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3/16/2010
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DHS May Be Wasting Data Center Spending

Inspector general says the Department of Homeland Security's facilities agreement with the Navy is poorly written, lacks oversight.

The Department of Homeland Security conscripted Navy facilities at NASA's Stennis Space Center in Mississippi as home for the new primary data center in the DHS' major data center consolidation effort, and in a new report, DHS auditors have expressed concern that problems with that agreement could disrupt the multi-year project.

Specifically, the DHS inspector general reported that problems with the way the Department of Homeland Security has managed its relationship with the Navy and tracks DHS spending on the data center has caused overspending and created poor oversight of the effort, which aims to cut the agency's inventory of data centers from 24 to 2 over the next several years.

The DHS' new primary data center is housed on grounds currently operated by the Navy's meteorology and oceanography arm -- the Navy does not own the land, but pays the Army for its use -- in a former munitions manufacturing facility that required major renovations to convert it for use as a data center. DHS is only one of several tenants in that building.

However, according to the report, the interagency agreement between the Navy and the DHS for use of the facilities lacks key terms, including methodology for allocating costs between DHS and the Navy and even the location of the building itself. The report noted that the agreement also lacks terms outlining the DHS' allotted floor space and power and utilities available for DHS use, something DHS CIO Richard Spires disputed in his response to the report.

Whatever the case, these omissions could spell trouble for DHS' continued tenancy in the building and may set up disputes over issues like cost and the extent of DHS' use of the facility. "Without these terms, DHS cannot be assured that it can continue to house its primary data center in the current location, or that DHS is reimbursing the Navy only for expenses related to the primary data center," the report said.

According to the report, DHS may be overspending. Despite occupying only 24% of the office space on the Navy's available land, the DHS is being charged 81% of the Navy's total cost.

This trouble began early in the process: DHS committed $5 million to use facilities in Stennis Space Center, but did so without formally establishing exactly which building it would occupy, and the Navy gave DHS a building that DHS hadn't even seen that would eventually cost DHS $64.1 million to renovate.

Furthermore, according to the report, DHS technical representatives have completely failed to review documents and invoices detailing the $160 million it has paid in total to the Navy. In some cases, those documents never made it to the DHS. The DHS requested documents on how its funds were used for rent, salaries, and the purchase of equipment to support the data center facilities, but the Navy never provided the DHS with specific invoices or documentation for these purchases, and DHS IT officials never notified senior DHS management of the problem.

In light of the report's findings, the inspector general's office is recommending that DHS update interagency agreements to include details on the data center's location, usage, and cost allocation methods and review invoices to insure proper use of funds.

Many of these problems may be in the past, as the Navy will transfer the property to NASA as soon as next month, and DHS and the Stennis Space Center are currently working through their future agreement. Spires said that he would incorporate some of the report's recommendations into the new deal.

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