STATE TO DUMP CHILD-SUPPORT COMPUTER SYSTEM.

Byline: Paul Hefner Daily News Sacramento Bureau

Unable to salvage another runaway technology project, state officials agreed Thursday to abandon a floundering $300 million effort to computerize California's child support collections system.

The state formally severed a contract with Lockheed Martin Inc. to develop, operate and maintain a system that officials contend has been plagued by technical problems and cost overruns.

``We are abandoning development - terminating development - of this software product,'' Russell Bohart, director of the Health and Welfare Agency Data Center, told lawmakers at a hearing on the issue.

Because Los Angeles County was treated separately under federal law that requires computerizing child-support collections, the Los Angeles system, also developed by Lockheed, wasn't part of the Statewide Automated Child Support System. The systems were designed to share data, said Wayne Doss, who oversees child support for the Los Angeles County District Attorney's Office.

The state will have to start virtually from scratch to build a new system - with little to show for $99 million spent so far. In addition, California will face financial penalties for missing an Oct. 1 federal deadline for having a project up and running.

Congress will likely take up the issue early next year of how to penalize the 18 states that missed the deadline, officials said.

Doss said Los Angeles County could suffer the financial penalty along with the state's 57 other counties. He said the cost of the penalty could be passed on to all the state's counties - even though Los Angeles County met a separate deadline for installing its own computerized system in 1995.

``We clearly feel, in L.A. County, that we did our part,'' Doss said. ``We will work to ensure we don't suffer any undue penalty.''

As problems with the state system have mounted, so have projected costs. Initial estimates called for spending $99 million, but the latest estimated price tag stands at more than $300 million.

Lockheed Martin received $47.3 million for the system before the state suspended payments. Company and state officials will allow an arbitrator to decide how much more, if anything, the state should pay.

In addition to the payments to Lockheed, agencies have spent about $50 million more on hardware and equipment. Officials said they hope some of that expense, perhaps 20 percent, can be used when a new system is developed.

The failure puts at risk the state's entire $4 billion welfare block grant from the federal government, but officials said they believe the sanctions will ultimately be much less severe.

Child welfare advocates said that problems installing the system across the state have hampered collection efforts and deprived many children of support. Officials estimate that only about 32 cents of every $1 owed in child support is collected in the state.

``We continue to run one of the poorest child support enforcement systems in the nation,'' said Leora Gerschenzon of the National Center for Youth Law. ``This process has kept us at the bottom.''

Only 17 counties use the state system. Several have pulled the plug, declaring the system hopelessly flawed.

Some agencies still using it have reported a wide variety of problems, from trouble printing forms to ``flying data'' - information that belongs to one case popping up with another, officials said.

Lockheed executives said the principal problem isn't with hardware or programs, but with working within the confines of a technologically obsolete federal mandate.

Julie Sgarzi, a senior vice president for Lockheed Martin IMS, also said the counties - each with slightly different ways of operating collection systems - also differ on how the computer system should work.

``You can always make software work,'' Sgarzi said. ``The question is what do you want it to do? How do you want it to operate and function?''

She said her company offered state officials a plan for upgrading and improving the system but got turned down. Instead, the company will provide temporary service to counties already using the system at a cost of up to $11 million.