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The Almighty Buck Businesses United States

D.C. Awards Obamacare IT Work To Offshore Outsourcer 402

Posted by samzenpus
from the cheap-labor dept.
dcblogs writes "Infosys, an India-based offshore IT outsourcing firm, recently announced that it had won a $49.5 million contract to develop a health benefit exchange for the District of Columbia. The contract was awarded to a U.S.-based Infosys subsidiary, Infosys Public Services. That's one of the larger government contracts won by an offshore outsourcing firm, but it's unclear whether any of the work will be done overseas. The District isn't disclosing any contract details. An FOIA request for the contract has been submitted. Infosys is one of the largest users of H-1B visas, and has been under a grand jury investigation for its use of B1 visitor visas."
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D.C. Awards Obamacare IT Work To Offshore Outsourcer

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  • by Moryath (553296) on Monday July 01, 2013 @12:00PM (#44154923)

    for why the H-1B system ought to be massively reduced and US contracts should be awarded only to actual US companies instead of shell-game "subsidiaries."

  • by Trepidity (597) <delirium-slashdo ... org minus author> on Monday July 01, 2013 @12:04PM (#44154979)

    These kinds of contracts are supposed to be bid out to the lowest bidder.

    If that actually happens: people complain that a company like Infosys wins the contract.

    If it doesn't happen: people complain that the government is overpaying for IT services, and back up their allegations by quoting a much lower price someone in the private sector got (...from Infosys) as evidence that the government is inefficient.

  • by penglust (676005) on Monday July 01, 2013 @12:10PM (#44155031)
    Nice sound bite. Too bad it is only that. We have never had, and should never have, true free market capitalism. The government has always provided many services to the businesses that make up our economy.

    Even if they had not, out taxes are paying for these contracts. Our government is supposed to represent the citizens. It is in the best interest of the citizens on this country to get people back to work.
  • by h4rr4r (612664) on Monday July 01, 2013 @12:12PM (#44155057)

    The race to the bottom only benefits the select few on top. With your idea we would all be working for $1/day while the rich get even richer.

    If you want a good example of this see hong kong or another place that allows those kinds of income inequalities. I would rather most americans be able to afford homes and food instead of most living in squalor so a select few can be super rich.

  • by meta-monkey (321000) on Monday July 01, 2013 @12:12PM (#44155059) Journal

    It would be great if immigration policy could be decided based on something other than the interests of suppressing wages and controlling the workforce.

    Agribusiness loves cheap labor from Mexico. Keep 'em coming, but keep that deportation threat over their heads so they don't get uppity about those "wages" and "working conditions" things.

    Then the wealthiest companies America need tech workers and don't want to pay American wages. Since they can't pile in illegals to run the data centers, get those h1bs rammed through congress. There we go, cheap tech workers who are nice and easy to control because they don't want to get deported after two weeks if they lose their job.

    Feudalism. Fascism. Whatever, it's a racket.

  • Re:Why? (Score:5, Insightful)

    by penglust (676005) on Monday July 01, 2013 @12:13PM (#44155067)
    Number? Studies? Actual data? I keep hearing this kind of crap. The problem is every time a project I was on got associated with off shoring it ended up costing time and effort here to cover up the screw ups.

    Again, present actual facts. I am sick and tired of the same old sound bites that just never seem to be true.
  • by Moryath (553296) on Monday July 01, 2013 @12:13PM (#44155071)

    How does that fit into the free market capitalism that made America great? If someone else can do the same job cheaper, hire them instead.

    You mean to say, "If someone can be hired for slave wages and locked into a single-employer contract with no chance to move jobs rather than hiring people on an equal footing."

    This is about as far from "free market capitalism" as it comes. The H-1B system deliberately alters the agreement [slashdot.org] and creates a semi-slave labor deliberately paying under-market wages.

    And then there's all [aila.org] the fraud [lexology.com] in the system [motherjones.com]. Including falsely inflated skills listings designed to keep anyone from successfully applying [dailykos.com] for the jobs later salted to H-1Bs with far less than the originally advertised qualifications. And of course the demand for H-1Bs rather than actual EB-5s [cringely.com] where they would have legal right to leave for better employment if it was offered by another company.

    Don't you dare use the term "free market capitalism", you fucking slavemonger. It's nothing of the sort.

  • by PortHaven (242123) on Monday July 01, 2013 @12:17PM (#44155111) Homepage

    Because, the government is what's making it uneconomical to hire US.

    First off, we were founded on the principal of having tariffs. Having kept tariffs, we'd have kept much of our manufacturing and middle-class.

