[House Report 114-587]
[From the U.S. Government Publishing Office]
114th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 114-587
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MEGABYTE ACT OF 2016
_______
May 23, 2016.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Chaffetz, from the Committee on Oversight and Government Reform,
submitted the following
R E P O R T
[To accompany H.R. 4904]
[Including cost estimate of the Congressional Budget Office]
The Committee on Oversight and Government Reform, to whom
was referred the bill (H.R. 4904) 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, report favorably thereon without amendment
and recommend that the bill do pass.
CONTENTS
Page
Committee Statement and Views.................................... 1
Section-by-Section............................................... 4
Explanation of Amendments........................................ 5
Committee Consideration.......................................... 5
Roll Call Votes.................................................. 5
Application of Law to the Legislative Branch..................... 5
Statement of Oversight Findings and Recommendations of the
Committee...................................................... 5
Statement of General Performance Goals and Objectives............ 5
Duplication of Federal Programs.................................. 5
Disclosure of Directed Rule Makings.............................. 6
Federal Advisory Committee Act................................... 6
Unfunded Mandate Statement....................................... 6
Earmark Identification........................................... 6
Committee Estimate............................................... 6
Budget Authority and Congressional Budget Office Cost Estimate... 6
Committee Statement and Views
PURPOSE AND SUMMARY
H.R. 4904, the Making Electronic Government Accountable by
Yielding Tangible Efficiencies (MEGABYTE) Act of 2016, was
introduced to improve federal agencies' management and
acquisition of software licenses. H.R. 4904 would require the
Director of the Office of Management and Budget (OMB) to issue
a directive on software licenses that would require each
executive agency Chief Information Officer (CIO) to develop a
comprehensive software licensing policy.
BACKGROUND AND NEED FOR LEGISLATION
In Fiscal Year (FY) 2015, the federal government spent over
$80 billion on Information Technology (IT) products and
services, including software licenses.\1\ However, the federal
government has not effectively managed this spending, prompting
the Government Accountability Office (GAO) to identify IT
acquisition as a high risk area in February 2015.\2\ GAO
designates areas as high risk due to significant
vulnerabilities to fraud, waste, abuse, and mismanagement.
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\1\Data provided to the Committee by the Gov't Accountability
Office (GAO) (April 2016) (on file with the Committee).
\2\U.S. Government Accountability Office, ``High Risk Series: An
Update'', GAO-15-290 (Feb. 2015).
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Over the last five years, there have been several IT
management initiatives to focus agency efforts on creating
inventories of IT assets, eliminating duplication, and
effectively managing such assets. However, these initiatives
have not made effective management of software licenses a
priority. The MEGABYTE Act is intended to fill this policy gap
and focus agencies on the management of software licensing.
In March 2012, OMB launched an initiative called
PortfolioStat to identify duplication and more effectively
manage agency IT portfolios.\3\ Under this initiative, OMB
directed agencies to review their IT investment portfolios in
order ``to identify opportunities to consolidate the
acquisition and management of commodity IT services and
increase the use of shared-service delivery models.''\4\
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\3\OMB Memorandum for Executive Agencies from Acting Director
Jeffrey Zients and Federal Chief Information Officer Steven VanRockel
(March 30, 2012) available at: https://www.whitehouse.gov/sites/
default/files/omb/memoranda/2012/m-12-10.pdf .
\4\Ibid. at 2.
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In December 2014, the Federal Information Technology Reform
Act (FITARA)\5\ codified the PortfolioStat initiative by
requiring agency CIOs to review annually the IT investments of
their agencies to, among other things: (1) identify ways to
increase efficiencies and effectiveness of IT investments; (2)
identify opportunities to consolidate and move to increase the
use of shared services models; (3) identify potential
duplication and waste; (4) optimize the IT portfolio; and (5)
identify cost savings.\6\ FITARA also requires the General
Service Administration (GSA) to develop a new strategic
sourcing initiative to enhance government-wide acquisition,
shared use, and dissemination of software, including the
purchase of government-wide license agreements. While FITARA
provides tools to more effectively manage IT assets, the
MEGABYTE Act will complement FITARA and prioritize more
effective management of software licenses to promote cost
savings in this area.
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\5\National Defense Authorization Act Fiscal Year 2015 Pub. L. No.
113-291, Title VIII, Subtitle D (Dec. 19, 2014).
