Archive for Monday, July 19, 2004

Kansans’ questions will stay in U.S.

Calls outsourced to India spur review of state contracts

July 19, 2004


Kansans' questions about food-stamp and public-assistance programs soon will be answered by someone a bit closer to home.

But the issue has opened scrutiny of all the state's service contracts and discussion of how to keep more of the state's work in Kansas.

Responding to heat from legislators, state welfare officials have renegotiated a $1.7 million-a-year contract with an Arizona-based company that has been using a call center in India to field questions about some public-assistance programs.

"Starting Nov. 1, those calls will go to a call center in Wisconsin," said Kyle Kessler, spokesman for the state Department of Social and Rehabilitation Services.

The contract and its outsourcing caused a ruckus this year when several legislators objected to the notion of Kansas money funding jobs in India.

"It didn't seem right to me," said Rep. Tom Holland, a Baldwin Democrat.

Holland carried the amendment that directed SRS to renegotiate its contract with eFunds, a company that specializes in managing electronic fund transfer accounts.

The amendment said the call center had to be in the United States.

"My preference was that it be in Kansas," Holland said, "but I knew that might not be feasible."

Kessler said that during negotiations with eFunds, it become clear that putting the call center in Kansas would cost an additional $650,000 a year.

"They gave us the option of doing that, but we don't have that kind of money," he said, noting that much of the increase was tied to equipment and startup costs.

"The nature of the work tends to be very technical," he said, noting that eFunds oversees electronic distribution of benefits through the state's food-stamp and cash-assistance programs.

The call center, he said, handled inquiries from recipients having trouble with their cards and clarified how much money remained in a recipient's account.

To accommodate the Kansas contract changes, eFunds expects to add from seven to nine workers at its call center in New Berlin, a Milwaukee suburb.

"That's for 24-7 staffing," Kessler said. "So we're not talking about a lot of people."

But Rep. Dennis McKinney, D-Greensburg, argued that for dozens of small towns across the state, nine jobs would be a godsend.

"I understand that it might have cost more, but it might be worth it, too," he said. "It's something we really need to look at."

McKinney said he sent copies of the initial contract to chambers of commerce in and around his district.

"A bunch of them said they were interested in seeing if they could put something together," he said. "We've got the broadband capability. Office space wouldn't be a problem."

The would-be coalition dissolved after members realized the contract period was until 2010, McKinney said.

McKinney and Holland said they would push for a full review of the state's service contracts over the next few years.

Joining them will be Rep. Dale Swenson, R-Wichita, who works at Boeing Co.

"I never thought I'd say this, but among my constituents, the labor issue -- the continuing loss of jobs -- has become a hotter topic than abortion or guns," Swenson said.

"I'm not saying abortion and guns aren't big. They are," he said. "But right now, the loss of jobs is higher on my radar than any other issue. It's huge."

At the state Department of Administration, spokesman Gavin Young said an internal review of the state's service contracts found the outsourcing in the eFunds deal was an exception.

"Seventy-five percent of all the money that's spent through the Division of Purchasing is spent with Kansas-based companies; that's 1,096 contracts for $28.2 million," Young said.

"For comparison, the next largest state is Missouri, with 207 contracts for a total of $3.4 million," he said. "So you can see that not that much leaves the state."

But those figures, Young said, did not include contracts let by the Department of Transportation, public schools or state universities.

Officials at the state Department of Commerce said they doubted there was much to be gained by weeding out whatever outsourcing remains in state contracts.

Instead, Matt Jordan, the department's director of operations, said its efforts were focused on making the state's rural areas more competitive by making tax incentives and credits available.

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