    Second, when you claim an American worker costs to much, but point to all the mandated costs the American government has placed upon U.S. workers and business. Then for that reason, go elsewhere. It's not because of capitalism, but regulation.

    Simple way to bring back jobs to America. Mandate ALL contracts abroad must maintain the same benefits and protections. Yes, healthcare must be provided, they must pay into social security, etc, etc.

    Same way to deal with illegal alien employers. Don't fine them for employing illegal aliens. Fine them for not paying minimum wage. And well, if they're paying minimum wage. Let them be.

  • by Anonymous Coward on Monday July 01, 2013 @12:21PM (#44155147)

    Everyone, except for small companies, is using H-1b programmers. InfoSys, Tata, and the like have discovered that an American front company can get them past the "we want to support American companies" view of business so they started buying up their American competitors.

    Since we can't get away from foreign programmers, then we need to ensure that the job they do is good. What the D.C. and the U.S. really need are decent lawyers who won't let something like this become a honeypot that any vendor can raid as they see fit. If InfoSys makes a bid, they should have to live up to it.

  • Re:Why? (Score:4, Insightful)

    by i kan reed (749298) on Monday July 01, 2013 @12:33PM (#44155283) Homepage Journal

    How about the real question, since companies are ephemeral entities with no real way to measure their "americanness." Why have we inserted pointless middlemen of contracting companies into our government's process of managing itself. The fact is that it's an internal project, and having developers working for the government wouldn't really cost us much more. We've yoked ourselves to the wagon of privatization, without really caring what that means. I'm not entirely convinced of the value of having entire industries built around providing workers to the government when the government can damn well hire its own employees.

  • Re:Groan (Score:3, Insightful)

    by Anonymous Coward on Monday July 01, 2013 @12:35PM (#44155309)

    You know, I know the argument tends to reach fever pitches of hysterics on both sides, but the core reasons for not undertaking government sponsored health-care is because ultimately it makes promises that the government won't be able to deliver on in the long run.

    It has little do do with "deserving health care" or "not being communists".

    The fact is that health care is a gigantic black hole that you can pay for while things are good, but sooner or later, something happens and flushes it down the toilet. Demographic collapse is already threatening to destroy pensions. Consider what happens when all your old people live even longer, but are still retired and getting government supported health care, but there are fewer workers to pay for it.

    Hopefully, our efficiency will get that much better than we can support them, but the reality is that the market appears to be evening out labor cost disparities by flooding production into markets where labor has a low cost due to years of artificially protecting wages of First World workers.

    Fully utilizing and improving the lot of poorer countries and their people is helping humanity overall in the long run, but until wages even out, those who were sailing on top of artificially produced wage disparities are going to suffer a loss of standard of living.

    So, in the end, the fact is that while everyone wants free or "better" health care, just legislating it into existence doesn't actually make it work, at least not in the long run. Some of us would prefer that we didn't make promises that we can't responsibly keep in the long run, and would prefer to hold the line at something like meaningful reform to improve efficiency.

    Personally, I see government health care, and its eventual failure as something that could throw the country into complete chaos and even rebellion. It would be sad indeed if we ended up in a bloody revolution and eventual dictatorship simply because we couldn't avoid destroying ourselves with "bread and circuses". I know that seems a little alarmist, but look at the past and understand that revolutions like that happen when governments start writing checks that can't be cashed, but the people are accustomed to expecting that these issues will be handled by the government, and they are angered when their needs aren't met to their expectations. In retrospect, I wonder if perhaps it is already too late, and if the time to stop this was before we even developed this reliance on government.

  • new reality (Score:5, Insightful)

    by AdmV0rl0n (98366) on Monday July 01, 2013 @12:41PM (#44155397) Homepage Journal

    US companies do business in India? Wait.. To get in there you have to fight to pass innumerable hurdles thrown in your way.
    How about China?

    If the world was a level playing field, I'd probably be ok with the H1 Visa scam bullshit. But I'm not (and I'm a Brit in the UK). Globalisation is fine, I have no problem with it in its bassic capitalist basis. But it has to cut both ways. If China and India get to grow their middle class by working on US workload, then US companies should have the same access to do the same in China and India.

    I watch real time each week. Its somewhat weird seeing the slagging off the republicans get there. The dems in the US seem very very friendly to immigration, and to globalisation, and seem to take a lot of funding from the Apple and 'Media' funding. In the meantime on an observational level, seems to me the bone marrow of America - the middle class person is under seige. I can't fundamentally understand off shoring, from a business perspective. Even in raw capitalists terms - eroding the middle class is eroding away your own customer base long term.

