Data Center Consolidation: Strengthened Oversight Needed to Achieve Cost Savings Goal
Published: 2013-04-23T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: 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.
As requested, GAO reviewed federal agencies continuing efforts to consolidate their data centers. This report (1) evaluates agencies' reported progress against OMBs planned consolidation and cost savings goals and (2) assesses 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. 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.
section_title: What GAO Found
paragraphs: The 24 agencies participating in the Federal Data Center Consolidation Initiative (FDCCI) 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 begins tracking and reporting on performance measures such as cost savings, it will be limited in its ability to oversee agencies' progress against key initiative goals. Additionally, extending the horizon for realizing planned cost savings could provide OMB and data center consolidation stakeholders with input and information on the benefits of consolidation beyond OMB's initial goal.
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, several weaknesses exist. 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. For example, the Task Force did not provide agencies with guidance for conducting peer reviews and did not provide oversight to ensure that all agencies exchanged 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 anticipated cost savings.
section_title: What GAO Recommends
paragraphs: GAO is recommending 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.

section_title: Letter
paragraphs: 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 increased their  information security profiles, their need for computing power and data  storage resources has increased. Over time, this increasing demand led  to a dramatic rise in the number of 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.
In July 2011 and July 2012, we reported on the progress the 24  participating federal departments and agencies were making on this  initiative, noting that, while progress has been made, as of July 2012  nearly all of the agencies had not yet completed a data center inventory  or the consolidation plans needed to implement their consolidation  initiatives. As a result, we recommended that OMB require agencies to  complete their missing inventory and plan elements. While OMB did not  specifically comment on our recommendation, the agency took some  actions to address these deficiencies, which are discussed later in this  report.
Given the importance of the consolidation initiative, this report responds  to your request that we review federal agencies’ continuing efforts to  consolidate their data centers. Specifically, our objectives were to (1)  evaluate agencies’ reported progress against OMB’s planned  consolidation and cost savings goals and (2) assess 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.
To address our first objective, we compared the 24 agencies’ data center  facility consolidations as they reported them on the website,  http://data.gov, to OMB’s planned consolidation goals. We also  interviewed OMB staff from the Office of E-Government and Information  Technology about their efforts to monitor agencies’ reported consolidation  progress and to track consolidation cost savings. To address our second  objective, we analyzed FDCCI-related documentation, such as OMB  memoranda and project charters, to determine the roles and  responsibilities of key FDCCI oversight organizations, including the  General Services Administration’s (GSA) FDCCI Program Management  Office and the Data Center Consolidation Task Force (Task Force). To  determine the extent to which oversight roles and responsibilities were  being executed, we analyzed supporting documentation provided by  these organizations regarding their efforts to oversee agencies’ data  center consolidation efforts. We also interviewed OMB, GSA, and Task  Force officials about their efforts to oversee agencies’ progress in  consolidating their data centers.
We conducted this performance audit from October 2012 to April 2013 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 I contains further  details about our objectives, scope, and methodology.
subsections: section_title: Background
paragraphs: 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 lends further credence to the need to  restructure federal data center operations to improve efficiency and  reduce costs.
subsections: section_title: OMB and the Federal CIO Established the Federal Data Center Consolidation Initiative
paragraphs: 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” 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 and was to be incorporated into the  agency’s fiscal year 2012 budget.
In October 2010, OMB reported that all of the agencies had submitted an  inventory and plan. In addition, in a series of memoranda, OMB described  plans to monitor agencies’ consolidation activities on an ongoing basis.  Starting in fiscal year 2011, OMB required agencies to provide an  updated data center asset inventory at the end of every third quarter and  an updated consolidation plan (including any missing elements) at the  end of every fourth quarter. Further, starting in fiscal year 2012, OMB  required agencies to provide a consolidation progress report at the end of  every quarter.
