Review of Selected State Practices for Information Technology Procurement

The Office of the Auditor General has conducted a special audit addressing selected state practices for information technology (IT) procurement as compared to other states. Specifically, auditors analyzed the State’s IT procurement practices in the areas of indemnification, liability, insurance, and warranties. The State’s IT contracts help to protect it from risk of loss, but would benefit from IT-specific contract templates. In addition, auditors reviewed best practices for the ownership of intellectual property and found that although Arizona’s terms and conditions generally require state ownership of intellectual property for IT projects, the State should provide options for intellectual property ownership based on who pays for the development costs. Finally, auditors’ analysis of IT standardization and its impact on the procurement process determined that although standardization can impact procurement, IT must still be purchased through a competitive procurement process.