Agencies to get new guidance on use of commercial products

The Office of Management and Budget's Office of Federal Procurement Policy is considering a new rule governing what kinds of technology products must be bought off the shelf and what kinds can be customized for agency use.

Last year, the Civilian Agency Acquisition Council and Defense Acquisition Regulations Council collected comments on which laws should apply to contracts for Commercial Off-the-Shelf, or COTS, products. They sent the responses to OFPP and are waiting for a response.

The coming rule will help agencies determine how to apply legislation requiring them to use more off-the-shelf products without a lot of individual customization.

"We're looking at how COTS products… are being treated, and whether or not there are pieces of current legislation that are essentially causing the government to pay higher prices than necessary for the products," said David Safavian, OFFP chief.

Until recently, agencies and subagencies within them have bought software and then customized it to fit their individual business processes. Customization not only cost money, but resulted in agencies relying on multiple systems that didn't easily interact. That lack of harmony led to calls for standardization.

"Not everyone needs their own personalized system," said Rep. Todd Platts, R-Pa., chairman of the House Government Reform Subcommittee on Government Efficiency and Financial Management.

The financial management community, one of the prime users of commercial software, has been focusing its efforts on increasing the use of COTS. Commercial financial management software has been increasingly used by agencies, according to the Joint Financial Management Improvement Program, a consortium of federal agencies that promotes improved financial management. In 1999, a quarter of financial systems in development used COTS without making major modifications, while in 2003, over three-quarters did.

"Congress wants [agencies] to use these systems that are out there. From a cost standpoint, and from an efficiency standpoint, that's the best way to do it," said Tabetha Mueller, a subcommittee spokeswoman.

Several pieces of legislation encourage the use of COTS, including the 1996 Clinger-Cohen Act and the 1996 Federal Financial Management Improvement Act. And even though the words "commercial off the shelf" weren't used in the 1990 Chief Financial Officers Act, Mueller said Congress intended to encourage the use of COTS with that piece of legislation, as well.

Using a COTS system at NASA, Mueller said, various subagencies were simultaneously connected to a general database that collects financial information, such as purchases and payments. Previously, when multiple systems were in play, information had to be entered by hand. NASA's commercial system went live in the middle of fiscal 2003.

TheLabor Department recently implemented an accounting system based on a COTS product from Oracle. It required only minor adjustments.

Samuel Mok, Labor's chief financial officer, said he is "100 percent" behind efforts to move to more commercially available systems. "It is like asking everyone to buy suits off the rack only," he said. "It makes a lot of sense."