Executive One-Pager #3: Procurement, Contracting and Budgeting for Open Source Software #
What Executives Need to Be Aware of:
The key differences between licensing and development approaches and why government systems are biased toward proprietary software and waterfall development
The different software revenue models and how they affect government cost structures
New approaches to procurement, contracting, licensing and staffing and how these create value and advance digital government goals
Key Points #
Procurement, contracting and budgeting structures and norms are designed for pre-digital assets – and therefore make it challenging to obtain open source software. However, as government organizations embrace digital-native approaches, open source software and agile method becomes the easiest path.
Open source software requires a different approach to budgeting than proprietary software. While proprietary software is priced using one of many standard revenue models, open source software is freely distributed, but requires investments in staff capacity and/or service providers to deploy and maintain software.
Open source software aligns well with ‘agile’ methods – which also happen to be the best practice for software development. When procuring custom software services, government should use modular contracting and budgeting approaches, which enable Agile development.
Procurement is a creative and exploratory process. Using procurement correctly, you can not only find the best, lowest cost solution, but also generate positive spin-off effects.
Pooled purchasing is an effective strategy for a peer group of government organizations to share the cost of obtaining and maintaining open source software that fills a common need.