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Indiana Senate to probe award of contract to TCS

Indiana will hold a Senate probe on why the contract was awarded to TCS, reports S Rajagopalan.

business Updated: Dec 28, 2003 15:02 IST

In the mounting backlash against outsourcing, the American state of Indiana is not content with cancelling a $15.2 million contract awarded to the Tata Consultancy Services. It will now hold a senate probe on why the contract was awarded to an outside company "planning to import cheap Indian labour".

State Senator Jeff Drozda, who is spearheading the campaign, says that he wants to send a strong message to other American states engaged in outsourcing and awarding of work contracts to foreign companies. The probe will begin on Monday.

A week ago, Indiana Governor Joe Kernan had terminated the four-year contract awarded to TCS' American subsidiary to upgrade the state computer network processing unemployment claims. Kernan's predecessor, Frank O'Bannon had cleared the contract weeks before his sudden death on September 13.

Drozda and other Republican lawmakers in the forefront of the campaign have alleged that the TCS was able to undercut American companies because of its planned import of 65 low-paid programmers from India to execute the project alongside 18 state employees.

Defending his campaign, Drozda argued there were many unanswered questions surrounding the contract. Initially, the state's Department of Workforce Development had rejected the demand to cancel the contract, saying it was a binding agreement. However, the governor has since "miraculously ended the contract without any penalties", he said adding: "I am not sure which department was misleading."

Indiana senate president Robert D. Garton said: "It is very important that this issue remains a priority during this session. We as legislators need to make sure that our state is doing everything in its power to protect and improve the Hoosier (Indiana residents) work force."

Drozda has separately sponsored a bill that seeks to ban contractors from using foreign workers on state projects. The bill is expected to be taken up by the state legislature's economic development and technology committee in January.

The fate of the bill will be watched with keen interest in India because of its possible spread-effect in other American states. There is a local political dimension to it as well since Kernan, the Democratic governor, does not favour a blanket ban on foreign companies. "We don't believe you can shut out companies from other parts of the world from Indiana," he commented.

First Published: Nov 28, 2003 00:00 IST