IBM, Indiana agree to mediation in welfare contract dispute, pick mediator for Feb. 25 session

INDIANAPOLIS – IBM Corp. and the state of Indiana are turning to mediation in hopes of settling their dispute over IBM’s failed attempt to privatize Indiana’s welfare services.

A Monday court filing with the Indiana Supreme Court says the two parties have agreed to mediation and have chosen a mediator who is scheduled to hear their differences Feb. 25.

The state Supreme Court suggested that the parties consider mediation last month, days after hearing oral arguments in the welfare-privatization case.

In 2009, then-Gov. Mitch Daniels cancelled IBM’s $1.3 billion state contract to automate much of Indiana’s welfare system amid complaints from welfare clients about long wait times, lost documents and improper rejections.

Indiana and IBM countersued each other after the contract was terminated less than three years into the 10-year deal.