DATA CENTER 

CONSOLIDATION

Strengthened Oversight 

Needed to Achieve Billions 

of Dollars in Savings

Statement of David A. Powner, Director 

Information Technology Management Issues

Testimony 

Before the Subcommittee on Government Operations 

Committee on Oversight and Government Reform

House of Representatives

For Release on Delivery

Expected at 2:30 p.m. EDT

Tuesday, May 14, 2013

GAO-13-627T

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-13-627T, a testimony 

before the Subcommittee on Government 

Operations, Committee on Oversight and 

Government Reform, House of 

Representatives

May 2013

DATA CENTER CONSOLIDATION 

Strengthened Oversight Needed to Achieve Billions 

of Dollars in Savings

Why GAO Did This Study

In 2010, as focal point for information 

technology management across the 

government, OMB’s Federal Chief 

Information Officer launched the 

Federal Data Center Consolidation 

Initiative—an effort to consolidate the 

growing number of federal data 

centers. In July 2011 and July 2012, 

GAO evaluated 24 agencies’ progress 

and reported that nearly all of the 

agencies had not completed a data 

center inventory or consolidation plan 

and recommended that they do so.

GAO was asked to testify on its report, 

being released today, that evaluated 

agencies' reported progress against 

OMB’s planned consolidation and cost 

savings goals, and assessed the 

extent to which the oversight 

organizations put in place by OMB for 

the Federal Data Center Consolidation 

Initiative are adequately performing 

oversight of agencies' efforts to meet 

these goals. In this report, GAO 

assessed agencies’ progress against 

OMB’s goals, analyzed the execution 

of oversight roles and responsibilities, 

and interviewed OMB, GSA, and Data 

Center Consolidation Task Force

officials about their efforts to oversee 

agencies’ consolidation efforts.

What GAO Recommends

In its report, GAO recommended that 

OMB’s Federal Chief Information 

Officer track and report on key 

performance measures, extend the 

time frame for achieving planned cost 

savings, and improve the execution of 

important oversight responsibilities. 

OMB agreed with two of GAO’s 

recommendations and plans to 

evaluate the remaining 

recommendation related to extending 

the time frame.

What GAO Found

The 24 agencies participating in the Federal Data Center Consolidation Initiative 

made progress towards the Office of Management and Budget’s (OMB) goal to 

close 40 percent, or 1,253 of the 3,133 total federal data centers, by the end of 

2015, but OMB has not measured agencies’ progress against its other goal of $3 

billion in cost savings by the end of 2015. Agencies closed 420 data centers by 

the end of December 2012, and have plans to close an additional 548 to reach

968 by December 2015—285 closures short of OMB’s goal. OMB has not 

determined agencies’ progress against its cost savings goal because, according 

to OMB staff, the agency has not determined a consistent and repeatable 

method for tracking cost savings. This lack of information makes it uncertain 

whether the $3 billion in savings is achievable by the end of 2015. Until OMB 

tracks and reports on performance measures such as cost savings, it will be 

limited in its ability to oversee agencies’ progress against key goals. 

Pursuant to OMB direction, three organizations—the Data Center Consolidation 

Task Force, the General Services Administration (GSA) Program Management 

Office, and OMB—are responsible for federal data center consolidation oversight 

activities; while most activities are being performed, there are still several 

weaknesses in oversight. Specifically, 

• While the Data Center Consolidation Task Force has established several 

initiatives to assist agencies in their consolidation efforts, such as holding 

monthly meetings to facilitate communication among agencies, it has not 

adequately overseen its peer review process for improving the quality of 

agencies' consolidation plans. 

• The GSA Program Management Office has collected agencies’ quarterly 

data center closure updates and made the information publically available on 

an electronic dashboard for tracking consolidation progress, but it has not 

fully performed other oversight activities, such as conducting analyses of 

agencies’ inventories and plans. 

• OMB has implemented several initiatives to track agencies’ consolidation 

progress, such as establishing requirements for agencies to update their 

plans and inventories yearly and to report quarterly on their consolidation 

progress. However, the agency has not approved the plans on the basis of 

their completeness or reported on progress against its goal of $3 billion in 

cost savings. 

The weaknesses in oversight of the data center consolidation initiative are due, in 

part, to OMB not ensuring that assigned responsibilities are being executed.

Improved oversight could better position OMB to assess progress against its cost 

savings goal and minimize agencies’ risk of not realizing expected cost savings. 

In March 2013, OMB issued a memorandum that integrated the Federal Data 

Center Consolidation Initiative with the PortfolioStat initiative, which requires 

agencies to conduct annual reviews of its information technology investments 

and make decisions on eliminating duplication, among other things. The 

memorandum also made significant changes to the federal data center 

consolidation effort, including the initiative’s reporting requirements and goals. 

Specifically, agencies are no longer required to submit the previously required 

consolidation plans and the memorandum does not identify a cost savings goal. 

View GAO-13-627T. For more information, 

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

pownerd@gao.gov. 
Page 1 GAO-13-627T

441 G St. N.W.

Washington, DC 20548

Chairman Mica, Ranking Member Connolly, and Members of the 

Subcommittee:

I am pleased to be here today to discuss federal agencies’ continuing 

efforts to consolidate their data centers. As federal agencies have 

modernized their information technology (IT) operations, put more of their 

services online, and increased their information security profiles, their 

need for computing power and data storage resources has resulted in a

dramatic increase in the federal data centers and a corresponding 

increase in operational costs. In response, the Office of Management and 

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

Federal Data Center Consolidation Initiative (FDCCI) in 2010.

