Defense Infrastructure
Changes in Funding Priorities and Strategic Planning Needed to Improve the Condition of Military Facilities Gao ID: GAO-03-274 February 19, 2003GAO prepared this report in response to its basic legislative responsibilities. Its objectives are threefold: (1) to examine the historical funding trends and their impact on the condition of the active forces' facilities, (2) to evaluate the consistency of the services' information on facility conditions, and (3) to assess the Department of Defense's (DOD) long-term strategic plan and objectives to improve facility conditions.
While the amount of money the active forces have spent on facility maintenance has increased recently, DOD and service officials said these amounts have not been sufficient to halt the deterioration of facilities. Too little funding to adequately maintain facilities is also aggravated by DOD's acknowledged retention of facilities in excess of its needs. From fiscal year 1998 to 2001, obligations for facility maintenance rose by 26 percent with increases coming from higher annual budget requests, congressional designations that exceeded those requests, supplemental appropriations, and the services' movement of funds to maintenance projects. Funding for military construction also increased during this period. However, military reports and testimonies state that these amounts have been insufficient, and GAO's recent visits to installations document the deteriorated conditions of facilities. There is a lack of consistency in the services' information on facility conditions, making it difficult for Congress, DOD, and the services to direct funds to facilities where they are most needed and to accurately gauge facility conditions. Although DOD developed a standard rating scale to summarize facility conditions (C-ratings), each service has the latitude to use its own system for assessing conditions, including the types of facility raters, assessment frequencies, appraisal scales, and validation procedures. Although DOD has a strategic plan for facilities, it lacks comprehensive information on the specific actions, time frames, responsibilities, and funding needed to reach its goals. Also, DOD has set up three objectives to improve its facility conditions--to fully fund sustainment, to achieve a 67-year average recapitalization rate by fiscal year 2007, and to improve facility conditions so that deficiencies have limited effects on military mission achievement by fiscal year 2010. However, the services have not proposed to fully fund all the objectives and have developed funding plans to achieve others that have unrealistically high rates of increase during the out-years. At the same time, the services have not developed comprehensive performance plans to implement DOD's vision for facilities.
RecommendationsOur 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.
Director: Team: Phone:GAO-03-274, Defense Infrastructure: Changes in Funding Priorities and Strategic Planning Needed to Improve the Condition of Military Facilities
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GAO:
Report to Congressional Committees:
February 2003:
DEFENSE INFRASTRUCTURE:
Changes in Funding Priorities and Strategic Planning Needed to Improve
the Condition of Military Facilities:
GAO-03-274:
GAO Highlights:
Highlights of GAO-03-274, a report to
Congressional Committees
Why GAO Did This Study:
GAO prepared this report in response to its basic legislative
responsibilities. Its objectives are threefold: (1) to examine the
historical funding trends and their impact on the condition of the
active forces‘ facilities, (2) to evaluate the consistency of the
services‘ information on facility conditions, and (3) to assess the
Department of Defense‘s (DOD) long-term strategic plan and
objectives to improve facility conditions.
GAO is recommending that the Secretary of Defense direct the
service secretaries to reassess the funding priorities attached to
sustaining and improving their facilities. Also, GAO is
recommending that the Secretary
* instruct the services to implement a consistent,
departmentwide process to assess, rate, and validate facility
conditions;
* revise DOD‘s facilities strategic plan to include detailed
information on specific actions, time frames, responsibilities,
and funding levels;
* clarify DOD‘s guidance by specifying the organizational
level at which its stated objectives should be achieved;
and
* direct the services to develop comprehensive performance
plans.
In commenting on a draft of this report, DOD agreed with the
recommendations and outlined actions to address them.
What GAO Found:
While the amount of money the active forces have spent on facility
maintenance has increased recently, DOD and service officials said
these amounts have not been sufficient to halt the deterioration of
facilities. Too little funding to adequately maintain facilities is
also aggravated by DOD‘s acknowledged retention of facilities in
excess of its needs. From fiscal year 1998 to 2001, obligations for
facility maintenance rose by 26 percent with increases coming from
higher annual budget requests, congressional designations that
exceeded those requests, supplemental appropriations, and the
services‘ movement of funds to maintenance projects. Funding for
military construction also increased during this period. However,
military reports and testimonies state that these amounts have been
insufficient, and GAO‘s recent visits to installations document the
deteriorated conditions of facilities.
There is a lack of consistency in the services‘ information on
facility conditions, making it difficult for Congress, DOD, and the
services to direct funds to facilities where they are most needed and
to accurately gauge facility conditions. Although DOD developed a
standard rating scale to summarize facility conditions (C-ratings),
each service has the latitude to use its own system for assessing
conditions, including the types of facility raters, assessment
frequencies, appraisal scales, and validation procedures.
Although DOD has a strategic plan for facilities, it lacks
comprehensive information on the specific actions, time frames,
responsibilities, and funding needed to reach its goals. Also, DOD has
set up three objectives to improve its facility conditions”to fully
fund sustainment, to achieve a 67-year average recapitalization rate
by fiscal year 2007, and to improve facility conditions so
that deficiencies have limited effects on military mission achievement
by fiscal year 2010. However, the services have not proposed to fully
fund all the objectives and have developed funding plans to achieve
others that have unrealistically high rates of increase during the
out-years. At the same time, the services have not developed
comprehensive performance plans to implement DOD‘s vision for
facilities.
Highlights Figure:
[See PDF for image]
[End of figure]
www.gao.gov/cgi-bin/getrpt?GAO-03-274.
To view the full report, including the scope and methodology, click
on the link above. For more information, contact Barry W.Holman at
(202) 512-8412.
Contents:
Letter:
Results in Brief:
Background:
Many Facilities Remain in Deteriorated Condition, Even with Increase in
Maintenance and Military Construction Funding:
Military Services‘ Data on Facility Conditions Are Inconsistent:
Weaknesses in Strategic Plan and Key Objectives Limit the Services‘
Ability to Sustain and Improve Facility Conditions:
Conclusions:
Recommendations for Executive Action:
Agency Comments:
Appendix I: Scope and Methodology:
Appendix II: DOD‘s Facilities Life-Cycle Management Model:
Appendix III: How Operation and Maintenance Funds Are Moved during the
Fiscal Year:
Appendix IV: Comments from the Department of Defense:
Appendix V: GAO Contact and Staff Acknowledgments:
Glossary:
Tables:
Table 1: Definitions of Installations‘ Readiness Report C-Ratings:
Table 2: Types of Facilities Included in the Nine Facility Classes:
Table 3: Comparison of DOD‘s and the Services‘ C-rating Definitions:
Table 4: Comparison of Basic Characteristics of Services‘ Facility
Condition Assessment Systems:
Figures:
Figure 1: Primary Funding Sources for DOD‘s Facility Management Program
in Fiscal Year 2002:
Figure 2: Requested, Congressionally Designated Initially, and
(Reported) Obligated Facility Maintenance Funding Levels for the Active
Military Services, Fiscal Years 1998 through 2001:
Figure 3: Requested and Appropriated Military Construction Funding
Levels for the Active Military Services, Fiscal Years 1998 through
2002:
Figure 4: World War II-Era Wood Building at Fort Bragg, North Carolina:
Figure 5: Structurally Unsound Warehouse at Fort Leavenworth, Kansas:
Figure 6: Choked and Clogged Water Pipes at Pope Air Force Base, North
Carolina:
Figure 7: Crumbling Concrete Outside Cargo Center at Whiteman Air Force
Base, Missouri:
Figure 8: Cracked and Broken Runway Surface at Naval Base Coronado,
California:
Figure 9: Garden Hose and Sprinkler Cooling Portable Generator at Naval
Air Station Oceana, Virginia:
Figure 10: Corroded Air-Conditioning System Valves at Quantico Marine
Corps Base, Virginia:
Figure 11: Outdoor Portable Facilities Used to Supplement Inadequate
Indoor Facilities at Quantico Marine Corps Base, Virginia:
Figure 12: Military Services‘ Proposed Sustainment Funding, Fiscal
Years 2002 through 2009:
Figure 13: Flow Chart of the Movement of Sustainment Funds to Other
Purposes in Fiscal Year 2002:
Figure 14: Sustainment Obligations as a Percentage of Requirements at
Installations We Visited, Fiscal Year 2002:
Figure 15: Projected Average Recapitalization Rate by Military Service,
Fiscal Years 2002 through 2009:
Figure 16: Total Restoration and Modernization Funding Proposed by
Military Service, Fiscal Years 2002 through 2009:
Figure 17: Projected Facilities Service Life and Performance with Full
Sustainment and Modernization:
Figure 18: Lost Facilities Service Life and Performance without Full
Sustainment:
Figure 19: DOD‘s Budget and Obligation Process for Operation and
Maintenance Funds:
Abbreviation:
DODDepartment of Defense:
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February 19, 2003:
Congressional Committees:
Department of Defense (DOD) installations and facilities are critical
to supporting U.S. military forces, but they have not been sufficiently
maintained or recapitalized for years. Defense facilities are durable
capital assets that, if properly built and sustained, have useful lives
ranging from 50 years and beyond. However, in the absence of proper
maintenance, these facilities perform poorly and decay prematurely.
Without periodic recapitalization, they can become obsolete and no
longer be cost-effectively renovated and must be replaced with new
construction. Consequently, DOD and active military service officials
report that 68 percent of facility classes rated by major commands are
in such a deteriorated condition that they negatively affect the
quality of life of military personnel and their families and their
ability to achieve their mission.[Footnote 1] Some officials estimate
that it will cost tens of billions of dollars spread over 6 to 9 years
to restore DOD‘s facilities, along with a steady, predictable stream of
sustainment and recapitalization funding after that to prevent problems
from reoccurring. DOD and Congress have recognized the need to fully
fund maintenance and recapitalization of facilities, as well as to
reduce the department‘s inventory of facilities through an upcoming
round of base realignments and closures scheduled for fiscal year
2005.[Footnote 2]
We prepared this report under our basic legislative responsibilities.
We are providing it to you because of your oversight responsibilities
for DOD‘s facilities. This report (1) examines the historical funding
trends for facility maintenance and military construction (including
budget requests, initial congressional designations,[Footnote 3] and
obligations) and their impact on the condition of the active forces‘
facilities, (2) evaluates the consistency of the services‘ information
on facility conditions to help ensure that funding decisions
effectively target facilities in greatest need and reported ratings
accurately measure facility condition improvements, and (3) assesses
the department‘s long-term strategic plan and objectives to sustain and
improve the condition of facilities. This is one of several reviews
that we have underway examining various aspects of facility conditions
in the department. We are also reviewing the physical condition of and
maintenance and recapitalization plans for military reserve facilities
and the management of housing for unaccompanied personnel.
