DATE: June 4, 2003

SUBJECT: Office of Management and Budget (OMB); Reducing Cost and Improving Quality in Purchases of Commercial Software ("SmartBUY")

SOURCE: OMB memorandum dated June 2, 2003

AGENCIES: Office of Management and Budget (OMB)

ACTION: Directive

SYNOPSIS: On June 2, 2003, OMB Director Mitchell Daniels, Jr., established "SmartBuy" as a coordinated approach to acquiring common software, and directed agencies to participate in SmartBuy and "refrain from entering into any new or renewal software licensing agreements pending a review by OMB and the SmartBuy initiative team."

DATE: Agencies must designate a point of contact for this initiative by June 6, 2003.

ADDRESSES: Agencies are to designate their point of contact to Kimberly Nelson at 202-395-3787, or by e-mail to: KNelson@omb.eop.gov.

FOR FURTHER INFORMATION CONTACT: Kimberly Nelson at 202-395-3787, or by e-mail to: KNelson@omb.eop.gov.

SUPPLEMENTAL INFORMATION: On June 2, 2003, OMB Director Daniels issued a memorandum to all department and agency heads notifying them that he had appointed the General Services Administration (GSA) to develop and manage the SmartBuy program to negotiate, by the end of fiscal year 2003, governmentwide enterprise licenses for various commerical off-the-shelf software, including office automation, network management, antivirus, database, business modeling tools, and open source software support.

"The federal government plans to spend more than $58 billion on information technology (IT) products and services in fiscal year 2003," wrote Daniels. "More than 4 million desktop, laptop, and networked computers serve as essential tools for achieving the missions of federal agencies. Since each computer uses at least one commercial software package, federal agencies engage in thousands of licensing agreements annually. This uncoordinated approach to acquiring common software is wasteful and ineffective.

"If the federal government applied a governmentwide approach for enterprise licenses on common software, there would be substantial benefits to the taxpayer. Several agencies have negotiated independent departmentwide licenses, creating a wide disparity in prices paid by agencies for exactly the same software. As an example, the amount that federal agencies pay for common desktop software varies from under $200 to about $500. If all agencies made joint use of the best priced software licenses, well in excess of $100 million could be saved each year. In addition, the broad mosaic of different software versions installed increases the difficulty and cost of securing federal computers."

Therefore, Daniels is directing all departments and agencies to assist and support the SmartBuy initiative by:

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2003 by Panoptic Enterprises. All Rights Reserved.

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