I have read only about five of the ninety-three pages of the opinion, but the Court of Appeals has partially reversed the trial court (pdf) in the State v. IBM litigation over FSSA “modernization.” The Court of Appeals said that IBM is still entitled to about $50 million in assignment and equipment fees. But, the Court of Appeals reversed the trial court, holding that IBM did breach its contract to the FSSA, with the matter being remanded to the trial court to figure out the damages from the breach. The damages will be offset against that $50 million in favor of IBM.
Per the Court of Appeals:
While IBM’s software, computers, and employee training aided in delivering welfare services, the primary focus of the contract was to provide food and medical care to our poorest citizens in a timely, efficient, and reliable manner within federal guidelines, to discourage fraud, and to increase work-participation rates. In the most basic aspect of this contract — providing timely services to the poor — IBM failed. We therefore reverse the trial court’s finding that there was no material breach.
In the State’s defense, it’s not like anyone else saw anything bad coming down the line.
My skeptical sense of the matter was that reducing payouts by inhibiting the delivery of timely services to the poor was more of a feature than a bug to those who were not excited about being obliged to provide those services in the first place.
A few days ago, Sheila Kennedy posted a discussion entitled “Hollow Government”, in which she discussed the consequences of too aggressively privatizing government services. I am afraid that our politicians will need their noses rubbed in this sort of thing: privatizing as ideology, followed by the discovery that people can die when you do that, followed by a sudden pullout, followed by law suit with various consequences but lots of money down the drain. Charters, vouchers and all the rest are in line for more waste and bad news. As Sheila pointed out, engaging in this sort of irresponsible behavior doesn’t make government smaller. It just makes it less visible, but some lessons come late and hard. Politicians seem to learn even more slowly when they carry a stubborn political ideology, but we all pay for their unwillingness to learn.