Data Center Optimization: Agencies Need to Complete Plans to Address Inconsistencies in Reported Savings
Published: 2017-05-18T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In December 2014, IT acquisition reform legislation was enacted that included a series of provisions related to ongoing federal data center consolidation efforts. The legislation required covered agencies to develop data center consolidation strategic plans and report cost savings to OMB. It also included a provision for GAO to annually review agencies' data center inventories and strategies. OMB's Federal Chief Information Officer (CIO) subsequently launched DCOI to build on prior data center consolidation efforts and improve federal data centers' performance.
GAO reviewed agencies' data center closure plans and consolidation savings progress and plans; and evaluated the extent to which agencies' annual consolidation strategic plans are complete. To do so, GAO assessed DCOI agencies' data center inventories, reviewed agencies' reported cost savings documentation, and evaluated their data center optimization strategic plans. GAO also updated its assessments in April 2017 in response to agency comments on its draft report.
section_title: What GAO Found
paragraphs: The 24 agencies participating in the Office of Management and Budget's (OMB) Data Center Optimization Initiative (DCOI) have made progress on their data center closure efforts. As of August 2016, the agencies collectively had identified a total of 9,995 data centers, of which they reported having closed 4,388 and having plans to close a total of 5,597 through fiscal year 2019. The Departments of Agriculture, Defense, Interior, and Treasury accounted for 84 percent of the completed closures.
In addition, 18 of the 24 agencies reported achieving about $2.3 billion collectively in cost savings and avoidances from their data center consolidation and optimization efforts from fiscal year 2012 through August 2016. The Departments of Commerce, Defense, Homeland Security, and Treasury accounted for approximately $2.0 billion (or 87 percent) of the total. Further, 23 agencies reported about $656 million collectively in planned savings for fiscal years 2016 through 2018. This is about $3.3 billion less than the estimated $4.0 billion in planned savings for fiscal years 2016 through 2018 that agencies reported to GAO in November 2015. (See figure.)
This reduction in planned savings is the result of eight agencies reporting less in planned cost savings and avoidances in their annual DCOI strategic plans, which are required by December 2014 information technology (IT) acquisition reform legislation, as compared to the savings these agencies previously reported to GAO in November 2015. The reduction also does not include cost savings information for one agency that had not submitted its strategic plan in time for our review. GAO has previously recommended that agencies fully report these savings.
Additionally, as of April 2017, 23 of the 24 agencies had submitted a strategic plan. Of the 23 plans, only 7 included all required information. The remaining plans either partially met or did not meet the requirements. Until agencies submit plans that address all required elements, they may be challenged in implementing the data center consolidation and optimization provisions of the legislation. GAO also identified inconsistencies in how 11 agencies reported historical cost savings in their DCOI strategic plans, as compared to a separate required quarterly report to OMB. These inconsistencies, due in part to weaknesses in OMB's oversight of agencies' savings information and their DCOI strategic plan, resulted in a reporting discrepancy of approximately $1.5 billion between the two sources. Until OMB improves its oversight of agencies' reporting of cost savings, and until agencies address inconsistencies in their reporting, the likelihood of further reporting errors is increased.
section_title: What GAO Recommends
paragraphs: GAO is recommending that OMB ensure that agencies complete their DCOI strategic plans and report achieved data center cost savings consistently across all reporting mechanisms. GAO is also recommending that 17 agencies complete their DCOI strategic plans and that 11 agencies ensure the amounts of achieved cost savings are consistent across reporting mechanisms. Twelve agencies agreed with GAO's recommendations, 2 disagreed, and 11 did not state whether they agreed or disagreed, as discussed in the report.

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 improved their  information security profiles, their need for computing power and data  storage resources has grown. Accordingly, this growing demand has 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 to reduce the growing number of centers.
Congress has also recognized the importance of reforming the  government-wide management of IT, and in December 2014, enacted  Federal Information Technology Acquisition Reform provisions  (commonly referred to as FITARA) as a part of the Carl Levin and Howard  P. ‘Buck’ McKeon National Defense Authorization Act for Fiscal Year  2015. Among other things, the law includes specific requirements related  to federal data center consolidation:
Covered departments and agencies (agencies) shall annually report  to OMB about federal data center inventories and strategies to  achieve consolidation, including yearly calculations of investment and  cost savings.
OMB shall develop and make publicly available a goal, broken down  by year, for the amount of planned cost savings and optimization  improvements achieved through FDCCI, and, for each year thereafter  through October 1, 2018, compare progress against those goals.
In addition, FITARA includes a provision for us to annually review and  verify the quality and completeness of covered agency federal data center  inventories and strategies for consolidation. The specific objectives of this  report were to (1) review agencies’ data center closures to date and plans  for further closures, (2) evaluate agencies’ progress in achieving data  center consolidation savings and describe plans for future savings, and  (3) evaluate the extent to which agencies’ annual strategic plans for data  center consolidation and optimization are complete.
On December 19, 2016, we delivered a briefing to congressional  committees on the results of our study. This report officially transmits the  results of our review.
To perform this work, we assessed the data center inventories of the 24  agencies participating in the Data Center Optimization Initiative (DCOI)  (which are the same agencies covered by FITARA’s data center  consolidation provisions) as of August 2016, reviewed agency-reported  cost savings and avoidance documentation as of August 2016, and  evaluated the extent to which agencies’ data center optimization strategic  plans (as of December 2016) provided the key elements identified in  OMB’s memorandum implementing FITARA. The briefing slides included  in appendix I provide greater detail on our scope and methodology.  Further, this report includes updated information provided to us by the  agencies we reviewed, as part of their comments on a draft copy of the  report.
We conducted this performance audit from July 2016 to May 2017 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.
As noted above, FITARA requires 24 agencies to submit to OMB a  comprehensive inventory of the data centers owned, operated, or  maintained by or on behalf of the agency. It also requires agencies to  report on data center consolidation and optimization progress.  Subsequent to the enactment of FITARA, in August 2016, the Federal  CIO announced in a memorandum the DCOI as a successor effort to  FDCCI. According to OMB, this new initiative supersedes and builds on  the results of FDCCI and is intended to improve the performance of  federal data centers in areas such as facility utilization and power usage.  Among other things, DCOI requires 24 federal agencies to develop plans  and report on strategies (referred to as DCOI strategic plans) to  consolidate inefficient infrastructure, optimize existing facilities, improve  security posture, and achieve cost savings. Through its August 2016  memorandum, OMB defines a framework for achieving specific data  center consolidation and optimization requirements, the criteria for  successful agency data center strategies, and the metrics OMB will use to  evaluate the success of those strategies.
The guidance also revised the definition of a physical data center to  include any room with at least one server that provides services (such as  testing and development). In light of this new definition, OMB directed all  agencies to perform a comprehensive review of their data centers and  maintain a complete and updated data center inventory.
