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. 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. 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. 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 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. 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. When accounting for additional closures expected in fiscal year 2019,  agencies have reported that they plan to close a total of 5,597 centers. 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. 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  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. 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. 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. 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. 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.
Why GAO Did This Study

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.

What GAO Found

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.

What GAO Recommends

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.