September 2, 2015
When purchasing Information Technology products and services, the United States government considers many different factors, including value and security. They don’t always end up purchasing the newest systems, but is that because they are slow to adapt or do they have other difficulties in acquiring the newest and the best?
How the Government Purchases Information Technology is Changing
Earlier this year, millions of current and former federal workers’ data was stolen from the Office of Personnel Management and, before that, security clearance information was stolen from the same office. Software used by the government, sometimes even including infrastructure, is not able to repel determined cyber-attacks and hacks. Since cyber-attacks are becoming more and more common against the government, IT purchasing needs to be at the cutting edge of technology.
The government’s purchasing methods have strict standards for contractors. The best and brightest of the information technology world, centered in Silicon Valley, currently don’t work with the government in part because most government agencies will not consider purchasing equipment and software before it’s been on the market for at least two years. Because of this, the two year rule is used by the General Services Administration when reviewing potential vendors. This was enacted due to the requirement that the federal government not purchase products that have not been tested commercially. With how quickly technology moves, this can leave the government vulnerable and open to cyber-attacks.
In June of 2015, the United States Navy signed a $9 million dollar contract to continue providing security patches for the Windows XP operating system, which originally was released to the public in October of 2001. Microsoft stopped support for the system in April 2014 but the US government is paying $9 million dollars to continue to support the system that is outdated. The newest system, which offers current updates and security upgrades doesn’t meet the two year government procurement purchasing standards.
Looking forward, The National Defense Authorization Act for fiscal year 2016 is being debated in Congress at this time. Within it are acquisition reform provisions, including some procurement rules that could potentially be repealed. At the top of that list is easing restrictions on Information Technology purchases, which will entice startups and the best and brightest of Silicon Valley to help the government upgrade to better and, more importantly, safer hardware and software. What does the proposed Act mean for you if you currently contract IT services to the government?
This article was originally posted on September 2, 2015 and the information may no longer be current. For questions, please contact GRF CPAs & Advisors at marketing@grfcpa.com.