Employment Agency Scuttles India Contract

Computerworld - At the behest of Indiana's governor, a state agency that helps unemployed residents find jobs has canceled a $15.2 million IT services contract with a company that planned to import up to 65 workers from India.
Gov. Joe Kernan on Nov. 20 ordered the Indiana Department of Workforce Development (DWD) to end its deal with Tata America International Corp. as part of a new plan to overhaul the state's procurement processes. The proposed changes are aimed at ensuring that Indiana-based companies get more chances 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.
Legislators Panned Deal
New York-based Tata America, which is also known as TCS America, was supposed to help the DWD redesign a system used to process unemployment claims and taxes. The DWD awarded the contract to TCS last summer, and work began Nov. 4. But the deal angered some state legislators, who complained that the planned use of Indian programmers went against the very nature of the DWD's charter .
Patrick Murphy, a deputy commissioner at the DWD, last week said TCS will continue work on the contract for 30 days beyond the cancellation date, partly to train IT staffers at the agency on developing Java applications. The DWD will pay the company for services rendered but won't be obligated to pay a termination fee, Murphy said.
It's unclear when the DWD will rebid the contract. Murphy said the governor's office will review the agency's procurement procedures "to see if we can give Indiana firms more opportunities" to bid.
TCS beat out two other finalists for the DWD contract -- Accenture Ltd. and Deloitte Consulting. No Indiana-based businesses submitted bids, although Murphy said some were included among a total of 84 companies that received invitations to attend a prebid conference in October 2002.
A spokesman for TCS, a subsidiary of Tata Consultancy Services in Bangalore, India, declined to comment in detail about the cancellation. "This is a decision made by the state of Indiana, and we will abide by it," he said.
TCS's bid was $8.1 million lower than the next closest offer, according to the DWD. The agency plans to replace its current claims and tax processing system, which runs on a Unisys Corp. mainframe, with a client/server application written in Java.
Jeff Drozda, a Republican state senator whocriticized the contract with TCS, is sponsoring legislation that would ban state contractors from using foreign workers on IT projects and other initiatives. Drozda said he expects the state Senate's Economic Development and Technology Committee to hold a hearing on the bill today.