Companies are feeling the pressure of potential risks from the Russia-Ukraine conflict. With tightened government regulations and a focus on national security, procurement leaders can play a role in ensuring their organization isn’t subject to billions of dollars in fines or other penalties for compliance violations.
Due to the heavy burden that regulation places on cybersecurity and access controls, staying compliant is mission critical right now. A prime example includes the International Traffic and Arms Regulations (ITAR), designed to control the distribution of defense and space-related information as a matter of national security.
With the heightened risk of cyber attack, your procurement team has an opportunity to assist human resources, IT and facilities management stakeholders in sourcing solutions to protect your company.
Incorporating a group purchasing organization (GPO) into your procurement strategy allows you to strengthen your company’s resilience and efficiency along with access to industry experts that can guide you through this complex process.
➡️ Let’s take a closer look how your procurement teams can prevent federal compliance violations at your organization.
Three Focus Areas to Remain ITAR Compliant
Selling to the U.S. Federal Government is tough business. Between the RFPs, public access to information and stiff competition, it’s easy to see why only the most strategic organizations survive in such a challenging business environment. By far, among the most arduous businesses are global manufacturers in the defense sector.
If your organization received revenue from the nearly $686 Billion the Federal Government spent on Defense (2019), it may be subject to ITAR compliance, which is ultimately administered by the U.S. State Department.
Turn your attention to the following three areas of impact to verify your company is ITAR compliant.
The foundation of ITAR mandates restricting access to protect defense secrets from foreign nationals. Citizenship verification is often a challenging process that falls on HR’s shoulders. Couple this process challenge with managing personnel and contractor information in multiple disparate human resources information systems (HRIS), and you have created the perfect scenario for a slip up; consolidation should be a priority.
If consolidation is not an option, procurement and HR should identify an automation solution that can securely speak to multiple systems to automate citizenship verification and conduct routine status checks.
Another important aspect of ITAR is the requirement to maintain and retain records for the life of their products, sometimes for more than 30 years. This becomes a burden for manufacturers who often rely, out of necessity, on systems that are no longer supported by their creator.
To handle this challenge, companies can adopt a “low-availability server strategy,” utilizing a remote data center. If the desire is to keep the data off-network, leveraging a secure co-location provider like Konica Minolta will provide a compliant and cost-effective solution.
Criminal fines up to $1 million and jail time of up to 10 years per instance are only the beginning of what’s in store for an organization that has an ITAR “data breach.” As a result, a laser focus must be placed on having the proper access management procedures. This applies to both physical and digital access as records rooms and data centers are vulnerable to access by individuals who should be prohibited.
Purchasing leaders can work with facilities managers on the best products and services to employ in and around their buildings. By adding an intelligent video surveillance solution, like Konica Minolta’s FORAXI Secure Access, organizations can feel confident that the areas that should be heavily guarded, remain secure.
Your Trusted Advisor for ITAR Compliance Needs
Leveraging a GPO adds value to your organization in both spend and category management while connecting you to industry-leading solutions to navigate the impacts of current geopolitical tensions.
Selling to the U.S. government is very lucrative, but in 2020 a global aerospace manufacturer was forced to pay $3.9B in global penalties related to ITAR violations. Konica Minolta allows organizations to avoid these types of ITAR contraventions, by providing compliant, intelligent, and secure solutions for human resources, data management and access control.