Data Center Consolidation:

Agencies Making Progress on Efforts, but Inventories and Plans Need to Be Completed

GAO-12-742: Published: Jul 19, 2012. Publicly Released: Jul 19, 2012.

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What GAO Found

As of the most recent agency data submitted in September 2011, 24 agencies identified almost 2,900 total centers, established plans to close 1,186 of them by 2015, and estimated they would realize over $2.4 billion in cost savings in doing so. However, while the Office of Management and Budget (OMB) required agencies to complete missing elements in their data center inventories and plans by the end of September 2011, only 3 agencies submitted complete inventories and only 1 agency submitted a complete plan. For example, in their inventories, 17 agencies do not provide full information on their information technology facilities and energy usage, and 8 provide only partial information on their servers. Further, in their consolidation plans, 13 agencies do not provide a full master program schedule and 21 agencies do not fully report their expected cost savings. Officials from several agencies reported that some of this information was unavailable at certain facilities or that the information was still being developed. In a prior report, GAO recommended that agencies complete the missing elements from their inventories and plans. Until these inventories and plans are complete, agencies will continue to be at risk of not realizing anticipated savings, improved infrastructure utilization, or energy efficiency.

OMB requires a master program schedule and a cost-benefit analysis (a type of cost estimate) as key requirements of agencies’ consolidation plans, but none of the five agencies GAO reviewed had a schedule or cost estimate that was fully consistent with the four selected attributes of a properly sequenced schedule (such as having identified dependencies), or the four characteristics that form the basis of a reliable cost estimate (such as being comprehensive and well-documented). For example, the Departments of Interior and Transportation did not have schedules and the Department of Agriculture’s schedule was consistent with three of four attributes. Additionally, cost estimates for the Departments of Homeland Security and Veterans Affairs were partially consistent with the four cost characteristics. In the absence of reliable schedules and estimates, these agencies are at risk of experiencing cost overruns, missed deadlines, and performance shortfalls. OMB has established a standardized cost model to aid agencies in their consolidation planning efforts, but use of the model is voluntary.

Many federal agencies reported consolidation successes. Notably, 20 agencies identified 34 areas of success, although only 3 of those areas were reported by more than 1 agency. The two most-reported successes were focusing on the benefits of key technologies and the benefits of working with other agencies and components to identify consolidation opportunities. However, agencies have continued to report a number of the same challenges that GAO first described in 2011, while other challenges are evolving. For example, 15 agencies reported continued issues with obtaining power usage information and 9 agencies reported that their organization continued to struggle with acquiring the funding required for consolidation. However, other challenges appear to be less prevalent, including challenges in identifying consolidation cost savings and meeting OMB’s deadlines. Overall, 25 challenges that were reported in 2011 were no longer reported in 2012. In light of these successes and challenges, it is important for OMB to continue to provide leadership and guidance, such as—as GAO previously recommended—using the consolidation task force to monitor agencies’ consolidation efforts.

Why GAO Did This Study

In 2010, as focal point for information technology management across the government, OMB’s Federal Chief Information Officer launched the Federal Data Center Consolidation Initiative—an effort to consolidate the growing number of federal data centers. In July 2011, GAO evaluated 24 agencies’ progress on this effort and reported that most agencies had not yet completed data center inventories or consolidation plans and recommended that they do so.

In this subsequent review, GAO was asked to (1) evaluate the extent to which the 24 agencies updated and verified their data center inventories and plans, (2) evaluate the extent to which selected agencies have adequately completed key elements of their consolidation plans, and (3) identify agencies’ notable consolidation successes and challenges. To address these objectives, GAO assessed the completeness of agency inventories and plans, analyzed the schedule and cost estimates of 5 agencies previously reported to have completed one or both estimates, and interviewed officials from all 24 agencies about their consolidation successes and challenges.

What GAO Recommends

OMB’s Federal Chief Information Officer should ensure that agencies use a standardized cost model to improve consolidation planning, and the 5 selected agencies should implement recognized best practices when establishing schedules and cost estimates for their consolidation efforts. OMB and 3 agencies agreed with, and 2 did not agree or disagree with, GAO’s recommendations.

