State of Texas
Department of Information Resources
Leadership for Texas Government Technology

DIR Store Software Licensing

Provision of these courtesy licenses has had the unintended effect of slowing down the payment of monies owed by customers who purchase software licenses through the Cooperative Contracts Program. Customer accounts payable departments will not pay for software licenses purchased through the Cooperative Contracts Program without proof that these courtesy licenses have been received (usually from the end user who purchased the licenses), even though they provide no legal basis that the customer is licensed to use the software.

DIR must pay its vendors with a similar 30-day period. Failure to do so results in interest penalties to DIR as well as the possibility of being put on credit hold until outstanding bills are brought up to date. These actions in turn jeopardize the intent and operation of the Cooperative Contracts Program.

DIR has conducted extensive research around the licensing issue. The Office of the State Auditor, the Software Publishers Association, and the software vendor community unanimously agree that there is no need to produce courtesy licenses for customers who purchase software licenses through the Cooperative Contracts Program. All of these entities are in agreement that the following constitutes a legally defensible audit trail for software purchases:

• A copy of the institutional purchase order authorizing purchase of the software;
  
• A copy of the bill from the software vendor (in this case DIR); and
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• Proof that a check was written or an institutional money transfer was processed for the licenses.

• Receipt of an institutional purchase order by DIR for software licenses entitles the customer to begin using the software. No courtesy license of any kind is required for this purpose.

Beginning July 1, 1999, DIR will produce a listing of all software licenses purchased through the program on a quarterly basis. These listings will be compiled into a report for each customer who purchases software licenses for that period and mailed to the customer. This list meets the Software Publishers Association approval in determining software copyright compliance. These reports will be sent to the affected customers within five (5) working days of the month following the reporting quarter.