GSA to piggyback on DOD licensing

The General Services Administration may jump-start its enterprise software licensing program by expanding contracts already in place at the Defense Department.

DOD's Enterprise Software Initiative (ESI) was originally launched in 1998, but the program has been expanded as part of Defense Secretary Donald Rumsfeld's plan to streamline the agency's operations.

The program thus far has saved more than $1 billion, according to Floyd Groce, enterprise processes team leader for the Navy Department's chief information officer's office. DOD has enterprise licenses with Microsoft Corp., Oracle Corp, Sybase Inc., IBM Corp.'s Informix and Adobe Systems Inc., as well as other software makers.

"We're working to craft a plan for folding their agreements into this process," said Neal Fox, GSA's assistant commissioner in the Office of Acquisition and one of two GSA officials leading the SmartBuy governmentwide enterprise licensing initiative. "That might include opening their contracts governmentwide, or there might be other opportunities."

Fox is working with Emory Miller, director of the professional development division in GSA's Office of Electronic Government and Technology.

The goal of SmartBuy is to reduce the government's cost f0r acquiring commodity software. In a June 2 memo, outgoing OMB Director Mitchell Daniels Jr. named office automation, network management, antivirus, database, business modeling tools and open-source software support as the first targets of the initiative.

Cost savings are attainable for such widely used commodity software, OMB officials believe.

The letter inspired a wave of questions for GSA, Fox said. "Federal agencies are mainly responding to the OMB letter, and asking, 'Does this mean we can't buy software on our own anymore? Does this mean everything has to go through SmartBuy?' " he said. "The answers to those are resounding no's — we don't want anyone to shut down what they're doing."

One key question for GSA is how to determine what companies get the licenses. Fox said companies that already do big business with the government would be the first priority.

"We are first trying to take the requirements that are intuitively obvious and deal with those first — the large companies where we're [buying] large quantities of software and putting out an enormous amount of money," he said. "We're trying to target those opportunities first. Almost simultaneously, though, we're trying to figure out how we deal with that great middle tier of companies [that] almost rise to that level."

Agencies that want to buy software for which an enterprise license exists must use the license, Fox said. However, "SmartBuy is not an attempt to enforce software architecture," he said.

Agencies with expensive software needs now should contact GSA to see if those requirements should be incorporated into enterprise licenses.

At DOD, Groce said his ESI office will become the interface with Smart- Buy. "We'll be the DOD implement-ation of SmartBuy," he said. "We'll be working with and coordinating with SmartBuy."

ESI has established enterprise licenses for products from several vendors, but often offers them through multiple resellers, he said.

The department also negotiated licenses with several vendors for some types of software. A DOD customer could choose a database from Oracle, Sybase, IBM Informix or Microsoft, for example.

"We are trying to offer choice to customers," he said. "We are not determining a customer's requirement."

That flexibility means that enterprise licensing won't necessarily lead to governmentwide standardization onto particular products.

"There needs to be a distinction made," said Kathy Conrad, a vice president at Jefferson Consulting Group LLC. "Trying to leverage the purchasing power of the government...is very different from standardizing on a particular product."

Agencies should refrain from suggesting that products they favor are somehow "standard," she said. "If [enterprise licensing] is used by either vendors or by agencies who have preferences for particular products to suggest that those products are standard, then it has the potential to limit" business opportunities.

Small-business executives are concerned about the initiative, fearing that if large companies get enterprise licenses, the small companies may be shut out or relegated to subcontractor status. Officials said the small companies should not be concerned.

"We have not seen that as an issue" at DOD, Groce said.

Licenses come through the Federal Supply Service schedules system, which includes many small businesses, Fox said.

"Small businesses are already positioned well to play in this program," he said. "We want to make sure that small business is not harmed in this process. Small business will play a great role in the SmartBuy program. We'll involve them to the maximum extent possible."

Some procurement analysts, notably Larry Allen, executive vice president of the Coalition for Government Procurement, have questioned whether enterprise licensing conflicts with another OMB priority: reducing contract bundling.

Hector Barreto, administrator of the Small Business Administration, said he sees no such conflict. Enterprise licenses, which Allen described as "the mother of all bundles," make sense for the government in some instances, he said.

"Not everything has to be unbundled," Barreto said. "It depends on the situation. Different agencies are doing different things at this time."

However, Allen said small businesses could suffer. "If I were part of the small-business community, I would wonder what kind of friend I have in OMB."

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The darker side of enterprise licensing

Small companies that fear that SmartBuy might cut them out of some federal contracts might contemplate Optimus Corp., a Silver Spring, Md., company that makes systems for emergency departments.

Last year, Optimus officials were talking to Baltimore officials about a medical charting system for ambulances. City officials already had negotiated an enterprise license for computer-aided dispatch with an Optimus competitor, said Eric Adolphe, chief executive officer of the company.

"We went up to Baltimore. The fire chief and some other folks came and looked and said it was the best they'd seen," he said. Ultimately, however, the city had to buy the module from the competitor, under the license's terms.

"They went and spent $2 million to have this company build a module for them when we had the same thing available off the shelf," Adolphe said. The Optimus module would have plugged into the other company's system, he said.

Federal officials say the enterprise licensing plan they are implementing will allow agencies to have flexibility if the systems available under the licenses aren't suitable.