Data center optimization savings falls short

Shutterstock image: black data center with white floors and ceiling. 

While agencies have made progress on their data center optimization efforts, they are reporting far less in savings than initially estimated.

Savings are falling $3 billion short of estimates, coming to 80 percent of the estimated savings.

According to a May 18 Government Accountability Office report, the steep reduction in reported savings is because of incomplete strategic plans and inconsistent reporting.

In December 2014 legislation was enacted to encourage data center consolidation. By November 2015, the 24 participating agencies reported to GAO that they estimated that data center optimization would save about $4 billion between fiscal years 2016 and 2018.

In August 2016, then-Federal CIO Tony Scott released the final iteration of the Office of Management and Budget's push to identify and reduce the number of data centers, the Data Center Optimization Initiative.

However, now, 23 agencies -- one agency did not submit a strategic plan -- collectively estimate savings of $656 million.

Most of the reduction in savings can be traced to a handful of agencies. Eight agencies reported less in planned cost savings, and four -- the Departments of Defense, Energy, Homeland Security and the Office of Personnel Management -- had not submitted strategic plans as of December 2016.

In the previous round of data center closures, which extended through fiscal year 2016, four agencies -- the Departments of Commerce, Defense, Homeland Security and Treasury -- combined for 87 percent of the $2 billion in total savings.

This time around, in their respective annual strategic plans, Commerce reported none of its estimated $427 million in savings, and Treasury reported $303 million less. Defense's lack of a strategic plan accounts for about $2.9 billion of the underreported savings. Homeland Security also failed to submit its plan by December 2016.

GAO found that agencies also reported inconsistent historical cost savings, which auditors ascribed primarily to weaknesses in strategic plans.

Additionally, as of April 2017, 23 of the 24 agencies had submitted a strategic plan, of which only seven included all information required by the Federal Information Technology Acquisition Reform Act. The National Science Foundation was the only one to fully meet all strategic plan submission requirements in 2016.

GAO recommended that the federal CIO provide oversight to ensure that agencies complete their annual strategic plans and that agencies provide consistent data center consolidation and cost savings information in their quarterly data submissions and annual reports. The permanent federal CIO role remains unfilled.

GAO also said it wants to see 17 agencies complete the missing information in their strategic plans and submit updated ones to OMB.

Lastly, GAO recommended 11 agencies to make sure their achieved cost savings and avoidances are reported consistently.

Most agencies either agreed with the recommendations or did not state a position. However, two -- the Department of Housing and Urban Development and the Nuclear Regulatory Commission -- did not agree that they were out of compliance with reporting requirements.

About the Author

Chase Gunter is a former FCW staff writer.


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