Outsourcing Law & Business Journal™: August/September 2010
September 14, 2010 by Bierce & Kenerson, P.C.
OUTSOURCING LAW & BUSINESS JOURNAL (™) : Strategies and rules for adding value and improving legal and regulation compliance through business process management techniques in strategic alliances, joint ventures, shared services and cost-effective, durable and flexible sourcing of services. www.outsourcing-law.com. Visit our blog at http://blog.outsourcing-law.com.
Insights by Bierce & Kenerson, P.C., Editors. www.biercekenerson.com
Vol. 10, No. 8-9 (August/September 2010)
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1. Government Procurement: Civil Fraud and Debarment for Non-Disclosure of [Offshore] “Outsourcing.
2. U.S. Increases Visa Fees by $2,000 for H1-B’s and $2,250 for certain L’s: Sen. Schumer Leaps from “Chop Shops” to “Body Shops.”
3. Humor.
4. Conferences.
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4. Conferences.
September 13-15, 2010. 5th eDiscovery for Pharma, Biotech and Medical Device Industries, Philadelphia, Pennsylvania. Presented by IQPC, this event will bring together industry leaders from in-house eDiscovery teams, expert judges and outside counsel as they discuss:
- How the new Pension Committee decision will effect eDiscovery professionals in the life science industries
- The unique challenges biopharmaceutical and medical device companies face with respect to social media content
- Preparing and responding to FDA inquiries, patent issues, and other types of pharmaceutical litigation
- A progress report on the 7th circuit eDiscovery pilot program and its implications for Pharma and Biotech
- Reducing patient privacy risks and unnecessary disclosures due to indiscriminate document retention
- Discovering new technologies to reach your goal of gaining proactive control over all your data
To register and view the whole program, click here.
September 26-28, 2010. IQPC Shared Services Exchange™ Event, 2nd Annual, to be held in The Hague, Netherlands. Shared Service Centres have long been seen as the cost saving centre of HR, Finance & Accounting and IT processes, but with changing employment trends and global challenges facing organisations, how can SSC’s continually offer service value?
Unlike typical conferences, the Shared Services Exchange™, which will be co-located with the Corporate Finance Exchange™, focuses on networking, strategic conference sessions and one-on-one meetings with solution providers. The Exchange invites strategic decision makers to take a step back from their current operations, see what strategies and solutions others are adopting, develop new partnerships and make investment choices that deliver innovative solutions and benefits to their businesses.
To request your complimentary delegate invitation or for information on solution provider packages, please contact: exchangeinfo@iqpc.com, call +44 (0) 207 368 9709, or visit their website at http://www.sharedservicesexchange.co.uk/Event.aspx?id=263014
September 27-28, 2010, CxO Dialogue Business Process Outsourcing Conference to be held in Berlin, Germany. The CxO Dialogue Business Process Outsourcing offers a neutral platform for about 50 decision makers from HR, finance, CRM and IT that allows to discuss individual projects regarding the outsourcing of business processes. Case studies, workshops and one-to-one meetings provide the opportunity to network on a level playing field and talk with speakers, colleagues from other companies and expert consultants from leading solution providers about topics that really matter.
Our extensive business matching process guarantees tailor-made agendas and really meaningful contacts. To learn more about econique’s business matching, click here. Participation is free of charge but an executive position is requisite. To reserve your spot, please contact catherine.harrison@econique.com. To become an exclusive solution partner and meet executives from your target group, please contact juergen.haller@econique.com.
September 28-30, 2010, SSON presents Finance Transformation 2010, Chicago, Illinois. If you are facing challenges to meet your finance end-to-end and top quartile requirements, consider Finance Transformation 2010 – the most comprehensive event for anyone managing finance back office operations looking for end-to-end capability.
The main themes explore the strategic views of true transformation across the entire finance supply chain and highlight the roadmaps which will help you to achieve top quartile business outcomes you aspire to. Sessions will cover the key tenets that all of you in the industry – large and small, beginner and established, vendor and buyer, private and public – are required to confront. For more information and to register, visit Finance Transformation.
