled to nearly $50 million in fees that the state agreed to pay.

Thursday’s decision sends the four-year-old dispute between IBM and the Indiana Family and Social Services Administration back to the trial judge in Marion County to work out the details.

The state court ruled 2-1 that IBM failed in its most important task — to provide timely services to Indiana’s needy.

The judges said the state owes IBM nearly $50 million in agreed-upon fees, but not nearly $13 million for terminating the contract early.

The state and the company sued each other in 2010 after then-Gov. Mitch Daniels canceled the $1.3 billion contract.

In arguing its case, IBM referred to then-Gov. Mike Pence and a 2009 press conference in which he said IBM brought 1,000 new private-sector jobs in Anderson and Daleville. At the time, companies that had expanded due to IBM’s contract withe state included a call center in Daleville and an Affiliated Computer Services facility at the Flagship Enterprise Park.

— The Associated Press

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