Q: Do you think you'll be spending more money on these contracts, though?
Another positive is that sometimes people think this will drive the price of doing business up. Will we be awarding contracts at a higher price? This presumes that we're currently reaping the benefits of offshoring with these contracts coming in at lower prices. That's not really true. Some vendors might give us a job rate for a U.S. programmer and then immediately, or later on, they ship that job over to India. They're getting a higher profit margin, but the tax payers ought to reap the benefits of that savings. I know it's happened in at least one situation, and I suspect it's potentially more.
Q: What kind of effect are you expecting this to have?
I can't really tell you that. That's why the directive is so important. We awarded over $8 billion in 2,200 contracts last year, and I don't know if it's 50 percent, 70 percent or 10 percent going to Michigan companies. What's important, too, is that if we're dealing with a company with headquarters in Denver, we're asking if that work will be done in Michigan or Colorado or India. We're asking who they are subcontracting with, and where are they located? Maybe 50 percent of the work is being done by programmers over in India. Now, we have more of a real sense of how much is staying in Michigan and how much is leaving Michigan.
Q: How much do you think this will help the residents of Michigan?
I think there's a very real possibility that it will have a positive outcome. Through these directives you communicate your values and what's important. This is what's important to us -- jobs. And the governor is backing it up with more than just talk.