VA to spend $3.7M on encryption tools

The move follows the theft of a VA laptop in May

The U.S. Department of Veterans Affairs will spend $3.7 million on encryption software following a theft in May of hardware containing the personal information of 26.5 million veterans and active-duty military personnel.

The VA has awarded a contract for veteran-owned small business SMS Inc. in Syracuse, N.Y., to install two encryption software packages on all of the department's computers, handhelds and storage devices. The installation is scheduled to start Friday, and VA Secretary R. James Nicholson wants all VA laptops to include encryption software within a month, the VA said.

Laptops will be the first devices to have encryption hardware installed. The theft of a laptop and hard drive -- containing names, dates of birth, Social Security numbers and some limited health records -- from a VA analyst's home in early May set off widespread criticism from the U.S. Congress on the VA's IT security program. Law enforcement agents recovered the stolen hardware in late June, and the FBI told the VA that forensic tests suggested thieves had not accessed the personal data.

The encryption software installation will involve about 300,000 computers and other devices, said Warren Smith, vice president of marketing at GuardianEdge Technologies Inc. in San Francisco. The VA will use GuardianEdge's encryption software on its laptops, desktop PCs and removable storage devices, Smith said.

Trust Digital in McLean, Va., will provide encryption software for VA handhelds and smart phones.

The combination of GuardianEdge and Trust Digital will give the VA a "comprehensive suite" of encryption products, Smith said. "We're very confident we can provide the protection the VA needs."

Today's announcement comes after the VA last Wednesday said it will use San Diego-based ID Analytics Inc.'s data breach analysis services to ensure that the information contained on the stolen hardware was not compromised. ID Analytics will check the VA's database against its fraud detection network to monitor for misuse of the data, the company said.

Copyright © 2006 IDG Communications, Inc.

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