Mobile Services Category Team (MSCT)

Device Procurement and Management Guidance

November 2016

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Background The Government’s adoption of category management principles as outlined by the Office of Federal Procurement Policy (OFPP)5 requires agencies to take new steps to improve the acquisition and management of mobile devices and services. On August 4, 2016, the Office of Management and Budget (OMB) issued OMB Memo M-16-20, Category Management Policy 16-3: Improving the Acquisition and Management of Common Information Technology: Mobile Devices and Services (PDF). The Memo directs Agencies to consolidate their procurement of mobile services and to modify management practices to optimize plan pricing and device refresh schedules as well as to eliminate unnecessary inventory. The Category Management Leadership Council established the Mobile Services Category Management Team (MSCT) to serve as the Category Lead for mobile devices and services to direct this effort. The Memo tasks the MSCT with several responsibilities, including ensuring that security, privacy, sustainability, accessibility (including 508), and other standards and requirements applicable to mobile device lifecycle management are in place to ensure compliance with Government-wide legislation and policies. As such, the Mobile Services Category Management Team is providing recommendations to Agencies regarding the selection, procurement, management and end of service disposal of mobile devices. Some of the challenges encountered by Agencies when addressing Enterprise Mobility Management are the myriad of issues directly associated with device management. Managing the physical device is not specific to the software or manufacturer. Physical lifecycle device management is addressed through a series of policies and guidance that maximize the Agency’s return on their investment and minimize the disruptions of their mobile infrastructure. A well managed inventory can reduce purchases, extend the life of individual products, and reduce the number of products disposed of, all while incurring savings and improving efficiency.

Device Selection and Replacement Guideline 1: As a best practice, it is recommended that Agencies align their mobile device requirements with the business needs of the Agency, specific user groups within the Agency, and / or individual employees. This process includes developing use case scenarios for the purpose of selecting and procuring the appropriate mobile devices, features, and functionality to effectively support the Agency’s mission, cost requirements, and employee productivity and job responsibilities. Considerations for aligning business needs with mobile device selection:

Expected Device Use o Develop use case scenarios and determine which of the three primary profiles or

combination of profiles best address mobility use within the Agency: General use – standard wireless use of voice, text, and mobile data

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Vertical application – specialized use to address a particular situation, activity, and environment

Custom solution – combined service, device, and software by an integrator or other service provider, which requires custom development and enhanced devices

Device usage environment and frequency of use

Connectivity requirements o Voice and data, voice only, or data only services o Coverage – urban, rural, or highly remote, CONUS, OCONUS o WiFi calling o Tethered services or hotspot capability o Simultaneous use of both voice and data o Customized connectivity solutions

Agencys’ device cost parameters

Device requirements, options, features, and functionality o Smartphone, feature phone, or data only device o Data storage capacity o Operating system (iOS, Android, Windows, or other) o Mobile security or other software requirements (some software may only be

available for select operating systems or versions) o Size and weight o Screen size and technology requirements (primarily indoor or outdoor use) o Mobile applications from major app stores (use and support needs) o Camera and camera focusing speed and photo quality o Battery life o Device color (some colors or device finishes incur a premium price) o Other special conditions

Device or usage requirements critical to mission success

Projected device life and required refresh cycle

Validate device alternatives against the National Information Assurance Partnership (NIAP) Protection Profile for Mobile Devices Fundamentals (see below).

Documentation of requirements aligned to OEM, mobile device model, OS version, and device generation

Further, it is advised that Agencies procure mobile devices that meet technology specific security requirements through the evaluation and certification by NIAP (National Information Assurance Partnership) against a NIAP-approved Protection Profile. The devices meeting this requirement are a combination of approved hardware and OS versions. The list of compliant devices may be found at the NIAP website1.