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, the principal interagency forum to improve IT- related practices across the federal government. In addition, OMB  identified two additional organizations to assist in managing and  overseeing FDCCI:
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.
section_title: With an Expanded Definition, OMB’s Inventory of Federal Data Centers Has Grown
paragraphs: “…a data center is…a closet, room, floor or building for the storage, management, and  dissemination of data and information and  computer systems and  associated components, such as database, application, and storage systems and data  stores [excluding facilities exclusively devoted to communications and network equipment  (e.g., telephone exchanges and telecommunications rooms)]. A data center generally  includes redundant or backup power supplies, redundant data communications  connections, environmental controls…and special security devices housed in leased,  owned, collocated, or stand-alone facilities.”
Under the first definition, OMB identified 2,094 data centers in July 2010.  Using the new definition from October 2011, OMB estimated that there  were a total of 3,133 federal data centers in December 2011, was to consolidate approximately 40 percent for a savings of  approximately $3 billion by the end of 2015.
OMB, Implementation Guidance for the Federal Data Center Consolidation Initiative  (Washington, D.C.: Mar. 19, 2012).
The number changes as agencies identify new centers, but agencies are only required to  provide updated inventories once a year, by the end of June.
section_title: OMB Is Integrating FDCCI with the PortfolioStat Initiative
paragraphs: In March 2012, OMB launched the PortfolioStat initiative, which requires  agencies to conduct an annual agency-wide IT portfolio review to, among  other things, reduce commodity IT spending and demonstrate how its IT  investments align with the agency’s mission and business functions.  PortfolioStat is designed to assist agencies in assessing the current  maturity of their IT portfolio management process, make decisions on  eliminating duplication, and move to shared solutions in order to  maximize the return on IT investments across the portfolio. To support  this initiative, agencies were required to take several actions including  designating a lead for PortfolioStat by April 9, 2012, holding their first  PortfolioStat session by July 31, 2012, and submitting a final plan to  consolidate commodity IT by August 31, 2012.
In September 2012, the Federal CIO wrote in an e-mail to agencies that  OMB was planning to integrate FDCCI with the PortfolioStat initiative to  allow agencies to focus on an enterprisewide approach to address all  commodity IT, including data centers, in an integrated, comprehensive  plan and that agencies should continue to focus on optimizing those data  centers that are essential to delivering taxpayer services, while continuing  to close those that are duplicative. In addition, the e-mail directed  agencies to delay submitting their October 1, 2012, submissions of  updated consolidation plans until further guidance could be provided.  However, agencies were still to report quarterly updates on their data  center closures. Going forward, the Federal CIO wrote that OMB plans to  require agencies to submit and publish updated consolidation plans that  reflect these new points of emphasis and integrate data center  consolidation with the enterprisewide plans to reduce commodity IT and  decrease duplicative applications as part of overall portfolio management.
More recently, in March 2013, OMB issued a memorandum documenting  the integration of FDCCI with PortfolioStat. Among other things, the  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,  an enterprise road map, and an integrated data collection channel.  Agencies’ draft versions of their strategic plans and enterprise road maps  are due to OMB in May 2013, as well as their first integrated data  collections. The integrated data collections are to be updated quarterly  beginning in August 2013 and the strategic plans and road maps are to  be updated after Congress receives the President’s budget for fiscal year  2015. Agencies are still required to update their data center inventories by  the end of June 2013 and report quarterly on consolidation progress. The  memorandum and its implications on FDCCI are discussed in more detail  later in this report.
section_title: GAO Has Previously Reported on Federal Data Center Consolidation Efforts
paragraphs: We have previously reported on OMB’s efforts to consolidate federal data  centers. In March 2011, we identified data center consolidation as one of  the 81 areas within the federal government with the opportunity to reduce  potential duplication, overlap, and fragmentation. In this regard, we  reported on the status of FDCCI and noted that data center consolidation  made sense economically and was a way to achieve more efficient IT  operations, but that challenges existed.facing challenges in ensuring the accuracy of their inventories and plans,  providing upfront funding for the consolidation effort before any cost  savings accrued, and overcoming cultural resistance to major  organizational changes, among other things.
