Hey, Congress—if you're looking to cut spending, go after wasteful software contracts

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Legacy software companies have spammed federal agencies with outdated, costly and ridiculously complex software assets that impede actual IT modernization.

In the depths of the 2008 financial crisis, some journalists took to labeling some of the financial services firms that had jammed our economy full of subprime loans and bad securitization products as "vampire squids." That moniker referred to the companies who were reaping incredible profits while sinking the country with toxic assets and drowning the world in bad debt. It took years to unwind the U.S economy, and so many others around the globe, from this vicious morass.

In a somewhat different, but eerily similar, context, the vile vampire squid approach continues in federal software licensing. One of the most persistent areas of wasteful spending and abusive practices in government is the way many legacy software companies have spammed federal agencies with outdated, costly and ridiculously complex software assets that impede actual IT modernization, dramatically increase cybersecurity risks, and hamstring agencies from moving to the cloud. The software vampire squid persists—and often thrives—despite seemingly constant reports highlighting the outrageous costs agencies must continue to accrue because they were unaware of the complex licensing arrangements that companies were aggressively and often purposefully pushing to every corner and cranny of their organization. 

Recent independent reports note that this lack of visibility into the types of software bought, deployed, or in use throughout federal agencies breeds a debilitating cycle of vendor lock-in and technical debt that will cost billions of taxpayer dollars over the next decade. Without substantive reforms, agencies will never be able to untangle themselves from the software vampire squid's tentacles.

Fortunately, Congress understands this pervasive problem and is planning to take decisive actions to address it. Recently, a bipartisan group of seven senators, led by Gary Peters (D-Mich.) and Bill Cassidy (R-La.), and a separate bipartisan group of 16 House Members, led by Reps. Matt Cartwright (D-Pa.) and Nancy Mace (R-S.C.), reintroduced the "Strengthening Agency Management and Oversight of Software Assets Act" (dubbed SAMOSA), which will seek to rid federal agencies of the software vampire squid once and for all. The Senate Homeland Security and Governmental Affairs Committee, chaired by Peters, plans to get traction on this important legislation by moving the bill at a business meeting this week. The committee should adopt the strongest possible version of the bill, as the software vampire squid—including its trade associations and lobbyists—will undoubtedly try to water it down as this critical legislation moves forward.

The bill would require agencies to conduct comprehensive assessments of all software that "has been purchased, leased, or licensed by or billed to an agency under any contract or other business arrangement." 

To put this back into financial crisis terminology, agencies will have to conduct "stress tests" of every piece of software (and the underlying licensing arrangements, use restrictions, and any other policies that inhibit the ability of the agency to effectively deploy software to meet mission needs) and submit those findings to the White House and to Congress. In doing so, chief information officers and chief acquisition officers will be forced to perform the unsexy, but very necessary, IT accounting and analysis that will dramatically improve their agency's understanding of the risks they own given their current state—and future obligations—incurred through their software assets, associated licenses, and contractual arrangements.

Beyond the comprehensive assessments, agencies will have to use the data and information made available by "opening their books" to develop and implement plans to consolidate licenses, adopt enterprise licensing arrangements where necessary, and take other prudent procurement actions to reduce unnecessary costs, improve IT performance and eliminate any abusive and restrictive licensing provisions in their upcoming procurements. If enacted, the SAMOSA Act will increase competition by stopping harmful vendor lock-in and transform the way agencies buy and use the most cutting edge American technology capabilities to deliver higher value digital experiences to our citizens. Not only could the bill save billions for the taxpayer over the next decade, agencies will dramatically reduce cybersecurity risks because they will rid themselves of incredible amounts of outdated, shadow IT assets that often go unmonitored or unpatched. 

Most importantly, in a time when debt-ceiling brinkmanship and federal spending battles are upon us, and bipartisanship seems at its lowest ebb, the administration and Congress should be looking for as many common sense cost-cutting proposals as they can find. Fortunately, they don't need to perform any deep-dive assessments to understand that the SAMOSA Act is good policy, good politics, and good for the country's purse. It's time to slay the software vampire squid, unlock American innovation and expedite true IT modernization through comprehensive bipartisan software licensing reform.

Matthew T. Cornelius is a former senior professional staff member on the Senate Homeland Security and Governmental Affairs Committee. He also served in several senior executive branch technology and cybersecurity policy roles, including at the Office of Management and Budget and the General Services Administration. The views expressed here are his personal opinions.

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