DATA CENTER 

OPTIMIZATION 

Continued Agency 

Actions Needed to 

Meet Goals and 

Address Prior 

Recommendations

Report to Congressional Committees

May 2018

GAO-18-264

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-18-264, a report to 

congressional committees

May 2018

DATA CENTER OPTIMIZATION

Continued Agency Actions Needed to Meet Goals and 

Address Prior Recommendations

What GAO Found

The 24 agencies participating in the Office of Management and Budget’s (OMB) 

Data Center Optimization Initiative (DCOI) reported mixed progress toward 

achieving OMB’s goals for closing data centers by September 2018. Over half of 

the agencies reported that they had either already met, or planned to meet, all of 

their OMB-assigned goals by the deadline. This would result in the closure of 

7,221 of the 12,062 centers that agencies reported in August 2017. However, 4 

agencies reported that they do not have plans to meet all of their assigned goals 

and 2 agencies are working with OMB to establish revised targets.

With regard to agencies’ progress in achieving cost savings, 20 agencies 

reported, as of August 2017, that they had achieved $1.04 billion in cost savings 

for fiscal years 2016 and 2017. In addition, the agencies’ DCOI strategic plans 

identify an additional $0.58 billion in planned savings—for a total of $1.62 billion 

for fiscal years 2016 through 2018. This total is approximately $1.12 billion less 

than OMB’s DCOI savings goal of $2.7 billion (see figure). This shortfall is the 

result of 12 agencies reporting less in planned cost savings and avoidances in 

their DCOI strategic plans, as compared to the savings targets established for 

them by OMB.

Agencies’ Reported Achieved and Planned Data Center Optimization Initiative Savings against 

OMB’s Goal for Fiscal Years (FY) 2016 through 2018, as of August 2017

The 24 agencies reported limited progress against OMB’s five data center 

optimization targets for server utilization and automated monitoring, energy 

metering, power usage effectiveness, facility utilization, and virtualization. As of 

August 2017, 1 agency had met four targets, 1 agency had met three targets, 6 

agencies had met either one or two targets, and 14 agencies reported meeting 

none of the targets. Further, as of August 2017, most agencies were not 

planning to meet OMB’s fiscal year 2018 optimization targets. Specifically, 4 

agencies reported plans to meet all of their applicable targets by the end of fiscal 

year 2018; 14 reported plans to meet some of the targets; and 4 reported that 

they do not plan to meet any targets.

In 2016 and 2017, GAO made a number of recommendations to OMB and the 24 

DCOI agencies to help improve the reporting of data center-related cost savings 

and to achieve optimization targets. As of March 2018, 74 of these 81 

recommendations had not been fully addressed. 

View GAO-18-264. For more information, 

contact David A. Powner at (202) 512-9286 or 

pownerd@gao.gov.

Why GAO Did This Study

In December 2014, Congress enacted 

federal IT acquisition reform legislation 

that included provisions related to 

ongoing federal data center 

consolidation efforts. OMB’s Federal 

Chief Information Officer launched 

DCOI to build on prior data center 

consolidation efforts; improve federal 

data centers’ performance; and 

establish goals for inventory closures, 

cost savings and avoidances, and 

optimization performance. 

The 2014 legislation also included a 

provision for GAO to annually review 

agencies’ data center inventories and 

strategies. Accordingly, GAO reviewed

agencies’ data center closures to date 

and plans for further closures; 

evaluated agencies’ progress in 

achieving consolidation savings and 

described their plans for future 

savings; and assessed agencies’ 

progress against OMB’s data center 

optimization targets. To do so, GAO 

assessed the 24 DCOI agencies’ data 

center inventories as of August 2017; 

reviewed their reported cost savings 

documentation; evaluated their data 

center optimization strategic plans; and 

assessed 22 agencies’ progress 

against OMB’s established 

optimization targets. Two agencies did 

not have a basis to report planned 

optimization milestones.

OMB and the 24 DCOI agencies 

provided mixed responses to GAO’s 

findings on the progress made towards 

initiative goals. GAO continues to 

believe that implementation of the 

recommendations made previously will 

help the agencies meet OMB’s targets 

for cost savings and optimization of

performance.
Page i GAO-18-264 Data Center Optimization 

Letter 1

Background 5

Agencies Report Mixed Results Relative to Achieving OMB’s Data 

Center Closure Targets 15

Agencies’ Planned Savings Are Not Expected to Meet OMB’s 

Goal 20

Agencies Continue Reporting Limited Progress against OMB’s 

Data Center Optimization Metrics 25

Summary 33

Agency Comments and Our Evaluation 34

Appendix I: Objectives, Scope, and Methodology 39

Appendix II: Comments from the Social Security Administration 43

Appendix III: Comments from the Department of Housing and Urban Development 44

Appendix IV: Comments from the Department of Transportation 46

Appendix V: Comments from the Department of the Interior 47

Appendix VI: GAO Contact and Staff Acknowledgments 49

Tables

Table 1: Number of Reported Tiered and Non-tiered Federal 

Agency Data Centers with Completed and Planned 

Closures through Fiscal Year 2018, as of August 2017 18

Table 2: Agencies’ Reported Planned and Achieved Data Center 

Optimization Initiative Savings for Fiscal Years 2016 and 

2017, as of August 2017 (dollars in millions) 22

Contents
Page ii GAO-18-264 Data Center Optimization 

Table 3: Comparison of Office of Management and Budget (OMB) 

Targets, as Reported on the Information Technology (IT) 

Dashboard, and Agencies’ Planned Savings, as Reported 

in Data Center Optimization Initiative (DCOI) Strategic 

Plans, as of August 2017 (dollars in millions) 23

Table 4: The Office of Management and Budget (OMB) Data 

Center Optimization Metrics and Targets 26

Table 5: Agency Data Center Optimization Performance 

Compared to Office of Management and Budget 

Optimization Targets, as of August 2017 28

Figures

Figure 1: Example of Data Center Server Racks at the Social 

Security Administration’s National Support Center 7

Figure 2: Total Number of Federal Data Centers and Closures, as 

Reported by Agencies and OMB, from 1998 to August 

2017 16

Figure 3: Total Number of Federal Agency Data Centers that 

Were Closed, Planned for Closure, or Not Planned for 

Closure, as of August 2017 17

Figure 4: Agencies’ Reported Achieved and Planned Data Center 

Optimization Initiative Savings against OMB’s Goal for 

Fiscal Years 2016 through 2018, as of August 2017 21

Figure 5: Agencies’ Progress against Office of Management and 

Budget (OMB) Data Center Optimization Targets, as of 

August 2017 27

Figure 6: Agency-Reported Plans to Meet or Exceed the Office of 

Management and Budget’s (OMB) Data Center 

Optimization Targets 32
Page iii GAO-18-264 Data Center Optimization 

Abbreviations

Agriculture Department of Agriculture

CIO chief information officer 

Commerce Department of Commerce

DCOI Data Center Optimization Initiative 

Defense Department of Defense

DHS Department of Homeland Security

Education Department of Education

Energy Department of Energy

EPA Environmental Protection Agency

FDCCI Federal Data Center Consolidation Initiative

FITARA Federal Information Technology Acquisition Reform

 Act

GSA General Services Administration

HHS Department of Health and Human Services

HUD Department of Housing and Urban Development

IT information technology 

Interior Department of the Interior

Justice Department of Justice

Labor Department of Labor

NASA National Aeronautics and Space Administration

NRC Nuclear Regulatory Commission

NSF National Science Foundation

OMB Office of Management and Budget 

OPM Office of Personnel Management

SBA Small Business Administration

SSA Social Security Administration

State Department of State

Transportation Department of Transportation

Treasury Department of the Treasury

USAID U.S. Agency for International Development

VA Department of Veterans Affairs

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without further permission from GAO. However, because this work may contain 

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Page 1 GAO-18-264 Data Center Optimization 

441 G St. N.W.

Washington, DC 20548

May 23, 2018

Congressional Committees

The federal government’s demand for information technology (IT) is ever 

increasing. In recent years, as federal agencies have modernized their 

operations, put more of their services online, and improved their 

information security profiles, their need for computing power and data 

storage resources has grown. Accordingly, this growing demand led to a 

dramatic rise in the number of federal data centers and a corresponding 

increase in operational costs.

To reduce data center duplication and costs, the Office of Management 

and Budget’s (OMB) Federal Chief Information Officer (CIO) launched 

two initiatives. The first, launched in 2010, was the Federal Data Center 

Consolidation Initiative (FDCCI), which aimed to reduce the number of 

data centers that were outdated or duplicative. The second initiative—the 

Data Center Optimization Initiative (DCOI)—was launched in August 2016 

and superseded FDCCI. This initiative shifted the focus to optimizing 

agencies’ remaining data centers by requiring, among other things, that 

agencies consolidate inefficient infrastructure, optimize existing facilities, 

and transition to more efficient infrastructure, such as cloud services.

Further, Congress has recognized the importance of reforming the 

government-wide management of IT and, in December 2014, enacted 

Federal Information Technology Acquisition Reform provisions 

(commonly referred to as FITARA) as a part of the Carl Levin and Howard 

P. ‘Buck’ McKeon National Defense Authorization Act for Fiscal Year 

2015.

1 Among the requirements related to federal data center 

consolidation, the law requires:2

 1

Pub. L. No. 113-291, division A, title VIII, subtitle D, 128 Stat. 3292, 3438 (Dec. 19, 

2014). In November 2017, the FITARA Enhancement Act of 2017 was enacted into law to 

extend the sunset date for the data center provisions of FITARA. The law’s data center 

consolidation and optimization provisions now expire on October 1, 2020. Pub. L. No. 115-

88, 131 Stat. 1278 (Nov. 21, 2017).

2

Pub. L. No. 113-291 § 834, 128 Stat. 3444 – 3448 (44 U.S.C. 3601 note). Unless 

otherwise noted, these requirements apply to the 24 agencies specified in section 834 

(corresponding to those agencies covered by the Chief Financial Officers Act of 1990. 31 

U.S.C. § 901(b)).

Letter
Page 2 GAO-18-264 Data Center Optimization 

• Covered departments and agencies (agencies)3 to annually report to 

OMB about federal data center inventories and strategies to achieve 

consolidation, including yearly calculations of investment and cost 

savings.4

• OMB to develop goals for the amount of planned cost savings and 

optimization improvements that agencies are to achieve through 

FDCCI. OMB is to make the goals publicly available and compare 

progress against the goals.

