When a private company took over the state's child support enforcement program in Baltimore in November 1996, it promised a sharp rise in collections and better service for everybody who deals with the system.
Now, Lockheed Martin IMS faces a $407,845 penalty, for failing to meet its collection goals, along with complaints that problems with child support enforcement are worse than ever.
The problems come as Lockheed Martin IMS is trying to persuade Gov. Parris N. Glendening and the state legislature to grant a one-year extension of its three-year contract.
Its parent company, Bethesda-based defense contractor Lockheed Martin, is among the corporate sponsors of Glendening's Jan. 20 inaugural ball, paying $10,000 for a table.
Lockheed Martin IMS Vice President Audrey Rowe said the state, not Lockheed, is to blame for many of the problems.
"I think we have done a good job of making the Baltimore City operation a better operation in spite of all the hurdles that have been thrown at us from day one," said Rowe.
The Teaneck, N.J., company is getting more money to more children more efficiently than the state did, she said.
But dozens of parents who depend on child support, those who pay it and current and former Lockheed workers say the system is far from efficient.
Among the problems they point to:
Staff cuts by Lockheed have strained operations. Of 330 state workers who transferred to Lockheed, 170 remain as part of a staff that numbers 220. Current and former staffers say longtime staff members often are replaced with lower-paid "welfare-to-work" employees who are poorly trained and have no experience dealing with difficult problems that arise in child support cases.
Parents who depend on child support say Lockheed is often slow in getting checks to them.
"It's a constant problem," said Catherine T. Crook, a hospital secretary who relies on child support to pay household bills. "To me, it's like a paycheck. Imagine if your paycheck wasn't there every week."
Clients with complaints frequently get busy signals when they call, are put on hold for long periods and, if they do speak with someone, often find that the person is unable to solve their problem.
"Lockheed is very, very frustrating to a lot of people," said Rachmiel Tobesman, state president of Fathers United, an advocacy group for noncustodial parents. "You can never get hold of anyone to deal with issues."
The company, paid about 20 cents for each dollar it collects, focuses on getting more money in. Cases requiring attention "drop into a black hole" unless the people affected by them get a political official to intervene, said Cecilia White Matthews, a former supervisor with the state who resigned from Lockheed in October.
"Most people don't know to take it to the next level," she said. "They get frustrated and give up. The quiet customers stay at the bottom of the pile."
Rowe, the Lockheed vice president, said those problems are exaggerated by opponents of privatization and disgruntled former public employees who could not adjust to the private company's higher performance expectations.
"What gets me frustrated is, we're doing a damn good job in this city," Rowe said. "Those out to destroy public-private partnerships throw up a small number of cases and try to say we're not doing it right."
She said many problems stem from a conversion in March to a new state computer system. With 126,807 accounts to transfer -- Baltimore has about 40 percent of child support cases in Maryland -- the conversion was a huge task, disrupting operations and sometimes preventing timely payments.
By late April, $3.1 million remained undistributed. Rowe said the backlog has been whittled to less than $725,000. (The company earns no interest on the money.)
State officials say state-run offices have had similar problems with the computer conversion. Clifford P. Layman, who heads the state Department of Human Resources' child support enforcement division, said the state-run enforcement offices are not having as much trouble as Lockheed is.
"The problems are in their system right now, as far as I'm concerned," Layman said, attributing most problems to the network linking Lockheed's offices and the state's mainframe computer.
Crook, the hospital secretary, said that as Thanksgiving approached, she needed money, not excuses. Unable to give Crook her check, Lockheed gave her a $25 gift certificate for a local supermarket.
Other mothers have related similar problems. "It's never been a smooth ride, but the problems really escalated when Lockheed Martin took over collections," said Kathleen Kunziman. She said the company mishandled her case and cost her $1,800.
Some fathers paying child support are also frustrated.
'A no-win situation'
Dominic J. Bonomo got a call in May from an attorney telling him that his child's mother had received no payments since his monthly support was increased by the courts Feb. 1.
Bonomo, who works for a Baltimore auto dealership, faxed the lawyer copies of his canceled checks and called Lockheed, which told him he was due a refund of $516.
"I told them not to send a refund because my account balance should be zero," he said.
