North Carolina plans to privatize IT services

Move to centralize operations would close 100 IT shops

North Carolina is proposing to privatize its IT services as part of a broad cost-cutting move.

Gov. Bev Perdue said last week she wants to hire a vendor to consolidate and centralize the state’s IT services, Matt Williams writes in Government Technology.

Across the state government, Perdue would consolidate 14 departments into eight, institute a hiring freeze and outsource the state’s procurement process, Williams writes. North Carolina’s Office of IT Services would be folded into a new Department of Management and Administration, and about 100 computer service units would be closed.

The state began looking into reorganizing its IT department in July, when it hired a consulting firm to help identify potential outsourcing companies, InformationWeek reported at the time. A pending $3 billion budget shortfall, in a state that spends $1.1 billion on IT annually, prompted the move.

States have outsourced parts of their IT functions by moving services such as e-mail to the cloud, and a few states have tried outsourcing IT operations, although with mixed results.

In October, Texas put the brakes on an $863 million data center consolidation contract it had outsourced to IBM after Gov. Rick Perry said the company had failed to perform necessary data backup for 20 agencies, according to an InformationWeek report. However, at least one Texas legislator maintained that, despite the problems, outsourcing is still the right option, Government Technology reported.

Virginia has also encountered problems with its $2 billion outsourcing deal with Northrop Grumman, which it modified earlier this year, Washington Technology reported. New concerns were raised in August when state agencies were hit with a weeklong computer failure.

Georgia has an eight-year, $873 million contract with IBM and AT&T to handle the state’s IT infrastructure, according to Public CIO.

Last summer, West Virginia began considering privatizing its IT services, which raised concerns about residents’ personal data being held by a private company. It also drew opposition from the state’s IT workers, according to Computerworld.

About the Author

Kevin McCaney is a former editor of Defense Systems and GCN.


  • 2020 Government Innovation Awards
    Government Innovation Awards -

    21 Public Sector Innovation award winners

    These projects at the federal, state and local levels show just how transformative government IT can be.

  • Federal 100 Awards
    cheering federal workers

    Nominations for the 2021 Fed 100 are now being accepted

    The deadline for submissions is Dec. 31.

Stay Connected