Texas and Accenture Demonstrate Outsourcing Doesn't Always Work

(MoneyWatch)  The State of Texas and Accenture negotiated an early end to a contract that had out sourced the state's work signing eligible citizens up for food stamps and health programs for the poor. The Austin Statesman reports on the details of the deal. The original contract had been worth almost $900 million but in the end the state spent about $250 million. The goal was to have a centralized call center to assist people to get into food stamps, Medicaid and the Texas program for poor children. There were issues with how much the contract was actually saving the state in administrative costs and performance had not been to standards. The state is planning on awarding a long term contract. Most times outsourcing is considered is to reduce costs based on the concept that contractors are cheaper and easier to hire. They are also compared to Civil Servants often non-unionized and easier to get rid off if necessary. As we wrote about earlier this year New York is running into that issue as it tries to cut back on state spending.