Over the past few years, we have reported and testified1 on federal data 

center consolidation, noting that, while the initiative has the potential to 

provide billions of dollars in savings, improvements in the oversight of 

agencies’ efforts are needed. For example, in July 2012, we reported on 

the progress the 24 participating federal departments and agencies2

 

1

GAO, Information Technology: OMB and Agencies Need to Fully Implement Major 

Initiatives to Save Billions of Dollars , 

were 

making on this initiative and found that, while progress had been made, 

nearly all of the agencies had not yet completed a data center inventory 

or the consolidation plans needed to implement their consolidation 

initiatives.

GAO-13-297T (Washington, D.C.: Jan. 22, 2013); 

Data Center Consolidation: Agencies Making Progress on Efforts, but Inventories and 

Plans Need to Be Completed, GAO-12-742 (Washington, D.C.: July 19, 2012); Information 

Technology Reform: Progress Made; More Needs to Be Done to Complete Actions and 

Measure Results, GAO-12-745T (Washington, D.C.: May 24, 2012); Information 

Technology Reform: Progress Made; More Needs to Be Done to Complete Actions and 

Measure Results, GAO-12-461 (Washington, D.C.: Apr. 26, 2012); and Data Center 

Consolidation: Agencies Need to Complete Inventories and Plans to Achieve Expected 

Savings, GAO-11-565 (Washington, D.C.: July 19, 2011).

2

The 24 major departments and agencies that participate in the Federal Data Center 

Consolidation 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. 

 
 

Page 2 GAO-13-627T 

You asked us to testify on our report being released today that evaluated 

agencies’ reported progress against OMB’s planned consolidation and 

cost savings goals and assessed the extent to which the oversight 

organizations put in place by OMB for FDCCI are adequately performing 

oversight of agencies’ efforts to meet these goals.3

All work on which this testimony is based was performed 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.

This report contains a 

detailed overview of our scope and methodology, including the steps we 

took to assess the quality of data that we relied on.

Over the last 15 years, the federal government’s increasing demand for IT 

has led to a dramatic rise 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 and more than 1,100 in 

2009. Operating such a large number of centers is a significant cost to the 

federal government, including costs for hardware, software, real estate, 

and cooling. For example, according to the Environmental Protection 

Agency, the electricity cost to operate federal servers and data centers 

across the government is about $450 million annually. According to the 

Department of Energy, data center spaces can consume 100 to 200 times 

more electricity than a standard office space. According to OMB, reported 

server utilization rates as low as 5 percent and limited reuse of data 

centers within or across agencies lend further credence to the need to 

restructure federal data center operations to improve efficiency and 

reduce costs.

 

3

GAO, Data Center Consolidation: Strengthened Oversight Needed to Achieve Cost 

Savings Goal, GAO-13-378 (Washington, D.C.: Apr. 23, 2013).

Background 
 

Page 3 GAO-13-627T

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, under the direction of the 

Federal CIO, established FDCCI in February 2010. This initiative’s four 

high-level goals are to

• promote the use of “green IT”4 by reducing 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.

As part of FDCCI, OMB required the 24 agencies to identify a senior, 

dedicated data center consolidation program manager to lead their 

agency’s consolidation efforts. In addition, agencies were required to 

submit an asset inventory baseline and other documents that would result 

in a plan for consolidating their data centers. The asset inventory baseline 

was to contain detailed information on each data center and identify the 

consolidation approach to be taken for each one. It would serve as the 

foundation for developing the final data center consolidation plan. The 

data center consolidation plan would serve as a technical road map and 

approach for achieving the targets for infrastructure utilization, energy 

efficiency, and cost efficiency.

While OMB is primarily responsible for FDCCI, the agency designated 

two agency CIOs to be executive sponsors to lead the effort within the 

Federal CIO Council,5

 

4

“Green IT” refers to environmentally sound computing practices that can include a variety 

of efforts, such as using energy efficient data centers, purchasing computers that meet 

certain environmental standards, and recycling obsolete electronics.

the principal interagency forum to improve ITrelated practices across the federal government. In addition, OMB 

identified two additional organizations to assist in managing and 

overseeing FDCCI:

5

As of February 2013, OMB had assigned one CIO from the Department of the Interior. 

Initially there had been two executive sponsors, but one resigned and OMB stated that 

they had no plans to fill the second position. 

OMB and the Federal CIO 

Established the Federal 

Data Center Consolidation 

Initiative 
 

Page 4 GAO-13-627T

• The GSA FDCCI Program Management Office is to support OMB in 

the planning, execution, management, and communications for 

FDCCI.

• The Data Center Consolidation Task Force is comprised of the data 

center consolidation program managers from each agency. According 

to its charter, the Task Force is critical to supporting collaboration 

across the FDCCI agencies, including identifying and disseminating 

key pieces of information, solutions, and processes that will help 

agencies in their consolidation efforts.

