IBM Ordered To Pay Indiana $78M

Posted On August 08, 2017

By Mike Perleberg

(Indianapolis, Ind.) – IBM Corp. must pay Indiana millions of dollars after botching a contract to automate the state’s welfare services.

That ruling was issued Friday by a Marion County judge, who ordered IBM to pay $78 million in damages, The Indianapolis Star reports.

The judgment follows an Indiana Supreme Court decision last year ruling that IBM breached its contract. The justices sent the case back to the trial court to determine the amount of damages.

Indiana and IBM each filed lawsuits in 2010 after then-Governor Mitch Daniels canceled a 10-year, $1.3 billion contract with the company in 2009. IBM was to privatize and automate the processing of Indiana’s welfare applications, but the effort led to numerous complaints.

IBM says it plans to appeal the ruling. The company argues in an email to The Star that it worked “diligently and invested significant resources” toward improving Indiana’s system for processing of welfare applications.