In performing our work for this review, we examined DOD‘s budget
requests, congressional designations, and obligations data for
facilities maintenance and construction since fiscal year 1998. In
addition, we visited 10 military installations and met with officials
of the department, the services, and six major commands to review the
management and physical condition of their facilities.[Footnote 4]
During our visits to installations, we discussed the evaluation methods
and the condition assessment processes with the facility raters and
reviewers and toured various facilities to observe their physical
condition and deficiencies. We reviewed each service‘s system for
assessing facility conditions and compared this information across the
services. We also examined DOD‘s plans and objectives to address the
condition of facilities. We did not attempt to validate DOD‘s reported
requirements for the sustainment of its facilities, nor did we validate
DOD‘s facility inventory database. We conducted our work between
February and November 2002 in accordance with generally accepted
government auditing standards. A more thorough description of our scope
and methodology is in appendix I.
Results in Brief:
Although funding for facility maintenance and military construction
increased during the past few years, DOD and service officials said
these amounts must compete with other defense programs and priorities
and have fallen short of what is needed to halt the deterioration of
facilities used by the active military forces. From fiscal year 1998 to
fiscal year 2001, the department‘s reported obligations for facility
maintenance rose by
26 percent, from $3.8 billion to $4.8 billion.[Footnote 5] In general,
these funding increases resulted from four primary sources: the
military services‘ moderately higher annual funding requests, except in
fiscal year 2000; congressionally designated funding that was above the
amounts requested by the services; supplemental appropriations; and the
movement of funds into facility maintenance from other operating
accounts at the end of each fiscal year. During fiscal years 1998
through 2002, appropriations for military construction also rose from
$2.1 billion to $4.1 billion. In fiscal year 2003, appropriations for
military construction were $4.07 billion. Even with the funding
increases in facility upkeep and military construction, DOD officials
said that these amounts have been insufficient to contain the
deterioration of military facilities.[Footnote 6] In addition, the
services have pointed out in both congressional testimony and various
reports that their funding requests for facility upkeep have to compete
with other defense programs and priorities and have been consistently
below what is needed. At the same time, department officials also
acknowledge having facilities in excess of their needs, which they
expect to address in a new base realignment and closure round planned
for fiscal year 2005. The deteriorated condition of military facilities
is further documented in DOD-wide ratings that show that 68 percent of
facility classes rated by major commands are in such poor condition
that they cannot fully support military missions, and in our own visits
to 10 U.S. military installations where we found instances of leaking
roofs, rotting piers, mold-covered child development centers and
administrative buildings, and deteriorated warehouses.
While deteriorated facilities are common on many installations, there
is a lack of consistency in the services‘ information on facility
conditions, making it difficult for DOD and the services to direct
funds to facilities where they are most needed and to measure progress
in improving facilities. Although DOD has established a standard rating
scale to summarize the condition of facilities in terms of their
ability to support military missions, the military services, and in
some cases major commands within a service, have the latitude to use
their own systems to develop and validate their ratings. According to
DOD‘s guidance, the services can implement the department‘s rating
scale without modifying their existing assessment processes. Our
analysis shows that the services use different kinds of facility raters
and procedures, assessment scopes and frequencies, appraisal scales,
and validation procedures, all of which result in inconsistencies and a
lack of comparability in their ratings. Without a consistent cross-
service system for assessing facility conditions and developing
ratings, DOD and the services cannot be assured that their funding
decisions effectively target facilities in greatest need and reported
ratings accurately measure progress in facility condition improvements.
Therefore, Congress may be relying on inconsistent data in its
oversight responsibilities.
DOD has developed a facilities strategic plan and adopted three key
objectives for the services to sustain and improve the condition of
their facilities, but both the plan and the objectives have weaknesses.
While the plan offers an overall vision for managing facilities, it
lacks comprehensive information on the specific actions, time frames,
assigned responsibilities, and resources that are needed to meet that
vision. Although not part of the plan, three key objectives are meant
to help the services begin reversing the trend of deteriorating
facilities. These objectives are to fully fund sustainment starting in
fiscal year 2004, reach a 67-year average recapitalization
rate[Footnote 7] for the services‘ facilities by fiscal year 2007, and
improve the condition of facilities so that deficiencies have only a
limited effect on mission performance by fiscal year 2010.[Footnote 8]
The department is unlikely to achieve these objectives, however,
because the military services do not propose to fully fund all of them
or have developed funding plans that have unrealistically high rates of
increase in the out-years when compared with previous funding trends
and against other defense priorities. Moreover, achieving these
objectives at the service level still allows for a wide range of
sustainment funding and facility deficiencies at the installation
level. For example, in the case of the first objective to fully fund
sustainment, we found that even though the services intended to fund
sustainment between 78 and 98 percent of requirements in fiscal year
2002, sustainment funding at 7 of the 10 installations we visited, in
fact, ranged from 35 to 77 percent of their requirements at year‘s
end.[Footnote 9] During our visits to major commands and installations,
we found that sustainment funds can be reduced or held back at the
service headquarters, major command, and installation levels to cover
more pressing needs or emerging requirements. Installation officials
told us that, as a result of these holdbacks and movements, it was
difficult for them to make or implement rational plans for maintaining
their facilities. In addition, the services have not developed
comprehensive performance plans to implement the department‘s vision
for facilities that provides specific metrics to measure performance
and credible and realistic funding plans to sustain and recapitalize
facilities. On a positive note, the department and the services have
undertaken some recent initiatives that are designed to improve the
department‘s ability to monitor and hold accountable the services‘
facility management programs. Among these initiatives are the
department‘s development of a facilities assessment database, a
handbook specifying the standard costs to maintain different types of
facilities, and a model to calculate annual sustainment costs for
facilities as well as an Army effort to centralize and streamline its
facility management program to prevent major commands from moving
maintenance funds to other programs. For several years, the Navy has
had a less centralized regional program to manage its installations,
which did not prevent the movement of sustainment funds from facilities
early in fiscal year 2002. While the Navy is now moving toward a more
centralized management structure similar to the Army‘s facility
management program, it is too early to assess the potential success of
either facility program.
We are recommending that the Secretary of Defense direct the service
secretaries to reassess the funding priorities the services have
attached to sustaining and improving the condition of their facilities
relative to other needs and funding limitations. In addition, we are
recommending that the Secretary of Defense (1) instruct the services to
implement a consistent, departmentwide process to assess the condition
of facilities and develop a method to validate the ratings; (2) revise
the department‘s facilities strategic plan to provide comprehensive
information on specific actions needed, time frames, responsibilities,
and resources; (3) clarify the department‘s guidance by specifying the
organizational level to which its three stated objectives should be
achieved; and (4) direct the services to develop comprehensive
performance plans that implement the department‘s facilities strategic
plan and provide specific metrics to measure performance and credible
and realistic funding plans to sustain and recapitalize facilities. In
comments on a draft of this report, DOD concurred with our
recommendations. The department also provided technical
clarifications, which we incorporated as appropriate.
Background:
In the United States, the active military services are responsible for
nearly 380,000 facilities, with an estimated plant replacement value of
over $435 billion.[Footnote 10] These facilities include buildings,
such as barracks, administrative space, classrooms, hangars,
warehouses, maintenance buildings, churches, and child development
centers, as well as non-buildings, such as runways, roads, railroads,
piers, and utility structures and systems. If family housing were
included, the total number of facilities would rise to more than
524,000, with a plant replacement value of more than $477
billion.[Footnote 11]
Funding for Facilities:
Historically, the military services used their own metrics,
terminology, and accounting structures to manage their facilities. In
fiscal year 2002, DOD replaced the operation and maintenance funded
real property maintenance program with two distinct activities and
accounting structures for (1) sustainment and (2) restoration and
modernization, having already created a separate accounting structure
for demolition and disposal in fiscal year 1999. In addition, DOD has
developed a model for estimating sustainment funding needs, and it is
developing a model for forecasting restoration and modernization
funding requirements. The Army and the Air Force began using the
sustainment and restoration and modernization programs in fiscal year
2002, while the Navy and the Marine Corps asked for and were given
permission to delay implementation of these new programs until fiscal
year 2003.
Operation and maintenance funds primarily support sustainment
activities, which are designed to keep facilities in good working
order. Sustainment funds cover expenses for all recurring maintenance
costs and contracts, as well as for major repairs of nonstructural
facility components (e.g., replacing the roof or repairing the air-
conditioning system) that are expected to occur during a facility‘s
life cycle. Restoration includes repair and replacement work to restore
facilities damaged by inadequate sustainment, excessive age, natural
disaster, fire, accident, or other causes. Modernization includes
altering, or modernizing, facilities to meet new or higher standards,
accommodate new functions, or replace structural components. Both
operation and maintenance and military construction monies fund these
activities, as well as demolition and disposal activities. A fourth
activity--new construction--is also funded with both military
construction and operation and maintenance monies. This activity
involves the construction of new buildings and other facilities,
referred to as new footprint projects.[Footnote 12] There are
limitations to the amount of operation and maintenance funds that can
be used for new construction and the alteration or conversion of
existing facilities: a maximum of $750,000 per project or up to $1.5
million if the project is designed to correct a deficiency that
threatens life, health, or safety.[Footnote 13] As figure 1
illustrates, overlapping funding sources support DOD‘s sustainment,
restoration, and modernization of military facilities, along with its
demolition program and new military construction.
Figure 1: Primary Funding Sources for DOD‘s Facility Management Program
in Fiscal Year 2002:
[See PDF for image]
[End of figure]
Notes: GAO‘s analysis of DOD data.
The military services also use military pay; working capital funds;
research, development, test, and evaluation funds; and host nation
support funds to sustain and recapitalize facilities.
According to DOD, fully funding sustainment is the most cost-effective
approach to managing facilities because it provides the most
performance over the longest period of time for the least investment.
Without adequate sustainment, expected service life is reduced and
facilities must be recapitalized sooner than expected. Yet, even with
adequate sustainment, over time facilities eventually either physically
wear out or become obsolete. An obsolete facility is one that is
irrelevant to present-day missions regardless of its condition; for
example, a firehouse built in 1930 that is too narrow or too short to
accommodate modern fire trucks. Once facilities reach the end of their
expected service life, they must be replaced or extensively renovated
or modernized--referred to as recapitalization--if they are to continue
providing adequate performance. DOD estimates that an average
recapitalization rate of 67 years allows fully sustained facilities to
meet their requirements.[Footnote 14] In fiscal year 2002, DOD‘s
average recapitalization rate was 101 years, and it is projected to
increase to about 150 years in fiscal year 2003. Recapitalization
investments can also be made periodically throughout a facility‘s
service life, which extends service life and delays the need for
replacement. Moreover, even after recapitalization investments are
made, facility performance can rapidly decline in the absence of
adequate sustainment.