In addition to these requirements, FITARA included a provision for GAO 

to annually review and verify the quality and completeness of covered 

agencies’ federal data center inventories and strategies for consolidation. 

Accordingly, our specific objectives were to (1) review agencies’ data 

center closures to date and plans for further closures, (2) evaluate 

agencies’ progress in achieving data center consolidation savings and 

describe plans for future savings, and (3) assess agencies’ progress 

against OMB’s data center optimization targets.

On November 13, 2017, we briefed congressional committee staff on the 

results of our work. This report officially transmits the results of our review 

to the committees.

To review agency closures to date and plans, we obtained and analyzed 

August 2017 data center inventory documentation from the 24 DCOI 

agencies. We compared information on the agencies’ completed and 

planned data center closures to OMB’s fiscal year 2018 consolidation 

goals, as documented in its August 2016 memorandum (M-16-19).5 We 

 3

The 24 agencies that are required to participate in the Data Center Optimization Initiative 

are the Departments of Agriculture, Commerce, Defense, Education, Energy, Health and 

Human Services, Homeland Security, Housing and Urban Development, the Interior, 

Justice, Labor, State, Transportation, the Treasury, and Veterans Affairs; the 

Environmental Protection Agency, General Services Administration, National Aeronautics 

and Space Administration, National Science Foundation, Nuclear Regulatory Commission, 

Office of Personnel Management, Small Business Administration, Social Security 

Administration, and U.S. Agency for International Development. These are the same 

agencies covered by FITARA’s data center consolidation provisions.

4

In lieu of submitting a data center inventory and strategy, the Department of Defense 

may submit this information as part of a defense-wide plan and report on cost savings, as 

required under §§ 2867(b)(2) and 2867(d) of the National Defense Authorization Act for 

Fiscal Year 2012 (10 U.S.C. § 2223a note).

5

OMB, Data Center Optimization Initiative (DCOI), Memorandum M-16-19 (Washington, 

D.C.: Aug. 1, 2016).
Page 3 GAO-18-264 Data Center Optimization 

determined the number of data center that had been closed by adding the 

closures from fiscal year 2010 through August 2017, as reported by the 

agencies.6 We identified future closures by counting data centers that 

agencies reported as planned closures, as of August 2017 through fiscal 

year 2019.

To verify the quality, completeness, and reliability of the agencies’ data 

center inventories, we compared the information on completed and 

planned data center closures to similar information reported on OMB’s IT 

Dashboard—a public website that provides information on federal 

agencies’ major IT investments.7 We determined that the data were 

sufficiently reliable to report on agencies’ consolidation progress and 

planned closures.

In order to evaluate agencies’ progress in and plans for achieving data 

center cost savings, we reviewed August 2017 cost savings and 

avoidance8 documentation submitted by the 24 DCOI agencies in 

response to OMB’s March 2013 and August 2016 memorandums.9 This 

documentation included the agencies’ quarterly reports of cost savings 

and avoidances posted to their digital services websites and discussed in 

their DCOI strategic plans. We determined cost savings achieved by 

adding agencies’ reported savings and avoidances from the start of fiscal 

years 2012 through August 2017, as found in the August 2017 quarterly 

reports posted to their digital services websites. We identified future 

planned savings by totaling the agencies’ projected savings and 

avoidances from fiscal years 2016 through 2018, as reported in their 

DCOI strategic plans.

 6

OMB launched FDCCI in February 2010, at which point, agencies were required to begin 

closing data centers. However, current OMB guidance only requires agencies to report 

historical cost savings and avoidances realized since fiscal year 2012.

7

We did not physically visit agencies’ data center locations to verify their inventory totals.

8

Beginning in March 2013, OMB required agencies to report on both cost savings and 

cost avoidances. OMB defines cost savings as a reduction in actual expenditures below 

the projected level of costs to achieve a specific objective and defines a cost avoidance as 

the result of an action taken in the immediate time frame that will decrease costs in the 

future.

9

OMB, Fiscal Year 2013 PortfolioStat Guidance: Strengthening Federal IT Portfolio 

Management, Memorandum M-13-09 (Washington, D.C.: Mar. 27, 2013) and 

Memorandum M-16-19.
Page 4 GAO-18-264 Data Center Optimization 

To assess the quality, completeness, and reliability of each agency’s data 

center consolidation cost savings information, we used the latest version 

of each agency’s update of the August 2017 quarterly cost savings report 

and DCOI strategic plan. We also reviewed the quarterly reports and 

DCOI strategic plans for missing data and other errors, such as missing 

cost-savings information. In addition, we compared agencies’ reported 

cost savings and avoidances with data from our most recently issued 

report on data center consolidation.10 Further, we obtained written 

responses from agency officials regarding the steps they took to ensure 

the accuracy and reliability of their cost savings data. As a result, we 

determined that the data were sufficiently reliable to report on agencies’

data center consolidation cost-savings information.

To assess agencies’ progress against OMB’s data center optimization 

targets, we obtained the August 2017 data center optimization progress 

information of 22 DCOI agencies, as reported on the IT Dashboard.11 We 

then compared the agencies’ optimization progress information to OMB’s 

fiscal year 2018 optimization targets, as documented in its August 2016 

memorandum.12

To assess the reliability of agencies’ optimization progress information on 

OMB’s IT Dashboard, we reviewed the information for errors or missing 

data, compared agencies’ optimization progress information across 

multiple reporting quarters to identify any inconsistencies in agencies’

reported progress, and discussed with OMB and agency officials the 

steps they took to ensure the accuracy and reliability of the reported 

optimization progress. We determined that the data were sufficiently 

reliable to report on agencies’ optimization progress.

In addition, to assess the reliability of the DCOI strategic plans, we 

reviewed agencies’ documentation to identify any missing or erroneous 

data. We also compared the planned data center optimization milestones 

contained in agencies’ documentation against current optimization 

 10GAO, Data Center Consolidation: Agencies Making Progress, but Planned Savings 

Goals Need to Be Established [Reissued on March 4, 2016], GAO-16-323 (Washington, 

D.C.: Mar. 3, 2016)

11Two agencies—the Departments of Education and Housing and Urban Development—

report that they do not have any agency-owned data centers and, therefore, do not have a 

basis to measure and report on optimization progress.

12OMB, Memorandum M-16-19.
Page 5 GAO-18-264 Data Center Optimization 

progress information obtained from the IT Dashboard; we then discussed

any discrepancies or potential errors that we identified with agency 

officials to determine the causes or request additional information. As a 

result of these efforts, we determined that the agencies’ strategic plan 

information was sufficiently reliable for reporting on plans to meet or not 

meet OMB’s fiscal year 2018 optimization targets. Appendix I provides 

greater details regarding our objectives, scope, and methodology.

We conducted this performance audit from July 2017 to May 2018 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

The federal government’s increasing demand for IT has led to an 

increase in the number of federal data centers and a corresponding 

increase in operational costs. According to OMB, the federal government 

had 432 data centers in 1998, 2,094 in July 2010, and 9,995 in August 

2016.13

Operating such a large number of centers has been, and continues to be, 

a significant cost to the federal government.14 For example, in 2007, the 

Environmental Protection Agency (EPA) estimated that the electricity 

costs to operate federal servers and data centers across the government 

were about $450 million annually. According to the Department of Energy 

(Energy), a typical data center has 100 to 200 times the energy use 

intensity of a commercial building. In 2009, OMB reported that server 

utilization rates as low as 5 percent across the federal government’s 

estimated 150,000 servers were a factor driving the need to establish a 

coordinated, government-wide effort to improve the efficiency, 

 13Between 1998 and 2016, OMB used several different definitions of a data center, which 

contributed to the increase in the number of reported centers. This issue is discussed in 

more detail later in this report.

14Costs include hardware, software, real estate, electricity, and heating and cooling.

Background
Page 6 GAO-18-264 Data Center Optimization 

performance, and environmental footprint of federal data center 

activities.15

Concerned about the size of the federal data center inventory and the 

potential to improve the efficiency, performance, and the environmental 

footprint of federal data center activities, OMB’s Federal CIO established 

FDCCI in February 2010. This initiative’s four high-level goals were to 

reduce the overall energy and real estate footprint of government data 

centers; reduce the cost of data center hardware, software, and 

operations; increase the overall IT security posture of the government; 

and shift IT investments to more efficient computing platforms and 

technologies.

In February 2010, OMB required all of the agencies participating in the 

FDCCI to submit a data center inventory and a consolidation plan.16 In 

October 2010, OMB also clarified the definition of a data center and noted 

that, for the purposes of FDCCI, a data center was to be defined as any 

room used for the purpose of processing or storing data that is larger than 

500 square feet and meets stringent availability requirements. Under this 

definition, OMB reported that agencies had identified 2,094 data centers 

as of July 2010.

However, in 2011, the Federal CIO expanded the definition to include a 

facility of any size and OMB published its revised definition in March 

2012.17 Based on the revised definition, OMB estimated that there were a 

total of 3,133 federal data centers in December 2011. In addition, its goal 

was to consolidate approximately 40 percent, or 1,253 of these data 

centers, for a savings of approximately $3 billion by the end of 2015. 

Figure 1 provides an example of data center server racks at the Social 

Security Administration’s (SSA) National Support Center.

 15OMB, Inventory of Federal Data Center Activity, Budget Data Request No. 09-41 

(Washington, D.C.: Aug. 10, 2009).

16The same 24 agencies participated in the FDCCI and DCOI. 

17OMB, Implementation Guidance for the Federal Data Center Consolidation Initiative

(Washington, D.C.: Mar. 19, 2012).

OMB and the Federal CIO 

Established FDCCI
Page 7 GAO-18-264 Data Center Optimization 

Figure 1: Example of Data Center Server Racks at the Social Security 

Administration’s National Support Center

The number of federal data centers reported by agencies has continued 

to grow since 2011. In March 2016, we reported that agencies had 

collectively identified a total of 10,584 data centers as of November 

2015—an increase of about 7,500 data centers compared to OMB’s 

October 2011 estimate.18 According to the Federal CIO, the increase in 

the number of data centers was primarily due to the expanded definition 

of a data center and improved inventory reporting by the agencies.

Further, OMB placed greater emphasis on data center optimization when 

it issued memorandum M-13-09 in March 2013.19 Specifically, OMB 

stated that, to more effectively measure the efficiency of an agency’s data 

center assets, agencies would also be measured by the extent to which 

their primary data centers are optimized for total cost of ownership by 

 18GAO-16-323.

