OMB: Cut your data centers or lose '98 funds

The Office of Management and Budget will use the president's fiscal 1998 budget
proposal to force agencies to make consolidation and outsourcing decisions about their ADP

In the coming weeks, as push comes to shove over which data centers will remain open,
OMB and agency officials said 1998 funding will become a compelling factor.

The administration wants to cut the number of government data centers in half--to about
100--by June 1998.

Regardless of waiver requests or revamped client-server designs, OMB officials said,
the budget will be the ultimate tool for weeding out unessential data centers.

Agencies must submit preliminary progress reports on data center consolidation to OMB
this Thursday, Jan. 30. But several government and industry sources said OMB has not
commented yet on the consolidation plans agencies submitted last summer [GCN, June 10,
1996, Page 1]. Many agencies also are awaiting word on waiver requests, sources said.

OMB officials declined to comment on the program until President Clinton sends his 1998
budget proposal to Congress on Feb. 6. OMB officials said they have been reviewing agency
data center plans during the budget preparation process.

''Agency plans are undergoing review at OMB as part of the fiscal year 1998 budget
review. The results will be reflected in agency budget proposals to the Congress this
spring,''an OMB official said.

To ease the consolidation pain a bit, the General Services Administration is
accelerating work on its virtual data center procurement and plans to award a
governmentwide data processing services contract within the next few weeks, GSA officials

GSA's Federal Computer Acquisition Center is running the buy, which it expects agencies
to use as a way to meet the White House mandate.

FEDCAC's procurement blueprint calls for several indefinite-delivery,
indefinite-quantity contracts offering a range of ADP services.

FEDCAC originally planned to award a contract in March. But John Ortego, acting deputy
director of GSA's Office of Information Technology Integration, said GSA is trying to
provide agencies with additional data processing options as quickly as possible.

''We want it awarded because there is a need. We want to take advantage of the
contracting latitude that we have,'' Ortego said. ''We don't think we should take four
months to do the job if we can complete it in two. We're entering the evaluation stages,
and everything is being done at full speed.''

The service contracts likely will serve as the administration's answer to agencies that
cannot meet OMB's minimum processing requirements. OMB endorsed the National Performance
Review's recommendation of a 400-million-instructions-per-second processing baseline as
the standard for federal data centers.

Despite any budget limits imposed by the White House, OMB officials said agency
managers would retain authority to decide which centers remain open and what work to
outsource. But people familiar with the process said the autonomy has been as much a help
as a burden for some agencies.

''The crux of the issue is who in the agency has the ultimate decision-making
authority,''said Linda Berdine, president of Berdine & Associates, a Fairfax, Va.,
consulting company.

''Much depends on which agencies have appointed chief information officers or have
persons acting in positions where they are authorized to grant final approval,''she said.

Berdine, who worked with several agencies in crafting consolidation strategies, said
most have a good ''view from 30,000 feet.''

Agencies that used working groups to review operations were able to define requirements
for personnel, hardware, software and telecommunications.

''Those agencies with teams divided by key areas have been able to look at migration
from both a top-down and bottom-up approach,''Berdine said. ''Everyone seems to have a
mind-set to meet the minimums. That has been the driver, and we're seeing a move toward
more standardization in architecture, operating procedures and data set naming

Officials at the Health and Human Services Department used the committee approach to
pare down their 19 data centers to four sites run by the Health Care Financing
Administration, Centers for Disease Control and Prevention, National Institutes of Health,
and Food and Drug Administration.

Neil J. Stillman, deputy assistant secretary of HHS for IRM, said the department's
consolidation committee first froze all IT acquisitions and decided against building new
facilities to handle work from closing sites.

The committee group then adjudicated waiver requests and reviewed its alternatives for
the work at the sites slated for closure.

''Two principles guided the formation of consolidation alternatives. First,
applications would not move from one hardware platform to a dissimilar one. Second, where
possible, consolidations would not cross HHS agencies,''Stillman said. ''Decisions were
based on the criteria, not lack or availability of funds needed to implement the

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