11/25/13 Brandon Smith

IBM Case in Appeals Court

Tech giant IBM says Indiana canceled its contract for the company to run the state s !elfare system "ecause Indiana didn t li#e the system it as#ed IBM to use$ Indiana %u"lic Broadcasting s Brandon Smith reports on Monday s arguments in the Indiana Court of Appeals& IBM Case in Appeals Court OUT:SOC TRT: 0:00

Indiana signed a 1'(year contract !orth more than a "illion dollars !ith IBM in 2'') for the firm to moderni*e and manage the state s !elfare system$ That moderni*ation included a shift a!ay from human case !or#ers to a system more reliant on technology and automation$ But three years in+ ,o-ernor Mitch .aniels canceled the contract+ saying the system had "een!as "eset "y pro"lems$ The state and IBM ha-e since sued each other+ see#ing lost costs and damages$ Attorney /ay 0ef#o!it*+ !ho represented IBM+ says the company deli-ered e1actly !hat Indiana as#ed for& LEFKOWITZ11 !1" t&at' TRT: :1# OUT: $a rea%tion to

This was not a failure of implementation; it was a failure of design. The state recognized that it wanted this very modern system where you eliminated all human element, all human contact and do everything through the computers. And then there was a reaction to that. But attorney %eter 2ustho-en+ representing the state+ says the contract allo!ed IBM to s!itch gears and use a system that "lended case!or#ers !ith technology 3 the #ind of hy"rid system the state uses no!& RUST(O)E*11 !1" pro-i.in/' TRT: :0+ OUT: $%ost o,

Providing the human dimension was something they didnt want to pay the e tra cost of providing. A Marion County 4udge ruled in IBM s fa-or earlier this year$ The Appeals Court did not set a timeta"le for its ruling$ 5or Indiana %u"lic Broadcasting+ I m Brandon Smith$