US National Security Agency

As German rift with US over spying widens, Berlin reviews IT procurement rules

PUBLISHED : Monday, 14 July, 2014, 9:14pm
UPDATED : Monday, 14 July, 2014, 9:14pm

Germany's Interior Ministry is reviewing rules for awarding government contracts for computer and communications equipment and services as a political rift with the US widens.

Any tightening of procurement procedures could affect US technology companies such as IBM, Cisco Systems and Microsoft as they vie for government contracts.

US-German tensions escalated last week after Germany expelled a top intelligence officer from the US embassy in Berlin.

"Contracts with US suppliers will be scrutinised as they come up for renewal," said Andrew Rose, a London-based security and risk analyst at Forrester Research. "There is a definite point here about privacy and respect under which the Germans are trying to draw a line."

German federal and local agencies spend US$28 billion on technology and communications hardware and services annually, of which at least €1 billion (HK$10.5 billion) of contracts are handled by the Interior Ministry.

The US intelligence official was asked to leave Germany following allegations that an American double agent leaked information from Germany's foreign intelligence services.

Another espionage suspect worked at the Defence Ministry, according to Spiegel Online.

Even before the latest row, US business was being hurt by revelations about espionage.

After Chancellor Angela Merkel's government said last month it won't renew a contract with Verizon Communications that expires next year, the interior ministry said it would probably replace Verizon with Deutsche Telekom, Germany's former state-owned phone monopoly.