OMB hopes a third time is the charm for software management

For at least the third time in the last dozen years, the Office of Management and Budget is trying to tame how agencies buy and manage software.

OMB released draft guidance for comments Dec. 21 detailing the governmentwide and agency-specific strategies for improving how agencies spend an estimated $9 billion a year on software.

“Agencies need to move to a more centralized management structure so they can reduce underutilization and maximize the use of best-in-class solutions,” wrote Anne Rung, the administrator in the Office of Federal Procurement Policy, and Tony Scott, the federal chief information officer. “In parallel, governmentwide strategies, such as increasing the number and use of enterprise software agreements and developing better inventory tools, are needed to reduce duplication of efforts. The success of these governmentwide steps depends on the improvements that agencies make in their own license management programs.”

As part of the governmentwide strategy, the administration is creating a new Enterprise Software Category Team to develop governmentwide software license agreements that will be mandatory for agencies to use. OMB also will encourage or direct the use of existing software licensing agreements.

OMB, the General Services Administration and the Defense Department will lead the ESCT. Within 90 days of the policy becoming final, agencies will post pricing and terms and conditions to the Acquisition Gateway of the best enterprise software licenses available currently.

Within 120 days, the ESCT will develop policy standardizing the terms, conditions of enterprisewide deals, and identify those “best-in-class” agreements already in place.

“At least two new enterprise software agreements will be in place by the end of calendar years 2016 and 2017; the ESCT will establish bi-annual targets thereafter. To move agencies away from issuing redundant contracts, within 90 days, the ESCT shall post on the Acquisition Gateway a new business case review process that agencies will be required to use when acquiring software that would overlap with software covered by any of these enterprise software agreements,” the draft policy stated. “As a result of these efforts, beginning in fiscal year 2017, the government will gain visibility into the agency-reported governmentwide spend on software licenses, which shall be posted to the Acquisition Gateway to further assist in the creation of new enterprise software agreements and other tools.”

Joe Jordan, former OFPP administrator and now CEO of FedBid, said the move to reign in enterprise software purchasing is an important goal.

“More collaboration between agencies, and among the IT and acquisition communities within each agency, is good for increasing both the effectiveness and efficiency of the $9 billion in annual software purchases,” Jordan said. “In addition to reducing duplication in contracts, as well as sharing data and pricing information, many in industry would like to see the category management team will also look to innovative tools and purchasing methods that have helped agencies maximize cost savings in software purchasing.”

This is the third attempt in the last decade by OMB to better manage how agencies buy computer software.

In 2003, OMB launched the SmartBuy initiative. Over the next decade, the program went through several iterations, but none overly successful in coordinating governmentwide.

The Obama administration tried its hand at the agency level. For example, the General Services Administration issued a request for quote in 2013 to create a blanket purchase agreement for Microsoft system, applications, server, enterprise, online and premier support services. It’s unclear whether GSA every made awards under the BPA.

The Defense Department also has been one of the most active agencies to establish enterprisewide software licenses. The Navy, for instance, has more than two dozen agreements across 11 broad software categories.

Despite all of these efforts, the Government Accountability Office found in May 2014 that agencies struggled to manage software, likely are spending too much for licenses and not taking advantage of existing enterprise deals.

This report recently attracted the attention of two lawmakers. Sens. Bill Cassidy (R-La.) and Gary Peters (D-Mich.) introduced the Making Electronic Government Accountable by Yielding Tangible Efficiencies (MEGABYTE) Act of 2015 Dec. 2 to reform the government’s management of IT software licenses.

Part of the problem over the years is a lack of accountability and no specific mandate.

Rung and Scott hope to address both of these issues — first by requiring the use of the agreements as part of the governmentwide strategy, and second by requiring agencies to name a software manager within 30 days of OMB finalizing the policy.

The software manager must report to the agency CIO and develop a plan to centralize the management of software licenses that addresses life-cycle, funding and other areas such as mobility and cloud funding models.

Additionally, the manager must increase the use of enterprise licenses, reduce duplication and implement a vendor management strategy within 120 days.

“Agencies may continue the use of mandatory agencywide software license agreements through the end of the current base or option period, as applicable, the draft policy stated. “When a governmentwide solution is available, the agency shall analyze terms, conditions, pricing, performance, fees, and savings under the agency agreement relative to the approved agreements, document findings, and provide this information to the ESCT for approval no less than 6 months prior to the exercise of each option. Eighteen months prior to any recompetition of these solutions, the agency must submit a transition plan to the ESCT that outlines how the agency will transition to the governmentwide agreement.”

The agency software manager also will complete and maintain an inventory of all licenses and spending, and provide OMB with an annual report no later than Aug. 31.

“Agencies shall develop repeatable processes to aggregate software requirements and associated funding, as appropriate, for commercial enterprise software acquisitions,” the draft policy stated. “Agency CIOs must use their authority under Federal IT Acquisition Reform Act (FITARA) to align all components with a centralized acquisition strategy that defines common software requirements across the enterprise. This work should consider a review of the installed software against the agency-approved list of software. When software is discovered that is not on the agency-approved software list, agencies must consider whether to include it on the list or identify an approved software to replace it.”

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