Indiana agency, IBM sue each other over canceled $1.3 billon deal to automate welfare system

Indiana agency, IBM sue each other over $1.3B deal

INDIANAPOLIS — IBM Corp. and Indiana’s human services agency are going to court over how much the company is owed for work it did to automate the state’s welfare application system before being fired.

Both sides announced that they filed lawsuits Thursday in Marion Superior Court. That comes a day after Family and Social Services Administration Secretary Anne Murphy said the state had rejected some invoices submitted by IBM Corp. and had asked for some money back.

Gov. Mitch Daniels canceled IBM’s 10-year, $1.34 billion contract to run welfare intake last October.

IBM says it is owed nearly $53 million in fees and equipment expenses under the 2006 contract. The state says in its lawsuit that it has paid $437 million to IBM and has received “minimal value” in return.