19OMB, Memorandum M-13-09.
Page 8 GAO-18-264 Data Center Optimization 

incorporating metrics for data center energy, facility, labor, and storage, 

among other things. Subsequently, in May 2014, OMB issued 

memorandum M-14-08, which established a set of data center 

optimization metrics to measure agency progress, along with target 

values for each metric.20 All agencies were expected to achieve the target 

values by the end of fiscal year 2015.

Recognizing the importance of reforming the government-wide 

management of IT, Congress enacted FITARA in December 2014. 

Among other things, the law required agencies to:21

• Submit to OMB a comprehensive inventory of the data centers owned, 

operated, or maintained by or on behalf of the agency.

• Submit, by the end of fiscal year 2016, a multi-year strategy to 

achieve the consolidation and optimization of the agency’s data 

centers.22 The strategy was to include performance metrics that were 

consistent with the government-wide data center consolidation and 

optimization metrics.

• Report progress towards meeting government-wide data center 

consolidation and optimization metrics on a quarterly basis to OMB’s 

Administrator of the Office of Electronic Government.

In addition, according to FITARA, the Office of Electronic Government at 

OMB was to:

• Establish metrics applicable to the consolidation and optimization of 

data centers (including server efficiency), ensure that agencies’

progress toward meeting government-wide data center consolidation 

and optimization metrics is made publicly available, review agencies’

inventories and strategies to determine whether they are 

 20OMB, Fiscal Year 2014 PortfolioStat, Memorandum M-14-08 (Washington, D.C.: May 7, 

2014).

21Pub. L. No. 113-291 § 834, 128 Stat. 3444 – 3448 (44 U.S.C. 3601 note). Unless 

otherwise noted, these requirements apply to the 24 agencies specified in section 834 

(corresponding to those agencies covered by the Chief Financial Officers Act of 1990. 31 

U.S.C. § 901(b)).

22In lieu of submitting a data center inventory and strategy, the Department of Defense 

may submit this information as part of a defense-wide plan and report on cost savings, as 

required under §§ 2867(b)(2) and 2867(d) of the National Defense Authorization Act for 

Fiscal Year 2012 (10 U.S.C. § 2223a note).

IT Acquisition Reform Law 

Enhanced Data Center 

Consolidation and 

Optimization Efforts
Page 9 GAO-18-264 Data Center Optimization 

comprehensive and complete, and monitor the implementation of 

each agency’s strategy.

• Develop and make publicly available not later than December 19,

2015, a goal broken down by year, for the amount of planned cost 

savings and optimization improvements to be achieved through 

FDCCI and, for each year thereafter until October 1, 2020, compare 

reported cost savings and optimization improvements against those 

goals.23

In August 2016, OMB issued memorandum M-16-19, which established 

DCOI and included guidance on how to implement the data center 

consolidation and optimization provisions of FITARA.24 Among other 

things, the guidance required agencies to consolidate inefficient 

infrastructure, optimize existing facilities, improve their security posture, 

and achieve cost savings. For example, each agency was required to 

maintain a complete inventory of all data center facilities owned, 

operated, or maintained by or on its behalf, and measure progress toward 

defined optimization performance metrics on a quarterly basis as part of 

its data center inventory submission.

OMB’s memorandum also directed each agency to develop a DCOI 

strategic plan that defined its data center strategy for fiscal years 2016 

through 2018. Among other things, this strategy was to include a timeline 

for agency consolidation and optimization activities with an emphasis on 

cost savings and optimization performance benchmarks that the agency 

could achieve between fiscal years 2016 and 2018. For example, each 

agency was required to develop cost savings targets due to consolidation 

and optimization actions and report any realized cost savings. OMB 

required each agency to publicly post its DCOI strategic plan to its 

agency-owned digital strategy website by September 30, 2016, and to 

post subsequent strategic plan updates by April 14, 2017 and April 13, 

2018.

Further, the memorandum stated that OMB was to maintain a public 

dashboard (referred to as the IT Dashboard) to display government-wide 

and agency-specific progress in areas such as planned and achieved 

 23As mentioned previously, the FITARA Enhancement Act of 2017 extended FITARA’s 

data center consolidation and optimization provisions until October 1, 2020. Pub. L. No. 

115-88, 131 Stat. 1278 (Nov. 21, 2017).

24OMB, Memorandum M-16-19.

OMB Established DCOI
Page 10 GAO-18-264 Data Center Optimization 

data center closures, consolidation-related cost savings, and data center 

optimization performance information. In this regard, OMB began 

including data center consolidation and optimization progress information 

on the IT Dashboard in August 2016.

OMB’s memorandum also provided new guidance for the classification of 

a physical data center, expanding the definition of a data center. 

According to the revised definition, a room with at least one server that 

provides services (whether in a production, test, staging, development, or 

any other environment) should be considered a data center, while a room 

containing only print servers, routing equipment, switches, security 

devices (such as firewalls), or other telecommunication components, was 

not to be considered a data center.25

In light of this new definition, OMB directed each agency to perform a 

comprehensive review of its data centers and maintain a complete and 

updated data center inventory. Further, OMB directed each agency to 

categorize each of its data centers as either a tiered data center or a nontiered data center. OMB’s memorandum defined a tiered data center as 

one that uses each of the following:

• a separate physical space for IT infrastructure;

• an uninterruptible power supply;

• a dedicated cooling system or zone; and

• a backup power generator for a prolonged power outage.

According to the memorandum, all other data centers are to be 

considered non-tiered.26

Moreover, OMB guidance included a series of performance metrics in the 

areas of data center closures, cost savings, and optimization progress.

• Data center closures: Agencies are expected to close at least 25 

percent of tiered data centers government-wide, excluding those 

approved as inter-agency shared services providers, by the end of 

 25OMB, Memorandum M-16-19.

26The term “tiered” and its definition are derived by OMB from the Uptime Institute’s Tier 

Classification System. However, OMB notes that no specific certification is required in 

order for a data center to be considered tiered by OMB.
Page 11 GAO-18-264 Data Center Optimization 

fiscal year 2018.27 Further, agencies are to close at least 60 percent 

of non-tiered data centers government-wide by the end of fiscal year 

2018. OMB’s guidance further notes that, in the long term, all 

agencies should continually strive to close all non-tiered data centers, 

noting that server rooms and closets pose security risks and 

management challenges and are an inefficient use of resources.

• Cost savings: Agencies are expected to reduce government-wide 

annual costs attributable to physical data centers by at least 25 

percent, resulting in savings of at least $2.7 billion for fiscal years 

2016 through 2018.28

• Data center optimization: Agencies are expected to measure progress 

against a series of new data center performance metrics29 in the 

areas of server utilization, energy metering, power usage, facility 

utilization, and virtualization.30 Further, OMB’s guidance established 

target values for each metric that agencies are to achieve by the end 

of fiscal year 2018.

OMB’s guidance further noted that agency progress against these 

performance metrics is to be measured by OMB on a quarterly basis, 

using agencies’ data center inventory submissions and OMB-defined 

closures, cost savings, and optimization targets.

 27For more information about shared services, see OMB, Federal Information Technology 

Shared Services Strategy (Washington, D.C.: May 2, 2012). 

28OMB established a goal of $2.7 billion in Memorandum M-16-19. Subsequently, OMB 

increased the goal to $2.74 billion when it published agency-specific targets on the IT 

Dashboard.

29These metrics supersede OMB’s previous set of optimization metrics established in 

2014. 

30Virtualization is a technology that allows multiple software-based machines with different 

operating systems to run in isolation, side-by-side, on the same physical machine.
Page 12 GAO-18-264 Data Center Optimization 

Since the enactment of FITARA in December 2014, we have annually 

reviewed and verified the quality and completeness of each covered 

agency’s inventory and DCOI strategy. We have also published reports 

documenting the findings from each of these reviews.31 In addition, we 

have examined and reported on agencies’ efforts to optimize their data 

centers, as well as the challenges encountered and successes 

achieved.32

In a report that we issued in March 2016, we noted that agencies had 

reported significant data center closures—totaling more than 3,100 

through fiscal year 2015—with the Departments of Agriculture 

(Agriculture), Defense (Defense), the Interior (Interior), and the Treasury 

(Treasury) accounting for 84 percent of the total.33 Although agencies fell 

short of OMB’s fiscal year 2015 consolidation goal, their plans identified 

about 2,100 additional centers planned for closure through fiscal year 

2019.

Agencies also reported significant consolidation cost savings and 

avoidances—totaling about $2.8 billion through fiscal year 2015, and 

expected to increase to over $8.0 billion in future years. The Departments 

of Commerce (Commerce), Defense, Homeland Security (DHS), 

Transportation (Transportation), and the Treasury accounted for 96 

percent of the total planned savings. However, we pointed out that many 

agencies lacked complete cost savings goals for the next several years 

despite having closures planned.

In addition, we reported that 22 agencies had made limited progress 

against OMB’s fiscal year 2015 data center optimization performance 

metrics, such as the utilization of data center facilities. Accordingly, we 

recommended that the agencies take actions to complete their cost 

savings targets and improve optimization progress. Of the 24 agencies to 

which we made recommendations, 14 agreed with our recommendations, 

4 did not state whether they agreed or disagreed, and 6 stated that they 

 31GAO-16-323 and Data Center Optimization: Agencies Need to Complete Plans to 

Address Inconsistencies in Reported Savings, GAO-17-388 (Washington, D.C.: May 18, 

2017).

32GAO, Data Center Optimization: Agencies Need to Address Challenges and Improve 

Progress to Achieve Cost Savings Goal, GAO-17-448 (Washington, D.C.: Aug. 15, 2017).

33GAO-16-323. 

Agencies Have Taken 

Limited Action to Address 

GAO Recommendations 

from Prior Reports on 

Agencies’ Consolidation 

and Optimization Efforts
Page 13 GAO-18-264 Data Center Optimization 

had no comments. As of March 2018, 26 of the 32 recommendations from 

this report had yet to be fully addressed.

In May 2017, we reported that the agencies continued to report significant 

data center closures—totaling more than 4,300 through August 2016—

with Agriculture, Defense, Interior, and the Treasury accounting for 84 

percent of the total.34 The agencies’ plans for 2016 had identified more 

than 1,200 additional centers planned for closure through fiscal year 

2019.

Agencies also reported significant consolidation and optimization cost 

savings and avoidances, which totaled about $2.3 billion through August 

2016. However, reductions in the amount of achieved savings reported to 

OMB, particularly by the Treasury, resulted in a net decrease of more 

than $400 million in these savings, compared to amounts we previously 

reported in 2015.

