Connealy demands state cancel contract with India

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By KEVIN O'HANLON

Sen. Matt Connealy on Monday demanded that the state of Nebraska cancel a contract with an Indian firm that was picked to do computer work over two U.S. companies.

The Department of Labor signed a $7.9 million contract last month with TCS America, a branch of the information technology firm Tata Consultancy Services of India.

The two-year contract calls for TCS to upgrade the Labor Department's computer system to better handle unemployment benefits.

"We cannot look the people of Nebraska in the eye and say we're going to create American jobs when our own state government is sending jobs to India or bringing in foreigners to do work here," said Connealy, a Democrat seeking the 1st District congressional seat.

"We need to create jobs in Nebraska, not give away state contracts to overseas companies," he said. "It's simply wrong, and, from the looks of it, more expensive."

Labor Department spokesman Chris Triebsch said the prospect of canceling the contracts was "out of the question."

He said that because federal money is being used on the project, the department cannot discriminate in awarding the bid.

He also said the contract was awarded based on other criteria, including oral presentation by company officials.

"The company that offers the lowest price doesn't always offer the services that you are looking for," he said.

Triebsch said the department weighed concerns about U.S. jobs being lost when it signed the deal with TCS.

To do that, Triebsch said, the contract requires TCS to hire 25 percent of the workers for the project locally and for all the work to be done onsite - even work done by workers from outside the United States.

A similar deal with TCS and the state of Indiana was canceled last year by Indiana Gov. Joe Kernan when he found out that two U.S. companies lost bids for the contract.

Kernan then created a program to give Indiana companies help bidding on government contracts.

Gov. Mike Johanns declined earlier through a spokeswoman to comment on the contract, referring questions to state Labor Commissioner Fernando Lecuona III.

Lecuona referred questions to Triebsch.

"We're happy with the contract," Triebsch said. "It will mean more jobs in our local economy."

Five companies submitted bids, but one was disqualified because its proposal did not meet the requirements.

The four remaining bids ranged from $6 million to $13.5 million. TCS's bid of $7.9 million was the second highest.

State Sen. Chris Beutler of Lincoln also has expressed concern about the awarding of the contract.

India is the leader among several countries that develop software and handle back office work for foreign companies and government agencies at a fraction of the cost of U.S. firms.

But the practice has become a hot-button issue as overseas companies either ship U.S. jobs abroad or send their employees to the United States to do the work.

Tata has 30,000 employees worldwide, including 7,000 in North America.