Rating of Facilities:
In an attempt to standardize the rating of facilities across the
services and to provide a measure of facility conditions, DOD issued
its first Installations‘ Readiness Report in 1999. Within the report,
the services‘ major commands report on each of their nine facility
classes using a scale of C-1 through C-4, as defined in table
1.[Footnote 15] For example, a C-4 rating is an indication that a
facility class for a specified installation or major command has
deficiencies that require workarounds or effectively preclude
satisfactory mission accomplishment. According to DOD‘s guidance to the
services, they could implement this readiness reporting system without
modifying their existing assessment processes. As a result, all four
services are using different systems to assess facility conditions and
develop C-ratings. However, reporting their ratings to DOD requires the
services to implement additional processes to summarize information by
major commands using C-ratings for facility classes.
Table 1: Definitions of Installations‘ Readiness Report C-Ratings:
Rating: C-1; Definition: Only minor facility deficiencies with
negligible impact on capability to perform missions.
Rating: C-2; Definition: Some facility deficiencies with limited impact
on capability to perform missions.
Rating: C-3; Definition: Significant facility deficiencies that prevent
performing some missions.
Rating: C-4; Definition: Major facility deficiencies that preclude
satisfactory mission accomplishment.
[End of table]
Source: DOD.
The nine facility classes are groupings of like facilities. These
facility classes are similar to the groupings traditionally used for
military construction budgets and are consistent with the real property
inventories the military services maintain. Table 2 lists the nine
classes with examples of the types of facilities included in each
class.
Table 2: Types of Facilities Included in the Nine Facility Classes:
Facility class: Operations and training; Types of facilities:
Airfields, piers and wharves, training ranges and classrooms, recruit
facilities, armories, aircraft parking and hangars, refueling hydrants,
and flight simulators.
Facility class: Mobility; Types of facilities: Facilities directly
related to mobilization of forces, including staging areas and
transportation systems.
Facility class: Maintenance and production; Types of facilities:
Vehicle and avionics maintenance shops, tactical equipment shops,
aircraft maintenance hangars, foundries, and ammunition
demilitarization.
Facility class: Research, development, testing, and evaluation; Types
of facilities: Test chambers, laboratories, and research buildings.
Facility class: Supply; Types of facilities: Warehouses, hazardous
material storage, and ammunition storage.
Facility class: Medical; Types of facilities: Hospitals and medical and
dental clinics.
Facility class: Administrative; Types of facilities: Office space and
computer facilities.
Facility class: Community and housing; Types of facilities: Family
housing, barracks and dormitories, dining halls, recreation and
physical fitness facilities, child development centers, fire and police
stations, visitors‘ quarters, and elementary and high schools.
Facility class: Utilities and ground improvements; Types of facilities:
Power production, distribution, and conservation systems; water and
sewage systems; roads and bridges; water pollution abatement;
wastewater treatment facilities; fuel storage tanks; and containment
areas.
[End of table]
Source: DOD.
In fiscal year 2001, DOD reported that 68 percent of facility classes
rated by the services‘ major commands received C-3 or C-4 ratings,
indicating that they were in such deteriorated condition that they
negatively affected the quality of life of military personnel and their
families and their ability to achieve their mission. For example, the
Army Forces Command did not rate any of its facility classes as C-1,
but it rated its medical class as C-2 and its remaining eight classes
as C-3. During the same period, the Navy‘s Pacific Fleet did not rate
any of its facility classes as C-1 or C-2, but it rated its community
and housing class as C-4 and its remaining seven classes as C-3. The
Pacific Fleet does not report ratings for the mobility class.
Strategic Plan and Objectives for Facilities:
DOD has labored in recent years to develop its Defense Facilities
Strategic Plan, which outlines a set of initiatives over a 20-year
period that are directly linked to the plan‘s vision, mission, and
goals.[Footnote 16] The vision set forth in the plan is to have
installations and facilities available when and where needed to
effectively and efficiently support missions. To achieve its vision,
the plan‘s strategic goals are to (1) locate, size, and configure
defense installations and facilities to meet the requirements of
today‘s and tomorrow‘s force structures; (2) acquire and sustain
defense installations and facilities to provide mission-ready
installations with quality living and work environments; (3) leverage
resources--money, people, and equipment--to achieve the proper balance
between requirements and available funding; and (4) improve facility
management and planning by embracing best business practices and taking
advantage of modern asset-management techniques and performance-
assessment metrics.
In addition to the broad goals set forth in its strategic plan, DOD
established three key objectives. The objectives are (1) to fully fund
sustainment, starting in fiscal year 2004; (2) to achieve an average
recapitalization rate of 67 years, by fiscal year 2007; and (3) to
concentrate funding so as to eliminate C-3 and C-4 facility ratings,
bringing the ratings up to a minimal C-2 level by fiscal year 2010. As
a point of reference, although there were no specific funding targets
for fiscal year 2002, the military services intended to fund
sustainment between 78 and 98 percent of requirements and reach an
average recapitalization rate between 63 and 163 years in fiscal year
2002. As well, departmentwide facility ratings show that major commands
rated 68 percent of facility classes C-3 or C-4. DOD gradually phased
in its guidance to the services on sustainment beginning in fiscal year
2002 when it instructed the services to fund sustainment to the maximum
extent possible. For fiscal year 2003, DOD instructed the services to
attempt to fully fund sustainment to the levels specified by its
facilities sustainment model.[Footnote 17] For fiscal year 2004 and
thereafter, DOD instructed the services to fully fund sustainment to
the levels defined by the facilities sustainment model. To reduce the
recapitalization rate and eliminate C-3 and C-4 ratings, facilities
need to be fully sustained.
The Defense Facilities Strategic Plan also notes that DOD needs to
better focus its sustainment and restoration and modernization dollars
to cost-effectively operate and maintain its facilities to support its
military missions. The plan states that DOD should only fund
sustainment and restoration and modernization of those facilities that
are needed. As authorized by Congress in 2001, DOD intends to reduce
its inventory of facilities as the result of closing some installations
and by consolidating overlapping activities within and across the
services through a round of base realignments and closures scheduled
for fiscal year 2005.
Prior GAO Reports:
We have conducted a number of reviews where we identified areas in
which DOD and the services could improve their facilities management
program. Since 1997, we have identified DOD infrastructure management
as a high-risk area. In 2001, we reported that DOD needed to develop a
comprehensive long-range plan for its facilities infrastructure that
addresses facility requirements, recapitalization, and maintenance and
repair needs.[Footnote 18] We updated this report in January 2003, as
well as designated federal real property as a new high-risk area at the
same time.[Footnote 19] In September 1999, we reported on the
management of DOD‘s facility maintenance and repair programs and
recommended that the Secretary of Defense (1) develop a way to link
needs assessment with both resource allocations and tracking systems
that show whether high-priority needs are receiving funding, (2)
establish standardized condition assessment criteria, and (3) have the
services adopt a valid engineering-based assessment system for
facilities maintenance.[Footnote 20] In February 2000, we reported on
the funding amounts that Congress had designated for DOD‘s operation
and maintenance subactivities and compared the amounts with DOD‘s
obligations for those same subactivities.[Footnote 21] We found that
DOD consistently moved operation and maintenance funds into and out of
certain activities, usually because they were needed elsewhere. In a
June 2002 report, we examined the condition of barracks used to house
military recruits in basic training and concluded that, to varying
degrees, most barracks were in significant need of repair, although
some were in better condition than others.[Footnote 22]
Many Facilities Remain in Deteriorated Condition, Even with Increase in
Maintenance and Military Construction Funding:
While the amounts of money DOD devoted to facility maintenance and
military construction increased between fiscal year 1998 and 2001 and
fiscal year 1998 and 2002, respectively, DOD and service officials said
these amounts have to compete with other defense programs and
priorities and have been insufficient to restrain the deterioration
and/or obsolescence of facilities used by the active forces. In
general, the funding increases for facility maintenance resulted from
moderately higher annual requests by the services, except in fiscal
year 2000; congressionally designated funding that was higher than that
requested by the services; supplemental appropriations; and the
services‘ movement of funds to maintenance projects at the end of each
fiscal year. The funding increase in military construction resulted
primarily from congressional designations greater than initially
requested by DOD. Even with these increases, funding has fallen short
of what is needed to reverse the deteriorated state of many facilities,
as highlighted in recent congressional testimony and various studies
conducted by the services. Recent departmentwide facility ratings show
that major commands rated 68 percent of facility classes C-3 or C-4.
Our visits to 10 military installations further underscored the scope
of the deteriorated conditions.
Facility Maintenance Funding Increased from Fiscal Year 1998 to Fiscal
Year 2001:
DOD‘s reported obligations for facility maintenance, funded with
operation and maintenance monies, show an increase between fiscal year
1998 and 2001.[Footnote 23] Moreover, these obligations were always
more than the services originally requested or that Congress initially
designated. As figure 2 shows, the amounts that DOD requested for
facility maintenance fluctuated between 1998 and 2001, increasing
overall from $3.5 billion in fiscal year 1998 to just above $4.6
billion in fiscal year 2001. During the same period, Congress
consistently designated more funding for facility maintenance than DOD
had requested. In addition, DOD‘s reported obligations for facility
maintenance increased from over $3.8 billion in fiscal year 1998 to
more than $4.8 billion in fiscal year 2001, a 26 percent increase
during fiscal years 1998 through 2001, unadjusted for inflation.
Figure 2: Requested, Congressionally Designated Initially, and
(Reported) Obligated Facility Maintenance Funding Levels for the Active
Military Services, Fiscal Years 1998 through 2001:
[See PDF for image]
[End of figure]
Notes: GAO‘s analysis of DOD and congressional data.
Some of this increase is a result of internal adjustments among
accounts. For example, during this period, some services moved
research, development, test, and evaluation funds budgeted for the
maintenance and repair of research, development, test, and evaluation
facilities into the operation and maintenance budget.
Fiscal year 2002 data are not included above because obligations data
were not available during our review.
While some funding increases for facility maintenance resulted from
moderately higher requests by the services (except in fiscal year
2000), most of the growth stemmed from congressionally designated
funding that was above that requested by the services; supplemental
appropriations that increased facility maintenance funding in each
fiscal year; and the services‘ internal movement of funds into facility
maintenance from other operation and maintenance-funded programs, such
as operating tempo programs.[Footnote 24] According to a DOD official,
some of the growth in the reported maintenance funding resulted from
internal adjustments among accounts--intrabudget transfers from other
appropriations to facility maintenance. The services also moved funds
out of facility maintenance to other programs such as base operations
and force readiness during this period; however, the outward movements
of funds were generally less than the amounts moved into facility
maintenance. For example, during fiscal year 2000, the Army initially
moved $6.8 million out of facility maintenance to base operations
support but, by the end of the fiscal year, had moved more than $10
million back into facility maintenance from base operations support. In
addition, it is important to note that in fiscal year 2000, DOD split
its budget request for facilities between $2.8 billion for facility
maintenance and $1.8 billion for quality of life enhancements.[Footnote
25] DOD specifically requested funds for quality-of-life enhancements
in fiscal year 2000 to reduce the services‘ facility maintenance
backlog and to repair barracks, dormitories, and related facilities.