In an effort to accelerate federal data center consolidation, OMB has 

directed agencies to use cloud computing6 as an approach to migrating or 

replacing systems with Internet-based services and resources. In 

December 2010, in its 25 Point IT Reform Plan,7

We have previously reported that, while selected federal agencies had 

made progress in implementing cloud computing, they also faced 

challenges.

OMB identified cloud 

computing as having the potential to play a major part in achieving 

operational efficiencies in the federal government’s IT environment. 

According to OMB, cloud computing brings a wide range of benefits, 

including that it is (1) economical—a low initial investment is required to 

begin and additional investment is needed only as system use increases, 

(2) flexible—computing capacity can be quickly and easily added or 

subtracted, and (3) fast—long procurements are eliminated, while 

providing a greater selection of available services. To help achieve these 

benefits, OMB issued a “Cloud First” policy that required federal agencies 

to increase their use of cloud computing whenever a secure, reliable, and 

cost-effective cloud solution exists.

8

 

6

Cloud computing is an emerging form of delivering computing services via networks with 

the potential to provide IT services more quickly and at a lower cost. Among other things, 

it provides users with on-demand access to a shared and scalable pool of computing 

resources with minimal management effort or service provider interaction.

For example, agencies identified cloud computing 

challenges related to meeting federal security requirements that are 

7

OMB, 25 Point Implementation Plan to Reform Federal Information Technology 

Management (Washington, D.C.: Dec. 9, 2010). 

8

GAO, Information Technology Reform: Progress Made but Future Cloud Computing 

Efforts Should be Better Planned, GAO-12-756 (Washington, D.C.: July 11, 2012) and 

Information Security: Federal Guidance Needed to Address Control Issues with 

Implementing Cloud Computing, GAO-10-513 (Washington, D.C.: May 27, 2010).
 

Page 5 GAO-13-627T

unique to government agencies, such as continuous monitoring and 

maintaining an inventory of systems. Agencies also noted that, because 

of the on-demand, scalable nature of cloud services, it can be difficult to 

define specific quantities and costs and, further, that these uncertainties 

make contracting and budgeting difficult due to the fluctuating costs 

associated with scalable and incremental cloud service procurements. 

Finally, agencies cited other challenges associated with obtaining 

guidance, and acquiring knowledge and expertise, among other things.

More recently, in March 2013, OMB issued a memorandum documenting 

the integration of FDCCI with the PortfolioStat initiative.9 Launched by 

OMB in March 2012, PortfolioStat requires agencies to conduct an annual 

agency-wide IT portfolio review to, among other things, reduce 

commodity IT10 spending, demonstrate how its IT investments align with 

the agency’s mission and business functions, and make decisions on 

eliminating duplication.11 OMB’s March 2013 memorandum discusses 

OMB’s efforts to further the PortfolioStat initiative by incorporating several 

changes, such as consolidating previously collected IT-related plans, 

reports, and data submissions. The memorandum also establishes new 

agency reporting requirements and related time frames. Specifically, 

agencies are no longer required to submit the data center consolidation 

plans previously required under FDCCI. Rather, agencies are to submit 

information to OMB via three primary means—an information resources 

management strategic plan,12 an enterprise road map,13 and an 

integrated data collection channel.14

 

9

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

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

10According to OMB, commodity IT includes services such as IT infrastructure (data 

centers, networks, desktop computers and mobile devices); enterprise IT systems (e-mail, 

collaboration tools, identity and access management, security, and web infrastructure); 

and business systems (finance, human resources, and other administrative functions).

11OMB, Implementing PortfolioStat, Memorandum M-12-10 (Washington D.C.: Mar. 30, 

2012).

12OMB, Management of Federal Information Resources, Circular A-130 (Washington, 

D.C.: Nov. 30, 2000). According to OMB Circular A-130, an agency’s information 

resources management strategic plan should describe how information resources 

management activities help accomplish agency missions, and ensure that information 

resource management decisions are integrated with organizational planning, budget, 

procurement, financial management, human resources management, and program 

decisions. 
 

Page 6 GAO-13-627T

In July 2012, we issued a report on the status of FDCCI and found that, 

while agencies’ 2011 inventories and plans had improved as compared to 

their 2010 submissions, significant weaknesses still remained.15

Specifically, while all 24 agencies reported on their inventories to some 

extent, only 3 had submitted a complete inventory.16 The remaining 21 

agency submissions had weaknesses in several areas. For example, 

while most agencies provided complete information on their 

virtualization17

 

13OMB, Increasing Shared Approaches to Information Technology Services (Washington, 

D.C.: May 2, 2012). The enterprise road map is to include a business and technology 

architecture, an IT asset inventory, a commodity IT consolidation plan, a line of business 

service plan, and an IT shared service plan. 

efforts, network storage, and physical servers, 18 agencies 

did not provide complete data center information, such as data center 

type, gross floor area, and target date for closure. In particular, several 

agencies fully reported on gross floor area and closure information, but 

partially reported data center costs. In addition, 17 agencies did not 

provide full information on their IT facilities and energy usage. For 

example, the Department of Labor partially reported on total data center 

IT power capacity and average data center electricity usage and did not 

report any information on total data center power capacity. We also noted 

that 3 agencies had submitted their inventory using an outdated format, in 

part, because OMB had not publicly posted its revised guidance. Figure 1 

provides an assessment of the completeness of agencies’ 2011 

inventories, by key element.

