Special Audit: 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 procurement as compared to other states. Specifically, we analyzed the State’s practices in the areas of indemnification, liability, insurance, and warranties. As with other states we reviewed, Arizona’s IT contracts help to protect the State from risk of loss, but would benefit from IT-specific contract templates. We also reviewed best practices for the ownership of intellectual property. 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. In addition, we analyzed IT standardization and its impact on the procurement process. Although standardization can impact procurement, IT must still be purchased through a competitive procurement process.