OMB and federal agencies have key roles and responsibilities for overseeing IT investment management. OMB is responsible for working with agencies to ensure investments are appropriately planned and justified pursuant to the Clinger-Cohen Act of 1996. The law places responsibility for managing investments with the heads of agencies and establishes chief information officers (CIO) to advise and assist agency heads in carrying out this responsibility.OMB to establish processes to analyze, track, and evaluate the risks and results of major capital investments in information systems made by federal agencies and report to Congress on the net program performance benefits achieved as a result of these investments. Additionally, this law requires Federal agencies are responsible for managing their IT investment portfolio, including the risks from their major information system initiatives, in order to maximize the value of these investments to the agency. Federal agencies expect to spend at least $82 billion in fiscal year 2014 to meet their increasing demand for IT products and services, such as purchases of software licenses. Additionally, two executive orders contain information for federal agencies relative to the management of software licenses. In particular, executive order 13103 specifies that each agency shall adopt policies and procedures to ensure that the agency uses only computer software not in violation of copyright laws. These procedures may include information on preparing agency software inventories. Additionally, as part of executive on promoting efficient spending, agencies are required to order 13589,assess current device inventories and usage, and establish controls to ensure that they are not paying for unused or underutilized IT equipment, installed software, or services. According to the Information Technology Infrastructure Library’s Guide to Software Asset Management, software licenses are legal rights to use software in accordance with terms and conditions specified by the software copyright owner. Rights to use software are separate from the legal rights to the software itself, which are normally kept by the software manufacturer or other third party. Licenses may be bought and are normally required whenever externally acquired software is used, which will typically be when the software is installed on a computer (or when executed on a computer even if installed elsewhere such as on a server). They may also be defined in enterprise terms, such as number of workstations or employees, in which case a license is required for each qualifying unit or individual regardless of actual usage. Many software products are commercial-off-the-shelf, meaning the software is sold in substantial quantities in the commercial market place. Commercial software typically includes fees for initial and continued use of licenses. These fees may include, as part of the license contract, access to product support and/or other services, including upgrades. Licensing models and definitions may significantly differ depending on the software product and vendor. For example, the guidebasic types of licenses vary by duration and measure of usage: Perpetual licenses: These licenses are when use rights are permanent once purchased. Subscription or rental licenses: These licenses are used for a specific period of time, which can vary from days to years and may or may not include upgrade rights. Temporary licenses: These licenses are pending full payment or receipt of proof of purchase. Per copy, by workstation/seat/device, name used, anonymous user, or concurrent user: Historically most licenses sold have been on a per-copy-used basis, with several different units of measure possible. Sometimes multiple users will be allowed per license Concurrent usage: This type of license allows a specified number of users to connect simultaneously to a software application. Products exist to help monitor and control concurrent usage; however, concurrent licenses are not as commonly available as per copy licenses. Per server speed or per processor: These licenses are linked to the speed or power of the server on which they run, or the number of processors within the server. Enterprise or site: These licenses are sold on an enterprise or site basis that requires a count of qualifying entities. Other complexities: Other, more complex licensing situations related to usage also exist with regard to licensing and the use of techniques such as multiplexing, clustering, virtualization, shared services, thin client, roaming services, and cloud and grid computing. The objective of software license management is to manage, control, and protect an organization’s software assets, including management of the risks arising from the use of those software assets. Proper management of software licenses helps to minimize risks by ensuring that licenses are used in compliance with licensing agreements and cost-effectively deployed, and that software purchasing and maintenance expenses are properly controlled. To help ensure that the legal agreements that come with procured software licenses are adhered to and that organizations avoid purchasing unnecessary licenses, proper management of licenses is essential. OMB and most federal agencies that we reviewed do not have adequate policies for managing software licenses. OMB has a broader IT management initiative, known as PortfolioStat, which is intended to assist agencies in gathering information on their IT investments, including software licenses. However, OMB does not have a directive guiding agencies in developing