1 https://www.niap-ccevs.org/Product/

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Agencies should seek a clear commitment from device vendors and / or Wireless Service Carriers that security updates will be provided in a timely manner and that devices will continue to be supported with security and OS updates for the expected use period between device deployment and the projected device refresh. Guideline 2: It is recommended, based upon the outcome of the alignment of mobile device requirements and business needs from Guideline 1, that Agencies prioritize the utilization of the most recent previous generation devices (one generation behind the most current version) for the majority of Government employees to lower overall mobility costs. To the fullest extent possible and in compliance with OMB memo M-16-20, Agencies, whenever possible based upon business needs, shall utilize the most recent previous mobile device versions for the vast majority of employees. Most users do not require the latest hardware and feature upgrades present in the most recently released, current generation devices. Deploying the previous generation device can reduce or eliminate any premium device charge and / or lower the monthly recurring wireless service and device subsidy cost. Selecting the previous generation devices encourages a market for older generation devices, extends the life of mobile devices, and reduces the overall environmental and public health impacts of manufacturing new electronics. Even when device cost is included in the monthly service pricing, those service fees reflect the subsidization cost of mobile devices. An additional benefit of deploying previous generation devices, is the opportunity to allow unresolved technical and safety issues in newly released models to be corrected. Problems with the newest generation models have been previously documented across leading OEMs of smartphones and tablets. Note: It is expected that when deploying previous generation devices, government employees will receive devices that are sufficiently maintained including necessary OS versions and those devices will meet the requirements for their job responsibilities. When a device model is no longer supported with OEM OS updates, those devices should be decommissioned and replaced with technically supported devices. Guideline 3: It is recommended that Agencies review current procurement agreements and contracts which allow for device replacement with refurbished devices and that those agreements be updated to require replacement with a new like-for-like or newer device.

Device replacement - Current contracts in place with Verizon and AT&T contain language that when a device malfunctions within 30 days, a new device is provided as a replacement. If the malfunction occurs beyond 30 days from receipt of the new device, a re-furbished device is provided. Agencies have experienced issues very quickly with refurbished devices such as problems that cannot be fixed with software updates or configuration. Additionally, in many

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cases refurnbished devices have a shorter lifespan and malfunction again within as short a time as within 90 days. It is recommended that contracts be updated to include a new device replacement when malfunctions occur. Device Pricing - Procurement Guideline 4: It is recommended that Agencies negotiate a 24-month device refresh cycle, instead shorter refresh cycles if corresponding service and subsidization price reductions are obtained from the wireless service providers and if this extended refresh period continues to support the alignment of business needs and device requirements as established in Guideline 1. Over the course of an Agency’s investment in mobile devices, simply reducing the generation of most users’ devices can save thousands of dollars annually. This immediate and tangible benefit can make a material difference to an Agency that prudently invests their limited budget. For example, there is a substantial drop in price of a current model when a new successor model is released. In recent years, Apple’s iPhone has received a price reduction of $100 or more when the next generation iPhone is announced2. Samsung’s flagship “S” line observes a similar series of price reductions on the launch of each generation of device. For most government users, the service plan and the subsidized device are offered for a single monthly recurring charge. The monthly recurring charge may increase or a one-time premium device fee may be charged if the Agency requires the newest devices. Wireless Carriers determine a monthly recurring charge that is based upon a device refresh rate of approximately 18-months or other refresh cycle if negotiated as part of the agreement. Supply/Standardization Guideline 5: Agencies shall, to the extent possible, standardize devices within their organization by consistently acquiring the same brand and model for the vast majority of users during a given time period. Benefits of Standardization

Decreased user and device support (help desk) costs

Streamlined development and implementation of mobile applications and accessibility

Avoidance of potential delays in Agency timelines and refresh cycles, which are negatively impacted by multiple models, brands, and operating systems within an individual Agency and work teams.

It is recognized that there may be necessary exceptions to standardized devices within an Agency or bureau to meet specific group or individual user needs requiring the most recent

2 http://tech.co/iphone-smartphone-depreciation-2016-07

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technology, premium devices, or devices that deviate in brand or model from those selected for the majority of users. Device Pricing – Exchange, Trade-In, Recycling, and Disposal Guideline 6: Agencies shall develop recycling programs to help offset the cost of mobile devices and service plans and to support the government’s associated environmental initiatives . The value of mobile devices being sold, recycled or otherwise disposed of is significantly impacted by the device condition, brand, model, launch timing of the successor model, the features and functionality of the competitor and successor models and whether a phone is locked or unlocked3. iPhones generally retain more of their value over the same period of time in comparison to Android models. Depreciation rates are not consistent across all iPhone and Android models. Additionally, depreciation is not a straightline reduction in value. Depending upon market demand for used devices, the exchange or trade-in value fluctuates month-to-month but maintains an overall downward trend even though there may be months where the value remains flat or even increases from the previous month.

