Freedom to compete: Fixing software procurement

On Tuesday December 7, we issued a press release about a contract awarded by the European Commission, under which the EC and other European institutions will spend up to 189 million Euro on proprietary software and related services. We are of the view that in issuing this contract, the EC has once more failed to live up to its own guidelines and recommendations about the use of Free Software and Open Standards, and has missed an opportunity to open up software procurement to competition from Free Software companies.

The contract in question, called SACHA II, is the responsibility of the EC's Directorate-General for Informatics (DIGIT for short). A few days after our press release, we received a written reply from Mr Francisco García Moran, the head of DIGIT.

We would like to thank Mr García Moran for replying to our concerns in detail. He requested that we publish his reply, which we are glad to do. Here is the original letter we received.

The EC's reply does nothing to allay our concerns

Unfortunately, the EC's reply neither shows our stance to be wrong, nor does it allay our criticism. This is why we would like to return some questions to Mr García Moran. We appreciate the opportunity to enter into a detailed discussion of the EC's software strategy and its software procurement practices, and hope for a constructive dialogue.

We note that DIGIT's reply does not answer our criticism regarding the mismatch between the Commission's own guidelines and recommendations (as referred to in the press release), and the massive acquisition of licenses for proprietary software.

This criticism applies to both the recent SACHA II contract, as well as the framework contract with Fujitsu-Siemens for the provision of Microsoft products concluded on January 10, 2008.

We would like to see the European Commission back up its public rhetoric regarding Free Software, Open Standards and interoperability with its own actions. This would require DIGIT to rethink some procurement practices in order to open up public software procurement to competition.

EC letter from Dec 10th, 2010

FSFE's comments

(1) The press release does not mention the fact that the contract you refer to is the result of an open call for tenders awarded on the basis of the highest quality/price ratio. This is a major omission in a press release which, on the one hand, says that the Commission should avoid discrimination and open up public procurement to competition, and, on the other, accuses the Commission of not doing enough to keep its costs low and to spend the taxpayers' money in the best possible way.

It is only natural to assume that a responsible public administration such as the EC would not spend such sums without an open call for tender. We did not consider it necessary to highlight something that should be self-evident.

Our criticism is directed at the way in which this call for tender was designed, and at the underlying lack of a coordinated effort to make greater use of Free Software and Open Standards on the part of DIGIT.

(2) The first sentence of your press release ("77ze Commission will spend EUR 189 million on proprietary software over the next six years'") is totally misleading for the following reasons:

(a) Awarded amount. The sentence implies that the Commission has awarded the total amount of EUR 189 million for itself, without mentioning the fact that the contract in question also covers the needs of 36 other EU Institutions, Agencies and other Bodies. The amount awarded for the Commission's own needs is EUR 67.4 million (see paragraph VI.2 of the contract notice).

We understand that the institutions for which software and services will be provided are funded by European Union budgets, and that they will obtain software and services through the SACHA II contract. The contract is signed by the European Commission, and the money will come out of the taxpayers' purse.

(b) Commitment to spend. The Commission has not committed itself to spend the whole of this amount. In the case of a framework contract (or "framework agreement") such as this one, the amount mentioned in the award notice corresponds to the maximum budgetary ceiling which can be used over the entire duration of the contract (including all possible renewals). In order to avoid new administrative procedures, such maximum budgetary ceilings contain provisions for various contingencies which could arise during or at the end of the contract.

While this is a maximum budget, it is not at all uncommon for public administrations to reach such ceilings in their procurement contracts.

In order to provide orientation to the concerned public, would DIGIT be able to provide an indication of the percentage of the total final value which has been spent under the Commission's current contract with Fujitsu (2008/S 53-071324) to provide Microsoft software products and licenses?

(c) Duration. The duration of the contract in question for acquisitions is two years, which may (but do not have to) be renewed up to two times for a period of one year each. The total duration is therefore four (not six) years. The two additional years only cover maintenance of already acquired licences.

It follows that the total duration of the contract is six years, during which EUR 189 million in public funds may be spent.