For more information, contact David Powner at (202) 512-9286 or pownerd@gao.gov.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: In addition to reiterating our prior recommendation to agencies to complete the missing elements of their inventories and plans, the Director of OMB should direct the Federal CIO to ensure agencies utilize OMB's Total Cost of Ownership model as a standardized planning tool across the consolidation initiative.

    Agency Affected: Executive Office of the President: Office of Management and Budget

    Status: Closed - Implemented

    Comments: The Office of Management and Budget (OMB) agreed with our recommendation and, in its September 2012 data center consolidation plan guidance, required agencies to use the Total Cost of Ownership model as they developed their 2014 budget request. Specifically, OMB's guidance stated that use of the cost model is required as agencies derive investment needs for and savings resulting from data center consolidation. Further, the guidance stated that the cost model is intended to provide a modeling and simulation tool to inform data center consolidation decisions, among other things. By requiring use of the cost model, OMB will be better assured that agencies are utilizing a comprehensive planning tool to inform their consolidation efforts, thus increasing the likelihood that the federal data center consolidation effort will be successful.

    Recommendation: In addition to reiterating our prior recommendation to agencies to complete the missing elements of their inventories and plans, the Director of OMB should direct the Federal CIO to ensure agencies utilize OMB’s Total Cost of Ownership model as a standardized planning tool across the consolidation initiative.

    Agency Affected: Executive Office of the President: Office of Management and Budget

    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretaries of Agriculture, Homeland Security, Interior, Transportation, and Veterans Affairs should direct their component agencies and their data center consolidation program managers to implement recognized best practices when completing required program schedules and cost-benefit analyses.

    Agency Affected: Department of Agriculture

    Status: Open

    Comments: In March 2013, the Office of Management and Budget (OMB) issued a memorandum that made significant changes to the Federal Data Center Consolidation Initiative's reporting requirements, including eliminating the requirement for agencies (including the Department of Agriculture) to submit the previously required data center consolidation plans, which contained program schedules and cost-benefit analyses. Rather, starting in May 2013, agencies were to begin submitting data center consolidation information to OMB via three primary means--an information resources management strategic plan, an enterprise road map, and an integrated data collection channel. After agencies fully implement OMB's new reporting requirements, which is expected in February 2014, we will review the extent to which the information submitted by the Department of Agriculture includes elements required by the reporting structure and reflects recognized best practices.

    Recommendation: The Secretaries of Agriculture, Homeland Security, Interior, Transportation, and Veterans Affairs should direct their component agencies and their data center consolidation program managers to implement recognized best practices when completing required program schedules and cost-benefit analyses.

    Agency Affected: Department of Homeland Security

    Status: Open

    Comments: In March 2013, the Office of Management and Budget (OMB) issued a memorandum that made significant changes to the Federal Data Center Consolidation Initiative's reporting requirements, including eliminating the requirement for agencies (including the Department of Homeland Security) to submit the previously required data center consolidation plans, which contained program schedules and cost-benefit analyses. Rather, starting in May 2013, agencies were to begin submitting data center consolidation information to OMB via three primary means--an information resources management strategic plan, an enterprise road map, and an integrated data collection channel. After agencies fully implement OMB's new reporting requirements, which is expected in February 2014, we will review the extent to which the information submitted by the Department of Homeland Security includes elements required by the reporting structure and reflects recognized best practices.

    Recommendation: The Secretaries of Agriculture, Homeland Security, Interior, Transportation, and Veterans Affairs should direct their component agencies and their data center consolidation program managers to implement recognized best practices when completing required program schedules and cost-benefit analyses.

