1. Software That Goes “Bump in the Night”: Software Licensing Do’s and Don’ts
Floyd Groce, DoD ESI Co-Chair
Sylvia Neidig, Naval Inventory Control Point
Contract Specialist
Suzi Ellison, SPAWAR-SSC Pacific Umbrella Program
DON IT West Coast Conference 2011/AFCEA West 2011
25 January 2011
Architecture, Operations, Networks, and Space (AONS)

2. DoD Enterprise Software Initiative (ESI) and SmartBUY
Agenda
Introduction
DoD Enterprise Software Initiative (ESI) and SmartBUY
Software licensing pitfalls
What do you do to protect your software project from going “bump in the night”?
Questions

3. Ground rules – What we will discuss?
Introduction
Ground rules – What we will discuss?
Commercial off the shelf (COTS) software
DoD perspective
Licensing expertise
Lessons learned – hopefully not too costly
Share, Share, Share

4. DoD ESI established June 1998 by DoD CIO Mission
DoD ESI And SmartBUY
DoD ESI established June 1998 by DoD CIO
Mission
Lower total cost of ownership across DoD, Coast Guard and Intelligence communities
Establish and manage enterprise COTS IT agreements, assets and policies
Methodology
Chaired by an OASD(NII)/CIO staffer
Co-chaired by Navy, Army or Air Force Working Group rep (currently Navy)
DoD Components appoint Software Product Manager (SPM) to:
Consolidate requirements and develop business case
Negotiate best-value deals
Administer resulting agreements

5. DoD SmartBUY Policy – 22 Dec 05
DoD ESI And SmartBUY
Goals
Reduce acquisition and support costs by leveraging DoD buying power
Provide best, most flexible DISR-conforming software
Obtain buy-in for DoD enterprise-wide software agreements
Create a funding mechanism that incentivizes the use of DoD-wide software initiatives
DoD SmartBUY Policy – 22 Dec 05

6. Authority: DoD Enterprise Software Initiative (DFARS 208.7402)
DoD ESI And SmartBUY
Authority: DoD Enterprise Software Initiative (DFARS )
Procure COTS software IAW DoD Enterprise Software Initiative (ESI)
ESI Order of Precedence
DoD inventory
DoD Enterprise Software Agreement (ESA)
Other means
Authority: SmartBUY
FAR change pending
22 Dec 2005 policy memo – DPAPS and deputy DoD CIO

7. Software Licensing Pitfalls
Selecting software by name, not licensing model
Terms and conditions (T&Cs)
End user license agreements (EULA) – license grants
Sarbanes-Oxley – revenue recognition
Maintenance & maintenance escalation
The “*”
Re-use clause
Q/A: AWCF funds available, approximately $60MM per FY

8. Software Licensing Pitfalls (cont)
Software function tied to maintenance
Virtualization – risk of license non-compliance if not managed
Transferability
Termination and rights of survival clauses
True up/true down
Audit clauses
Cost may not be the cost
Compliance
Q/A: AWCF funds available, approximately $60MM per FY

9. Software Licensing Pitfalls (cont)
License use rights
License scope
Restrictive, i.e., program specific
Unlimited use
Third Party use
License Use
Named user/concurrent user
Device
Non-human devices
Processor based and multi-core processing license
Developer vs. full use
Secondary use rights (laptop, home use)
License type
Perpetual
Subscription or term
Q/A: AWCF funds available, approximately $60MM per FY

10. Seek advice when selecting your software:
What to do to protect your software project from going “bump in the night” ?
Seek advice when selecting your software:
Consulting groups
License experts
Network with other service and agencies
Software attorney
Requiring technical team may understand technology but not licensing
May not always have enterprise perspective
Q/A: AWCF funds available, approximately $60MM per FY

11. Use the following to describe your requirement to contracting:
What to do to protect your software project from going “bump in the night” ?
Use the following to describe your requirement to contracting:
What do you need to do with your system?
Share inward and outward
Describe your requirement – give examples
Definitions
Describe your customer base clearly
Government, civilian, military, contractors supporting government, non-human devices, etc
Manipulating data vs. static data (viewing data)
How will the product or vendor be determined?
Competitive - provide technical evaluation criteria
Limited or sole source – provide brand name justification
Q/A: AWCF funds available, approximately $60MM per FY

12. Document negotiated changes in resultant contract
What to do to protect your software project from going “bump in the night” ?
How many years will you need to contract?
Flat lined maintenance
Audit clauses
Transferability
True up/true down
Test & development vs. full use license
Escrow agreement
Software distribution
Price Estimate based on market research
Document negotiated changes in resultant contract
Q/A: AWCF funds available, approximately $60MM per FY

13. ESI Web Site: http://www.esi.mil13