The legislation, among other things, would establish pilot programs to try out “more flexible, competitive purchasing practices” and require that government contracts for AI “to include safety and security terms for data ownership, civil rights, civil liberties and privacy, adverse incident reporting and other key areas,” according to a release.

“Artificial intelligence has the power to reshape how the federal government provides services to the American people for the better, but if left unchecked, it can pose serious risks,” Sen. Gary Peters, D-Mich., who sponsors the bill with Sen. Thom Tillis, R-N.C., said in a statement. “These guardrails will help guide federal agencies’ responsible adoption and use of AI tools, and ensure that systems paid for by taxpayers are being used safely and securely.”

According to the release, the Promoting Responsible Evaluation and Procurement to Advance Readiness for Enterprise-wide Deployment (PREPARED) for AI Act builds on a law passed in 2022 that required agencies to protect privacy and civil rights when purchasing AI. That legislation was also sponsored by Peters. President Joe Biden cited that law in a section of his executive order on AI that directed the Office of Management and Budget to take action on addressing federal AI acquisition. 

The OMB in March asked for input on AI procurement, including how the administration can promote competition and protect the government’s rights to access its data in those contracts. The administration has said it plans to take action on AI procurement later this year.

“As the role of artificial intelligence in the public and private sectors continues to grow, it is crucial federal agencies have a robust framework for procuring and implementing AI safely and effectively,” Tillis said in the release. 

A Senate Homeland Security and Governmental Affairs Committee aide told FedScoop that Peters, who chairs the panel, plans a markup for the bill this summer. Once it’s passed by the panel, the aide said Peters “will keep all options on the table and pursue any path forward, whether that’s advancing the bill as a standalone or as part of a larger vehicle.” 

The bill has the support of Center for Democracy and Technology, Transparency Coalition, the AI Procurement Lab, and the Institute of Electrical and Electronics Engineers (IEEE), according to the release.

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During a Senate Homeland Security and Governmental Affairs hearing, Jennifer Pahlka, former U.S. deputy chief technology officer within the Office of Science and Technology Policy, said that federal agencies require support to add and encourage AI tech talent, which involves reducing burdens on agencies for hiring processes. Pahlka said that while OPM’s memo that authorizes direct hire authority removes some red tape for agencies, it does not help agencies that have to run separate hiring processes for open positions. 

In an interview with FedScoop after the hearing, Pahlka said that the government needs to “pair mandates with enablement,” and that it is critical to both hire AI talent and upskill existing federal employees. 

“In government, we invest orders of magnitude less than we should and upskilling our people. We should be training folks, not on compliance issues, like how to comply” with the White House’s AI executive order, Pahlka said. “We should be having a huge investment in fundamentals of core digital work as a foundation, including training on AI. We could do a lot more than we’re doing now and we still wouldn’t be doing enough.”

As for next steps, Pahlka said that some existing tools can help these AI recruitment efforts, like Subject Matter Expert Qualifying Assessments, or SME-QAs, which already support a streamlined approach to hiring. If paired with pool hiring, Pahlka said the government could bring on “great people, quickly.”

“We have to recognize that just changing a policy is insufficient; the engagement and education has to go along with it and sometimes it’s very hard to do,” Pahlka told FedScoop. “OPM doesn’t really have the resources. The philanthropy world needs to step up and see this as a critical issue and say, ‘how can we help with all of that stuff that’s hard for a constrained agency to do so that we can get the people we need in government?’”

Pahlka said that she “would love to see a super honest, frank conversation between folks on the Hill and folks in an agency,” where they discuss what barriers to hiring could be removed. 

Noting that she was not able to discuss it during the hearing, Pahlka said that the government’s approach to funding needs to change from a “once and done” procurement philosophy to longer-term maintenance of projects and funding programs. 

She stated that the timeline for funding projects often runs for a year or two, then faces large layoffs before the project becomes neglected during operation and maintenance time. Then, the government calls for modernization efforts for said project. 

