The federal government spends $100 billion annually on federal information technology. Improving how departments and agencies manage IT is therefore a ripe opportunity for Washington to achieve taxpayer savings and make the government work better for the American people.
One of the most apparent areas of unnecessary spending in federal IT is unnecessary software licenses. Every year, departments and agencies pay for unnecessary or duplicative software, and the chief information officers charged with overseeing IT spending struggle to keep track of their software license inventories.
This is a longstanding problem. In 2015, the nonpartisan Government Accountability Office included the agencies’ management of their software license on its “high risk” list of significant areas of government waste and management challenges. At the time, GAO reported:
In particular, 22 of the 24 major agencies did not have comprehensive license policies, and only 2 had comprehensive license inventories. As a result, agencies’ oversight of software license spending was limited or lacking, and thus 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.
The congressional watchdog agency recommended that the Office of Management and Budget issue guidance to federal departments and agencies to oversee software spending. At the time, GAO warned: “Without such guidance, agencies will likely continue to lack the visibility into what needs to be managed.”
While OMB initially disagreed, Congress enacted a bipartisan law in 2016, and the White House issued guidance, both encouraging departments and agencies to improve their management of software licenses. According to GAO, this move has led to more than $2 billion in savings.
But fast-forward a decade (and four administrations) later, and the federal government’s management of software licenses remains a problem. A 2024 GAO review found that nine large federal agencies were not following best practices to track their software licenses and analyze their license inventories for their most used software services.
Inspectors General have found similar problems. For example, an Inspector General reported that “NASA has not implemented a centralized Software Asset Management tool to discover, inventory, and track license data as required by federal policy,” and that as a result NASA has spent “approximately $15 million over the past 5 years on unused licenses, an amount we found wasteful and are therefore questioning.” Another IG found that the Environmental Protection Agency overlooked $1 million in software licenses and didn’t include it in its inventory. Similar IG audits of the Postal Service, National Archives and Records Administration, and Election Assistance Commission have identified similar issues of lax management of software contracts.
The good news is that Congress is now considering legislation that would require federal departments and agencies to address this problem: The bipartisan Strengthening Agency Management and Oversight of Software Assets (SAMOSA) Act.
The bill would require federal agencies to develop comprehensive software licenses inventories and leverage independent audits to assess their management of these assets. It would also require agency CIOs to develop new plans to better manage software licenses. Finally, the legislation would require OMB to create a federal strategy for managing software licenses and annually review agencies’ plans.
These bipartisan bills have broad support in both parties on both sides of the Capitol. In the House, Reps. Shontel Brown (Ohio), Mace (South Carolina), Pat Fallon (Texas), and Delaney (Maryland) are sponsoring the legislation. In the Senate, Senators Peters (Michigan), Cassidy (Louisiana), Ernst (Iowa), Lankford (Oklahoma), Tillis (North Carolina), and Wyden (Oregon) are backing a companion bill. This legislation was previously introduced by Congressman Gerald Connolly (Virginia), who passed away earlier this year.
The same bill passed the House of Representatives last December, but was not approved in the Senate before the end of the term. Now, lawmakers have a new opportunity to get the bill across the finish line.
As American families are tightening their belts this holiday season in response to rising prices, it’s reasonable for the federal government to do the same. Requiring federal departments and agencies to take a close look at their software license spending is a simple yet essential step toward the broader goal of modernizing federal IT and achieving billions in taxpayer savings.
