IBM owes Indiana $78 million over failure to automate welfare benefits

(Photo supplied/IBM)

INDIANAPOLIS (AP): A judge has ruled that IBM Corp. owes Indiana $78 million in damages stemming from the company’s failed effort to automate much of the state’s welfare services.

The Marion County judge’s ruling Friday came nearly six months after hearing arguments in the case. The ruling was published Monday.

Indiana and IBM sued each other in 2010 after then-Gov. Mitch Daniels cancelled the company’s $1.3 billion contract to privatize and automate the processing of Indiana’s welfare applications following numerous complaints. The Indiana Supreme Court ruled last year that IBM breached its contract.

The justices affirmed a lower court’s award of nearly $50 million to IBM in state fees, but that ruling allowed Indiana to seek more than $172 million in damages from IBM.

IBM is planning an appeal. The company says the court’s ruling is contradicted by “the facts and the law.”

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