Feds find $2.8B in data center consolidation savings – watchdog says could do better

Departments of Commerce, Defense, Homeland Security, and the Treasury accounted for about $2.4 billion (or about 86%) of the total, GAO report stated

The massive federal data center consolidation effort has seen $2.8 billion in cost savings and a shuttering or merging of some 3,125 sites but issues remain, according to a report from the watchdogs at the Government Accountability Office.

According to the GAO, the 24 agencies participating in the Federal Data Center Consolidation Initiative have collectively made progress on their data center closures efforts. As of November 2015, agencies identified a total of 10,584 data centers, of which they reported closing 3,125 through fiscal year 2015.

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“Agencies are planning to close an additional 2,078 data centers—for a total of 5,203—by the end of fiscal year 2019. In total, 19 of the 24 agencies reported achieving an estimated $2.8 billion in cost savings and avoidances from fiscal years 2011 to 2015. In particular, the Departments of Commerce, Defense, Homeland Security, and the Treasury accounted for about $2.4 billion (or about 86%) of the total. Further, 21 agencies collectively reported planning an additional $5.4 billion in cost savings and avoidances, for a total of approximately $8.2 billion, through fiscal year 2019,” the GAO stated.

The GAO says planned savings may be higher because 10 agencies that reported planned closures from fiscal years 2016 through 2018 have not fully developed their cost savings goals for these fiscal years.

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Agencies provided varied reasons for not having fully developed these goals, including facing challenges such as being in the process of re-evaluating their data center consolidation strategies, the GAO stated.

Some other key points of the GAO report:

  • The reporting of planned savings goals is increasingly important considering the recent enactment of Federal Information Technology Acquisition Reform Act, or FITARA, which requires agencies to develop yearly calculations of cost savings as part of their multiyear strategies to consolidate and optimize their data centers. Until agencies address their challenges and complete and report such information, the $8.2 billion in total savings and avoidances may be understated and agencies will not be able to satisfy the data center consolidation strategy provisions of FITARA.
  • Agencies made limited progress against OMB’s fiscal year 2015core data center optimization performance metrics. In total, 22 of the 24 agencies have reported data center optimization information to OMB. However, of the nine metrics with targets, only one—full-time equivalent ratio (a measure of data center labor efficiency)—was met by half of the 24 agencies, while the remaining eight were each met by less than half of the agencies.
  • Federal Office of Management and Budget currently categorizes data centers as “core” (i.e., primary consolidation points for agency enterprise IT services) or “non-core.” Of the total reported data centers, 224 were reported by agencies as core data centers, while the remaining 10,360 were reported as non-core. Agencies reported closing 4 core data centers and 3,121 non-core data centers.
  • Agencies reported challenges in meeting OMB's targets, such as the decentralized nature of some agencies. Until agencies take action to improve progress against OMB's metrics, including addressing any challenges identified, they could be hindered in making progress against OMB's optimization targets.

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