    Agency Affected: Department of the Interior

    Status: Open

    Comments: In March 2013, the Office of Management and Budget (OMB) issued a memorandum that made significant changes to the Federal Data Center Consolidation Initiative's reporting requirements, including eliminating the requirement for agencies (including the Department of the Interior) to submit the previously required data center consolidation plans, which contained program schedules and cost-benefit analyses. Rather, starting in May 2013, agencies were to begin submitting data center consolidation information to OMB via three primary means--an information resources management strategic plan, an enterprise road map, and an integrated data collection channel. After agencies fully implement OMB's new reporting requirements, which is expected in February 2014, we will review the extent to which the information submitted by the Department of the Interior includes elements required by the reporting structure and reflects recognized best practices.

    Recommendation: The Secretaries of Agriculture, Homeland Security, Interior, Transportation, and Veterans Affairs should direct their component agencies and their data center consolidation program managers to implement recognized best practices when completing required program schedules and cost-benefit analyses.

    Agency Affected: Department of Transportation

    Status: Open

    Comments: In March 2013, the Office of Management and Budget (OMB) issued a memorandum that made significant changes to the Federal Data Center Consolidation Initiative's reporting requirements, including eliminating the requirement for agencies (including the Department of Transportation) to submit the previously required data center consolidation plans, which contained program schedules and cost-benefit analyses. Rather, starting in May 2013, agencies were to begin submitting data center consolidation information to OMB via three primary means--an information resources management strategic plan, an enterprise road map, and an integrated data collection channel. After agencies fully implement OMB's new reporting requirements, which is expected in February 2014, we will review the extent to which the information submitted by the Department of Transportation includes elements required by the reporting structure and reflects recognized best practices.

    Recommendation: The Secretaries of Agriculture, Homeland Security, Interior, Transportation, and Veterans Affairs should direct their component agencies and their data center consolidation program managers to implement recognized best practices when completing required program schedules and cost-benefit analyses.

    Agency Affected: Department of Veterans Affairs

    Status: Open

    Comments: In March 2013, the Office of Management and Budget (OMB) issued a memorandum that made significant changes to the Federal Data Center Consolidation Initiative's reporting requirements, including eliminating the requirement for agencies (including the Department of Veterans Affairs) to submit the previously required data center consolidation plans, which contained program schedules and cost-benefit analyses. Rather, starting in May 2013, agencies were to begin submitting data center consolidation information to OMB via three primary means--an information resources management strategic plan, an enterprise road map, and an integrated data collection channel. After agencies fully implement OMB's new reporting requirements, which is expected in February 2014, we will review the extent to which the information submitted by the Department of Veterans Affairs includes elements required by the reporting structure and reflects recognized best practices.

    Recommendation: In addition to reiterating our prior recommendation to agencies to complete the missing elements of their inventories and plans, the Director of OMB should direct the Federal CIO to ensure that all future revisions to the guidance on data center consolidation inventories and plans are defined in OMB memorandum and posted to the Federal Data Center Consolidation Initiative (FDCCI) public website in a manner consistent with the guidance published in 2010.

    Agency Affected: Executive Office of the President: Office of Management and Budget

    Status: Open

    Comments: Although the Office of Management and Budget (OMB) agreed with, and has taken steps to address, this recommendation, additional actions are needed. In September 2012, OMB posted its guidance for updating data center inventories and plans to the Federal Data Center Consolidation Initiative public website. In addition, in March 2013, OMB issued a memorandum that provided guidance on significant changes to the federal data center consolidation effort, including the initiative's reporting requirements. For example, instead of the previously required data center consolidation plans, starting in May 2013 agencies were to begin submitting data center consolidation information to OMB via three primary means--an information resources management strategic plan, an enterprise road map, and an integrated data collection channel. However, the memorandum did not provide adequate guidance in other important areas. For example, while the memorandum stated that agencies' are to categorize their data center populations into two categories--core and non-core data centers, it did not provide specific definitions for these categories. In addition, while the memorandum stated that agencies will be measured by the extent to which their data centers are optimized for total cost of ownership by incorporating metrics for data center energy, labor, and storage, among other things, it did not include the specific metrics for agencies to report against. We will continue to monitor OMB's progress in implementing this recommendation.

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