U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

1 

59–010 

" ! SENATE 

114TH CONGRESS

2d Session 

REPORT

2016

114–289 

Calendar No. 533 

MAKING ELECTRONIC GOVERNMENT 

ACCOUNTABLE BY YIELDING TANGIBLE 

EFFICIENCIES ACT OF 2015 

R E P O R T 

OF THE

COMMITTEE ON HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

TO ACCOMPANY

S. 2340 

TO REQUIRE THE DIRECTOR OF THE OFFICE OF MANAGEMENT 

AND BUDGET TO ISSUE A DIRECTIVE ON THE MANAGEMENT OF 

SOFTWARE LICENSES, AND FOR OTHER PURPOSES 

JUNE 28, 2016.—Ordered to be printed 


SSpencer on DSK4SPTVN1PROD with REPORTScongress.#13
(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

RON JOHNSON, Wisconsin, Chairman 

JOHN MCCAIN, Arizona 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

JAMES LANKFORD, Oklahoma 

MICHAEL B. ENZI, Wyoming 

KELLY AYOTTE, New Hampshire 

JONI ERNST, Iowa 

BEN SASSE, Nebraska 

THOMAS R. CARPER, Delaware 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

TAMMY BALDWIN, Wisconsin 

HEIDI HEITKAMP, North Dakota 

CORY A. BOOKER, New Jersey 

GARY C. PETERS, Michigan 

CHRISTOPHER R. HIXON, Staff Director 

GABRIELLE D’ADAMO SINGER, Chief Counsel 

PATRICK J. BAILEY, Chief Counsel for Governmental Affairs 

ANN F. VAN HOUTEN, U.S. Department of Homeland Security Detailee 

GABRIELLE A. BATKIN, Minority Staff Director 

JOHN P. KILVINGTON, Minority Deputy Staff Director 

MARY BETH SCHULTZ, Minority Chief Counsel 

MATTHEW R. GROTE, Minority Senior Professional Staff Member 

LAURA W. KILBRIDE, Chief Clerk 


SSpencer on DSK4SPTVN1PROD with REPORTS
Calendar No. 533 

114TH CONGRESS SENATE REPORT " ! 2d Session 114–289 

MAKING ELECTRONIC GOVERNMENT ACCOUNTABLE BY 

YIELDING TANGIBLE EFFICIENCIES ACT OF 2015 

JUNE 28, 2016.—Ordered to be printed 

Mr. JOHNSON, from the Committee on Homeland Security and 

Governmental Affairs, submitted the following 

R E P O R T 

[To accompany S. 2340] 

The Committee on Homeland Security and Governmental Affairs, 

to which was referred the bill (S. 2340) to require the Director of 

the Office of Management and Budget to issue a directive on the 

management of software licenses, and for other purposes, having 

considered the same, reports favorably thereon with an amendment 

in the nature of a substitute and recommends that the bill, as 

amended, do pass. 

CONTENTS 

Page 

I. Purpose and Summary .................................................................................. 1 

II. Background and Need for the Legislation ................................................... 2 

III. Legislative History ......................................................................................... 4 

IV. Section-by-Section Analysis .......................................................................... 5 

V. Evaluation of Regulatory Impact .................................................................. 5 

VI. Congressional Budget Office Cost Estimate ................................................ 5 

VII. Changes in Existing Law Made by the Bill, as Reported ........................... 6 

I. PURPOSE AND SUMMARY

The purpose of S. 2340, the Making Electronic Government Accountable By Yielding Tangible Efficiencies (MEGABYTE) Act of 

2015, is to improve software license management across the Federal Government to achieve tangible cost savings. The bill requires 

the Office of Management and Budget (OMB) to issue a directive 

to each Executive agency to develop a comprehensive software licensing policy. The policy must require each agency’s Chief Information Officer (CIO) to: (1) establish a comprehensive inventory of 

software licenses; (2) track and maintain such licenses; (3) analyze 

software usage to make cost-effective decisions; (4) provide software 


SSpencer on DSK4SPTVN1PROD with REPORTS
2 

1Steven Vanroekel, PortfolioStat 2.0: Driving Better Management and Efficiency in Federal IT, 

THE WHITE HOUSE BLOG, https://www.whitehouse.gov/blog/2013/03/27/portfoliostat-20-drivingbetter-management-and-efficiency-federal-it. 2GOV’T ACCOUNTABILITY OFFICE, GAO–15–404SP: ADDITIONAL OPPORTUNITIES TO REDUCE

FRAGMENTATION, OVERLAP, AND DUPLICATION AND ACHIEVE OTHER FINANCIAL BENEFITS 25 

(2015), available at http://gao.gov/assets/670/669613.pdf [hereinafter GAO–15–404SP: ADDI- TIONAL OPPORTUNITIES]; see also Jason Miller, OMB launches PortfolioStat to reduce commodity 

