Military Bases

The yearly cost to maintain the Army's inactive ammunition plants, which has totaled about $118 million since 1990, has decreased over the years. This decline is the result of various initiatives, including downsizing, reduced maintenance requirements, more rigorous contract negotiations with operating contractors, and the Armament Retooling and Manufacturing Support Act of 1992. That legislation provides financial incentives to ammunition plant contractors to reuse idle capacities by attracting commercial tenants to their facilities. The Army could further decrease its infrastructure costs by disposing of unneeded property at inactive Army ammunition plants. In addition, DOD should establish (1) incentives for communities to speed up the transfer of closed bases and (2) after the initial maintenance period has elapsed, criteria for a phased drawdown of maintenance until minimum levels are reached.

GAO found that: (1) the annual cost of maintaining the Army's inactive ammunition plants, which totalled about $118 million since 1990, has decreased over the years; (2) this decrease is the result of various initiatives, including downsizing projects, reduced maintenance requirements, more rigorous contract negotiations with operating contractors, and the Armament Retooling and Manufacturing Support (ARMS) Act of 1992; (3) the ARMS program provides financial incentives to ammunition plant contractors to reuse idle capacities by attracting commercial tenants to the facility; (4) the contractors act as landlords with authority to lease buildings and equipment to commercial producers, and the revenue generated is used to offset the ammunition plants' maintenance costs; (5) it should be noted that, while the ARMS initiative has offset some of the Army's maintenance costs, maintaining ammunition plants in inactive status still represents a significant cost to the federal government; (6) while some initial investments will likely be necessary, the Army could further decrease its infrastructure costs by disposing of unneeded property; (7) the Kansas, Louisiana, and Sunflower plants, three of the six inactive plants retained for replenishment purposes, contain 37,000 acres of unneeded land, facilities, and infrastructure that could be declared excess; (8) none of the four inactive plants retained for their unique capabilities, Badger, Indiana, Longhorn, and Volunteer, are needed because alternative sources exist to provide the capabilities these plants provide; (9) the overall cost to maintain bases closed in the 1988 and 1991 rounds was approximately $290 million through fiscal year 1996; (10) no trends in costs are discernable because most bases have been closed only a few years and because costs at individual bases vary widely, given their different sizes, varying infrastructure, and diverse locations; (11) maintenance costs are higher than they need to be because DOD does not tie maintenance levels to the amount of time it takes to transfer bases to the community. The services seldom reduce the maintenance levels, even when progress toward reuse is slow; (12) continuing maintenance at initial levels keeps maintenance costs high and reduces the savings from base closure; (13) contractors at inactive ammunition plants and closed bases GAO visited were satisfying the terms outlined in their maintenance contract; and (14) GAO observed peeling paint and disassembled production lines at several ammunition plants; however, these conditions were within contract maintenance requirements.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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