Md. board defers decision on Baltimore City child support contract

Comptroller Peter Franchot. (The Daily Record / Maximilian Franz)

ANNAPOLIS — The state’s Board of Public Works has delayed a decision on a child support services contract for the city of Baltimore after the winning bid came in at nearly $14 million more than the lowest proposal.

The three-member board Wednesday decided to delay for two weeks a decision on the contract with Veritas HHS after Comptroller Peter Franchot questioned the cost of the contract.

“How do you explain why these proposals are so vastly different?” asked Franchot, who along with Gov. Larry Hogan and Treasurer Nancy Kopp makes up the board. “Have you been unhappy with the incumbent, Maximus, to the extent that you’re going to choose someone that is $13.7 million higher?”

The department sought approval from the board on a three-year contract with two renewal years with Veritas valued at a total of more than $39.2 million. The bid is about one-third higher than that of Maximus Inc., the incumbent, which had the lowest bid at $25.5 million.

The company would be responsible for providing child support services including paternity testing and locating custodial parents for payment disbursement as well as collecting from parents who owe child support.

Baltimore City, with more than 51,000 cases, is the largest child support operation in the state. Approximately 80 percent of those cases receive some form of temporary cash assistance from the state.

Gregory S. James, deputy secretary of the Department of Human Services, said the department awarded the contract not just on the basis of cost.

“Simply stated, this was a best-value contract,” James said. “When our agencies reviewed the contract … they felt that the services being offered and the prior history merited the award even though the contract cost would be higher.”

James said “Maximus’ bid was so aggressive that it stretched credulity that they were going to be able to perform at that level.”

But Franchot countered that the incumbent may have low-balled the contract “because they knew how much it would cost. I don’t have any particular information on this, I just don’t find the explanation adequate to justify the evaluation committee’s decision. I’m not suggesting anything is wrong. I’m just suggesting it’s a mistake.”

But Franchot said he would likely vote against the contract.

“It’s a $39 million contract but $13.7 million more than the incumbent vendor,” said Franchot, adding that he believed the agency had “no complaints” with Maximus. “They submit the bid, the bid is acceptable, it’s $13.7 million less than this Colorado company and you pick the Colorado company because they are going to open a new office.”

Officials with the state Department of Human Services defended the decision, saying that Veritas would rely less on contractors and offer more training and that responses from the incumbent during the evaluation “were inadequate.”

Additionally, officials said, the state agency had to implement corrective action with Maximus regarding some of its services while the company exceeded state standards in other areas.

“It was determined that the cost was unrealistic to meet those needs,” said Kevin P. Guistwite, executive director of the department’s Child Support Administration. “We felt the innovations (Veritas) was offering were better and appropriate for Baltimore City.”

James added that the contract, while not being the lowest bid, was still lower “to get more services” than what the state is currently paying.

Franchot was ultimately joined by Hogan, who suggested delaying a decision for two weeks, just before the current contract is expected to end on Nov. 30. The time, Hogan said, could be used to address Franchot’s questions.

“We want to get it done before Dec. 1,” Hogan said.