Although Congress initially designated only slightly more funds
(approximately $64 million) for facility maintenance than DOD
requested, in its conference report Congress moved more than $1.6
billion from DOD‘s quality-of-life enhancements into facility
maintenance.
DOD has considerable flexibility in using operation and maintenance
funds and can move them in several ways. Congress makes appropriations
at the aggregated account level--that is, for the Army, the Air Force,
the Navy, the Marine Corps, and the Defense-wide operation and
maintenance accounts. However, to indicate how it expects operation and
maintenance funds to be spent, Congress designates, in its conference
report on annual appropriations acts, specific amounts for each
subactivity group, such as sustainment, restoration and modernization,
or base operations. As discussed further in appendix III, DOD has broad
discretion in how it uses operation and maintenance funds.
Military Construction Appropriations Increased from Fiscal Year 1998 to
Fiscal Year 2002:
At the same time that DOD‘s reported obligations for facility
maintenance increased, appropriations for military construction also
rose. However, the amounts that DOD requested for military construction
fluctuated between fiscal year 1998 and 2001, from nearly $1.6 billion
in fiscal year 1998, down to about $1.2 billion in fiscal year 2000,
and up to more than $3.9 billion in fiscal year 2002. During the same
period, as figure 3 shows, Congress consistently appropriated more
funding for military construction than DOD had requested by adding
construction projects. Although the appropriated amounts slightly
decreased between fiscal year 1998 and 1999 and again between fiscal
year 2000 and 2001, total appropriations increased from $2.1 billion in
fiscal year 1998 to more than $4.1 billion in fiscal year 2002, a 95
percent increase, unadjusted for inflation.[Footnote 26]
Figure 3: Requested and Appropriated Military Construction Funding
Levels for the Active Military Services, Fiscal Years 1998 through
2002:
[See PDF for image]
[End of figure]
Notes: GAO‘s analysis of DOD and congressional data.
This table does not include yearly obligated amounts for military
construction because such funds are available for obligation over a 5-
year period. For example, funds appropriated in fiscal year 1998 can be
obligated through fiscal year 2002.
In fiscal year 2000, DOD requested less in military construction funds
than it had asked for in the previous two fiscal years but it also
requested advance appropriations for fiscal year 2001 totaling more
than $1.5 billion for the active services.[Footnote 27] Congress did
not appropriate funds for the advance appropriation request but
appropriated military construction funds for fiscal year 2000 that were
greater than the initial request. In its report on the fiscal year 2000
military construction appropriation bill, the Senate Committee on
Appropriations noted that the use of advance appropriations was not
consistent with the long-standing policy of fully funding military
construction and directed DOD to fully fund all military construction
projects in future budget requests. The Committee also noted that it
was concerned about DOD‘s continued lack of investment in military
facilities and indicated that the fiscal year 2000 military
construction request failed to request sufficient funds to support
DOD‘s efforts to modernize, renovate, and improve aging facilities. In
fiscal year 2002, the administration requested $3.9 billion--$1.72
billion more than requested in fiscal year 2001--for military
construction to help eliminate the most seriously degraded facilities
and reduce the recapitalization rate.
Testimony and Studies Indicate that Services Have Underfunded Facility
Maintenance:
Even with the growth in funding for facility maintenance and military
construction, DOD and service officials said the amounts have fallen
short of what is needed to stop the deterioration and obsolescence of
facilities used by the active forces. In testimony in April 2001 before
the House Committee on Armed Services, Military Installations and
Facilities Subcommittee, officials from the military services
attributed deteriorated facility conditions to consistent
underfunding. For example, Army officials testified that average
facility maintenance funding since the early 1990s was approximately 60
percent of what was needed. These officials also testified that
available maintenance funding met only 70 percent of their needs in
fiscal year 2001. Likewise, Air Force officials testified that facility
maintenance funding shortfalls have hindered the service‘s efforts to
sustain and operate Air Force facilities and only allow the Air Force
to provide day-to-day maintenance for facilities. Navy and Marine Corps
officials also testified that their services consistently underfunded
facility maintenance.
In addition to congressional testimony, DOD and the military services
have issued a number of recent reports that further underscore the
insufficiency of funding for facility maintenance. In its annual
financial reports, DOD reported that its deferred maintenance increased
from $35.9 billion in fiscal year 1998 to $50 billion in fiscal year
2001--a $14.1 billion increase in 3 years. However, it is important to
note that in fiscal year 2001, DOD stopped reporting deferred
maintenance because it found deferred maintenance to be inaccurate,
subjective, and unverifiable. In the Installations‘ Readiness Report
for fiscal year 2001, the services reported that 68 percent of their
facility classes rated by major commands were C-3 or C-4. In a report
on its facilities investment plan, the Air Force indicated that, since
fiscal year 1998, operation and maintenance facilities funding was
limited to 1 percent of the service‘s total plant replacement
value.[Footnote 28] However, the full 1 percent rarely reached Air
Force installations because the funds were moved to other needs or used
to pay for critical repairs or upgrades to facilities, which are not
considered maintenance activities. Based on DOD‘s facilities
sustainment model, 1 percent of plant replacement value is not enough
to fully sustain facilities. In a 2002 report on the Navy‘s facilities
maintenance program, the Naval Audit Service stated that the Navy
historically understated its maintenance requirements and used its
facility maintenance funds to resolve funding shortfalls in other Navy
programs.[Footnote 29] The Naval Audit Service concluded that, as a
result of these movements and the resulting reductions in maintenance
funding at the beginning of the fiscal year, it is difficult for the
Navy to make or implement rational plans for maintaining and repairing
its facilities.
Deteriorated Condition of Military Facilities:
Although we found new construction and renovations of buildings taking
place, we also observed numerous examples of deteriorated conditions of
military facilities during our visits to 10 installations across the
country. Moreover, we noted that while facilities may appear to be in
relatively good condition on the exterior, their interior conditions
may be less so with deteriorated heating, air-conditioning, and
ventilation systems and other deficiencies. Among the deficiencies
observed were:
* buildings closed due to excessive mold and mildew;
* motor pools forced to perform vehicle maintenance outdoors on gravel
lots;
* administrative offices located in converted wooden barracks built in
the 1940s;
* maintenance performed on expensive electronic equipment inside
temporary structures with inadequate heating, air-conditioning, or
ventilation systems; and:
* runways policed regularly by base personnel to pick up debris and
identify cracked pavement.
In the following sections, we describe some of the facility
deficiencies we observed at each of the 10 military installations we
visited.
Deficiencies Observed at Army Installations:
Established in 1918, Fort Bragg, North Carolina, is home to the 82nd
Airborne and its three brigades. At Fort Bragg, we observed a number of
newly constructed facilities, such as a medical center and a youth
center, as well as many facilities that were in relatively poor
condition. For example, we saw wooden buildings that were constructed
during World War II and were still in use for a variety of purposes,
including administrative space and storage. In fiscal year 2001, Fort
Bragg‘s administrative facilities were rated C-4, which is defined by
DOD as having major deficiencies that preclude satisfactory completion
of the mission. These wooden buildings contain nearly 2 million square
feet, or about 7 percent of the installation‘s total facility space.
Figure 4 shows the exterior walls of one of these badly deteriorating
buildings; the paint on the walls was peeling and there were several
holes in the wood. In addition, a number of temporary structures were
in use, including sheds used for administration and training at a
vehicle maintenance yard. At this location, personnel also performed
maintenance on vehicles on a gravel lot where dirt and debris sometimes
got into engine parts and compromised the quality of their work.
Figure 4: World War II-Era Wood Building at Fort Bragg, North Carolina:
[See PDF for image]
[End of figure]
Fort Leavenworth, Kansas, which was established in 1827, is home to the
Combined Arms Center that educates officers in operational command and
staff functions, the Command and General Staff College, the National
Simulation Center, and the U.S. Disciplinary Barracks. At Fort
Leavenworth, we saw a newly constructed prison and a recently renovated
visiting officers‘ quarters but also numerous deteriorated facilities,
including a warehouse with a broken structural wood beam, as shown in
figure 5. Notwithstanding this hazard, personnel still worked in this
facility daily. In fiscal year 2001, Fort Leavenworth‘s supply
facilities, which include warehouses, were rated C-4.
Figure 5: Structurally Unsound Warehouse at Fort Leavenworth, Kansas:
[See PDF for image]
[End of figure]
Deficiencies Observed at Air Force Installations:
Pope Air Force Base, North Carolina, established as Pope Field in 1919,
is currently home to the 43rd Airlift Wing, which provides airlift
support to adjacent Fort Bragg. While we saw buildings at Pope that
appeared to be in good condition on the outside, officials advised us
to drink only bottled water because the installation‘s water pipes were
so thoroughly clogged with rust and sediment that the water was
considered unsafe to drink. Figure 6 shows some of the water pipes that
were removed from a renovated building. Base officials told us that the
fire station‘s ventilation system was unable to adequately remove
diesel fire engine exhaust from the air. We also learned that crumbling
concrete and a decaying storm drainpipe required the base‘s main runway
to be shut down in February 2002. While the runway and one taxiway were
being repaired, all flight operations, equipment, and personnel had to
be transferred to other installations for 30 days--at a cost of over
$800,000. We were also told the runway was policed regularly to clean
up debris and identify cracked pavement. The base‘s operations and
training facility class, including runways and taxiways, was rated C-4
in fiscal year 2001.
Figure 6: Choked and Clogged Water Pipes at Pope Air Force Base, North
Carolina:
[See PDF for image]
[End of figure]
Whiteman Air Force Base, Missouri, established in 1942 as Sedalia Army
Air Field, is a former missile base that is now home to the Air Force‘s
B-2 bombers. Even with new construction to accommodate B-2 maintenance
operations, the facilities exhibited a number of problems. Crumbling
pavement outside the entrance of a main cargo center threatened to
topple loaded forklift machinery (see fig. 7). A 48-year-old wood frame
warehouse had safety, lighting, and electrical code violations and a
leaky roof. The warehouse also had a loading dock that forklift
operators were told not to use because the dock‘s cracked and pitted
concrete might not support the weight of the machinery. In fiscal year
2001, the base‘s supply facility class, including warehouses, was rated
C-4.
Figure 7: Crumbling Concrete Outside Cargo Center at Whiteman Air Force
Base, Missouri:
[See PDF for image]
[End of figure]
Los Angeles Air Force Base, California, officially designated as Los
Angeles Air Force Station in 1964, is the current home of the Air Force
Space and Missile Systems Center whose mission involves acquisition and
research, development, and testing of missile systems. Base officials
told us that a number of buildings had asbestos in the interior walls
and ceilings, and we observed peeling lead-based paint on the exterior
surfaces. The officials also told us that at one of the base‘s computer
laboratories the asbestos levels in the floor tiles were too high to
risk removing them. The base‘s research, development, testing, and
evaluation facilities were rated C-4 in fiscal year 2001. Officials
also showed us the main electrical substation for the base, which used
1930s-era equipment and was difficult to repair because parts were no
longer available. The substation once caught fire and was shut down;
there was a great deal of difficulty getting it completely operational.