\6\National Defense Authorization Act FY 2015, Pub. L. No. 113-291,
Title VIII, Subtitle D (Dec. 19, 2014).
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In 2014, GAO focused on potential areas of cost savings in
software management.\7\ GAO stated that the federal government
enters into thousands of software license agreements annually
and that more effective management of software licenses could
result in fewer duplicate licenses and licenses that go unused.
However, GAO found only two of 24 major agencies had
comprehensive software licensing policies in place and only two
agencies had comprehensive license inventories. Further, GAO
said federal agencies were not generally following leading best
practices identified by GAO for managing software licenses. GAO
stated that, ``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.''\8\
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\7\Gov't Accountability Office, Better Management Needed to Achieve
Significant Savings Government-wide (May 2014) (GAO-14-413).
\8\GAO Report (May 2014) (GAO-14-413) at 7.
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In 2015, GAO listed IT software license management as a
potential cost savings area in its annual report to Congress
concerning fragmentation, overlap, and duplication.\9\ GAO
stated that the federal government has already achieved at
least $250 million in savings as a result of effective software
license management. For example, GAO reported one major agency
saved approximately $181 million by consolidating its
enterprise license agreements. In addition, another major
agency report savings of approximately $33 million as a result
of consolidating major IT contracts, including licenses. GAO
stated that additional savings could result if agencies
implemented GAO's recommendations. In 2016, GAO again listed
the IT software license management area as a potential cost
savings area in its annual Duplication Report.\10\
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\9\Gov't Accountability Office, Additional Opportunities to Reduce
Fragmentation, Overlap, and Duplication and Achieve Other Financial
Benefits (April 2015) (GAO-15-404SP) at 181. GAO also listed this area
in the same report in 2016. Gov't Accountability Office, Additional
Opportunities to Reduce Fragmentation, Overlap, and Duplication and
Achieve Other Financial Benefits (April 2016) (GAO-16-375SP) at 285.
\10\Gov't Accountability Office, Additional Opportunities to Reduce
Fragmentation, Overlap, and Duplication and Achieve Other Financial
Benefits (April 2016) (GAO-16-375SP) at 285.
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In December 2015, OMB released draft guidance on strategies
for improving federal government spending of more than $9
billion on software.\11\ The draft guidance would establish an
Enterprise Software Category Team co-managed by OMB, GSA, and
the Department of Defense (DOD) to develop government-wide
software license agreements and encourage the use of best-in-
class existing software licensing agreements. At the agency
level, the draft guidance would require agencies to: (1)
appoint a software manager and team to manage agency contracts
and licenses for commercial software; (2) maintain
comprehensive annual inventories of software license and
spending; and (3) aggregate agency software license
requirements and funding. The draft guidance is a positive
step, but the MEGABYTE Act will ensure a comprehensive and
sustained approach to implement leading practices in software
management, as identified by GAO.
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\11\OMB Draft Memorandum for Executive Agencies from Chief
Acquisition Officer Anne Rung and Chief Information Officer Tony Scott
on Category Management Policy 16-1: Improving the Acquisition and
Management of Common Information Technology: Software Licensing
(December 2015) available at: https://whitehouse.github.io/software-
policy//CategoryManagementSoftware.pdf.
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On April 13, 2016, the Council for Citizens Against
Government Waste wrote a letter in support of H.R. 4904.\12\ In
addition, On April 14, 2016, Senator Cassidy, the author of the
Senate companion bill (S. 2340) to H.R. 4904 wrote the
Committee supporting H.R. 4904.\13\
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\12\Council for Citizens Against Government Waste Letter to Members
of the House Committee on Oversight and Gov't Affairs, April 13, 2016
available at: http://ccagw.org/legislative-affairs/letters-officials/
support-megabyte-act-0
\13\Senator Cassidy Letter is on file with the Committee.
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LEGISLATIVE HISTORY
On April 12, 2016, Congressman Matt Cartwright (D-PA)
introduced H.R. 4904, the Making Electronic Government
Accountable by Yielding Tangible Efficiencies (MEGABYTE) Act.
A companion bill, S.2340 was introduced by Senator Bill
Cassidy (R-LA) on December 2, 2015. The Senate Committee on
Homeland Security and Governmental Affairs ordered S.2340
favorably reported on February 10, 2016.
Section-by-Section
Section 1. Short title
Designates the short title of the bill as the ``Making
Electronic Government Accountable by Yielding Tangible
Efficiencies Act of 2016.''
