Business News

CGI Federal: Sound familiar?

by Leslie Turk

Canadian company bringing new 400-job technology center to Lafayette is same entity behind the disastrous rollout

Photo by Robin May

Flanked by local officials Monday, Gov. Bobby Jindal announced a major economic development project for Lafayette: a new tech center at UL Research Park that will create 400 direct jobs

If the name of the Canadian company bringing a 400-job technology center to UL Lafayette's Research Park sounds familiar, it's because it should. CGI Federal is the same company behind the bureaucratic and technical nightmare

In early January the Obama administration and CGI Federal, part of technology behemoth CGI Group (its U.S. headquarters are in Fairfax, Va.) that now ranks fifth largest in the world, agreed to part ways, both saying very little about what went so wrong to cause the epic disaster. CGI wasn't the only head to roll: Earlier this month Health and Human Services Secretary Kathleen Sebelius resigned over the botched rollout (but not until the initiative reached its 7 million sign-up goal).

Local and state officials have distanced themselves from the controversy (there was not a mention of it at Mondays' press conference announcing the expansion to Lafayette) for good reason: There is simply no connection. "While the fallout from the launch has been a political issue, that has nothing to do with our project," Lafayette Economic Development Authority President and Chief Executive Officer Gregg Gothreaux tells ABiz. "Our project is about 400 new direct jobs in the Acadiana region. It's about retaining our grads and bringing some folks home."

The total investment, including government incentives and contributions, is about $25 million.

"With 68,000 employees, more than $10 billion in revenue, and offices located in 40 countries, CGI is one of the largest IT services firms in the world," Louisiana Economic Development Secretary Stephen Moret says in an emailed response. "The firm's work on represented less than 1 percent of its business and had no impact on our discussions with the company." (Negotiations with CGI went on for two years.)

Gothreaux in fact views the CGI project as a game-changer for our region, in much the same fashion as the IBM project is seen in Baton Rouge, pointing out that the recruitment effort represents for Acadiana roughly half of what IBM represents for the Baton Rouge region. IBM's software development center is creating 800 direct jobs in Downtown Baton Rouge).

Gothreaux says the collaboration between CGI and UL Lafayette will be instrumental in shaping the future of the technology industry in Acadiana. "This is all part of a Blue Ocean strategy for Louisiana spearheaded by LED that has been supported by UL Lafayette and our economic development efforts," he adds.

Gothreaux says he's seen reports that CGI has $8 billion dollars of work in the pipeline and believes "a portion of that work will be done at their Lafayette technology center."

Gothreaux's LEDA team is in the midst of conducting an economic analysis of the deal, and has thus far concluded that the 10-year impact of CGI on Lafayette Parish is $929.8 million, of which $366.2 million is attributed to new income for Lafayette Parish residents.

From 2015-2024 CGI will add $621.2 million to the Lafayette Parish GDP, LEDA finds.

Additionally, the average annual impact from 2015-2024 is $93 million, of which $36.6 million is new income for Lafayette parish residents. An annual average of $62.1 million will be added to the Lafayette Parish GDP because of CGI.

"It's about the future, not the past," Gothreaux says.

Read more about the CGI deal here.