The US is buying into open-source software development methodology. "This policy will require new software developed specifically for or by the Federal Government to be made available for sharing and re-use across Federal agencies. It also includes a pilot program that will result in a portion of that new federally-funded custom code being released to the public."
Why are they doing this? For the same reason that businesses have: It saves money.
Specifically, Scott said, "We can save taxpayer dollars by avoiding duplicative custom software purchases and promote innovation and collaboration across Federal agencies."
The other reason is the one Eric S. Raymond spelled out in the bible of the open-source approach, The Cathedral and the Bazaar. By letting many programmers read and work on any code, the program is improved far more quickly than if it's left in the hands of a small group.
As Scott said, "We will also enable the brightest minds inside and outside of government to review and improve our code, and work together to ensure that the code is secure, reliable, and effective in furthering our national objectives."
This is far from the first time that the government has used open source. NASA was open-sourcing its software long before the term existed in the 1960s. Some of the fruits of that labor live on in the NASA COSMIC collection.
Open-source supporters outside the government are applauding its move towards open source. Bob Canaway, Black Duck Software's Chief Marketing Officer, said, "With this new policy, the U.S. government is bringing itself in line with the best practices adopted by many commercial enterprises today: emphasize source code reuse internally; prefer viable open -source solutions over custom code; and when custom development is needed, leverage an open source model to maximize transparency, access, and innovation."