State of Indiana, Acting on Behalf of the Indiana Family & Social Services Administration v. International Business Machines Corporation

DAVID, Justice.

This case involves a $1.3 billion Master Services Agreement (“MSA”) entered into between the State of Indiana, acting on behalf of the Family and Social Services Administration, (“State”) and International Business Machines, Corp. (“IBM”) to modernize and improve Indiana’s welfare eligibility system. Although the MSA was supposed to last ten years, the State terminated it less than three years in, citing performance issues on the part of IBM. Both parties sued each other for breach of contract.

At issue is whether IBM’s breach of the MSA was “material.” The trial court found…