Final Updated Data Center Guidance Aligns More Closely with FITARA

Published: June 27, 2019

Data Center

On Tuesday, OMB published final updated guidance for the Data Center Optimization Initiative (DCOI) which aligns it more closely with FITARA objectives and refocuses the effort on projects that drive the most cost savings and return on investment (ROI).

Since 2010 the federal government has made a concerted effort to consolidate and optimize data centers, first with the Federal Data Center Consolidation Initiative (FDCCI) and then in FY 2016 with the Data Center Optimization Initiative (DCOI). The initiatives have been aimed at modernizing IT infrastructures, achieving cost savings and shoring up cybersecurity. DCOI goals were originally to be met by the end of FY 2018.  However, the FITARA Enhancement Act of 2017 extended the deadlines to October 1, 2020.

Although agencies have made great strides in consolidating and optimizing data centers, to date they have failed to achieve data center closure, facility utilization, energy metering, virtualization, or cost savings targets on a government-wide basis. The new guidance states that OMB has seen diminishing returns on data center closures over the last eight years. The new policy is meant to refocus efforts in key areas that promise “meaningful improvements and achieve further cost savings.”

The updated guidance encourages agencies to focus on applications, rather than infrastructure alone in their data center optimization efforts. This may require them to modernize legacy applications using APIs, microservices, and cloud computing.

According to the new guidance, agencies will be required to submit the following to 0MB:

  • Annually - A comprehensive inventory of the data centers owned, operated, or maintained by or on behalf of the agency
  • Annually - A multi-year strategy to achieve the consolidation and optimization of these data centers
  • Quarterly - Updates on their progress towards activity completion, consolidation and optimization metrics, and cost savings realized through the implementation of their strategy

The updated data center strategy encourages the use of cloud computing and adherence to the new Federal Cloud Computing Strategy, which was released just one day prior to the updated DCOI guidance. Reducing applications, systems, and databases, along with increased use of virtualization, shared services, and co-location will further reduce the federal data center footprint.

GSA will continue in its roles as data center Shared Services Managing Partner, Managing Partner of the Data Center Line of Business (LoB), and operator of the Data Center and Cloud Optimization Initiative Program Management Office (DCCOI PMO). However, it is no longer tasked with establishing and maintaining a data center shared services marketplace.

The updated guidance once again changes the definitions of the categories of data centers.  The former definition of a “tiered” data center excluded spaces such as server closets that lacked a backup generator.  The new guidance will treat these facilities as full-fledged data centers. The new definition of a “tiered” data center is a “purpose-built physically separate and dedicated space.”

OMB states that agencies have seen few cost savings and ROI from consolidation or optimization of non-tiered data centers.  For this reason, OMB will no longer require agencies to consolidate or report metrics on these server closets, telecom closets, individual print and file servers, or single computers acting as servers. In addition, agencies will not include them in their inventory submissions.

The old guidance did not define private sector-provided cloud services as data centers for the purposes of DCOI.  However, agencies were required to report them in their quarterly inventory submissions.  The new guidance removes this reporting requirement.

The new DCOI guidance establishes Key Mission Facilities (KMF) allowing agencies more latitude in requesting exemption from consolidation requirements.  The original 2016 DCOI guidance created an exemption for data centers that were “physically inseparable from non-IT hardware and that perform a specific, non-standard set of tasks.”  The new guidance allows agencies to request an exemption from DCOI requirements for mission-critical or non-severable systems and services that stretch beyond the original definition, such as “weather stations, air traffic control systems, and supervisory control and data acquisition (SCADA) systems.” Although individual tiered data centers that fall within these categories they may receive an exemption from OMB, they are still encouraged to optimize for energy and operational efficiency.

The updated guidance does not set specific closure or cost savings targets government-wide.  Because of increased data production and computing needs due to AI, IoT, digital service delivery, etc., the guidance states that the federal government “should not expect to see continued dramatic savings or large-scale closures from ongoing data center consolidation and optimization efforts as agency needs grow.”  The guidance suggests that agencies seek more cost savings and ROI from energy efficiency, such as replacing inefficient hardware and using ENERGY STAR certified equipment.

The new guidance advocates that agencies continue to implement automated infrastructure management capabilities. It requires that “any data center initiation, significant expansion, or migration project that received Development, Modernization, and Enhancement (DM&E) funds in fiscal year 2017 or later must implement automated monitoring and management tools.”

The former DCOI guidance set specific metrics and targets across the agencies that were then reported as an agency average. According to the new guidance, these metrics resulted in a lack of clarity and “did not yield transparency into how effectively or efficiently an agency is running data centers, or whether the agency is improving over time.” The new guidance states that moving forward, OMB will not use averages for metrics or set arbitrary goals.

The new guidance and metrics are much less prescriptive and allow agencies and OMB to set goals and targets on a case by case basis.  The main intent is to see improvement in metrics over time rather than to set arbitrary targets.

A comparison of the original DCOI performance goals and targets with that of the updated guidance, is shown below:


Original DCOI Targets

New Guidance Targets

Development Freeze for New and Current Data Centers

Agencies may not budget any funds or resources toward initiating a new data center or significantly expanding an existing data center without OMB approval.

Key Mission Facilities (KMF) are exempt from this freeze.


Tiered Data Center Closures


No Target

Non-Tiered Data Center Closures


No Target

Cost Savings

Agency and OMB collectively set

Agency and OMB collectively set



Agencies are to report the number of servers and mainframes that are currently serving as hosts for virtualized or containerized systems in their agency-managed data centers.  They may report systems under their cloud investments towards this total count, but are not required. No specific metric to meet.

Energy Metering


100% for the following: Agencies will be expected to have advanced energy metering and sub-metering, sufficient to accurately estimate Power Usage Effectiveness (PUE), for all remaining data centers over 100 kW that they are planning to keep open.  OMB will track agencies' implementations of advanced energy metering by measuring the number of facilities with a majority of the space having this metering.

Power Usage Effectiveness (PUE)

<=1.5 for existing data centers

<=1.4 for new data centers

Will continue to track, but no specific metric to meet.

Server Utilization and Automated Monitoring


Promotes use of automated infrastructure management tools such as Data Center Infrastructure Management (DCIM). See below for new server utilization metric.

Under-Utilized Production Servers (replaces server utilization)

Not tracked

New Metric - Agencies are to report the number of under-utilized production servers in each data center, with the intent that agencies should reduce the number of these servers over time.

Facility Utilization


Metric removed.


Not Tracked

New Metric - Agencies are to report planned hours of availability for each data center, as well as any unplanned outages for that data center over the reporting period.

































The new guidance also offers agencies guidance on how they should prioritize their data center optimization and consolidation efforts to yield maximum ROI and impact.  Data center initiatives should be prioritized in the following order:

  1. Consolidation and Closure
  2. Optimization
    1. Virtualization
    2. Availability
    3. Energy Metering
    4. Server Utilization

The ITDashboard has already been updated to reflect the new DCOI guidance and metrics. The DCOI Optimization report shows closures over time for all facilities, as well as “valid tiered” facilities using the new definition of “tiered.”  It also shows cost savings, virtualization, availability, energy metering and underutilized servers through 2Q FY 2019.

Federal contractors will continue to see opportunities to assist agencies with data center consolidation and optimization efforts. Opportunities exist in the areas of application rationalization, infrastructure modernization, cloud migration, and shared service migration.