Report: Feds Underreport Data Center Consolidation Savings by Billions

GAO finds many agencies still have trouble calculating cost savings from data center closures

Yevgeniy Sverdlik

September 26, 2014

2 Min Read
Report: Feds Underreport Data Center Consolidation Savings by Billions

A federal government watchdog agency released a report charging that agencies have been inaccurately reporting cost savings they expect to get by consolidating data centers, collectively missing the mark by billions of dollars.

The Government Accountability Office estimated that agencies would save as much as $3.1 billion through next year. The amount of savings they reported for the same period was $876 million, however, according to a GAO report released Thursday.

The report attributes a portion of the gap to the inability of six agencies to calculate their baseline, pre-consolidation data center costs. These agencies reported having closed 67 data centers but reported between zero and very little savings.

They are:

  • Department of Health and Human Services

  • Department of the Interior

  • Department of Justice

  • Department of Labor

  • General Services Administration

  • National Aeronautics and Space Administration (NASA)

Another big part of the problem is underreporting of planned cost savings between fiscal 2012 and 2015 by 11 of the 24 agencies participating in the Federal Data Center Consolidation Initiative (now in its fifth year). Some agencies blamed the problem on communication problems, while others gave no reason to the GAO.

Like two years ago, one of the most common reporting problems for agencies is finding power usage data for their data centers, which makes true cost savings calculation impossible.

Vivek Kundra, former CIO of the federal government, rolled out FDCCI in 2010 to rein in unchecked sprawl of government data centers. The initial inventory, completed in 2011, concluded that there were about 3,000 data centers total, but as the initiative’s working definition of data center changed, the number grew, reaching about 9,600 facilities as of May of this year.

Department of Defense has had more data centers than any other government agency, but has also shut down the most facilities since the initiative started. Its most current baseline is 2,308, of which 374 were shut down as of May. Including these, Defense has identified for about 940 data centers for closure.

Agriculture and Treasury follow Defense closely, the former’s baseline being 2,277 data centers and the latter 2,137. Agriculture is planning to get rid of 2,254 of its facilities, while Treasury has put only 111 data centers (5 percent of the total) on the chopping block.

Since 2012, the government has been trying to take a more nuanced approach to optimization of its IT infrastructure than simply counting buildings and IT rooms. It merged FDCCI with another initiative, called PortfolioStat with the goal of analyzing and consolidating the actual applications agencies use and consolidating physical infrastructure to support the rationalized application portfolios.

Earlier this week, the U.S. Senate passed a bill meant to expedite the government’s data center consolidation, however.

The legislation sets deadlines and requires agencies that are behind on inventories and consolidation strategies to act. It also directs GAO to verify data agencies produce and Office of Management and Budget to report on cost savings to Congress routinely.

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