Goldner Stands Up For Local Companies
Posted by Jeff Pruitt - 5/24/08 @ 10:53 am - Filed Under Featured, Local Politics
Today’s JG fronts a story on councilwoman Karen Goldner and her efforts to keep our tax dollars local. At issue is the city and county’s IT services contract that will likely be awarded to one of two finalists which are both foreign companies.
“I, as a city councilwoman, cannot say I want Fort Wayne to develop a technology community and at the same time vote to offshore this contract,” she said. “In my opinion local businesses were not given the consideration they merited.”
In the comments section here at FWP Goldner said she plans to introduce her “Buy Local” ordinance at the June 3 city council meeting. This ordinance would give additional points in the selection process for “Emerging Business Enterprises (EBE’s) which are small businesses, including minority and women-owned but not limited to that.”
Meanwhile the city’s CTO Clifford Clark continues to defend the RFP by using the line that the money will stay local and now he’s got commissioner Nelson Peters saying the same thing:
“The strongest players in the marketplace are all multinational companies,” he said.
Clark said whichever contract is selected, there will still be local workers involved.
“We’re not having any call centers or work shipped off our shores,” he said.
County Commissioner Nelson Peters said many of the people currently doing work for the county would likely remain and switch to the new contractor. So the tax dollars spent on a new contract would stay here, he said Friday.
Let me point out a few things for these gentlemen:
- Being a multinational company has nothing to do with it. You can be a multinational company and be American/locally owned. That’s what we’re talking about here.
- There is no guarantee that the workers must be local as I didn’t see anything in the statement of work that listed that as a requirement (except for a 6 month period for “key personnel”). Essentially we have to take their word for it that they will somehow add that requirement to the contract.
- Even if the workers are local the profit is going overseas.
- It’s an embarrassment for the administration to push the idea we need to transition to a technology economy while simultaneously contracting our technology work to India.
It’s good to know that government officials like Karen Goldner are still fighting to invest in this community even while the administration and county commissioners are writing us off…
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14 Responses to “Goldner Stands Up For Local Companies”
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Jeff,
If a foriegn company wants to do business with the city, they can just create a shell company technically located in Fort Wayne.
Let’s say the city signs a contract with the “All American Three Rivers Corp” to build a new fire station. Nothing prevents that local company, which maintains a Fort Wayne mailing address, from subcontracting it out to a foriegn company.
Whenever you pay a company for a service, most of that money goes to pay for materials and labor. Most companies pay more in wages than what they receive in net profits. If a contractor hires locally, the money you spent on labor stays local.
Taxpayer dollars at cross-purposes comes to mind.
Why award contacts with public monies for local and regional economic development to retain and bring bussiness and jobs and then award contracts with public monies to businesses overseas or out of area? It’s like the staff in charge of the Downtown Fort Wayne District driving from downtown to Hicksville each day for lunch rather than eat at restaurants downtown.
Perhaps the Fort Wayne-Economic Development Alliance should review and at least comment to decision-makers on out-of-area contracts before decisons are final. I can’t imagine they are pleased with this pending IT contract award.
“Offshoring” is so 15 years ago. Someone needs to tell Cliff that the economy in India + the demand for resources FAR outweigh what can be supplied.
Believe me - I’m living smack in the middle of this. It’s painful. It’s embarassing. It’s shameful.
Offshoring was done in the name of “saving” dollars but in many cases, it’s costing companies more. I’d love to see a case (in the IT world) where this isn’t the case.
Kristina
P.S. And good for Karen. What Fort Wayne needs more of is local businesses and opportunities for them - not this other stuff.
Ah, that Karen. You guys are getting what you deserve for hiring a smart lady for City Council.
A study done by IU in 2007 showed that outsourcing in local government results in fewer full time positions and more part time work. http://newsinfo.iu.edu/news/page/normal/4720.html
By outsourcing to an overseas company, I’m sure this is more at risk. They say they wont take jobs overseas now but should the budget get a little tighter, that promise can be easily broken. Its sad that is a city where we keep talking about our great IT companies, where we fund a huge “Innovation” center, and we continue to struggle with Economic Development that we’re willing to risk jobs being moved overseas, profits taken out of the country and taxes that will be collected in India instead of Fort Wayne. Have we not learned?
I’d like to know just what jobs people think are going to be “lost” or “outsourced” to “overseas” with the selection of one of the two remaining companies competing for the City IT contract?
Here is how this will likely work (and it is very common) after the award, those employees currently working in support of the current IT contract, will change badges one morning, and report to work as employees of the new company contracted for City IT services.
BTW, from what I have been able to find out, both companies have US Headquarters (eg. VW of America). They are interested in accessing and serving the US market, that’s why they have US operations.
Both of the companies plan to have US call center operations.
Both companies have an aggressive investment plan for Fort Wayne (something ACS, it is my understanding , has not). They are interested in becoming part of the community.
Both companies plan to contract with local companies as necessary, and hire qualified local personnel as needed.
So tell me again, what is being outsourced?
Mr. Rost,
It seems that you know a great deal about these companies. Which is far more then the city apparently, or the bidders themselves, have shared with the media.
Profits drive future investments!