    Globalisation in the west now seems to be 'worry about the H1 visa holders', and immigrants, and 3rd world - more than your own people. Screw them. Very strange way to proceed.

    Its ok to have a concern about minorities and immigrants, but its got strangely out of kilter.

  • Re: Why? (Score:4, Insightful)

    by Ash Vince (602485) * on Monday July 01, 2013 @12:45PM (#44155453) Journal

    I work for Accenture, my counterparts in India cost 1/5 of my wage and in many ways equal my quality. I'm not going to stick my fingers in my ears and him loudly, it is the facts.

    So in the name of helping the american economy you should clearly accept an 80% pay cut to make yourself competitive with someone from India :)

    (PS - This is a joke, in my experience offshoring to India is an utter disaster as your average indian outsourced development company will never give you an honest assessment of time involved in a project or actually admit when they are going to overrun the deadline before they do, causing any sort of confrontation is just too alien to the local culture even when it is better in the long run)

  • Re:Why? (Score:5, Insightful)

    by pla (258480) on Monday July 01, 2013 @12:51PM (#44155537) Journal
    Average salary of systems administrator in India - ~$4,000 US
    Average salary of a systems administrator in Washington DC - ~$75,000 US


    Availability of your systems administrator when the shit hits the fan:
    Outsourced to India - ~The third Thursday after Monsoon season ends.
    In-house in DC - ~Already waiting in your office with an apology and an action plan.

    Which one do you want to explain to the board you hired to save $71k/year, while the company hemorrhages 10x that per day in downtime because of your savings?

    Now in fairness, I've worked with Indian H1Bs, and they pretty much have the same skills profiles as Americans - Half can just about get the job done when nothing exciting comes up, a quarter suck, and a quarter rock. But despite that, outsourcing still simply doesn't work for one simple reason - Management views it as waving the magic green wand and making a pesky project someone else's problem; when in reality, outsourced work requires more careful management than traditional in-house development.

    Any PHB who thinks coding something to spec means a job well done, has never actually looked at the craptastic quality of most real-world specs.
  • by AlphaWolf_HK (692722) on Monday July 01, 2013 @12:53PM (#44155557)

    Protectionism is why sugar prices are so high in America that we use high fructose corn syrup whereas the rest of the world uses ordinary sugar. Protectionism, not the stock market, caused the great depression (Smoot-Hawley tariff act). Protectionism causes domestic steel prices to go up, which makes goods we export cost more than foreign goods.

    I could go on with a ton of examples of why protectionism does far more harm to our economy than good. When trade restrictions are lifted on the other hand, we win.

    A lot of people think we're getting the shaft from China, but it's really the other way around. They give us nice LCD screens, smartphones, and even capital goods (capital goods being tools used to build our infrastructure) and in return we give them useless little pieces of paper that we basically charge them interest on (inflation.)

    Yes, the free market is the way to go.

  • by AmazingRuss (555076) on Monday July 01, 2013 @12:58PM (#44155615)

    A gigantic, unexploited continent chock full of resources is what made America great. Americas problems have increased as less of those resources and land remain there for the taking. Meanwhile, we blame each other for what none of us have any control of.

  • by cold fjord (826450) on Monday July 01, 2013 @01:09PM (#44155739)

    These kinds of contracts are supposed to be bid out to the lowest bidder.

    Not necessarily. Another common standard is, "best value."

    Cheapest "up front" doesn't always equal cheapest total cost.

    Cheapest doesn't necessarily mean you are getting a good deal.

  • by AlphaWolf_HK (692722) on Monday July 01, 2013 @01:16PM (#44155805)

    The race to the bottom argument is a logical fallacy. Let's suppose this: If you race the prices to the bottom (i.e. everything becomes so cheap that anybody can afford it anyways) then who cares how much money you have? You can't eat money, and you can't use money: You can only spend it.

    What you need to look at is purchasing power, and you need to understand the distinction between money and wealth.

    I'd rather live in a world where I make $10 an hour with my lunch costing only $4 than live in a world where I make $20 an hour and the same lunch costs $20. And as time goes on, this is the reality we live in.

    In the world we live in, yes, the rich become wealthier, but the poor also become wealthier. In fact, the poor are wealthier than they've ever been at any point in history. This is an indisputable fact. Most of today's poor, even in third world countries, own cell phones, TV's, and have ample access to food. In fact food is now cheaper than it has ever been, so where that was a problem in the past it almost no longer exists.