14The integrated data collection channel will be used by agencies to report structured 

information, such as progress in meeting IT strategic goals, objectives, and metrics, as 

well as cost savings and avoidances resulting from IT management actions. 

15GAO-12-742. 

16These agencies were the Department of Housing and Urban Development, the National 

Science Foundation, and the Social Security Administration. 

17Virtualization 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.

GAO Has Previously 

Reported on Significant 

Weaknesses in Agencies’ 

Inventories and Plans
 

Page 7 GAO-13-627T

Figure 1: Twenty-one Agencies’ Completion of Required Information for Data 

Center Inventory Key Elements, as of June 2011

Officials from several agencies reported that some of the required 

information was unavailable at certain data center facilities. We reported 

that, because the continued progress of FDCCI is largely dependent on 

accomplishing goals built on the information provided by agency 

inventories, it will be important for agencies to continue to work on 

completing their inventories, thus providing a sound basis for their 

savings and utilization forecasts.

In addition, while all 24 agencies submitted consolidation plans to OMB, 

only 1 had submitted a complete plan.18

 

18This agency was the Department of Commerce. 

For the remaining 23 agencies, 

selected elements were missing from each plan. For example, among the 
 

Page 8 GAO-13-627T

24 agencies, all provided complete information on their qualitative 

impacts, and nearly all included a summary of the consolidation 

approach, a well-defined scope for data center consolidation, and a highlevel timeline for consolidation efforts. However, most notably, 21 

agencies did not fully report their expected cost savings; of those, 13 

agencies provided partial cost savings information and 8 provided none. 

Among the reasons that this information was not included, a Department 

of Defense official told us that it was challenging to gather savings 

information from all the department’s components, while a National 

Science Foundation official told us the information was not included 

because the agency had not yet realized any cost savings and so had 

nothing to report. Other significant weaknesses were that many agencies’ 

consolidation plans did not include a full cost-benefit analysis that 

included aggregate year-by-year investment and cost savings 

calculations through fiscal year 2015, a complete master program 

schedule,19

 

19A master program schedule was to be created for the entire agency, from the detailed 

implementation schedules provided by each of the data center managers as well as driven 

by related federal government activities (e.g., OMB reporting, budget submission, or 

beginning of a new fiscal year). 

and quantitative goals, such as complete savings and 

utilization forecasts. Figure 2 provides an assessment of the 

completeness of agencies’ 2011 consolidation plans, by key element.
 

Page 9 GAO-13-627T

Figure 2: Twenty-four Agencies’ Completion of Required Information for Data Center Consolidation Plan Key Elements, as of 

September 2011

Officials from several agencies reported that the plan information was still 

being developed. We concluded that, in the continued absence of 

completed consolidation plans, agencies are at risk of implementing their 

respective initiatives without a clear understanding of their current state 

and proposed end state and not being able to realize anticipated savings, 

improved infrastructure utilization, or energy efficiency.

We also found that while agencies were experiencing data center 

consolidation successes, they were also encountering challenges. While 

almost 20 areas of success were reported, the 2 most often cited focused 

on virtualization and cloud services as consolidation solutions, and 

working with other agencies and components to find consolidation 

opportunities. Further, while multiple challenges were reported, the two 

most common challenges were both specifically related to FDCCI data 
 

Page 10 GAO-13-627T

reporting required by OMB: obtaining power usage information and 

providing a quality data center asset inventory.

We further reported that, to assist agencies with their data center 

consolidation efforts, OMB had sponsored the development of a FDCCI 

total cost of ownership model that was intended to help agencies refine 

their estimated costs for consolidation; however, agencies were not

required to use the cost model as part of their cost estimating efforts. We 

stated that, until OMB requires agencies to use the model, agencies will 

likely continue to use a variety of methodologies and assumptions in 

establishing consolidation estimates, and it will remain difficult to 

summarize projections across agencies.

Accordingly, we reiterated our prior recommendation that agencies 

complete missing plan and inventory elements and made new 

recommendations to OMB to publically post guidance updates on the 

FDCCI website and to require agencies to use its cost model. OMB 

generally agreed with our recommendations and has since taken steps to 

address them. More specifically, OMB posted its 2012 guidance for 

updating data center inventories and plans, as well as guidance for 

reporting consolidation progress, to the FDCCI public website. Further, 

the website has been updated to provide prior guidance documents and 

OMB memoranda. In addition, OMB’s 2012 consolidation plan guidance 

requires agencies to use the cost model as they develop their 2014 

budget request.
 

Page 11 GAO-13-627T

We and other federal agencies20

The 24 agencies have collectively made progress towards OMB’s data 

center consolidation goal to close 40 percent, or approximately 1,253 of 

the 3,133 data centers, by the end of 2015. To track their progress, OMB 

requires agencies to report quarterly on their completed and planned 

performance against that goal via an online portal. After being reviewed 

for data quality and security concerns, the GSA FDCCI Program 

Management Office makes the performance information available on the 

federal website dedicated to providing the public with access to datasets 

developed by federal agencies, 

have documented the need for initiatives 

to develop performance measures to gauge progress. According to 

government and industry leading practices, performance measures 

should be measurable, outcome-oriented, and actively tracked and 

reported. For FDCCI, OMB originally established goals for data center 

closures and the expected cost savings. Specifically, OMB expected to 

consolidate approximately 40 percent of the total number of agency data 

centers and achieve $3 billion in cost savings by the end of 2015, and 

established the means of measuring performance against those goals 

through several methods.

http://data.gov. 

