Private company falls short on child support collections

December 03, 1997|By Michael Dresser | Michael Dresser,SUN STAFF

An effort to improve the collection of child support payments in Baltimore by turning the job over to a Lockheed Martin Corp. subsidiary is in danger of falling significantly short of the company's ambitious first-year projections, Maryland legislators were told yesterday.

After six months on the job, Lockheed Martin IMS was only 33 percent of the way to its goal of collecting $80 million in city child support payments during the first year, according to a preliminary report by the state Child Support Enforcement Administration.

Lockheed also is off to a slow start in meeting four other performance goals established in its contract, under which the state will pay the company up to $70 million over three years. Lockheed won the contract last year after projecting collection increases that a rival bidder called "unreasonable and unattainable."

While yesterday's report could give some ammunition to critics of privatization, it also provided some comfort for proponents. Collections in Baltimore by Lockheed employees were up 16.75 percent from November 1996 to April 1997 over the amount collected by state workers during the same period the previous year.

Officials said that increase could be due in part to a new program under which deadbeat parents can lose their driver's licenses. Statewide, collections were up 6 percent for fiscal 1997.

But Clifford Layman, executive director of the child support enforcement agency, said much of the improvement in Baltimore can be credited to Lockheed.

"There were a lot of positive things that happened the first year," Layman said. He told the General Assembly's Joint Committee on Welfare Reform that Lockheed's lagging performance in the first six months was the result of "start-up problems."

Layman said it was too soon to proclaim privatization a success or a failure, and most committee members seemed to agree.

"The general view is that although they haven't met their target, it's too early to judge the ultimate success," said Sen. Martin G. Madden, a Howard County Republican who co-chairs the panel.

The General Assembly authorized the privatization pilot project in 1996 amid widespread dissatisfaction over the state agency's track record in collecting money owed to Baltimore children and their custodial parents. For fiscal 1996, the agency's office in the city collected $54.9 million of the $575.5 million in current and past payments due.

Lockheed Martin IMS, based in Teaneck, N.J., said in its bid that it could improve collection rates by 145 percent over three years. Its closest rival, Maximus Inc. of McLean, Va., projected a 114 percent increase.

Yesterday's report showed that Lockheed collected $26.6 million during its first six months. John Bayne, director of child support services for the company, conceded that the company would not meet its $80 million goal for the year, but predicted it would exceed the $61.8 million minimum required in its contract.

Bayne said he expects that by the end of the year, the company will achieve its goals in other categories in which it is now lagging. Those include establishing paternity and getting court orders directing fathers to make payments.

Pub Date: 12/03/97

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