“AI is going to make that even more critical. We can just buy something and then be done with it,” Pahlka said. “We need a competency, ongoing, to work with the AI. It’s consistent with what I’m saying overall, which is the thing that we needed to do in the Internet era, that is work that is still undone now, really needs to be done because of AI.”

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The Improving Government Services Act, sponsored by Sens. Gary Peters, D-Mich., James Lankford, R-Okla., and John Cornyn, R-Texas, would require certain agencies to develop an “annual customer experience action plan” within a year of enactment of the bill, providing details on how to offer a better and more secure experience for taxpayers by adopting best customer service practices from the private sector.

“Taxpayers must be able to easily and efficiently reach federal agencies when they have questions about services or benefits,” Peters, chairman of the Senate Committee on Homeland Security and Governmental Affairs, said in a statement. “My commonsense bipartisan bill would require agencies to adopt customer service best practices that limit wait times and use callbacks to ensure taxpayers receive support in a timely manner.”

The bill, which will get a committee vote next week, would require federal agencies to develop a written strategy to improve customer experience. That strategy would include a plan to adopt customer service practices such as online services, improved protections for personally identifiable information, telephone call back services and employee training programs. 

The legislation would direct the White House’s Office of Management and Budget to designate certain federal agencies as “high-impact service providers,” such as those that deliver key services to the public or fund state-based programs. 

Federal agencies that deal with health care, public lands, loan programs, passport renewal, tax filing, customs declarations and other such key programs are likely to be designated as high impact.

“Some agencies have already successfully implemented private-sector best practices, but we need them governmentwide,” Lankford said. “Providing good customer service doesn’t have to be difficult. Let’s get this nonpartisan bill to the finish line so interacting with the federal government is less frustrating for the public.”

The bill also references the 21st Century Integrated Digital Experience Act, also known as the IDEA Act, and its push for the expansion of easy-to-use digital services through which Americans can communicate with federal agencies and programs while also maintaining in-person, telephone, postal mail and other contact options.

Nearly five years after the IDEA Act was first signed into law in 2018, OMB last month issued guidance for agencies to deliver on implementation of the legislation.

The new legislation is scheduled for a markup and vote in the Senate Homeland Security and Government Affairs Committee on Oct. 25.

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The Strengthening Agency Management and Oversight of Software Assets Act passed mark-up by the House Oversight Committee Wednesday morning, and now moves forward to be debated by lawmakers on the House floor.

The SAMOSA legislation has potentially widespread implications for U.S. government software procurement, including mandating more centralized software purchasing and the requirement for independent watchdog audits of agency contracts with big tech companies.

Details of the bipartisan bill, which is intended to overhaul software purchasing, were first revealed by FedScoop in November. A companion SAMOSA bill in the upper chamber was reported favorably out of the Senate Homeland Security and Governmental Affairs Committee in May.

The proposed legislation has attract both support and criticism from industry leaders and independent experts. Some say it represents a long-awaited push to improve competition and reduce fees in the government software market. Others argue it could restrict the choice of products that agencies can choose from in an already consolidated market.

In a letter sent to House Oversight Committee leaders on Tuesday, a coalition of technology industry lobby groups expressed support for legislation, and said it could help the government save at least $750 million each year.

“This critical legislation authorizes the Administration to take the steps necessary to know what enterprise software exists across departments and agencies, and use that information to make smarter, more informed choices when procuring software,” said the letter signed by the Coalition for Fair Software Licensing, the Computer and Communications Industry Association, NetChoice and the Alliance for Digital Innovation.

Former senior Senate staffer and SAMOSA Act co-author Matt Cornelius said: “Cracking down on extortionate software licenses will increase competition, lower costs, and improve agency cybersecurity. Passing SAMOSA out of COA will show that bipartisanship and bicameral cooperation is still possible — and sets the bill up well for final passage as either a stand-alone or part of a larger package before the end of this year.” 

