Company Hired To Collect State's Child Support Payments Will Receive $5.5 Million Raise

Systems and Methods Incorporated (SMI) was hired to collect child support as part of the state's newcentralized system.

Thestate Department of Health and Human Servicesnow says it underestimated what it costs to do the job. The department plans to pay the company an additional $5.5 million.

"That's a real bargain for the state of North Carolina because other states are paying much more," says Lois Nilsen of Health and Human Services.

North Carolina had two qualified bidders to create a central child support system.

Lockheed Martin IMS, which had experience in 16 similar projects, bid $29.5 million. SMI, which was new to the child-support business, bid $20.8 million. SMI won the bid, but Lockheed protested. The company claimed SMI underestimated the staff and equipment it would take.

The state says, in exchange for more money, SMI will do more to research lost checks.