SC to get $39 million to settle lawsuit over unfinished child-support system

After paying about $73 million in fines, South Carolina will get $39 million to settle a lawsuit over a still-unfinished system for collecting unpaid child support.

The S.C. Department of Social Services announced late Tuesday that a settlement had been reached with computer-giant Hewlett-Packard, the most recent vendor hired to complete the computer system.

The state has been working on the system since Congress passed a 1992 law requiring all states to build a statewide system for enforcing the collection of child-support payments.

Social Services hired HP in 2007 and fired the company in 2013 for failure to complete the project, asking for more than $200 million in damages. In a countersuit, HP said South Carolina owed it $39 million.

South Carolina has been fined nearly $124 million in penalties since 1998 for failing to complete the system. The state has paid about $73 million of the penalties with the computer companies paying the rest.

To settle the legal tussle, HP has agreed to pay South Carolina $44 million. The state has agreed to pay HP $5 million for unpaid invoices for goods and services that were delivered and retainer money that was withheld under the contract.

The state’s chief procurement officer must approve the settlement. Social Services’ officials said Tuesday they expect the agreement to be approved quickly.

If lawmakers approve, the $39 million go to offset costs associated with the project.

As part of the settlement, Social Services hopes to work with Xerox, which created a system in Delaware that Social Services hopes to replicate for South Carolina.

That system, which could take as long as four years to complete, must meet federal approval to move forward.

This story was originally published January 20, 2015 at 6:08 PM with the headline "SC to get $39 million to settle lawsuit over unfinished child-support system."