Indiana State Jobs May be Saved

Date: Saturday, November 29, 2003 1:14 AM

JOB DESTRUCTION NEWSLETTER

www.ZaZona.com

Just ten days ago Indiana said that they were going to outsource an
upgrade of their unemployment computer system to Indian owned TATA.

I first reported about this on 9/29/2003 in a report titled "Hoosier
Unemployment System "upgraded" by TATA" and then followed that with
"Indian's Indians" on 11/18/2003.

Unfortunately this article doesn't give a clear reason why Indiana's
state government backpedaled. Whatever the reason, it can't be to save
American jobs because they already said that lowering labor costs was
more important.

http://www.computerworld.com/managementtopics/outsourcing/story/0,10801,87537,00.html?from=imutopstory

State agency cancels controversial outsourcing deal

By Thomas Hoffman
NOVEMBER 25, 2003

The Indiana Department of Workforce Development (DWD) has canceled a

controversial $15.2 million IT development contract with TCS America
that would have brought up to 65 Indian contract workers to overhaul a
system used to process unemployment claims and taxes (see story).
Last Thursday, Indiana Gov. Joe Kernan ordered the DWD to cancel the
contract as part of a new initiative launched by the state called
Opportunity Indiana. The initiative is aimed at overhauling the state's
procurement processes to ensure that the state gives Indiana companies
more opportunities to win contracts.

"After having a chance to discuss our vision of how the state should do
business, and how we can provide better opportunities to Indiana
companies and workers, we concluded that this contract did not fit in
that framework," Kernan said in a statement. "The procedures we had in
place virtually knocked Indiana companies out of the running."

Patrick Murphy, a deputy commissioner at DWD, which originally issued
the contract to TCS America this summer, said TCS America will have
another 30 days to work on the project, which began Nov. 4. He said the
agency will pay TCS for services rendered, but won't be obligated to
pay a termination fee.

It's not clear when DWD will re-bid the contract, said Murphy. First,
officials in the governor's office plan to review DWD's procurement
procedures "to see if we can give Indiana firms more opportunities" to
bid on the contract.

Jeff Drozda, a Republican state senator who voiced opposition to the
original contract, said he was confused by the decision to cancel it.
"Thirty days ago, administration officials told me it was legally
impossible to cancel the contract."

Drozda has sponsored legislation that would ban contractors from using
foreign workers on IT initiatives and other state projects. He said the
bill is expected to be heard by the state Senate's Economic Development
and Technology Committee on Dec. 1 and then introduced on the Senate
floor within two weeks.

Jonathan Swain, a spokesman in Kernan's office, said he was unaware of
the conversation Drozda had with officials about whether the contract
could be canceled. Swain also said TCS America wouldn't be prevented
from bidding on the DWD contract in the future.

As for Drozda's charge that he was told by the governor's office that
the project couldn't be canceled, Swain said: "This office wouldn't and
didn't give that answer if that question were directed to us."

State contracts, he said, "always have a [cancellation] clause in
them."

When TCS America won the original bid, it beat out two other companies
-- Deloitte Consulting and Accenture Ltd. No Indiana-based firms bid on
the final contract, although a letter of invitation to attend a pre-bid
conference was sent out to 84 companies in October 2002.

DWD had hired TCS America to overhaul a Unisys Corp. mainframe-based
tax and unemployment claims processing system with a client/server
system to be written in Java. The TCS America proposal was $8.1 million
lower than the bid made by the closest rival.

During the project, as many as 65 contract employees were to work in
the Indiana Government Center alongside 18 state workers, which TCS
America had begun training. TCS America had subcontracted
Indianapolis-based Bucher & Christian Consulting and Troy, Mich.-based
Nexor Technologies Inc. to do at least 5% of the work, said Jayanta
Banerjee, regional manager in Indianapolis for TCS America.

A spokesperson for TCS America was unavailable for comment.

See more coverage of this issue in our Outsourcing Center.

Support this Newsletter and ZaZona.com by donating:
www.zazona.com/Donations.htm

To Subscribe or Unsubscribe send an email to

Back to archives