(WASHINGTON, D.C.) – The federal government underreports cost savings from federal data center consolidation by billions of dollars, according to a new report by the Governmental Accountability Office (GAO).

The Federal Data Center Consolidation Initiative (FDCCI) is a government-wide effort to reduce the number of redundant data centers, which have grown from several hundred in the late 1990s to nearly 10,000 today.

According to the GAO report, agencies have struggled to accurately calculate the amount of savings they have and will achieve through data center consolidation. Further, GAO found that agencies are underreporting their FDCCI savings to the Office of Management and Budget (OMB), forcing OMB to underreport the total savings to Congress. 

The report found that consolidation would lead to savings of $3.1 billion through next year. However, the amount agencies have reported to OMB for the same time period is $876 million, meaning total savings have been underreported to OMB by approximately $2.2 billion. The Department of Defense (DOD) has also significantly scaled back its earlier planned savings estimates, from $4.7 billion through FY 2017 to $2.6 billion.

GAO estimates that consolidating federal data centers could save over $5 billion through Fiscal Year (FY) 2017 and over $10 billion in later years. However, until agencies improve their reporting practices and OMB assists agencies in calculating savings, agencies will continue to have difficulty measuring progress toward cost-savings goals, the report found.

“Vast amounts of taxpayer savings can be achieved by consolidating the thousands of redundant data centers operated by the federal government. While progress has been made, this report makes clear that more can be done to achieve significant savings,” Dr. Coburn said. “It is also important to get the numbers right. Improving transparency will better allow agencies to gauge their progress and help Congress hold them accountable. I am pleased the Senate recently passed the Federal Data Center Consolidation Act to address GAO’s recommendations.”

“The Administration’s Federal Data Center Consolidation Initiative is an ambitious challenge that is worth meeting – and today’s report from the Government Accountability Office underscores its potential,” said Senator Carper, Chairman on the Senate Committee on Homeland Security and Governmental Affairs. “This report shows that agencies are achieving significant cost savings and taking innovative steps to trim the federal government’s massive information technology portfolio – saving billions of taxpayer dollars in the process. That being said, the report also underscores the critical need for agencies to improve reporting. As the saying goes, you can’t manage what you can’t measure. Without accurate tracking and reporting of performance measures, we run the risk of not achieving the full potential savings. This means it is critical that the Office of Management and Budget and agencies continue to improve their process for reporting, tracking and measuring progress on this initiative. Along with this, I will continue to work closely with my colleagues in the Senate and House on bipartisan legislation that will address the necessary updates and upgrades to the federal government’s information technology management.”

GAO recommends that OMB assist agencies in reporting their cost savings. In addition, GAO recommended that OMB improve its standardized metrics so that agencies can better measure their progress. Last week a bipartisan bill passed the Senate that would address many of the issues GAO has raised in its series of reports, including requirements for improved reporting practices and standardized cost-savings metrics.

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