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How the U.S. Labor Department Consolidated Washington-Area Data Centers at BYTEGRID

In 2013, DOL planned to consolidate Washington-area data centers at BYTEGRID’s Silver Spring facility. Here’s what was reported about the contract, rationale, and results.
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In 2013, the U.S. Department of Labor (DOL) announced plans to consolidate its Washington-area data centers at BYTEGRID’s facility in Silver Spring, Maryland. Lockheed Martin was reported to have won the transition and relocation work. The move was part of a broader federal consolidation effort, not evidence that every DOL system moved to BYTEGRID or that the department completed a shift to cloud computing.

What was announced in 2013?

On July 8, 2013, Data Center Knowledge reported that DOL planned to consolidate its metropolitan Washington, DC data centers at BYTEGRID’s Silver Spring facility. It said Lockheed Martin would manage the transition and relocation under a seven-year indefinite delivery/indefinite quantity (IDIQ) contract. An IDIQ contract sets up an arrangement for work to be ordered over time rather than describing a single, fully specified delivery.

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Data Center Dynamics also reported that six Washington-area data centers were in scope and described the contract as worth US$59 million over seven years. Those facility-count and contract-value figures are contemporaneous industry reporting; they are not presented here as independently verified award-record details. The reporting described shared resources across several DOL agencies, with migration taking place over time.

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Why did DOL consolidate its facilities?

The consolidation was presented in the context of the federal Data Center Consolidation Initiative (FDCCI), which aimed to close or consolidate federal data centers. DOL also faced an immediate operational disruption: the Government Accountability Office (GAO) recorded that a fire at DOL headquarters in May 2013 made several data centers there inoperable, after which the department moved those centers to an outsourced facility.

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GAO said Labor officials identified improved disaster-recovery capability as a non-monetary benefit and described enterprise-wide cloud computing as a possibility for the future. Those aims help explain the rationale for relocating infrastructure, but they are not proof that the BYTEGRID project itself completed an agency-wide cloud transition.

What is known about savings?

The available evidence does not establish an audited, project-wide savings total for the BYTEGRID move. GAO documented one specific Labor consolidation example: a data center was reduced from 43 server racks to 27 before relocation, avoiding about 37 percent of the previously planned floor space and associated rental costs. That percentage applies to that example’s planned space and rental costs—not to the total cost or savings of the BYTEGRID project.

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GAO also noted challenges for Labor in setting cost baselines. Updating physical hardware and consolidating operations and maintenance contracts affected the realization of savings. Without a project-wide verified baseline and outcome, a single overall savings figure should not be inferred from the rack-reduction example.

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What did DOL later say about the consolidation?

In a later presidential-transition document, DOL stated that it had met 100% of federal milestones for moving its local Washington, DC data centers to one commercial BYTEGRID data center. The same document said the department had closed 24 data centers nationwide. These are DOL’s retrospective statements about milestones and closures; they do not independently establish the financial results or service outcomes of the BYTEGRID relocation.

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How did DOL’s infrastructure plans evolve?

The BYTEGRID consolidation was one stage in a longer modernization effort. In its FY2025 budget justification, DOL described a cloud-first approach intended to reduce its on-premises footprint while maintaining operations. It also said the department would continue modernizing its primary and secondary data centers and consider a future cloud transition or move for the secondary center.

DOL’s FY2024 budget justification separately reported that it had moved its disaster-recovery Data Center West from St. Louis to a location geographically separate from the primary data center in Ashburn, Virginia. That document also described further application migrations to cloud and virtual desktop modernization. These later projects are distinct from the 2013 Washington-area BYTEGRID consolidation.

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