Federal Agencies Mandated to Inventory All Software Assets in 18 Months to Cut Waste, But Must Use Existing Budgets

The Strengthening Agency Management and Oversight of Software Assets Act is a major push to stop the federal government from wasting billions on software licenses it doesn't use. Essentially, this bill forces nearly every federal agency to conduct a massive, top-to-bottom audit of every piece of software they own, lease, or use—a process called a “Comprehensive Assessment.” This check-up must be completed within 18 months of the bill becoming law, and it needs to track everything from licenses sitting unused to contracts that create unnecessary duplication (Sec. 3).

The IT Clean-Up Crew: Finding the Ghost Licenses

Think of this as the government’s biggest-ever digital spring cleaning. The goal is simple: find out exactly what the government is paying for and whether it’s actually being used. Agencies must list all their software entitlements, categorize them by cost and type, and—crucially—identify any software they’re paying for but aren’t deploying (Sec. 3(c)(2)). This is aimed squarely at eliminating “shelfware”—licenses bought in bulk that just sit around, costing taxpayers money. If an agency has three different pieces of software doing the exact same thing, the CIO has to flag that as unnecessary duplication (Sec. 3(c)(3)).

For the average person, this matters because it’s about efficiency. If the government can stop paying for thousands of unused licenses, those savings can theoretically be redirected elsewhere—or at least reduce the overall IT budget. The bill also requires agencies to track the total cost of ownership, including cloud fees and maintenance, to get a real picture of what that software is costing over its lifetime (Sec. 3(e)).

Modernization Plan: Less Red Tape, More Cloud

Once the agencies know what digital junk they have, they must develop a detailed Software Modernization Plan within one year (Sec. 4(a)). This plan isn't just about saving money; it’s about gaining flexibility. Agencies must outline strategies to switch to more cost-effective options like enterprise licenses or open-source software when contracts renew (Sec. 4(b)(4)).

One of the most important parts for modernization is the push to minimize restrictive contract rules. The bill specifically requires training for federal employees on how to negotiate contracts that avoid limitations on deployment, access, or data ownership, especially concerning the use of cloud providers (Sec. 4(b)(2)). This means agencies should be able to move their data and software to modern cloud platforms without being locked in by legacy vendor contracts—a huge win for future flexibility and performance.

The Catch: Unfunded Mandate

While this bill is a slam-dunk for efficiency, there’s a massive catch that could slow everything down: No additional funds are authorized to be appropriated to carry out this Act (Sec. 6). This means agencies have to absorb the significant costs of conducting the comprehensive 18-month audit, hiring outside experts (if needed), and developing the modernization plan using money they already have.

For agency employees and IT managers, this is going to be a heavy lift. Imagine being told to conduct a massive, complex inventory of every tool in your company, but you can’t hire anyone new or buy any new inventory software—you just have to squeeze it into your current workload and budget. This high economic burden could lead to delays or force agencies to cut corners on the assessment, potentially undermining the bill’s effectiveness. It's a classic case of the federal government saying, “Do this huge, important thing,” without providing the budget to match the mandate.