Talend, a licensor of open source enterprise software, has recently received a ruling from the U.S. Customs Service corroborating that its software complies with the Trade Agreements Act 0f 1979 (19 USC 2511 et seq.) (“TAA”). Open source software adoption by the US Federal government must comply with many regulations, some of which can be difficult given the nature of modern software development. And these rules are frequently used as a barrier, or a bar, to the use of FOSS in federal government procurement. One of these issues is the ability of the FOSS company to certify compliance with the TAA which requires a product to be manufactured or “substantially transformed” in the United States or a “designated country”. A “designated country” is one of a handful of countries with which the U.S. has a trade agreement on government procurement or a similar arrangement. However FOSS frequently contains routines or other components whose origin is not sufficiently certain to “certify” compliance with these requirements, or if certain, the origin is a non-designated country such as India or China (as a matter of transparency, my partner, Fern Lavallee, represented Talend in the approval process).
Like many companies, Talend has a substantial part of the source code of some of its products written in the People’s Republic of China. However, virtually all other aspects and steps in the “manufacture” of its software – and particularly the complex activities fundamental to manufacturing the software - are performed in the United States or the “designated countries” of France or Germany. The letter goes into significant detail about the process of designing, developing and testing the Talend software. Talend successfully argued that the steps performed in the US, France and Germany constituted the “substantial transformation” of the source code into the “product”, i.e., the machine-readable object code software product, in a designated country for federal government procurement purposes sufficient to certify TAA compliance. The U.S. Customs Service agreed in its advisory letter.
This decision is timely because U.S. Department of Defense (DoD) is currently revising the “DoD Open Systems Architecture, Contract Guidebook for Program Managers” which was issued in draft in December, 2011. This Contract Guide is specifically intended to be used by DoD Program Managers who are incorporating Open System Architecture principles into National Security Systems. The new version is currently expected to be released by the end of this calendar year. A copy of the decision can be obained from Talend at http://www.talend.com/about-us/press/us-customs-and-border-protection-decision-boosts-open-source-software-for-government
This year has seen an increasing focus on the use by free and open source software (“FOSS”) by governments with recent announcements by the UK, the Australian Federal Government and NASA. FOSS projects and companies need to be aware of these efforts because of the scope of the opportunity to transform government and provide less expensive software infrastructure to government. Governments are also a very large market for software. Yet governments continue to be hampered by their habits of using proprietary software as demonstrated by the recent decision by an administrative court in Lille, France. http://lawandlifesiliconvalley.com/blog/?p=584 .
The UK Government recently provided a very broad endorsement of FOSS and open standards in UK government procurement. The UK government described its new policy for the next 24 months recently: http://www.cabinetoffice.gov.uk/resource-library/uk-government-ict-strategy-resources. The approach to FOSS is described below:
To assist with the deployment of agile solutions using open source technology, the Government will establish an Open Source Implementation Group, a System Integrator Forum and an Open Source Advisory Panel. These will aim to educate, promote and facilitate the technical and cultural change needed to increase the use of open source across government.
This encouragement is similar to the approach of the Department of Defense in the United States several years ago. http://lawandlifesiliconvalley.com/blog/?p=314. The UK government describes its goals in broader terms as follows:
The Government is taking a different approach to deliver this strategy, characterised by a strong centre and continued commitment to greater transparency through regular and open reporting. The approach includes:
mandatory open standards;
spending controls to ensure that new ICT solutions comply with strategy objectives;
transparency to ensure the continued comparison of common ICT services so that government gets the best price;
increased standardisation and modularisation of business processes and supporting technologies to create a platform from which government can deliver new models of open and innovative public services;
a new, strengthened governance structure; and
greater engagement with departments and suppliers to remove cultural as well as technical barriers.
The FSF Europe provides additional information on the approach in the UK. http://fsfe.org/uk/mapping-uk.en.html
This UK policy announcement follows a similar one by the Australian Government earlier this year which requires “covered procurements”, those procurements for over $80,000 AUS must comply with the Open Source Policy in procurement. http://www.finance.gov.au/e-government/infrastructure/open-source-software.html. The principles are summarized below:
Principle 1: Australian Government ICT procurement processes must actively and fairly consider all types of available software.
Australian Government agencies must actively and fairly consider all types of available software (including but not limited to open source software and proprietary software) through their ICT procurement processes. It is recognised there may be areas where open source software is not yet available for consideration. Procurement decisions must be made based on ‘value for money’. Procurement decisions should take into account whole-of-life costs, capability, security, scalability, transferability, support and manageability requirements.
For a covered procurement (over $80K), agencies are required to include in their procurement plan that open source software will be considered equally alongside proprietary software. Agencies will be required to insert a statement into any Request for Tender that they will consider open source software equally alongside proprietary software. Tender responses will be evaluated under the normal requirements of the Commonwealth Procurement Guidelines (CPGs). For a non-covered procurement (below $80K), agencies are required to document all key decisions, as required by the CPGs. This includes how they considered open source software suppliers when selecting suppliers to respond to the Select Tender or Request for Quotation.
Principle 2: Suppliers must consider all types of available software when dealing with Australian Government agencies.
Australian Government agencies will require suppliers to consider all types of available software (including but not limited to open source software and proprietary software) when responding to agencies’ procurement requests.
Agencies are required to insert this requirement into their tender documentation. Suppliers will need to provide justification outlining their consideration and/or exclusion of open source software in their response to the tender. Agencies will determine compliance with this requirement when assessing tender responses.
Principle 3: Australian Government agencies will actively participate in open source software communities and contribute back where appropriate.
The Australian Government, through AGIMO, will actively seek to keep up-to-date with international best practice in the open source software arena, through engaging with other countries and organisations. Australian Government agencies should also actively participate in open source software communities and contribute back where appropriate.
In the United States, NASA recently held an Open Source Summit where it described how it is using open source and how it intends to use it in the future. http://www.nasa.gov/open/source/live.html. Although I was not able to attend, the presentation by David Wheeler from the Institute of Defense Analysis of the Department of Defense was very interesting, both for his criticism for NASA’s approach to using FOSS as well as his discussion of how FOSS fits into the regime of government contracting. http://www.slideshare.net/ckleclerc/2011-nasa-open-source-summit-david-wheeler. The Federal Government has an elaborate set of procurement regulations (which differ between different agencies and which are very different from traditional “commercial arrangements” and set up a “unique” infrastructure for software licenses. Wheeler’s presentation describes how FOSS can be used in this system. I don’t agree with Wheeler’s complaints about the use of “intellectual property” but his summary can be very useful for persons trying to understand the fit between government regulations and FOSS.
Governments offer an enormous potential market for FOSS and the community needs to moniter government decisions on procurement, both at the policy level and on decisions about individual procurements.