For example, agencies reported  In July 2011, we issued a report on the status of FDCCI and found that  only 1 of the 24 agencies had submitted a complete inventory and no  agency had submitted complete plans. agencies to document the steps they had taken, if any, to verify the  inventory data. We concluded that until these inventories and plans were  complete, agencies would not be able to implement their consolidation  activities and realize expected cost savings. Moreover, without an  understanding of the validity of agencies’ consolidation data, OMB could  not be assured that agencies were providing a sound baseline for  estimating consolidation savings and measuring progress against those  goals. Accordingly, we made several recommendations to OMB, including  that the Federal CIO require that agencies, when updating their data  center inventory, state what actions were taken to verify the information in  the inventory and to identify any associated limitations on the data, and to  complete the missing elements in their inventories and consolidation  plans. OMB generally agreed with our report and has since taken actions  to address our recommendations. For example, in July 2011, OMB  required agency CIOs to submit a letter that identified steps taken to  verify their data center inventory information and attest to the  completeness of their consolidation plan. In addition, in March 2012, OMB  required that all agencies, by the end of the fourth quarter of every fiscal  year, complete all elements missing from their consolidation plans.
GAO-11-565. publicly posted its revised guidance. Notwithstanding these weaknesses,  we found that 19 agencies reported anticipating about $2.4 billion in cost  savings between 2011 and 2015.
We also reported that none of five selected agencies had a master  program schedule or cost-benefit analysis that was fully consistent with  best practices. 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. 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.
section_title: Consolidation of Federal Data Centers is Under Way, but Initiativewide Cost Savings Have Not Been Determined
subsections: section_title: Progress Made on Data Center Closures, but Size of Facilities Is Not Reported
paragraphs: 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, http://data.gov.
section_title: Oversight of FDCCI is Not Being Performed in All Key Areas
paragraphs: We have previously reported that oversight and governance of major IT  initiatives help to ensure that the initiatives meet their objectives and  performance goals. 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, and OMB requires,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. As the FDCCI executive-level  body, OMB has put in place a governance hierarchy that is responsible  for FDCCI oversight activities; while most of these activities are being  performed, several weaknesses exist. The 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’s March 2013 memorandum  made significant changes to FDCCI; however, the impact on several key  FDCCI oversight responsibilities is not addressed.
subsections: section_title: Oversight Responsibilities Have Been Assigned to Three Organizations
paragraphs: 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. For example, through its  charter, the Task Force is given responsibility for assisting agencies with  the development of their consolidation plans and assisting OMB with  launching an electronic public dashboard for tracking the progress of  agencies’ consolidation efforts. OMB memoranda assign the GSA FDCCI  Program Management Office the responsibility of collecting agencies’  data center inventories in June and consolidation plans in September of  each year. OMB memoranda also establish OMB’s responsibility for  providing executive-level oversight and approving agencies’ data center  consolidation plans. Other responsibilities were not documented in official  policy, but were shared with us by agency staff and confirmed in OMB’s  January 2013 quarterly report to Congress. For example, agency staff  described additional GSA FDCCI Program Management Office  responsibilities, including analyzing agencies’ inventories and plans and  providing OMB with quarterly and ad-hoc reports on consolidation  progress. In addition, the Task Force Chairperson stated that the Task  Force has been responsible for developing and administering the peer  review process for agencies’ consolidation plans. See table 1 for a listing  of the FDCCI oversight and governance entities and their key  responsibilities.
The Task Force has been assigned and has executed a wide range of  FDCCI responsibilities, many of which are related to assisting agencies in  their consolidation efforts. 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 the  development of their consolidation plans by discussing lessons learned  during its monthly meetings and disseminating new OMB guidance. In  addition, the Task Force worked with the GSA FDCCI Program  Management Office to develop a standard total cost of ownership model  intended to help agencies in the development of cost savings figures in  their consolidation plans, among other things, and has also assisted with  its ongoing management by establishing a change control process.  Lastly, the Task Force worked with GSA and OMB to launch an electronic  governmentwide data center marketplace that is intended to match  agencies that have extra data center capacity with agencies with  increasing demand, thereby improving the utilization of existing facilities.
