Feds fear offshore outsourcing, while contractors fear a backlash

Government employees and contractors are worried about offshore outsourcing, but for different reasons.

Both groups agree that few, if any, federal IT jobs have been offshored ? that is, sent overseas to be done cheaper by foreign labor.

But Colleen Kelley, national president of the National Treasury Employees Union, worries that offshoring could occur under a second Bush administration.

"You see things in the news about companies moving call sites overseas," Kelley said. "There are a lot of call sites in federal agencies. It's one of the things we want to make sure everybody is aware of so there is not some hidden move" to send the work overseas.

Chris Jahn, president of the Contract Services Association, which represents companies doing business with the federal government, said he doubts work currently done by federal employees would ever be sent overseas.

"It would be political suicide to do that," he said. "Why risk it and then have some member of Congress beat you over the head with it?"

Of greater concern to contractors are legislative attempts to limit offshoring by restricting overseas work on products and services that are sold to federal agencies.

For example, Sen. Christopher Dodd (D-Conn.) earlier this year offered an amendment to a corporate tax bill that would have prohibited the performance of any part of federal contracts overseas.

Contractors say it's impossible for them to know where every component service comes from. They've been lobbying to get Congress to remove such restrictions, said Bruce Josten, executive vice president for government affairs at the U.S. Chamber of Commerce.

"Far more white-collar work is shipped to the United States, not the other way around," Josten said. "We think policy makers are starting to understand that."

Dodd's amendment has since been softened to say that contracts may not be performed outside the United States unless the work must be done outside the country, or unless one of several other requirements is met ? work could be done overseas if the agency's head determined that the products or services were not available in the United States.

The amendment also would exempt defense and homeland security work.

Presidential nominee Sen. John Kerry (D-Mass.) has said he believes that federal contracts, when possible, should be performed by American workers. He also supports policies that promote domestic manufacturing for defense and homeland security needs.

Even under a Kerry administration, strong "Buy America" requirements would need to be softened, said Robert Atkinson, vice president at the Democrat-affiliated Progressive Policy Institute.

For example, the White House might support a requirement that says high-level services work on government contracts must be done in the United States, but doesn't say that products need to be manufactured domestically.

Further restricting "Buy America" requirements to require contractors to know where all aspects of product manufacturing are done could "get a little ridiculous," Atkinson said.

"How do you know where the steel for the bolts was made?" he asked.



Staff Writer Gail Repsher Emery can be reached at gemery@postnewsweektech.com.