2. GAO Has Previously Reported on Federal Data Center Consolidation Efforts

We have previously reported on OMB’s efforts to consolidate federal data  centers. However, we also found that  only one of the 24 agencies submitted a complete inventory and no  agency submitted complete plans. Agencies Updated Inventories and Plans, but Key Elements Are Still Missing

As discussed earlier, OMB required agencies to submit an updated data  center inventory that included information on each center and its assets  by the end of June 2011, and an updated consolidation plan that included  key information on the agencies’ consolidation approach by the end of  September 2011. Additionally, in their consolidation plans, 13 agencies do not provide a full  master program schedule, 17 agencies do not provide full cost-benefit  analysis results, and 21 agencies do not include all required cost savings  information. In the absence of important information such as schedules  and cost estimates, agencies are at risk of not realizing key FDCCI goals  such as anticipated cost savings and improved infrastructure utilization. Our most recent analysis of 24 agencies’  documentation indicates that as of September 2011, agencies identified  almost 2,900 total centers, and established plans to close over 1,185 of  them by 2015. Asset Inventories Are Still Not Complete

In our July 2011 report, we recommended that agencies complete the  missing elements from their inventories. IT facilities and energy. Only 1 agency fully reports on consolidation cost  savings, while 13 agencies do so partially, and 8 do not. Without completing this information, agencies may not realize anticipated  cost savings, improved infrastructure utilization, or energy efficiency. Selected Agencies Have Incomplete Schedules and Cost Estimates

OMB requires both a master program schedule and a cost-benefit  analysis as key elements of agencies’ consolidation plans, but none of  the agencies we evaluated had complete schedules or cost estimates. Our research has identified four select  attributes of properly sequenced schedule activities that are essential for  a reliable schedule network. However, none of these agencies’ schedules is fully  compliant with the four attributes, although each agency was at least  partially consistent with these practices. Identified dependencies. Comprehensive. Well-documented. In the absence of reliable cost  estimates, these five agencies are exposed to the types of risks that we  have reported to be recurring problems in our program reviews—namely  cost overruns, missed deadlines, and performance shortfalls. Officials from several agencies told us that they plan to use the TCO  model in future cost estimating efforts. Agencies Have Experienced Consolidation Successes and Continue to Report Challenges

Agencies reported experiencing multiple areas of success in their  consolidation efforts. Specifically, 20 agencies identified 34 areas of  success, with the number of agencies reporting a particular success  ranging from 9 to 1. Additionally,  25 challenges reported in 2011 were not reported in 2012. Specifically, 15 agencies reported that obtaining  power usage information was a challenge, which is less than the 19  agencies that reported this challenge last year. The two most  reported consolidation successes are both key tenets of OMB’s FDCCI:  the use of virtualization and cloud services, and working with other  agencies to find consolidation opportunities. In light of  how closely the successes and challenges reported by agencies relate to  FDCCI, it will be important for OMB to continue to provide leadership and  guidance to the initiative. However, agencies’ use of the model  is still voluntary. Specifically, we recommend that  the Director of OMB direct the Federal CIO to ensure that all future revisions to the guidance on data center  consolidation inventories and plans are defined in OMB memorandum  and posted to the FDCCI public website in a manner consistent with  the guidance published in 2010, and ensure agencies utilize OMB’s Total Cost of Ownership model as a  standardized planning tool across the consolidation initiative. In addition, we recommend that the Secretaries of Agriculture, Homeland  Security, Interior, Transportation, and Veterans Affairs direct their  component agencies and their data center consolidation program  managers to implement recognized best practices when completing  required program schedules and cost-benefit analyses. Appendix I: Objectives, Scope, and Methodology

Our objectives were to (1) evaluate the extent to which agencies have  updated and verified their data center inventories and data center  consolidation plans, (2) evaluate the extent to which selected agencies  have adequately completed key elements of their consolidation plans,  and (3) identify agencies’ notable consolidation successes and  challenges. For this governmentwide review, we assessed the 24 departments and  agencies (agencies) that were identified by the Office of Management and  Budget (OMB) and the Federal Chief Information Officer (CIO) to be  included in the Federal Data Center Consolidation Initiative (FDCCI). To assess the reliability of the data agencies  provided in their data center inventories and plans, we reviewed the  letters agencies were required to submit attesting to the completeness  and reliability of their inventories and plans, we interviewed agency  officials about the actions taken to verify their data, and reviewed those  results against our past reviews of agency inventories and plans. To assess the reliability of the  data the five agencies provided in their master program schedules and  cost estimates, we reviewed the schedules and estimates, compared  them to our guidance on scheduling and estimating, and interviewed  officials about how the schedules and estimates were constructed.
Why GAO Did This Study