Some of its wiring was still covered with asbestos insulation.
Deficiencies Observed at Navy Installations:
At Naval Station San Diego, California, established in 1922 and
homeport to 89 Pacific Fleet ships, we observed several deteriorated
facilities, including piers with broken wooden fenders and cracked
concrete. One pier could not support heavy loading equipment. In
addition, officials told us the heating, ventilation, and air-
conditioning systems at the radar school have only been minimally
maintained for many years due to a lack of funds. In fiscal year 2001,
Naval Station San Diego‘s operations and training class, of which these
facilities are part, was rated C-3, which is defined by DOD as having
significant deficiencies that prevent performing some missions.
During our visit to Naval Base Coronado, California, which was
established as Naval Air Station North Island in 1917 and is comprised
of the naval air station, Naval Amphibious Base Coronado, and five
other activities, we observed a severely deteriorated runway with large
sections of cracked and broken concrete that had, on at least one
occasion, caused minor damage to aircraft using the runway (see fig.
8). The operations and training facility class, including runways, at
Naval Base Coronado was rated C-3 in fiscal year 2001. Moreover,
officials told us that the base continually dealt with large problems
created by small maintenance problems that were not addressed. For
instance, they told us a toilet, which did not shut off properly,
flooded out one building, resulting in $140,000 in cleanup costs. We
also saw one of the base‘s child development centers, which was
permanently closed in January 2002 because of severe problems with mold
that had rotted the support structure underneath the building‘s floor.
The building‘s closure, which affected more than 160 children for whom
alternate care had to be found, had a significant impact on the quality
of life of military families at this base.
Figure 8: Cracked and Broken Runway Surface at Naval Base Coronado,
California:
[See PDF for image]
[End of figure]
At Naval Station Norfolk, Virginia, established in 1917 and homeport
for 76 ships and 138 aircraft, we observed several facilities under
renovation, but we also saw many deteriorated facilities, including a
large warehouse that was evacuated because the wooden beams supporting
the roof broke. Likewise, during our visit to Naval Air Station Oceana,
Virginia, established in 1952 and home to 23 aircraft squadrons
assigned to both the Atlantic and Pacific Fleets, we saw several newly
constructed facilities, some of which were replacing obsolete
facilities. Still, officials told us that sections of the
installation‘s aircraft intermediate maintenance depot, the Navy‘s only
F-14 aircraft electronics maintenance support center, frequently shut
down because the facility‘s failing air-conditioning system could not
adequately cool room temperatures to the levels necessary for aircraft
repair equipment to function. As a result, according to base personnel,
there was a backlog of aircraft parts that needed repairs, grounding
some aircraft and forcing sailors to work long hours to make up the
backlog. In fiscal year 2001, Naval Air Station Oceana‘s maintenance
and production facilities, including avionics maintenance shops, were
rated C-4. Figure 9 shows the aircraft intermediate maintenance depot‘s
portable generator, used to supplement the internal air-conditioning
system, being cooled by a garden hose and a sprinkler to prevent
overheating. In addition, officials told us that some barracks at Naval
Air Station Oceana were not occupied because their heating,
ventilation, and air-conditioning systems were not maintained, allowing
mold and mildew to grow in walls, carpeting, and ceilings--all of which
must be replaced. Personnel who occupied these buildings had to find
housing off base.
Figure 9: Garden Hose and Sprinkler Cooling Portable Generator at Naval
Air Station Oceana, Virginia:
[See PDF for image]
[End of figure]
Deficiencies Observed at Quantico Marine Corps Base, Virginia:
Quantico Marine Corps Base, Virginia, established in 1917, serves two
primary roles--as the location where Marine Corps‘ concepts, doctrine,
training, and equipment are developed and as the focal point for Marine
Corps‘ professional military education. While we saw a number of new
buildings in good exterior condition, we also saw a number of older,
deteriorated facilities at the base. For example, we observed buildings
with doors falling off their frames, barracks room walls cracked and
covered with mold, and air-conditioning systems close to failure. In
one building with a mess hall, living quarters, and classrooms, base
officials showed us corroded valves from the air-conditioning system
(see fig. 10). They told us that the system, which was imported from
India in 1999, constantly leaked and had corroded the two valves in
only one year. They added that because the system was only one of three
in use in the United States, it was difficult to obtain the parts
needed to repair it.
Figure 10: Corroded Air-Conditioning System Valves at Quantico Marine
Corps Base, Virginia:
[See PDF for image]
[End of figure]
Although the base‘s operations and training facility class was rated C-
2 in fiscal year 2001, we visited two old classroom buildings that were
still in use but did not have adequate indoor bathroom facilities. As
figure 11 shows, personnel must use outdoor portable facilities at one
training location.
Figure 11: Outdoor Portable Facilities Used to Supplement Inadequate
Indoor Facilities at Quantico Marine Corps Base, Virginia:
[See PDF for image]
[End of figure]
Military Services‘ Data on Facility Conditions Are Inconsistent:
The information that the services have on the condition of their
facilities is inconsistent across the services, making it difficult for
Congress, DOD, and the services to direct funds to facilities that are
in most need of repair and to measure progress in improving facilities.
Although DOD established a standard rating scale to summarize facility
conditions and ability to support military mission, each service has
the latitude to use its own system for developing and validating the
ratings. According to DOD‘s guidance to the services, they can
implement this rating scale without modifying their existing assessment
processes. We found that the services, and in some cases major commands
within a service, employ different types of facility raters and
procedures, assessment scopes and frequencies, appraisal scales, and
validation procedures. This lack of consistency makes it difficult for
DOD and the services to direct funds to facilities that are in most
need of repair and to accurately measure the progress of improvements
in facility conditions. Therefore, Congress may be relying on
inconsistent data in its oversight responsibilities.
DOD Established a Standard Rating Scale to Summarize Facility
Conditions:
In fiscal year 1999, DOD developed a standard rating scale for
summarizing the condition of military facilities using C-ratings and
adopted the Installations‘ Readiness Report as its method for reporting
facility conditions to Congress. DOD issued the Installations‘
Readiness Report to fulfill its reporting requirement to Congress under
section 117 of title 10 of the United States Code, which specifies that
DOD measure the capability of defense installations and facilities to
provide appropriate support to forces in the conduct of their wartime
missions. DOD adopted the report as a method for including the
condition of installations and facilities in its readiness reporting
system, in which commanders rate the readiness of their units to carry
out required missions, and to help in the decision-making process on
how to allocate facility maintenance and construction funds. Regardless
of the creation of the standard scale for summarizing facility
conditions, each service has the latitude to develop its own C-rating
definitions and facility condition assessment system. DOD‘s guidance to
the services state that they can implement this readiness reporting
system without modifying their existing assessment processes.
Services Use Different C-rating Definitions:
Although DOD developed a standard rating scale, the services‘ C-ratings
have a somewhat different focus and definitions than DOD‘s. DOD‘s
C-rating definitions focus on the impact of facility deficiencies on
mission accomplishment and do not specify whether it is the mission of
the personnel who use the facilities or the mission of the facilities.
In general, the services‘ C-rating definitions focus on the impact of
deficiencies on the ability of facilities to support or perform their
assigned or required missions. For example, the mission of a child
development center is to provide safe and adequate care for the
children of military families. As a result, C-ratings are not
consistently defined across DOD and the services. Table 3 compares
DOD‘s and the service‘s C-rating definitions.
Table 3: Comparison of DOD‘s and the Services‘ C-rating Definitions:
Rating: C-1; DOD: Only minor facility deficiencies with negligible
impact on capability to perform missions; Army: Almost all required
facilities on hand; meet unit/activity needs and Army standards; very
minor, if any, functional deficiencies; facilities fully supports
mission performance; Air Force: Only minor deficiencies with negligible
impact on the facility class‘ capability to support assigned missions;
Navy: Ready for all missions, having only minor deficiencies with
negligible impact on capability to perform required facility missions;
Marine Corps: Ready for all missions, having only minor deficiencies
with negligible impact on capability to perform required facility
missions.
Rating: C-2; DOD: Some facility deficiencies with limited impact on
capability to perform missions; Army: Most required facilities on hand;
meet unit/activity needs and partly meet Army standards; minor
functional deficiencies; facilities supports majority of assigned
missions; Air Force: Some facility deficiencies with limited impact on
the facility class‘ capability to support assigned missions; Navy:
Ready for bulk of missions, having some deficiencies with limited
impact on capability to perform required facility missions; Marine
Corps: Ready for bulk of missions, having some deficiencies with
limited impact on capability to perform required facility missions.
Rating: C-3; DOD: Significant facility deficiencies that prevent
performing some missions; Army: Majority of required facilities on
hand; meet majority of unit/activity needs; do not meet Army standards;
some functional deficiencies; impairs mission performance; Air Force:
Major facility deficiencies that significantly degrade the facility
class‘ ability to support assigned missions; Navy: Ready for some
portions of missions, having significant deficiencies that prevent
performing some facility missions; Marine Corps: Ready for some
portions of missions, having significant deficiencies that prevent
performing some facility missions.
Rating: C-4; DOD: Major facility deficiencies that preclude
satisfactory mission accomplishment; Army: Less than 60 percent of
required facilities on hand; facilities do not meet unit/activity needs
or Army standards; major functional deficiencies; significantly impair
mission performance; Air Force: Critical facility deficiencies that
preclude the facility class‘ support of assigned missions; Navy: Not
ready for missions, having major deficiencies that preclude
satisfactory accomplishment of facility missions; Marine Corps: Not
ready for missions, having major deficiencies that preclude
satisfactory accomplishment of facility missions.
[End of table]
Source: DOD and the services.
Note: GAO‘s analysis of DOD and service data.
Although none of the C-ratings measures the impact of facility
conditions on readiness, DOD‘s reporting of the ratings in its annual
Installations‘ Readiness Report to Congress attempts to link facility
conditions to military readiness. However, some service officials told
us that it is difficult to gauge the affect of facility conditions on
military mission or readiness. For example, an Atlantic Fleet official
said it is hard to quantify how a leaking roof affects the Navy‘s
readiness to protect sea lanes.
Services Have Different Assessment Systems for Developing and
Validating Ratings:
In determining C-ratings for its facility classes, each service
developed its own system for assessing and validating its facility
conditions. Table 4 compares the basic characteristics of the
assessment systems used by the four services to develop C-ratings.
Table 4: Comparison of Basic Characteristics of Services‘ Facility
Condition Assessment Systems:
Rating system characteristic: Name; Service: Army: Installation Status
Report; Service: Air Force: Installations‘ Readiness Report; Service:
Navy: Installation Readiness Reporting System; Service: Marine Corps:
Commanding Officer‘s Readiness Reporting System.
