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Companies engaged in outsourcing, including those based in India, may find their businesses affected as state politicians in the United States, eager to keep jobs at home, are finding more ways to stem the flow of government work overseas, a media report has said.
In the past year, at least five governors took executive action to curtail the offshoring of state work. Legislators introduced more than 100 anti-offshoring bills in almost 40 states. More than half sought to forbid the states from contracting with companies that would do any of the work over seas, a report in USA Today said.
While most of the bills died, California lawmakers last week passed one that would bar state and local government agencies from using state funds to contract for services unless the contractor certified the work would be done in the USA.
Proponents expect a veto from state Governor Arnold Schwarzenegger. Massachusetts Governor Mitt Romney vetoed a similar measure this year, saying it could increase costs.
Last year, Indiana Governor Joseph Kernan cancelled a $15.2 million contract to software company Tata Consultancy Services in India after no Indiana firms bid for the job. The work will be broken into smaller pieces so that smaller Indiana tech firms have a chance.
Another American company, eFunds, which used a call centre in India as of March to handle work of food stamps and welfare for 19 states as of March, has crafted deals with New Jersey, North Carolina and Missouri to return its work to the USA.
Twelve to 15 call-centre jobs doing work for Oregon are slated to move from India to Wisconsin, then to Oregon.
EFunds said fewer than 10 per cent of state calls go to overseas agents; 90 per cent are automated.
Other states like Missouri and Arizona have also taken measures to bar outsourcing.
Missouri Governor Bob Holden in March told state agencies not to award contracts to vendors who plan to perform the work outside the USA, with exceptions.
Arizona in April, through a rules change, banned future state contracts from contractors who offshore jobs.
Tennessee in May said it would give preference to data-entry and call-centre companies that don't offshore. Michigan pledged consideration to state-based companies. Almost 40 states outsource some work, including call centres, overseas where labour is cheaper, said the National Conference of State Legislatures.
Those opposing government offshoring say US workers should get the tax-funded work.
Those who oppose restrictions say costs will go up, an efficient economy will be undercut and bans may be unconstitutional because states cannot make trade or foreign policy, said the National Foundation for American Policy, a think-tank.