Commerce mulls share-in-savings

The Commerce Department is considering a share-in-savings approach to consolidate

its multiple data centers without having to provide any upfront funding.

Last week, Commerce issued a request for information to vendors asking

for "innovative contracting solutions," including share-in-savings, for

its data center consolidation plan.

In a share-in-savings contract, an agency outsources a program to a

vendor as a way to save money and improve efficiency. As payment, the vendor

receives a proportion of the savings it produces.

Because no money exists for Commerce's data center consolidation, vendors

would have to make an initial investment and assume the risk. However,

the program has the potential for "significant savings" in the long term,

according to the RFI.

Commerce spends about $103 million a year operating its 14 data centers,

said Roger Baker, chief information officer at the department. The department

is aiming to lower the number of centers to four, or even as few as three

or two.

Commerce's data centers, which operate on a variety of processing

platforms, support the department's mission-critical automated information


The Office of Management and Budget supports the idea of innovative

contracting approaches, said John Spotila, administrator of OMB's Office

of Information and Regulatory Affairs. "This is not unlike what a number

of companies have done in the private sector," he said. "If we can do this

in a way that saves the taxpayers money and gives us more effective performance,

I think it could be a good thing."


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