Ohio will no longer allow any taxpayer dollars to be used to pay for the outsourcing of services after an embarrassing snafu involving a central American call center was reported, the governor’s office said August 6.

The controversy arose last week after it was revealed that call center services for a federally funded appliance-rebate program had been outsourced to a location in El Salvador.

“Outsourcing jobs does not reflect Ohio values,” Governor Ted Strickland said in a press release. “Ohioans have been among the hardest hit by more than a decade of unfair trade agreements and the trickle-down economic policies that promoted offshoring jobs at the expense of Ohioans who work for a living.”

The program, funded by the $787 billion stimulus package, provides tax rebates to consumers for the purchase of energy efficient appliances.

In March, the state contracted with Texas-based service provider Perago Inc. for a hefty sum of $357,300. The company then outsourced the call center work to a company in El Salvador.

According to Strickland, Ohio law prohibits public funds from being spent on services provided offshore. State directive already requires agencies to ask vendors where all services will be performed.

“Ohio’s policy has been – and must continue to be – that public funds should not be spent on services provided offshore,” Strickland said in a press release.

The problem with the $11 million program was discovered not by a state official, but by a private citizen who asked the Texas-based company about the location of the call center.

The executive order issued by Strickland reaffirms state law and requires the Department of Administrative Services to develop new procedures to ensure that no taxpayer dollars are used for services outside the U.S.

“We must do everything within our power to prevent outsourcing jobs because it undermines our economic development objectives, slows our recovery and deprives Ohioans and other Americans of employment opportunities,” he said.

The revelations of the outsourcing scandal could be damaging to Strickland’s reelection campaign. He is currently locked in a tight race with former Congressman John Kasich and has made his opponent’s support of free trade agreements that increased outsourcing a focal point of his campaign.

“Throughout my Administration, procurement procedures have been in place that restrict the purchase of offshore services,” Strickland said. “Despite these requirements, federal stimulus funds were recently used to purchase services from a domestic company which ultimately provided some of those services offshore. This incident was unacceptable and has caused me to redouble my commitment to ensure that public funds are not expended for offshore services.”

Print PDF