Cost and Savings Estimates the Air Force Used To Decide Against Relocating the Electromagnetic Compatibility Analysis Center From Annapolis, Maryland, to Duluth, Minnesota

Gao ID: PLRD-83-48 March 9, 1983

In response to a congressional request, GAO reviewed the cost and savings estimates used by the Air Force to decide against relocating the Electromagnetic Compatibility Analysis Center from Government-owned and leased space in Annapolis, Maryland, to Government-owned space at the Duluth International Airport, Minnesota.

The Air Force estimated in September 1980 that relocation would, over a 10-year period, cost $11 million more than leaving the Center in Annapolis. In September 1981, the Air Force revised this estimate to $5 million over a 10-year period. GAO estimated that relocation would increase cost to the Government, over the next 15 years, between $4.3 million and $7 million, depending upon the number of personnel that would relocate. The GAO estimate of relocation costs and the Air Force's estimates differ because: (1) GAO used 1982 cost data whereas the Air Force used 1979 cost data; (2) GAO projected costs over 15 years whereas the Air Force projected costs over 10 years; (3) GAO used a 13.26-percent discount factor to compute the present value of total costs whereas the Air Force used a 10-percent factor; and (4) GAO computed higher or lower estimates for some cost items. GAO believes that the decision not to relocate was, from a cost standpoint, appropriate.

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