However, the Task Force has not provided oversight of the agency  consolidation peer review process. According to officials, the purpose of  the peer review process was 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, the Task Force Chairperson stated that they did  not perform checks to ensure that all agencies had exchanged plans. As  a result, the GSA FDCCI Program Manager acknowledged that there may  have been cases where agencies did not exchange their plans, but was  not completely sure because this had not been tracked. In addition, the  Task Force 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 identified. As previously mentioned,  in July 2012, we reported 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. At the time,  agency officials told us that they did not realize they were relying on an  outdated inventory template, an oversight that might have been identified  through a robust peer review process.
Several actions have been taken to address these communication issues.  Specifically, OMB has posted updated inventory and plan guidance on  the FDCCI website and committed to posting future guidance in a similar  manner, and officials from GSA’s FDCCI Program Management Office  stated that inventory data are now being collected via an electronic portal  to help prevent format issues. However, well-documented peer review  guidance and improved Task Force oversight of this process can help  ensure that similar situations are avoided in the future. According to OMB  staff from the Office of E-Government and Information Technology,  guidance for the peer review process has not been documented because  the expectation has been that agencies, as part of their review of another  agency’s plan, would determine the most important areas of the plan on  which to provide feedback. Until OMB ensures that the peer review  process is documented, agencies will lack the necessary guidelines for  carrying out their peer reviews and the likelihood of any errors or missing  elements in agencies’ inventories and consolidation plans not being  detected is increased.
section_title: GSA Assists OMB in Managing FDCCI, but Reviews of Inventories and Plans Were Incomplete
paragraphs: In its supporting role, the GSA FDCCI Program Management Office has  been assigned and has performed a broad set of responsibilities,  including many that are related to assisting OMB in managing FDCCI. For  example, GSA has collected responses to OMB-mandated document  deliveries, including agencies’ consolidation inventories and plans, on an  annual basis. Further, 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. GSA has also  maintained and updated other FDCCI-related online portals, such as  http://CIO.gov. In addition, GSA worked with the Task Force to develop  the total cost of ownership model, assists with the ongoing management  of the model, and provides ongoing technical assistance to agencies  regarding the model, as well as inventory and plan requirements. Lastly,  GSA worked with the Task Force and OMB to launch an electronic  governmentwide marketplace for data center availability.
However, 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 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. In addition, we noted that three  agencies had submitted their inventory using an outdated template.  According to OMB’s January 2013 quarterly report to Congress, GSA is  responsible for analyzing agencies’ inventories and plans, but this report  does not provide any information on specific analysis requirements. In  contrast, officials from GSA’s FDCCI Program Management Office stated  that their office does not do any significant validation of agencies’  consolidation plans, but typically checks to see if any major sections  (such as cost savings) are missing. Because OMB has not required  agencies to submit updated plans since September 2011, 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. A mechanism to help  ensure that GSA’s review requirements are fully executed could provide  OMB with reasonable assurance that any gaps between agency plans  and OMB’s requirements are identified.
section_title: OMB Has Partially Reported Agencies’ Consolidation Progress, but Has Not Approved Agency Plans or Tracked Cost Savings
paragraphs: After establishing FDCCI in 2010, OMB has taken several actions to  manage the initiative and to facilitate and oversee agencies’ consolidation  progress. As the FDCCI executive-level body, OMB is responsible for  managing FDCCI and ensuring that roles and responsibilities are fully  documented and carried out as intended. For example, 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 has also put in  place mechanisms to track and report on progress against one of its key  performance goals, the consolidation of approximately 40 percent of the  total data centers by the end of 2015. In this regard, OMB launched a  publically available electronic dashboard to track and report on agencies’  consolidation progress and, starting in fiscal year 2012, required agencies  to report quarterly via an online portal on their completed and planned  data center consolidation efforts. Lastly, OMB worked with the Task Force  and GSA to launch an electronic governmentwide marketplace for data  center availability.