Gain value from High-caliber Keynote & Plenary Sessions and Three Conference Tracks:
- Sourcing Strategy: Achieving New Business Value Through Innovation
- Mastering Sourcing: Driving Outcomes Through Smart Partnerships & Delivery Models
- Best Sourcing Practices: Exceeding ROI Goals While Minimizing Risk
To register, and for the most up-to-date event information, please visit http://www.globalsourcingforum.com
October 21-22, 2010, American Conference Institute’s 5th National Forum on Reducing Legal Costs, Philadelphia, Pennsylvania.
The essential cross-industry forum for corporate and outside counsel who are truly motivated to create value and reduce legal costs through innovative fee arrangements, enhanced relationships, and streamlined operations
Come join senior corporate counsel responsible for cost-reduction success stories, as well as leaders from law firms that have pioneered the use of alternative fee arrangements and other innovative cost-reduction initiatives, as they provide a roadmap for navigating the complexities of keeping legal department costs in check. Now in its fifth installment, this event offers unique networking opportunities with senior practitioners from around the nation, including in-house counsel from a wide range of companies and industries.
Reference discount code “outlaw” for the discounted rate of $1695! To get more information, visit www.americanconference.com/legalcosts
October 25-27, 2010, The 8th Annual HR Shared Services and Outsourcing Summit, Orlando, Florida. This will be a gathering for corporate HR & shared services executives from companies across North America to exchange ideas, develop new partnerships and discuss the latest tools, technologies and strategies being employed in the profession to enhance departmental efficiencies and propel corporate growth. The event will focus on the most current topics in the HR shared services industry including metrics, automation, outsourcing, globalization, compensation & rewards, benefits and an overall focus on the new strategic role of HR shared services. We will review how to tackle change management, analyze current and future projects and further develop the instrumental key areas within HR shared services. Outsourcing Law contacts can receive 20% off the standard all access price when they register with the code HRSS5. Register by calling 212-885-2738. View the program brochure for more details by clicking here.
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FEEDBACK: This newsletter addresses legal issues in sourcing of IT, HR, finance and accounting, procurement, logistics, manufacturing, customer relationship management including outsourcing, shared services, BOT and strategic acquisitions for sourcing. Send us your suggestions for article topics, or report a broken link at: wbierce@biercekenerson.com. The information provided herein does not necessarily constitute the opinion of Bierce & Kenerson, P.C. or any author or its clients. This newsletter is not legal advice and does not create an attorney-client relationship. Reproductions must include our copyright notice. For reprint permission, please contact: wbierce@biercekenerson.com . Edited by Bierce & Kenerson, P.C. Copyright (c) 2010, Outsourcing Law Global LLC. All rights reserved. Editor in Chief: William Bierce of Bierce & Kenerson, P.C. located at 420 Lexington Avenue, Suite 2920, New York, NY 10170, 212-840-0080.
Government Procurement: Civil Fraud and Debarment for Non-Disclosure of [Offshore] “Outsourcing”
September 14, 2010 by Bierce & Kenerson, P.C.
Many companies provide services to the U.S. government. Directly and indirectly, government contractors must disclose extensive information in their bid documents. Under a draft U.S. law, such bids would need to disclose whether the bidder has a history of “the laying off of a United States worker from a job, and the hiring or contracting for the same job to be performed in a foreign country.”
Under the draft “Stop Outsourcing and Create American Jobs Act of 2010”, introduced by Rep. Jerry Cranwell (D., Calif.) on June 29, 2010, all Federal government departments and agencies would be required to request each bidder for a Federal contract to provide information regarding whether the offeror engaged in “outsourcing” during the fiscal year preceding the fiscal year in which the contract is to be awarded. The bill attacks the restructuring of government suppliers who terminate the employment of a United States worker from a job and hire (or contract for) the same job to be performed in a foreign country.
The bill would punish bidders by debarment from future Federal government contracts and impose criminal fraud penalties under 18 U.S.C. 1001 (false statements to the Government).
