CBO Scores the MEGABYTE Act (S 2340)

The MEGABYTE Act of 2015 (S 2340) 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. Because efforts to better manage software licenses are already underway, the Congressional Budget Office estimates that the bill would not substantially change those efforts, and that implementing S. 2340 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 S. 2340 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 S. 2340 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.