Federal agencies expect to spend at least $82 billion in fiscal year 2014  to meet their increasing demand for IT products and services, such as  purchases of software licenses. OMB and Federal Agencies Need to Improve Policies on Managing Software Licenses

OMB and most federal agencies that we reviewed do not have adequate  policies for managing software licenses. OMB has a broader IT  management initiative, known as PortfolioStat, which is intended to assist  agencies in gathering information on their IT investments, including  software licenses. Further, while 2 agencies have adequate policies for managing  software licenses, the vast majority of agencies do not. Specifically, of the  24 major federal agencies, 18 have developed them, but they are not  comprehensive; and 4 agencies have not developed any. Without guidance from OMB or comprehensive policies, it will be  difficult for the agencies to consistently and effectively manage software  licenses. The Majority of Agencies Have Software License Management Policies, but They Are Not Comprehensive

Given the absence of an OMB directive providing guidance to agencies  on licensing management policy, we identified seven elements that a  comprehensive software licensing policy should specify:  identify clear roles, responsibilities, and central oversight authority  within the department for managing enterprise software license  agreements and commercial software licenses; establish a comprehensive inventory (80 percent of software license  spending and/or enterprise licenses in the department) by identifying  and collecting information about software license agreements using  automated discovery and inventory tools; regularly track and maintain software licenses to assist the agency in  implementing decisions throughout the software license management  life cycle; analyze software usage and other data to make cost-effective provide training relevant to software license management; establish goals and objectives of the software license management  consider the software license management life-cycle phases (i.e.,  requisition, reception, deployment and maintenance, retirement, and  disposal phases) to implement effective decision making and  incorporate existing standards, processes, and metrics. The general consensus of the agency officials we spoke to on their policy  weaknesses was that they were due, in part, to the lack of a priority for  establishing or enhancing department- or agency-level software license  management. Table 2 describes  these leading practices in managing software licenses. The inadequate implementation of leading practices in software license  management can be linked to the weaknesses in agencies’ policies and  decentralized approaches to license management. As a result, agencies’  oversight of software license spending has been limited or lacking. Agencies’ Most Widely Used Software Applications Are Not Known Due to Data Limitations

Given the weaknesses identified in this report regarding agencies’  lack of comprehensive, well-maintained inventories of software  licenses, we cannot accurately describe the most widely used  software applications across the government, including the extent to  which they were over and under purchased. Further, the data  provided by agencies regarding their most widely used applications  are varying, incomplete, or not available—and thus, cannot be  compared across the government. Varying data: The agencies that had data on widely used software  applications provided it in various ways, including by license count,  usage, and cost. NASA reported that in fiscal year 2012 the agency spent about  $13 million on its most widely used applications. Incomplete data: The data provided by the agencies on the most widely  used applications were not always complete. OMB  has issued a policy associated with a broader IT management initiative  but does not have a directive that assists agencies in developing licensing  policies. In written comments, OMB noted that there are several management  tools in place with respect to software license management, including  the three we identified in our report; however, the agency disagreed  with our statements that OMB and federal agencies need to improve  policies on managing software licenses, and that until agencies have  sufficient direction from OMB, opportunities to systematically identify  software license related cost savings across the federal government  will likely continue to be missed. Appendix I: Objectives, Scope, and Methodology

Our objectives for this engagement were to (1) assess the extent to which  the Office of Management and Budget (OMB) and federal agencies have  appropriate policies on software license management, (2) determine the  extent to which federal agencies are adequately managing software  licenses, and (3) describe the software applications most widely used by  the federal agencies and the extent to which they were over or under  purchased. ● Fully met—the agency provided evidence that it fully addressed the leading practice. leading practice.
Why GAO Did This Study

The federal government plans to spend at least $82 billion on IT products and services in fiscal year 2014, such as software licenses. Federal agencies engage in thousands of licensing agreements annually. Effective management of software licenses can help avoid purchasing too many licenses that result in unused software.
GAO was asked to review federal agencies' management of software licenses. GAO (1) assessed the extent to which OMB and federal agencies have appropriate policies on software license management, (2) determined the extent to which agencies adequately manage licenses, and (3) described agencies' most widely used software and extent to which they were over or under purchased. GAO assessed policies from 24 agencies and OMB against sound licensing policy measures. GAO also analyzed and compared agencies' software inventories and management controls to leading practices, and interviewed responsible officials. To identify sound licensing policy measures and leading practices, GAO interviewed recognized private sector and government software license management experts.

What GAO Found

The Office of Management and Budget (OMB) and the vast majority of agencies that GAO reviewed do not have adequate policies for managing software licenses. While OMB has a policy on a broader information technology (IT) management initiative that is intended to assist agencies in gathering information on their IT investments, including software licenses, it does not guide agencies in developing comprehensive license management policies. Regarding agencies, of the 24 major federal agencies, 2 have comprehensive policies that include the establishment of clear roles and central oversight authority for managing enterprise software license agreements, among other things; 18 have them but they are not comprehensive; and 4 have not developed any. The weaknesses in agencies' policies were due, in part, to the lack of a priority for establishing software license management practices and a lack of direction from OMB. Without an OMB directive and comprehensive policies, it will be difficult for the agencies to consistently and effectively manage software licenses.
Federal agencies are not adequately managing their software licenses because they generally do not follow leading practices in this area. The table lists the leading practices and the number of agencies that have fully, partially, or not implemented them.
The inadequate implementation of leading practices in software license management was partially due to weaknesses in agencies' policies. As a result, agencies' oversight of software license spending is limited or lacking, and they may miss out on savings. The potential savings could be significant considering that, in fiscal year 2012, one major federal agency reported saving approximately $181 million by consolidating its enterprise license agreements even though its oversight process was ad hoc.
Given that agencies lack comprehensive software license inventories that are regularly tracked and maintained, GAO cannot accurately describe the most widely used software applications across the government, including the extent to which they were over and under purchased. Further, the data provided by agencies regarding their most widely used applications had limitations. Specifically, (1) agencies with data provided them in various ways, including by license count, usage, and cost; (2) the data provided by these agencies on the most widely used applications were not always complete; and (3) not all agencies had available data on the most widely used applications. Until weaknesses in how agencies manage licenses are addressed, the most widely used applications cannot be determined and thus opportunities for savings across the federal government may be missed.

What GAO Recommends

GAO recommends OMB issue a directive to help guide agencies in managing licenses and that the 24 agencies improve their policies and practices for managing licenses. OMB disagreed with the need for a directive, but GAO believes it is needed, as discussed in the report. Most agencies generally agreed with the recommendations or had no comments.