The bill progresses amid a wider debate about how software is bundled and sold to U.S. government agencies by big tech companies. A recent study published earlier year, which was commissioned by NetChoice, warned that government software contractors such as Microsoft and Oracle routinely lock federal agencies into sole-source contracts.

The bill passed the committee mark-up with a 39-0 unanimous roll call vote.

Editor’s note, 7/12/23: This story was updated to include details of the roll call vote.

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The Strengthening Agency Management and Oversight of Software Assets (SAMOSA) Act was favorably reported out of the Senate Homeland Security and Governmental Affairs Committee and will now move to the Senate floor to be debated by lawmakers.

The legislation has potentially sweeping implications for federal IT procurement executives, including a requirement that each agency inspector general conduct an independent review of software license management within their respective departments. 

It also includes a detailed, governmentwide strategy to increase the interoperability of software acquired and deployed within agencies to cut costs and improve performance.

The Senate bill was reintroduced in March after an initial version was introduced by lawmakers in the previous Congress. The latest version was introduced by Sens. Gary Peters, D-Mich., Bill Cassidy, R-La., Bill Hagerty, R-Tenn., Thom Tillis, R-N.C., Joni Ernst, R-Iowa, Ron Wyden, D-Ore. and John Hickenlooper, D-Colo.

A source close to Hill deliberations said the current bill version represents a consensus, compromise version of the text that could both pass the Senate and House without further changes.

Details of the legislation were first revealed by this publication in September.

The bill is intended to build upon the MEGABYTE Act, which in 2016 compelled agencies to report licensing information on software contracts struck with technology companies. Since MEGABYTE passed into law, that legislation to a degree has increased lawmakers’ visibility of what IT services federal agencies are using.

Commenting on the passage of the bill, Coalition for Fair Software Licensing Executive Director Ryan Triplette said: “The Coalition for Fair Software Licensing applauds the Senate Homeland Security & Government Affairs Committee for taking this important step towards ensuring that U.S. taxpayer dollars are not wasted as a result of restrictive software licensing practices.”

“The Coalition for Fair Software Licensing now calls on Majority Leader Schumer and Minority Leader McConnell to prioritize the passage of this bipartisan legislation in 2023,” she added.

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Senators Gary Peters, D-MI., Chairman of the Homeland Security and Governmental Affairs Committee, and Josh Hawley, R-MO., reintroduced the Securing Open Source Software Act last week which would direct the Cybersecurity and Infrastructure Security Agency (CISA) to develop a risk framework to evaluate how open source code is used by the federal government. 

Peters first proposed the bill in September last year after holding a Senate hearing in response to the discovery of a severe, widespread Log4j vulnerability in open source code affecting federal systems and millions of others worldwide.

“The Log4j incident demonstrated that we must work to secure open source software against persistent and evolving cybersecurity threats,” Senator Peters said in a statement. “This bipartisan bill will help ensure this widely used software is secure against foreign adversaries and cybercriminals seeking to disrupt our national and economic security.”

The Securing Open Source Software Act would have CISA hire open source software experts to help address cyber incidents, require the Office of Management and Budget to issue guidance for agencies on securing open source software, and establish a software security subcommittee of the CISA Cybersecurity Advisory Committee.

CISA would also evaluate how the same framework could be voluntarily used by critical infrastructure owners and operators. This will identify ways to mitigate risks in systems that use open source software. 

“At a time when our adversaries, particularly the Chinese Communist Party, continue to attack and exploit our federal agencies’ software vulnerabilities, it is imperative that Congress work to bolster our national cybersecurity,” Senator Hawley said in a statement. “The Securing Open Source Software Act is a great step toward better understanding the risk associated with software deficiencies, and better defending the U.S. government and its critical infrastructure from cyberattacks by our enemies.”

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FedScoop exclusively obtained draft legislation earlier this month from the Senate Homeland Security and Governmental Affairs Committee, that if passed into law, would require government departments to purchase unlimited software contracts and require greater software interoperability from services they procure from Big Tech companies.