In summary, the agencies have collectively made progress on their data  center closure efforts. Specifically, as of August 2016, the agencies had  identified a total of 9,995 data centers, of which they reported closing  4,388. The Departments of Agriculture, Defense, Interior, and Treasury  accounted for 84 percent of the completed closures.
Further, the agencies collectively reported that they are planning to meet  OMB’s fiscal year 2018 consolidation targets to close 25 percent of tiered  data centers and 60 percent of non-tiered centers. Specifically, as of  August 2016, our analysis of the agencies’ data center inventories  showed that they were planning to close approximately 25 percent of the  government-wide total of tiered data centers and approximately 66  percent of the government-wide total of non-tiered centers by the end of  fiscal year 2018. When accounting for additional closures expected in  fiscal year 2019, the agencies reported that they plan to close a total of  5,597 centers. Figure 1 provides a summary of the 24 agencies’ total data  centers and completed and planned closures.
Additionally, FITARA and OMB’s guidance require the DCOI agencies to  provide yearly estimates of cost savings. FITARA contains a series of  requirements for OMB and agencies related to reporting on cost savings.  For example, according to the law, agencies are to submit a multi-year  strategy for achieving the consolidation and optimization of data centers  that includes year-by-year calculations of investment and cost savings  through fiscal year 2018.
OMB’s August 2016 guidance also provides additional information  regarding how agencies should implement the requirements of FITARA,  including how to report cost savings and avoidances. Specifically,  covered agencies are to establish a strategic plan that includes  information on historical cost savings and avoidances due to data center  consolidation and optimization through fiscal year 2015. In addition,  OMB’s guidance states that agency strategic plans are to include year-by- year calculations of target and actual agency-wide spending and cost  savings on data centers from fiscal years 2016 through 2018. OMB has  also required agencies to report both their data center consolidation cost  savings and avoidances, among other areas, as part of OMB’s quarterly  data collection process known as the integrated data collection.
Accordingly, 18 of the 24 agencies collectively reported achieving an  estimated $2.3 billion in cost savings and avoidances from their data  center consolidation and optimization efforts from the start of fiscal year  2012 through August 2016. The Departments of Commerce, Defense,  Homeland Security, and Treasury accounted for approximately $2.0  billion (or 87 percent) of the total.
The approximately $2.3 billion in cost savings and avoidances reported to  OMB are about $451 million less than the total amount of achieved cost  savings and avoidances that agencies reported to us in November 2015,  even though agencies had 9 additional months to accrue additional  savings. Figure 2 provides a comparison of the total cost savings and  avoidances agencies reported to us in November 2015 with the achieved  cost savings and avoidances that agencies reported to OMB in August  2016.
In addition, agencies are planning a total of approximately $656 million in  savings between fiscal years 2016 and 2018, according to their DCOI  strategic plans. However, this is about $3.3 billion less than the  approximately $4.0 billion in fiscal year 2016 through 2018 planned  savings that agencies reported to us in November 2015. This is also  about $2.1 billion less than OMB’s $2.7 billion cost savings goal for  agencies to achieve by the end of fiscal year 2018, as required by OMB’s  August 2016 memorandum. Figure 3 presents a comparison of the  amounts of cost savings and avoidances reported by agencies to OMB  through their DCOI strategic plans and the amounts the agencies  reported to us.
The reduction in planned savings reflects eight agencies reporting less  planned cost savings and avoidances in their DCOI strategic plans  compared to the savings amounts previously reported to us in November  2015. It also reflects the absence of cost savings information for one  agency that had not submitted its strategic plan in time for our review.
Further, in March 2016, we reported that 10 agencies had not  established planned cost savings goals for fiscal years 2016 through  2018 even though they had closures planned during that time period. We  concluded that, until agencies complete their savings goals, total planned  savings amounts may be understated and agencies will not be able to  fully satisfy requirements regarding data center consolidation.  Accordingly, we recommended that these agencies complete their  planned data center cost savings targets for fiscal year 2016 through  2018. Most agencies agreed with the recommendations or had no  comments.
Nonetheless, agencies continue to be challenged in identifying and  reporting their cost savings. In the absence of consistent and full reporting  of fiscal year 2016 through 2018 planned savings in agencies’ DCOI  strategic plans, as required by FITARA and OMB, agencies’ total planned  savings will likely continue to be understated. Therefore, we are re- emphasizing the need for agencies to implement our prior  recommendation to complete their planned data center cost savings  targets.
Finally, as noted earlier, FITARA required agencies to submit a multi-year  strategy to achieve the consolidation and optimization of their data  centers no later than the end of fiscal year 2016. Among other things, this  strategy was to include such information as data center consolidation and  optimization metrics; and year-by-year calculations of investment and  cost savings through October 1, 2018.
Further, OMB’s August 2016 guidance contained additional information  for how agencies are to implement the strategic plan requirements of  FITARA. Specifically, the guidance stated that agency DCOI strategic  plans are to include, among other things, planned and achieved  performance levels for each optimization metric; calculations of target and  actual agency-wide spending and cost savings on data centers; and  historical cost savings and cost avoidances due to data center  consolidation and optimization. OMB’s guidance also stated that agencies  were required to publicly post their DCOI strategic plan to their agency- owned digital strategy website by September 30, 2016.
Of the 23 agencies that submitted their DCOI strategic plans, only 7— the Departments of Agriculture, Education, Homeland Security, and  Housing and Urban Development, the General Services Administration,  the National Science Foundation, and the Office of Personnel  Management—had addressed all five elements required by the OMB  memorandum implementing FITARA; the remaining 16 either partially met  or did not meet the requirements. For example, most agencies partially  met or did not meet the requirements to provide information related to  data center closures and cost savings metrics. Figure 4 provides an  assessment of the completeness of agencies’ data center optimization  plans, by key element.
Our analysis of the agencies’ DCOI strategic plans determined that most  of the agencies that submitted a plan met OMB’s requirements for  providing planned data center optimization, closure, and savings goals.  However, agencies’ DCOI strategic plans are also required to include  achieved performance levels for each OMB optimization metric, closures,  and actual cost savings. Our analysis showed that most plans did not  provide information on progress achieved in these areas for fiscal year  2016.
Agencies provided a variety of reasons for why their plans were  incomplete, including the difficulty of reporting on fiscal year 2016 actual  savings and closures when the data are not yet finalized and the receipt  of incomplete data from some agency components. However, although  the DCOI strategic plans were due to OMB on September 30, 2016  (before the fiscal year ended), agencies could still have reported achieved  progress information in their plans. For example, agencies report data  related to fiscal year 2016 achieved optimization progress, closures, and  cost savings through other OMB reporting mechanisms, such as the  quarterly data submissions, which could have been included in their DCOI  strategic plan. Until agencies address the missing elements in their DCOI  strategic plans, they will be at risk of not realizing anticipated savings,  improved infrastructure utilization, and energy efficiency; they also may  not be able to satisfy requirements regarding data center consolidation  and optimization.
