States aim at contractors in NSA backlash

EDITOR'S NOTE: This article originally appeared on FCW.com.

Legislation introduced in several state legislatures aimed at blunting the National Security Agency's ability to collect data on U.S. citizens could wind up sideswiping federal contractors, according to federal acquisition industry experts.

Versions of the legislation were introduced in Utah, California, and Missouri in the last few weeks, and supporters are active in 11 states. The bills look to rein in NSA's data collection activities by targeting its suppliers. The measures would limit state agencies, officials and corporations that provide services to the state from providing material support or assistance to federal agencies that collect personal data without a warrant.

Utah GOP state Rep. Marc Roberts introduced a bill in February that reports said would block local utility companies from providing water to cool the NSA's $1.5 billion data center in Bluffdale. California Democratic state Sen. Ted Lieu introduced a measure in early January that  would penalize state agencies, contractors and officials if they assist a federal agency that collects data without warrants. A bill with language similar to the California measure was introduced in the Missouri Senate the week of Feb. 17.

The bills could have a steep downside for states and government contractors, warned Trey Hodgkins, senior vice president, public sector at the Information Technology Alliance for Public Sector (ITAPS). Because data is collected by other federal agencies such as Homeland Security and  the FBI, the legislation would wind up barring a wide range of companies that compete for federal work from competing for state contracts. Hodgkins said the bills are so broadly written that they will cause "inadvertent damage" to contractors if not reworked.

"Such a prohibition would seem to apply broadly to any corporate offering, from janitorial services to electronic data collection and anything in between," said a Feb. 20 ITAPS letter to Lieu.

US News and World Report detailed in early December how Offnow.org, a coalition of libertarian organizations that includes the Tenth Amendment Center, the Bill of Rights Defense Committee and a handful of other anti-surveillance groups, was ramping up efforts to get states to introduce legislation based on its model.

"We have only heard through third parties that some in the business community are concerned about being put between a rock and a hard place should a version of our legislation pass into law, and have yet to be contacted by anyone representing a business organization, unfortunately," Offnow Coalition spokesman Michael Boldin said in an email to FCW.

Boldin said the coalition would consider adjustments or amendments to their model legislation to address the concerns and suggested business groups contact them about those changes.

Hodgkins said his organization's concerns were probably best discussed with state legislators rather than the anti-surveillance groups. "It's a better use of our resources to address lawmakers," he said.

According to federal procurement expert Larry Allen, states that pass such legislation would "limit their IT talent pool quickly" and be left with smaller local IT support providing limited resources to support their operations. The big IT contractors, he said, all deal with federal agencies that are likely to conduct data gathering activities in some fashion.

State lawmakers, he said, are unlikely to pass legislation that hobbles federal facilities that are  big local economic engines. Allen chalked the bills up to "grandstanding" by the coalition to focus attention on NSA's data gathering activities and broaden discussion on the issue, rather than a serious attempt to set new rules.