This is an archive of news stories and research from the National Union of Public and General Employees. Please see our new site - https://nupge.ca - for the most current information.
Billion-dollar British IT privatization gamble runs into trouble
Vancouver (30 Nov. 2007) - The British Columbia Government and Service Employees' Union (BCGEU/NUPGE) is calling on the province to review information technology (IT) privatization practices and halt any further expansion following the spectacular failures, privacy breaches, massive cost overruns and allegations of fraud and bribery associated with subsidiaries of two American companies, Texas-based Electronic Data Systems (EDS) and Virginia-based Maximus.
The Liberal administration of Premier Gordon Campbell has already privatized the administration of B.C. revenue collection to EDS. The province's Medical Services Plan (MSP) and Pharmacare are privately administered by Maximus.
In Britain, EDS is at the centre of an unprecedented data leak that was described as "catastrophic" by The Times of London on Nov. 22. To avoid exorbitant EDS surcharges related to the removal of personal data, the government shipped insecure files. Data on 25 million British citizens has been misplaced in the process, leaving them vulnerable to identity theft.
Checkered history
Both Maximus and EDS have a checkered history involving data security and other matters.
EDS agreed in September to pay nearly $500,000 (U.S.) to halt a U.S. Securities and Exchange Commission (SEC) investigation into allegations of accounting irregularities and
bribery allegations associated with an Indian contract. Maximus paid a $30 million (U.S.) settlement after the company was accused of helping to defraud the federal Medicaid program.
Meanwhile, the B.C. government has also issued an outstanding "request for proposals" (RFP) to private companies for a contract to provide mainframe hosting for the B.C. government.
The contract could run for 20 years. EDS and Maximus are both considered prime contenders. If it proceeds, the plan would put a vast array of confidential government information in the hands of these companies.
"The Campbell government has committed nearly a billion dollars to foreign based multinationals that fail to deliver time and time again," says BCGEU president George
Heyman.
"Why is the Campbell government continuing to sign multi-year contracts with foreign multinationals that are experiencing serious problems in other jurisdictions?" he asks.
"The benefits are non-existent. The risks are too high." NUPGE