I know when local company got out of the internal IT business and contracted it out all of their people where hired by the new company. Of course we will not talk about their loss of vacation time, lower quality health insurance, loss of retirement bennies, no more 401 account, and 9% cut in pay. I guess it is better then no job but did not help the local economic picture.
I am no fan of ACS as it appears they did not meet the needs of the city/county.
My issue is we have been beat over the head how Fort Wayne is going to become a mecca for software type tech. Here is a chance for the City to lead the way by trying within common sense to help that case. In my book they dropped the ball big time.
It seems if it is much more then double talk and tax abatements we continue to fail on nearly a weekly basis.
Then again I would enjoy hearing your stand on how Maplecrest Ext is going to be a key to all future economic develop. in Allen County
Fred,
I will tell you that in my opinion there is NO REASON for our local Government to outsourse their IT services in the first place. We would be far better off hiring qualified people as government employees and running our own IT services.
We use too many contractors…
Second off at the very least the profits the company hopes to earn will leave this area.
Mike Sylvester
Mike,
That may have also been an approach, but one the City did not choose when they began this process. They are where they are with the approach they are chosen, and my comments are on the results, so far, of that process. This acquisition has been going on for months apparently, are you suggesting they tell the 8 companies that responded to the RFP, “Just kidding, sorry you spent all that time and money responding to our RFP. We changed our mind and decided we are going to do it all ourselves.”?. If they did that, they would lose a lot of credibility, and it would confidence with other vendors that the City is not a reliable customer to deal with. Certainly if there were no qualified bidders, the City could chose another approach, but that has not occurred.
The time for a decision on the acquisition approach, is long gone,. The City is where it stands. I am commenting on what is, not what should be.
JQ,
I don’t think anyone knows what the packages are for the tranferring employees. Perhaps it is part of the evaluation criteria, I don’t know. Certainly they will have to be competitive if they want to keep the folks, and no one is forcing anyone to work the company that wins. One thing for sure, any open IT jobs are not likely go unfilled no matter who wins.
You are right Mr. Rost in that the jobs will be filled. With jobs so hard to come by in Fort Wayne it will allow them to interview 100s for the jobs. I doubt there will be many out of towners fighting for them though.
Low paying jobs will not grow Fort Wayne, buy condos at Harrison Square, to take care of the new life style down down, or maybe even food alley at the Three Rivers Fest.
Fred,
I am glad to see you have done such a great job investigating the two companies that are bidding for this contract. It does wonders for me when I look at the Indian site and find them bragging about their relations with Communist China. I am sure that our personal data as well as all of the law enforcement data is in good hands once the new company takes over. As for the French company. It does my heart good to see that the last place that they got a contract with posted all of the positions as available on their web site. That definately sounds like the employees will just switch a badge and come into work the next day.
As for ACS and their commitment to the area. The City/County contract is not the only one that they have locally, and statewide they have close to 2500 employees(which is more than the French company has in all of North America, according to their website).
It is interesting to read and hear the elected and appointed officials as they try so hard to justify the spending of millions of our tax dollars. Either with a company from France, a country that looks forward to getting billions from the U.S. Air Force at a loss of about 10,000 American jobs, or a company from India whose Chairman brags about doing business with a Communist Chinese city.
Where do our elected representatives have their heads buried? Or, what do they have to gain personally from this outsourcing? History should have taught us a number of lessons by now. Among them are:
You only get what you pay for. If these companies under bid ACS by a substantial amount, how do they propose to provide equal service let alone more and better service?
When you outsource critical information (tax, financial, infrastructure, security data), the more leaks you develop in securing that data. The Pentagon is suffering some 30,000 attacks on their computers every day. And they do NOT outsource their data! Chinese officials are so intent on collecting information the State Department is warning visitors to the Olympics their hotel rooms may be “bugged”. And any government traveler overseas must have their laptops “sanitized” when the return to the U.S. To avoid implanted “bugs” from spreading.
When you deal with an “Off Shore” company your ability to enforce contract agreements is directly proportional to the distance between the “company” and the “customer”. Most times any stated savings is paid in fees to lawyers.
Promises to “keep many of the old employees” mean one of two things. Those who are kept are offered much lower wages (remember that “low bid” thing?) Or, the promise is just to shut up the media questions. The current employees are being told they “will have to re-interview” for any jobs and that “there is no assurance a job will be available”.
Appointed managers may have a motive for choosing a particular company or companies. Much like those federal appointees that land “sweet” jobs later on with companies they did business with earlier. Or, they may get tax paid vacations for regular meetings with company officials in far away places.
These are just a few of the lessons history keeps attempting to teach. For some yet unknown reason, those folks we elect just seem to be immune from learning from them. With the logic they display, let’s see how much we can truly save. Let’s “off shore” all our services. Why do we need a Mayor that lives in America? Couldn’t a City Council or County Commissioners in a third world country do just as well as what we now have?
We may find the so called savings in this deal may be a considerable amount less that the “bean counters” brag about. I seriously hope the voters remember those people that suggested how much the taxpayer would save by contracting with an “off shore” company. When their jobs are taken and their companies gone, will they pat themselves on the back and brag about their decisions?
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