Report | Aug. 7, 2013

The Navy’s Management of Software Licenses Needs Improvement



Our objective was to determine whether the Department of the Navy (DON) effectively managed software licenses. Specifically, we determined whether the DON included appropriate clauses in software license contracts. We reviewed 1 Enterprise Licensing Agreement (ELA), 13 non- ELAs, and the associated End User License Agreements (EULAs) to determine if the contracts included desirable language in accordance with the DoD Enterprise Software Initiative approved software licensing training.


Overall, the DON made progress toward the mandated use of DON ELAs by issuing a $700 million ELA for Microsoft software. However, the ELA included unacceptable language in 2 of the 11 best practice areas we identified in software licensing training.

In addition, the DON non-ELA software license contracts reviewed, valued at $8.1 million, included unacceptable language for contract clauses in 7 of the 11 areas of concern listed in the software licensing training. Furthermore, 8 of the 13 DON contracting officers accepted EULAs containing unacceptable language.

This occurred because no established requirements existed to guide contracting personnel in making a determination on whether to include specific clause language in software license contracts. Furthermore, 11 of the 13 contracting officers did not receive the necessary training to gain the specialized knowledge needed to write software license contracts or review EULAs properly. As a result, the DON increased the risk of wasteful spending, disruption to Government operations, and vulnerability to lawsuits, claims, and penalties.


We recommend that the Assistant Secretary of the Navy (Research, Development, and Acquisition) (ASN[RDA]) require all DON contracting personnel involved in preparing and issuing software license contracts to take specialized training on using appropriate language in software acquisition contracts.

We recommend that the DON Chief Information Officer (CIO):

  • require personnel to include favorable language expressed in warranty and embedded third-party software sections of the software licensing training when preparing ELAs for the remaining software on DONs proposed list; and
  • issue a memo identifying the types of training available for determining the appropriate language needed to include and avoid in software license contracts.

Management Comments andOur Responses

The Executive Director for the Deputy Assistant Secretary of the Navy for Acquisition and Policy, responding for ASN(RDA), comments were responsive for both recommendations. The DON CIO comments were responsive to two of three and partially responsive to one of three of the recommendations. We request that the DON CIO provide revised comments to the final by September 9, 2013. Please see the Recommendations Table on the back of this page.