In 2010, as focal point for information technology management across the government, OMBs Federal Chief Information Officer launched the Federal Data Center Consolidation Initiativean effort to consolidate the growing number of federal data centers. In July 2011, GAO evaluated 24 agencies progress on this effort and reported that most agencies had not yet completed data center inventories or consolidation plans and recommended that they do so.
In this subsequent review, GAO was asked to (1) evaluate the extent to which the 24 agencies updated and verified their data center inventories and plans, (2) evaluate the extent to which selected agencies have adequately completed key elements of their consolidation plans, and (3) identify agencies notable consolidation successes and challenges. To address these objectives, GAO assessed the completeness of agency inventories and plans, analyzed the schedule and cost estimates of 5 agencies previously reported to have completed one or both estimates, and interviewed officials from all 24 agencies about their consolidation successes and challenges.

What GAO Found

As of the most recent agency data submitted in September 2011, 24 agencies identified almost 2,900 total centers, established plans to close 1,186 of them by 2015, and estimated they would realize over $2.4 billion in cost savings in doing so. However, while the Office of Management and Budget (OMB) required agencies to complete missing elements in their data center inventories and plans by the end of September 2011, only 3 agencies submitted complete inventories and only 1 agency submitted a complete plan. For example, in their inventories, 17 agencies do not provide full information on their information technology facilities and energy usage, and 8 provide only partial information on their servers. Further, in their consolidation plans, 13 agencies do not provide a full master program schedule and 21 agencies do not fully report their expected cost savings. Officials from several agencies reported that some of this information was unavailable at certain facilities or that the information was still being developed. In a prior report, GAO recommended that agencies complete the missing elements from their inventories and plans. Until these inventories and plans are complete, agencies will continue to be at risk of not realizing anticipated savings, improved infrastructure utilization, or energy efficiency.
OMB requires a master program schedule and a cost-benefit analysis (a type of cost estimate) as key requirements of agencies consolidation plans, but none of the five agencies GAO reviewed had a schedule or cost estimate that was fully consistent with the four selected attributes of a properly sequenced schedule (such as having identified dependencies), or the four characteristics that form the basis of a reliable cost estimate (such as being comprehensive and well-documented). For example, the Departments of Interior and Transportation did not have schedules and the Department of Agricultures schedule was consistent with three of four attributes. Additionally, cost estimates for the Departments of Homeland Security and Veterans Affairs were partially consistent with the four cost characteristics. In the absence of reliable schedules and estimates, these agencies are at risk of experiencing cost overruns, missed deadlines, and performance shortfalls. OMB has established a standardized cost model to aid agencies in their consolidation planning efforts, but use of the model is voluntary.
Many federal agencies reported consolidation successes. Notably, 20 agencies identified 34 areas of success, although only 3 of those areas were reported by more than 1 agency. The two most-reported successes were focusing on the benefits of key technologies and the benefits of working with other agencies and components to identify consolidation opportunities. However, agencies have continued to report a number of the same challenges that GAO first described in 2011, while other challenges are evolving. For example, 15 agencies reported continued issues with obtaining power usage information and 9 agencies reported that their organization continued to struggle with acquiring the funding required for consolidation. However, other challenges appear to be less prevalent, including challenges in identifying consolidation cost savings and meeting OMBs deadlines. Overall, 25 challenges that were reported in 2011 were no longer reported in 2012. In light of these successes and challenges, it is important for OMB to continue to provide leadership and guidance, such asas GAO previously recommendedusing the consolidation task force to monitor agencies consolidation efforts.

What GAO Recommends

OMBs Federal Chief Information Officer should ensure that agencies use a standardized cost model to improve consolidation planning, and the 5 selected agencies should implement recognized best practices when establishing schedules and cost estimates for their consolidation efforts. OMB and 3 agencies agreed with, and 2 did not agree or disagree with, GAOs recommendations.