US govt insists on keeping jobs

NEW YORK: An Indiana senate committee on Monday will look into why the state awarded a computer contract to an Indian company that planned to import workers to do the job.

"We're supposed to be helping unemployed and underemployed Hoosiers," said State Sen. Jeff Drozda, referring to the popular name for people who live in Indiana. "This is clearly contrary to our mission."

While the $15.2 million contract to a subsidiary of Tata Consultancy Services, India's biggest software company, has been canceled, the controversy over outsourcing high-tech work overseas remains.

Critics say Tata America underbid Accenture Ltd. and Deloitte Consulting to upgrade the processing of unemployment claims in part because it planned to import 65 Indian technicians to work alongside 18 current state employees.

Drozda, a Republican, has proposed a bill that would require all state-related work to be done by U.S. citizens.

"I want to send a message to other states," Drozda said in an interview, adding his bill enjoys bipartisan support in the Indiana Legislature, where Republicans control the Senate and Democrats the House.

Gov. Joe Kernan told Reuters he will examine "the entire procurement system" in state government.

But Kernan added: "We don't believe you can shut out companies from other parts of the world from Indiana."

Indiana, like many state governments, seeks to trim the cost of services, so it routinely awards contracts to outside companies. But until now, they had not sought to bring foreign-trained professionals to the United States.

The controversy also highlights the effort by huge computer service providers -- led by IBM Corp., Electronic Data Systems Corp. and Computer Sciences Corp. -- to hold costs down tapping expertise in India, Brazil, Israel, China and the Philippines.

While the trend is nationwide, there is virtually no national political response, said Alan Tonelson, a researcher with the U.S. Business and Industrial Council in Washington. What response there is has been from states, such as Indiana, where local officials have become angry about job losses.

Except for a summer congressional hearing on cutting the number of non-U.S. professionals allowed to work here under special visas, no major Washington lawmaker has proposed examining the issue, Tonelson said.

AFL-CIO member unions have not devised a comprehensive strategy, either.

"Unions don't get involved because it's not their jobs being exported," said Greg Tarpinian, director of the Labor Research Association, which is funded by AFL-CIO unions.

One union, the Communications Workers, does sponsor Seattle-based group WashTech, which advocates ending the importation of non-U.S. professionals and closer scrutiny of the trend to send work offshore.

"We've got to find a way to deal with this," said WashTech head Marcus Courtney. "I'd like to know whose job isn't going to be outsourced. We need to find a way to engage in trade that is fair."

Back in Indiana, Drozda wants to examine the pay scales Tata proposed for the workers it would have imported. If they were to be paid at prevailing Indian wages, that might explain why Tata undercut its U.S. rivals, he said.

There are now about 500,000 non-citizens working in the United States under special visas, said Ron Hira, a professor at Rochester Institute of Technology.

Hira, who heads a policy committee for the Institute of Electrical and Electronics Engineers, said the longer-term implications could harm all U.S. professionals.

Reuters