IT spending, FEDERAL NEWS RADIO (Apr. 2, 2012 5:22 a.m.), http://federalnewsradio.com/defense/ 

2012/04/omb-launches-portfoliostat-to-reduce-commodity-it-spending/. 3Office of Management and Budget, Memorandum M–12–10: Implementing PortfolioStat 

(2012) https://www.whitehouse.gov/sites/default/files/omb/memoranda/2012/m-12-10l1.pdf. 4GOV’T ACCOUNTABILITY OFFICE, GAO–14–413, FEDERAL SOFTWARE LICENSES BETTER MAN- AGEMENT NEEDED TO ACHIEVE SIGNIFICANT SAVINGS GOVERNMENT-WIDE (2014), available at 

http://www.gao.gov/assets/670/663560.pdf [hereinafter GAO–14–413, FEDERAL SOFTWARE LI- CENSES]. 5 Id. at 7. 6 Id. 7 Id. 8 Id. 

license management training; (5) establish goals and objectives for 

the agency’s software license management program; and (6) consider the software license management life cycle phases to implement effective decision making and incorporate existing standards, 

processes, and metrics. 

II. BACKGROUND AND THE NEED FOR LEGISLATION

OMB launched the PortfolioStat initiative in March 2012.1 The 

initiative requires Federal agencies to conduct an annual, agencywide IT portfolio review to, among other things, ‘‘reduce commodity 

IT spending and demonstrate how their IT investments align with 

their missions and business functions.’’ 2 To implement these goals, 

OMB directed agencies to reduce duplicative IT commodities that 

could include software.3 Subsequently, Congress asked the Government Accountability Office (GAO) to evaluate Federal agencies’ 

management of software licenses. GAO found that ‘‘. . . while 

PortfolioStat can assist agencies in identifying cost savings and 

avoidance related to software licensing, this initiative, combined 

with the key executive order on more efficient software spending, 

is not enough to guide the agencies in developing comprehensive licensing management policies.’’ 4

Portfolio Stat does not guarantee savings through prudentlymanaged software licenses. Under this initiative it is up to the 

agencies to decide whether to prioritize software licenses as part of 

the PortfolioStat review.5 Several agencies, including the Department of Housing and Urban Development (HUD), the Department 

of State (State), the Department of Homeland Security (DHS), and 

the Department of Veterans Affairs (VA) included software license 

management as part of Portfolio Stat, but other agencies did not.6

The GAO noted that the agencies that created an inventory of software licenses and actively managed it needed additional guidance 

from OMB to save money.7 The corollary cautions that if agencies 

are not required to manage their software licenses and there is no 

central policy on software management, some agencies will forgo 

the associated savings.8 In its 2014 report, GAO recommended specific action for OMB and for the agencies to obtain savings from 

better management of software licenses. Specifically, these recommendations included: directing OMB to guide agencies in managing software licenses, and for agencies to develop software license policy, inventory software licenses, train staff on software liVerDate Sep 11 2014 05:09 Jul 01, 2016 Jkt 059010 PO 00000 Frm 00004 Fmt 6659 Sfmt 6602 E:\HR\OC\SR289.XXX SR289

SSpencer on DSK4SPTVN1PROD with REPORTS
3 

9 Id. at 62. 10 Id. at 21. 11GAO–15–404SP: ADDITIONAL OPPORTUNITIES at 181–82. 12 Id. at 183. 13Letter from Senator Bill Cassidy to Mr. Shaun Donovan (June 2, 2015) (on file with Comm. 

staff). 14Letter from Mr. Shaun Donovan to Senator Bill Cassidy (July 16, 2015) (on file with Comm. 

staff). 15 As enacted in Section 837 within Title VIII Acquisition Policy, Acquisition Management and 

related Matters, Subtitle D, Federal Information Technology Acquisition Reform of the National 

Defense Authorization Act of 2015. 