Further, our report noted that, as of December 2016, agencies’ total 

planned cost savings of about $656 million were more than $3.3 billion 

less, compared to the amounts that we reported in 2015, and more than 

$2 billion less than OMB’s fiscal year 2018 cost savings goal of $2.7 

billion. This reduction in planned savings was the result of eight agencies 

reporting less in planned cost savings and avoidances in their DCOI 

strategic plans compared to the savings amounts previously reported to 

us in November 2015. The reduction also reflected the absence of cost 

savings information for one agency (Defense) that did not submit its 

strategic plan in time for our review.

In addition, our May 2017 report identified weaknesses in agencies’ DCOI 

strategic plans.35 Of the 23 agencies that had submitted their strategic 

plans at the time of our review, 7 agencies—Agriculture, the Department 

of Education (Education), DHS, and the Department of Housing and 

Urban Development (HUD); the General Services Administration (GSA); 

the National Science Foundation (NSF); and the Office of Personnel 

Management (OPM)—had addressed all five required elements of a 

strategic plan, as identified by OMB (such as providing information related 

to data center closures and cost savings metrics). The remaining 16 

agencies that submitted their plans either partially met or did not meet the 

 34GAO-17-388. 

35GAO-17-388. 
Page 14 GAO-18-264 Data Center Optimization 

requirements. We also pointed out that there were inconsistencies in the 

reporting of cost savings in the strategic plans of 11 agencies.

Given these findings, we recommended that OMB improve its oversight of 

agencies’ DCOI strategic plans and their reporting of cost savings and 

avoidances. We also recommended that 16 agencies and Defense (which 

did not submit a plan in time for our review) complete the missing 

elements in their strategic plans, and that 11 agencies ensure the 

reporting of consistent cost savings and avoidance information to OMB. 

Of the 25 agencies (including OMB) to which we made recommendations, 

12 agreed with our recommendations, 2 disagreed, and 11 did not state 

whether they agreed or disagreed. As of March 2018, 29 of the 30 

recommendations had not been fully addressed.

In a subsequent report that we issued in August 2017, we noted that 22 of 

the 24 agencies required to participate in the OMB DCOI collectively had 

reported limited progress against OMB’s fiscal year 2018 performance 

targets for the five optimization metrics. The 2 remaining agencies, 

Education and HUD, did not have agency-owned data centers and, 

therefore, did not have a basis to report on progress.36 Specifically, for 

each of the five targets, no more than 5 agencies reported that they had 

met or exceeded that specific target. This limited progress against OMB’s 

optimization targets was due, in part, to agencies not fully addressing our 

prior recommendations in this area.

In addition, we noted in the report that most agencies had not yet 

implemented automated monitoring tools to measure server utilization, as 

required by the end of fiscal year 2018. Specifically, 4 agencies reported 

that they had fully implemented such tools, 18 reported that they had not 

yet done so, and 2 did not have a basis to report on progress because 

they did not have agency-owned data centers.

We also noted that, although federal standards emphasize the need to 

establish plans to help ensure goals are met, none of the 18 agencies 

had fully documented plans for implementing automated monitoring tools. 

Accordingly, we recommended that OMB formally document a 

requirement for agencies to include plans, as part of existing OMB 

reporting mechanisms, to implement automated monitoring tools at their 

agency-owned data centers. We also recommended that the 18 agencies 

 36GAO-17-448.
Page 15 GAO-18-264 Data Center Optimization 

without fully documented plans take action, within existing OMB reporting 

mechanisms, to complete plans describing how they intend to achieve 

OMB’s requirement to implement automated monitoring tools at all 

agency-owned data centers by the end of fiscal year 2018. Of the 19 

agencies (including OMB) to which we made recommendations, 10 

agreed with our recommendations, 3 partially agreed, and 6 did not state 

whether they agreed or disagreed. As of March 2018, none of the 19 

recommendations had been fully addressed.

As previously mentioned, in August 2016, OMB established a goal to 

close at least 25 percent of each agency’s tiered data centers and at least 

60 percent of each agency’s non-tiered data centers by the end of fiscal 

year 2018.37 Related to doing so, agencies’ August 2016 inventories 

reported a total of 9,995 data centers and, in August 2017, 14 agencies 

reported an additional 2,067 facilities, for a total of 12,062 data centers.38

Based on this revised inventory, agencies will need to close 6,306 data 

centers (665 tiered and 5,641 non-tiered) to meet OMB’s goals by the end 

of fiscal year 2018.

Toward this end, the 24 agencies participating in DCOI collectively have 

made progress on their data center closure efforts. Specifically, as of 

August 2017, the agencies reported that they had closed 5,805 tiered and 

non-tiered centers (48 percent). Figure 2 provides a summary of the total 

number of federal data centers and closures reported from 1998 to 

August 2017.

 37OMB, Memorandum M-16-19.

38The overall net increase was primarily from Treasury’s Internal Revenue Service. 

Discussions between OMB and Treasury officials resulted in Treasury recategorizing

certain telecommunications closets to be compliant with OMB’s current guidance. 

Consequently, the department added 1,589 data centers to its 2017 inventory.

Agencies Report 

Mixed Results 

Relative to Achieving 

OMB’s Data Center 

Closure Targets
Page 16 GAO-18-264 Data Center Optimization 

Figure 2: Total Number of Federal Data Centers and Closures, as Reported by Agencies and OMB, from 1998 to August 2017

a

OMB did not publicly report the total number of data centers in 2012 and expanded its definition of a 

data center in March 2012, which partially accounts for the sharp increase in the number of data 

centers.

b

OMB again revised the definition of a data center in August 2016.

Figure 3 provides a further breakdown of agencies’ data center 

inventories, as of August 2017, in terms of the total number of data 

centers that were closed, planned for closure, or not planned for closure.
Page 17 GAO-18-264 Data Center Optimization 

Figure 3: Total Number of Federal Agency Data Centers that Were Closed, Planned for Closure, or Not Planned for Closure, as 

of August 2017

Nevertheless, while the agencies collectively had made progress toward 

OMB’s closure goals, the 24 agencies’ individual reported progress and 

plans showed mixed results when compared with OMB’s goal for each 

agency to close at least 25 percent of tiered data centers and at least 60 

percent of non-tiered centers. Specifically, as of August 2017, 13 

agencies reported that they had already met the goal of closing 25 

percent of their tiered data centers, another 4 agencies reported that they 

plan to meet the goal by the end of fiscal year 2018, and 5 agencies 

reported that they do not currently plan to meet the goal.39

Further, as of August 2017, 7 agencies reported having already met the 

goal for closing 60 percent of their non-tiered centers, 6 agencies 

reported that they planned to meet the goal by the end of fiscal year 

2018, and 10 agencies reported that they did not plan to meet the goal.40

Table 1 displays a breakdown of the number of reported tiered and nontiered data centers and completed and planned closures by agency, as of 

August 2017.

 39Two agencies—Education and NSF— did not report any tiered data centers in their 

inventories. 

40SSA did not report any non-tiered data centers. 
Page 18 GAO-18-264 Data Center Optimization 

Table 1: Number of Reported Tiered and Non-tiered Federal Agency Data Centers with Completed and Planned Closures 

through Fiscal Year 2018, as of August 2017

Tiered Non-tiered

Agency 

Total 

data 

centers 

Closed 

through 

August 

2017 

Additional 

planned 

closures 

through 

fiscal year 

2018 

Percent 

of closed 

and 

planned 

closures/ 

total 

Total 

data 

centers 

Closed 

through 

August 

2017 

Additional 

planned 

closures 

through 

fiscal year 

2018 

Percent of 

closed 

and 

planned 

closures/ 

total 

Department of Agriculture 35 19 9 80 2,237 2,214 16 100a 

Department of Commerce 244 27 1 11 134 56 4 45 

Department of Defense 1,266 200 258 36 2,357 634 864 64 

Department of Education 0 0 0 0 2 2 0 100 

Department of Energy 109 18 5 21 180 66 6 40 

Department of Health and Human Services 95 17 6 24 283 60 6 23 

Department of Homeland Security 38 12 1 34 231 33 3 16 

Department of HUD 4 1 1 50 63 11 52 100 

Department of the Interior 93 26 0 28 328 161 0 49 

Department of Justice 41 20 8 68 69 57 4 88 

Department of Labor 10 2 6 80 76 30 46 100 

Department of State 24 7 4 46 366 0 0 0 

Department of Transportation 222 10 1 5 231 161 1 70 

Department of the Treasury 60 25 3 47 2,401 1,688 37 72 

Department of Veterans Affairs 292 21 5 9 123 18 5 19 

Environmental Protection Agency 5 1 1 40 78 35 15 64 

General Services Administration 42 33 2 83 92 80 2 89 

National Aeronautical and Space 

Administration

55 31 4 64 4 4 0 100 

National Science Foundation 0 0 0 0 2 0 1 50 

Nuclear Regulatory Commission 5 3 0 60 14 5 3 57 

Office of Personnel Management 6 3 1 67 2 1 1 100 

Small Business Administration 9 0 4 44 43 8 30 88 

Social Security Administration 3 1 0 33 0 0 0 0 

U.S. Agency for International Development 2 2 0 100 86 2 0 2 

Total 2,660 479 320 30% 9,402 5,326 1,096 68% 

Source: GAO analysis of agency data. | GAO-18-264

Note: Light grey highlighting indicates agencies that, as of August 2017, had met—or plan to meet—

their September 2018 closure target. Dark grey highlighting indicates agencies that, as of August 

2017, do not have plans to meet their September 2018 closure target.
Page 19 GAO-18-264 Data Center Optimization 

a

The Department of Agriculture plans to close 99.7 percent of its non-tiered data centers; due to 

rounding, this appears as 100 percent.

As shown in the table, the reported closures of Agriculture (2,233 data 

centers), Defense (834), and Treasury (1,713) together accounted for 

4,780 (or 82 percent) of the 5,805 data center closures. However, no 

other agency accounted for more than 187 (or 3 percent) of those 

closures. In addition, the remaining 1,416 planned closures are to be 

carried out across 20 agencies. Further, among the agencies, 7 reported 

that they do not plan to meet one of their tiered or non-tiered closure 

goals, and 4 reported that they do not plan to meet either of the goals by 

the end of fiscal year 2018.