Rating system characteristic: Facility raters and procedures; Service:
Army: Building occupants/users assess facilities using facility
condition assessment worksheets; Service: Air Force: Building
occupants/users, engineers, engineering technicians, and facility
managers report facility deficiencies for which repair projects are
programmed; Service: Navy: Engineers, engineering technicians, and
certified journeymen assess facilities and classify identified
deficiencies as critical or deferrable; Service: Marine Corps:
Technicians and skilled craftsmen assess facilities.
Rating system characteristic: Assessment scopes and frequencies;
Service: Army: Facilities are assessed annually; ; Some sampling is
used to estimate conditions; Service: Air Force: Installation officials
identify deficiencies and program repair projects throughout the fiscal
year; Service: Navy: Most major commands assess facilities every 3
years; one major command assesses facilities on 2, 3, and 6-year
cycles; Service: Marine Corps: Facilities are assessed at different
frequencies, depending on type.
Rating system characteristic: Appraisal scales; Service: Army: Three-
level scale for facility conditions: green, amber, and red; Service:
Air Force: Three-level scale for impact of facility deficiencies on
mission: minimal, degraded, and critical; Service: Navy: Three-level
scale for facility conditions: good, fair, and poor; Service: Marine
Corps: Three-level scale for facility conditions: adequate, inadequate,
and substandard.
Rating system characteristic: Validation procedures; Service: Army: No
Army-wide system; some review of the data is done by Army headquarters
and the major commands; Service: Air Force: No Air Force-wide system;
some major commands send infrastructure sustain teams to validate
projects; Service: Navy: No Navy-wide system; some major commands and
regions have own review processes; Service: Marine Corps: No Marine
Corps-wide system.
[End of table]
Source: DOD and the services.
Note: GAO‘s analysis of DOD and service data.
Services Use Different Types of Facility Raters and Procedures:
The services use different types of personnel and procedures to rate
the condition of their facilities. The Army relies on building
occupants and users to rate each facility using facility condition
assessment worksheets. The worksheets contain a list of Army required
components for each type of facility, such as condition of restrooms,
adequacy of storage space, or size and adequacy of administrative or
training space. Booklets containing illustrations showing conditions
for facility components at each rating level accompany the worksheets.
The Air Force has no formal facility assessment process. Instead,
building occupants and users report any deficiencies to building
managers, who then review the deficiencies and submit work orders to
initiate repair projects. In addition, engineers and engineering
technicians also assess some facilities. The Navy uses mostly
engineers, engineering technicians, and certified journeymen to assess
facilities. They conduct the assessments by identifying and classifying
deficiencies as either critical or deferrable.[Footnote 30] The
Atlantic Fleet, the Navy‘s second largest major command, however,
developed its own assessment system that uses criteria different from
Navy-wide standards to classify deficiencies.[Footnote 31] Atlantic
Fleet facilities staff told us that they developed this system because
they were concerned about the lack of consistency under the Navy wide
system. The Marine Corps depends on technicians and personnel with
skilled trade backgrounds to rate the condition of facilities‘ major
components and structural integrity. Based on the raters‘ data, a
computer program then calculates both the cost of improvements and the
installations‘ C-ratings.
Assessment Scopes and Frequencies Vary among the Services:
The scopes and frequencies of facility assessments also differ among
the services. The Army assesses all of its facilities annually and uses
some sampling as part of the process. The Air Force does not formally
assess facilities; rather, installation officials identify
deficiencies and program repair projects throughout the year. In most
Navy major commands, facilities are inspected on a 3-year cycle, but in
the Atlantic Fleet, facilities are assessed on 2-, 3-, and 6-year
cycles, depending on the type of facility. The Marine Corps inspects
some types of facilities annually but inspects other types of
facilities less frequently.
In addition, the services do not assess all facilities in their
inventory. For example, the Army does not report on the condition of
its temporary facilities, which includes World War II-era wood
buildings. At Fort Bragg, World War II-era facilities comprise nearly 2
million square feet of space, or 7 percent of the installation‘s total
facility space. The Army does not consider temporary facilities as
meeting quantity requirements. In the Air Force, some temporary
structures are not considered part of an installation‘s facility
inventory. At Pope Air Force Base, for instance, temporary structures
that have been used for electronic equipment maintenance since the
1970s are not counted as part of the installation‘s facility inventory
but, rather, are counted as equipment. According to one Navy official,
the service also does not assess temporary structures, such as
trailers.
Services Use Different Appraisal Scales:
The four services also use different appraisal scales in assessing
facility conditions. In the Army, facilities receive a green, amber, or
red rating based on an assessment of physical conditions. A green
rating signifies that a facility meets standards and is in overall good
condition. An amber rating indicates that a facility does not fully
meet facility standards, while a red rating signifies a facility is
substandard and in overall poor condition. In the Air Force, projects
are prioritized using the Facility Investment Metric, which weights
repair project costs by mission area, such as primary mission and base
support, and mission impact. Projects, not facilities, are rated as
minimal, degraded, or critical. A minimal rating indicates marginal or
little adverse impact to installation mission capability. A degraded
rating indicates a limited loss of installation mission capability. A
critical rating indicates a significant loss of installation mission
capability and frequent mission interruptions. In the Navy, facilities
are rated good, fair, or poor based on deficiencies identified during
assessments. A good rating indicates that a facility complies with
facility standards. A fair rating denotes a facility that does not meet
standards and is in overall poor condition. A poor rating indicates
that a facility requires replacement. In the Marine Corps, facilities
are rated as adequate, substandard, or inadequate based on renovation
costs or the condition of major facility components, as well as health
or safety issues. An adequate rating indicates that facility components
(such as electrical systems or fire protection) have only minor
deficiencies, a substandard rating signifies that facility components
have significant deficiencies, and an inadequate rating indicates that
facility components have major deficiencies that impair functionality.
In translating facility condition or project ratings into C-ratings
reported to DOD, the Army, the Navy, and the Marine Corps use similar
computation methods while the Air Force employs a different method. In
general, the Army, Navy, and Marine Corps systems assign C-ratings to
facility classes based on mathematical formulas that consider both the
results of facility condition assessments and the plant replacement
value. These formulas vary slightly from service to service. In
contrast, the Air Force uses its Facility Investment Metric to weight
repair project costs by mission area and impact. The total weighted
repair project costs are summed and divided by the total plant
replacement value to obtain a percentage for each facility class. Each
percentage is converted to a C-rating using the following break points:
C-1: 0 to 10 percent; C-2: greater than 10 to 20 percent; C-3: greater
than 20 to 40 percent; and C-4: greater than
40 percent.
Validation Procedures Are Not Comprehensive:
Neither DOD nor the services have comprehensive validation procedures
for facility condition information, although some major commands and
installations review and verify their own data. However, such practices
are inconsistent within the services. In the Army, for instance, we
found that facilities personnel at Fort Leavenworth reviewed every
Installation Status Report worksheet. By comparison, at Fort Bragg
there is no review process. During our visit to that base, we reviewed
Installation Status Report worksheets where facility assessors rated
all assessment categories as amber. Facilities personnel told us that
since an amber rating requires no written explanation of deficiencies,
as does a red rating, building users often assign amber ratings so they
can quickly complete their assessment worksheets. Moreover, at Fort
Leavenworth we found that all building users responsible for assessing
facilities were required to attend a training session on completing
Installation Status Report worksheets. At Fort Bragg, on the other
hand, we were told that no facility assessors attended this year‘s 1-
hour training session while last year only two individuals attended the
training. In the Air Force, some major commands send infrastructure
sustain teams to visit installations on an
18-month cycle to identify and validate specific projects for major
infrastructure systems (e.g., airfield pavements, airfield lighting,
etc.). In the Navy, some regions and major commands have procedures for
reviewing facility condition information. For example, Atlantic Fleet
facilities personnel told us that facility assessors and installation
staff review and collaborate on all assessment data before they are
submitted for calculating facility condition ratings. They also told us
that all critical deficiencies are reviewed by a Navy public works
center. The Pacific Fleet relies primarily on its component regional
commands to verify assessment data but has developed a program called
condition assessment validation visits in which fleet, regional, and
installation staff members visit bases to review and evaluate
assessment data. However, according to Pacific Fleet officials, since
the program began in fiscal year 2001 they have completed only three
visits and there are no funds currently programmed to support future
visits. The Marine Corps has no servicewide validation procedures.
Inconsistent Definitions and Data May Be Misleading:
Without a DOD-wide standard system for defining, assessing, and
validating facility conditions, the services‘ data on facility
conditions are not consistent. These inconsistent data, along with
DOD‘s attempt to link the data to military readiness in its
Installations‘ Readiness Report, make it difficult for Congress to
fulfill its oversight responsibilities and for DOD and the services to
direct funds to facilities in greatest need and to measure progress in
improving facilities. Because the services‘ C-rating definitions do not
directly link facility conditions with military readiness, the ratings
reported to Congress by DOD in the Installations‘ Readiness Report may
not accurately indicate the ability of installations to support
military readiness. In addition, a facility at one service‘s
installation may be rated C-4 for its deficiencies, but a comparable
facility at another base in the same service with similar deficiencies
may not be rated C-4. For example, the Atlantic Fleet found that a
facility at one base was rated C-3 while a comparable facility at
another base--with the same deficiency--was rated C-4, contributing to
the fleet‘s decision to develop its own process for assessing facility
conditions. Moreover, comparable types of facilities with similar
deficiencies may not be rated consistently across the services.
In our previous review on the condition of barracks used to house
military recruits attending basic training, we found some apparent
inconsistencies in the application of C-ratings to describe the
condition of barracks.[Footnote 32] For example, as a group, the
barracks at the Marine Corps Recruit Depot, Parris Island, were the
highest rated--C-2--among all the services‘ training barracks. The
various conditions we observed, however, suggested that they were among
the worst barracks in terms of physical condition that we had seen.
Marine Corps officials acknowledged that, although they had recently
inspected the barracks and had identified significant deficiencies, the
updated data had not yet been entered into the ratings database. On the
other hand, the barracks at the Marine Corps Recruit Depot, San Diego,
were rated C-3, primarily because of noise from the adjacent San Diego
airport. Otherwise, our observations indicated that these barracks
appeared to be in much better physical condition than those at Parris
Island. After we completed our work, the Marine Corps revised its
ratings for the Parris Island and San Diego barracks to C-4 and C-2,
respectively, in its fiscal year 2002 report. The Air Force barracks
were rated C-3, but we noted that they appeared to be among those
barracks in better physical condition and in significantly better
condition than the Army barracks that were rated C-3.