However, 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. Staff from OMB’s Office of E-Government and  Information Technology have since stated that OMB is not responsible for  ensuring that agencies’ plans are complete, rather that the agencies are  solely responsible for this effort. While these staff have also  acknowledged that all FDCCI roles and responsibilities have not been  formally documented, OMB’s October 2010 FDCCI memorandum  documents OMB’s responsibility for approving agencies’ consolidation  plans. Further, in recognizing OMB’s role in providing executive-level  oversight of the initiative, we have also previously reported that OMB is  responsible for ensuring that agencies submit complete plans. Until  OMB reviews and approves agencies’ consolidation plans on the basis of  their completeness, OMB and the FDCCI agencies may remain unaware  of any gaps between these plans and OMB’s requirements, furthering the  risk that agencies will move ahead with consolidation efforts that do not  fully support OMB’s anticipated cost savings goal.
Additionally, 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,reported on cost savings realized for FDCCI. Instead, the agency’s  quarterly reports have 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. As previously  mentioned, OMB has not yet started to track agencies’ progress against  its cost savings goal because the agency is working to identify a  consistent and repeatable method for tracking cost savings. OMB staff  stated that they will begin reporting on cost savings after they determine  the appropriate method for tracking progress against this goal, but did not  know when this would occur. Until OMB fulfills its responsibility to track  and report on consolidation cost savings, the agency cannot begin to  measure progress against a key FDCCI performance goal and  stakeholders in the federal consolidation effort may not receive  information critical for monitoring the progress of a key government IT  reform effort.
section_title: Impact of FDCCI Integration with PortfolioStat on Key Oversight Responsibilities Is Not Addressed
paragraphs: OMB’s March 2013 memorandum integrating FDCCI with the  PortfolioStat initiative documents several oversight responsibilities related  to data center consolidation under the new combined initiative. As  previously mentioned, the memorandum describes OMB’s responsibilities  for collecting agencies’ information resources management strategic  plans, enterprise road maps, and integrated data collections, as well as  the Task Force’s responsibility for developing data center performance  metrics for energy, facility, and labor, among other things. The  memorandum also states that GSA is still responsible for collecting  agencies’ data center inventories in June 2013.
However, several other important oversight responsibilities related to data  center consolidation are not 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 these plans. 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.
section_title: Conclusions
paragraphs: 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. Additionally, even though  best practices promote the importance of establishing comprehensive  performance measures, OMB is not reporting on a key component of  consolidation progress, namely the size of facilities that are being closed,  and current agency consolidation progress indicates that additional time  will be needed beyond the original 2015 target in order to realize  anticipated cost savings. In the absence of tracking and reporting on key  performance measures, notably 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. In establishing this  oversight structure, these organizations have established and fulfilled  responsibilities designed to better ensure that federal data center  consolidation meets its planned goals, 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 reviews 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, 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.
section_title: Recommendations for Executive Action
paragraphs: To better ensure that FDCCI achieves expected cost savings and to  improve executive-level oversight of the initiative, we are making three  recommendations to OMB. 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.
section_title: Agency Comments and Our Evaluation
paragraphs: We received comments on a draft of our report from OMB and GSA.  Specifically, in written comments, 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 FDCCI and PortfolioStat initiatives  proceed and continue to generate savings, OMB will consider whether  updates to the current time frame are appropriate. OMB’s written  comments are provided in appendix II.
GSA provided technical comments in which it stated that it disagreed with  our finding that the agency has not executed its responsibilities related to  analyzing agencies’ inventories and plans. Specifically, GSA stated that  its FDCCI Program Management Office is not set up to perform audit or  in-depth review activities, that GSA’s review requirements are not  specifically defined by OMB, and that accountability for the accuracy and  completeness of inventories and plans lies with agency CIOs. We agree  that agencies have a responsibility for ensuring the completeness of their  documentation, and we note in the report that agency CIOs are required  to attest to the completeness of their consolidation plans. However, as  also mentioned in this report, OMB documentation specifically states that  the GSA FDCCI Program Management Office is responsible for analyzing  agencies’ inventories and plans. In addition, the report includes  information from GSA officials about their efforts to check these  documents for missing sections. Based on these facts, we stand by our  assessment that GSA has not fully executed its oversight responsibilities.