Officials from these 11 agencies that do not plan to meet one or both of 

their goals provided various reasons for why they currently do not plan to 

do so. For example, officials in USAID’s Office of the Chief Information 

Officer stated that their agency had reported a number of server closets in 

overseas locations as non-tiered data centers to comply with OMB’s data 

center definition provided in its August 2016 guidance. The officials said 

that, as long as USAID maintains those locations, the agency needs the 

services provided in those server closets and will not be able to close 

them to meet OMB’s goal. However, the officials also said that the agency 

is exploring ways to replace the server closets using cloud services.

Several agencies that viewed their goals as unattainable indicated that 

they were seeking revised closure goals. Specifically, officials from 

Interior’s Office of the Chief Information Officer stated that a number of 

the department’s non-tiered data centers were either mission critical or 

not cost effective to close. Thus, the officials said Interior was working 

with OMB to establish a revised closure goal. Similarly, Transportation’s 

Director for IT Compliance stated that the department was working with 

OMB to establish a revised closure goal. The department reported having 

186 tiered data centers in Federal Aviation Administration control towers 

that it believes should be excluded from its count of data centers when 

OMB sets the department’s goal for closures.

Further, our analysis determined that it may not always be realistic for an 

agency to meet OMB’s targets. For example, NSF, which does not have 

any tiered data centers, reported that it plans to close one (50 percent) of 

its two non-tiered data centers. However, the only way to meet OMB’s 60 

percent threshold would be for the agency to close both of its non-tiered 

centers, which may not be an option, depending on the services provided 

by that one remaining center.
Page 20 GAO-18-264 Data Center Optimization 

Although OMB’s stated time frame for closing data centers currently 

remains as the end of fiscal year 2018, the recent extension of FITARA’s 

data center consolidation and optimization provisions through fiscal year 

2020 provides agencies additional time to work toward meeting OMB’s 

closure targets. However, in some cases, these efforts may require 

significant restructuring of an agency’s business operations, or, as 

reported by several agencies, a revision of OMB’s goals in consideration 

of the agencies’ specific needs.

Given that agencies had been working toward OMB’s DCOI goals for 

approximately one year as of August 2017, and because the extension of 

FITARA’s data center provisions pushes the sunset for these efforts out 

through fiscal year 2020, we are not making any related 

recommendations to those agencies that have not met the closure goals 

at this time. We plan to continue to monitor the agencies’ progress toward 

meeting the goals in our future work.

Since 2013, federal agencies have been required to report on data center 

cost savings. In this regard, OMB provided guidance regarding how 

agencies were to report cost savings and avoidances.41 Specifically, it 

required agencies to report both data center consolidation cost savings 

and avoidances, among other areas, as part of a quarterly data collection 

process known as the integrated data collection. FITARA also called for 

each agency to submit a multi-year strategy for achieving the 

consolidation and optimization of data centers that includes year-by-year 

calculations of investment and cost savings through fiscal year 2018, 

which has now been extended to 2020.

In addition, in August 2016, OMB M-16-19 provided guidance on how 

agencies should implement the requirements of FITARA. Specifically, 

agencies were to develop a strategic plan that included information on 

historical cost savings and avoidances due to data center consolidation 

and optimization through fiscal year 2015. This guidance stated that 

agency strategic plans were also to include year-by-year calculations of 

target and actual agency-wide spending and cost savings on data centers 

from fiscal years 2016 through 2018. Further, the guidance established a 

 41OMB, Memorandum M-13-09. OMB defines cost savings as a reduction in actual 

expenditures below the projected level of costs to achieve a specific objective and defines 

cost avoidances as results from an action taken in the immediate time frame that will 

decrease costs in the future.

Agencies’ Planned 

Savings Are Not 

Expected to Meet 

OMB’s Goal
Page 21 GAO-18-264 Data Center Optimization 

DCOI government-wide cost savings goal of $2.7 billion for all federal 

agencies to achieve from fiscal years 2016 through 2018. This overall 

goal is then broken down into agency-specific targets on the IT 

Dashboard.

As of August 2017, 20 agencies had reported through the integrated data 

collection that they had achieved $1.04 billion in cost savings for fiscal 

years 2016 and 2017, while 4 agencies reported that they had not 

achieved any savings. Further, the 20 agencies’ DCOI strategic plans 

identified an additional $0.58 billion, for a total of $1.62 billion in planned 

savings from fiscal years 2016 through 2018. Nevertheless, this total is 

about $1.12 billion below OMB’s goal of $2.7 billion for DCOI savings. 

Figure 4 provides a comparison of the 24 agencies’ total reported savings 

for fiscal years 2016 and 2017, and the planned savings through 2018, 

against OMB’s DCOI savings goal for fiscal years 2016 through 2018.

Figure 4: Agencies’ Reported Achieved and Planned Data Center Optimization Initiative Savings against OMB’s Goal for 

Fiscal Years 2016 through 2018, as of August 2017

Among the 24 participating DCOI agencies that reported achieving about 

$1.04 billion in savings, Commerce ($594.28 million), Defense ($141.36 

million), and DHS ($106.51 million) were responsible for approximately 

$842 million (about 81 percent) of that total. No other agency reported 

saving more than $54.40 million. Table 2 provides specific data related to 

each agency’s planned and achieved savings for fiscal years 2016 and 

2017, as of August 2017.
Page 22 GAO-18-264 Data Center Optimization 

Table 2: Agencies’ Reported Planned and Achieved Data Center Optimization 

Initiative Savings for Fiscal Years 2016 and 2017, as of August 2017 (dollars in 

millions)

Agency Total 

planned for 

2016 and 

2017

Total 

achieved 

for 2016 

and 2017

Difference 

between 

planned and 

achieved

Department of Agriculture $8.72 $5.71 $(3.01)

Department of Commerce 792.18 594.28 (197.90)

Department of Defensea 141.30 141.36 0.06 

Department of Education 0.76 0.57 (0.19)

Department of Energy - 2.99 2.99 

Department of Health and Human Services 3.89 5.51 1.62 

Department of Homeland Security 246.17 106.51 (139.66)

Department of HUD - - -

Department of the Interior 8.80 4.39 (4.41)

Department of Justice 36.07 35.69 (0.38)

Department of Labor 0.08 10.03 9.95 

Department of State 27.90 54.40 26.50 

Department of Transportation 1.31 3.71 2.40 

Department of the Treasury 38.25 34.25 (4.00)

Department of Veterans Affairs 3.70 3.80 0.10 

Environmental Protection Agency - - -

General Services Administration 1.18 16.73 15.55 

National Aeronautical and Space 

Administration

17.72 12.68 (5.04)

National Science Foundation - - -

Nuclear Regulatory Commission - 2.00 2.00 

Office of Personnel Management 8.50 4.65 (3.85)

Small Business Administration 0.97 0.97 -

Social Security Administration 0.50 - (0.50)

U.S. Agency for International Development 3.73 2.51 (1.22)

Total 1,341.73 1,042.73 (299.00)

Legend: - = 0

Source: GAO analysis of agency data. | GAO-18-264

a

In a November 2014 response to our report, GAO-14-713, the Department of Defense noted that, in 

addition to the $2.6 billion in cost savings planned by fiscal year 2017, the department expected that 

figure to increase to $4.7 billion in future years as efficiencies are gained. Subsequently, the 

department changed its methodology for calculating cost savings and lowered its planned cost 

savings estimates accordingly.
Page 23 GAO-18-264 Data Center Optimization 

In addition, the 24 agencies reported that they have planned an additional 

$0.58 billion in DCOI cost savings (for a total of $1.62 billion) through 

fiscal year 2018. However, as noted earlier, this total is approximately 

$1.12 billion below OMB’s $2.7 billion goal for the initiative. Table 3 

provides a more detailed comparison between each agency’s planned 

savings, as reported in its DCOI strategic plan, and OMB’s agencyspecific targets, as reported on the IT Dashboard.

Table 3: Comparison of Office of Management and Budget (OMB) Targets, as Reported on the Information Technology (IT) 

Dashboard, and Agencies’ Planned Savings, as Reported in Data Center Optimization Initiative (DCOI) Strategic Plans, as of 

August 2017 (dollars in millions)

Agency OMB savings target 

from IT Dashboard

2016 through 2018 

planned savings from 

DCOI plan

Difference

Department of Agriculture $23.62 $13.93 $(9.69)

Department of Commerce 94.97 887.15 792.18 

Department of Defense 1,800 205.40 (1,594.60)

Department of Education - 1.00 1.00 

Department of Energy - - -

Department of Health and Human Services 77.84 11.67 (66.17)

Department of Homeland Security 154.94 254.70 99.76 

Department of HUD - - -

Department of the Interior 88.19 13.20 (74.99)

Department of Justice 65.86 46.96 (18.90)

Department of Labor 23.94 0.12 (23.82)

Department of State 17.07 72.40 55.33 

Department of Transportation 30.26 1.31 (28.95)

Department of the Treasury 86.16 51.69 (34.47)

Department of Veterans Affairs 66.04 3.70 (62.34)

Environmental Protection Agency - - -

General Services Administration 8.35 2.34 (6.01)

National Aeronautical and Space Administration 15.10 22.19 7.09 

National Science Foundation - - -

Nuclear Regulatory Commission 1.21 0.53 (0.68)

Office of Personnel Management 21.92 22.90 0.98 

Small Business Administration 0.86 2.07 1.21 

Social Security Administration 164.69 1.08 (163.62)

U.S. Agency for International Development - 3.73 3.73 
Page 24 GAO-18-264 Data Center Optimization 

Agency OMB savings target 

from IT Dashboard

2016 through 2018 

planned savings from 

DCOI plan

Difference

Total 2,741.02 1,618.06 (1,122.97)

Legend: - = 0

Source: GAO analysis of agency data. | GAO-18-264

Note: Totals may not add up due to rounding.

As shown in table 3, 6 agencies identified planned savings that are 

expected to meet or exceed their OMB targets, while 2 agencies that did 

not have an OMB target also identified planned savings. In contrast, 12

agencies reported that they are not currently planning to meet their

targets, and 4 agencies did not have a savings target and are not 

planning any savings.

These findings align with what we reported in March 2016, when we 

noted that 10 agencies had not established planned cost savings goals 

for fiscal years 2016 through 2018, even though they had closures 

planned during that time period.42 Accordingly, in that report, we 

recommended that these agencies complete their planned data center 

cost savings targets for fiscal years 2016 through 2018. Most of the 

agencies agreed with the recommendations or had no comments. 

