White House Cracks Down on Software Spending

The White House has issued a new policy seeking to tighten the reins on wasteful software purchasing by federal agencies.

Under a new final policy announced today, agencies will have to appoint software managers to centrally manage their software buying. Agencies will also have to maintain a continually updated inventory of software licenses to track usage and weed out potentially redundant applications.

The final version of policy was announced in an Office of Management and Budget blog post from U.S. Chief Information Officer Tony Scott and Administrator of the Office of Federal Procurement Policy Anne Rung.

“Smarter acquisition strategies typically don’t garner a lot of headlines or attention. But they matter,” Scott and Rung wrote in the blog post, adding the new policy would leverage “the government’s vast buying power” and “save taxpayers’ money and deliver more value for the American people.”

The federal government spends some $6 billion on software annually, through as many 42,000 different individual transactions, resulting in a “fragmented and inefficient marketplace,” according to the new White House policy.

The new policy also charges a cross-agency task force -- made up of the General Services Administration, OMB and the Defense Department -- with developing governmentwide software license agreements.

The task force “has already been hard at work,” Rung and Scott said. For example, the team renegotiated a governmentwide agreement with geospatial software provider Esri, helping to save total of more than $1.5 million this year.

In 2014, GAO reported only two of the 24 largest agencies had compiled comprehensive inventories of their software licenses.

The final software policy comes after OMB issued a draft policy in December.

The policy is part of a multipart approach using “category management,” which involves more centralized purchasing of common products and services, to slash inefficient IT spending.

Last fall, OMB issued a freeze on new awards or solicitations for laptop or desktop computers, limiting agencies instead to governmentwide contracting vehicles. By the end of 2016, according to OMB projections, about 45 percent of the $1.1 billion spent on desktops and laptops will come from just three governmentwide contracts.

In March, OMB issued a similar draft covering mobile devices.

Overall, the federal government has realized $2 billion in savings since 2009 through the use of category management, according to OMB.