Six weeks later, Lockheed informed him that his account was $1,860 in arrears and threatened him with suspension of his driver's license and court action.
In the next few months, calls and a visit to Lockheed's offices yielded a promise that officials would review his case and that his case had become mixed up with someone else's.
In late October, after being notified that his state and federal tax refunds would be intercepted, Bonomo talked to a caseworker who said she had discovered miscalculations in his account and determined that he owed $490, not $1,860.
"I said, 'That's not acceptable, I do not owe that.' She said she could not bring an account to zero without a supervisor's approval. That's telling me it's a no-win situation," he said.
Early last month, one day after The Sun asked Lockheed about his case, Bonomo got a call from a company representative -- followed by a letter -- saying he owed nothing and his tax refunds would not be intercepted.
Several current and former Lockheed workers said experiences such as Bonomo's are not unusual because the company puts a priority on collecting money, not on seeing that problems are resolved.
"If you come in with a problem that's not going to generate any money, they don't want to hear from you," said Matthews, the former supervisor. "Each one of those cases represents someone's life, and you can't just say it's not cost-effective to deal with them."
Lockheed officials say they receive about 500 complaints a month, less than 0.5 percent of their more than 100,000 cases. But current and former workers say the complaints are more frequent, and some take their complaints elsewhere.
Joan Kennedy, an aide to state Sen. George W. Della Jr., a Baltimore Democrat, said she spent as much as 25 percent of her time dealing with child support complaints over the past year.
"The biggest thing is [Lockheed's] lack of responsiveness," Kennedy said. "People shouldn't have to call their senator to get their child support."
Layman, the state's enforcement director, said his office also hears from disgruntled parents. "We've gotten 350 complaints in writing the past 12 months and probably three times that in calls," he said.
The complaints come as Lockheed is trying to persuade legislators to extend its contract for a year. Without the extension, child support collections would revert to the state.
Among other things, lawmakers will have to sort out conflicting claims by Lockheed and the Department of Human Resources about the company's failure to meet its collection goals.
During the first year of its contract, the company fell almost $18 million short of the $80 million it promised to collect in Baltimore. In its second contract year, which ended Nov. 1, it collected about half of its $120 million goal.
Lockheed was paid $14 million for its first-year efforts, based on the $62 million it collected and distributed in Baltimore. The company also earned $220,417 for running the smaller child support program in Queen Anne's County, where collections totaled about $2 million.
Rowe said the company based its goals on information from human resources officials about the number of cases, the amount of money available for collection and collection records.
Much of that information turned out to be inaccurate, she said, which Lockheed cites in challenging the $407,845 penalty the department wants to impose on the company for failing to meet its first-year goal.
No penalty has been proposed for its second-year shortfall.
Layman disputes Lockheed's contention that the numbers were incorrect, saying the agency gave bidders the most accurate information available. An independent consultant is reviewing the dispute.
Though Lockheed failed to meet its goal, state officials say it increased collections in Baltimore by almost 15 percent its first year, from less than $54 million to $62 million. Lockheed says it increased collections by 20 percent.
Human resources officials say the state probably would have done at least as well because of new enforcement tools, such as a law that allows the state to suspend the driver's licenses of parents who fall more than two months behind on payments.
The license suspension program accounted for more than half of the 15 percent increase in child support collections during Lockheed's first contract year, Layman said.
Statewide, child support collections totaled $324 million from Nov. 1, 1996, to Oct. 31, 1997, which covers the same period as Lockheed's first contract year. Collections were about 7 percent higher statewide than in the same period the previous year.
Lockheed has not had access to the license suspension program since the conversion to the new state computer system in March because problems in converting case files had to be fixed
Lockheed officials say the lack of that enforcement tool has cost the company about $900,000 a month in lost collections. The company is expected to resume using the program this month.
'Give me a fair year'
"The only thing I'm asking [legislators] for is to give me a fair year to show you what we can do," Rowe said. "We can demonstrate clearly that privatization can be successful in Maryland."
Layman, who told a legislative panel in November that he considered Lockheed's performance "disappointing," said his department is prepared to do the job if legislators decide to end the experiment in privatization.
"Do I think we could go in and do a better job next year?" he asked. "Absolutely."
Pub Date: 1/10/99