cense management, and use the information from the inventory to 

make good management decisions and reduce agency costs.9 As 

stated by GAO, 

[W]hile agencies were able to identify millions in savings 

for software, there is the potential for even greater savings 

and additional opportunities to reduce software license 

spending and duplication than what agencies have reported. Until OMB and the agencies focus on improving 

policies and processes, they will not have the data to manage software licenses and will likely miss opportunities to 

reduce costs.10

In 2015, the GAO listed software license management as a top 

priority in its annual duplication report for the second year in a 

row.11 The GAO report found that Government-wide there could be 

greater savings if all agencies better managed all of their software 

licenses.12

Following the release of the GAO report, Senator Bill Cassidy 

sent a letter to the Director of OMB expressing his concerns about 

the report’s findings and requesting that the Director take action 

to implement GAO’s recommendations.13 According to Director 

Donovan, OMB has requested that agencies provide information on 

their software inventories, thus satisfying the first recommendation 

from the 2014 GAO report. However the response only addressed 

OMB’s activities; it did not confirm that agencies have developed 

software license policy, developed training or are inventorying their 

software licenses or are using the inventory information to make 

prudent management decisions.14

S. 2340 provides the legislative support for OMB’s directive to 

agencies to manage their software licenses. The bill goes beyond 

OMB’s efforts to include a mandate that agencies implement the 

GAO recommendations that OMB did not address. This bill will ensure that agencies inventory their software licenses, train their IT 

management workforce on how to manage software licenses, and 

use the software license information to manage the agency’s software licenses in accordance with agency policy. It also goes beyond 

the OMB directive by requiring agencies to account for the savings 

achieved through better software license management. 

The bill also supports the Federal Information and Technology 

Acquisition Reform Act (FITARA),15 which requires the General 

Services Administration (GSA) to develop Government-wide strategic sourcing vehicles so agencies can procure software licenses efficiently and at a reasonable price. Before GSA can develop new 

strategic sourcing vehicles for agencies to use, there must be a government wide inventory of the software licenses the government 

has and an assessment of what it needs. According to GAO, this 


SSpencer on DSK4SPTVN1PROD with REPORTS
4 

16 GAO–15–404SP: ADDITIONAL OPPORTUNITIES at 183 (2015). 17Office of Management and Budget, Memorandum M–16–12: Category Management Policy 

16–1: Improving the Acquisition and Management of Common Information Technology: Software 

Licensing (2016) https://www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m–16– 

12l1.pdf. 18 Id. 19 U.S. CERT, SWAM Illustrative Process v2 (2014) available at https://www.us-cert.gov/sites/ 

default/files/cdmlfiles/SWAMIllustrativeProcess.pdf. 20 GAO–14–413, FEDERAL SOFTWARE LICENSES at APPENDIX III. 21 Id. at 7. 

type of analysis is rarely done within agencies.16 Without S. 2340, 

FITARA implementation could be delayed or sub-optimized due to 

the lack of information about software licenses. 

In June 2016, the United States Chief Acquisition Officer and 

United States Chief Information Officer issued a joint memorandum entitled, Category Management Policy 16–1: Improving the 

Acquisition and Management of Common Information Technology: 

Software Licensing.17 This policy was intended to be responsive to 

the software requirements in FITARA. It creates the Enterprise 

Software Category Team which is comprised of GSA, the Department of Defense and OMB. The team is intended to help the government acquire software with less overlap, fragmentation and duplication. It also requires each agency to appoint a software manager, create an agency-wide software inventory and analyze the 

data to identify opportunities for savings.18

Accordingly, S. 2340 requires the agency CIO to inventory at 

least 80 percent of the software licenses using automated tools. By 

requiring agencies to inventory software licenses using automated 

tools, software licenses that are on the agencies networks can be 

easily found without a manual search.19 Software installed on 

stand-alone computers is not always discoverable using automated 

tools and could require a long manual search if it was required to 

be in the inventory. While management of stand-alone licenses 

must also be improved, the 2014 GAO report found that savings 

could be achieved through consolidating enterprise-wide (on the 

network) software licenses.20 This finding means that agencies will 

save money without necessarily inventorying 100 percent of the off 

network software licenses.21

S. 2340 establishes a framework to find the savings by requiring 

training for software license managers and requiring the life cycle 

costs be considered in management decisions. These savings are reported to OMB and posted publically which holds the Director of 

OMB ultimately accountable for results while informing the American public of the progress being made to reduce wasteful spending. 

When these GAO recommendations are implemented throughout 

the government, GAO estimates the savings. 

III. LEGISLATIVE HISTORY

The MEGABYTE Act of 2016, S. 2340, was introduced December 

2, 2015, by Senators Bill Cassidy (R–LA) and Gary Peters (D–MI). 

The bill was referred to the Committee on Homeland Security and 

Governmental Affairs. 

The Committee considered S. 2340 at a business meeting on February 10, 2016. During the business meeting, Senator Peters offered a substitute amendment to the bill that would directly hold 

each CIO accountable for managing his or her agency’s software license and limiting the reporting period to five years. The legislaVerDate Sep 11 2014 05:09 Jul 01, 2016 Jkt 059010 PO 00000 Frm 00006 Fmt 6659 Sfmt 6602 E:\HR\OC\SR289.XXX SR289

SSpencer on DSK4SPTVN1PROD with REPORTS
5 

tion, as modified by the Peters substitute amendment, was adopted 

by voice vote en bloc. Members present for the vote were: Senators 

Johnson, McCain, Portman, Paul, Lankford, Ayotte, Ernst, Sasse, 

Carper, McCaskill, Tester, Baldwin, Heitkamp, Booker, and Peters. 

IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED

Section 1. Short title 

This section establishes the short title of the bill as the ‘‘Making 

Electronic Government Accountable By Yielding Tangible Efficiencies Act of 2015,’’ or the ‘‘MEGABYTE Act of 2015.’’ 

Section 2. OMB directive on management of software licenses 

This section provides definitions for the terms ‘‘Director’’ and ‘‘executive agency’’. It also provides specific direction to the Director 

of OMB to develop software licensing policy for Federal agencies. 

This policy must include identifying for agencies the roles, responsibility and oversight responsibilities for managing enterprise software licenses. 

It also requires Executive agency CIOs to establish an inventory 

of 80 percent of their software licenses identifying the software licenses through automated tools. The CIOs are required to manage 

the software licenses through their lifecycle and use software usage 

information to make cost-effective decisions for the agency. They 

must also provide training on how to manage software licenses, establish goals for software license management, and consider the 

total life cycle costs in decision making. This section also requires 

the CIOs to provide a report to the OMB Director and the public 

for the next five fiscal years that lists savings resulting from improved software license management. 

V. EVALUATION OF REGULATORY IMPACT

Pursuant to the requirements of paragraph 11(b) of rule XXVI of 

the Standing Rules of the Senate, the Committee has considered 

the regulatory impact of this bill and determined that the bill will 

have no regulatory impact within the meaning of the rules. The 

Committee agrees with the Congressional Budget Office’s statement that the bill contains no intergovernmental or private-sector 

mandates as defined in the Unfunded Mandates Reform Act 

(UMRA) and would impose no costs on state, local, or tribal governments. 

VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

APRIL 21, 2016. 

Hon. RON JOHNSON, 

Chairman, Committee on Homeland Security and Governmental Affairs, U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 2340, the MEGABYTE Act 

of 2015. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Matthew Pickford. 

Sincerely, 

KEITH HALL. 


SSpencer on DSK4SPTVN1PROD with REPORTS
6 

Enclosure. 

S. 2340—MEGABYTE Act of 2015 

S. 2340 would amend federal laws related to managing the federal government’s licenses for information technology software. The 

bill would require the Office of Management and Budget (OMB) to 

issue a directive to each federal agency to develop a comprehensive 

policy for software licensing including a complete inventory of software licenses and to develop a mechanism to track, maintain, and 

analyze software use. 

Most of the provisions of the bill would codify and expand current policies and practices of the federal government. OMB has reported that agencies spent about $9 billion in 2015 on software licenses. The Federal Information Technology Acquisition Reform 

Act (FITARA) recently directed agencies to acquire and manage 

software in a more coordinated way. In addition, the Enterprise 

Software Category Team, managed by the General Services Administration, the Department of Defense, and OMB, is developing government-wide agreements for obtaining software licenses. Because 

such efforts to better manage software licenses are already underway, CBO estimates that the bill would not substantially change 

those efforts, and that implementing S. 2340 would have no significant net impact on the federal budget over the next five years. The 

bill could affect direct spending by agencies not funded through annual appropriations; therefore, pay-as-you-go procedures apply. 

CBO estimates, however, that any net change in spending by those 

agencies would not be significant. Enacting S. 2340 would not affect revenues. 

Some agencies have reported that they have spent less to acquire 

software by more effectively analyzing data on software licenses 

and the Government Accountability Office expects that there is the 

potential for even greater savings government-wide through more 

efficient spending to acquire software. CBO expects that by improving software purchasing decisions implementing S. 2340 could lead 

to lower federal costs. However, we expect most of the savings in 

this area will probably be achieved through current efforts to make 

cost effective decisions when acquiring software. 

CBO estimates that enacting S. 2340 would not significantly increase net direct spending or on-budget deficits in any of the four 

consecutive 10-year periods beginning in 2027. 

S. 2340 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

not affect the budgets of state, local, or tribal governments. 

The CBO staff contact for this estimate is Matthew Pickford. The 

estimate was approved by H. Samuel Papenfuss, Deputy Assistant 

Director for Budget Analysis. 

VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

Because this legislation would not repeal or amend any provision 

of current law, it would make no changes in existing law within the 

meaning of clauses (a) and (b) of paragraph 12 of rule XXVI of the 

Standing Rules of the Senate. 

Æ 


SSpencer on DSK4SPTVN1PROD with REPORTS