Like many people who have overstuffed closets, cupboards, and garages filled with items they don’t remember buying, never needed, and never used, the federal government has a large inventory of useless things in storage that it didn’t need and doesn’t use.  As home organizers often recommend, sorting in boxes is usually helpful – a box to keep, a box to discard, a box to fix, and a box to donate.  While the government can’t exactly sort its enormous inventory into boxes, it can and should keep better track of the inventory it has purchased, as well as how these items are used. 

The federal government spends more than $80 billion annually on information technology (IT), which means that every dollar should be accounted for, particularly the purchase and use of software.  CAGW has long been a proponent of improving software management at federal agencies, including hosting a panel discussion on May 10, 2013 to educate federal agencies and Congress on the issue. 

In May 2014, the Government Accountability Office (GAO) issued a report highlighting chronic mismanagement and missed opportunities to save money on software purchases.  GAO concluded that the vast majority of agencies reviewed “do not have adequate policies for managing software licenses.”  In April 2015, GAO issued a report on “Opportunities to Reduce Fragmentation, Overlap, and Duplication and Achieve Other Financial Benefits,” updating taxpayers on the progress in addressing more than 440 prior GAO recommendations to reduce duplication and overlap.  This report recommended improved software license management in order to achieve “hundreds of millions of dollars in government-wide savings.” 

On December 4, 2014, Congress included the Federal Information Technology Acquisition Reform Act of 2014 (FITARA) in the National Defense Authorization Act for fiscal year 2015.  The measure provided agency chief information officers (CIOs) with increased authority and responsibility for IT budgets, inventories, and timelines for project management. 

The Office of Management and Budget (OMB) is currently developing guidance to agencies on implementing the increased CIO responsibilities including IT inventory management.  CAGW provided comments to OMB on January 20, 2016, which suggested that OMB require agencies to report 1) the number of existing software licenses at the agency; 2) the number of software licenses used; 3) 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, 4) a plan of action for bringing the number of software licenses into balance with the agency’s needs.  This will provide a more accurate picture of the federal software landscape and improve oversight regarding software duplication.

As just one example of why enacting FITARA was essential, in 2006, the Department of Veterans Affairs (VA) purchased 400,000 licenses for encryption software to be installed on agency computers.  Ordinarily, the installation of such software is a simple process.  However, an October 11, 2012 VA Office of Inspector General (OIG) report found that only 65,000 licenses had been installed and activated.  The remaining 335,000 licenses, valued at approximately $5.1 million, remained unused.  In typically understated language, considering the report was issued six years after the licenses were purchased, the OIG stated, “Given changes in VA technology since 2006, the Department lacks assurance the remaining software licenses are compatible to meet encryption needs in the current computer environment.”

Improving software asset management can help agencies avoid such purchasing and deployment snafus.  By evaluating and understanding software asset inventory, agency CIOs can ensure that purchased software is deployed appropriately, and they will not be required to pony up additional funds for true up costs at the end of each fiscal year to pay vendors for software license overuse when not enough licenses are purchased. 

On December 2, 2015, Sen. Bill Cassidy (R-La.) introduced S. 2340, the Making Electronic Government Accountable by Yielding Tangible Efficiencies Act of 2015 (MEGABYTE Act of 2015).  This legislation would require the OMB director to issue a directive on the management of software licenses.  The bill would require agencies to establish a comprehensive inventory of 80 percent of software license spending, as well as enterprise licenses; track and maintain software licenses in order to inform the agency’s software life cycle management; analyze software use; provide training to employees on software licenses management; and, establish goals for agency software license management.

Knowing an agency’s needs is difficult without knowing what is already in its inventory.  While FITARA helped start moving software asset management moving in the right direction, the steps recommended in CAGW’s January 20 comments to OBM, as well as the more detailed requirements included in the MEGABYTE Act, will help federal agencies engage in some serious “spring cleaning.”  In order to save taxpayers money and improve efficiency, agencies must have a better understanding of IT requirements and reduce or eliminate the unnecessary expenditure of funds for software and equipment.