IBM and Indiana caught in $billions contract row

IBM wants to have an Indiana governor deposed after a row about contracts in the billions.

Gov. Mitch Daniels cancelled a contract worth $1.37 billion. The hefty 10 year contract was rubbished after just three years because Daniels thought the automated system wasn’t up to scratch. In May last year, the state attempted to sue IBM to claw back the $437 million it spent on the system.

The Indiana Family and Social Services Administration claims IBM breached one of the largest outsourcing deals in Indiana history and is suing for over $1.3 billion – however, IBM wants the state to hand over $50 million it is owed in deferred payments and equipment.

Although the modernisation was deemed unsuccessful, IBM says that Daniels should give a deposition because he was at the heart of the project, reports the Indy Star.  

But Indiana says that government officials are not usually involved in lawsuits – unless they’ve been engaging in personal misconduct.

The next hearing is set for 15 April. The state says depositions would be “unnecessary and burdensome”. But a 150 year old Indiana law, says the Chicago Tribune, means Daniels does not have to provide testimony, though IBM insists it only refers to subpoenas and civil arrests.