Dec 28 2015

OMB Sets New Guidelines for Federal Agencies’ Software Purchases, Management

The federal government wants to restructure how agencies procure and handle their software licenses.

Last week, the Office of Management and Budget released draft guidelines on how federal agencies should purchase and manage software licenses. The guidelines are part of an effort to streamline and coordinate software purchases across the federal government.

The guidelines set several deadlines for federal agencies to meet in 2016 as they work to improve their software procurement procedures. As FedScoop reported, the guidelines are designed to foster a more centralized approach to how software is managed within so-called CFO Act agencies. They are also aimed at letting agencies get software contracts that can be used across the entire federal government, which could potentially save money.

According to the White House, the current CFO Act agencies include the departments of Agriculture, Commerce, Defense, Education, Energy, Health and Human Services, Homeland Security, Housing and Urban Development, Justice, Labor, State, Transportation, Veterans Affairs, the Interior and the Treasury; the Environmental Protection Agency; the General Services Administration; the National Aeronautics and Space Administration; the National Science Foundation; the Office of Personnel Management; the Small Business Administration; the Social Security Administration; the U.S. Agency for International Development; and the U.S. Nuclear Regulatory Commission.

The Need for a New Approach

As federal Chief Acquisition Officer Anne Rung and federal CIO Tony Scott wrote in a White House blog post on Dec. 21, “Each year the U.S. government spends more than $9 billion on software through more than 50,000 transactions, which results in a fragmented and inefficient marketplace.”

Rung and Scott said that a recent report by the Government Accountability Office “indicates that agencies buy and manage software licenses in a decentralized manner, struggle to create accurate inventories, often purchase unneeded capabilities, and generally do not share pricing, terms, and conditions across government to facilitate better purchasing.”

Furthermore, Rung and Scott added, “most agencies do not have a designated central oversight authority to manage software agreements, and agency personnel often lack sufficient experience and expertise to effectively negotiate and manage large software agreements. Today’s guidance addresses these and other challenges in information technology management, specifically software licenses.”

The guidelines call for several steps to be taken, some in quick order: According to FedScoop, CFO Act agencies must immediately start accepting only software contracts that let the agencies share pricing and other information with fellow agencies.

Then, within 30 days, agencies must alert the OMB of the name and contact information of their new centralized software managers, who will report to the agency’s CIO. The managers will “develop a plan for moving to a more centralized management of their licenses” and “develop a plan to increase the use of government-wide software license agreements," Rung told FedScoop. "And not only just develop a plan, but do it.”

There are other deadlines that agencies will need to meet as 2016 progresses, FierceGovernmentIT notes. The agencies will need to submit a software management plan to the OMB by May 31, 2016, and continue to do so each year after that. By Aug. 31, 2016, departments and agencies will need to furnish OMB with an inventory of all software licenses and cloud agreements. And they will need to provide a report on software inventory and usage by September 30, 2016.

Government Takes Other Steps Beyond New Guidelines

Rung and Scott said their agencies are already taking steps “to improve how the government buys and manages software.” For example, the General Services Administration “will soon have in place a new government-wide solution that will save taxpayer millions of dollars and allow agencies, for the first time, to take advantage of government-wide volume discounts, to reduce unnecessary duplication, and increase transparency of existing agreements.”

The Obama administration also has launched a category management initiative to purchase government products and services like software in a more strategic fashion. In October 2015, the OMB released a directive barring agencies from issuing new contracts for notebook and desktop computers. OMB said agencies would need to buy those devices using three existing contracts, including NASA’s Solutions for Enterprise-Wide Procurement (SEWP) service. “In just one month after OMB issued the new policy, vendors dropped their prices for select notebooks and desktops for the standard configurations on NASA SEWP by up to 50 percent,” Rung and Scott wrote.


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