Firms downplay local impact of canceled IBM contract

Discussion

October 18, 2009

By Dave Stafford, Herald Bulletin Staff Writer The Herald Bulletin Sun Oct 18, 2009, 07:07 PM EDT

ANDERSON — Companies in Anderson and Daleville that expanded two years ago when IBM won a contract to privatize Indiana’s welfare system downplayed local effects after the state canceled the deal.

An IBM call center in Daleville and an Affiliated Computer Services facility at the Flagship Enterprise Park had expanded as part of an IBM pledge to create 1,000 jobs in exchange for getting a $1.34 billion contract to handle welfare applications and provide other services for the Family and Social Services Administration.

“There’s no impact and it’s business as usual,” Affiliated spokesman Ken Ericson said. He said no work done at the Anderson office was related to the welfare contract. He declined for proprietary reasons to discuss clients served by the company’s local office.

Similarly, IBM spokesman John Buscemi said, “The Daleville call center does not handle FSSA work.” Asked whether the cancellation of the contract would have an impact on workers in Daleville, he said, “I have no information on that.”

Neither Ericson nor Buscemi would provide employment figures for the Anderson ACS facility nor the Daleville IBM center. However, both firms announced the addition of hundreds of jobs amid fanfare at or around the time IBM was awarded the state welfare contract.

Indiana Gov. Mitch Daniels announced on Thursday that he was canceling IBM’s contract because he said the company had not followed through on promised improvements. Problems included lost documents, delays in benefit approval and poor service.

IBM’s contract included automating applications for food stamps, Medicaid and other welfare benefits.

Buscemi said IBM had improved the system, which he said Daniels had criticized as the nation’s worst when he took office. The IBM spokesman said the recession had led to an unanticipated spike in applications, and that other unforeseen problems had beset the ambitious project.

“IBM rejects the state’s claim and believes state’s action is unjustified,” he said. “We’ve significantly improved the Indiana welfare agency.”

In a press release that announced 200 jobs being added at Anderson’s Affiliated Computer Services in September 2007, Daniels said, “This fulfills the commitment made by IBM last year that the company and its partners would create 1,000 jobs for Hoosiers if selected to help us fix the state’s welfare system.”

Contact Dave Stafford: 648-4250, dave.stafford@heraldbulletin.com

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Firms downplay local impact of canceled IBM contract

Gov. Mitch Daniels says it is "very improbable" that the Republican nominee for president would choose him as the running mate. As a running mate, would Daniels help the Republican ticket in the November election?

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