In a series of events that began with the signing of a very profitable outsourcing deal between the states of Indiana and technology outsourcing company IBM, the big blue is making the state of Indiana and its residents see red. In a series of events that began with the signing of a very profitable outsourcing deal between the state of Indiana and Technology outsourcing company IBM, the deal has now ended up with IBM filing a countersuit against Indiana late lastweek in an affair that began. The deal began with the best intentions in mind from Gov. Mitch Daniels who envisioned that the deal would make America’s worst welfare system better for the people it serves. There was already much talk over the proposed deal. IBM and Accenture were the original contenders and at the time most of the concerns were raised over the two companies.
With the IBM leading a group of ten companies, the IBM and Indiana signed the $1.16 billion deal, the group included now xerox subsidiary. The contract was a ten year agreement to manage and process the state of Indiana’s applications for food stamps, Medicaid and other welfare benefits for its residents. At the automation of the welfare system and software problems that plagued the deal, leading to delays in food stamp processing an d loss of benefits. The problems in the implementation of the contracts had become so numerous. The request called for the cancellation of the deal if and when IBM failed to improve the situation. Fixing the problems would cost Indiana almost $180 million more than the initial cost of the deal.
Indiana announced that they had indeed canceled the deal with IBM, citing failure to act on the proposed improvements to the satisfaction of the state. The Indiana moved on to a hybrid system involving the companies that had worked with IBM on the deal, including ACS eliminating the middle man. IBM meanwhile believed that the states moves were unjustified blaming the recession and a high unemployment for the deal’s performance leading up to the cancellation. In marion, the real ruckus began just last week as Indiana filed a lawsuit for breach of the contact and actions which included denying Medicaid to a cancer patient. The IBM meanwhile was quick to counter with a lawsuit against Indiana, the company is seeking payment owed by the State of Indiana for IBM’s work to revamp and modernize Indiana’s antiquated and a highly inefficient welfare eligibility system. The IBM is no stranger to government contracts.
REFERENCE:
http://www.blog.infinit-o.com/ibm-vs-indiana-big-blue-indiana-red/
