Constitutional affairs legal affairs

Workshop: Legal aspects of free and open source software 
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Although this may be difficult, it is possible to evaluate spending over a long-term horizon 
to make sure that taxpayers get the best value for their money. It is important to ensure 
that decisions that look good for the short term do not result in higher expenses and 
reduced choices over the long term. 
3.3.1 Long-term 
costs 
Open source software licences may be available free of charge. This does not mean that the 
use of open source software is free, of course. Several costs may be involved in the 
operation of software, including associated hardware, support and maintenance, training 
and other services. The exit cost is also an important consideration, namely the cost 
incurred in migrating to another IT system. This should properly be accounted for as a cost 
not of the new system being migrated to, but of the old system being migrated from. After 
all, if the old system were based on open standards, migration would not be as expensive, 
thus the cost of migration is imposed by the current, old system. 
Even if open source software licences are in fact free of charge (and therefore do not even 
need a call for tenders in order to be acquired, as they can simply be downloaded by a 
public sector organisation: see the next section), these other costs need to be estimated 
over the long term. A decision on the software system to be used needs to be made after 
evaluating all the long term costs associated with the use of that software system. 
Similar considerations could be taken into account for the evaluation of proprietary 
software, which also has requirements for hardware, support, customisation, training and 
other services. Furthermore, with proprietary software a long term evaluation of costs 
should include the frequency and necessity of purchasing upgrades. 
In a normal procurement process, a pre-defined period is announced at the beginning of 
the procurement procedure. It is assumed that all costs related to the procured software 
that will be incurred during that period, such as upgrades, will be taken into account in the 
evaluation of the bids. A basic assumption of normal public procurement is that at the end 
of the pre-defined period, the procuring public agency has no contractual obligations 
towards the original vendor. 
However, when software based on proprietary standards and proprietary interfaces is 
procured, these assumptions of normal public procurement break down. No contractual 
obligations may exist towards the original vendor beyond the pre-defined lifetime of the 
original procurement. However, there may be a very high technical and financial cost of 
moving to a system from another vendor or producer – for example, converting previously 
created data stored in a proprietary format of the original vendor into another format 
compatible with other systems. Even acquiring support from another independent vendor, 
without the support of the original vendor, may have very high costs.  
Software is used to create documents, data and customised applications that, in the public 
sector, have a life-time that may be well beyond the originally announced life-time of the 
procurement procedure for the software. If the software originally purchased makes it 
difficult to use the documents, data and customised applications with similar software from 
other producers, then there is a high cost in terms of changing from the original software to 
another software - the exit cost. With proprietary software this also means there is a high 
cost in terms of changing from the original vendor to another vendor. 
Thus, the assumption of normal procurement procedures, that all costs and obligations 
relating to procurement are completed after the pre-defined period for which the 
procurement takes place, appears to fail when applied to software. Contractual obligations 
do not extend beyond the original procurement period for the software; but the need of the 
public agency to be able to continue to use its own data and applications means that 
technical obligations come into play, as well. Proprietary standards provide technical 
obligations that result, in effect, in contractual obligations. This explains why so many 
public agencies publish tenders for software referring to proprietary software by brand 
name. They do this because they find the exit cost too high, and may simply not quantify 
it. 

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Policy Department C: Citizens' Rights and Constitutional Affairs 
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Since an essential principle of public sector IT systems is sustainability and independence, 
the ability to change vendors and systems in the future is essential, and the cost of doing 
so should be included in the evaluation of the cost of the original software purchase. Hence 
the term exit cost, as these costs are essentially a result of the technical and business 
model choices of the original software vendor. 
The initial selection of proprietary software, if it uses proprietary standards or implements 
standards in a way that is not exactly the same as software from other producers, can limit 
future software choices.  
As an example, a one-time, presumably competitive acquisition of a proprietary system for 
web server administration can result in a requirement that all future additions to the web 
site must be made with the same proprietary system. This not only limits the future choice 
of the public agency that acquired the software in the first place; it may force citizens who 
wish to access the public website, as well as businesses and other future contractors 
developing additions to the public website to become customers of the vendor of the 
original software acquired by the public agency. In some cases, citizens may not even be 
able to access such a website without installing a browser from a particular vendor. Such 
long-term costs of proprietary software are frequently not included in the evaluation 
process, but are essential for a sustainable, efficient use of public funds. 
In brief, long term dependencies on a particular vendor - extending past the boundaries of 
individual procurement actions - are not good procurement practice and may even be 
against regulations. Any decision, such as a further procurement action, that reinforces this 
dependency on a particular vendor, should be avoided, as it will only increase the exit 
costs. 
Note that the argument for the inclusion of exit costs in evaluation is essentially one for 
open standards, not necessarily open source software
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. Since exit costs may be hard to 
quantify at the time of initial procurement, choosing software that works fully with open 
standards may be a way of avoiding the lock-in effect discussed above.  
3.3.2 
Long-term benefits (sustainability), additional services 
Like costs, benefits should also be evaluated in the long term. Buying new software 
because it is compatible with previously purchased software may seem to save on 
migration and training costs. But when this software is proprietary, and is not fully based 
on protocols and standards that are fully and freely supported by other independent 
vendors, exit costs and associated costs may greatly increase over the long term, since the 
agency's dependence on the proprietary vendor is increased as the agency creates more 
and more systems and data relying on the proprietary software over time. Thus the 
apparent short term benefit of compatibility is much reduced when considered over the 
longer term. 
Acquiring software that is fully open and sustainable by multiple independent vendors may 
seem to have less benefits initially, especially if such procurement requires a more detailed 
study of the market (e.g. for the acquisition of open source software by downloading, or for 
the identification of appropriate open standards in case of procurement of software that 
may be proprietary). It may require more detailed procurement specifications, such as 
functional requirements. And the benefits of having independence and sustainability are not 
always apparent in the short term. In the long term, however, the ability to change to a 
new vendor independent of the initial vendor is key to the sustainability and independence 
of the public agency, and the benefit of such a choice when examined in the long term is 
thus great. 
                                                 
95 If open source software is being used without open standards, it may implement interfaces and formats that - 
while not proprietary - are not widely used; it may limit interoperability with other software. However, open 
source software does not lock the user to the same vendor, and with the source code available, it is possible to 
have other software adapted to use the protocols implemented, at a cost. Moreover, open source software can 
often be upgraded at no cost at all - through free downloads - or by any vendors of the procuring agency's choice 
at a time of the agency's choice. 

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