Agencies Waste Hundreds of Millions on Software

The Homeland Security Department figured out how to save $125 million on Adobe products alone, according to a recent report. Unfortunately, that’s the exception.

Federal software agreements are for the most part an unwieldy mess. Only two of the 24 major federal agencies have comprehensive inventories of their software licenses, according to the Government Accountability Office, and none are fully analyzing their software licensing data.

Auditors were asked to determine the most popular software in government, but they couldn’t do it because agencies don’t know what they have, and to the extent they do know, their reporting is all over the map.

If agencies could be more organized and analyze their software licensing data, the potential savings are huge, as evidenced by a few opportunities agencies found somewhat haphazardly -- or "in an ad hoc manner," as the report says. These include DHS’ reported $125 million savings on Adobe licenses between March 2010 and December 2012, and $181 million the agency saved in 2012 alone after negotiating 10 enterprise software agreements.

The Office of Management and Budget in 2012 launched PortfolioStat, a review process aimed at reducing duplication and waste in federal information technology, GAO noted. “However, it is up to the agencies to decide whether software licenses should be a priority for consolidation during the PortfolioStat review.” A handful of agencies, including Homeland Security, did make software licenses a PortfolioStat priority, but that’s not enough, GAO said.

In 2011, President Obama ordered agencies to make sure they weren’t paying for unused technology, including software. But even that plus PortfolioStat “is not enough to guide the agencies in developing comprehensive licensing  management policies,” GAO said.

“Without guidance from OMB or comprehensive policies, it will be difficult for the agencies to consistently and effectively manage software licenses,” GAO said.

OMB disagreed with that assessment. In his response to a draft version of the GAO report, federal Chief Information Officer Steven VanRoekel highlighted additional management tools OMB had implemented to give agencies the tools they need to determine their own policies and processes. “Given these facts,” VanRoekel said, “we don’t agree with the statement ‘OMB and federal agencies need to improve policies for managing software licenses.’”

Sen. Tom Carper, D-Del., requested the report. "The federal government doesn’t even know how much money it’s spending on unnecessary licenses because the accounting systems are so inadequate," he said in a statement to Nextgov. "We can do better and frankly we must."