Tuesday, August 3, 2010

Stimulus work outside the US

References to US federal government stimulus spending and El Salvador kept popping up in Google Reader, so I figured I had to read it as some point as apparently a lot of people are really upset. 

[Ohio] Gov. Ted Strickland said he's disappointed that federal stimulus money went to a company that outsourced work to an overseas call center, and he pledged better oversight of future contracts.
A Texas company hired to administer Ohio's popular appliance rebate program used hundreds of workers in El Salvador to process applications and to answer customers' calls...
Several Republican congressmen from Ohio...said this week the stimulus-funded work should not have ended up in Central America.
Strickland, a Democrat, said Thursday the state will do a better job of vetting companies that get stimulus contracts...

President Barack Obama's stimulus package gave Ohio $11 million to provide rebates to consumers who buy energy-efficient appliances, including clothes washers, dishwashers and water heaters.

Parago received the highest score among nine companies that bid on the contract, and its $171,300 proposal was the second-cheapest, Patt-McDaniel said.

Two Ohio companies, Twenty First Century Communications and Focus on Ohio's Future, were the most expensive, at $467,238 and $493,763, respectively.
Upon learning of the El Salvador call center, Ohio officials immediately contacted Parago and asked the company to process the Ohio calls within the United States, she said.
But Parago, which has no domestic call centers, had already grabbed thousands of rebate applications, and disrupting the program would have jeopardized rebates to consumers, Patt-McDaniel said...

"For a government-run program, with all due respect, it's running very, very smoothly," said Bob Bloom of Bloom Brothers Supply, a retailer in Chesterland, about 20 miles east of Cleveland.

Bloom said he hired two more workers to handle the extra sales. They will keep their jobs after the program ends...
Well, I can understand some of the frustration with federal stimulus money going to a company that employs hundreds of workers in El Salvador to process applications and answer calls.

On the other hand, do you really want to interrupt a program that helps retailers (business is booming and we are hiring), was awarded to the business with the best proposal (highest score among all bidders), gets generally good reviews from the participants ("running very smoothly"), and costs nearly one-third the price of doing it in Ohio (171k vs. 475k)?

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