OMB, GSA to push for bulk buys of software

'Just aggregating a buy across government is not enough of a reason to do it.'

'GSA's Mary Mitchell

The Interior Department estimates it will save $78 million by 2007 through enterprise licenses it holds for four software programs. The Navy expects similar savings from the more than 600,000 licenses it bought for personnel support software from PeopleSoft Inc. of Pleasanton, Calif.

These two examples are a chief reason the Office of Management and Budget and the General Services Administration have begun work on the SmartBuy program.

OMB and GSA hope to drive down the cost of enterprise licensing and improve the terms the government gets from software vendors, said Keith Thurston, GSA assistant deputy associate administrator for e-government and technology.

Later this summer, OMB and GSA will release agency guidance and a request for industry comment on enterprise software licenses.

'The push is to aggregate requirements and put in place agreements so that the government benefits from being a large buyer,' a senior administration official said. 'The federal government often is a vendor's largest single customer, and we ought to be getting the best price. Many times we don't act like the largest customer because of the way we purchase goods and services.'

OMB announced SmartBuy last month in its E-Government Strategy report.

SmartBuy initially will target specific software classes such as antivirus and network management applications, said Mary Mitchell, deputy associate administrator in GSA's E-Government and Technology Office. An interagency working group is developing goals, identifying performance metrics and planning how the program will work, she said.

'We hope to have some experience in buying governmentwide before the end of this fiscal year,' Mitchell said. 'There has been enough experience with this to know this is worthwhile, but just aggregating a buy across government is not enough of a reason to do it.'

In the E-Government Strategy report, OMB said the initiative will 'employ smart buying practices to reduce acquisition and support costs, including software asset management, and increase the use of standards-compliant software.'

Through their enterprise deals, Interior and the Navy are experiencing the benefits that OMB wants to provide to other agencies through the initiative.

Single umbrella

Samantha Goldstein, Interior's enterprise solutions manager, said her agency decided to standardize on database management software from Oracle Corp. and geographic information system software from ESRI of Redlands, Calif., because several bureaus had software agreements that were about to expire.

'It made sense to put all current and prospective users in respective bureaus under a single umbrella and negotiate a price with the vendor for common denominator products or services,' she said.

Interior expects to save $40 million alone from the ESRI license, Goldstein said. The department also negotiated enterprise licenses with Microsoft Corp. for Windows XP, Office XP and Active Directory server software, and with MRO Software Inc. of Bedford, Mass., for facilities management software.

Goldstein said additional cost savings will come from reduced maintenance and training needs.

Steven Ehrler, the Navy's program executive officer for IT, said, 'It made sense to cover our organization as opposed to each command identifying who will use it and order licenses by seat. There also is a lot more visibility of cost because there is one bill to pay, instead of each command paying for software.'

An important aspect of using licenses is to understand an organization's needs, Ehrler said. Agencies have to avoid being defined by the limitations of a vendor's products, he added.

'We had to be careful not to overbuy or buy too early because it will take time to migrate employees to the new software,' Ehrler said. 'We will do a business case on applications for which we have a large number of users to determine if buying an enterprise license is cost effective.'

Goldstein added that it's important to incorporate training and administrative support into a license.

GSA's Mitchell said the SmartBuy program will face such challenges, but on a much larger scale.

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