On January 20, 2016, Citizens Against Government Waste (CAGW) weighed in on a request for comments from the Office of Management and Budget (OMB) on the requirements that should be included in its guidance to federal departments and agencies for improving the management and purchasing of software assets. 

CAGW recommended that agencies should be required to report to OMB on a regular basis the number of existing software licenses at the agency; the number of software licenses used; the amount of funding expended each year for software license compliance costs when an agency is not in compliance with the terms of the software licensing agreement; and, a plan of action for bringing the number of software licenses into balance with the agency’s needs.  By gathering this information to report to OMB, agencies and OMB will be able to gain a more accurate picture of the federal software landscape and improve oversight regarding software duplication.              

On June 2, 2016, OMB released its guidance to federal agencies on managing their software assets.  Several of CAGW’s recommendations regarding the inventory and reporting of software assets were included in the final guidance, with a requirement for quarterly reporting of all cost savings and cost avoidance stemming from improved software license management.  In addition, OMB has forbidden all federal departments and agencies from prohibiting the sharing of all prices, terms, and conditions of software licensing agreements with other agencies; ordered the appointment within each agency a software manager and support team; and, required the posting and maintenance of standard pricing and terms and conditions for agreements on the Acquisition Gateway.

In overall budget discussions, software licenses are sometimes dismissed as low-hanging fruit.  However, it is this type of low-hanging fruit that, if not properly managed, can add up to a big piece of pie out of the budget.  If the software asset management guidance from OMB’ is followed, federal agencies should realize some savings in their information technology budgets that could be redirected towards modernizing older legacy systems.