Child-support collection company for the city is not meeting its goal Contractor blames failure on faulty information provided by the state

November 11, 1998|By Greg Garland | Greg Garland,SUN STAFF

A private company brought in to increase child-support payments in Baltimore is failing for the second year to meet collection goals that it promised the state to win the contract, a legislative panel was told yesterday.

Officials of Lockheed Martin IMS said they expect to collect a little more than $60 million in Baltimore -- far short of the $110 million they had forecast for the second year of the company's three-year contract.

Audrey Rowe, a senior vice president of the subsidiary of Lockheed Martin Corp., blamed the problems on faulty data the state provided when it put the contract out for bid in 1995. She said that led to unrealistic collection goals that now need to be renegotiated.

Rowe told the General Assembly's Joint Committee on Welfare Reform that the state's request for proposals "overstated the actual number of child-support accounts that were open and available for collection by well over 80 percent."

The state had said there were 202,000 child-support accounts in the city, Rowe said, but the number turned out to be 108,000. She also said that back payments owed and available for collection totaled $317 million, not $479 million as the state had said.

Rowe said the company would not have bid as it did if it had had accurate information.

But Clifford Layman, executive director of the state Child Support Enforcement Administration, said the state gave Lockheed Martin and other bidders the best, most accurate information that was available.

Layman told committee members the privatization effort has been "disappointing" and that the state "would have done at least as well as Lockheed Martin" in collecting child-support payments in Baltimore.

Lockheed Martin IMS also fell short of its first-year performance objective of collecting $80 million. The company collected $54.9 million for that contract period, which ran from Nov. 1, 1996, through Oct. 31, 1997.

The state has notified the company that it intends to assess a $407,845 penalty for failing to meet the performance standard. The firm is challenging that based on what it says were faulty state data.

Layman said an independent consultant has been hired to review the dispute over the figures. The consultant will advise Department of Human Resources Secretary Alvin C. Collins on the issue within the next few weeks, he said.

Sen. Martin G. Madden, chairman of the joint committee, said legislators decided to experiment with privatizing child-support collections in Baltimore because the state's track record had not been good.

He said the consultant's report should help sort out the conflicting claims and give legislators a clearer picture of whether the privatization effort should be continued.

"At this point, the jury is still out as to whether the pilot program has been a success or not," Madden said.

He said the General Assembly will have to decide during next year's legislative session whether to continue with the privatized service. He noted that the law setting up the three-year pilot project expires June 30.

Pub Date: 11/11/98

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