Millions at Stake in S.C. Contract Fight Over Child Support System

7:29 PM, Oct 21, 2013   |    comments
  • Share
  • Print
  • - A A A +

By Robert Kittle

South Carolina is the only state that doesn't have a working child support enforcement computer system that was required by federal law in 1997, and a hearing that started Monday is shedding light on why.

The state and Hewlett Packard are in a contract dispute over who's responsible. That dispute is being heard by the state's chief procurement officer. The hearing is expected to last five weeks.

The state says HP didn't put enough staff on the job and missed important testing deadlines. Marcus Manos, one of the attorneys representing the state Department of Social Services, said in opening remarks, "This case is a story about how those who acquired Saber Software found they could not do the work, that the shortcuts they took led to the ultimate default that resulted after repeated failures to meet their own schedules." The state had hired Saber Software, which was bought by Electronic Data Systems, which was later acquired by HP.

The state's original contract to build the system called for it to be done in 36 months, but that was extended several times until it was 73 months. And the contract price grew from $89 million originally to $136 million.

The state has been fined more than $104 million by the federal government for missing the deadline to have a working system. HP has paid almost $40 million of that fine.

HP says it's the state's fault that there's no working system, including multiple changes to the system after computer code had already been written. For example, the state originally wanted dates to appear as six-digit numbers, like 12/25/12. But after the code was written that way, the state changed it to an eight-digit number, like 12/25/2012.

HP says the project was 75 to 90 percent complete when it was fired, if you don't count the parts the state was responsible for.

David Dukes, one of the attorneys representing HP, said in opening remarks, "In June of 2013, this system passed 24 out of 25 federal tests, with the federal government sitting there and observing. The one that failed was an easy fix. It was based on getting some inaccurate information from the state."

He says the state wants to finish the project itself, using HP's code without paying for it. He showed emails and letters from the state that talked about a secret "Plan B," in which the state would fire HP, use its existing code, and even hire HP's personnel who had been working on it to finish it.

"The state's going to say Hewlett Packard's employees are incompetent. But we know from their own documents that they want to hire Hewlett Packard employees to complete the system," he said.

He argued that South Carolina is the only state or territory in the U.S. that doesn't have a working system, despite going through several contracts to get it built. The one constant is the state of South Carolina.

But Manos countered, in a written statement, "With 3 companies and 5 CEOs in just 7 years, this project has been defined by corporate chaos. The State of South Carolina demands performance and accountability from all its contractors and the same applied to HP. The fact is HP consistently failed to meet the terms of their contract, were unable to successfully test the computer system they designed, and became a hindrance to the timely completion of this project."

Both sides are asking for damages if they win the contract dispute. The state is asking for $204 million. HP is asking for almost $39 million.

Most Watched Videos