Section 2. OMB directive on management of software licenses
Section 2(a) defines ``Director'' and ``executive agency''.
Section 2(b) requires OMB to issue a directive to the CIO
of each executive agency to develop a comprehensive software
licensing policy.
Under this OMB directive, the agency CIO must establish an
agency software licensing policy that identifies clear roles,
responsibilities, and central oversight authority within the
executive agency for managing enterprise software license
agreements and commercial software licenses.
Under this OMB directive, the agency CIO also shall
establish a software licensing policy that will:
(1) establish a comprehensive inventory (including 80
percent of software license spending and enterprise
licenses in the agency) by identifying and collecting
information about software license agreements using
automated discovery and inventory tools;
(2) regularly track and maintain software licenses to
assist the agency with implementing decisions
throughout the software license management life cycle;
(3) analyze software usage and other data to make
cost-effective decisions;
(4) provide training relevant to software license
management;
(5) establish goals and objectives for the agency
software license management program; and,
(6) consider the software license management life
cycle phases (including requisition, reception,
deployment and maintenance, retirement, and disposal
phases) to implement effective decision making and
incorporate existing standards, processes, and metrics.
Section 2(c) requires agency CIOs to submit a report to OMB
on the financial savings or avoidance of spending that resulted
from improved software license management. This reporting
requirement begins the first fiscal year after enactment and
continues in each of the following five fiscal years. OMB is
also required to make these reports publically available.
Explanation of Amendments
No amendments to H.R. 4904 were offered during Full
Committee consideration of the bill.
Committee Consideration
On April 14, 2016, the Committee met in open session and
ordered reported favorably the bill, H.R. 4904, by voice vote,
a quorum being present.
Roll Call Votes
No roll call votes were requested or conducted during Full
Committee consideration of H.R. 4904.
Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch where the bill relates to the terms and conditions of
employment or access to public services and accommodations.
This bill requires the Director of the Office of Management and
Budget to issue a directive on the management of software
licenses. As such this bill does not relate to employment or
access to public services and accommodations.
Statement of Oversight Findings and Recommendations of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the descriptive portions of
this report.
Statement of General Performance Goals and Objectives
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goal or objective of the bill is to require the Director of the
Office of Management and Budget to issue a directive on the
management of software licenses.
Duplication of Federal Programs
No provision of this bill establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Disclosure of Directed Rule Makings
The Committee estimates that enacting this bill does not
direct the completion of any specific rule makings within the
meaning of 5 U.S.C. 551.
Federal Advisory Committee Act
The Committee finds that the legislation does not establish
or authorize the establishment of an advisory committee within
the definition of 5 U.S.C. App., Section 5(b).
Unfunded Mandate Statement
Section 423 of the Congressional Budget and Impoundment
Control Act (as amended by Section 101(a)(2) of the Unfunded
Mandate Reform Act, P.L. 104-4) requires a statement as to
whether the provisions of the reported include unfunded
mandates. In compliance with this requirement the Committee has
received a letter from the Congressional Budget Office included
herein.
Earmark Identification
This bill does not include any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.
Committee Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs that would be incurred in carrying out
this bill. However, clause 3(d)(2)(B) of that rule provides
that this requirement does not apply when the Committee has
included in its report a timely submitted cost estimate of the
bill prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974.
Budget Authority and Congressional Budget Office Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause (3)(c)(3) of rule XIII of the Rules
of the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee has received
the following cost estimate for this bill from the Director of
the Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 28, 2016.
Hon. Jason Chaffetz,
Chairman, Committee on Oversight and Government Reform,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 4904, the MEGABYTE
Act of 2016.
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.
Enclosure.
H.R. 4904--MEGABYTE Act of 2016
H.R. 4904 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 H.R. 4904 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 HR. 4904 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 H.R. 4904 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 H.R. 4904 would not
significantly increase net direct spending or on-budget
deficits in any of the four consecutive 10-year periods
beginning in 2027.
On April 21, 2016, CBO transmitted a cost estimate for S.
2340, the MEGABYTE Act of 2015, as ordered reported by the
Senate Committee on Homeland Security and Governmental Affairs
on February 10, 2016. The two pieces of legislation are
similar, and the CBO's estimates of the budgetary effects are
the same.
H.R. 4904 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 Theresa Gullo, Assistant
Director for Budget Analysis.