Judge: Indiana Owes IBM For Welfare Overhaul Equipment

The judge who heard counter lawsuits filed by the state of Indiana and IBM says neither party deserved to win.

IBM Headquarters

Photo: Simon Grieg (Flickr)

IBM and the state of Indiana sued each other over a cancelled contract IBM had to process welfare applications.

A Marion County Judge has ruled today Indiana owes IBM $12 million, mainly to cover equipment that was left in the state’s possession after the company cleared out following cancellation of its contract to modernize the state’s computerized welfare system.

In his ruling, Judge David Dreyer says neither party deserved to win the suit.

Previously the judge had ruled the state owed IBM $40 million for subcontractor fees. In his most recent ruling, Dreyer calls the case a “perfect storm of misguided government policy and overzealous corporate ambition.”

Governor Mitch Daniels says the state will seek and expect a reversal of Dreyer’s decision, and the state budget office says even if the ruling stands, it won’t affect the state’s budget surplus.

Daniels cancelled the ten-year IBM deal in 2009, saying there were too many problems with the new system.

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