comprehensive software license management policies. Further, while 2 agencies have adequate policies for managing software licenses, the vast majority of agencies do not. Specifically, of the 24 major federal agencies, 18 have developed them, but they are not comprehensive; and 4 agencies have not developed any. The lack of robust licensing policies is due in part to the absence of direction from OMB. Without guidance from OMB or comprehensive policies, it will be difficult for the agencies to consistently and effectively manage software licenses. OMB has developed policy that addresses software licenses as part of its broader PortfolioStat IT initiative, as well as an executive order containing additional direction to the agencies. Specifically, OMB launched the PortfolioStat initiative in March 2012, and it requires agencies to conduct an annual, agency-wide IT portfolio review to, among other things, reduce commodity IT spending and demonstrate how their IT investments align with the agency’s mission and business functions. Toward this end, OMB established several key requirements for agencies, including designating a lead official with responsibility for implementing the process and consolidating at least two duplicative commodity IT areas; such areas could include software licenses. PortfolioStat is also intended to assist agencies in meeting the targets and requirements under other OMB initiatives aimed at eliminating waste and duplication and promoting shared services across the federal government, such as the Federal Strategic Sourcing Initiative.example, through the PortfolioStat process, OMB works with agencies to improve agency IT procurement processes, as outlined in the Federal Strategic Sourcing Initiative, in order to reduce prices on specific commodities that agency IT managers acquire, including software licenses. However, it is up to the agencies to decide whether software licenses should be a priority for consolidation during the PortfolioStat review. Several agencies identified enterprise software licensing as a target area for cost savings or avoidance in the plans they provided to OMB in September 2012: 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). Further, 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. As previously discussed, the executive order requires agencies to establish controls to ensure that they are not paying for unused or underutilized software. However, OMB lacks a directive that guides the agencies to ensure that they have appropriate policies. An official from OMB’s Office of E-Government and Information Technology stated that the PortfolioStat effort is intentionally focused on the organization as opposed to an individual area such as software license management. This official added that they have no plans to develop such guidance at this time. Until the agencies have sufficient direction from OMB, opportunities to systematically identify software license related cost savings across the federal government will likely continue to be missed. Given the absence of an OMB directive providing guidance to agencies on licensing management policy, we identified seven elements that a comprehensive software licensing policy should specify: identify clear roles, responsibilities, and central oversight authority within the department for managing enterprise software license agreements and commercial software licenses; establish a comprehensive inventory (80 percent of software license spending and/or enterprise licenses in the department) by identifying and collecting information about software license agreements using automated discovery and inventory tools; regularly track and maintain software licenses to assist the agency in implementing decisions throughout the software license management life cycle; analyze software usage and other data to make cost-effective provide training relevant to software license management; establish goals and objectives of the software license management consider the software license management life-cycle phases (i.e., requisition, reception, deployment and maintenance, retirement, and disposal phases) to implement effective decision making and incorporate existing standards, processes, and metrics. The following table provides a composite assessment of the 24 agencies’ policies on managing software license against the seven elements. Two of the 24 agencies have developed comprehensive policies for managing software licenses, the Department of Labor (Labor) and DHS. For example, in April 2013, Labor’s Office of the CIO software license management policies documented, among other things, how the agency manages installation requests and licensing of software that is applicable to its office and customers, as well as how licenses become part of its inventory. Similarly, in February 2012, DHS provided guidance that the Office of the CIO will monitor agency component usage of the enterprise license agreement software transfer process, refine the process as needed, and ensure cost avoidances are achieved. Related guidance also directs all DHS components, directorates, and offices not to use other contracting vehicles to procure software licenses once enterprise licenses are in place DHS-wide. Further, 18 agencies have taken steps to include software license management policies in their IT management policies and procedures. However, inclusion of the seven elements we identified varied with each agency. Appendix II provides detailed information describing the extent to which the 18 agencies had comprehensive policies, and the following are illustrative examples.