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US firm fined for outsourcing work to India

A US contractor has been asked to pay fine of $3.1 million for illegally outsourcing government-funded work to a contractor in India

Policy Pulse
Publish Date: Mar 25 2016 12:40PM | Updated Date: Mar 26 2016 11:41AM

US firm fined for outsourcing work to India

 A US contractor has been asked to pay fine of $3.1 million for illegally outsourcing government-funded work to a contractor in India. 

 
Focused Technologies Imaging Services, its owner Charles Tobin and ex-co-owner Julie Benware will have to pay fine and fees under a deal with New York State Attorney General Eric Schneiderman after accepting  their fault in violating New York federal laws by illegally outsourcing e work to a subcontractor based in Mumbai in 2008 and 2009.
 
Officials said Indian firm, which was unaware it had got the work illegally, fully and voluntarily cooperated with the investigation.
 
Agreement arises from a $3.45 million contract in 2008-09 between the New York State Industries for the Disabled (NYSID) and the New York State Division of Criminal Justice Services (DCJS), to digitise and index approximately 22 million fingerprint cards into a searchable database.
 
Cards contained personal data including Social Security numbers, date of birth and basic physical characteristics.
 
Firm paid the Indian company just over $82,000 for this indexing between October, 2008 and September, 2009.
 
Officials pointed out that there is no proof the Indian company, nor any of its employees, knew it had obtained the work illegally.
 
They said the outsourcing was not legal since Focused sent personal information of over 16 million people to the Mumbai-based subcontractor that was not authorised to receive such information.
 
The outsourcing also led to failure of Focused to follow a requirement that over 50 per cent of the labour hours of the contract be performed by individuals with disabilities.
 
Indian company performed approximately 37.5 per cent of the work on the contract, Schneiderman said.
 
In the first-of-its-kind pact obtained by Schneiderman regarding a government contractor illegally shipping jobs overseas, 
Focused and Tobin will pay $3.05 million in penalties, fees and costs, and Benware will pay $50,000.
 
On the confidential nature of the information of the fingerprint cards, Focused should have performed all of the work in New York and it could only use employees that had passed a criminal background check.