Building on Progress: Improving the Way the Government Buys IT

Today, the Office of the Federal Chief Acquisition Officer and the Office of the Federal Chief Information Officer released for public comment a directive to Federal agencies to drive greater efficiency into how we manage and buy software.

Each year, the U.S. Government spends more than $9 billion on software through more than 50,000 transactions, which results in a fragmented and inefficient marketplace.  A recent report by the Government Accountability Office (GAO) indicates that agencies buy and manage software licenses in a decentralized manner, struggle to create accurate inventories, often purchase unneeded capabilities, and generally do not share pricing, terms, and conditions across Government to facilitate better purchasing.  Furthermore, most agencies do not have a designated central oversight authority to manage software agreements, and agency personnel often lack sufficient experience and expertise to effectively negotiate and manage large software agreements.  Today’s guidance addresses these and other challenges in information technology management, specifically software licenses.

Even as we finalize our policy, we are already taking concrete steps to improve how the government buys and manages software. For example, in support of the Federal Information Technology Reform Act (FITARA) and the Administration’s category management initiative, General Services Administration (GSA) is working with the government’s largest buyers of geospatial software, such as DoD and the Department of the Interior, and will soon have in place a new government-wide solution that will save taxpayer millions of dollars and allow agencies, for the first time, to take advantage of government-wide volume discounts, to reduce unnecessary duplication, and increase transparency of existing agreements.

Similarly, GSA is working with agencies to establish a government-wide Blanket Purchase Agreement (BPA) for Salesforce Services.  The Salesforce Implementation, Integration, and Support Services BPA, which will be awarded shortly, will drive consistent technology standards that will allow agencies to share and reuse developed applications, code, and best practices, which will save money.  In fact, agencies can potentially save between 50 and 80 percent on application development costs by reusing code that the government has already paid for.  For example, if an application costs $500k to build from scratch, agencies could save between $250k and $400k by leveraging existing applications shared on GSA Labs.

In October, building on the Administration’s category management initiative to buy and manage common commodities – like commercial software – in a more coordinated way, we released a directive prohibiting agencies from using issuing new contracts for laptops and desktop computers, requiring they buy their laptops and desktops using just three existing contracts, including NASA’s Solutions for Enterprise-Wide Procurement (SEWP) service.  In just one month after OMB issued the new policy, vendors dropped their prices for select laptops and desktops for the standard configurations on NASA SEWP by up to 50%.                                                            

Today’s proposed guidance doubles down on this progress by calling on agencies to centrally manage their software buys to reduce underutilization, to maximize the use of best-in-class solutions and for a multi-agency software team to develop new enterprise-wide software agreements.  Guidance for mobile solutions will come in the new year.

The public can submit comment on the proposed guidance by clicking HERE.

Anne Rung is the U.S. Chief Acquisition Officer.

Tony Scott is the U.S. Chief Information Officer.