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Trial over Indiana welfare overhaul begins Monday

Last updated on Monday, February 27, 2012

(INDIANAPOLIS) - Opening arguments could come today in the civil trial over Indiana’s cancellation of a billion-dollar contract to overhaul the state’s welfare intake system.

The trial is set to begin today in Marion Superior Court in Indianapolis.

The Indiana Family and Social Services Administration is suing IBM for $437 million, the money it paid IBM to introduce call centers, document imaging and other automation to applications for food stamps, Medicaid and other public assistance programs. Governor Mitch Daniels fired IBM for breach of contract in 2009, less than three years into the 10-year-deal, amid complaints of lost documents, lengthy hold times for the call centers and improperly denied benefits.

IBM's countersuit says the state still owes the company about $100 million in deferred payments and equipment costs.

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