Since 2013, OMB has required agencies to provide quarterly data  submissions that report on their data center consolidation related cost  savings and avoidances. As noted above, OMB’s August 2016  memorandum also required agencies to report on historical data center- related cost savings in their DCOI plans, which were due in September  2016. In our December 2016 briefing, we reported that, in comparing the  August 2016 quarterly data, which at the time were the most recent data  available, and the historical savings in the DCOI plans, we identified  inconsistencies in the reporting of historical cost savings by agencies  across those two reporting mechanisms. Specifically, we found that of the  24 agencies, 9 consistently reported savings information in their DCOI  strategic plans and their August 2016 quarterly reports to OMB, 11  agencies did not report consistent information, and 4 agencies (the  Departments of Defense, Energy, and Homeland Security, and the Office  of Personnel Management) did not submit their DCOI strategic plans.  These inconsistencies resulted in a discrepancy totaling approximately  $1.5 billion between the two mechanisms, and were due, to incomplete  data in the DCOI strategic plans that agencies submitted. Subsequently,  after receiving a draft copy of this report for comment, three of the four  agencies (the Departments of Energy and Homeland Security and the  Office of Personnel Management) provided us with a copy of their  strategic plan.
According to staff in OMB’s Office of the Federal CIO, the OMB staff who  review agency budget submissions also worked with the agencies to  ensure that they provided complete savings information in their DCOI  strategic plan. However, several agencies’ DCOI strategic plans did not  include the fiscal year 2012 through 2015 savings that were reported in  their August 2016 quarterly cost savings update. Further, we identified  several instances in which agencies’ plans had underreported their  planned cost savings and avoidances. We also found other errors in  agencies’ quarterly data reporting, such as incorrectly categorized data  center savings due to initiatives that were incorrectly marked as being  data center-related. Until OMB improves its oversight of agencies’  reporting of cost savings, and agencies ensure that their savings  information is consistent across all reporting mechanisms, the likelihood  of further reporting errors is increased. Additionally, until OMB improves  its oversight of the information in agencies’ DCOI strategic plans, it may  be challenged in demonstrating that DCOI is meeting its established  objectives.
subsections: section_title: Conclusions
paragraphs: Continuing to build on progress made under FDCCI, agencies have  reported significant data center closures—totaling more than 4,300  through August 2016—and current plans identify more than 1,200  additional centers planned for closure through fiscal year 2019. If  executed as planned, such closures will help agencies continue to  increase their operational efficiency and achieve savings. Agencies have  also reported significant consolidation and optimization cost savings and  avoidances. However, agencies’ total planned cost savings are $3.3  billion less than what we reported in 2015. In the absence of planned  savings that remain consistent and fully reported, total planned savings  are likely to continue to be understated.
OMB’s recent guidance on data center optimization was a positive step  forward in providing agencies with the detailed guidance to establish their  required strategic plans to optimize their data centers and achieve cost  savings. However, not all agencies have submitted their plans and only  seven of the plans submitted addressed all the key elements required by  FITARA and OMB. Moreover, significant inconsistencies in agencies’  reported savings raise further questions regarding the accuracy of agency  reporting and OMB’s oversight of this initiative. Addressing these  inconsistencies and expeditiously completing these plans is increasingly  important in order to meet the federal requirements. Until OMB improves  its oversight of the information in agencies’ strategic plans, and agencies  complete the missing elements, they may be challenged in fully  implementing the data center consolidation and optimization provisions of  FITARA. Further, until OMB improves it oversight of agencies’ reporting of  cost savings and agencies address inconsistencies in their reporting,  savings will likely continue to be underreported.
section_title: Recommendations for Executive Action
paragraphs: To better ensure that federal data center optimization efforts improve  governmental efficiency and achieve cost savings, we are making two  recommendations to OMB. Specifically, we recommend that the Director  of OMB direct the Federal CIO to provide the necessary oversight to ensure that each agency completes their DCOI strategic plan in  accordance with OMB’s guidance implementing FITARA and ensure that agency reporting of achieved data center consolidation  and optimization cost savings and avoidances is consistent across all  reporting mechanisms, including quarterly data submissions and  agency DCOI strategic plans.
We also recommend that the following 17 agencies (the Secretaries of  the Departments of Commerce, Defense, Energy, Health and Human  Services, Interior, Labor, State, Transportation, Treasury, and Veterans  Affairs; the Attorney General; and the Administrators of the Environmental  Protection Agency, National Aeronautics and Space Administration, Small  Business Administration, and U.S. Agency for International Development;  the Chairman of the Nuclear Regulatory Commission; and the  Commissioner of the Social Security Administration) each take action to  complete the missing elements in their respective DCOI strategic plan,  including addressing any identified challenges, and submit their  completed strategic plan to OMB.
Finally, we recommend that the following 11 agencies (the Secretaries of  the Departments of Commerce, Education, Health and Human Services,  Interior, Labor, State, Transportation, and Treasury; the Administrators of  the Environmental Protection Agency, General Services Administration,  and the U.S. Agency for International Development) also each take action  to ensure that the amounts of achieved data center cost savings and  avoidances are consistent across all reporting mechanisms, including the  quarterly data submissions and DCOI strategic plans.
section_title: Agency Comments and Our Evaluation
paragraphs: We received comments on a draft of this report from OMB and from the  24 agencies that we reviewed. Of these, 12 stated they agreed with our  recommendations, 2 (the Department of Housing and Urban  Development and the Nuclear Regulatory Commission) did not agree,  and 11 (including OMB) did not state whether they agreed or disagreed.  Multiple agencies also provided technical comments, which we have  incorporated as appropriate. The following discusses each agency’s  comments.
In an e-mail received on April 5, 2017, a staff member from OMB’s  Office of General Counsel did not agree or disagree with our  recommendation, and offered several comments on our findings.  Specifically, the staff member stated that OMB was unable to replicate  our totals of the number of data centers closed and remaining. The  staff member also noted that we did not include agency cloud service  providers or data centers with no closing date in our totals, whereas  OMB includes such instances in its counts. In conducting our analysis,  we did not count cloud service providers because OMB’s guidance  specifically states that such providers are not to be considered as  data centers. In regard to data centers identified as planned for  closure, but without a closing date, we did not count such facilities as  closures because the lack of a date suggested only a tentative plan,  rather than a firm commitment.
