The US government has launched a marketplace where federal agencies can buy and sell excess data center space, as part of the Federal Data Center Consolidation Initiative (FDCCI).

FDCCI project manager Zach Baldwin announced creation of the marketplace during a webinar in late August, FierceGovernmentIT, which organized the webinar, reported. The marketplace is currently limited to rack space, but the plan is to add vitualized server capacity to the menu.

At the moment, the main obstacle to its further development is implementing a system of enforceable inter-agency service level agreements (SLAs) and metering. Baldwin said agencies had “very little incentive for agencies to take on outside customers.”

Penalizing the provider for failing to meet an SLA is difficult when both the provider and the user are federal agencies, he said. Federal regulations prohibit a provider agency to make a profit.

Because there are no enforceable SLAs, some components of the Defense Department, for example, are afraid to move applications into the Defense Information Systems Agency (DISA) cloud.

Consultant Kevin Carroll said there had been instances where a DISA cloud SLA would not be honored, while the price increased. “There wasn’t the same discipline that you have with the contractor, who you could punish or move,” he said.

The government is going through these pains as it consolidates data centers and tries to transition its IT infrastructure to a modern one, using as many cloud-based services as possible, while having a lean data center footprint.

The current goal is to have closed 1,200 data centers (about 40% of the total). As of August, about 320 had been closed since the beginning of the initiative.

About 120 closures are on the slate between now and the end of fiscal year 2012, with a total of about 680 planned closures by the end of 2013.