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The Board of Governors of the Federal Reserve System's (Board) project to relocate its data center is a major element of the third theme in the Board's Strategic Framework 2012-15.1 This multiyear project is composed of four overlapping phases, with completion scheduled for December 2015. Given its magnitude and significance, the Office of Inspector General (OIG) plans to monitor the Board's data center relocation as the project continues through 2015. The objective of this initial audit is to obtain information and gain an understanding of the project's scope, cost, and schedule. We are issuing this first report as build-out of the new data center is beginning. We plan to issue subsequent reports at key future dates.
The Board's data center provides the infrastructure that makes data and information technology available to the Board and to the Federal Reserve System for monetary policy, financial supervision, consumer protection, and economic research. The data center currently resides in the Board's Martin Building, in Washington, DC, which the Board plans to completely renovate. With this planned renovation, the Board decided to evaluate its data center operations and options for improving the data center.
The Board contracted with a third-party consultant to develop a business case, which was released in 2011, to improve and/or relocate the primary data center. The business case compared the following eight options for the data center:
Four core categories were identified as criteria with which to evaluate the eight options: reliability, operations, political exposure, and cost.
The analysis and final recommendation were a collaborative effort between the consultant and stakeholders from the Division of Information Technology (IT Division), the Research and Statistics Division, and the Management Division. The final recommendation was for the Board to relocate the data center to the Baltimore Branch of FRB Richmond. The Board acted on this recommendation by approving the scope and funding for this option in June 2012 as part of the Board's strategic plan.
The overall approved funding for the project, which is intended to cover all costs associated with building, migrating, and operating the data center for 10 years, is $201.5 million. This amount was allocated into three high-level categories:
In January 2013, a memorandum of understanding (MOU) was executed between the Board and FRB Richmond that defines the responsibilities relating to the design and build-out of the data center and identifies the space at the Baltimore Branch that the Board leased for the new data center. In March 2013, an architecture and engineering (A/E) firm was hired to provide design services for the data center.
A high-level timeline was established within the MOU, dividing the project into the following four overlapping phases:
FRB Richmond is responsible for the build-out of the data center and has designated a project manager to oversee the design and build-out of the data center. The Board has designated several key individuals and teams to monitor and provide input into key decisions. The Board has designated a program manager and a project manager, both within the IT Division, to oversee the project in coordination with a team composed of members with experience in information technology as well as procurement and financial management, among other areas. There is also an Executive Oversight Group to oversee the status of the project, provide senior-level guidance and consultation, and ensure that the Board's strategic objectives are being met. The Executive Oversight Group is chaired by the Director of the IT Division and includes a representative from FRB Richmond as well as representatives from the IT Division, the Management Division, the Division of Financial Management, the Research and Statistics Division, and the Division of Reserve Bank Operations and Payment Systems.