GAO Report Shows Duplicative Spending on Software Licenses

By Anderson Haxton, Special forUSDR

Federal agencies are missing opportunities to save money in their software license purchases, according to a May 2014 Government Accountability Office (GAO)report.  Citizens Against Government Waste (CAGW) has been following this issue for some time, including a May 10, 2013 briefing on Capitol Hill highlighting the problems with software asset management in the federalgovernment.

According to the GAO report, agencies are not following leading software license management practices, including centralizing management, establishing a comprehensive inventory of licenses, regularly tracking and maintaining comprehensive inventories, analyzing software license data to inform investment decisions, and providing sufficient training to the appropriatepersonnel.

Unfortunately, GAO found that only two of 24 major agencies operate with “comprehensive policies that include the establishment of clear roles and central oversight authority for managing enterprise software license agreements.”  None of the 24 agencies are fully tracking and maintaining software license inventories, even though 20 of them use automated tools and metrics to perform thatanalysis.

The GAO stated that “the inadequate implementation of leading practices in software license management can be linked to the weakness in the agencies’ policies and decentralized approaches to licensemanagement.”

This egregious lack of oversight is not a small problem.  The federal government plans to spend at least $82 billion on information technology (IT) in FY 2014, including the purchase of softwarelicenses.

The GAO report stated that the Office of Management and Budget and federal agencies have responsibility for overseeing IT investment management pursuant to the Clinger-Cohen Act of 1996.  In addition, executive orders have been issued to enhance these requirements.  Executive Order 13103 states that “each agency shall adopt procedures to ensure that the agency does not acquire, reproduce, distribute, or transmit computer software in violation of applicable copyright laws.”  According to Executive Order 13589, agencies are required to “access current device inventories and usage, and establish controls to ensure that they are not paying for unused or underutilized IT equipment, installed software, orservices.”

Sadly, some agencies, such as the Department of Health and Human Services (HHS), do not even feign an interest in following suggested management practices.  According to GAO, HHS did not analyze FY 2012 and 2013 department-wide software license data.  The Department of Transportation failed to provide “software license management training to its employees and does not have plans to do so, according toofficials.”

The GAO report stated that “proper management of software licenses helps to minimize risks by ensuring that licenses are used in compliance with licensing agreements and they are cost-effectively deployed, and that software purchasing and maintenance expenses are properly controlled.”  In other words, the agencies’ improper management of software licenses wastes the taxpayers’ money when software licenses are underutilized or, worse yet, never used atall.

This GAO report is just the latest example of inadequate software license management.  On April 10, 2014 CAGW responded to a Treasury Inspector General for Tax Administration (TIGTA) report, which found that the Internal Revenue Service “spent $235 million on software licenses in 2011 and accounted poorly for those assets.”  Even worse, the agency determined that it needed to build its own software asset management system rather than use private sectorsolutions.

Federal agencies should respond expeditiously to the GAO report in order to consolidate their software and enhance software management practices.  Unfortunately, based on past failures to address these issues, the response to the GAO report may beunderwhelming.

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.

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