Virginia Welcomes TATA For State Jobs

Date: Wednesday, September 24, 2003 8:39 AM

JOB DESTRUCTION NEWSLETTER

www.ZaZona.com

George Newstrom is the Secretary of Technology for Virginia's state
government. He is supposed to provide technology planning, acquisition,
data processing and related services to the state.
His website is at:
http://www.technology.virginia.gov/

Newstrom's website didn't say anything about his mission to destroy
jobs in Virginia, but this article does:

Virginia's Newstrom said he would have no problem with
a foreign-owned company bringing jobs to his state.
"I would welcome Tata to come to Virginia and set up an
operation," he said. "We'll give you all the work you can
possibly have. ... There is no restriction whatsoever.
But the other side of it is, we most likely won't award
you a contract that will go anywhere offshore."

Unfortunately it appears that Newstrom's intention is to give Virginia
IT jobs to TATA - the largest of the H-1B/L-1 bodyshops. In his
misguided zeal for cutting cost he is willing to replace state workers
with cheap foreign labor. His assertion that TATA brings jobs to the
state is totally false. TATA will replace good paying state jobs with
low paid nonimmigrant labor. The net gain in jobs will be zero.

Many states are adopting similar self-destructive behavior in order to
cut costs. The irony is that their deficits will increase as they
eliminate the jobs of tax-paying citizens and replace them with TATA
nonimmigrants that are often exempt from paying tax.

http://www.computerworld.com/managementtopics/outsourcing/story/0,10801,84644,00.html

Government bodies wary of offshore outsourcing

By Grant Gross

SEPTEMBER 05, 2003

Some governmental bodies in the U.S. hope to outsource certain IT

functions to private vendors in the coming years but are concerned
about the political fallout if outsourced jobs go overseas. And in some
cases, they don't know enough about their IT assets to make an informed
decision about what to outsource.
Both the state of Virginia and the U.S. Department of the Treasury are
interested in the cost savings they could achieve by outsourcing, but
neither has a good handle yet on which IT functions could be
outsourced, leaders of the two government bodies said yesterday at a
government outsourcing discussion sponsored by the Information
Technology Association of America.

George Newstrom, CIO for Virginia's state government, said that after a
year and a half on the job, he's just begun to get a handle on the IT
resources across 91 state agencies.

"We need to look at outsourcing as a possibility," Newstrom said. "But
until we get our arms around what we have, where we have it, how we do
it, etc., I don't know what to outsource. I don't have the numbers or
metrics to give to an EDS or an IBM."

The Treasury Department is also conducting a review of all the IT
outsourcing that's currently done at the agency, said Drew Ladner, the
department's CIO. That report should be completed within a few months.

Ladner agreed with Newstrom that some outsourcing may make sense if
U.S. workers are used. However, the two said government agencies aren't
likely to take advantage of lower wages outside the U.S. because of the
current political climate and economy. Driven by a stagnant U.S.
economy and concerns about the security of IT products created
overseas, a handful of state legislatures across the U.S. have
considered bills this year that would prohibit offshore outsourcing of
government contracts.

None passed, but Newstrom predicted that similar bills will be
introduced in the next year. Virginia even hates to lose jobs to
neighboring Maryland, he said.

He and others on the panel were careful to draw a distinction between
outsourcing with U.S. workers and offshore outsourcing. By using U.S.
workers, a government agency would be replacing the government job with
another in the U.S., he said, but a job that moves overseas is lost to
the country.

Asked if offshore outsourcing is out of the question, Newstrom
answered, "I think the political climate is very adverse. Today, the
climate doesn't exist in government to say 'offshore' out loud."

The Information Technology Association of America opposes legislation
that would bar U.S. government bodies from using offshore workers,
because U.S. companies would then have a more difficult time of selling
their products and services overseas, said Harris Miller, president of
the ITAA. "It hurts our efforts to convince governments around the
world to open their competition," Miller said of such legislation. "It
plays into the hands of other governments around the world who do not
want to open their government IT business to an EDS or IBM."

But the unwritten rule among most government entities in the U.S. is,
Don't use offshore workers, Miller said. With 2004 an election year in
many states, Miller expects politicians trying to connect with the
public to introduce more legislation prohibiting governments from using
offshore workers, especially if the U.S. economy doesn't improve.

"Even though no state has yet passed the legislation, the state
procurement officials are getting very, very nervous," Miller said.
"They're all afraid of being the front-page story ... in the state
capital that says, 'Thanks to procurement official X, they just hired a
company, and 15 jobs ended up going to Ireland or South Africa or
India.'"

William Sweeney, vice president of global government affairs for
outsourcing services vendor Electronic Data Systems Corp., and Arup
Gupta, president of Tata Consultancy Services America, defended
outsourcing as a way for companies and government agencies to cut costs
and focus their employees on core business functions. Both said any
government contracts their companies sign state clearly what IT work is
being done where.

"It has to be understood upfront ... that this piece of work is going
to be done by U.S. citizens in the U.S., and this piece of work is
going to India," Gupta said.

The general rule for government contracts is that the work is done in
the home country, Sweeney said, and some states even require that the
IT work be done within 50 miles of the state capital, as a way to
minimize travel costs.

TCS America, owned by India-based TCS, is looking at opening more IT
shops in the U.S. as a response to the backlash against offshore
workers, Gupta said.

Virginia's Newstrom said he would have no problem with a foreign-owned
company bringing jobs to his state. "I would welcome Tata to come to
Virginia and set up an operation," he said. "We'll give you all the
work you can possibly have. ... There is no restriction whatsoever. But
the other side of it is, we most likely won't award you a contract that
will go anywhere offshore."

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