As of February 2013, agencies had collectively reported closing a total of 

420 data centers by the end of December 2012,21 and were planning to 

close an additional 396 data centers—for a total of 816—by September 

2013.22

 

20GAO, Aviation Weather: Agencies Need to Improve Performance Measurement and 

Fully Address Key Challenges, 

While the number of data centers that agencies are planning to 

GAO-10-843 (Washington, D.C.: Sept. 9, 2011); GAO, 

NextGen Air Transportation System: FAA’s Metrics Can Be Used to Report on Status of 

Individual Programs, but Not of Overall NextGen Implementation or Outcomes,

GAO-10-629 (Washington, D.C.: July 27, 2010); OMB, Guide to the Program Assessment 

Rating Tool (Washington, D.C.: January 2008); Department of the Navy, Office of the 

Chief Information Officer, Guide for Developing and Using IT Performance Measurements

(Washington, D.C.: October 2001); and GSA, Performance-Based Management: Eight 

Steps To Develop and Use Information Technology Performance Measures Effectively

(Washington, D.C.: 1996). 

21Of the 24 agencies, 17 reported closing at least one data center by the end of 

December 2012. The remaining 7 agencies did not report closing any data centers during 

this time. 

22Of the 24 agencies, 19 reported plans to close at least one data center by the end of 

September 2013. The remaining 5 agencies did not report plans to close any data centers 

in this time frame. 

Consolidation of 

Federal Data Centers 

is Under Way, but 

Initiativewide Cost 

Savings Have Not 

Been Determined
 

Page 12 GAO-13-627T

close from October 2013 through December 2015 (the planned 

completion date of FDCCI) is not reported on http://data.gov, OMB’s July 

2012 quarterly report to Congress23 on the status of federal IT reform 

efforts contains other information on agencies’ data center closure plans. 

Among other things, the report states that agencies have collectively 

committed to closing a total of 968 data centers by the end of 2015. 

According to OMB staff from the Office of E-Government and Information 

Technology, this figure represents the number of commitments reported 

by agencies, as compared to the initiative’s overall goal of closing 1,253 

data centers by December 2015. The agencies have not identified the 

remaining 285 consolidation targets to achieve that goal. OMB’s January 

2013 quarterly report to Congress24

 

23OMB, Quarterly Report to Congress: Integrated, Efficient, and Effective Uses of 

Information Technology (Washington, D.C.: July 30, 2012). 

does not provide any new information 

about either planned or completed agency data center closures. See 

figure 3 for a graphical depiction of agencies’ progress against OMB’s 

data center consolidation goal.

24OMB, Quarterly Report to Congress: Integrated, Efficient, and Effective Uses of 

Information Technology (Washington, D.C.: Jan. 31, 2013). 
 

Page 13 GAO-13-627T

Figure 3: Agencies’ Progress against OMB’s Data Center Consolidation Goal (as of 

February 2013)

However, OMB has not measured agencies’ progress against the cost 

savings goal of $3 billion by the end of 2015. According to a staff member 

from OMB’s Office of E-Government and Information Technology, as of 

November 2012, the total savings to date had not been tracked but were 

believed to be minimal. The staff member added that, although data 

center consolidation involves reductions in costs for existing facilities and 

operations, it also requires investment in new and upgraded facilities and, 

as a result, any current savings are often offset by the reinvestment of 

those funds into ongoing consolidation efforts. Finally, the staff member 

stated that OMB recognizes the importance of tracking cost savings and 

is working to identify a consistent and repeatable method for tracking cost 

savings as part of the integration of FDCCI with PortfolioStat, but stated 

that there was no time frame for when this would occur.

The lack of initiativewide cost savings data makes it unclear whether 

agencies will be able to achieve OMB’s projected savings of $3 billion by 

the end of 2015. In previous work, we found that agencies’ cost savings 
 

Page 14 GAO-13-627T

projections were incomplete and, in some cases, unreliable. Specifically, 

in July 2012,25 we reported that most agencies had not reported their 

expected cost savings in their 2011 consolidation plans. Officials from 

several agencies reported that this information was still being developed. 

Notwithstanding these weaknesses, we found that agencies collectively 

reported anticipating about $2.4 billion in cumulative cost savings by the 

end of 2015 (the planned completion date of FDCCI).26 With less than 3 

years remaining to the 2015 FDCCI deadline, almost all agencies still 

need to complete their inventories and consolidation plans and continue 

to identify additional targets for closure. Because closing facilities is a 

significant driver in realizing consolidation savings, the time required to 

realize planned cost savings will likely extend beyond the current 2015 

time frame. With at least one agency not planning on realizing savings 

until after 2015 and other agencies having not yet reported on planned 

savings, there is an increased likelihood that agencies will either need 

more time to meet the overall FDCCI savings goal or that there are 

additional savings to be realized in years beyond 2015. Until OMB tracks 

cost savings data, the agency will be limited in its ability to determine 

whether or not FDCCI is on course toward achieving planned 

performance goals. Additionally, extending the horizon for realizing 

planned cost savings could provide OMB and FDCCI stakeholders with 

input and information on the benefits of consolidation beyond OMB’s 

initial goal.

