VA's $985M software licensing chaos: GAO report reveals decade of mismanagement

The Department of Veterans Affairs is grappling with a software licensing crisis that has persisted for nearly a decade, according to a damning new report from the Government Accountability Office. The federal watchdog found that VA has lost track of software licenses amid its $985 million annual software expenditure, potentially wasting taxpayer money on duplicate or unnecessary licenses while facing restrictive vendor practices that limit cloud computing options.

The GAO report, published last month, reveals that VA identified its five most widely used software vendors with the highest quantity of licenses installed but faced significant challenges in determining whether it was purchasing too many or too few licenses. This fundamental inability to track software usage has been a known problem since at least 2015, when the GAO first identified "the management of software licenses as a focus area" for the VA in a high-risk report.

A Decade of Warnings Ignored

Despite repeated warnings from the GAO, VA has failed to implement basic software license management practices. A January 2024 GAO report specifically recommended that VA track licenses in use within its inventories and compare them with purchase records. The VA agreed with these recommendations but had only taken "preliminary actions" to track software license usage as of the latest report.

The situation is particularly concerning given the scale of VA's software spending. For fiscal 2025, the department planned to spend approximately $985 million on software, including commercial software licenses. Without proper tracking mechanisms, VA cannot determine if it's overspending on licenses it doesn't need or under-licensing critical software that veterans depend on.

Restrictive Vendor Practices Compound the Problem

Beyond the basic tracking failures, the GAO identified another significant challenge: restrictive software licensing practices from vendors. The watchdog defined these as "any software licensing agreements or vendor processes that limit, impede, or prevent agency efforts to use software in cloud computing."

These restrictive practices have real consequences for VA's ability to modernize its IT infrastructure. The GAO found that such practices either increased costs of cloud software or services or limited the department's options when selecting cloud service providers. Despite recognizing this issue, VA had not established guidance for effectively managing impacts from restrictive practices for cloud computing or determined who is responsible for managing these impacts.

The GAO has been tracking this issue since an earlier report in November 2024, highlighting how long-standing these problems have been and how little progress has been made in addressing them.

Implementation Delays and Limited Progress

While VA has promised improvements, the GAO remains skeptical about the department's ability to implement necessary changes. The VA told the GAO it expected to implement additional actions to address the recommendations by September 30, 2026. However, as of March 2026, VA had not provided an update on the status of the working group established to address these issues.

The department did begin implementing a centralized software license inventory in late March 2026, which the GAO called "a critical first step in improving the department's ability to track and analyze licenses across the department." However, this implementation came years after the initial recommendations and only after years of mismanagement.

Political Context and Leadership Changes

VA's response to the GAO report emphasized recent leadership changes and efforts to address "Biden-era deficiencies." Quinn Slaven, VA press secretary, stated that "VA is aware of the findings in GAO's 2024 report that identified problems during the Biden Administration. The irresponsible mismanagement of software licenses is among the many Biden-era deficiencies VA has worked diligently to address."

Slaven highlighted that under Secretary Doug Collins' leadership, VA began implementing the centralized software license inventory in March 2026, which is critical to reducing costs on duplicate or unnecessary licenses and ensuring the responsible use of taxpayer dollars.

Broader IT Challenges at VA

The software licensing issues are part of a larger pattern of IT challenges at VA. The department has been at the center of a troubled IT rollout of electronic health records in its hospitals, which relied on software from Cerner, later acquired by Oracle. After numerous delays and a period during which the project was suspended for review, VA restarted the project in February 2023 with a $330 million contract.

These IT challenges have real-world consequences for veterans who rely on VA services. The department's inability to effectively manage its software infrastructure could jeopardize its ability to provide critical services to the millions of veterans who depend on VA healthcare and benefits.

The Path Forward

The GAO's report makes clear that VA must take immediate and sustained action to address its software licensing challenges. The recommendations are straightforward: implement a centralized software license inventory, regularly compare software usage with purchase records, establish guidance for managing restrictive vendor practices, and assign clear responsibility for software license management.

However, the history of this issue suggests that implementation will be challenging. The fact that VA has known about these problems since at least 2015 but has failed to implement basic tracking mechanisms raises questions about the department's ability to manage its IT infrastructure effectively.

For veterans and taxpayers, the stakes are high. Every dollar wasted on unnecessary software licenses is a dollar not spent on veteran care or services. Every delay in implementing modern IT systems is a delay in improving the services that veterans need and deserve.

As VA moves forward with its centralized software license inventory implementation, the GAO and other oversight bodies will need to maintain close scrutiny to ensure that this time, the department follows through on its commitments. The veterans who rely on VA services deserve nothing less than effective, efficient, and well-managed IT systems that support their care and benefits.