GAO Reports Progress with Federal Data Center Optimization but Inventory Visibility Has Diminished

Key Takeaways:

• As of August 2020, almost all of the 24 agencies covered under DCOI had met or planned to meet, their FY 2020 closure and cost savings goals.
• Due to changes in the definition of data center, visibility into approximately 4,500 former data centers has diminished.
• 53 of 125 recommendations made by GAO in the last five years related to data center consolidation and optimization have not been implemented.

FITARA legislation instructed GAO to annually report on DCOI progress. In early March, GAO released its most recent assessment of agency advancement toward reaching DCOI goals, entitled “Data Center Optimization: Agencies Report Progress and Billions Saved, but OMB Needs to Improve Its Utilization Guidance.”

The report analyzes progress on closures, savings, optimization targets, and the effectiveness of the server utilization metric. Data center data and inventories were reviewed as of August 2020. Since then, updated statistics have been published on the IT Dashboard that I summarized in a January blog post.

GAO reported as of August 2020, almost all of the 24 agencies covered under DCOI had met or planned to meet, their FY 2020 closure and cost savings goals, translating to closure of 230 facilities. Agencies were on track to reach $6.24B in cumulative cost savings and avoidance from FY 2012 to FY 2020.

OMB updated their guidance for DCOI in June 2019, which revised the definition of a data center, resulting in the elimination of over 4,500 facilities from data center tracking requirements. GAO believes that the elimination of these facilities from DCOI tracking presents cybersecurity risks arising from the lack of continued visibility into these facilities. GAO recommended in their March 2020 progress report that OMB require agencies to continue to report these facilities so that visibility from a security standpoint could be retained. To date, OMB has not taken action on this request.

In the current analysis, GAO found that progress varied by agency against the four additional DCOI optimization metrics:

Percentage of the 24 agencies that met the metric as of August 2020:

• Virtualization - 46%
• Availability – 67%
• Advanced Energy Metering – 46%
• Underutilized Servers – 50%

Since 2016, GAO has made 125 recommendations related to data center consolidation and optimization. To date, 53 have not been implemented. In its most recent report, GAO reiterated the need to address the previous recommendations and made one new recommendation to OMB.

This is the sixth report GAO has released tracking agency progress toward meeting data center consolidation and optimization goals.  Below are the number of outstanding recommendations from each of the five previous reports:

• 2016 Report Identifies Need for Agencies to Complete Cost Savings Goals and Improve Data Center Optimization – 0
• 2017 Report Focused on New DCOI Implementation – 11
• 2018 Report Emphasized Need for Agencies to Address Prior Recommendations – No recommendations made
• 2019 Report Focused on Agencies’ Progress as DCOI Neared Sunset in 2018 – 34
• 2020 Report Discussed OMB’s Revised DCOI Policy Weaknesses – 8

The new recommendation to OMB in this year’s report requests that OMB reexamine and consider revising server utilization measurements.  GAO believes that OMB developed an effective server utilization metric in 2016, but that revisions to it in 2019 no longer capture actual server utilization.

Federal contractors should continue to see opportunities to assist agencies with data center consolidation and optimization efforts even though the official number of data centers has decreased. Opportunities exist in the areas of application rationalization, infrastructure modernization, cloud migration, and shared service migration.