IBM-Led Team Inks $1.16B Pact in Indiana

DATELINE: INDIANAPOLIS

Indiana would pay an IBM Corp.-led team $1.16 billion over 10 years for help upgrading programs for food stamps, Medicaid and welfare but would retain state control over eligibility decisions under a reform plan made public by Gov. Mitch Daniels on Wednesday.

IBM also would create 1,000 new jobs in Indiana over four years including 850 in the first two years and provide more than $8 million in computer equipment and services to the state.

The Family and Social Services Administration also would spend $500 million internally on the plan.

The Daniels plan envisions improving the delivery of the public safety-net benefits system received by one in six Hoosiers by making it easier to apply through the Internet and telephone call centers. It also aims to use computers to drive the process with self surveys, instead of time-consuming interviews, to ease case workers' paperwork and reduce error and fraud.

The proposal still needs approval from federal officials who oversee the benefits distributed to about 1 million children and needy, elderly and disabled Indiana residents. However, administration officials were confident they would gain that approval and begin the changes by late spring in a phased rollout expected to cover the entire state by late 2008.

IBM also would provide hardware, software and three researchers to upgrade a supercomputer on the Indiana University campus in Bloomington. Purdue University would share ownership of the upgraded supercomputer, which also would serve Indiana's life sciences industry.

IBM also would establish a $2 million technology center on the Bloomington campus that could foster Indiana economic development. The IBM-led team also includes Dallas-based Affiliated Computer Services Inc.