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Microsoft licensing agreement pioneers new concept

Aug. 20, 2014 - 05:09PM   |  
By MICHAEL HARDY   |   Comments
Iraqi airmen closer to controlling Taji tower
U.S. Army Spc. Cyrus Haines types air traffic notes onto a laptop at Camp Taji, Iraq. (Staff Sgt Quinton Russ)

When the Defense Department wanted to make Microsoft products available to multiple organizations, it settled on a joint enterprise license agreement to do it.

As the name implies, a JELA applies to several organizations blending their requirements into one contract. Microsoft’s JELA serves the Army, Air Force and the Defense Information Systems Agency.

The licensing arrangement is an emerging procurement method in which different branches of the Defense Department combine their IT buying power, and needs, to gain better pricing from vendors.

Similar to the strategic sourcing model, JELA leads to greater standardization and higher efficiencies. Only two JELAs have been awarded, but both are showing early signs of success.

“We realized that by joining forces with the military services, we can achieve better buying power,” said Keith Nakasone, technical director of the DISA Procurement Directorate. “This helps us to standardize the software and the contracts. We get consolidation and standardization across the services.”

However, a JELA is no cure-all; it is most effective for products that come off the shelf, can be commoditized and are usually purchased in volume, said Lorne Shackelford, vice president of strategic accounts at procurement analysis firm SmartProcure.

To learn more about joint enterprise licensing, including real-world examples, download our free editorial white paper on the topic.

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