Ohio Governor Ted Strickland Friday issued an executive order that prohibits the expenditure of public funds for services provided offshore.
“Outsourcing jobs does not reflect Ohio values,” Strickland said. “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. 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.”
“Ohio’s policy has been – and must continue to be – that public funds should not be spent on services provided offshore,” Strickland says in the order. “Throughout my Administration, procurement procedures have been in place that restrict the purchase of offshore services. 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.”
In March, the Department of Development contracted with Texas-based service provider Parago, Inc. to assist with the agency’s implementation of the federal stimulus-funded appliance rebate program. Despite state procurement requirements designed to restrict service providers from using public funds for offshore labor – in particular, a DAS directive that requires agencies to ask potential vendors to list all locations where the services will be performed – the contract was let with a company that ultimately used offshore labor.
Earlier this week, the governor asked Development Director Lisa Patt-McDaniel to further review the circumstances surrounding the award of the Parago contract including any potential legal recourse with the vendor.
Officials say Ohio’s appliance rebate program has stimulated manufacturing activity with Ohio companies such as Whirlpool, which has increased shifts and moved to a six day schedule to satisfy demand generated by the program. Nearly $10.5 of the $11 million in total program funding was awarded directly to Ohio consumers for the purchase of energy-efficient appliances. Parago was awarded $357,300, or 3.2 percent, of the total funding, for providing services.
“This program was successful in stimulating economic activity for Ohio appliance manufacturers and retailers,” Strickland said. “But contracting with a domestic service provider that ultimately outsourced jobs could and should have been prevented. This order will ensure that this never happens again.”
In June 2008, Strickland signed an executive order (E.O. 2008-12S) that implemented Think Ohio First practices, which promotes economic development by maximizing the use of Ohio businesses when agencies conduct purchases. The order outlined procurement reform efforts and directed all state agencies to work together for cost savings and efficiencies when purchasing supplies and services. In addition, it directed the Department of Administrative Services to hire a chief procurement officer to oversee agency purchasing functions.
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