A bill before Parliament would require all of government to use only

1. Open-source software is not always free is mentioned by the software company, and the government doesn't dispute but rather reinforces that the initial cost is worth making. NO

2. Not mentioned explicitly NO

3. Quite the opposite, its the primary aim of the bill to protect citizens' free access to information. NO

I dont think the question is complete as Software company response is not shown and question says
which of the following...made in one or the other of the two passage....

they all undermine

since you have to take into accounts both sides of the argument

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This is the correct answer. They all undermine. The first one undermines the software company (paragraph 1). The second one undermines the software company (paragraph 2). The third one undermines the government (paragraph 2).

SN: I'm annoyed that I just bought these practice exams, they include questions from years ago (as per this thread), and they don't provide explanations for the correct answers.

Anyone have any idea why the answer to B is does not undermine?

The last sentence in the software company's argument states that the bill’s measures are likely to increase compatibility problems between the information-technology systems of government agencies, as well as between government systems and private-sector systems.

I had this question just now as well, but it's not on the OP?

For each of the following statements, select Yes if the statement is made by the software company and disputed by the government in its response. Otherwise, select No.

Yes No Open-source software is not always free from purchase costs.
Yes No Government decisions concerning choice of a software system should be based primarily on economizing and cost.
Yes No It is not the primary aim of the bill to protect citizens’ free access to information.

Statement 1: Migration from proprietary software to open-source software would be significantly more expensive for the government than would migration from proprietary software to other proprietary software.

Undermines the government's argument. The government argues that the bill would make software migration easier and less expensive in the long run. However, if statement 1 is true, then the opposite would be the case. Migration from proprietary software to open-source software would be significantly more expensive than migration from proprietary software to other proprietary software, which would make the bill more expensive in the long run.

Statement 2: The measures included in the bill will, if complied with, ensure compatibility among software systems used by all the various relevant stakeholders.

Does not undermine either argument. The company's argument is that the bill would increase compatibility problems, while the government's argument is that the bill would decrease compatibility problems. Statement 2 does not address either of these arguments directly, so it does not undermine either one.

Statement 3: As a software package is used for a longer period of time, it becomes less expensive to migrate from that package to another.

Undermines the company's argument. The company argues that the cost of open-source software is much higher than the cost of proprietary software, and that this would make migration to open-source software more expensive. However, if statement 3 is true, then the opposite would be the case. As software packages are used for longer periods of time, they become more complex and interconnected, which would make migration from them more difficult and expensive.