Indian IT firms bid for contracts as U.S. govt. slashes IT budget

By siliconindia   |   Wednesday, 23 February 2011, 10:58 Hrs
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Indian IT firms bid for contracts as U.S. govt. slashes IT budget
Bangalore: Indian IT Service firms are in for a big lottery with the U.S. government deciding to cut more than $61 billion from their current spending levels. This will prove to be a blessing in disguise for the service firms who are betting on the U.S. government contracts as most of them are pushing hard to be a part of the $100-billion U.S. government outsourcing market. More of government sector contracts will be outsourced to Indian firms as the U.S. states look at gaining greater efficiencies by reducing costs. Healthcare service companies are largely to gain as the U.S. government has mandated that all healthcare records needs to be archived digitally. Companies like TCS and Wipro who have a nine year $407-million outsourcing contract from the state of Missouri for delivering healthcare-related IT services will be the companies bagging the most number of contracts. Since these government contracts are large in nature, they usually give away all the responsibilities to the vendors including the infrastructure for delivering and hosting the solutions. The other areas that the vendors will get to explore are departments of justice, transportation, homeland security, health and human services, commerce, energy, veterans administration, agriculture and treasury. However experts are not very optimistic of Indian firms bagging new government contracts as outsourcing is a sensitive subject for the U.S. government due to high unemployment rate. If the government cuts jobs then the political cost will be high. When the proposed budget by the government is very limited it is very likely for them to opt for outsourcing but they are trying their best to avoid that and are making sure that most of the work should be done onshore.

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