All Our Eggs in One Basket?

The Chief Technology Officer of the State of West Virginia is proposing to consolidate and outsource all the state data centers, application support programmers, mainframe computer, and other associated staff.  The State workers in question will be let go from the state and hired by a private company.

While Chief Technology Officer Kyle Schafer was telling legislators that plans for outsourcing Office of Technology jobs are in the very preliminary stages, some OT employees said Schafer advised them it's a done deal, with the RFP for the outsourcing contract to go out by September, with the contract to be awarded before the end of the year - prior to the 2011 legislative session.
Some OT employees have been meeting with representatives of state Public Workers Union UE 170 regarding organizing efforts.  WV Gazette-Mail State House Beat, June 20, 2010

It's true that I am potentially in the group of people to be outsourced, and that may color my opinion.  But am I the only one who thinks that relying totally upon an outside company to host, protect and maintain the states data is not a good idea?

Think about it.  The State Police database, the Medicaid data, birth, death, marriage, data, among so many others will be in the hands of the lowest bidder.

Not to mention that savings are in doubt.  State employees do these jobs now, and most of these workers are underpaid (the state's salaries are significantly lower than the private sector counterparts.  For example, median U.S. Salary for a programmer is about $55,893.  State, $33,036.)  Sure, there are lazy, worthless state employees (just like there are lazy worthless private sector employees.) 

If the state goes this direction, reversing course will be extremely costly and nearly impossible. It's like putting all the state's eggs in one basket, then waving it over your head.