City of San Diego, Off-Shore Division

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To continue my series of posts on city of San Diego outsourcing issues, I pose another question.

When we say "outsourcing" just how far "out" are we talking?

Councilwoman Sherri Lightner asked the question at Tuesday's City Council hearing on the outsourcing deadlock between the Mayor's Office and the city's white- and blue-collar labor unions.

"Is there a requirement here that the companies be local? The contractors be local? The jobs be local?" Lightner asked city staff.

Lightner was concerned about the loss of city revenue should companies and workers live, work and pay taxes, in say Texas.

Staff responded there was no restriction against companies from outside the area, but that jobs would require workers to live in or around the city. Garbage collectors, for one, couldn't commute from El Paso.

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But, Lightner said, certain jobs could be performed from anywhere. Like data processing.

Funny Lightner should mention data processing. The city has put out for bid portions of its information technology services now performed by city-created nonprofit, Data Processing Corp.

In the city's request for proposals, there was no restriction against companies providing services outside the area, or even outside the country. In fact, the city expects each bidder to do so.

"I anticipate that each responder will intend to leverage their existing operations on-shore or off-shore to support their options and related costs for each option," said Naresh Lachmandas, the city's chief information officer and director of information technology. "I believe we have a requirement that the bidders must be incorporated within the U.S."

Lachmandas also said the city would account for local companies when evaluating the bids and expect each bid to have some part of its operations in San Diego. The city's focus, however, is to save money.

"We're always looking at what's best from a cost standpoint for taxpayers especially given the $179 million budget deficit," Lachmandas said.

Bidding for the IT services closed last Friday and the city is reviewing the nine proposals that were submitted.

One of those proposals came from the city's current provider, Data Processing Corp.

Board Chairman Reed Vickerman couldn't discuss Data Processing's bid, but he too expected the city would receive proposals with out of area workers. Currently, all of Data Processing Corp.'s employees are local.

"As a taxpayer, I just think the taxpayers ought to be thinking about whether this is a time to have people in the area losing jobs," Vickerman said.

-- LIAM DILLON

4 Comments so far on this story...

Maybe Mr. Vickerman should realize that if you're doing the job correctly and for a reasonable price, then no one should have to think about "people in the area" losing a job. Maybe the Data Processing Corp. should have thought about that when the unbelievable bonuses were being paid to employees for just doing their job. Stop the foolishness and you probably wouldn't have to be concerned about losing the account. And if you have to pay bonuses to employees to retain them, it's time they left, along with you for not being competent enough to run the DPC.

Posted by Buddy in Mission Valley | reply to this comment
October 30, 2009 6:58 am

You do realize that the staff who have their positions being put out to bid have never received annual bonuses?

Posted by larry | reply to this comment
October 30, 2009 2:48 pm

Does this alarm anyone else that our local Tax dollars are going to go to support out of country or even out of area employees? I understand not all of the people who work for local governments work in the area but at least they work NEAR the area they service! If our local government doesn't want to employ people in our city how can we attract other companies to employee people in our city?

Posted by Kandy | reply to this comment
October 30, 2009 8:55 am

Perhaps Mr. Dillon missed why Sherri Lightner may have been asking the questions that she did. If the City is going to outsource a job, by law, there needs to be a clear 10% (or more) savings to the taxpayers. If the bulk of a potential contractor's staff (and/or the company itself) pays taxes outside the City (or County or State), then there is a net loss of tax revenue to San Diego City that needs to be accounted for. This factor can be quantified---and therefore should be factored into any decision whether to "outsource" jobs to a particular contractor.

Posted by Worried San Diegan | reply to this comment
October 30, 2009 12:05 pm

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