The Federal government has thousands of software license agreements with vendors, but a new Government Accountability Office (GAO) report revealed that Federal agencies need better data on these software licenses to maximize cost savings and not over-purchase licenses.
GAO examined the 24 Chief Financial Officers Act agencies’ software licenses and found that 10 vendors accounted for the majority of the most widely used licenses, as of July 2022. These top vendors include Microsoft, Adobe, Salesforce, IBM, Oracle, McAfee, Cisco, ServiceNow, VMware, and Google.
However, the watchdog agency said that it’s unclear which products under those licenses are most widely used due to agencies’ inconsistent and incomplete data.
“For example, multiple software products within license agreements were not separately priced,” the report says. “Key activities for assessing the appropriate number of software licenses are (1) tracking licenses currently in use and (2) regularly comparing the inventory of software licenses currently in use to purchase records.”
“Conducting such activities can help avoid purchasing too many licenses – referred to as over-purchasing – or purchasing too few licenses that may result in additional fees – referred to as under-purchasing,” it adds.
GAO selected nine agencies with varying IT budget sizes – the Departments of Agriculture, Energy, Housing and Urban Development (HUD), Justice, State, and Veterans Affairs; the Office of Personnel Management; Social Security Administration; and U.S. Agency for International Development – but none of them could fully determine whether or not their five most widely used software licenses were over- or under-purchased.
Since 2014, agencies have reported about $2.1 billion in cost savings related to better management of software licenses, according to GAO. By maintaining consistent and complete data, GAO said that Federal agencies could maximize cost savings when purchasing software licenses.
GAO made 18 recommendations to the nine agencies to consistently track software license usage and compare the inventories with purchased licenses. Eight agencies agreed with the recommendations and one – HUD – neither agreed nor disagreed.
According to the report, HUD said it was in the process “of remediating the issue to develop and implement procedures for comparing the inventories of licenses in use to purchase records.”
