When Privatization Becomes a Problem / Indiana cut its 10-year welfare-privatization contract short.

By Jonathan Walters, Governing.com December 8, 2009
 

Well it's happened again--another spectacular crash and burn of an information-technology system that was supposed to be the magical answer to a state human services system's performance and cost woes. This time it is Indiana's 10-year $1.16 billion deal with IBM to pre- and re-qualify clients for health and human services ranging from TANF to Medicaid to food stamps. Two and half years into the deal, Indiana Governor Mitch Daniels flipped off the switch, cancelling the contract and sending IBM packing.

....... As the story is told in the general media, it's the classic and predictable bad-guys-in-action story line: Governor Mitch Daniels, conservative Republican, looking to do a little union-busting, decides to turn over a significant portion of the work done by the state's Family and Social Services Administration (FSSA) to IBM. As part of the deal, hundreds of former public employees are summarily shifted over to IBM, where they serve as at-will employees, outside of the state's public employee collective bargaining system.