More and more states are hiring private firms to help them track down "deadbeat" parents and collect overdue child-support payments. According to the General Accounting Office (GAO), 15 states have fully privatized their child support enforcement programs and many other states have partially privatized their systems.

Under the terms of most of the collection contracts, the private firms are paid a fixed percentage of the collections they make. The contracts typically cover one or more of the following services: parent location, collection, and payment processing. Collection is far and away the most widely privatized service.

One of the most successful privatization models has been in Virginia, where, according to the GAO, Lockheed Martin IMS doubled the collection rate and was 60 percent more cost-effective than the public sector.

Virginia is the only state in which the private contractor has had to establish, staff, and equip full-service child-support enforcement offices from the ground up. In other states, the contractor has just taken over an existing public operation. About two-thirds of Lockheed Martin's Virginia operation is staffed by former state employees.

A prominent new privatization in 1996 occurred in the state of Florida, which contracted with Lockheed Martin IMS to operate the state's location and collection services. In one year, the company collected over $15 million in payments from parents who were at least six months behind on their payments.

State officials cite a number of reasons for pursuing privatization, including handling growing caseloads, increasing collection rates, reducing administrative costs, and meeting federal performance requirements. Contractors typically enjoy several advantages over public units, including more flexibility in acquiring resources, more personnel flexibility, and better access to technology. In Virginia, for example, the contractor was able to have all its equipment up and running within 90 days of signing the contract, whereas state officials estimated that it would have taken them up to six months to do the same.