Judge: IBM Owes Indiana $78M After Failed Welfare Privatization

Geronimo Vena
Agosto 8, 2017

The case involves what the state has maintained was a breach of contract by the software provider for welfare system modernization services for the Indiana Family and Social Services Administration.

Marion Superior Court Judge Heather Welch ruled on Friday that IN was entitled to $128 million IN damages for the breach of contract by the company. Welch also said IBM was entitled to almost $50 million in damages for equipment fees and related costs, according to court documents.

A spokesman said in a statement, "IBM worked diligently and invested significant resources in its partnership with FSSA to help turn around a welfare system described at the time by Indiana's governor as one of the worst in the nation".

IBM and IN in 2006 signed a contract under which the company would modernize the state's welfare system. "IBM will appeal this decision which is contradicted by the facts and the law". IBM was seeking back payment once the state pulled out of the deal. The contract was terminated in 2009 after numerous problems and has been tied up in court ever since. "We look forward to the resolution of the lawsuit".

IBM and IN sued each other IN 2010, alleging breach of contract.

It comes after the Indiana Supreme Court ruled past year IBM had breached its $1.3 billion contract with then-Gov.

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