The staff member further stated that OMB could not replicate our cost  savings estimates and noted that while OMB relied solely on  information reported by agencies to the IT Dashboard, we also had  access to contextual information about the data, provided to us by the  agencies. The staff member asserted that OMB did not have access  to that same information. However, the contextual information  referenced by the staff member is only amplifying information we  obtained from the agencies through the normal course of our audit  work, as we interviewed agency officials in order to verify the  information reported by the agencies to OMB and to verify the results  of our analyses. On multiple occasions, our work has pointed out the  differences in what agencies are reporting to OMB and what they are  reporting to us, and we have made multiple recommendations for  OMB and agencies to address these discrepancies. For this reason,  we requested and received agencies’ validation of the results of our  analysis of agency closures and cost savings on multiple occasions.  As such, we stand by the results of our analysis and the data center  closures and cost savings estimates that we are reporting.
Additionally, the staff member stated that grouping together in one  category the agencies that had not fully completed all the required  elements of their DCOI strategic plans ignored significant quality  differences between the plans, as well as shared problems with each  of them. Our report currently summarizes that seven agencies  addressed all required plan elements, but that 17 other agencies  either partially met or did not meet the requirements. Our report also  provides a graphic that illustrates the number of agencies that met,  partially met, or did not meet each requirement. Further, the briefing  slides that we are transmitting with this report (found in appendix I)  detail the extent to which individual agencies completed their strategic  plans and also discuss reasons why agencies were unable to  complete their plans, including shared challenges. As such, we  maintain that the statement in our report appropriately summarizes  the findings detailed in our briefing.
In an e-mail received on April 3, 2017, a senior advisor in the  Department of Agriculture’s Office of the CIO stated that the CIO  concurred with our recommendation that the department had taken  action to complete the missing elements in its strategic plan, including  addressing any identified challenges, and submitted the completed  strategic plan to OMB. The advisor noted that the department had  updated its DCOI strategic plan to include fiscal year 2016  achievement information and posted its revised plan. In addition, the  advisor said that the department had posted its CIO statement  asserting that the agency has complied with all reporting requirements  in OMB’s memorandum and the data center requirements of FITARA.
Our analysis of the department’s updated DCOI strategic plan  concluded that the plan included the missing elements we identified  during our review. We also confirmed that the department’s CIO  statement was available publicly on the department’s website. As a  result, we have removed this recommendation from our report. In  addition, the department provided technical comments, which we  have incorporated as appropriate.
In written comments, the Department of Commerce agreed with our  recommendations and described planned actions to address them.  Specifically, the department stated that it will continue to aggregate its  data center inventory and update its DCOI strategic plan by OMB’s  April 17, 2017, submission deadline. The department also stated that  it will, through the integrated data collection process, continue to  collect and report all initiatives resulting in cost savings and  avoidances to ensure IT savings are being captured and realized. The  Department of Commerce’s comments are reprinted in appendix II.
In an e-mail received on March 27, 2017, a Department of Defense  CIO audit liaison stated that the department had no comment on the  draft report, and did not state whether the department agreed or  disagreed with the recommendations. The department provided  technical comments, which we have incorporated as appropriate.
In written comments, the Department of Education did not agree or  disagree with our recommendations but acknowledged that the  department had not included historical cost savings and avoidance  information in its DCOI strategic plan, as required. The department  attributed the omission to its interpretation of DCOI strategic plan  guidance, and provided a life cycle cost estimate, rather than the  required historical cost savings through 2015. The department stated  that it has subsequently corrected its strategic plan, and it provided us  with a copy of the plan.
Our draft report provided to the department for comment included a  recommendation that the department take action to complete the  missing elements in its strategic plan, including addressing any  identified challenges, and submit the completed strategic plan to  OMB. Our analysis of the department’s updated DCOI strategic plan  states that it includes the missing elements we identified during our  review. We also confirmed that the department’s CIO statement was  available publicly on the department’s website. As a result, we have  removed this recommendation from our report. The Department of  Education’s comments are reprinted in appendix III.
In written comments, the Department of Energy concurred with our  recommendation that it take action to complete the missing elements  in its DCOI strategic plan, including addressing any identified  challenges, and submit the completed strategic plan to OMB. The  department stated that it had submitted its fiscal year 2016 DCOI  strategic plan to OMB in February 2017 and posted a copy on an  agency web site. The department further said that in the plan, it  reported meeting or exceeding all fiscal year 2016 goals and  established performance targets for fiscal years 2017 and 2018, and  that the plan included all past and present cost savings and  avoidances achieved. Further, the department noted that it expects to  complete a comprehensive inventory of its data centers by the release  date for the fiscal year 2017 DCOI strategic plan in April 2017.
Our analysis of the department’s updated strategic plan found that it  includes most of the missing elements we identified during our review.  For example, it includes target optimization, closure, and savings  metrics for fiscal years 2016 through 2018 and achieved data for  those metrics for 2016. However, the plan does not include the costs  of closures and optimization, two key components of OMB’s required  cost savings metric. In the updated plan, the department states that it  intends to include such information in the next plan update. Because  the department’s updated DCOI strategic plan did not include the  costs of closures and optimization, we maintain that the  recommendation is still valid. The Department of Energy’s comments  are reprinted in appendix IV.
In an e-mail received on April 3, 2017, a Department of Health and  Human Services audit liaison stated that the department had no  comments on the draft report, and did not state whether the  department agreed or disagreed with our recommendations.
In written comments, the Department of Homeland Security concurred  with our recommendation that it take action to complete the missing  elements in its strategic plan, including addressing any identified  challenges, and submit the completed plan to OMB. The department  stated that, in March 2017, its Office of the Chief Information Officer  finalized its DCOI strategic plan and uploaded it to an agency web  page, as directed by OMB. The department further noted that the plan  contained all required elements and discussed challenges identified  by the department. Finally, the department said that its DCOI metrics  and its CIO certification had been uploaded to the web page, as well.
Our analysis of the department's updated DCOI strategic plan found  that it includes the missing elements we identified during our review.  We also found that the department's CIO statement was available  publicly on the department's website. As a result, we have removed  this recommendation from our report. In addition, the department  provided technical comments, which we have incorporated as  appropriate. The Department of Homeland Security's comments are  reprinted in appendix V.
In written comments, the Department of Housing and Urban  Development disagreed with our recommendation to take action to  complete the missing elements in its DCOI strategic plan, including  addressing any identified challenges, and to submit its completed  strategic plan to OMB. Specifically, the department requested that it  be removed from the list of agencies that had not completed elements  in their strategic plan. The department noted that its data center  consolidation efforts were complete and associated cost savings  realized at least 10 years prior. Consequently, the department had  completed the estimated savings section of its plan as "not  applicable," an option provided by OMB.
After further review of the department's DCOI strategic plan, we agree  with the department's assertion that it provided a complete plan. As a  result, we have removed this recommendation from our report.