    I remember in the 80's, you were one wealthy SOB if you owned a personal computer, a big screen TV and a carphone. Now try to find somebody who doesn't have these things, and the ones they have are FAR better than the ones the rich had in the 80's. And in spite of this, people like you come around insisting that things are only getting worse for the poor, and it's all the fault of capitalism. You simply look at dollar figures and say "adjusted for inflation, this person now makes less" and with that information alone you conclude that capitalism is the problem, and you wrongly conclude that we're on this race to the bottom where everybody is worse off than they were before. It's just not true, not even close to being true.

    I don't know what your motivations are, but I do know this: When people like you see these things as being wrong, they lobby for the government to "fix" things, and the "fixes" almost always end up making things worse for everybody. Case in point: Smoot-Hawley was supposed to "fix" unemployment, and it did the opposite. We're fine the way we're going now. Technology keeps advancing, and food and luxury items keep getting cheaper.

  • by gestalt_n_pepper (991155) on Monday July 01, 2013 @01:27PM (#44155903)

    The race to the bottom argument is a logical fallacy.
    Yes, it's only in that inconvenient real world that it happens. In case you've forgotten, wages in the USA started stagnating in the 70s and the divide between wealthy and poor grows larger each year. Moreover, the real world examples of unregulated capitalism (e.g. Pakistan, Somalia, Mexico, the USA, China) show exactly what happens when the government "gets out of the way." This is solely due to changes in government taxation regulation changes on high income earners and high income corporations, and the demise of checks on finance (i.e. Glass-steagall).

  • by gandhi_2 (1108023) on Monday July 01, 2013 @01:34PM (#44156003) Homepage

    i'll take a capitalist race to the bottom over a communist forced march to the gulag.

  • by h4rr4r (612664) on Monday July 01, 2013 @01:35PM (#44156009)

    Awesome false dichotomy you got there.

  • by lgw (121541) on Monday July 01, 2013 @01:48PM (#44156227) Journal

    Everyone working in tech in America is in the 1% - of the world. There's no moral harm when a job moves overseas to someone who objectively needs the money more. Arguing that the rich have too much is a poor strategy when you're part of the richest 1%.

    And the race to the bottom ends with everywhere in the world having a real middle class - hardly a dystopia. Everything people say today about work going to China or India was said when I was young about work going to Japan, and later about South Korea. Emerging nations do eventually emerge, and everyone benefits as a result.

  • by danbert8 (1024253) on Monday July 01, 2013 @02:13PM (#44156601)

    You missed his point. There are more poor people in the US than in any point in history because we have been continually raising the cutoff to what we consider "poor". Poor people today are likely to have a car, a fridge, a cell phone, a flat screen TV, air conditioning, etc. The majority of the poor in the US are obese, not starving. Wages may be declining, but standard of living is still increasing.

  • by hawguy (1600213) on Monday July 01, 2013 @02:58PM (#44157319)

    Everyone working in tech in America is in the 1% - of the world. There's no moral harm when a job moves overseas to someone who objectively needs the money more. Arguing that the rich have too much is a poor strategy when you're part of the richest 1%.

    And the race to the bottom ends with everywhere in the world having a real middle class - hardly a dystopia. Everything people say today about work going to China or India was said when I was young about work going to Japan, and later about South Korea. Emerging nations do eventually emerge, and everyone benefits as a result.

    But when the job moves overseas so do all of the secondary effects.

    The $100K/year programmer may be in the top 1% so no great harm if that job moves overseas (except for well except for the programmer, but that job is in the 1% and we don't care about the 1%).

    The problem is that that $100K/year programmer owns a house, and the property taxes help pay for services that the 99% use.

    That $100K/year programmer goes to restaurants, where the 99% work.

    That $100K/year programmer gets her blouses dry cleaned, and the dry cleaner's employees are in the 99%.

    That $100K/year programmer pays federal state & local taxes (including sales tax), gets hair cuts, oil changes, buys groceries, remodels his house, and a multitude of other tasks that give money to the 99%.

    When that $100K/year job is outsourced to an outsourcing company for $20K/year, then none of the money stays in the USA.

  • by chihowa (366380) on Monday July 01, 2013 @04:01PM (#44158223)

    And the race to the bottom ends with everywhere in the world having a real middle class - hardly a dystopia.

    How do you figure? The race to the bottom ends at the bottom. Real wages reach a minimum and only capital has any value.

    That there are local minima along the way (where emerging nations prosper) doesn't mean that the end result is a middle class everywhere. The end result is that a few extremely wealthy persons have most of the capital and everyone else works for peanuts. Look at the money "saved" by outsourcing labor. Do the prices you see at the store reflect all of that savings or are the profits from those products just increasing?

    Globalization is just wealth consolidation. Though it may be nice in the short term, it doesn't end well for most of the global population.

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