Nonetheless, agencies continued to be challenged in identifying and 

reporting their cost savings. As of August 2017, 5 of the agencies had 

implemented our recommendations in this area.

In the absence of consistent and full reporting of fiscal years 2016 

through 2018 planned savings in agencies’ DCOI strategic plans, as 

required by FITARA and OMB, agencies’ total planned savings will likely 

continue to be understated. With less than a year for agencies to meet 

OMB’s current planned savings targets, we are re-emphasizing the need 

for agencies to implement our prior recommendations related to 

establishing and meeting their planned data center cost savings targets.

 42GAO-16-323.
Page 25 GAO-18-264 Data Center Optimization 

FITARA required OMB to establish metrics to measure the optimization of 

data centers, including server efficiency, and ensure that agencies’

progress toward meeting the metrics is made public. Pursuant to FITARA, 

OMB’s August 2016 memorandum established a set of five data center 

optimization metrics intended to measure agencies’ progress in the areas 

of server utilization and automated monitoring, energy metering, power 

usage effectiveness, facility utilization, and virtualization.43 According to 

OMB, while the server utilization and automated monitoring metric applies 

to agency-owned tiered and non-tiered data centers, the four remaining 

metrics apply only to agency-owned tiered centers.44

OMB’s memorandum also established a target value for each of the five 

metrics, which agencies are expected to achieve by the end of fiscal year 

2018. OMB measures agencies’ progress against the optimization targets 

using the agencies’ quarterly data center inventory submission and 

publicly reports this progress information on its IT Dashboard. Table 4 

provides a description of the five data center optimization metrics and 

target values.

 43OMB, Memorandum M-16-19. 

44While agencies can also report data centers as outsourced, co-located, or cloud 

provided in their inventories, OMB’s optimization metrics only apply to data centers 

identified as agency-owned.

Agencies Continue 

Reporting Limited 

Progress against 

OMB’s Data Center 

Optimization Metrics
Page 26 GAO-18-264 Data Center Optimization 

Table 4: The Office of Management and Budget (OMB) Data Center Optimization Metrics and Targets

Metrics Description Applicable agencyowned data centersTarget value (to be 

achieved by the end of 

fiscal year 2018)

Server utilization and 

automated monitoring

Percent of time busy, measured directly by 

continuous, automated monitoring software, 

discounted by the fraction of data centers fully 

equipped with automated monitoring. 

Tiered and non-tiered 

data centers

At least 65 percent

Energy metering Percent of total gross floor area in an agency’s 

tiered data center inventory located in tiered data 

centers that have power metering.

Tiered data centers 100 percent

Power usage 

effectiveness

Proportion of total data centers energy used by IT 

equipment.

Tiered data centers 1.5 or lower (1.4 or lower 

for new data centers)

Facility utilization Portion of total gross floor area in tiered data 

centers that is actively utilized for racks that 

contain IT equipment.

Tiered data centers At least 80 percent

Virtualization Ratio of operating systems to physical servers. Tiered data centers 4 or higher

Source: OMB. | GAO-18-264

As of August 2017, 22 of the 24 DCOI agencies continued to report 

limited progress in meeting OMB’s fiscal year 2018 data center 

optimization targets identified on the IT Dashboard. As noted earlier, the 

remaining 2 agencies—Education and HUD—reported that they did not 

have any agency-owned data centers in their inventory and, therefore, did 

not have a basis to measure and report optimization progress.

With regard to the data center optimization targets, the most progress 

was reported for the power usage effectiveness and virtualization metrics, 

with 5 and 6 agencies, respectively, reporting that they had met OMB’s 

targets. However, only 3 agencies or fewer reported meeting the energy 

metering, facility utilization, and server utilization and automated 

monitoring metrics. Figure 5 summarizes the 24 agencies’ progress in 

meeting each optimization target, as of August 2017.
Page 27 GAO-18-264 Data Center Optimization 

Figure 5: Agencies’ Progress against Office of Management and Budget (OMB) Data 

Center Optimization Targets, as of August 2017

a

Two agencies did not have any reported agency-owned data centers in their inventory and, 

therefore, did not have a basis to measure and report on optimization progress. In addition, two other 

agencies did not have any agency-owned tiered data centers and, therefore, did not have a basis to 

measure and report on four of the five metrics.
Page 28 GAO-18-264 Data Center Optimization 

As of August 2017, SSA and EPA reported the most progress among the 

22 agencies with a basis to report against OMB’s metrics targets—

meeting 4 and 3 targets, respectively. Six agencies met either one or two 

targets, and 14 agencies reported meeting none of the targets.

Further, of the 22 agencies, 9 were not able to report any progress 

against either the server utilization metric or power usage effectiveness 

metric, or both, because their data centers lacked the required monitoring 

tools to measure progress in these areas. OMB began requiring the 

implementation of these monitoring tools in August 2016; however, as of 

August 2017, these 9 agencies had not reported that they had 

implemented the tools at any data centers. The remaining 13 agencies 

reported that they had implemented the tools in at least one data center. 

Table 5 depicts the agencies and whether they met or did not meet each 

OMB target.

Table 5: Agency Data Center Optimization Performance Compared to Office of Management and Budget Optimization Targets, 

as of August 2017

Agency Server utilization 

and automated 

monitoringa

Energy 

metering

Power usage 

effectiveness

Facility 

utilization

Virtualization

Department of Agriculture ◌ ◌ ◌ ◌ ●

Department of Commerce ◌ ◌ ◌ ◌ ◌

Department of Defense ◌b ◌ ◌ ◌ ◌

Department of Educationc n/a n/a n/a n/a n/a

Department of Energy ◌ ◌ ◌ ◌ ◌

Department of Health and Human Services ◌ ◌ ◌ ◌ ◌

Department of Homeland Security ◌ ◌ ◌b ◌ ◌

Department of Housing and Urban 

Developmentc n/a n/a n/a n/a n/a

Department of the Interior ◌ ◌ ◌ ◌ ◌

Department of Justice ◌ ◌ ◌ ◌ ◌

Department of Labor ◌b ◌ ◌b ◌ ◌

Department of State ◌b ◌ ● ◌ ◌

Department of Transportation ◌b ◌ ◌ ◌ ◌

Department of the Treasury ◌b ◌ ◌ ◌ ◌

Department of Veterans Affairs ◌ ◌ ● ◌ ◌

Environmental Protection Agency ◌ ● ● ◌ ●

General Services Administration ◌ ● ◌ ◌ ●

National Aeronautics and Space Administration ◌ ◌ ◌ ◌ ◌
Page 29 GAO-18-264 Data Center Optimization 

Agency Server utilization 

and automated 

monitoringa

Energy 

metering

Power usage 

effectiveness

Facility 

utilization

Virtualization

National Science Foundationd ◌ n/a n/a n/a n/a

Nuclear Regulatory Commission ◌b ◌ ◌b ◌ ●

Office of Personnel Management ◌b ◌ ◌ ◌ ●

Small Business Administration ◌b ◌ ◌b ◌ ◌

Social Security Administration ◌e ● ● ● ●

U.S. Agency for International Developmentd ◌ n/a n/a n/a n/a

Legend:● = met—the agency’s reported progress met or exceeded OMB’s target for the related metric.

◌ = not met—the agency’s reported progress did not meet OMB’s target for the related metric.

n/a = not applicable.

Source: GAO analysis of data from OMB’s IT Dashboard. | GAO-18-264

a

For this metric only, OMB’s IT Dashboard displays agency progress for tiered and non-tiered data 

centers separately. However, for the purpose of this table, and to be consistent with how this metric 

was established in OMB’s August 2016 memorandum (M-16-19), we combined the progress 

information for tiered and non-tiered data centers into a single assessment.

b

According to OMB’s IT Dashboard, the agency did not report any progress made on this metric. This 

is due to the agency lacking the monitoring tools required to measure progress and report on this 

metric.

c

Agency did not have any reported agency-owned data centers in its inventory and, therefore, does 

not have a basis to measure and report on optimization progress.

d

Agency did not have any reported agency-owned tiered data centers in its inventory and, therefore, 

does not have a basis to measure and report on four of the five metrics.

e

Although not yet reported on OMB’s IT Dashboard, the Social Security Administration reported in its 

data center optimization strategic plan that it has met this metric.

Agencies’ limited progress against OMB’s optimization targets is due, in 

part, to not fully addressing our prior recommendations in this area. As 

discussed earlier, in March 2016, we reported45 on weaknesses in 

agencies’ data center optimization efforts, including that 22 agencies46 did 

 45GAO-16-323. 

46These 22 agencies are the Departments of Agriculture, Commerce, Defense, Education, 

Energy, Health and Human Services, Homeland Security, Housing and Urban 

Development, the Interior, Justice, Labor, State, Transportation, the Treasury, and 

Veterans Affairs; the Environmental Protection Agency, General Services Administration, 

National Aeronautics and Space Administration, Nuclear Regulatory Commission, Office 

of Personnel Management, Social Security Administration, and U.S. Agency for 

International Development.
Page 30 GAO-18-264 Data Center Optimization 

not meet OMB’s fiscal year 2015 optimization targets.47 We noted that 

this was partially due to the agencies facing challenges in optimizing their 

data centers, including their decentralized organizational structures that 

made consolidation and optimization difficult, and competing priorities for 

resources. In addition, consolidating certain data centers was problematic 

because the volume or type of information involved required the data 

center to be close in proximity to the users. Accordingly, we 

recommended that the agencies take action to improve optimization 

progress, to include addressing any identified challenges. Most agencies 

agreed with our recommendations or had no comments.

In response to our recommendation, 19 of the 22 agencies submitted 

documentation to us that described steps they intended to take to 

improve their data center optimization efforts. The planned steps included 

completion dates ranging between April 2016 and September 2019.48

Among the steps described by the agencies was developing internal 

scorecards to track and report on optimization progress, including 

progress at their component agencies, and launching more aggressive 

efforts to optimize data centers using virtualization and cloud computing 

solutions. However, as of February 2018, only 1 of the 22 agencies 

(Education) had fully addressed our recommendation.

In addition to reporting current optimization progress on the IT 

Dashboard, OMB requires agencies’ DCOI strategic plans to include, 

among other things, planned performance levels for fiscal years 2017 and 

2018 for each optimization metric.

