Federal Agencies Must Audit All Software Within 18 Months to Cut Waste: No New Budget Allocated

This new legislation, the Strengthening Agency Management and Oversight of Software Assets Act, is essentially a massive, government-wide mandate to clean out the digital junk drawer. It requires every non-intelligence federal agency to conduct a full, comprehensive inventory of all software they use, pay for, or have installed—whether it’s commercial, custom-built, or shared—within 18 months of the bill becoming law (SEC. 3(a)). The goal is simple: find out exactly what the government owns, what it uses, and how much it’s paying for licenses that are just gathering dust.

This isn’t just a quick count; the assessment must detail every software entitlement, including extra costs like cloud service fees, and identify anything that looks redundant or unnecessary (SEC. 3(b)). For the average taxpayer, this is a big deal because it targets the kind of wasteful spending that happens when one department buys 500 licenses for a program that another department already purchased 1,000 licenses for, and half of them are never even installed. The entire process must be overseen by the agency’s Chief Information Officer (CIO), working alongside the Chief Financial Officer and Chief Acquisition Officer.

The Digital Spring Cleaning Plan

Once the agencies finish this massive inventory, they have one year to turn the findings into a detailed Software Modernization Plan (SEC. 4(a)). This plan is where the rubber meets the road. It must outline how the agency will consolidate licenses, move toward cheaper options like enterprise or open-source licenses when contracts are up for renewal, and automate license management to prevent future waste. They must also identify contract restrictions that limit where or how they can deploy the software, such as limiting cloud use or restricting data ownership, and plan to minimize those restrictions.

Crucially, this bill centralizes software purchasing power. Going forward, no bureau or program can buy, use, or develop any software without the CIO’s stamp of approval, in consultation with the Chief Acquisition Officer (SEC. 4(b)). For an IT manager working at a federal agency, this means less rogue spending and more standardization, but it also creates a major administrative bottleneck if the approval process isn't streamlined. The idea is to stop the wild west of software procurement and ensure every dollar spent is strategic.

The Catch: Unfunded Mandate

Here’s the part that hits the hardest for the folks tasked with implementation: Section 6 explicitly states that this Act does not authorize any additional funds. This means the massive, complex, 18-month inventory and the subsequent year-long planning process must be done using money already budgeted for other things. For agency IT departments already stretched thin, this is a significant, unfunded administrative burden. They have to divert resources and personnel from their existing duties—like keeping systems secure and operational—just to comply with this new mandate. While the long-term goal is massive cost savings for taxpayers, the immediate cost is paid by the agency staff's time and resources.

Who Wins and Who Pays

If implemented effectively, the biggest winner is the federal budget, which stands to save money by cutting off payments for unused software. The bill also benefits specialized IT auditing and compliance contractors, as agencies are allowed to hire outside help for the initial assessment, provided there are no conflicts of interest (SEC. 3(c)).

On the flip side, software vendors who currently rely on fragmented, redundant contracts across the government may see their revenue drop as agencies consolidate licenses or shift to open-source alternatives. Furthermore, while the intelligence community is required to conduct a similar assessment, their process is separate and less transparent to the public (SEC. 3(e)), which slightly reduces the overall oversight this bill provides across the government's most sensitive digital assets.