 

25GAO-12-742. 

26One agency—the Department of Defense—estimated about $2.2 billion in cost savings 

by the end of 2015, which accounts for about 92 percent of the total anticipated cost 

savings. However, the department’s consolidation plan noted that their cost savings 

estimates do not account for any up-front costs associated with the consolidation effort.
 

Page 15 GAO-13-627T

We have previously reported that oversight and governance of major IT 

initiatives help to ensure that the initiatives meet their objectives and 

performance goals.27 When an initiative is governed by multiple entities, 

the roles and responsibilities of those entities should be clearly defined 

and documented, including the responsibilities for coordination among 

those entities. We have further reported,28 and OMB requires,29

Oversight and governance of FDCCI is the responsibility of several 

organizations—the Task Force, the GSA FDCCI Program Management 

Office, and OMB. Roles and responsibilities for these organizations are 

documented in the Task Force charter and OMB memoranda, while 

others are described in OMB’s January 2013 quarterly report to Congress 

or have been communicated by agency officials. See table 1 for a listing 

of the FDCCI oversight and governance entities and their key 

responsibilities.

that an 

executive-level body be responsible for overseeing major IT initiatives. 

Among other things, we have reported that this body should have 

documented policies and procedures for management oversight of the 

initiative, regularly track progress against established performance goals, 

and take corrective actions as needed.

 

27GAO, USDA Systems Modernization: Management and Oversight Improvements Are 

Needed, GAO-11-586 (Washington, D.C.: July 20, 2011); United States Coast Guard: 

Improvements Needed in Management and Oversight of Rescue System Acquisition, 

GAO-06-623 (Washington, D.C.: May 31, 2006); and Information Technology Investment 

Management: A Framework for Assessing and Improving Process Maturity, GAO-04-394G

(Washington, D.C.: March 2004). 

28GAO-11-586, GAO-06-623, and GAO-04-394G. 

29OMB, Capital Programming Guide, V. 3.0, Supplement to OMB Circular A-11: Planning, 

Budgeting, and Acquisition of Capital Assets, (Washington, D.C.: July 2012). The Capital 

Programming Guide is intended to help agencies effectively plan, procure, and use capital 

assets. 

Oversight of FDCCI is 

Not Being Performed 

in All Key Areas
 

Page 16 GAO-13-627T

Table 1: Key Responsibilities of FDCCI Oversight and Governance Organizations

Organization FDCCI responsibilities

Task Force • Hold monthly meetings to facilitate communication between agencies

• Communicate and coordinate agency best practices

• Identify policy and implementation issues that could negatively impact agencies’ abilities to meet 

their FDCCI goals

• Assist agencies with development of their consolidation plans

• Develop and manage the data center total cost of ownership model (GSA)

• Develop an electronic governmentwide marketplace for data center availability (GSA and 

OMB)

a

• Oversee the agency consolidation plan peer review process

GSA FDCCI Program 

Management Office

• Collect agencies’ consolidation inventories and plans annually (inventories in June; plans in 

September)

• Under OMB direction, collect and disseminate data related to the FDCCI closure updates

• Provide ad-hoc and quarterly reports to OMB regarding agencies’ reported consolidation updates

• Maintain and update FDCCI-related online portals, such as http://CIO.gov and http://data.gov (i.e., 

the consolidation progress dashboard)

• Develop and manage the data center total cost of ownership model (Task Force)

• Provide agency support including technical assistance on the total cost of ownership model and 

clarifying inventory and plan requirements

• Develop an electronic governmentwide marketplace for data center availability (Task Force 

and OMB)

• Conduct analysis of FDCCI inventories and plans, including reviewing agencies’ submissions for 

errors 

OMB • Establish and manage FDCCI

• Provide Federal CIO policy and guidance to the initiative

• Launch an electronic public dashboard to track consolidation progress

• Develop an electronic governmentwide marketplace for data center availability (Task Force 

and GSA)

• Approve federal agency consolidation plans

• Report quarterly to the Senate and House Committees on Appropriations identifying the savings 

achieved by OMB’s governmentwide IT reform effort, which includes FDCCI

• Provide executive-level oversight of FDCCI

Source: GAO analysis of OMB data and agency interviews.

Note: Bold text indicates a responsibility that is shared with the entities indicated in parentheses.

a

This model is intended to provide agencies with a comprehensive tool to help inform decision 

making, model paths, and the development of cost savings figures and funding needs.

The Task Force, the GSA FDCCI Program Management Office, and OMB 

have performed a wide range of FDCCI responsibilities. For example, the 

Task Force holds monthly meetings to, among other things, communicate 

and coordinate consolidation best practices and to identify policy and 

implementation issues that could negatively impact the ability of agencies 

to meet their goals. Further, the Task Force has assisted agencies with 
 

Page 17 GAO-13-627T

the development of their consolidation plans by discussing lessons 

learned during its monthly meetings and disseminating new OMB 

guidance. GSA has collected responses to OMB-mandated document 

deliveries, including agencies’ consolidation inventories and plans, on an 

annual basis. In addition, GSA has collected data related to FDCCI data 

center closure updates, disseminated the information publically on the 

consolidation progress dashboard on http://data.gov, and provided ad hoc 

and quarterly updates to OMB regarding these data. Lastly, as the 

executive-level body, OMB issued FDCCI policies and guidance in a 

series of memoranda that, among other things, required agencies to 

provide an updated data center asset inventory at the end of every third 

quarter and an updated consolidation plan at the end of every fourth 

quarter. In addition, OMB launched a publically available electronic 

dashboard to track and report on agencies’ consolidation progress.