The department also pointed to multiple locations in the report where  it stated we had inaccurately assessed the state of its data center  consolidation efforts and associated savings, and the completeness of  the department's DCOI strategic plan. However, all of the specific  instances cited by the department are found in appendix I of this  report, which is a briefing that we delivered to Congress on December  19, 2016. Before we delivered our briefing, the department was  provided two separate opportunities to comment on the facts and  findings contained in our briefing. Specifically, on November 21, 2016,  we provided the department with a copy of the briefing for factual  correction and on December 6, 2016, we provided a copy of the  briefing for comment on the conclusions and recommendations. In  response to our first request, a departmental liaison replied on  November 30, 2016, that the department had no factual corrections to  the briefing. The department did not respond to our second request,  despite several attempts that we made to obtain its comments.
The department did not raise these concerns over the factual  statements in our briefing until its March 29, 2017, written comments  on the draft copy of this report.  As this report serves to publish our  briefing that was delivered to Congress in December 2016, we have  not revised the contents of the briefing that is re-printed in appendix I.  However, as noted, we have re-evaluated our characterization of the  department’s strategic plan that is found in the body of this report,  have updated our assessment of the completion of the plan, and  removed our recommendation. The Department of Housing and  Urban Development’s comments are reprinted in appendix VI.
In written comments, the Department of the Interior agreed with our  recommendations and stated that it would take action to complete the  missing items in its DCOI strategic plan, including addressing any  identified challenges, and would submit the completed plan to OMB.  The department also said it would ensure that the amounts of  achieved data center cost savings and avoidances are consistent  across all reporting mechanisms, including the quarterly data  submissions and DCOI strategic plans. The Department of the  Interior’s comments are reprinted in appendix VII.
In an e-mail received March 28, 2017, an audit liaison specialist in the  Justice Management Division of the Department of Justice stated that  the department had no formal comments on the draft report. The  liaison also did not state whether the department agreed or disagreed  with our recommendation that it take action to complete the missing  elements in its strategic plan, including addressing any identified  challenges, and submit the completed strategic plan to OMB.
However, the liaison did provide us a copy of an updated DCOI  strategic plan and a copy of the department's CIO statement.
Our analysis of the department's updated DCOI strategic plan  determined that it includes most of the missing elements we identified  during our review. For example, it includes the achieved data values  for optimization metric performance, data center closures, and data  center consolidation and optimization-related cost savings for fiscal  year 2016. We also found that the department's CIO statement was  available publicly on the department's website.
Nevertheless, while the updated DCOI plan provides a description of  costs for data center consolidations and optimization in fiscal year  2016, it does not provide dollar amounts for the data center  investments. Further, while we recognize that the updated plan  addresses the majority of the requirements, the department did not  include the dollar amounts for its fiscal year 2016 investments in data  center consolidation and optimization, as required by OMB's guidance  on the implementation of FITARA. Thus, we maintain that our  recommendation is still valid. The department also provided technical  comments, which we incorporated as appropriate.
In an e-mail received on April 3, 2017, a Department of Labor audit  liaison stated that the department’s technical staff had no comments  on the draft report and did not state whether the department agreed or  disagreed with our recommendations.
In written comments, the Department of State agreed with our  recommendations and described planned actions to address them.  Specifically, the department described plans to acquire, subject to  funding availability, automated monitoring tools for its enterprise data  centers. It also described plans to engage OMB to rebaseline the  closure target for its non-tiered data centers located outside the  United States, based on the department’s mission needs. In addition,  the department noted that it is in the process of identifying the number  of server rooms in the United States that meet the DCOI definition of a  data center. The department also reaffirmed its commitment to include  updated data center closures and cost savings information in its DCOI  strategic plan. The Department of State’s comments are reprinted in  appendix VIII.
In an e-mail received on March 6, 2017, an audit liaison in the  Department of Transportation’s Audit Relations and Program  Improvement office stated that the department concurred with our  recommendations.
In an e-mail received on March 31, 2017, an audit liaison in the  Department of the Treasury’s Office of the CIO did not agree or  disagree with the recommendations, but commented on our findings.  Specifically, the comments noted that the differences we identified in  Treasury’s reported savings were due to a change in calculation  methodology. The comments further noted that the department’s  February 2017 quarterly report to OMB included both the historical  savings identified under the old methodology and the current DCOI  savings initiative, to better correlate with savings figures previously  reported to us and with savings figures reported in the department’s  DCOI strategic plan. We agree that, while the gap in Treasury’s  reported savings to OMB, as compared to savings reported to us, has  narrowed substantially, there is still a shortfall between what the  department recently reported and what was previously reported to us.
In written comments, the Department of Veterans Affairs agreed with  our recommendation that it take action to complete the missing  elements in its DCOI strategic plan, including addressing any  identified challenges, and submit the completed strategic plan to  OMB. The department further stated that it had completed and  resubmitted its DCOI strategic plan to OMB in December 2016 and  that it had posted the plan on an agency web page.
Our analysis of the department's updated plan determined that the  updated plan includes several of the missing elements we identified  during our review. For example, it includes the achieved data values  for optimization metric performance, data center closures, and data  center consolidation and optimization-related cost savings for fiscal  year 2016.
However, while the updated DCOI plan provides a description of costs  for data center consolidations and optimization in fiscal year 2016, it  does not provide dollar amounts for the data center investments.  While we found that the department's updated plan addresses most of  the requirements, the plan does not include the dollar amounts for the  department's fiscal year 2016 investments in data center  consolidation and optimization, as required by OMB's guidance on the   implementation of FITARA. Further, we also did not find the  department's CIO statement available publicly on the department's  website. For these reasons, we maintain that our recommendation is  still valid. The Department of Veterans Affairs' comments are  reprinted in appendix IX.
In written comments, the Environmental Protection Agency did not  agree or disagree with our recommendations, but described actions  planned to address them. Specifically, the agency stated that it will  update its DCOI strategic plan to include elements not reflected in the  2016 submission and will complete the plan to the extent feasible. The  Environmental Protection Agency also stated that it is working toward  consistent reporting on cost savings and avoidances in future  reporting submissions and is finalizing a cost analysis methodology to  be applied to its DCOI strategy. The agency further stated that it  would ensure consistent use of the process for all reporting queries.  We encourage the agency’s efforts to ensure consistent reporting  across the various mechanisms that collect DCOI data. The  Environmental Protection Agency‘s comments are reprinted in  appendix X.
In written comments, the General Services Administration agreed with  our recommendation that it take action to complete the missing  elements in its strategic plan, including addressing any identified  challenges, and submit the completed strategic plan to OMB. The  agency stated that it had updated its DCOI strategic plan to complete  the missing elements and had posted the plan on its public web page.
Our analysis of the agency's updated DCOI strategic plan determined  that the plan includes the missing elements we identified during our  review. We also found that the agency's CIO statement was available  publicly on the agency's website. As a result, we have removed this  recommendation.
