Firm is asked to end India outsourcing

Barraged by complaints from outraged Utahns, the state is asking its private contractor handling welfare calls to cease sending them to India and somehow return them to U.S. soil.

"We have asked them to do a complete analysis," said Department of Workforce Services spokesman Michael Sullivan. "If we could have given the contract to someone more local, we seriously would have."

As it was, the state awarded a nearly $8 million five-year contract to eFunds two years ago, which later ceased having a Wisconsin call center field questions from Utah's welfare recipients.

Instead, eFunds sent Utah calls to one of its centers in India, where it is one of the top "business process outsourcing" companies handling calls and information technology related services.

That foreign outsourcing for state services has become a trend among budget-strapped state governments seeking ways to cut spending while maintaining services to residents.

In a jobless economy, however, the resulting outcry has caused a dilemma for state officials.

"The policy dilemma for legislators is equity," notes Justin Marks, a policy analyst for the National Conference of State Legislatures who has done extensive research on foreign outsourcing.

"Is it equitable to spend tax dollars in the world economy, regardless of savings, or is it the responsibility of lawmakers to ensure jobs and tax revenues stay in the United States?"

The result is 31 states that have introduced legislation this year prohibiting state agencies from using foreign offshore labor, although no measure has yet to pass. Utah is not among them.

Sullivan said the call center part of Utah's eFunds contract is a minimal aspect of the work performed, which includes processing the transactions for Utah's Horizon cards. That portion of the business continues to be done in the states, Sullivan said.

"Ninety-six percent of the Horizon calls are handled by an automated response unit," here in the United States, Sullivan said. "The average support requirement to handle the referrals that were forwarded to India is only four people."

In February, Sullivan said, 1,258 calls from Utah were placed to the help-line — with only 211 that eventually found their way to India to a live person.

"We are between a rock and a hard place," Sullivan said, noting that the $125,000 the state spends on its eFunds contract could very well help Utah families — about 25 of them.

"Do we spend that money for four people to handle all this business or help those families?"

But critics say it is not that cut and dried.