However, oversight of FDCCI is not being performed in other key areas. 

For example,

• The Task Force has not provided oversight of the agency 

consolidation peer review process. According to officials, the purpose 

of the peer review process is for agencies to get feedback on their 

consolidation plans and potential improvement suggestions from a 

partner agency with a data center environment of similar size and 

complexity. While the Task Force documented the agency pairings for 

2011 and 2012 reviews, it did not provide agencies with guidance for 

executing their peer reviews, including information regarding the 

specific aspects of agency plans to be reviewed and the process for 

providing feedback. As a result, the peer review process did not 

ensure that significant weaknesses in agencies’ plans were being 

identified. As previously mentioned, in July 2012, we reported30 that 

all of the agencies’ plans were incomplete except for one. In addition, 

we noted that three agencies had submitted their June 2011 inventory 

updates, a required component of consolidation documentation, in an 

incorrect format—an outdated template.

• The GSA FDCCI Program Management Office has not executed its 

responsibilities related to analyzing agencies’ inventories and plans 

and reviewing these documents for errors. In July 2012, we reported 

on agencies’ progress toward completing their inventories and plans 

 

30GAO-12-742. 
 

Page 18 GAO-13-627T

and found that only three agencies had submitted a complete 

inventory and only one agency had submitted a complete plan, and 

that most agencies did not fully report cost savings information and 

eight agencies did not include any cost savings information.31 The 

lack of cost savings information is particularly important because, as 

previously noted, initiativewide cost savings have not been 

determined—a shortcoming that could potentially be addressed if 

agencies had submitted complete plans that addressed cost savings 

realized, as required.

• Although OMB is the approval authority of agencies’ consolidation 

plans, it has not approved agencies’ submissions on the basis of their 

completeness. In an October 2010 memorandum, OMB stated that its 

approval of agencies’ consolidation plans was in progress and would 

be completed by December 2010. However, OMB did not issue a 

subsequent memorandum indicating that it had approved agencies’ 

plans, or an updated time frame for completing its review. This is 

important because, in July 2011 and July 2012, we reported that 

agencies’ consolidation plans had significant weaknesses and that 

nearly all were incomplete.32

• OMB has not reported on agencies’ progress against its key 

performance goal of achieving $3 billion in cost savings by the end of 

2015. Although the 2012 Consolidated Appropriations Act included a 

provision directing OMB to submit quarterly progress reports to the 

Senate and House Appropriations Committees that identify savings 

achieved through governmentwide IT reform efforts,33

These weaknesses in oversight are due, in part, to OMB not ensuring that 

assigned responsibilities are being executed. Improved oversight could 

better position OMB to assess progress against its cost savings goal and 

minimize agencies’ risk of not realizing anticipated cost savings.

OMB has not 

yet reported on cost savings realized for FDCCI. Instead, the agency’s 

quarterly reports had only described planned FDCCI-related savings 

and stated that future reports will identify savings realized. As of the 

January 2013 report, no such savings have been reported.

 

31GAO-12-742. 

32GAO-11-565 and GAO-12-742. 

33Consolidated Appropriations Act, 2012, Pub. L. No. 112-74, div. C, title II, 125 Stat. 786, 

896 (2011).
 

Page 19 GAO-13-627T

OMB’s recent integration of FDCCI and PortfolioStat made significant 

changes to data center consolidation oversight and reporting 

requirements. According to OMB’s March 2013 memorandum,34

However, OMB’s memorandum does not fully address the revised goals 

and reporting requirements of the combined initiative. Specifically, OMB 

stated that its new goal is to close 40 percent of non-core data centers 

but, as previously mentioned, the definitions for core and non-core data 

center were not provided. Therefore, the total number of data centers to 

be closed under OMB’s revised goal cannot be determined. In addition, 

although OMB has indicated which performance measures it plans to use 

going forward, such as those related to data center energy and labor, it 

has not documented the specific metrics for agencies to report against. 

The memorandum indicates that these will be developed by the Task 

Force, but does not provide a time frame for when this will be completed. 

Lastly, although OMB has previously stated that PortfolioStat is expected 

to result in savings of approximately $2.5 billion through 2015, its 

memorandum does not establish a new cost savings goal for FDCCI, nor 

does it refer to the previous goal of saving $3 billion. Instead, OMB states 

that all cost savings goals previously associated with FDCCI will be 

to more 

effectively measure the efficiency of an agency’s data center assets, 

agency progress will no longer be measured solely by closures. Instead, 

agencies will also be measured by the extent to which their data centers 

are optimized for total cost of ownership by incorporating metrics for 

energy, facility, labor, and storage, among other things. In addition, OMB 

stated that the Task Force will categorize agencies’ data center 

populations into two categories—core and non-core data centers—for 

which the memorandum does not provide specific definitions. Additionally, 

as previously discussed, agencies are no longer required to submit the 

data center consolidation plans previously required under FDCCI. Rather, 

agencies are to submit information to OMB via three primary means—an 

information resources management strategic plan, an enterprise road 

map, and an integrated data collection channel. Using these tools, an 

agency is to report on, among other things, its approach to optimizing its

data centers; the state of its data center population, including the number 

of core and non-core data centers; the agency’s progress on closures; 

and the extent to which an agency’s data centers are optimized for total 

cost of ownership.