The agency also agreed with our recommendation to ensure that the  reporting of achieved data center consolidation and optimization cost  savings and avoidances is consistent across all reporting  mechanisms, including quarterly data submissions and agency DCOI  strategic plans. The agency further described actions it planned to  address the recommendation. Specifically, to better understand  variances in OMB's cost model guidance, the agency said it will  conduct a variance analysis of the differences in reported savings.  Further, the agency said it will determine the most accurate  representation of realized savings and will adjust its strategic plan and  integrated data collection accordingly, making corrections in prior year  projections and actual savings, as appropriate. We encourage the  agency's efforts to ensure consistent reporting across the various  mechanisms that collect DCOI data. The General Services  Administration's comments are reprinted in appendix XI.
In written comments, the National Aeronautics and Space  Administration agreed with our recommendation and stated that it  would provide OMB with an update to the agency’s DCOI strategic  plan that would address missing elements and any identified  challenges. The National Aeronautics and Space Administration’s  comments are reprinted in appendix XII.
In an e-mail received on March 23, 2017, a National Science  Foundation GAO liaison said the agency had no comments on the  draft report.
In written comments, the Nuclear Regulatory Commission stated that  it generally agreed with our findings. However, the agency stated that  it disagreed with our recommendation to take action to complete the  missing elements in its DCOI strategic plan, including addressing any  identified challenges, and to submit its completed strategic plan to  OMB. Specifically, the agency asserted that its plan was completed  and submitted via the process referenced by our recommendation and  that OMB had assessed the agency's plan as including all information  required by the schema provided by OMB. The Nuclear Regulatory  Commission further stated that its CIO statement had been posted to  an agency web page, along with a document that provided  supplemental information beyond its strategic plan.
We acknowledge that the agency completed all the requirements  found in the OMB schema; however, its plan did not include all the  information required by OMB's August 2016 memorandum on the  content of agencies' DCOI strategic plans. Notably, the Nuclear  Regulatory Commission did not identify planned cost savings for fiscal  years 2016-2018, actual cost savings for fiscal year 2016, or costs for  consolidations and optimizations, as required by the memorandum.  We also acknowledge that the agency posted its CIO statement to an  agency web page, as required. However, OMB requires that this  statement describe the reasons that an agency's DCOI strategic plan  does not fully comply with all reporting requirements. Because we  found that the Nuclear Regulatory Commission's plan did not have all  required information, and because the agency's CIO statement did not  address this missing information, we assessed the CIO statement as  being only partially complete. All agencies in our review were similarly  evaluated. Based on this analysis, we maintain that our findings are  accurate and our recommendation appropriate.
The Nuclear Regulatory Commission also asserted that it had  provided comments on a draft of the briefing, whereas we state that  the agency did not. Specifically, the agency said that it provided  written comments to us on November 30, 2016. However, those  comments were in response to our November 21, 2016 request for  factual corrections to the briefing and the agency's response was  incorporated into the briefing, as appropriate. On December 6, 2016,  we also requested that the agency comment on the briefing's  conclusions and recommendations. We did not receive a response to  that request, despite several efforts to obtain one. It was the status of  this unanswered request that we summarized in the briefing passage  cited by the Nuclear Regulatory Commission.
Additionally, the agency addressed planned actions to implement  metering and monitoring capabilities for the data centers it intends to  keep, in order to start collecting metrics that could be used to show  future cost savings. We encourage these efforts, as the development  of such metering and monitoring capabilities are key components of  achieving the optimization and efficiency goals of DCOI. The Nuclear  Regulatory Commission's written comments are reprinted in appendix  XIII.
In written comments, the Office of Personnel Management agreed  with our recommendation to take action to complete the missing  elements in its DCOI strategic plan, including addressing any  identified challenges, and submit the completed plan to OMB. In  addition, the agency stated that it was in the process of updating its  plan and would submit the plan to OMB once finalized. The agency  later provided a copy of its strategic plan.
Our analysis of the agency's DCOI strategic plan determined that the  plan contained all required elements. We also found that the agency's  CIO statement was available publicly on the agency's website. As a  result, we have removed this recommendation from the report. The  Office of Personnel Management’s comments are reprinted in  appendix XIV.
In an e-mail received on March 24, 2017, a program analyst with the  Small Business Administration’s Office of Congressional and  Legislative Affairs stated that the agency had no comments on the  draft report and did not state whether the agency agreed or disagreed  with the recommendations.
In written comments, the Social Security Administration agreed with  our recommendation. The agency noted that it will continue to  economize and evolve its data center optimization management and  will continue to encourage open dialog and information exchange  between agencies to achieve efficiencies and enhanced data center  operations government-wide. The Social Security Administration’s  comments are reprinted in appendix XV.
In written comments, the U.S. Agency for International Development  did not agree or disagree with the recommendations, but described  planned actions to address them. Specifically, the agency stated that  it will, in accordance with OMB direction, take action to complete the  missing elements in its DCOI strategic plan, including addressing any  identified challenges, and submit the completed strategic plan to  OMB. Further, the agency said that it will, in accordance with OMB,  take action to ensure that the amounts of achieved data center cost  savings and avoidances are consistent across all reporting  mechanisms, including the quarterly data submissions and DCOI  strategic plans. The U.S. Agency for International Development’s  comments are reprinted in appendix XVI.
We are sending copies of this report to interested congressional  committees, the Director of OMB, the secretaries and heads of the  departments and agencies addressed in this report, and other interested  parties. In addition, the report will be available at no charge on GAO’s  website at http://www.gao.gov.
If you or your staffs have any questions about this report, please contact  me at (202) 512-9286 or pownerd@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made major contributions to  this report are listed in appendix XVII.
section_title: Appendix I: Briefing for Congressional Committees
subsections: section_title: Data Center Optimization: Agencies Need to Complete Plans to Address Inconsistencies in Reported Savings
paragraphs: Agency Comments and Our Evaluation  The federal government’s demand for information technology (IT) is ever increasing. In recent years, as federal  agencies have modernized their operations, put more of their services online, and improved their information  security profiles, their need for computing power and data storage resources has grown. Accordingly, this growing  demand has 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 to reduce the growing number of centers.
More recently, in August 2016, the Federal CIO launched the Data Center Optimization Initiative (DCOI) as a  successor effort to FDCCI. According to OMB, this new initiative is intended to improve the performance of federal  data centers in areas such as facility utilization and power usage. Among other things, DCOI requires 24 federal  departments and agencies (agencies) to develop plans and report on strategies (referred to as DCOI strategic  plans) to consolidate inefficient infrastructure, optimize existing facilities, improve security posture, and achieve cost  savings.
With Congress recognizing the importance of reforming the government-wide management of IT, Federal  Information Technology Acquisition Reform provisions (commonly referred to as FITARA) were enacted in  December 2014 as a part of the Carl Levin and Howard P. ‘Buck’ McKeon National Defense Authorization Act for  Fiscal Year 2015. Among other things, the law includes the following requirements related to federal data center  consolidation:
Agencies shall annually report to OMB about federal data center inventories and strategies to achieve  consolidation, including yearly calculations of investment and cost savings.
