Case Study: Information Services

Case Study: Information Services

In early 2002, the governor of Ohio ordered state agencies to cut spending by 6 percent because declining state revenues were creating a projected $1.5 billion deficit in the state’s two-year budget. The Department of Job and Family Services responded by replacing private contractors with state employees to save at least $39 million over two years.

The department’s Office of Management Information Services (OMIS) maintains computer systems for Medicaid, welfare, child support and unemployment compensation. State employees were making an average of $42 an hour including benefits, while contractors working in the OMIS were charging $105 an hour. In mid-2001, there were 613 contract computer programmers and systems analysts, and 298 public employees performing similar functions. The department cancelled contracts with 190 computer programmers and systems analysts from 30 companies and in February 2002 it was in the process of hiring 176 state employees to replace them. According to the department’s director, “we were getting more and more dependent on contractors.”

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