However, according to the 24 agencies’ DCOI strategic plan information 

as of August 2017, most are not planning to meet OMB’s optimization 

targets by the end of fiscal year 2018. More specifically, of the 24 

agencies, only 4—Commerce, EPA, NSF, and USAID—reported plans to 

fully meet their applicable targets by the end of fiscal year 2018. Of the 

remaining agencies, 14 reported plans to meet some, but not all, of the 

targets; 4 reported that they do not plan to meet any targets; and—as 

already discussed—Education and HUD do not have a basis to report 

 47OMB established fiscal year 2015 targets for the first set of 11 optimization metrics that 

it established in May 2014. OMB subsequently revised the optimization metrics and issued 

a new set of five metrics in August 2016.

48The three agencies that did not submit documentation to us in response to our 

recommendation are the Departments of Agriculture, Education, and the Treasury.

Agencies’ Planned 

Optimization Progress Will 

Not Meet OMB’s Fiscal 

Year 2018 Targets
Page 31 GAO-18-264 Data Center Optimization 

planned optimization milestones because they do not report having any 

agency-owned data centers.49 Figure 6 summarizes agencies’ progress, 

as of August 2017, in meeting OMB’s optimization targets and planned 

progress to be achieved by September 2018.

 49USAID does not have any tiered data centers in its data center inventory. Therefore, the 

agency only has a basis to report on its plans to meet the one OMB optimization metric 

applicable to its non-tiered data centers (i.e., server utilization and automated monitoring).
Page 32 GAO-18-264 Data Center Optimization 

Figure 6: Agency-Reported Plans to Meet or Exceed the Office of Management and Budget’s (OMB) Data Center Optimization 

Targets

Note: The five boxes in each column represent OMB’s five optimization targets. The shaded areas 

identify agencies’ current and planned progress in meeting or exceeding OMB’s fiscal year 2018 

target for each metric.

a

Agency did not have any reported agency-owned data centers in its inventory and, therefore, did not 

have a basis to measure and report on optimization progress.

b

The National Science Foundation did not have any reported agency-owned tiered data centers in its 

inventory as of February 2017 and, therefore, did not have a basis to report on progress for four of 
Page 33 GAO-18-264 Data Center Optimization 

the five metrics. However, according to the agency’s April 2017 data center optimization strategic 

plan, it will have a basis to report on all five metrics in fiscal years 2017 and 2018.

c

The U.S. Agency for International Development did not have any reported agency-owned tiered data 

centers in its inventory and, therefore, did not have a basis to measure and report on four of the five 

metrics.

The limited progress made by agencies in optimizing their data centers, 

combined with the lack of established plans to improve progress, makes it 

unclear whether agencies will be able to achieve OMB’s optimization 

targets by the end of fiscal year 2018. Considering that OMB is expecting 

at least $2.7 billion in cost savings from agencies’ optimization efforts, the 

ability of agencies to meet the optimization targets will be critical to 

meeting this savings goal. However, only four agencies are planning to 

meet all of their applicable targets. If the remaining agencies take steps to 

implement the prior recommendations we have made in this area, it 

should increase the likelihood that DCOI can achieve the expected 

benefits of optimization and the resulting cost savings.

With less than a year remaining to meet OMB’s current targets for data 

center closures, cost savings, and optimization performance, the 24 

agencies participating in DCOI are reporting mixed results. Further, many 

agencies do not currently plan to meet all of the initiative’s goals by the 

September 2018 deadline, and a number of the agencies do not plan to 

meet any of the goals by the deadline. While a number of agencies have 

ongoing discussions with OMB to revise their closure targets, even with 

the recent extension of FITARA’s provisions on data center consolidation, 

savings, and performance metrics, it remains important for all agencies to 

continue their efforts to meet their goals.

In light of these agencies’ ongoing discussions with OMB, as well as our 

March 2016, May 2017, and August 2017 recommendations to the DCOI 

agencies concerning greater cost savings and improved optimization 

performance, we are not making any new recommendations in this report. 

However, we encourage the agencies to further their implementation of 

our prior recommendations.

Summary
Page 34 GAO-18-264 Data Center Optimization 

We requested comments on a draft of this report from OMB and the 24

other agencies that we reviewed. Of these, 5 agencies indicated that they 

agreed with our report and 20 acknowledged receiving the draft, but did 

not state whether they agreed or disagreed with the report. Agencies also 

offered various comments in support of the DCOI effort and actions taken 

to improve performance. Additionally, multiple agencies provided 

technical comments, which we have incorporated, as appropriate. 

The following five agencies agreed with our report:

• In emails received from Agriculture, Energy, VA, and NRC, the 

agencies agreed with the findings in the draft report. In written 

comments, SSA agreed with the draft report’s characterization of the 

agency’s DCOI efforts. SSA’s comments are reprinted in appendix II.

In addition, the following 20 agencies did not state whether they agreed or 

disagreed with the report and offered other comments: 

• In written comments, HUD and Transportation did not agree or 

disagree with the draft report. The departments’ comments are 

reprinted in appendices III and IV, respectively.

• In emails received from Commerce, Defense, Education, HHS, DHS, 

Justice, Labor, State, Treasury, EPA, NASA, NSF, OPM, SBA, and 

USAID, the agencies did not agree or disagree with the draft report.

• In written comments, Interior did not agree or disagree with the draft 

report’s findings. 

In addition, Interior provided a technical comment related to our 

calculation of the department’s achieved optimization savings for 

fiscal years 2016 and 2017. Specifically, the department provided 

updated savings figures for those years, which were based on 

Interior’s February 2018 quarterly submission to OMB.

However, the effective date of the updated data (February 2018) is 

outside the scope of our review, which relied solely on data reported 

in August 2017, as detailed in appendix I. While we recognize the 

department’s efforts to ensure that its past reporting is updated and as 

accurate as possible, our report only presents data as reported by 

agencies in August 2017. Consequently, we believe that the achieved 

cost savings for Interior accurately reflect what the department 

reported at the time of our review. The department’s comments are 

reprinted in appendix V.

Agency Comments 

and Our Evaluation
Page 35 GAO-18-264 Data Center Optimization 

• In an e-mail received on March 27, 2018, GSA did not agree or 

disagree with the draft report’s findings, and provided comments 

questioning the methodology we used to determine the number of 

data center closures. Specifically, GSA stated that, by including 

facilities that are now closed in our reporting of the federal 

government’s inventory of 12,062 data centers, our report gives the 

impression that the government is currently operating 12,062 open 

data centers. GSA also asserted that we should include in our counts 

facilities identified as using cloud computing providers.

In our report, we consistently state that the 12,062 data centers reflect 

the overall count of federal facilities identified since the launch of 

FDCCI in 2010. Further, we clearly identify the portion of the overall 

count of data centers that have since closed, or that are planned to 

close. By doing so, we provide a perspective of consolidation 

progress against the overall inventory over the past 8 years. 

Further, in regard to facilities using cloud providers, OMB’s August 

2016 guidance specifically states that such facilities are not to be 

considered data centers. As such, we did not include them in our 

totals. Accordingly, we maintain that our methodology is reasonable 

and continue to believe that our report accurately reports the status of 

federal data center consolidation efforts. 

GSA also suggested that we confirm with OMB our statement that the

FITARA Enhancement Act of 2017’s extension of the sunset provides 

agencies with an additional 2 years to accomplish the goals of DCOI. 

It is true that OMB has not issued guidance that extends the existing 

August 2018 DCOI deadlines. However, it is appropriate to note that 

the 2017 law extends the DCOI sunset date for the data center 

requirements that govern agencies.

Finally, GSA expressed concern that the data on optimization metrics 

that we drew from the IT Dashboard were not representative of the 

data provided by agencies in their August 2017 quarterly submissions 

to OMB. Further, GSA noted that such a selection of mixed data 

sources may present an incomplete and inaccurate picture and 

recommended that we note the date on which we accessed the IT 

Dashboard data, note that those data are frequently updated, and 

specify the date of other sources of data that we used for our analysis. 

In this report, we present an analysis of agencies’ progress against 

OMB’s data center optimization metrics, using data that were taken 

from the IT Dashboard. These data are posted to the Dashboard after 

being automatically calculated from agencies’ quarterly submissions 

to OMB. For the purposes of this report, we pulled the data from the 
Page 36 GAO-18-264 Data Center Optimization 

Dashboard a week after agencies’ August 2017 submissions were 

due to OMB. We then confirmed with the agencies that the data we 

collected were consistent with their August 2017 submissions to OMB 

and we labeled the data as being effective as of August 2017. 

We also analyzed other data from the agencies’ August 2017 

quarterly submissions, such as the status of data center closures and 

associated cost savings, and showed the effective date of our 

analysis as being August 2017. Based on these actions, which are 

also discussed in the description of the scope and methodology of our 

audit work found in app. I, we believe that our presentation of the data 

on optimization metrics is accurate, appropriately labeled, and 

correctly reflects the status of agency efforts at a specific moment in 

time.

• In an e-mail received on April 18, 2018, OMB did not agree or 

disagree with our report, but offered several comments on our 

findings. Specifically, OMB noted that some agencies may be 

reporting their planned savings incorrectly in their DCOI strategic 

plans in that agencies may be reporting annual savings figures 

instead of the required cumulative figures. OMB further described 

plans to update the IT Dashboard in the near future to more 

accurately reflect planned DCOI savings and added that, as a result, 

the data in our report likely will not match the data OMB intends to 

publish.

In conducting our analysis, on two occasions, we requested and 

received agencies’ validation of the results of our analysis of their 

planned cost savings. This process resulted in minor technical 

changes to some agencies’ data. We believe that our continued 

efforts to validate these data provide reasonable assurance as to the 

accuracy of the agency reported information that we analyzed. The 

implementation of OMB’s proposed changes to the IT Dashboard 

should provide yet another tool that can be used to improve how 

agencies report their cost savings—an important measure of DCOI’s 

success.

Additionally, the comments noted that GAO and OMB use a different 

basis to calculate agencies’ data center closure targets, with OMB 

using a baseline inventory from the beginning of DCOI in 2016, which 

does not recognize changes in agencies’ inventories since that point. 

OMB asserted that, because GAO’s calculations account for changes 

in agencies’ inventories since the beginning of DCOI, OMB’s targets 

differ from GAO’s calculations.
Page 37 GAO-18-264 Data Center Optimization 

We recognize the difference in approach for calculating data center 

closures that we used, as compared to that used by OMB. As detailed 

in our report, when DCOI was launched in August 2016, agencies 

reported an overall inventory of 9,995 data centers. One year later, in 

August 2017, agencies reported more than 2,000 additional facilities, 

for a total of 12,062 centers. 