Analysis. This bill requires disclosure and imposes civil debarment and criminal liability for non-disclosure. The disclosure relates to a lawful act of laying off a U.S. worker followed by a lawful act of hiring a foreign worker.
Comity and Reciprocity. Public International Law is built upon reciprocity and “comity.” “Comity” represents a respect in one country for the reasonable internal actions in another country for matters that have potential dual impact in both countries. This draft legislation is patently nationalistic, protectionist and xenophobic. On a reciprocal basis, an American worker would have no chance of replacing a foreign worker employed by a foreign employer where the foreign employer provides goods or services to a foreign government. Such legislation risks serious harm to American workers by foreign adoption of similar laws where foreign labor is replaced by American labor.
Multilateral and Bilateral Commitments. As a legal matter, a law that violates U.S. international commitments may be valid under local law but engage the international responsibility of the United States under a prior binding international convention. This law would punish American government contractors for practices that are protected under the WTO General Agreement on Trade in Services (“GATS”) and possibly the WTO Agreement on Trade-Related Investment Measures. Similarly, the U.S. would be in breach of its bilateral duties under NAFTA.
Bill of Attainder. This faces U.S. Constitutional challenge as a Bill of Attainder under Article I, Section 9. A “bill of attainder” was a law that banned a person because of some inherent status or the exercise of some freedom, right or privilege that is generally available to all citizens. It is a legislative declaration that a person or group of persons is guilty of some crime and punishing them without benefit of a trial. In such, the draft law would have the same effect as debarring contractors who fire U.S. workers for any lawful reason, such as a shortage of work, or such as the employee’s abuse of the employer’s computer system or use of office equipment for conducting a sideline business during off-hours.
Business Process Transformation. The draft legislation does not define what is the “same work” that is being done offshore. In many cases, globalization occurs because the functions and roles are changing to use new technologies, to access new markets and to obtain new skills. As in other cases of “follow the work,” the question is not just work, but organizational design, workforce planning (such as for knowledge workers) and marketing (getting closer to the customers). The draft law invites artificial determinations that offshored work is the “same” and omits any definition of “sameness.”
Hidden Agenda: Compiling a Little List. Since public procurement procedures are accessible to the public in the United States, the draft legislation invites inquiry into its effects. If enacted, the draft law would allow the Government to compile a list of all Government contractors and subcontractors (to the infinite level) who had done any “outsourcing” in the prior 12 months. Such a list would then be used for political purposes to harangue any enterprise “guilty” of such lawful behavior. Companies that are indirect subcontractors would face the same reporting, compliance, perjury and debarment risks.
Instead of outlawing “outsourcing,” the draft legislation would outlaw those who wrongfully deny that they outsource (under 18 USC 1001) and create a political stigma for actions that are not illegal. This is reminiscent of the frenzy and abuses of the anti-Communist witch-hunt of Senator Joe McCarthy in the 1950’s.
A simpler legislative solution would be to ban “outsourcing.” Of course, such a ban would be so offensive (and contrary to national commitments under NAFTA, WTO and bilateral treaties) that it would never pass. But, certainly, no offense could be taken by an innocuous bill to prevent frauds and plan a smear campaign.
Strengthening American Employability. It is regrettable that such defective and ill-conceived legislation does not address the core issues of American employability, such as education, language skills, competitiveness and use of technology to improve the human touch. In fact, in the tax-haven segment of this same draft bill, the test of whether a foreign jurisdiction is a tax haven (justifying anti-deferral and other retaliatory treatment) includes some factors that the Congress should consider for promotion of American employability, such as ”Incentives which may encourage a United States corporation to invest abroad rather than domestically.” H.R. 5622, Sec. 2 (111th Cong., 1st Sess.).
There are other methods of aiding job losses from outsourcing. A legally valid solution would require re-examination of American global commitments and a balancing of benefits and burdens, including enforcement of WTO violations. Such enforcement actions are at the discretion ofthe President and not congressional legislation.