IRS needs better data center consolidation plan: IG

IRS computing center

The IRS's Enterprise Computing Center in Detroit. (Image via Google Maps)

The Internal Revenue Service collects trillions in taxpayer dollars, but the agency's incomplete plan to consolidate its 15 major data centers is costing taxpayers millions each year, according to an audit by the Department of Treasury Inspector General for Tax Administration.

The audit, released in June, suggests the IRS has made some progress in adhering to the Office of Management and Budget's 2010 plan to reduce and optimize the number of data centers across the government, called the Federal Data Center Consolidation Initiative.

However, the audit states the IRS has not formalized a project management plan that addresses challenges, optimal footprints, milestones, timeframes and other details necessary to meet its data center consolidation goals: Reducing its data center space by half – from 400,000 square feet to 200,000 square feet via 10 percent reductions per year from fiscal 2011 to fiscal 2015 – and trimming number of data centers from 15 to eight by the end of fiscal 2015.

The audit was also critical of IRS' inventory practices, claiming the agency's data center consolidation plan did not include all its data centers that meet the standard federal definition. According to the audit, IRS has an extra 115,000 square feet of data center space in 61 buildings across the country for which it did not account.

"While the IRS has exceeded its first two years' goals for reducing data center space and improving the energy efficiency of its data centers, management of the DCCI needs to be improved to ensure that the IRS meets its future DCCI goals," the audit said. "Two years of the IRS' five-year DCCI have elapsed without a clear plan for how the data center space reduction goals will be accomplished."

The IG notes that during the audit, IRS announced plans to close its Enterprise Computing Center in Detroit, an underutilized data center that will save the agency $15 million annually. That step in the right direction, however – along with two prior data center closures that reduced its footprint by 76,000 square feet – was not enough to stave off a series of IG recommendations.

The IRS agreed to fully adhere to seven recommendations made by the IG, including the development of an actual project management plan, allocating additional resources to data center savings efforts, correcting its inventory and developing a baseline footprint to the IRS' small data center.

The agency partially agreed with the IG's recommendation to consolidate the Detroit data center into Martinsburg, W.Va., and Memphis, Tenn., data centers. In the formal response, IRS officials stated following the recommendation fully might hinder the agency's ability to make the best decision on where to relocate the Detroit data center's assets.

This is not the first time the FDCCI has drawn negative attention for lacking specifics. Agencies are on their own when it comes to setting data center space savings goals and other requirements; OMB has drawn significant criticism for failing to provide clear instructions. Only a few agencies have released any metrics or cost savings data, according to Government Accountability Office, and many are in a similar position to the IRS, struggling to put together plans.

The GAO and members of Congress have repeatedly charged in recent months that OMB's poor leadership and lack of metrics makes FDCCI savings difficult to measure. FDCCI, which was supposed to save the government $3 billion to $5 billion by 2015, has only achieved $63 million in documented savings thus far, according to GAO assessments.

About the Author

Frank Konkel is a former staff writer for FCW.

FCW in Print

In the latest issue: Looking back on three decades of big stories in federal IT.


  • Anne Rung -- Commerce Department Photo

    Exit interview with Anne Rung

    The government's departing top acquisition official said she leaves behind a solid foundation on which to build more effective and efficient federal IT.

  • Charles Phalen

    Administration appoints first head of NBIB

    The National Background Investigations Bureau announced the appointment of its first director as the agency prepares to take over processing government background checks.

  • Sen. James Lankford (R-Okla.)

    Senator: Rigid hiring process pushes millennials from federal work

    Sen. James Lankford (R-Okla.) said agencies are missing out on younger workers because of the government's rigidity, particularly its protracted hiring process.

  • FCW @ 30 GPS

    FCW @ 30

    Since 1987, FCW has covered it all -- the major contracts, the disruptive technologies, the picayune scandals and the many, many people who make federal IT function. Here's a look back at six of the most significant stories.

  • Shutterstock image.

    A 'minibus' appropriations package could be in the cards

    A short-term funding bill is expected by Sept. 30 to keep the federal government operating through early December, but after that the options get more complicated.

  • Defense Secretary Ash Carter speaks at the TechCrunch Disrupt conference in San Francisco

    DOD launches new tech hub in Austin

    The DOD is opening a new Defense Innovation Unit Experimental office in Austin, Texas, while Congress debates legislation that could defund DIUx.

Reader comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

More from 1105 Public Sector Media Group