SEC Mulls Risky Data Center Move

My morning skulk through the government databases (i.e., my daily Constitutional, get it?) uncovered this little gem -- the SEC's lease on its backup data center in Virginia runs out early next year, and it may need to find new digs in a hurry. The situation carries some risk for the investing public.According to a document published by the SEC last week, the agency's contract for its current, alternate data center (the one that would come online if its main center got nuked or something) runs out in March 2010. "The SEC needs to evaluate the options of retaining the existing ADC in Ashburn, Va., or relocating it to another data center yet to be identified," the agency noted in a request for information from contractors.

Any new data center would have to be located in the metropolitan Washington, D.C., area, according to the document.

The SEC's concern: If the move is botched, it could bring down its EDGAR database, which provides crucial information to investors and institutions about publicly traded companies. "It is of primary importance that the operations of EDGAR...remain unaffected by the move," the SEC states.

With that in mind, the SEC wants to purchase a "turnkey solution" that would cover an assessment of its current backup data center, a moving plan that would be implemented if the agency opts for a new facility, and the physical move itself if the SEC goes that route.

The stakes are high, given the number of agencies with which the SEC needs to interact in order to carry out its mission of protecting investors. (Pause for guffaws.) The alternate data center would need to be capable of accommodating feeds from the Treasury, Interior, and Justice departments. It also would have to handle data feeds from external service providers such as Bloomberg and Bridge.

And, likely, from Morningstar. Check out my exclusive story about the SEC's plan to monitor hedge funds through Morningstar's Altvest service.

Given the checkered history of large government IT projects, I'm thinking the SEC might want to keep its backup data center where it is. But this one is worth keeping an eye on.