OMB sets SmartBuy action plan

The Office of Management and Budget is taking its search for savings to the users' desktops.A new directive requires agencies to use the new SmartBuy enterprise license program, inventory software bought last year and detail software buying plans for this year.In a memorandum last week to senior procurement executives, OMB gave agencies until April 15 to develop a software inventory that lists all software acquisitions conducted last year.The list must include the name and version of the software, the number of licenses bought, the lowest and highest price paid for the software, the total cost of purchases and the average price paid, said the letter from Karen Evans, administrator for e-government and IT.The software inventory is one of 10 actions OMB is asking agencies to take over the next nine months to make sure SmartBuy gains a foothold. By meeting OMB's demands, agencies will enhance their ability 'to manage and to maximize the federal government's buying power,' Evans said.But while OMB is being praised for establishing some discipline and parameters for SmartBuy, not all observers think the enterprise license initiative will work. Angela Styles, the former Office of Federal Procurement Policy administrator, questions whether agencies have the information to fulfill the requirements laid down by OMB.Many software prices and quantities are embedded in larger integration contracts, said Styles, now a lawyer with Miller & Chevalier of Washington.'How you derive the specific price per unit is tough to answer,' she said. 'I don't know if agencies know how to do this. This is a significant data requirement for agencies.'The General Services Administration, lead agency for SmartBuy, is trying to provide some help, said Glenn Perry, director of contracts and purchasing at the Education Department.A GSA-led team is looking at the need for a governmentwide software asset management policy to determine where improvements can be made, said Perry, vice chairman of the Federal Acquisition Council.'We know some agencies are better at keeping track of licenses at the CIO level. Those agencies link the receipt of software assets with their buying functions,' he said. 'If that is done up front as folks are making purchases, then they will be OK. But those agencies treating software assets as a consumable will have a bit of an issue tracking those costs.'Although isolating the software prices will be challenging for agencies, it makes sense to develop inventories because it is a good business practice, added Bob Dix, staff director for the House Government Reform Subcommittee on Technology, Information Policy, Intergovernmental Relations and the Census.OMB and GSA have identified specific target areas, Dix said. 'Some, like antivirus, should not be that hard to do; others will be more difficult. Agencies need to build a foundation and baseline metrics so they can move into the future. The memo is an important first step.'Once the inventories are finished, GSA's SmartBuy program office will release by May 31 a request for information about licenses for human resources, financial, grant, office automation and analytical software. Then, by Oct. 1, GSA will work out agreements with vendors in each of those categories.This memo comes on the heels of the first SmartBuy deal. GSA and six agencies late last month signed a contract with geographic information systems software vendor ESRI of Redlands, Calif.The contract marks the first good news for the struggling program; administration officials had hoped to have multiple contracts in place by last fall and had set a savings target of $100 million for this year.GSA expects the ESRI contract'for geographic information systems and geospatial applications'to save the Agriculture and Interior departments, Census Bureau, Environmental Protection Agency, National Geospatial-Intelligence Agency and National Security Agency more than $57 million over five years.'This is a specific arrangement with one contractor for those agencies, with specific needs for those contract services,' said G. Martin Wagner, GSA's associate administrator for governmentwide policy.Interior CIO Hord Tipton said until agencies establish their inventories, SmartBuy deals will be difficult to reach.'We did our software inventory three years ago, and we found lots of licenses in several places that have never been out of the shrink-wrap,' he said. 'You have to be comfortable with the amount of software you need. I think agencies will be surprised by how much money they spend.'Interior was one of three agencies with an enterprise deal in place with ESRI before GSA negotiated the recent SmartBuy deal. Tipton said Interior 'will have benefits beyond dollar savings, such as online training and some administration costs.'At EPA, the contract will help the agency save an additional 10 percent over the blanket purchase agreement it signed with ESRI in November, said Mark Luttner, director of EPA's Office of Information Collection. Overall, Luttner expects EPA will save $200,000 a year on the cost of software alone.'The contract will reduce overhead and administrative costs for EPA and ESRI,' he said. 'It also will help us manage the distribution of the software throughout the agency.'The first deal should make reaching future agreements easier, GSA's Wagner said.'We have to work more closely with the CIO community and be more demand-driven,' Wagner said. 'We will be pursuing different avenues based on different ways agencies buy software and based on different vendors' marketing approaches.'