Supreme Court to consider IBM welfare privatization case

The Indiana Supreme Court has agreed to hear the dispute between the state and IBM over the failed attempt to privatize public welfare services under former Gov. Mitch Daniels.

IBM and Indiana entered into a 10-year, $1.37 billion contract in 2006, which was hailed at the time as the solution for fixing one of the nation’s most-troubled welfare systems. The state, though, canceled the contract three years later after a flood of complaints about the system from clients, their advocates and federal officials.

At the time, the state had paid $437 million to IBM.

The two sides sued each other for damages. In 2012, a Marion Superior Court judge awarded $52 million to IBM.

In February, though, the Indiana Court of Appeals reversed the ruling and ordered a determination of damages suffered by the state. Indiana was seeking $177 million in a breach-of-contract countersuit against IBM.

The Indiana Supreme Court announced Friday it would take up the case.

Justice Mark Massa recused himself. Massa was general counsel to Daniels from 2006-10.

Call Star reporter Chris Sikich (317) 444-6036. Follow him @ChrisSikich.