West Virginia's IT workers fight state outsourcing

West Virginia considers outsourcing, a path that is increasingly getting mixed reviews

West Virginia's IT workers are concerned that the state plans to outsource their jobs and have responded with a protest and a lawsuit.

There are about 600 state IT workers in West Virginia and more than half of them may be affected by outsourcing , according to their union, the West Virginia Public Workers Union.

IT workers, who stayed with the state for lower wages in exchange for job security and state benefits, are worried that their state jobs are "about to evaporate," said Gordon Simmons, a union official.

The state has not reached the point where it has an outsourcing proposal from a vendor, but the IT workers and their union appear to be acting aggressively to pre-empt any outsourcing move.

Last week, a rally was held at the state Capitol in Charleston, and a group of tech workers attempted, unsuccessfully, to meet with the state's governor.

The union filed a lawsuit in state court Monday alleging that the state's Office of Technology ignored a legislative mandate to develop a strategic technology plan. Had it done so, the merits of outsourcing versus keeping the IT work in-house would have been examined, Simmons said.

If IT efficiencies can be gained by the existing workforce, "why turn it to an outside vendor in the first place?" Simmons asked.

State governments are clearly mixed on the merits of outsourcing IT work.

In the anti-outsourcing camp is New York state, which embarked this year on a plan to create as many as 500 new state IT jobs by bringing work back in-house that is now performed by contractors. The state estimates it can save as much as $25,000 annually for each contracting position that is shifted to state payroll.

But other states have embraced outsourcing. In 2005, the state of Virginia signed a 10-year, $2 billion agreement to outsource its IT infrastructure to Los Angeles-based Northrop Grumman Corp. That contract has drawn criticism, and reliability of the state's IT infrastructure was a focus this month after a breakdown of its storage-area network.

Separately, Texas IT officials reached an impasse in resolving issues over its seven-year, $863 million contract with IBM . Texas is now "moving forward with re-procurement" on the contract but has not terminated its agreement with IBM, a state official said.

Meanwhile, West Virginia IT officials told a legislative committee earlier this month that outsourcing $35 million in annual IT costs is an option. IBM has been consulting for the state on the issues, the Charleston Gazette reported. State officials did not respond to a request for comment.

Ray Bjorklund, a senior vice president with consulting firm FedSources, of McLean, Va., said state IT outsourcing problems "raise in peoples' minds a question of whether or not a state government, or any kind of public sector unit or school district, is willing to turn over its mission critical responsibilities and functions to a company that may not be fully accountable under the terms of the contract."

The state can make a vendor "fully accountable," but the more service level requirements imposed on a contractor, the higher the contract cost will be, Bjorklund said. A state CIO can ask for the same high service levels from state IT services, but in the latter case ensuring there is enough funding rests squarely on the legislature, he said.

Some states may view a decision to keep jobs in-house as part of a broader social goal of providing jobs in the state as well as helping the local economy overall, Bjorklund said. States that outsource jobs typically "re-badge" their state workers, turning them into vendor's employees and usually coupling it with a fixed period of job security. But how these employees fare over the long term is less clear, as are the contracts.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com .

Read more about outsourcing in Computerworld's Outsourcing Topic Center.

Copyright © 2010 IDG Communications, Inc.

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