IO Government Services, part of IO Data Centers, landed a $17.5 million contract to provide outsourced services to the U.S. Securities and Exchange Commission (SEC).
This is a win for IO, and a positive move for overall government data center consolidation efforts, but it does threaten the standing of the SEC’s self-run Alexandria facility and its workers. Also, this approach is significant because of what that data center does–it runs Electronic Data Gathering and Retrieval (EDGAR) an online database of corporate filings. One might conclude that government agencies are getting more and more comfortable in outsourcing higher-level, sensitive functions.
This contract makes the SEC less dependent on the General Green Way building that currently houses this infrastructure. The shift will save SEC millions, according to former SEC chairwoman Mary Schapiro, who wrote in a letter to Congress that outsourcing and eliminating the Alexandria facility from its portfolio of leased space would save $18 million.
More government consolidation comes as no surprise, as it’s been a major ongoing initiative. The contract is for one-year with renewal options up to nine years and it’s the second contract for the outsourcing of the SEC’s staff-operated data center at 6432 General Green Way in Alexandria. The facility is leased from Cafferty Commercial Real Estate Services.
According to the Washington Business Journal, Commission officials have floated several proposals over the past few years to shift the Alexandria workers to sites in downtown DC.
It’s believed that the staff at the Alexandria facility would be moved to sites in downtown DC, including the SEC’s Station Place HQ. This is causing some real estate experts to question the figures Mary Shapiro stated in her letter to Congress, as the rent is higher ($61 vs. $35 per square foot) downtown compared to the Alexandria facility. However, they fail to see that rent per square foot isn’t the true expense; it’s running the actual data center that costs a significant amount. As the outsourcing initiative continues and savings are realized, bigger and bigger self-run data centers will be outsourced.