Data Center Consolidation: Strengthened Oversight Needed to Achieve Billions of Dollars in Savings
Published: 2013-05-14T00:00:00

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.
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.
section_title: What GAO Found
paragraphs: 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.
section_title: What GAO Recommends
paragraphs: 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.

section_title: Letter
paragraphs: 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 testified 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 agenciesmaking 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. were  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. 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.
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.
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 lend 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.
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.
In an effort to accelerate federal data center consolidation, OMB has  directed agencies to use cloud computing as an approach to migrating or  replacing systems with Internet-based services and resources. In  December 2010, in its 25 Point IT Reform Plan, 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.
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). 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. Launched by  OMB in March 2012, PortfolioStat requires agencies to conduct an annual  agency-wide IT portfolio review to, among other things, reduce  commodity IT spending, demonstrate how its IT investments align with  the agency’s mission and business functions, and make decisions on  eliminating duplication. 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, an enterprise road map, and an  integrated data collection channel.
section_title: GAO Has Previously Reported on Significant Weaknesses in Agencies’ Inventories and Plans
paragraphs: 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.  Specifically, while all 24 agencies reported on their inventories to some  extent, only 3 had submitted a complete inventory. The remaining 21  agency submissions had weaknesses in several areas. For example,  while most agencies provided complete information on their  virtualization 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.
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,   For the remaining 23 agencies,  only 1 had submitted a complete plan.selected elements were missing from each plan. For example, among the  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 high- level 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   and quantitative goals, such as complete savings and  schedule,utilization forecasts. Figure 2 provides an assessment of the  completeness of agencies’ 2011 consolidation plans, by key element.
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  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.
section_title: Consolidation of Federal Data Centers is Under Way, but Initiativewide Cost Savings Have Not Been Determined
paragraphs: We and other federal agenciesto 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.   have documented the need for initiatives  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.
As of February 2013, agencies had collectively reported closing a total of  420 data centers by the end of December 2012, and were planning to  close an additional 396 data centers—for a total of 816—by September  2013. While the number of data centers that agencies are planning to  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 Congress 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 Congress 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.
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  projections were incomplete and, in some cases, unreliable. Specifically,  in July 2012, 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   With less than 3  end of 2015 (the planned completion date of FDCCI).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.
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, 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.
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.
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  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 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.
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. 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.
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, 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.
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.
section_title: Recent Integration with PortfolioStat Changes FDCCI, but Reporting Requirements and Goals Are Not Fully Defined
paragraphs: 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, 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.
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  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.
section_title: Implementation of Recommendations Could Help Ensure Improvements in Oversight
paragraphs: 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  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.
section_title: GAO Contact and Staff Acknowledgments
paragraphs: 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.
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