Troubled by the failure of Lockheed-Martin IMS to meet child support collection goals, state officials said yesterday they will not extend the firm's contract when it expires in October.
The Lockheed Martin Corp. subsidiary has been collecting child support payments in Baltimore City and Queen Anne's County since 1996.
Last year, it collected $63.1 million in Baltimore -- far short of the $110 million it promised in its agreement with the state.
The Maryland Department of Human Resources has imposed a $407,000 penalty on the company for failing to meet its own collection projections.
Company officials have blamed their failure on faulty data the state provided when it put the contract out for bid.
The state had the option of extending the contract for a fourth year but has decided not to do so, Human Resources Secretary Lynda Fox said yesterday.
Instead, if the General Assembly agrees, the agency will seek bids for a new contract, she said.
"We are disappointed that [Lockheed] did not achieve the goals that they proposed," Fox said. "It's always going to be challenging to collect child support in major urban centers. We have some ideas on how to do a better job in the future."
Fox said she expects "multiple vendors" to bid on any new contract, adding that nothing would preclude Lockheed from bidding if it chooses.
John R. Stierhoff, a Lockheed lobbyist, said the company might be interested.
"We will make a decision once the request for proposals is issued on whether or not to bid on it," Stierhoff said. "The legislation changes the way payments would be made to a contractor, among other things, which means they recognize there was a problem."
Fox said any new contract would include different standards for measuring performance and a different method for compensating the vendor that is not tied so heavily to the amount of child support payments it collects.
The General Assembly authorized the current contract to learn whether a private company could collect more child support money at a comparable cost than state workers.
In the year before privatization, state workers collected $55 million in Baltimore and $2.2 million in Queen Anne's County, state officials said.
In the first year of privatization, Lockheed collected $61.9 million in Baltimore, $18.1 million short of its $80 million goal. It collected $2.3 million in Queen Anne's, about $500,000 less than it had projected.
In the second year, Lockheed collected $63.1 million in Baltimore, missing its goal of $110 million by $46.9 million.
In Queen Anne's, the company collected $2.5 million, about $700,000 less than projected.
Audrey Rowe, a Lockheed senior vice president, and other company officials have said they are proud of the company's performance.
They said they collected more money for more children than the state collected when it ran the system. Their collection goals were off-target because they were based on inaccurate data Lockheed got from the state, company officials said. They also said collection efforts were hampered because of problems with the state's computer system.
The Associated Press contributed to this article.
Pub Date: 3/04/99