The Strengthening Agency Management and Oversight of Software Assets Act (SAMOSAA) will be marked up on Wednesday and is expected to pass the committee with broad bipartisan support, two sources familiar with the bill told FedScoop.

In its current form, SAMOSAA includes language to develop a governmentwide strategy to leverage procurement policies and practices to increase the interoperability of software acquired and deployed by agencies.

The bill was formally introduced last week by HSGAC committee chairman Sen. Gary Peters, D-Mich., and Republican Sen. Bill Cassidy of Louisiana.  

Major federal government software and cloud service providers like Microsoft, Amazon Web Services (AWS), Google, Oracle and Adobe are expected to be affected significantly by the legislation. 

IT contracting sources speaking with FedScoop said Microsoft is most likely to be most affected by the bill. According to one estimate, Microsoft holds about 85% of market share for federal government productivity and collaboration software.

The bill would build upon the Megabyte Act, which was enacted in 2016, and compelled agencies to report licensing information on software contracts struck with technology companies. Since it passed into law, that legislation to a degree has increased lawmakers’ visibility of what IT services federal agencies are using.

The bill is intended to improve the federal agency software procurement process and save money by forcing agencies to conduct independent reviews to ensure they have a clearer understanding of agency software licenses by cost and volume.

It would also direct agencies to provide shared services or other assistance capabilities to support agency enterprise license adoption, transition to open-source software, cost savings, and performance improvements.

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The Strengthening Agency Management and Oversight of Software Assets Act (SAMOSAA) would also compel agencies to provide greater transparency about software purchases and require additional contract audits.

IT contracting sources speaking with FedScoop said technology giants including Microsoft are most likely to be most affected by the bill. According to one estimate, Microsoft holds about 85% of market share for federal government productivity and collaboration software.

FedScoop exclusively obtained a draft copy of the legislation, which is sponsored by HSGAC Chairman Sen. Gary Peters, D-Mich. It is expected to be introduced formally in the coming weeks.

The bill would build upon the MEGABYTE Act, which was enacted in 2016, and compelled agencies to report licensing information on software contracts struck with technology companies. Since it passed into law, that legislation to a degree has increased lawmakers’ visibility of what IT services federal agencies are using.

“We are working to finalize this legislation that builds on Chairman Peters’ MEGABYTE Act, which has saved taxpayers more than $450 million since being signed into law. The Chairman will continue leading commonsense efforts to save taxpayer dollars and improve government efficiency,” a staffer for Sen. Peters told FedScoop.

According to the bill text, multiple reports from the Government Accountability Office and other organizations in recent years have shown that federal agencies could manage their software licenses better to save taxpayer dollars and more effectively execute technology modernization efforts.

“It is, therefore, in the interest of Congress to build upon the successes of the MEGABYTE Act of 2016 to improve the oversight, accountability, and effectiveness of agency software management practices so that agencies can acquire, deploy, and effectively leverage leading commercial software capabilities to meet their missions at a reduced cost to taxpayers,” the draft bill text said.

Major federal government software and cloud service providers like Microsoft, Amazon Web Services (AWS), Google, Oracle and Adobe are expected to be affected significantly by the legislation. 

The bill is intended to improve the federal agency software procurement process and save money by forcing agencies to conduct independent reviews to ensure they have a clearer understanding of agency software licenses by cost and volume. 

In its current form, the proposed legislation would require each inspector general to complete an independent review of software license management within their respective agency. This would take place one year after the bill passes into law, and would be required to capture the total costs of all software agreements as well as related costs.

The bill also includes a governmentwide strategy to leverage government procurement policies and practices to increase the interoperability of software acquired and deployed within agencies to reduce costs and improve performance. It would also direct agencies to provide shared services or other assistance capabilities to support agency enterprise license adoption, transition to open-source software, cost savings, and performance improvements.

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The Senate passed the Preventing Organizational Conflicts of Interest in Federal Acquisition Act, led by Senator Gary Peters, D-MI., the Chairman of the Senate Homeland Security and Governmental Affairs Committee, that would require federal agencies to identify potential conflicts for specific contracts early in the process. The bill is expected to pass the House as well.