Guideline 7: Lock in the exchange, trade-in, or recycling value at least 30 days prior to the launch of a new successor device to obtain a higher price for a mobile device. Obtaining the exhange or trade-in value of a smartphone prior to the launch of the successor device can result in between $50 to $100 more for that device4. Depreciation accelerates for the previous generation model once the successor model is launched. Prior research has shown that within 1 week of the announcement of a new iPhone model, the most recent older iPhone model drops in value by an additional 5% and then four weeks later can be worth 20% less than the price when the new iPhone model was announced5. The highest depreciation comes in the first three to six months after purchase depending upon the brand and model. Most smartphones experience about a 65% drop in value6 . A mobile device will depreciate the most within the first 12 months.7 An Android device typically depreciates about 35% to 50% after the first three months and can lose as much as 80% of its value after one year but this varies by brand and models as well as the other factors already

3 Gadgetvaluer.com Sell my iphone best trade in prices

4 Gsmarena.com “Here’s how much your iphone will depreciate shortly” Sept 9, 2015

5 Tech.co

6 http://tech.co/iphone-smartphone-depreciation-2016-07

7 Decluttr.com

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stated8. Purchasing flagship models by the most well-known, leading brands tend to be the best opportunities for retaining value in both the short and long term9. Average Depreciation Rates10

Recycling Devices Guideline 8: In accordance with Title 40 of the United States Code and GSA’s Federal Management Regulation, Agencies may sell or exchange mobile devices and use the sales proceeds or exchange allowances to help reduce overall costs when transitioning to new device models, provided they are used to acquire similar items. Rapid advances in information technology (IT) have resulted in increased sales of electronics worldwide, increased energy consumption, and a constant stream of obsolete and discarded products. The National Strategy for Electronics Stewardship (NSES), issued by the White House in 2011, directed the federal government to lead by example in electronics stewardship, including federal mobile device utilization. Federal sustainable electronics stewardship can move the marketplace so that sustainable choices are available for all purchasers, ensure that federal electronic assets are handled responsibly at end of service/life, and improve public health and the environment globally. As part of a contract, agencies may incorporate “take back” provisions where the vendor receives the used device and provides the Agency with a new/newer device. Additonally, if not addressed in the acquisition contract, agencies may retain the proceeds generated from the recycling of mobile devices, provided they are used to acquire similar items (i.e. newer mobile devices in a like-for-like fashion) in accordance with Title 40 of United States Code and GSA’s

8 http://www.androidauthority.com/which-smartphones-retain-their-resale-value-700865/

9 http://tech.co/iphone-smartphone-depreciation-2016-07

10 Decluttr.com http://www.decluttr.com/blog/2016/06/27/your-cell-phone-loses-value-quicker-than-your-car/

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Federal Management Regulation (FMR) (41 CFR 102-39). “In acquiring personal property, an executive agency may exchange or sell similar items and may apply the exchange allowance or proceeds of sale in whole or in part payment for the property acquired”. Example Exchange or Sale of Mobile Devices (all other recycling related criteria must be met): An Agency has 1000 devices to be recycled. The devices are a mixture of smartphones, feature phones and aircards. A certified recycler agrees to accept the mobile devices and in exchange provide an allowance to the Agency as follows: $100 per smartphone, $20 per feature phone, and $10 per aircard. The exchange allowance for the devices may be applied to the following scenarios: 1) Purchase of new mobile devices separate from service plans: Older mobile devices may be

exchanged for the same or fewer number of new / newer devices. Since new/newer devices have more functionality than older devices, and therefore, one new device may replace the functionality of two or more devices, the exchange credit may be applied to a fewer number of devices than were exchanged.

2) Purchase of mobile device accessories: The exchange allowance may be applied toward mobile device accessories if the accessories are necessary for the appropriate use and life of mobile devices. Necessary accessories may include device cases or screen protectors for protection of the device, chargers for powering the device, and wired or wireless headsets. Many states require hands-free usage of a mobile device when operating a motor vehicle, which requires the use of wireless headsets or similar accessories.

