Washington, DC, July 14, 2004--A report issued today by the Corporate Research Project of Good Jobs First spotlights the growing degree to which state governments are contracting with foreign outsourcing firms for public contracts and are funneling millions of state taxpayer dollars offshore.

The report, entitled "Your Tax Dollars at Work...Offshore," found that nearly every state has engaged foreign vendors to perform state work offshore. The research was commissioned by the Washington Alliance of Technology Workers (WashTech), a local union of the Communications Workers of America that supports workers in the information technology sector. 
 
The report found that 18 offshore outsourcing firms are aggressively seeking state government contract work -- primarily in information technology -- in at least 30 states. The 18 firms have captured about $75 million in state contracts so far and are seeking more, in part by hiring former government officials and by making state electoral campaign contributions.
 
Marcus Courtney, president of WashTech, noted that while the offshoring of private sector work is receiving growing public attention, there is a real need to document the extent of offshore outsourcing by states for information technology work related to social service programs and other state functions. "As state legislatures continue to take up this issue, they need the hard facts of how offshore contractors are positioning themselves to target the work of state governments," he said. 
 
Philip Mattera, director of the Corporate Research Project and Research Director of its parent organization Good Jobs First, stressed that this is the "first national study of a subject that has been generating intense controversy in many states. It is important for states to know where the work they have contracted is being performed, and many states have no idea that this work is sent offshore."
  
As the public controversy over the offshoring of private sector U.S. jobs to locations overseas continues to grow, many contractors and offshore vendors are focusing their attention on states and state contracts as well as private sector business opportunities.
 
Often, state governments are not even aware that they are sending work offshore, the study found. In many cases, state governments awarded contracts to U.S. firms, believing that the work would be performed domestically, only to find that the work was subsequently subcontracted to an offshore vendor.

In other cases, states assume they are dealing with a domestic company because a U.S. mailing address is used.  Offshore vendors typically use such addresses for sales and marketing purposes, while the contract work is performed offshore.

Taxpayers and state policy makers are ill-equipped to respond, the study found, since most states have little or no power to regulate work performed offshore or the offshore vendors they find themselves dealing with.

The study also looks at the large number of states that operate food stamp call centers offshore.