“Federal contractors are entrusted to provide critical goods and services to the federal government as it serves the American people. If we don’t know whether they are serving other, potentially conflicting interests, we can’t be confident that Americans are getting exactly what they pay for,” said Senator Chuck Grassley, R-IA., a lead co-sponsor of the legislation. “We’ve put together a good government bill that takes steps to eliminate these potential conflicts of interest to rebuild public trust in our contracting process.” 

Many major federal government contractors, like McKinsey & Company or Booz Allen Hamilton also conduct business with the private sector entities, and this can raise questions about the reliability of consultations, advice or projects under federal contracts.

The new legislation aims to increase transparency in the federal contracting process by requiring Federal contractors to disclose other business relationships with entities that conflict with the specific work that an agency has hired them to do. 

Private companies currently under contract with the U.S. government would also be required under the law to disclose new potential business that opposes ongoing services they are providing to the government or the public at large. 

The bill would also ensure federal contractors are aware of how working with agencies could impact other parts of their business and will require federal agencies to assess and update their procedures for determining whether contractors could have a conflict of interest.

A House Committee on Oversight and Reform investigation from earlier this year uncovered evidence that McKinsey & Company consultants, including senior partners, frequently worked on Food and Drug Administration (FDA) contracts while also working for opioid manufacturers, including Purdue Pharma.

The investigation found that McKinsey’s conflicts, which the firm apparently did not disclose to the FDA, raised serious questions about McKinsey’s ability to provide objective advice and its compliance with the terms of its contracts and federal law.

The senators’ legislation will give federal agencies a process to evaluate other similar potential conflicts of interest to ensure that federal consultants and other contractors are not misusing taxpayer dollars.

“Companies that receive taxpayer dollars from federal contracts should not turn around and advise clients to take actions that are against the interests of the American people,” said Senator Peters. “This bipartisan, commonsense legislation will require federal contractors to disclose any potential conflicts of interest before they are awarded a federal contract to ensure they are effectively serving taxpayers.”

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An investigation by minority staff on the committee alleges that the equipment was compromised while the Fed employee was detained four times by Chinese government staff during a trip to Shanghai in 2019.

Officials working for China also used threats against the individual’s family in an attempt to coerce him to provide economic information and assistance, according to the report. Information copied from the detained Fed employee’s WeChat account included contact details for other federal government employees.

The report stated that China has targeted the U.S. Federal Reserve System since at least 2013, with the intention of undermining American economic and monetary policy. A 2019 bipartisan report previously detailed how China uses talent recruitment programs, including the Thousand Talents Plan, to target science and technology sectors.

The espionage allegations emerge amid heightened tensions between the U.S. and China, and after the Chinese government earlier this week warned of “serious consequences” if a trip to Taiwan by House Speaker Nancy Pelosi, D-Calif., goes ahead as planned.

The report also comes as widespread concerns over the ability of the Chinese government to compromise U.S. government IT systems. These include the prospect that China may be leveraging American-designed semiconductors to enhance its artificial intelligence capabilities, which may have sweeping civilian and military applications.

In the realm of quantum technology, where China and other nation states have made significant recent advances, cybersecurity leaders have warned that the technology may be used to break the public-key cryptography that secures most federal systems.

Sen. Rob Portman, R-Ohio, who led the report, said: “This investigation makes clear that China’s malign efforts at influence and information theft are not limited to science and technology fields — American economic and monetary policy is also being targeted by the Chinese government.”

“I am concerned by the threat to the Fed and hope our investigation, which is based on the Fed’s own documents and corresponds with assessments and recommendations made by the FBI, wakes the Fed up to the broad threat from China to our monetary policy,” Portman added. “The risk is clear, I urge the Fed to do more, working with the FBI, to counter this threat from one of our foremost foreign adversaries.”

China’s embassy in Washington D.C. did not respond to a request for comment.

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