Is the EC going to change its approach to software procurement after the initial two years, so that European Free Software SMEs will have an easier time bidding for contracts with the European institutions? If that is the case, we will be very glad to have been proved wrong here. If not, our criticism stands.

(d) Type of software covered. Contrary to your statement, the contract in question does not only cover the acquisition of proprietary software, but also of open source software (OSS) and of OSS-related services, such as high-level support of OSS products, for example from Red Hat, Atlassian, Balsamiq Studios, Adaptavist and others.

We have made no such statement. FSFE's press release explicitly states that the institutions covered will "acquire a wide range of mostly proprietary software".

Furthermore there seems to be some confusion on DIGIT's part regarding what, exactly, is Free Software. Most of Red Hat's products indeed fulfil the Free Software definition. Atlassian's products are distributed under proprietary licenses, as are those by Balsamiq. FSFE will be honoured to assist DIGIT in closing any possible gaps that may exist in the understanding of Free Software licenses.

(3) You argue that the Commission should have come up with a strategy to take advantage of Free Software. I take this opportunity to inform you that the Commission has actually had an OSS strategy since 2001. A summary of the last version of this strategy is available at DIGIT'S website on the EUROPA portal1. A new version is in its final draft phase and will be published very soon. As a result of this strategy, more than 250 OSS products pertaining to all the categories managed by DIGIT are already in use at the Commission. For the sake of completeness, it may be worth mentioning some additional examples of achievements in this area, which very few (if any) public administrations in the world can match:

The fact that the European Commission uses Free Software is not in doubt. Nor is it a special achievement. At the end of 2008, the consultancy Gartner expected 100% of businesses to use at least some Free Software by the end of 2009.

The EC-backed FLOSSPOLS study found that 78% of public administrations were using at least some Free Software already in 2004/5.

At the same time, the EC and the other institutions included in this contract continue to spend substantial amounts of money on proprietary software, as exemplified both by SACHA II and the separate framework contract for the provision of Microsoft products and licenses, concluded January 10, 2008. This casts some doubt on the effectiveness of the EC's strategy.

(a)The European Commission runs IT solutions on more than 350 Linux servers.

We would like to ask the Commission about the total number of servers run by the European Commission and the other institutions covered by the SACHA II contract, and about the percentage of these servers that use Free Software operating systems such as GNU/Linux or BSD systems.

(b) DIGIT'S Data Centre manages more than 800 OSS web servers.

We would be interested to know how many web servers the European Commission and the other institutions covered by the SACHA II contract are operating; which software they use; and what percentage of these web servers actually are Free Software.


(h) The European Commission also manages three important public websites, also entirely powered by OSS software: (e-govemment related open source observatory and repository), (semantic assets exchange centre) and (community of e- Govemment, e-Inclusion and e-Health)

We are fully aware of these websites, and appreciate their usefulness to many European public bodies. However, we regret that the Commission is not making greater efforts towards availing itself of the advantages of Free Software and Open Standards when it comes to its internal IT infrastructure. Such efforts would greatly help to increase interoperability, transparency and competition; they would enable a greater number of European SMEs to provide services to the Commission; and they would be likely to reduce the Commission's IT costs. Without decisive steps in this direction, the Commission's own guidelines and recommendations would ultimately be futile.

The SACHA II call for tender was designed in a way that made it very hard, if not impossible, for Free Software companies to offer their products and services:

The call for tender includes a long list of specific products, rather than a set of functional specifications. While formulations such as

Product names and trademarks: Whenever the tendering specifications mention a specific product name or trademark and a sufficiently precise and fully intelligible description is not possible, such mention should be understood as referring to that product or its equivalent. (SACHA II Annex 6 : 5.1.4.)

may or may not satisfy the letter of the law, they are certainly not conducive to competitive bidding by a large number of providers of different programs. This issue was at the heart of the European Commission's infringement proceedings against a number of Member States regarding discriminatory specifications in calls for tender specifying "Intel or equivalent" processors (see Press release IP/04/1210, October 13, 2004)

Annex 4 of the tendering specifications lists 251 named software products (not counting different varieties of those products). We are surprised that DIGIT found itself unable to provide a "sufficiently precise and fully intelligible description" for any of these products without resorting to product names and trademarks.

