Governor Mitch Daniels has sure put the state of Indiana in a fine mess.
As you recall, back in December of 2006, ignoring a loud chorus of critics and failing to learn from other states (Texas and Florida) where similar efforts had failed, Mitch Daniels stubbornly decided to forge forward with an enormous, 10-year, $1.16 billion deal with IBM Corp. to upgrade the state’s paper-based welfare application system to a system using a statewide call center and online document processing.
Part of this new plan was to shift 1,500 of the agency’s 2,200 caseworkers to the private sector, and in doing so, the Governor ignored the numerous critics who argued that outsourcing such a critical government function was a mistake.
Turns out, the critics were right all along. The supposed new and improved system was fraught with errors and riddled with problems from the beginning.
The list of headaches were lengthy and included issues with the processing of food stamps, bugs that repeatedly wreaked havoc with the system, and a lawsuit filed by The American Civil Liberties Union alleging that disabled Hoosiers were being denied benefits improperly.
Here’s more from the AP, via The Republic -
In its lawsuit, the Indiana Family and Social Services Administration is seeking to recover $437.6 million it paid IBM through Jan. 31, plus the costs of any third-party lawsuits, federal penalties and state employee overtime incurred as a result of the deal. The state is seeking triple damages, or more than $1.3 billion.
Armonk, N.Y.-based IBM countered with its own lawsuit, asking for $52.8 million in deferred payments and equipment costs that it said the state still owes. IBM said it followed the state’s instructions, but the contract designed by the Daniels administration didn’t allow for the economic downturn that created tens of thousands of new welfare applications.
Both lawsuits were filed in Marion County courts last Thursday.
But the lawsuits are not the first to result from the IBM contract. Carmel attorney Scott Severns has a federal class-action lawsuit pending in Indianapolis seeking to bar the state from cutting off aid to people while they appeal the decisions to deny them benefits.
“It’s certainly refreshing to see the state stating clearly what happened. If we had had that kind of transparency three years ago we could have avoided a lot of this,” Severns said, noting that only one public hearing was held just days before Daniels signed the deal. “It was tragic for the people who were affected by it.”
What a fine mess you’ve created, Governor Daniels.
It is clear that that both IBM and the State of Indiana have made mistakes in this nightmare of a deal. The greatest of which was how the Governor repeatedly refused to listen to critics and heed warnings signs which showed that this was a terrible deal to begin with.