May 30, 2013 09:45 AM IST | Source: CNBC-TV18

Obama Care Act may bring IT deals worth USD 10bn: Sources

Obama care Act aimed at healthcare reforms in US is likely to bring up information technology deals worth USD 10 billion for Indian IT companies.

The Obama Care Act, (an unofficial name for the Patient Protection and Affordable Care Act) is expected to bring deals worth USD 10 billion for Indian information technology service companies like Infosys, Tata Consultancy Services and HCL Technologies, reports CNBC-TV18’s Kritika Saxena.

Obama care which refers to Obama’s healthcare reforms aims to provide affordable health insurance to 44 uninsured Americans and reduce their healthcare spending.  This US government project could results in IT projects worth of USD 18-20 billion, of which Indian IT players can tap around USD 10 billion.

Sources informed that there could be around 20 deals and the request for proposal (RFPs) for these deals will begin in August 2013 and the official bids will be submitted by around November 2013.

These contracts include infrastructure management services, analytics, and digital services. These deals would have a mandatory 80-20 onshore offshore quotient,  essentially meaning that around 80 percent of the employees working for the project have to be onshore. Higher onshore quotient would directly impact the margins and prices of the IT companies that will bag these contracts.

CNBC-TV18 had last month reported that US-based Multinational Citibank would launch a 10-year IT outsourcing contract worth USD 1 billion which was likely to mandate a 90 percent onsite requirement for the contract.

Higher onsite quotient has become the feature of IT contracts in the financial and government space for sometime now, but its new phenomenon for healthcare. Considering that most IT companies have a strong exposure to healthcare this could change the entire mix of IT companies.

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