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3/23/2011
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IBM Seeks To Depose Indiana Governor

Big Blue wants to grill Republican Mitch Daniels over his decision to cancel outsourcing contract.

IBM has asked a judge to order Indiana governor Mitch Daniels to make himself available for a deposition in a lawsuit over the state's outsourcing contract with the tech services giant, which Daniels terminated in 2009.

Daniels' "refusal to be deposed and his attempt to hide public documents casts doubt on his credibility," an IBM spokesman told the political blog Talking Points Memo. "He expects transparency and openness from everybody but himself," the spokesman said.

Daniels' office didn't comment.

IBM and the state of Indiana last year filed claims and counterclaims against each other in an Indianapolis courthouse over the deal, under which IBM was to have modernized the state's aging welfare administration system. Indiana fired IBM as the primary contractor in October 2009 and now wants Big Blue to pay back hundreds of millions of dollars to make up for its "failed performance," according to the state's complaint.

For its part, IBM has said the work it did on the initiative improved service to residents, and saved Indiana millions through operating cost reductions and curtailment of fraud. IBM said it also brought 1,000 new jobs to Indiana. It wants the state to surrender $53 million it says it's still owed on the contract.

Indiana's Family and Social Services Administration tapped IBM in 2006 for a ten-year, $1.3 billion revamp of the creaky systems it was using to process applications for Medicaid, welfare, food stamps, and more than 160 other public assistance programs. IBM was also to handle a number of back office functions related to the services.

The arrangement called for about 1,500 state employees to be transferred to IBM.

Indiana's welfare administration had been overly reliant on outdated client-server technology and time consuming face-to-face meetings with benefits applicants and recipients.

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