Ready or not, agency data centers face cuts

Although most agencies failed to meet last week's deadline for
submitting data center consolidation plans to the Office and Management and Budget, OMB
will move forward and set systems budgets for 1997 based on fewer centers.

Agencies will not receive formal penalties for tardy submissions. But OMB officials
said they are ""serious about consolidation'' and will begin making decisions
about fiscal 1997 data center budgets and staffs regardless of whether they have every
agency plan.

Bogged down by political turf battles, most agencies missed last Monday's deadline for
filing. OMB officials acknowledged that ""some agencies would be late''
submitting their plans and that several agencies had requested extensions. OMB officials
declined to specify how many strategy documents they received by the June 3 deadline.

Several government and industry sources estimated that about only a third of the
agencies were far enough along in their operational assessments to present a final
consolidation strategy.

But the majority of agencies have developed several consolidation scenarios and likely
will present their final plans by month's end, several sources said.

Last fall, OMB mandated that agencies close or consolidate about half of their data
centers to reduce the government's total number of centers to about 100 by June 1998.

Agency data center inventories were due to OMB on March 1, and the implementation plans
for center closures and consolidations must be ready by Nov. 1.

Linda Berdine, formerly director of information systems for the House of
Representatives and now president of Berdine & Associates, a Fairfax, Va. consulting
company, said agencies are not deliberately dragging out the consolidation process. But,
she added, the tight deadlines have left little time for hashing out tough personnel
questions and resolving politically charged turf disputes, inherent in any downsizing

""Agencies are definitely trying to be responsive,'' said Berdine.
""But there's not a lot of time to build a true business case analysis. When it
comes down to alternatives, most agencies may be able to identify their best proposals,
but it may take another 90 to 120 days to really flesh out exactly what they want to do.''

OMB's consolidation bulletin was based on a National Performance Review task force that
recommended a processing capability threshold of 400 million instructions per second as a
standard for a modern agency data center.

The bulletin prescribed minimum MIPS levels for various mainframe environments and
urged agencies to upgrade their capital planning and charge-back schemes. But agencies
retain full authority for determining which centers stay open. Also, agencies failing to
meet their MIPS targets are free to decide whether to outsource data processing work to
another agency or to contractors.

Berdine said agencies can save about 40 percent in operational costs from
consolidation. But the key issues involve jobs and organizational clout, not technical
capabilities. ""It comes down to being more political than technical,'' she

Officials at the Health and Human Services Department have tried to jump ahead of the
consolidation curve in hopes of landing some of the processing work other agencies cannot
afford to keep.

Neil J. Stillman, deputy assistant secretary of HHS for IRM, said his department will
shrink from about 19 data centers to two megacenters run by the Health Care Financing
Administration and the National Institutes of Health, along with several specially
designated mainframe sites.

For example, Stillman said HHS is moving mainframe operations at the Indian Health
Service and NIH Library of Medicine to a client-server environment. The Public Health
Service's Parklawn Center in Rockville, Md., is merging into the Division of Computer
Research and Technology, while the National Cancer Institute will manage the department's
Cray supercomputer shop. The Food and Drug Administration will consolidate its mainframe
operations to create a single Digital Equipment Corp. systems site.

""This is not an easy thing to do, and no one is going to be entirely
happy,'' Stillman said. ""But we set up a consolidation committee and tried to
hammer out a consensus in a collegial manner. The next step is the implementation plan,
and we will begin work on that immediately.''

Stillman said HHS also requested an exception for its new data center run by the
Centers for Disease Control and Prevention in Atlanta.

Stillman acknowledged that the Atlanta site does not meet all of OMB's criteria. But
the CDC is more efficient than most existing centers and can easily grow to meet the
minimum MIPS threshold, he said.

Meanwhile, OMB has asked General Services Administration officials to help review
consolidation plans.

John Ortego, deputy commissioner of GSA for information technology integration, said
his Federal Systems Integration Center staff would lend their technical expertise in
assessing agency consolidation strategies. Ortego was chairman of the Federal Data Center
Consolidation Committee, which prepared the initial blueprint for the governmentwide
consolidation project.

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