Government Contracts Monitor

Short Take: Changes to Agency Management of Software Licenses on the Horizon

October 28, 2014

By: Eric Whytsell

Many companies licensing software to federal agencies have been frustrated by their government customers’ apparent inability to effectively manage their licensing efforts. Too often agencies either: (i) buy more licenses that they need and later ask for rebates or concessions because they “didn’t use the software”; or (ii) purchase too few licenses and exceed licensed usage limits, triggering a sometimes cumbersome “true-up” process. According to a recent report by the Government Accountability Office (“GAO”), help may be on the way for these contractors.

Back in May 2014, the GAO issued a report on the state of the federal government’s efforts to effectively manage its software licenses. That report found that the Office of Management and Budget (“OMB”) and the vast majority of agencies reviewed lacked adequate policies for managing software licenses and that the agencies generally were not following leading practices in this area. The GAO also issued over 100 recommendations addressing the specific weaknesses identified. Subsequently, Senator Tom Carper, head of the Homeland Security and Governmental Affairs Committee, asked for a description of OMB’s and agencies’ current and planned actions to address those findings. In the new report, GAO concludes that most agencies have reported planned actions to address it prior recommendations. More specifically, GAO found that the agencies had planned actions in response to all but 7 of the 136 recommendations.

Interestingly, the OMB continues to disagree with GAO’s prior recommendation that OMB issue a directive to help guide how agencies manage their software licenses. GAO believes that, without sufficient direction from OMB, the agencies will likely continue to miss opportunities to systematically identify software license related costs savings across the federal government. Obviously, it is still too soon to tell whether the agencies’ implementation of these plans will have the desired effect and actually improve their management of software licenses in a tangible way. But the fact that agencies have improvements in the works is at least a step in the right direction.

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