On the assumption that DOD and the services wish to target funding to
those facilities most in need of repair and with the greatest impact on
mission, the lack of standardization reduces the likelihood that
funding will be consistently directed to those facilities in greatest
need. This means that the limited funding available may not be
accurately targeted, reducing its cost-effectiveness. For instance, in
fiscal year 2002, DOD added an additional $2 billion to the services‘
budget requests for military construction. According to one DOD
official, the additional amounts were allocated to each service based
on the services‘ C-ratings. Furthermore, some facilities are not rated
by the services, such as the Army‘s World War II-era wood buildings.
Although they receive sustainment funding, they receive little
restoration and modernization funds because they are not rated.
Weaknesses in Strategic Plan and Key Objectives Limit the Services‘
Ability to Sustain and Improve Facility Conditions:
DOD‘s Defense Facilities Strategic Plan, along with several key
objectives it adopted to sustain and improve the services‘ facility
conditions, have weaknesses that limit their usefulness in providing
direction to the services and an understanding of DOD‘s vision for
facilities to Congress. The strategic plan lacks comprehensive
information on the specific actions, time frames, assigned
responsibilities, and resources--the elements of a well-developed
strategic plan--that are required to meet the plan‘s vision. In
addition, three key objectives--fully funding sustainment, 67-year
average recapitalization rates, and improvements in facility ratings to
ensure military mission achievement--which are not part of the
published strategic plan, are unlikely to be achieved because the
services do not propose to fully fund all of them, and others are based
on future funding plans that have unrealistically high rates of
increase when compared with previous funding trends and when considered
against other defense priorities. Moreover, achieving these objectives
at the service level still allows for a range of sustainment funding
and facility deficiencies at the installation level. For example, even
though the services intended to fund sustainment at more than 78
percent of requirements in fiscal year 2002, we found that 7 of 10
installations we visited received less. In addition, the services have
not developed comprehensive performance plans that include quantifiable
and measurable performance goals that fully address DOD‘s objectives;
indicators to determine if programs are meeting the objectives; and the
necessary resources, particularly realistic and credible funding plans,
for achieving those objectives--elements of a comprehensive performance
plan. On a positive note, DOD and the services have undertaken several
initiatives that are designed to improve the monitoring and
accountability of the facility management program.
DOD‘s Strategic Plan Is Not Comprehensive:
DOD‘s Defense Facilities Strategic Plan does not contain the
comprehensive information that is needed to guide DOD and the services
in their efforts to maintain thousands of facilities at defense
installations. Instead, the strategic plan identifies four overall
goals in areas that DOD believes can be significantly improved, such as
planning, programming, budgeting, and operations at all military
installations and facilities. The plan‘s four goals are:
* Right size and place--Locate, size, and configure defense
installations and facilities to meet the requirements of today‘s and
tomorrow‘s force structures.
* Right quality--Acquire and maintain defense installations and
facilities to provide quality living and work environments.
* Right resources--Leverage resources--money, people, and equipment--
to achieve the proper balance between requirements and available
funding.
* Right tools and metrics--Improve facility management and planning by
embracing best business practices and taking advantage of modern asset-
management techniques and performance-assessment metrics.
Our analysis of the plan, however, shows that it lacks the
comprehensive information that makes a strategic plan useful and that
most strategic plans encompass. It does not contain detailed
information on (1) the specific actions that are needed to achieve each
of the four goals; (2) the methods or processes that will be used to
achieve each goal; (3) the amount of funding or other resources needed
to reach the goals; (4) the time frames and milestones; (5) the
assignment of responsibilities, in other words what entity is
accountable for completing each goal; and (6) the performance
measurement tools to use to determine the progress being made toward
each goal. DOD officials told us that the lack of specific information
in the plan resulted, in part, from the fact that the services were
unable to agree on many of the actions and time frames before the plan
was issued. In addition, some of the detailed information about various
actions, time frames, and resources needed to sustain and improve
facility conditions that is missing from the plan could be found in
other DOD guidance and directives. Examples include DOD‘s annual
Defense Planning Guidance,[Footnote 33] which is not publicly
available; DOD‘s April 2001 report to Congress on the funding required
to eliminate deficiencies in the services‘ facilities,[Footnote 34]
DOD‘s annual Installations‘ Readiness Reports to Congress; and various
other briefings. The information in these documents, however, is
scattered and not always easily accessible.
DOD‘s Three Objectives for Sustaining and Improving Facility Conditions
May Not Be Achievable:
Although not fully developed in the 2001 Defense Facilities Strategic
Plan, DOD has identified three key objectives--and assigned deadlines-
-that are intended to ensure that the military services can stop the
deterioration of facilities at their installations. Officials of the
Office of the Secretary of Defense told us that DOD established these
objectives in its annual Defense Planning Guidance for fiscal year 2004
and other planning documents. They are to ensure that the services (1)
fund all of their sustainment requirements, starting in fiscal year
2004; (2) reach a 67-year average recapitalization rate for their
facilities, by fiscal year 2007; and (3) improve the condition of their
facilities so that deficiencies have only a limited effect on mission
performance, by fiscal year 2010. However, these objectives are not
likely to be achieved because the services do not propose to fully fund
all of them or have developed funding plans that have unrealistically
high rates of increase in the out-years when compared with previous
funding levels and against other defense priorities. In addition,
achieving these objectives at the service level still allows for a wide
range of sustainment funding and facility deficiencies at the
installation level.
Services Do Not Plan to Fully Fund Their Sustainment Requirements in
Fiscal Year 2004:
To arrest the further deterioration of facilities, DOD instructed the
services to fully fund sustainment requirements of their facilities
starting in fiscal year 2004. However, in developing their fiscal year
2004 programs, none of the services proposed to fully fund sustainment
in fiscal year 2004, even though the Marine Corps plans to fully fund
sustainment in fiscal year 2003. DOD and service officials said that
funding for sustainment must compete with other defense programs and
priorities. While the services had originally planned to fund
sustainment at no less than 78 percent of requirements in fiscal year
2002, these levels of funding did not reach the installations because
service headquarters and major commands withheld funds for other
purposes, such as civilian pay, emergency needs, and must-pay bills.
This practice raises questions about whether DOD‘s requirement of
fully funding sustainment, as currently implemented by the services,
will address all sustainment problems at the installation level.
At the time of our review, as figure 12 shows, none of the services
proposed to fully fund sustainment during fiscal year 2004. While the
Army planned to come close, with 98 percent, in fiscal year 2002, its
plan shows a decline in funding to 94 percent of its requirement in
fiscal year 2003, 79 percent of its requirement in fiscal year 2004,
and 77 percent in fiscal year 2005--short of DOD‘s objective of 100
percent sustainment funding starting in fiscal year 2004. Afterward,
the Army proposes to gradually increase its funding for sustainment
activities to 94 percent from 82 percent of its requirements during
fiscal years 2006 through 2009. The Air Force, starting at 90 and
98 percent in fiscal years 2002 and 2003, respectively, intends to
fund 96 percent of its sustainment requirement in fiscal year 2004--
short of DOD‘s objective. In fiscal year 2005, the Air Force proposes
to fund 97 percent of its sustainment requirement and fully fund
sustainment during subsequent fiscal years through 2009. The Navy,
on the other hand, projects that it will fund its sustainment
activities at about 78 and 84 percent of its requirements in fiscal
years 2002 and 2003, respectively, and at 90 percent annually
thereafter through fiscal year 2009--short of DOD‘s objective.
The Marine Corps, which started at 80 percent in fiscal year 2002,
proposes to fully fund sustainment in fiscal year 2003 and at between
98 and 99 percent thereafter during fiscal years 2004 through 2009.
DOD‘s objective to fully fund sustainment:
Figure 12: Military Services‘ Proposed Sustainment Funding, Fiscal
Years 2002 through 2009:
[See PDF for image]
[End of figure]
Notes: GAO‘s analysis of service data as of December 2002.
DOD initiated funding for sustainment in fiscal year 2002.
During our visits to major commands and installations, we found that
sustainment funds can be reduced or held back at the service
headquarters, major command, and installation levels. The reason that
service officials most often cited for moving funds was that these
funds were needed to cover more pressing needs or emerging
requirements. As figure 13 illustrates, in fiscal year 2002, service
headquarters withheld sustainment money to cover must-pay bills, such
as civilian pay, emergent needs, and other nonsustainment programs.
Similarly, major commands withheld sustainment funds to pay for
emergent needs, nonsustainment must-pay bills, commandwide sustainment
contracts, restoration and modernization projects, and other
unspecified reductions. Finally, individual installations that we
visited moved sustainment funds in fiscal year 2002 to pay for
restoration and modernization emergent needs and for other
nonsustainment programs, such as utilities. As a result of fund
movements at all three levels, the amounts that installations obligated
for sustainment purposes were far less than the amounts necessary to
meet requirements as identified by DOD‘s facilities sustainment model.
In addition, installation officials told us that because of these
holdbacks and movements, it was difficult for them to make or implement
rational plans for maintaining and repairing their facilities.
Figure 13: Flow Chart of the Movement of Sustainment Funds to Other
Purposes in Fiscal Year 2002:
[See PDF for image]
[End of figure]
Note: GAO‘s analysis of DOD and service data.
Some specific examples of where major commands moved sustainment funds
to cover emergencies or other priorities follow:
* In fiscal year 2002, the Army‘s Forces Command told us that it
received about 92 percent of its sustainment requirement, but it then
had to reduce the amounts passed on to component installations to 79
percent in order to pay for expanded utilities modernization,
engineering services, municipal services upgrades, and fire emergency
services.
* In fiscal year 2002, the Navy Pacific Fleet moved about $130 million,
or 29 percent of its total sustainment funding of $452 million, to
support nonsustainment programs such as base operating support
functions, unspecified requirements by the fleet‘s commander in chief,
and reserve force mobilization after the September 11th attacks. Of the
$130 million, $25 million for reserve force mobilization was returned
at the end of the fiscal year, and the fleet applied this amount to
sustainment projects.
* Early in fiscal year 2002, the Navy‘s Atlantic Fleet used $146
million, or 34 percent, of its total sustainment funding of $425
million to help pay for reserve force mobilization, the facilities
condition assessment program, the design of recapitalization and
demolition projects for the following fiscal year, the management of
the facility maintenance program, and a reserve fund for major storm
damage. A fleet official told us that the funds obligated for the
assessment program, the design of recapitalization and demolition
projects, and the facility management program benefited all of the
fleet‘s installations. At the end of the fiscal year, the fleet
received $98 million for reserve force mobilization back, which it
applied to sustainment projects, and provided the remaining balance of
the reserve fund to the installations.
