GSA signs first SmartBuy deal with ESRI

After struggling with the SmartBuy enterprise software licensing program for the past eight months, the General Services Administration last week finally signed the first agreement with geographic information systems vendor Environmental Systems Research Institute.

GSA officials said the contract with ESRI of Redlands, Calif., is for five years and would save the federal government $57 million in cost avoidance and nonvolume purchases from GSA's Federal Supply Service schedules.

"The ESRI agreement marks a good beginning for the SmartBuy initiative to save tens of millions of dollars by leveraging the government's consolidated buying power," GSA administrator Stephen Perry said in a release.

The contract took effect Feb. 13, GSA officials said.

Emory Miller, who ran the SmartBuy program for GSA before retiring from government in December, said GSA must have overcome one of the final hurdles: knowing how many licenses agencies hold for the ESRI software.

"Many agencies purchase software in different ways, and one of the issues we found was software asset management," said Miller, who now is a senior vice president for government affairs at Robbins-Gioia LLC of Alexandria, Va. "Agencies for the most part do not know what software they purchase and who purchases it, or have an accumulative account of the software. If any one thing delayed us, it was the time it took for the government to have a good understanding of its assets and future needs."

Many inside and outside government speculated that ESRI would be among the first vendors to take the leap of faith with SmartBuy. Other vendors that have expressed interest in signing enterprise licensing agreements include Microsoft Corp., Oracle Corp., PeopleSoft Inc., SAS Institute Inc., and Symantec Corp.

OMB had hoped to have agreements in place by Sept. 30, 2003, and avoid $100 million in costs in 2004. But changes to the program's model as well as vendor questions about how enterprise licensing would benefit them delayed the program.

Miller said now that this first deal is finished, others should follow soon.

"This will give the program momentum," Miller said. "There is no question that the government and vendors will recognize the benefits. The government will be smarter as it proceeds and continue to be successful in awarding contracts. The government learned tremendous lessons from this process, and I'm sure it will apply those lessons in the future."