Our draft report provided to OMB for comment included a  recommendation that OMB provide the FDCCI agencies with guidance on  how the initiative was to be integrated with PortfolioStat, including  direction on reporting requirements and the measurement of key  performance indicators. OMB’s March 2013 memorandum provided  guidance on how FDCCI will be integrated with PortfolioStat. Among  other things, the memorandum included new reporting requirements and  provided initial direction on the measurement of key performance  indicators. As a result of OMB’s action, we have removed this  recommendation from our final report. We also modified the language of  our other recommendations as appropriate, taking into consideration  OMB’s memorandum.
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If you or your staffs have any questions on the matters discussed in 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 III.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our objectives were to (1) evaluate agencies’ reported progress against  the Office of Management and Budget’s (OMB) planned consolidation  and cost savings goals and (2) assess the extent to which the oversight  organizations put in place by OMB for the Federal Data Center  Consolidation Initiative (FDCCI) are adequately performing oversight of  agencies’ efforts to meet these goals.
To evaluate agencies’ reported progress, we compared the 24  departments and agencies’ data center facility reductions as reported on  http://data.gov with OMB’s original consolidation goals. To assess the  reliability of these data, we reviewed related documentation, such as  OMB’s reports to Congress on the status of information technology reform  efforts, checked for missing data or obvious errors, and interviewed OMB  staff from the Office of E-Government and Information Technology  regarding actions taken to verify the data. We determined that the data  were sufficiently reliable to report on agencies’ progress towards OMB’s  consolidation goals. In addition, we interviewed OMB staff about their  efforts to track consolidation cost savings. We also analyzed the  agencies’ 2011 consolidation plans to extract estimated cost savings  information. To assess the reliability of the data agencies provided in their  data center consolidation plans, we relied on actions performed as part of  our previous work to assess the reliability of the data, which included  reviewing the letters agencies were required to submit attesting to the  completeness and reliability of their plans, interviewing agency officials  about actions taken to verify their data, and reviewing the past  evaluations of agency plans. In the previous audit of FDCCI, we found  that the data were sufficiently reliable for reporting on the completeness  of agencies’ plans but, in our assessment of the plans, noted that most  agencies did not fully report on their cost savings information. For this  review, we reviewed the results of our previous data reliability  assessment in the context of current objectives, and interviewed agency  officials about any additional actions taken to verify the data. We  concluded that the data were sufficiently reliable for our purposes, which  was to report on agencies’ estimated cost savings information, but that  limitations existed related to the completeness of agencies’ cost savings  information. As such, we identify the limitations of these data in the  finding sections of this report.
To assess the extent to which the oversight organizations put in place by  OMB for FDCCI are adequately performing oversight of agency  consolidation efforts, we analyzed OMB memoranda,Center Consolidation Task Force Charter, and other related  documentation to determine the roles and responsibilities of key oversight  organizations, including OMB, the General Services Administration  FDCCI Program Management Office, and the Data Center Consolidation  Task Force. We then compared supporting documentation provided by  these organizations against their documented roles and responsibilities to  determine the extent to which these organizations were overseeing  agencies’ consolidation efforts in a manner consistent with their assigned  responsibilities. In addition, we interviewed relevant OMB, General  Services Administration, and Data Center Consolidation Task Force  officials to determine the extent to which their oversight roles and  responsibilities were being executed, as well as the extent to which they  were providing oversight of agencies’ efforts to meet established  consolidation and cost savings goals.
We conducted this performance audit from October 2012 to April 2013 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.
section_title: Appendix II: Comments from the Office of Management and Budget
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, individuals making contributions  to this report included Dave Hinchman (Assistant Director), Justin Booth,  Nancy Glover, and Jonathan Ticehurst.