Dems protest as state extends contract for child support payouts

5/7/2002

COLUMBUS - Ohio yesterday, without competitive bidding, extended Bank One's contract for distributing child support checks an additional six months at a rate more than twice what some states pay.

The extension, which would run through the end of the year, was approved unanimously by the Ohio Controlling Board, even as Democrats claimed they were holding their noses while doing it.

“It smells,” said state Sen. Tom Roberts (D., Dayton). “This proposal is holding the people of the state of Ohio hostage. Since 1999, we've spent over $115 million on this contract. In two and a half years, we've almost doubled what the state of New York ... has spent on this.”

He said he voted to approve the extension rather than risk interruption of the flow of checks.

Bank One, which won its first contract without bid in late 1999, serves as the repository for $1.8 billion collected annually by the state in child support and is charged with distributing payments to families within 48 hours of their collection. It processes more than 920,000 checks monthly.

The state expects to open proposals from at least three bidders for a new five to seven-year contract next week with hopes of awarding that contract in September. But the winner, if it is not Bank One, is not expected to have a system up and running before the end of the year.

Pennsylvania has contracted with a vendor at $20.5 million a year to distribute about $1.4 billion in support annually, said Jay Pagni, spokesman for the State Department of Public Welfare. New York pays $16 million a year to distribute about $1.3 billion, said Jack Madden, spokesman for the New York Office of Temporary and Disability Assistance.

But Christopher Carlson, deputy director of contracts with the Ohio Department of Job and Family Services, told the board the other states' contracts do not demand as much of their vendors as Ohio does. The state's collections and the number of checks issued eclipse the loads handled in New York and Pennsylvania.

Bank One came under fire last year when it printed checks on the wrong paper that some check-cashers refused to honor.

The bank also dropped a controversial $3 check-cashing fee for noncustomers seeking to cash Bank One-written support checks at Bank One after the bank was accused of gouging.

The bank has since improved it accuracy rate to better than 99 percent.