DIGIT issued a comprehensive call for tender for a very large and diverse set of programs. If the Commission had truly wanted to acquire Free Software and related services, an appropriate approach would have been to tender a number of smaller, more specific contracts. European SMEs would have found it much easier to bid for such contracts.

We would appreciate if the European Commission could inform us how spending under the SACHA II contract will be allotted among the different software products and services listed in the the call for tender. Which percentage of spending under this contract will go towards the purchase of Free Software and related services?

Would the Commission also be able to inform us how many bids were received in total? This would be an interesting indication of the number of companies who felt that they were in a position to successfully bid for this contract.

(4) Your press release assumes that proprietary software is, by definition, unable to be interoperable or to implement standards. This is simply not true. Proprietary software can implement standards as much as OSS. To the best of my knowledge, the Commission's corporate IT infrastructure already supports all major IT standards, be it with proprietary software and/or OSS. Should you be aware of any major IT standard not currently supported by the Commission's infrastructure, I would be obliged if you could let me know about it, so that I can take appropriate measures.

Our press release assumes no such thing. FSFE maintains that Open Standards can be implemented in both Free and proprietary software. Open Standards, which do not depend on any particular vendor, and which can be implemented in any software model, offer freedom from vendor lock-in and open up the software market to innovation and competition.

We very much appreciate your request for input, and will avail ourselves of this opportunity whenever necessary.

The important question is rather whether European institutions are accessible to citizens regardless of the type of software they choose to use. A notable failing, for example, is the fact that webcasts from the European Parliament cannot to our knowledge currently be viewed using a GNU/Linux operating system. This is a major impediment to the participation and involvement of citizens in the EU's decision making process. We would welcome DIGIT's help in removing this obstacle to democratic participation.

We would also note that the Commission maintains a preference for proprietary document formats, and staff are still unable to receive documents in .odf formats without going through central translation, despite this having been established as a formal ISO standard.

(5) This procurement procedure is totally unrelated to the ongoing revision of the European Interoperability Framework. Concerning this point, I should simply like to remind that the Commission has committed itself to adopting its Communication on Interoperability (which will include both the European Interoperability Framework and the European Interoperability Strategy) before the end of 2010, as stated in point 2.2.3 of the Digital Agenda. Since this file is heading towards its final adoption, it is inappropriate for me to make any further comments about the process.

Our press release merely states that both this procurement and the revision of the European Interoperability Framework are coordinated by DIGIT.

We are looking forward to the impending publication of the European Interoperability Framework, and, despite indications to the contrary , remain hopeful that it will provide at least the same level of leadership for the European public sector as the original version where Open Standards are concerned.

I can only regret that you did not cross-check your sources prior to issuing the press release. This appears to be based exclusively on an article which contains plenty of misleading elements. Should you have contacted us, it would have been a pleasure for my department to provide you with accurate factual information, and I am sure that the result would have been more balanced.

I am pleased to inform you that rather than basing our public intervention merely on articles in the press, we followed FSFE's customary best practice of going to the source and, in this case, investing considerable amounts of time into studying the publicly available documents related to this procurement.

We regret that the SACHA II contract itself has not been published. If the contract were to be made publicly available, FSFE and other European citizens who care about the way in which their taxes are invested and their institutions conduct their business would be able to verify that this agreement is truly in their best interest.

The same applies for other contracts concluded by the Commission regarding the acquisition of software, such as the EUR 49 million framework contract for Microsoft software and services awarded to Fujitsu Siemens on January 10, 2008.

Our goal is to increase the use of Free Software and Open Standards in all parts of the European public sector. This includes opening up public procurement to participation by Free Software companies. FSFE will be happy to work with DIGIT and other parts of the European Commission in order to support competition, choice and freedom in the European software market.

$Date: 2010-12-15 14:08:10 +0100 (wed. 15 dec. 2010) $ $Author: maelle $