Software license purchases need better agency tracking, GAO says

Federal agencies are missing out on cost savings and making too many duplicative purchases when it comes to IT and cyber-related investments, according to a new Government Accountability Office report.

With an annual spend of more than $100 billion on IT products, the federal government is falling short on the consistent tracking of its software licenses, leading to missed opportunities for cost reductions, the GAO found. And though there are federal initiatives in place to “better position agencies to maximize cost savings when purchasing software licenses,” the GAO noted that “selected agencies have not fully determined over- or under-purchasing of their five most widely used software licenses.”

The GAO’s study looked at software licenses purchased by the 24 Chief Financial Officers Act agencies, finding that 10 vendors made up the majority of the most widely used licenses. For fiscal year 2021, Microsoft held by far the largest share of vendors organized by the highest amounts paid (31.3%), followed by Adobe (10.43%) and Salesforce (8.7%).

While the GAO was able to identify and analyze vendors based on government spend, it was “unclear which products under those licenses are most widely used because of agencies’ inconsistent and incomplete data,” the report noted. “For example, multiple software products may be bundled into a single license with a vendor, and agencies may not have usage data for each product individually.”

“Without better data, agencies also don’t know whether they have the right number of licenses for their needs,” the report continued.

For their recommendations, the GAO focused on nine agencies based on the size of their IT budgets and then zeroed in on the five most widely used licenses within those agencies. The selected agencies were the Departments of Agriculture, Energy, Housing and Urban Development, Justice, State and Veterans Affairs, as well as the Office of Personnel Management, Social Security Administration and USAID.

The recommendations centered most on better and more consistent inventory tracking to ensure that agencies didn’t double-dip on software license purchases and were in a better position to take advantage of cost-saving opportunities. There should be more concerted efforts to compare prices, the GAO stated.

HUD did not say whether it agreed or disagreed with the GAO’s recommendations, while the other eight agencies said in responses that they did.

Congress in 2023 attempted to rein in duplicative software across the government with the Strengthening Agency Management and Oversight of Software Assets Act, which aimed to consolidate federal software purchasing and give agencies greater ability to push back on restrictive software licensing. However, after passing the House in July, the bill never moved in the Senate.