Indiana, IBM Welfare Dispute May Not Be Over

State, Company Mum On Canceled $1.3 Billion Contract

State government and IBM may be headed for a court battle over the canceled contract to run Indiana's welfare system.

Aides to Gov. Mitch Daniels won't discuss the contract issues, and IBM shifted 6News' requests for information from voice mail to voice mail, 6News' Norman Cox reported.

The bulky contract appears to give the state the right to cancel without having to make any penalty payments, stating that "the state may terminate this agreement, in whole or in part, for cause."

But IBM could go to court to challenge whether Daniels has legal cause.

The state plans to go to a hybrid system, using a mix of privately employed personnel and state caseworkers. Advocates for the poor contend that isn't good enough.

"What we need is a system that is a unified system with unified standards that the public can understand," said John Cardwell, head of the Home Health Care Task Force

The Family and Social Services Administration promises to provide more face-to-face contact for clients who want it, but also won't go back to the old system completely and will keep its modernized options.

"If people want to apply on the Internet or on the telephone, they can," said FSSA spokesman Marcus Barlow.

Some applicants said they were badgered to use the modernized options, even though they felt uncomfortable with them or were unable to use them.

"That was one of the problems of modernization, and that's something that we are going to correct in the hybrid system" Barlow said.

Democratic lawmakers are skeptical.

Rep. William Crawford, (D) Indianapolis, said that if the people running the system remain employed by private subcontractors and don't return to their former role as state employees, little will change.

"I'm hopeful, but doubtful," Crawford said.

Daniels' aides said he plans to roll out the new system Dec. 14.