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Federal agencies favor budget friendly IT contracts

4/30/2012

Under pressure to cut costs, government IT executives are increasingly turning to enterprise license agreements and are reevaluating software purchasing practices, according to the Federal Times.

By using software enterprise license agreements to make acquisitions on an agency-wide scale rather than buying licenses for each individual desktop, the Department of Homeland Security has saved about $94 million since 2010, the Times reported.

Quoting Michael Mudgett, a leader on NASA's Shared Services Center Enterprise License Management Team, the source noted the space agency reduced software costs by about $1.7 million in the 2011 fiscal year thanks to enterprise software contracts.

The source also pointed to statements from Microsoft CTO Susie Adams, who said her company is tweaking its software delivery models and contracting practices to meet the evolving needs of government organizations. She said individual software licenses are likely to become increasingly obsolete due to the rise of smartphone and tablet technology.

At the same time they are considering new software acquisition practices, agencies are acting on an executive branch directive to review current software for issues such as compliance with license agreements, the source stated. Under the White House's "Shared First" initiative, agencies are communicating about contracting practices and ways to increase efficiency by sharing software.

Cost-cutting measures like these could benefit small business contractors, according to Nextgov, because they can often provide niche services at a lower cost-per-hour than large companies.