This story was updated Wednesday, April 22, 2020, at 6:47 p.m. to clarify information.
The Tennessee Valley Authority told IT workers at its Chattanooga computer center Tuesday that they should receive layoff notices by June as TVA moves to outsource some of its computer and software development jobs to outside contractors.
Despite opposition from one of TVA's biggest employee unions and some members of Congress, TVA told more than 100 IT workers their work is being turned over to three software development contractors — CapGemini, which is based in France and has half its staff in India; the Canadian-based CGI, and Accenture Federal Services, which is headquartered in Virginia and is a subsidiary of the Irish-based Accenture plc.
TVA spokesman Jim Hopson said the move follows nearly a year of study on ways to be more cost efficient and meet stricter demands for Cyber security.
"Like other federal agencies, TVA is continually exploring methods of fulfilling its mission in the most effective way possible, especially in such rapidly evolving fields as information technology," Hopson said.
Hopson said the contractors hired for the software and IT work — CapGemini, CGI and Accenture — already support numerous federal agencies, including the Department of Justice and the Department of Homeland Security, and all have an extensive U.S.-based workforce.
"TVA's contracts specify that all work will be conducted in the United States and all data stored on U.S.-based servers," Hopson said.
But Gay Henson, who is employed at TVA and serves as president of Engineering Association, IFTPE Local 1937, questioned why TVA it outsourcing the work when the utility hasn't proven that it will save money for the federal utility and undermines the utility's mission to aid economic development in the Tennessee Valley.
"Outsourcing the critical technology functions of a federally owned public utility to an overseas firm was always a bad idea. You're sending sensitive information to who knows who, in an unknown location, putting a huge chunk of the U.S. power grid at risk," she said. "But, to continue on this path now, when our entire economy is frozen and workers and families are desperate for income isn't in the best interest of TVA or our nation."
Henson called the move during the current coronavirus pandemic "heartless" and the president of the International Federation of Professional and Technical Engineers, Paul Shearon, blasted TVA for "sending pink slips to Americans and providing paychecks to foreign nationals" in the midst of a U.S. recession. U.S. Rep Steve Cohen, D-Memphis, has also criticized TVA for outsourcing the IT work.
TVA signed a $15 million contract last September with Capgemini, a global company based in Paris that has 100,000 workers in India, to write new software for TVA.
Jeremy Fisher, vice president and chief information officer at TVA, said a study of TVA's IT work recommended the change in the way TVA had done virtually all of its software writing and development in-house for nearly four decades.
"The demand for technology has never been higher, but there is a natural constraint on that if you are trying to do everything in-house and on your own," Fisher told the Times Free Press earlier this year. "We're looking to leverage the market with people who have the expertise to help us deliver more technology to help move TVA along that path of continuous improvement."
Contact Dave Flessner at firstname.lastname@example.org or at 423-757-6340.
CLARIFICATION: One of the three contractors that the Tennessee Valley Authority has hired for information technology services is Accenture Federal Services, which is headquartered in Arlington, Virginia. The company is a wholly owned subsidiary of Accenture, which is based in Ireland and was referred to in an earlier version of this story. Accenture Federal Services has its own board of directors and company structure and serves government agencies in the United States.