OMB to agencies: Justify new software contracts

Five months after issuing a draft memo, the Office of Management and Budget made few changes to how it wants to reign in $6 billion in software purchasing governmentwide.

OMB received 14 comments on the draft policy issued Dec. 21. In the end, nearly every one of the requirements in the draft memo remained the same in the final version.

“To take advantage of this buying power, reduce duplication and fragmentation, and ultimately save money, the policy released today will help agencies move to a more centralized and collaborative software management approach,” wrote Anne Rung, the administrator of the Office of Federal Procurement Policy, and Tony Scott, the federal chief information officer, in a June 2 blog post. “It calls on agencies to appoint a software manager to centrally manage software buys and reduce underutilization, to maintain a continual inventory of software licenses and better track usage, to consolidate redundant applications while identifying other savings, and to maximize the use of best-in-class solutions.”

Additionally, OMB is charging the Enterprise Software Category Team (ESCT), led by the Defense Department, the General Services Administration and OMB, with helping to “drive and monitor the development of governmentwide software strategies, such as increasing the number and use of governmentwide software agreements and improving software license management practices.”

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The ESCT will build upon DoD and GSA’s work with its Enterprise Software Initiative and SmartBuy programs over the last decade.

But where these programs struggled, OMB in the final memo gives the ESCT direct authority to approve or deny any software deal that’s outside the governmentwide vehicle.

“This memorandum further requires agencies to develop implementation plans, in accordance with ESCT guidance, to address how agencies will move from their existing agreements to those mandated by the ESCT,” Rung and Scott wrote in the memo. “Agencies must also justify and obtain ESCT approval to pursue new agreements that overlap or conflict with the ESCT mandated agreements.”

The ESCT has until early September to “post on the Acquisition Gateway a new business case review process that requires agencies to obtain approval to pursue new agreements that overlap or conflict with ESCT mandated governmentwide enterprise software agreements.”

Rung and Scott say the ESCT will develop four new governmentwide enterprise license agreements by the end of 2017.

“[T]he team renegotiated a governmentwide agreement with Environmental Systems Research Institute (ESRI), a geospatial software provider representing 27 percent of federal spending in this category,” Rung and Scott wrote in the blog. “As a result of the renegotiated agreement, agencies are already saving over 14 percent on their orders, and the federal government is estimated to save over $1.5 million in fiscal 2016 and over $3 million in future years.”

Agencies must develop an inventory of current software licenses by Sept. 30, and then develop a software management centralization plan to aggregate current license and maintenance agreements.

“This processes should include a means to review existing software that is currently in use against the agency-approved list of software,” the memo stated. “When software is discovered that is not on the agency-approved software list, the process should include provisions for agencies to consider whether to add the product to the approved software list or identify an approved alternative software product to replace it.”

OMB also wants agencies to post all prices, terms and conditions of their current software license agreements on the Acquisition Gateway in the next 90 days.

Then the ESCT will post on the gateway, within 120 days, best practices, including service level agreements and standard terms and conditions.

This memo follows two others that fall in line under the Federal IT Acquisition Reform Act (FITARA).

OMB says the desktop/laptop mandate from October already is seeing savings. The administration says prices have dropped by as much as 50 percent on personal computers, and by the end of 2016, 45 percent of the $1.1 billion spent on desktop and laptops will run through one of the three mandated contract vehicles.

OMB followed that policy with a new memo in March banning most new contracts for mobile devices and services.