 

34OMB Memorandum, M-13-09.

Recent Integration 

with PortfolioStat 

Changes FDCCI, but 

Reporting 

Requirements and 

Goals Are Not Fully 

Defined 
 

Page 20 GAO-13-627T

integrated into broader agency efforts to reshape their IT portfolios, but 

does not provide a revised savings estimate. The lack of a new cost 

savings goal will further limit OMB’s ability to determine whether or not 

the new combined initiative is on course toward achieving its planned 

objectives.

In addition, several important oversight responsibilities related to data 

center consolidation have not been addressed. For example, with the 

elimination of the requirement to submit separate data center 

consolidation plans under the new combined initiative, the memorandum 

does not discuss whether either the Task Force or the GSA Program 

Management Office will continue to be used in their same oversight roles 

for review of agencies’ documentation. In addition, while the 

memorandum discusses OMB’s responsibility for reviewing agencies’ 

draft strategic plans, it does not discuss the responsibility for approving 

them. In the absence of defined oversight assignments and 

responsibilities, it cannot be determined how OMB will have assurance 

that agencies’ plans meet the revised program requirements and, moving 

forward, whether these plans support the goals of the combined initiative.

In our report being released today, we are making recommendations to 

better ensure that FDCCI achieves expected cost savings and to improve 

executive-level oversight of the initiative. Specifically, we are 

recommending that the Director of OMB direct the Federal CIO to

• track and annually report on key data center consolidation 

performance measures, such as the size of data centers being closed 

and cost savings to date; 

• extend the time frame for achieving cost savings related to data 

center consolidation beyond the current 2015 horizon, to allow time to 

meet the initiative’s planned cost savings goal; and

• establish a mechanism to ensure that the established responsibilities 

of designated data center consolidation oversight organizations are 

fully executed, including responsibility for the documentation and 

oversight of the peer review process, the review of agencies’ updated 

consolidation inventories and plans, and approval of updated 

consolidation plans.

The Federal CIO stated that the agency concurred with the first and third 

recommendation. Regarding the second recommendation, OMB neither 

agreed nor disagreed. However, the Federal CIO stated that, as the 

Implementation of 

Recommendations 

Could Help Ensure 

Improvements in 

Oversight 
 

Page 21 GAO-13-627T

FDCCI and PortfolioStat initiatives proceed and continue to generate 

savings, OMB will consider whether updates to the current time frame are 

appropriate.

In summary, after more than 3 years into FDCCI, agencies have made 

progress in their efforts to close data centers. However, many key 

aspects of the integration of FDCCI and PortfolioStat, including new data 

center consolidation and cost savings goals, have not yet been defined. 

Further compounding this lack of clarity, total cost savings to date from 

data center consolidation efforts have not been determined, creating 

uncertainty as to whether OMB will be able to meet its original cost 

savings goal of $3 billion by the end of 2015. In the absence of tracking 

and reporting on cost savings and additional time for agencies to achieve 

planned savings, OMB will be challenged in ensuring that the initiative, 

under this new direction, is meeting its established objectives.

Recognizing the importance of effective oversight of major IT initiatives, 

OMB directed that three oversight organizations—the Task Force, the 

GSA FDCCI Program Management Office, and OMB—be responsible for 

federal data center consolidation oversight activities. These organizations 

have performed a wide range of FDCCI responsibilities, including 

facilitating collaboration among agencies and developing tools to assist 

agencies in their consolidation efforts. However, other key oversight 

activities have not been performed. Most notably, the lack of formal 

guidance for consolidation plan peer review and approval increases the 

risk that missing elements will continue to go undetected and that 

agencies’ efforts will not fully support OMB’s goals. Further, OMB’s March 

2013 memorandum does not address whether the Task Force and GSA’s 

Program Management Office will continue their oversight roles, which 

does not help to mitigate this risk. Finally, while OMB has put in place 

initiatives to track consolidation progress, consolidation inventories and 

plans are not being reviewed for errors and cost savings are not being 

tracked or reported. The collective importance of these activities to 

federal data center consolidation success reinforces the need for 

oversight responsibilities to be fulfilled in accordance with established 

requirements.

Chairman Mica, Ranking Member Connolly, and Members of the 

Subcommittee, this completes my prepared statement. I would be 

pleased to respond to any questions that you may have at this time.
 

Page 22 GAO-13-627T

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

contact me at (202) 512-9286 or at pownerd@gao.gov. Individuals who 

made key contributions to this testimony are Dave Hinchman (Assistant 

Director), Justin Booth, Nancy Glover, and Jonathan Ticehurst.

GAO Contact and 

Staff 

Acknowledgments 

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