IBM nabs California welfare contract

Big Blue gets the nod to revamp the state's ailing child-support computer systems and get California back on track.

Robert Lemos
Robert Lemos Staff Writer, CNET News.com
Robert Lemos
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California awarded an $801 million contract on Monday to IBM to consolidate the state's ailing child-support computer systems.

"This is a very high priority program for the administration," said David Maxwell-Jolly, project leader for the California Department of Health and Human Services. "It has a high level of participation."

By 2006, California wants its six different child support systems pared down to two connected by a central database system. By 2008, the state government wants to have an operations center that handles processing claims and management of the system. IBM's contract requires that the company help support and maintain the system for two years beyond the completion date, Maxwell-Jolly said.

In 1997, California canceled a contract with a subsidiary of Lockheed Martin after the company failed to implement a statewide database system for child-care support. Called the State Automated Child Support System (SACSS), the project lasted four years and cost taxpayers more than $100 million.

The failed system led to federal penalties: California missed out on about $180 million in annual federal grants that subsidize the tracking down of parents--mainly fathers--that don't pay childcare. That's a significant portion of the $2.3 billion that California collects annually.

IBM has subcontracted out part of the project to Accenture and American Management Systems (AMS). Accenture will develop the child-support application, while AMS will implement the system in the more than 50 counties and administrative regions in California.