Adds Wonderlich of the Sunlight Foundation: "It's really unfortunate because when you have an IT staff of one or two, sometimes there's no winning. You can either try to do everything on your own, which is becoming more and more impossible, or you can hire an outside company, in which case there's a big risk that you'll get fleeced."

As local and federal agencies struggle with the problem of how to store massive amounts of information on shrinking budgets, they're encountering yet another challenge: how to keep your data secure. And that's driving many agencies towards privatization — a trend that's been great for industry but may not be so great for privacy.

Last month, Microsoft inked a government contract to provide calendar, messaging, document-collaboration, and Web-conferencing services for the USDA. Fast Company magazine called the deal a "coup" for Microsoft, which is running neck-and-neck with Google to win federal contracts for cloud computing — Internet-based operations that are replacing old brick-and-mortar data storage methods. The USDA deal will affect 5000 US offices worldwide, with more reportedly coming online soon as other agencies employ high-tech solutions. Already more than 500 municipal governments nationwide use outside vendors for cloud computing.

Though cloud storage is a relatively new phenomenon, the outsourcing of public-document storage to private companies is not. One of the Department of State's three main data centers is managed by a commercial vendor, while the Census Bureau relies on multiple third-party providers. And that's the federal government, which has infinitely more resources than cities, towns, and states. In many cases, in order to comply with disclosure laws, municipalities have no choice but to seek help outside of their in-house IT departments, if they have one in the first place.

"There are pros and cons to third-party storage," says Sean Moulton, Federal Information Policy director for Office of Management and Budget (OMB) Watch. Based in Washington, OMB Watch aims "to protect and promote active citizen participation in our democracy." He adds, "If you've lost the capacity to run and manage a system, and the third party knows how to do it, then there can be a real benefit. It might even be more efficient. The downside is when you disconnect the management of the info and the ability to retrieve it, sometimes agencies don't even know what they have under their purview."

Despite prevalent security and FOIA-related concerns about private companies managing public information, data storage is a major boom industry in Washington. Tech leaders like Unisys and Agilex Technologies conduct business with the Departments of Defense, Homeland Security, Health & Human Services, Justice, and Veterans Affairs, just to name a few. Agilex was recently named the "Fastest Growing Company in the Washington DC Region" by Washington Business Journal, and the "Hottest Emerging Government Contractor" by the Northern Virginia Technology Council. In a climate marked by uncertainty and disorganization, one thing is for sure: as federal agencies seek to streamline data storage on tight budgets, these companies will play increasingly bigger roles.

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