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Mich. won't pay Xerox due to food stamp glitch

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LANSING, Mich. -- Michigan will withhold money from Xerox Corp. because a technical problem crashed the state's debit card-style food stamps program, a state spokesman said Tuesday.

People in 17 states from Alabama to California found themselves temporarily unable to use their food stamp cards on Saturday morning, after a routine test of backup systems by Xerox sparked technical problems that shut down the states' electronic benefit transfer, or EBT, systems. Xerox said access was restored for all users late that day.

Michigan is within its rights to withhold 15 percent of the October bill due to "vendor non-compliance," Department of Human Services spokesman Dave Akerly told The Associated Press.

The state's contract "requires Xerox-ACS to maintain 99.9 percent access, and they failed to meet this," Akerly said in an email.

The specific amount that won't be paid is unclear because Michigan hasn't gotten the monthly invoice yet. But if the tab is similar to the September bill, Xerox could lose out on $80,000.

"It depends, because each month the figures change based on transactions and usage," Akerly said. "We won't know the actual billable figure until Nov .1." He said the invoice for September was about $534,000.

The issue began after a routine test of backup systems by Xerox resulted in a system failure. The U.S. Department of Agriculture said the outage was unrelated to the government shutdown.  

An email message seeking comment was sent to Xerox spokespeople after business hours Tuesday. The company earlier expressed regret in a posting on its website.

"We appreciate our clients' patience while we resolved this issue and apologize for any inconvenience," the statement said. "We realize that access to these benefits is important to families in the states we serve. We continue to investigate the cause of the issue so we can take steps to ensure a similar interruption does not re-occur."

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