OMB shall develop and make publicly available a goal, broken down by year, for the amount of planned cost  savings and optimization improvements achieved through FDCCI, and, for each year thereafter through  October 1, 2018, compare progress against those goals.
In addition, the law includes a provision for GAO to annually review and verify the quality and completeness of  agency federal data center inventories and strategies for consolidation.
Over the past several years, we have reported and testified that, while data center consolidation and optimization  could potentially save the federal government billions of dollars, weaknesses exist in the execution and oversight of  these efforts. For example, in March 2016, we reported that 10 agencies had not developed planned data center  consolidation cost savings and avoidance targets for fiscal years 2016 through 2018, even though they had data  center closures planned during this time period. As a result, we recommended that these agencies complete their  planned cost savings and avoidance targets. Most agencies agreed with our recommendations or had no  comments.
Our objectives for this study were to  (1) review agencies’ data center closures to date and plans for further closures,  (2) evaluate agencies’ progress in achieving data center consolidation savings and describe plans for future  savings, and  (3) evaluate the extent to which agencies’ annual strategic plans for data center consolidation and optimization are  complete.
To accomplish the first objective, we obtained and analyzed data center inventory documentation from the 24 DCOI  agencies in our review. To determine data center closures to date, we totaled agency reported closures from fiscal  year 2010 through August 2016 and, to identify future closures, we totaled agency reported planned closures  through fiscal year 2019. We also compared agencies’ completed and planned closures to OMB’s fiscal year 2018  consolidation goals, as documented in its August 2016 memorandum (M-16-19).
To verify the quality, completeness, and reliability of the agencies’ data center inventories, we compared information  on data center closures completed and planned to similar information reported on OMB’s IT Dashboard—a public  website that provides information on federal agencies’ major IT investments. We also checked for missing data  and other errors, such as missing closure status information. Further, we obtained written responses from agency  officials regarding actions taken to ensure the reliability of their inventory data, and discussed any discrepancies or  potential errors identified to determine the causes or request additional information. We determined that the data  were sufficiently complete and reliable to report on agencies’ consolidation progress and planned closures.
For our second objective, we obtained and analyzed cost savings and avoidance documentation from the 24 DCOI  agencies required by OMB’s March 2013 and August 2016 memorandums. This documentation included the  agencies’ quarterly reports of cost savings and avoidances posted to their digital strategy websites and their DCOI  strategic plans. To determine cost savings achieved, we totaled agencies’ reported savings and avoidances from  the start of fiscal year 2012 through August 2016, as found in the August 2016 quarterly reports posted on their  digital strategy websites. To identify future planned savings, we totaled the agencies’ projected savings and  avoidances from fiscal years 2016 through 2018, as reported in their DCOI strategic plans.
To assess the reliability of the agencies’ cost savings and avoidance data, we reviewed agency documentation for  missing data or other errors (e.g., incorrect calculations). We also compared the cost savings and avoidances  reflected in the agencies’ quarterly reports sent to OMB with the cost savings reported on OMB’s IT Dashboard. In  addition, we obtained written responses from agency officials to confirm our understanding of their reported savings  and avoidances. Finally, we compared agencies’ reported cost savings and avoidances with data from our March  2016 report on agencies’ data center consolidation efforts. As a result of our analyses, we found that certain  agencies were reporting less cost savings and avoidances to OMB in their August 2016 quarterly reports and in their  DCOI strategic plans compared to the amounts reported to us in November 2015. In certain cases, agencies were  able to provide additional explanations for the differences in their savings. This issue is discussed in greater detail  later in the briefing slides.
To address the third objective, we obtained and analyzed 20 of the 24 agencies’ DCOI strategic plans, which were  required by FITARA and OMB’s August 2016 memorandum (M-16-19). This documentation included agencies’  strategic plan information publicly posted on agency-owned digital strategy websites, and additional agency- provided documentation of their data center consolidation and optimization strategic plans. We also obtained and  reviewed agency CIO statements of compliance with FITARA and OMB’s guidance. To assess the completeness of  agencies’ DCOI strategic plans, we compared information contained in the plans to the key elements required to be  in the strategic plans, as called for in OMB’s memorandum implementing FITARA.
To assess the reliability of the DCOI strategic plans, we reviewed the agencies’ documentation to identify any  missing data or errors. In addition, we obtained written responses from agency officials regarding the steps taken to  ensure the accuracy and completeness of their strategic plan information. We also discussed with the officials any  discrepancies or potential errors identified during our reviews of their strategic plans to determine the causes or  request additional information. As a result of these efforts, we determined that the agencies’ strategic plan  information was not reliable due to missing and incomplete data. This issue is discussed in greater detail later in the  briefing slides.
We conducted this performance audit from July 2016 to December 2016 in accordance with generally accepted  government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives.  We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our  audit objectives.
The 24 agencies participating in DCOI have collectively made progress on their data center closure efforts.  Specifically, as of August 2016, the agencies had identified a total of 9,995 data centers, of which they reported  closing 4,388. The Departments of Agriculture, Defense, Interior, and Treasury accounted for 84 percent of these  closures. Further, agencies collectively reported that they are planning to meet OMB’s fiscal year 2018 consolidation  targets to close 25 percent of tiered data centers and 60 percent of non-tiered centers. Specifically, as of August  2016, our analysis of agencies’ inventories showed that they were planning to close approximately 25 percent of the  government-wide total of tiered data centers and approximately 66 percent of the government-wide total of non- tiered centers by the end of fiscal year 2018. When accounting for additional closures expected in fiscal year 2019,  agencies have reported that they plan to close a total of 5,597 centers. Figure 1 provides a summary of agencies’  total data centers and completed and planned closures.
In total, 18 of the 24 agencies reported achieving an estimated $2.3 billion in cost savings and avoidances from their  data center consolidation and optimization efforts from the start of fiscal year 2012 through August 2016. The  Departments of Commerce, Defense, Homeland Security, and Treasury accounted for approximately $2.0 billion (or  87 percent) of the total. However, seven agencies are reporting less achieved cost savings and avoidances to OMB  compared to savings amounts they previously reported to us in November 2015. Further, agencies are planning a  total of approximately $378 million in savings between fiscal years 2016 and 2018, according to their DCOI strategic  plans. This is about $3.6 billion less than the approximately $4.0 billion in fiscal year 2016 through 2018 planned  savings that agencies reported to us in November 2015. This is also about $2.3 billion less than OMB’s $2.7 billion  cost savings goal for agencies to achieve by the end of fiscal year 2018, as required by OMB M-16-19. This  reduction in planned savings reflects 7 agencies reporting less planned cost savings and avoidances in their DCOI  strategic plans compared to the savings amounts previously reported to us in November 2015, as well as the  absence of cost savings information for 4 agencies that had not submitted their strategic plan. See figure 2 for a  comparison of the amounts of cost savings and avoidances reported by agencies to OMB through their DCOI  strategic plan and the amounts reported to us.
