(UNDATED) - Governor Daniels has terminated an IBM-Led Consortium's contract to assess who's eligible for welfare benefits.
Opponents have charged for two years that IBM was taking too long to make determinations, and often denying applications that should have been approved.
Daniels isn't backing off his description of the old state-run system as the worst in the nation, but says IBM's attempt to replace face-to-face applications with a call center and online access backfired.
The governor says without a caseworker to guide clients through the maze of regulations and required paperwork, many applications bounced back as incomplete, leaving the system almost as riddled with delays and errors as before.
And Daniels says IBM's decision to break down the process into assembly-line-style component parts snarled the bureaucracy instead of streamlining it.
The state will return to face-to-face meetings at local welfare offices.
An outside subcontractor will still take the applications in what Daniels terms a "hybrid" system, but the Family and Social Services Administration will now oversee the process.
Then-FSSA Secretary Mitch Roob Froze the phase-in of the system last year as reports of delays and errors mounted.
59 counties had switched to the IBM system.
Democrats and organized labor had blasted the privatization plan from the start, predicting a for-profit company would be looking for reasons to deny applications.
In recent months, some republican legislators in areas where the transition had taken effect had joined in the criticism, and lawmakers in both parties had explored ordering a freeze or cancellation of the contract.
Daniels says the problem wasn't the use of a private firm, but a flawed plan from IBM.
Have a question or comment about a news story? Send it to firstname.lastname@example.org