It is advised that when the recycling or trade-in of mobile devices for an exchange allowance is not straightforward, the Agency should consult legal counsel to ensure compliance to federal regulation. * Recommendation ~ Agency legal personnel across government agree that agencies are not able to recycle devices and have those credits applied to their carrier services. The MSCT recommends that action be taken that can allow for the application of credits for carrier services, which requires a change or addendum associated with 41 CFR 102-39. Handling Mobile Devices At End of Service and/or End of Life In addition to the fiscal incentive for recycling devices, proper disposal of electronic devices provides a number of environmental benefits in support of government green initiatives outlined in Executive Order 13693 and the National Strategy for Electronics Stewardship. EO13693 requires Agencies to employ environmentally sound practices with respect to Agency disposition of all Agency excess or surplus electronics. GSA has also issued Electronics Take Back Guidance, which was developed in collaboration with the member Agencies of the Federal Electronic Stewardship Working Group (FESWG), and reviewed for consistency with applicable federal property management laws and policy. GSA’s guidance addresses the inclusion of

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provisions in contracts or leases for manufacturer or reseller take-back of used electronic assets. FMR Bulletin B-34 provides guidance on the use and disposal of electronic assets. Guideline 9: Recycle only unclassified devices and do so in a secure manner, which meets the list of requirements below: The Federal Government must meet security requirements in its reuse or recycling of mobile devices. The Mobile Services Category Team recommends that Agencies implement the following guidance regarding recycling devices in a secure manner:

The device history and profile shall be :

Used for unclassified communications only;

Validated against the National Information Assurance Partnership (NIAP) Protection Profile for Mobile Devices Fundamentals;

Sanitized in accordance with the purge procedures documented in National Institute of Standards and Technology Special Publication 800-88 “Guidelines for Media Sanitization” Reference (b). Note: see Table A-3: “Mobile Device Sanitization”; o NIAP validation ensures that the device’s built-in mechanism for erasure

of information properly sanitizes the device o 800-88 recommends picking the least destructive option based on the

security classification of the data on the device Never involved in a classified data spillage incident;

Cleaned of all stickers, markings, and Agency component identification. All certified electronics recyclers are required to use stringent media sanitization practices under their respective recycling standards. Agencies may opt to conduct their media sanitization “in house”, or outsource this service to a certified recycler with documented and acceptable sanitization processes. Handling Mobile Devices and End of Service/Life Through A Mobile Services Solution If the Agency is going to handle disposition of the mobile devices, then Agencies shall take these actions:

• Require all mobile devices taken back by the vendor to be sent to electronics recyclers who are third party certified to a standard for environmentally responsible electronics recycling (i.e. R2 or e-Stewards)

• Add the following contract language to all current and future solutions (per the GSA Take Back Guidance):

• “The Contractor shall assess the remaining value of purchased equipment at the end of its useful life based on its current value. The Government may return the equipment to the Contractor and use the assessed value to offset the purchase price of a new device.

• As part of the proposal, the Contractor shall clearly identify its approach to device end-of-life management. Unless approved by the Government as a management option, electronic assets shall not be disposed of in a landfill or by incineration.

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• For any equipment removed by the Contractor and scheduled to be refurbished or recycled, the Contractor is required to demonstrate as part of its management plan that those actions will be handled by a refurbisher or recycler that is third party certified to one of the known electronics recycling certification programs that is used in the United States, the Responsible Recycling Standard for Electronics Recyclers (R2) or the e-Stewards Standard for Responsible Recycling and Reuse of Electronic Equipment© (e-Stewards ®).”

Handling Mobile Devices and End of Service/Life Outside a Mobile Services Solution If the Agency is going to handle disposition of the mobile devices, then Agencies shall take these actions:

All devices that are no longer of use by the acquiring Agency, and that cannot be used as an exchange/sale asset to acquire replacement property, reused by other Agencies, transferred to a Federal donation program customer, or provided to a participant in the Computer for Schools Program should be sent to recyclers that are certified by an accredited, independent third-party certification body to meet specific standards to safely recycle and manage electronics. At present, two acceptable standards exist in the U.S.: R2 and e-Stewards.

If recycling devices through the carriers, agencies need to ensure that they are doing so with recyclers that meet the above standards.

The United States Postal Services Blue Earth Program uses third party certified recyclers (per federal requirements) and offers free shipping for federal Agencies with their regular mail to the recycler. They take all mobile devices – tablets, cell phones, and PDAs. An MOU is required for the Agency to participate in this USPS program.