Of the 20 agencies that submitted their DCOI strategic plan as of December 2016, only 1—the National Science  Foundation—had addressed all five elements required by the OMB memorandum implementing FITARA, while the  remaining 19 either partially met or did not meet the requirements. For example, most agencies partially met or did  not meet the requirements to provide information related to data center closures and cost savings metrics. See  figure 3 for an assessment of the completeness of agencies’ data center optimization plans, by key element.
We also identified inconsistencies in the reporting of historical cost savings by 11 agencies across OMB’s two  reporting mechanisms—the DCOI strategic plans and the quarterly data submissions. Specifically, of the 24  agencies, 9 consistently reported savings information in their DCOI strategic plan and their August 2016 quarterly  reports to OMB, 11 agencies did not report consistent information, and 4 agencies did not submit their DCOI  strategic plan. These inconsistencies resulted in a discrepancy totaling approximately $1.5 billion between the two  sources. These inconsistencies were due, in part, to incomplete data in agencies’ DCOI strategic plans.
Agencies provided a variety of reasons for why their plans were incomplete, including the difficulty of reporting on  fiscal year 2016 actual savings and closures when the data are not yet finalized and the receipt of incomplete data  from some agency components. Completing these plans is increasingly important in light of the enactment of  FITARA, which requires agencies to establish a multi-year strategy to consolidate and optimize their data centers,  including performance metrics and cost savings goals. Moreover, as OMB’s data center consolidation and other  related initiatives have been underway since 2010, agencies should have all the information necessary to complete  their plans. Until agencies address the missing elements in their DCOI strategic plan, they will be at risk of not  realizing anticipated savings, improved infrastructure utilization, and energy efficiency; they also may not be able to  satisfy federal requirements regarding data center consolidation and optimization. Further, until OMB improves its  oversight of agencies’ reporting of cost savings and agencies ensure that their savings information is consistent  across all reporting mechanisms, the likelihood of further reporting errors is increased. Finally, until OMB improves  its oversight of the information in agencies’ DCOI strategic plans, it may be challenged in demonstrating that DCOI  is meeting its established objectives.
To better ensure that federal data center optimization efforts improve governmental efficiency and achieve cost  savings, we are recommending that the Director of OMB direct the Federal CIO to provide the necessary oversight  to (1) ensure that agencies complete their DCOI strategic plan in accordance with OMB’s guidance implementing  FITARA and (2) ensure that agency reporting of achieved data center consolidation and optimization cost savings  and avoidances is consistent across all reporting mechanisms, including quarterly data submissions and agency  DCOI strategic plans.
We are also recommending that 23 agencies take action to complete the missing elements in their respective DCOI  strategic plan, including addressing any identified challenges, and submit their completed strategic plan to OMB.  Further, we are recommending that 11 agencies take action to ensure that the amounts of achieved data center cost  savings and avoidances are consistent across all reporting mechanisms, including the quarterly data submissions  and DCOI strategic plans.
We received comments on a draft of our briefing from OMB and 17 of the 24 agencies to which we made  recommendations. In its comments, OMB neither agreed nor disagreed with our recommendations. Among the  agencies, 4 agencies agreed with our recommendations, 1 (Agriculture) indicated that it did not agree with our  recommendation, 3 commented on our findings but did not provide a position on the recommendations, and 8 stated  that they had no comments. In addition, 1 agency provided only technical comments, while 2 agencies provided  technical comments along with their other comments. All technical comments were incorporated as appropriate. We  did not receive a response from 7 agencies.
The federal government’s increasing demand for IT has led to an increase in the number of federal data centers and  a corresponding increase in operational costs. According to OMB, the federal government had 432 data centers in  1998, more than 1,100 in 2009, and 10,584 in November 2015. Operating such a large number of centers has been  and continues to be a significant cost to the federal government, including costs for hardware, software, real estate,  and cooling. For example, in 2007, the Environmental Protection Agency estimated that the electricity costs to  operate federal servers and data centers across the government were about $450 million annually. According to the  Department of Energy, a typical data center has 100 to 200 times the energy use intensity of a commercial building.  In 2009, OMB reported that server utilization rates as low as 5 percent across the federal government’s estimated  150,000 servers were a factor driving the need to establish a coordinated, government-wide effort to improve the  efficiency, performance, and environmental footprint of federal data center activities.
Background  OMB and the Federal CIO Established FDCCI  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 were to reduce the overall  energy and real estate footprint of government data centers; reduce the cost of data center hardware, software, and  operations; increase the overall IT security posture of the government; and shift IT investments to more efficient  computing platforms and technologies.
subsections: section_title: Under the first definition, OMB identified 2,094 data centers in July 2010. Under the subsequent definition, in December 2011, OMB estimated that there were a total of 3,133 federal data centers.
paragraphs: OMB, Implementation Guidance for the Federal Data Center Consolidation Initiative (Washington, D.C.: Mar. 19, 2012).
Background  OMB’s Inventory of Federal Data Centers Has Grown  Since 2011, the number of federal data centers reported by agencies has continued to grow. In March 2016, we  reported that agencies had collectively identified a total of 10,584 data centers as of November 2015—an increase  of about 7,500 data centers compared to OMB’s October 2011 estimate. According to the Federal CIO, the increase  in data centers was primarily due to the expanded definition of a data center and improved inventory reporting by  the agencies. Figure 4 shows the growth in the total number of reported federal data centers from 1998 to  November 2015.
section_title: Appendix II: Comments from the Department of Commerce
section_title: Appendix III: Comments from the Department of Education
section_title: Appendix IV: Comments from the Department of Energy
section_title: Appendix V: Comments from the Department of Homeland Security
section_title: Appendix VI: Comments from the Department of Housing and Urban Development
section_title: Appendix VII: Comments from the Department of the Interior
section_title: Appendix VIII: Comments from the Department of State
section_title: Appendix IX: Comments from the Department of Veterans Affairs
section_title: Appendix X: Comments from the Environmental Protection Agency
section_title: Appendix XI: Comments from the General Services Administration
section_title: Appendix XII: Comments from the National Aeronautics and Space Administration
section_title: Appendix XIII: Comments from the Nuclear Regulatory Commission
section_title: Appendix XIV: Comments from the Office of Personnel Management
section_title: Appendix XV: Comments from the Social Security Administration
section_title: Appendix XVI: Comments from the U.S. Agency for International Development
section_title: Appendix XVII: 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  (Analyst-in-Charge), Gerard Aflague, Chris Businsky, Nancy Glover,  Linda Kochersberger, Carlo Mozo, Jon Ticehurst, and Jonathan Wall.