GAO: Closed Data Centers Will Save Feds at Least $8B


Agencies have saved about $2.8 billion so far.

The federal government’s push to close and optimize a sizable chunk of its nearly 11,000 data centers will result in at least $8.1 billion in savings through 2019. But a new report from the Government Accountability Office suggests the savings ought to be much higher.

According to data compiled by GAO, 19 of the 24 largest federal agencies have saved about $2.8 billion, closing some 3,125 data centers since 2011.

Further, GAO estimates another $5.4 billion in planned cost savings and avoidances from 2016 to 2019 by closing another 2,078 data centers.

However, that total estimated savings is likely understated, because nearly half of the agencies that planned to close data centers in the future “have not developed their cost savings and avoidance goals for these fiscal years,” GAO reported.

In other words, those 10 agencies – including the departments of Interior, State and Transportation as well as NASA, among others – said they planned to close data centers but didn’t claim any estimated cost savings. Reasons varied: In one example, DOT reported challenges in developing cost-savings forecasts because it leases space owned by different business entities or agencies with no dedicated metering.

In any case, “There’s probably a lot more savings out there,” Dave Powner, director of information technology management issues at GAO, told Nextgov.

As the report notes, agencies are directed by the Federal IT Acquisition Reform Act -- known as FITARA -- to develop calculated cost savings in their multiyear strategies to optimize data center inventories.

Agencies also struggled to address nine metrics for optimizing data centers established by the Office of Management and Budget. These metrics included energy consumption, labor and storage rates, among others. Only half of the 24 agencies could meet the “data center labor efficiency” metric, and that was actually the government’s best showing. The remaining eight metrics were met by less than half the 24 agencies.

There were some bright spots -- at least for select agencies.

According to the most recent statistics, the departments of Agriculture, Defense, Interior and Treasury were responsible for 84 percent of the 3,125 data centers closed so far.

(Overall, though, the government fell short of its goal of closing 4,144 data centers.)

In addition, Commerce, Defense, Homeland Security and Treasury accounted for 86 percent -- or $2.4 billion -- of the total $2.8 billion that’s been saved by consolidating data centers.

OMB is implementing a new, stronger policy regarding data centers in government, but it remains unclear how its call for more metrics will be implemented by agencies still struggling to implement policies put in place five years ago.

A cursory look at OMB’s estimated data center cost savings across government through 2018 is $1.4 billion, a much lower target than what GAO estimates for savings.

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