Tuesday, February 15, 2005

Illinois will have Stats on Offshoring in 3rd Qtr 2005

Companies that bid on state contracts must now report where contracts will be executed because of a new law that takes effect in July, 2005. Although some might be tempted to think this law "curbs" offshoring, don't you make that mistake. It's a data gathering bill, with a report on offshoring due by 2007, written by Central Mangament Services, the major procurement division of the state of Illinois.

prospective vendors shall disclose
in a statement of work where services will be performed under
that contract, including any subcontracts, and whether any
services under that contract, including any subcontracts, are
anticipated to be performed outside the United States.

What goes into a Bill may not always Come out as Legislation
This bill was originally written to prevent companies that offshore state work. Apparently, members received word that Central Management Services (CMS), was dismayed by the intent of the original bill. Because of this, successful efforts were undertaken to subsantially change the impact of the bill.

Legislators then re-worked the bill so that companies bidding on contracts must report their offshoring activities. Rep. Harry Osterman, from Chicago, added some teeth to the bill at the last minute by allowing the state to end a contract early - if the company decides to offshore the work after receiving the contract.

As may of you are aware, offshoring is a new phenomanom. Most foundations and think tanks aren't yet studying the issue yet, so in this regard this legislation may provide some data in the later part of 2005.

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