You are not alone. The UK government is doing something similar.
http://www.theguardian.com/technology/2014/apr/07/uk-governm...
http://www.theguardian.com/technology/2014/apr/07/uk-governm...
Sounds like a good startup opportunity.
They only have option b) if they won't to avoid this in the future. Open source or not.
A big example is Gov.UK which is mostly mostly open source as well as a few other big UK gov services like police.gov [1]
A large part of the NHS was moved off of a proprietary oracle system just a few months ago [2]
[1] http://github.com/alphagov [2] http://www.theregister.co.uk/2013/10/10/nhs_drops_oracle_for...
In any case, if they have the usual volume licensing deal with Microsoft, they can use any version of Windows without charge.