Because OMB’s closure targets required agencies to close a certain 

percentage of their data centers, basing agency goals on an outdated 

inventory (that did not include the additional facilities) does not give a 

true picture of progress towards consolidation of data centers. 

Conversely, our methodology (detailed in app. I) takes into account 

inventory growth and uses the same percentage-based closure goals 

defined in OMB’s guidance. Our methodology presents a more 

accurate status of progress based on the growth of the inventory over 

time. Consequently, we believe that our methodology allows us to 

present a reasonable status of agencies’ progress against OMB’s 

goals. 

We are sending copies of this report to interested congressional 

committees, the Director of OMB, the secretaries and heads of the 

departments and agencies addressed in this report, and other interested 

parties. In addition, the report will be available at no charge on GAO’s 

website at http://www.gao.gov.

If you or your staffs have any questions about this report, please contact 

me at (202) 512-9286 or pownerd@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made major contributions to 

this report are listed in appendix VI.

David A. Powner

Director, Information Technology

Management Issues
Page 38 GAO-18-264 Data Center Optimization 

List of Committees

The Honorable John McCain

Chairman

The Honorable Jack Reed

Ranking Member

Committee on Armed Services

United States Senate

The Honorable Ron Johnson

Chairman

The Honorable Claire McCaskill

Ranking Member

Committee on Homeland Security and Governmental Affairs

United States Senate

The Honorable Mac Thornberry

Chairman

The Honorable Adam Smith

Ranking Member

Committee on Armed Services

House of Representatives

The Honorable Trey Gowdy

Chairman

The Honorable Elijah Cummings

Ranking Member

Committee on Oversight and Government Reform

House of Representatives
Appendix I: Objectives, Scope, and 

Methodology

Page 39 GAO-18-264 Data Center Optimization 

Our objectives for this engagement were to: (1) review agencies’ data 

center closures to date and plans for further closures, (2) evaluate 

agencies’ progress in achieving data center consolidation savings and 

describe plans for future savings, and (3) assess agencies’ progress 

against the Office of Management and Budget’s (OMB) data center 

optimization targets.

To address the first objective, we obtained and analyzed August 2017 

data center inventory documentation from the 24 departments and 

agencies (agencies)1 that participate in OMB’s Data Center Optimization 

Initiative (DCOI).2 To determine data center closures to date, we totaled 

agency reported closures from fiscal year 2010 through August 2017 and, 

to identify future closures, we totaled agency reported planned closures 

through fiscal year 2019. We also compared agencies’ completed and 

planned closures to OMB’s fiscal year 2018 consolidation goals, as 

documented in its August 2016 memorandum (M-16-19).3

To verify the quality, completeness, and reliability of the agencies’ data 

center inventories, we compared information on completed and planned 

data center closures to similar information reported on OMB’s Information 

Technology (IT) Dashboard—a public website that provides information 

on federal agencies’ major IT investments.4 We also checked for missing 

data and other errors, such as missing closure status information. 

Further, we obtained written responses from agency officials regarding 

actions taken to ensure the reliability of their inventory data, and

discussed any discrepancies or potential errors identified to determine the 

causes or to request additional information. We determined that the data 

 1

The 24 agencies that are required to participate in the Data Center Optimization Initiative 

are the Departments of Agriculture, Commerce, Defense, Education, Energy, Health and 

Human Services, Homeland Security, Housing and Urban Development, the Interior, 

Justice, Labor, State, Transportation, the Treasury, and Veterans Affairs; the 

Environmental Protection Agency, General Services Administration, National Aeronautics 

and Space Administration, National Science Foundation, Nuclear Regulatory Commission, 

Office of Personnel Management, Small Business Administration, Social Security 

Administration, and U.S. Agency for International Development.

2

Agencies’ data center optimization progress information displayed on OMB’s IT 

Dashboard is updated by OMB on a quarterly basis based on data center inventory data 

collected from agencies at the end of February, May, August, and November of each year.

3

OMB, Data Center Optimization Initiative (DCOI), Memorandum M-16-19 (Washington, 

D.C.: Aug. 1, 2016).

4

We did not physically visit agencies’ data center locations to verify their inventory totals.

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 40 GAO-18-264 Data Center Optimization 

were sufficiently complete and reliable to report on agencies’

consolidation progress and planned closures.

For the second objective, we obtained and analyzed cost savings and 

avoidance5 documentation from the 24 DCOI agencies. This 

documentation is required by OMB’s March 2013 and August 2016 

memorandums and included the agencies’ quarterly reports of cost 

savings and avoidances posted to their digital services websites and their 

DCOI strategic plans.6 To determine cost savings achieved, we totaled 

agencies’ reported savings and avoidances from the start of fiscal years

2012 through August 2017, as found in the August 2017 quarterly reports 

posted to the agencies’ digital services websites.7 To identify future 

planned savings, we totaled the agencies’ projected savings and 

avoidances from fiscal years 2016 through 2018, as reported in their 

DCOI strategic plans.

To assess the quality, completeness, and reliability of each agency’s data 

center consolidation cost savings information, we used the latest version 

of each agency’s update of the August 2017 quarterly cost savings report 

and DCOI strategic plan. We also reviewed the quarterly reports and 

DCOI strategic plans for missing data and other errors, such as missing 

cost-savings information. In addition, we compared agencies cost savings 

and avoidances with data from our most recent data center consolidation 

report.8 Further, we obtained written responses from agency officials 

regarding the steps taken to ensure the accuracy and reliability of their 

cost savings data. As a result, we determined that the data were 

 5

Beginning in March 2013, OMB required agencies to report on both cost savings and 

cost avoidances. OMB defines cost savings as a reduction in actual expenditures below 

the projected level of costs to achieve a specific objective and defines a cost avoidance as 

the result of an action taken in the immediate time frame that will decrease costs in the 

future.

6

OMB, Memorandum M-16-19 and Fiscal Year 2013 PortfolioStat Guidance: 

Strengthening Federal IT Portfolio Management, Memorandum M-13-09 (Washington, 

D.C.: Mar. 27, 2013).

7

OMB launched FDCCI in February 2010, at which point, agencies were required to begin 

closing data centers. However, current OMB guidance only requires agencies to report 

historical cost savings and avoidances realized since fiscal year 2012.

8

GAO, Data Center Consolidation: Agencies Making Progress, but Planned Savings 

Goals Need to Be Established [Reissued on March 4, 2016], GAO-16-323 (Washington, 

D.C.: Mar. 3, 2016)
Appendix I: Objectives, Scope, and 

Methodology

Page 41 GAO-18-264 Data Center Optimization 

sufficiently complete and reliable to report on agencies data center 

consolidation cost-savings information.

For our third objective, we analyzed the August 2017 data center 

optimization progress information of the 24 DCOI agencies. This progress 

information was obtained from the IT Dashboard—an OMB public website 

that provides information on federal agencies’ major IT investments. We 

then compared the agencies’ optimization progress information against 

OMB’s fiscal year 2018 optimization targets,9 as documented in its 

August 2016 memorandum.10 Although OMB’s memorandum establishes 

a single optimization target value for the server utilization and automated 

monitoring metric, the IT Dashboard displays agencies’ progress for 

tiered and non-tiered data centers separately. To report consistently with 

OMB’s implementation memorandum, we combined the progress 

information for tiered and non-tiered data centers into a single 

assessment in this report.

To assess the reliability of agencies’ optimization progress information on 

OMB’s IT Dashboard, we reviewed the information for errors or missing 

data, such as progress information that was not available for certain 

metrics. We also compared agencies’ optimization progress information 

across multiple reporting quarters to identify any inconsistencies in 

agencies’ reported progress. We discussed with staff from OMB’s Office 

of the Federal Chief Information Officer any discrepancies or potential 

errors identified to determine the causes.

In addition, we interviewed OMB officials to obtain additional information 

regarding the steps taken to ensure the reliability of and validate the 

optimization data on the Dashboard. Moreover, we obtained written 

responses from agency officials regarding the steps taken to ensure the 

accuracy and reliability of the reported optimization progress. We 

discussed with agency officials any discrepancies or potential errors 

identified during our reviews to determine the causes or request 

additional information. We determined that the data were sufficiently 

reliable to report on agencies’ optimization progress.

 9

Two agencies—the Departments of Education and Housing and Urban Development—do 

not have any agency-owned data centers and, therefore, do not have a basis to measure 

and report on optimization progress.

10OMB, Memorandum M-16-19.
Appendix I: Objectives, Scope, and 

Methodology

Page 42 GAO-18-264 Data Center Optimization 

To assess the reliability of the DCOI strategic plans, we reviewed 

agencies’ documentation to identify any missing data or errors. We also 

compared the planned data center optimization milestones in agencies’

documentation against current optimization progress information obtained 

from the IT Dashboard. In addition, we discussed with agency officials 

any discrepancies or potential errors identified during our reviews of the 

DCOI strategic plans to determine the causes or request additional 

information. As a result of these efforts, we determined that the agencies’

strategic plan information was sufficiently reliable for reporting on plans to 

meet or not meet OMB’s fiscal year 2018 optimization targets.

We conducted this performance audit from July 2017 to May 2018 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix II: Comments from the Social 

Security Administration

Page 43 GAO-18-264 Data Center Optimization 

Appendix II: Comments from the Social 

Security Administration
Appendix III: Comments from the Department 

of Housing and Urban Development

Page 44 GAO-18-264 Data Center Optimization 

Appendix III: Comments from the 

Department of Housing and Urban 

Development
Appendix III: Comments from the Department 

of Housing and Urban Development

Page 45 GAO-18-264 Data Center Optimization 
Appendix IV: Comments from the Department 

of Transportation

Page 46 GAO-18-264 Data Center Optimization 

Appendix IV: Comments from the 

Department of Transportation
Appendix V: Comments from the Department 

of the Interior

Page 47 GAO-18-264 Data Center Optimization 

Appendix V: Comments from the Department 

of the Interior
Appendix V: Comments from the Department 

of the Interior

Page 48 GAO-18-264 Data Center Optimization 
Appendix VI: GAO Contact and Staff 

Acknowledgments

Page 49 GAO-18-264 Data Center Optimization 

David A. Powner, (202) 512-9286 or pownerd@gao.gov

In addition to the contact named above, individuals making contributions 

to this report included Dave Hinchman (Assistant Director), Justin Booth 

(Analyst-in-Charge), Chris Businsky, Nancy Glover, Linda Kochersberger, 

and Jonathan Wall.

Appendix VI: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(102177)
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