Oklahoma May Be Paying Inflated Rates on Outsourcing Pacts

Article excerpt

Oklahoma taxpayers may be paying inflated rates on contracts that are outsourced to companies outside the United States for pennies on the dollar, giving massive profits to the original vendor, legislators were told Monday.

We've got to figure out who our subcontractors are, said Trish Frazier, senior government relations coordinator for policy and agency affairs at the Oklahoma Public Employees Association. Because you really don't know if we have any more subcontractors that are international at this point, because no one knows who our subcontractors are.

The issue of state government outsourcing first received attention when it was learned the Oklahoma Department of Human Services was utilizing a call center in India to handle the food stamp program, officials told members of the House Governmental Operations and Agency Oversight Committee.

Lisa Henley, project director for DHS, said the agency contracted its food stamp program with Affiliated Computer Services, which then subcontracted with J.P. Morgan. About the time the subcontract was let, J.P. Morgan moved its call centers from Florida to India.

She said the contract does not expire until March 2006.

State Rep. Al Lindley, D-Oklahoma City, and several other officials at the meeting said the use of vendors overseas could create a wide range of problems for Oklahoma government. Somebody in India doesn't have a clue about what's going on in Bugtussle, Oklahoma, Lindley said.

Henley said the India call centers employed by DHS handle simple inquiries and do not deal with benefit requests for the food stamp program.

But Lindley said his constituents have indicated there are problems getting information from the India call center due to language barriers. I've had a number of folks in my district say they have to hang up and call back, he said.

Frazier also suggested other problems could occur due to the transmission of sensitive data outside U.S. borders.

Prosecuting identity theft across national lines would be kind of difficult, she said.

However, Henley said there have been no reports of identity theft as the result of DHS contracts that are handled overseas, even though those vendors may handle more than 200,000 cases per month.

Tom Jaworsky, state purchasing director at the Department of Central Services, said only $3.5 million out of $650 million in state contracts are awarded directly to entities based outside the United States. However, he said state officials do not know how many overseas vendors have been employed as the result of subcontracting. …