Federal officials claim they're realizing greater efficiencies through cloud computing and data center consolidation, and plan to use those savings to fund other projects. But one analyst says their efforts to shift funding could be in vain due to a congressional push to defund projects.

The Energy Department has moved its public key infrastructure, Energy.gov and financial assistance models to the cloud, said the department's Deputy Secretary Daniel Poneman, while speaking on an April 27 panel at the Eisenhower Executive Office Building in Washington, D.C.

"The money we save on these back-office operations, will go right back into mission, go right into muscle and sinew," said Poneman.

But Ray Bjorklund, senior vice president and chief knowledge officer at Tysons Corner, Va.-based FedSources (recently acquired by Deltek), said he's concerned about agencies that rely too heavily on savings realized from efficiencies.

"Congress may just reach in and say: 'Thank you very much. You've achieved those savings so let's take that money back right now,'" Bjorklund said earlier in the day at a FedSources event on the federal budget.

The Defense Department in particular could be setting itself up to lose priority project funds as a result of its efficiency drive, said Bjorklund.

"When you think about what Congress did to sweep out some of these unused dollars and funds in accounts, then I'm really wondering whether Congress is going to permit Gates--or Panetta, who will be his successor--permit them to retain those savings," said Bjorklund.

"Remember, Secretary Gates says, 'I want to find the savings and I want to reinvest them in higher-priority projects.' I'm not sure it's going to happen. Congress likes to control the purse strings. I think they're going to take that money away."

In February a Washington, D.C.-based think tank advised against DoD planning to use anticipated efficiency savings to fund other projects until the savings are actually realized. Similarly, Federal CIO Vivek Kundra has said his cloud-first initiative would be funded by data center consolidation cost savings.

At the conference Bjorklund also advised an industry audience to prepare for project cancellation and longer acquisition cycles.

"We're literally going to see breakage of programs," said Bjorklund. As budget constraints force programs to rescope and reconfigure, the result will be longer acquisition cycles, he said.

- listen to Poneman and other federal officials speak at the April 27 White House presentation

Related Articles:
Think tank warns against reinvestment plans before DoD efficiency savings are realized
Kundra: 'Cloud first' to be funded by data center consolidation savings
Gates carries on with DoD efficiency drive