UNICOR, as a third party certified recycler, offers free and responsible recycling of mobile devices under many circumstances.

GSA has developed a schedule for electronics recycling services (Schedule 899). Agencies should maintain an auditable record of each item’s final disposition status and

prepare disposition reports to ensure each organization is able to meet the personal property management reporting requirements of Title 40 of United States (U.S.) Code Reference (c) and the U.S. General Services Administration Federal Management Regulation (FMR) (41 CFR chapter 102) Reference (d). The disposition report should include the following:

IMEI/ESN

Model Number

Item Unique Identification (IUID)/Asset Tag Number (removed for recycling purposes but recorded as having been recycled)

Service Status

Wipe Date

Disposition Status (recycled, destroyed, reused)

Disposition Vendor Used

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Utilizing Environmentally Sustainable Mobile Devices Guideline 10: Support the Government’s green initiative by purchasing only Energy Star certified and EPEAT (Electronic Product Environmental Assessment Tool) registered devices. The Federal Acquisition Regulation (FAR) and Executive Order 13693, ttps://www.whitehouse.gov/the-press-office/2015/0DecadeL(3l) require federal purchasers to procure or lease tablets which are ENERGY STAR certified and EPEAT registered. FAR 23.705 specifically applies this requirement to both products and support services at Government owned or operated facilities. The Mobile Services Category Management Team recommends that Agencies integrate the following directives into the GSA Wireless BPA and all other current and future government mobile solutions to meet these requirements:

• All mobile devices and tablets offered are: • ENERGY STAR certified and • EPEAT registered

• All of the following products offered are ENERGY STAR certified:

• Broadband Modems (Cable, DSL); • Optical Network Termination Devices (ONT); • Integrated Access Devices (IAD); • Routers(if fewer than 12 ports); • Switches; or • Access Points (non-enterprise grade)

• Vendors are required to report quarterly on the number of EPEAT registered

products accessed via the solution to each Agency to help Agencies meet OMB data mandates for their OMB Energy and Sustainability Scorecards

• “Future Considerations” sections of solutions note an interest in mobile devices that meet upcoming sustainable mobile device standards. (Work is ongoing to develop and publish sustainability performance standards for a broader array of mobile devices. When this work is completed it will likely impact federal procurement.)

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Sources: http://uscode.house.gov/view.xhtml?req=(title:40 section:503 edition:prelim)

http://www.gsa.gov/portal/ext/public/site/FMR/file/Part102-_39.html/category/21858/#wp2017411

https://www.epa.gov/smm-electronics/national-strategy-electronics-stewardship-nses

https://www.whitehouse.gov/the-press-office/2015/03/19/executive-order-planning-federal-sustainability-next-decade

Other Resources:

http://uscode.house.gov/view.xhtml?req=(title:40 section:503 edition:prelim)

http://www.gsa.gov/portal/ext/public/site/FMR/file/Part102-_39.html/category/21858/#wp2017411

National Strategy for Electronics Stewardship: https://www.epa.gov/smm-electronics/national-strategy-electronics-stewardship-nses Executive Order 13693: https://www.whitehouse.gov/the-press-office/2015/03/19/executive-order-planning-federal-sustainability-next-decade

EPA Electronics Environmental Benefits Calculator: https://www.whitehoushttps://www.epa.gov/greenerproducts/electronic-product-environmental-assessment-tool-epeat

ENERGY STAR CERTIFIED PRODUCTS: https://www.epa.gov/greenerphttps://www.energystar.gov/products

EPA Recommended Standards and Ecolabels for Use in Federal Procurement: https://www.epa.gov/greenerproducts/epas-recommendations-specifications-standards-and-ecolabels

GSA FMR Bulletin: http://www.gsa.gov/graphics/ogp/FMR_Bulletin_B-34.pdf

GSA Take Back Guidance: http://www.gsa.gov/portal/mediaId/252399/fileName/Electronics_Take-Back_Guidance_final-9-16-15.action

More information about the Responsible Recycl ing ( R2) and e­Stewards standards and certification programs can be found at these links:

www.epa.gov/wastes/conserve/materials/recycling/certification.htm

http://www.epa.gov/wastes/conserve/materials/ecycling/certmap.htm

http://e-stewards.org/find-a-recycler/

http://www.sustainableelectronics.org/find-a-recycler