Officials told us that the fiscal year 2002 actual obligations for 7 of
the 10 installations we visited were well below the services‘ planned
funding levels (see fig. 14). The Marine Corps base at Quantico,
Virginia, Pope Air Force Base, North Carolina, and Los Angeles Air
Force Base, California, which funded 97, 95, and 113 percent,
respectively, of their sustainment requirements in fiscal year 2002,
were the exceptions. However, after using a portion of their
sustainment funding to pay for nonsustainment related costs, the other
7 installations had only enough sustainment funds to meet from 35 to 77
percent of their requirements as identified by DOD‘s facilities
sustainment model (see fig. 14). Installation officials told us that
they had to obligate a portion of their fiscal year 2002 sustainment
funds for a variety of nonsustainment-related purposes, such as paying
for utilities and for restoration and modernization projects, including
emergency repairs. They said that their installations received very
little operation and maintenance funds for restoration and
modernization projects in fiscal year 2002. At Fort Bragg, North
Carolina, sustainment funding was reduced to just 57 percent of its
requirement because of the movement of funds to nonsustainment
activities. This leads us to question whether DOD‘s guidance on fully
funding sustainment is directed toward the service or installation
level. Thus, it is uncertain that the stated objective of fully funding
sustainment, as currently implemented by the services, will address all
sustainment problems at the installation level.
Figure 14: Sustainment Obligations as a Percentage of Requirements at
Installations We Visited, Fiscal Year 2002:
[See PDF for image]
[End of figure]
Notes: GAO‘s analysis of DOD and service data.
Air Force totals do not include some military pay that supports
sustainment.
The Marine Corps base at Quantico, Virginia; Pope Air Force Base, North
Carolina; and Los Angeles Air Force Base, California, clearly stand out
as exceptions to the sustainment funding levels at the other
installations (see fig. 14). According to Marine Corps officials, their
service does not permit sustainment funds to be taken away from
installations by intermediate commands without the explicit permission
of headquarters‘ facilities staff. There is no intermediate command
between Quantico Marine Corps Base and headquarters. Furthermore, the
officials said the base received $1 million in sustainment funding in
September 2002 to replace heating, ventilation, and air-conditioning
systems in two buildings; this amount alone accounted for 5 percent of
its $18.6 million obligation for sustainment in fiscal year 2002.
Officials at Pope Air Force Base told us that the base received 95
percent of its sustainment requirement in fiscal year 2002 because its
major command, Air Mobility Command, made a concerted effort to repair
some key facility problems at the installation with funds the command
had received at the end of the fiscal year. Air Force officials also
told us that Pope Air Force Base‘s and Los Angeles Air Force Base‘s
fiscal year 2002 sustainment obligations were higher than amounts
initially received by the bases for sustainment because major commands
provided additional funds during the fiscal year and moved funds from
other sources.
In addition to the 10 installations we recently visited, we found
similar underfunding for sustainment at bases with barracks used to
house military recruits.[Footnote 35] Our analysis of cost data
generated by DOD‘s facilities sustainment model showed, for example,
that Fort Knox required about $38 million in fiscal year 2002 to
sustain its facilities. However, base officials told us they had
received about $10 million, or 26 percent, of the required funding.
Officials at other Army basic training sites also told us that they had
received less funding, typically 30 to 40 percent, than what they
considered was required to sustain their facilities. Army officials
told us that, over time, the sustainment funding shortfalls at their
training bases have been caused primarily by the movement of funding
from facility sustainment to other priorities, such as the training
mission.
Achieving a 67-Year Average Recapitalization Rate by Fiscal Year 2007
Is Unlikely:
To restore and modernize facilities, DOD instructed the services to
achieve a 67-year average recapitalization rate by fiscal year 2007.
The recapitalization rate is based on an assessment of the expected
service life of different types of facilities and is defined as the
number of years it would take to restore or replace those facilities at
a given level of investment. The recapitalization rate is derived by
dividing recapitalizable plant replacement value by the total
restoration and modernization funding.[Footnote 36] In general, the
recapitalization rate declines as more restoration and modernization
funds are spent for facilities. While all the services plan to improve
their fiscal year 2002 average recapitalization rates by fiscal year
2009, the rates are expected to worsen before they recover. Also, all
of the plans, except for the Army‘s, call for rapid funding increases
between fiscal year 2003 and 2009 that are uncertain when compared to
prior funding levels and the need for funds for other defense
priorities. Furthermore, DOD‘s guidance does not specify that each
installation should achieve a 67-year average recapitalization rate and
therefore allows for a range of recapitalization rates at the
installation level.
While all the services plan to improve their fiscal year 2002 average
recapitalization rates, as shown in figure 15, nearly all of the
improvement is expected to occur in the later years, when only the Air
Force and the Navy expect to exceed DOD‘s objective of 67 years by
fiscal year 2007. Under its funding proposal, the Army projects its
average recapitalization rate will increase from 70 years in fiscal
year 2002 to 122 years in fiscal years 2003 and 2004 and then improve
again to 83 years in fiscal year 2007--falling short of DOD‘s objective
of 67 years. Afterward, the Army tends to achieve 84-and 87-year
recapitalization rates in fiscal years 2008 and 2009, respectively. The
Air Force expects that its average recapitalization rate will increase
from 163 years in fiscal year 2002 to 257 years in fiscal year 2003 and
then improve to 61 years in fiscal years 2006 and 2007--meeting DOD‘s
objective of 67 years. It also plans to achieve 55-and 57-year
recapitalization rates in fiscal years 2008 and 2009, respectively.
The Navy estimates that its rate will increase from 113 years in fiscal
year 2002 to 116 and 134 years in fiscal years 2003 and 2004,
respectively, and then decrease from 129 years in fiscal year 2005 to
69 years in fiscal year 2006. Between fiscal year 2007 and 2009, the
Navy‘s average recapitalization rate is projected to decrease from 64
to 47 years--exceeding DOD‘s 67-year objective. Under its funding plan,
the Marine Corps projects its average recapitalization rate will
increase from 63 years in fiscal year 2002 to 155 years in fiscal year
2003 and then decrease to 81 years in fiscal year 2004. Afterward, it
plans to maintain recapitalization rates between 79 and 73 years during
fiscal years 2005 through 2007--falling short of DOD‘s objective of 67
years. However, the Marine Corps plans to meet this objective in fiscal
years 2008 and 2009 by achieving 66-and 42-year recapitalization rates,
respectively, in these years.
Figure 15: Projected Average Recapitalization Rate by Military Service,
Fiscal Years 2002 through 2009:
[See PDF for image]
[End of figure]
Notes: GAO‘s analysis of DOD data as of December 2002.
Recapitalization rates were not consistently calculated prior to fiscal
year 2002.
To achieve these recapitalization rates, all the services, except for
the Army, call for rapid increases in restoration and modernization
funding between fiscal year 2003 and 2009, but this growth appears
unrealistic when compared with prior funding levels. As shown in figure
16, using constant fiscal year 2002 dollars, the four services propose
to decrease their restoration and modernization funding between fiscal
year 2002 and 2003. From a low of $1.3 billion in fiscal year 2003, the
Army proposes to increase its restoration and modernization funding 31
percent, to
$1.7 billion in fiscal year 2009. It is important to note again that
figure 15 shows the Army does not plan to achieve DOD‘s
recapitalization target of 67 years anytime during this period. From a
low of $553 million in fiscal year 2003, the Air Force proposes to
increase its restoration and modernization funding 316 percent to $2.3
billion in fiscal year 2009. A significant part of this increase is
planned in one budget year, between fiscal year 2005 and 2006, when the
Air Force expects to increase its restoration and modernization funding
by 123 percent, to $2 billion from $895 million. While the Navy
proposes a decrease from fiscal year 2003 to fiscal year 2004, it
intends to increase its restoration and modernization funding 145
percent--from $857 million in fiscal year 2003 to $2.1 billion in
fiscal year 2009. More than half of this increase is planned in one
budget year, between fiscal year 2005 and 2006, when the Navy proposes
to increase its restoration and modernization funding by 80 percent, to
$1.4 billion from $777 million. The Marine Corps plans a 188 percent
increase in restoration and modernization funding, from a low $145
million in fiscal year 2003 to $418 million in fiscal year 2009.
Figure 16: Total Restoration and Modernization Funding Proposed by
Military Service, Fiscal Years 2002 through 2009:
[See PDF for image]
[End of figure]
Notes: GAO‘s analysis of DOD data as of December 2002.
DOD initiated funding for restoration and modernization in fiscal year
2002.
Totals include operation and maintenance and military construction
funding for restoration and modernization.
Defense installation officials referred to the services‘ out-year
funding plans as ’hockey sticks“ because of their abrupt increases in
funding in the out-years, indicating skepticism about the likelihood
that the services would be able to achieve such rapid increases. They
told us that they recommended the services revise their plans so that
the funding increases would not be so steep, by proposing more funding
for the early years of the period. At the time of our review, DOD had
not finished its review of the services‘ funding plans. Marine Corps
officials described their proposed increase as much larger than any
amount they had ever seen and expressed doubt about whether the service
would actually come up with the funds.
The services‘ rapid increases in restoration and modernization funding
between fiscal year 2003 and 2009 also appear uncertain when compared
with the need for funds for other defense priorities, such as the war
on terrorism, weapon system modernization, and force transformation. As
a result of the war on terrorism, DOD is seeking higher than previously
planned funding for a number of pressing priorities against which
facilities maintenance must compete, such as military readiness,
training, antiterrorism, force protection, weapons procurement, and
research and development. For example, in the Army‘s fiscal year 2004
program objective memorandum, the Army plans to increase funding for
force protection by $2.7 billion, or 60 percent; for future combat
systems by $19.1 billion, or 197 percent; and for force transformation
by $16.6 billion, or 37 percent.[Footnote 37] In addition, facilities
maintenance must compete with the Air Force‘s plans to modernize space
forces and procure new weapons systems and with the Navy‘s plans to
procure new ships and weapons systems.
Bringing Facility Ratings Up to a Minimal C-2 Level by Fiscal Year 2010
Is Unlikely:
To improve the overall condition of facilities, DOD set an objective
for the military services to concentrate funding in order to eliminate
C-3 and C-4 facility ratings, bringing them up to a minimal C-2 level
by fiscal year 2010. However, at the time of our review, the Army and
the Navy were not planning to meet this objective. The Air Force and
the Marine Corps only plan to meet this objective through proposed
funding increases, shown in figure 16, which are uncertain when
compared to prior funding levels and the need for funds for other
defense priorities. DOD estimates that it would cost $62 billion (or $7
billion annually during fiscal years 2002 through 2010) to achieve this
objective departmentwide. This amount would only be enough to bring all
facilities up to the minimal C-2 level, or ’minimal acceptable
performance,“ in DOD‘s rating system. DOD estimates that it would cost
more than $160 billion over the same time period to reach a C-1 level
for all facilities.
DOD‘s guidance for this objective allows a wide range of facility
deficiencies at installations. A service could have some facility
classes rated C-3 and C-4 and still have an overall C-2 rating because
of a preponderance of C-1 and C-2 rated classes. For example, in its
facility strategy, the Army plans to concentrate restoration and
modernization funding on certain types of facilities to raise their
rating to a C-1, and thus raise the Army‘s overall rating to a C-2
level. Furthermore, because there is no common, standardized system by
which to rate the condition of facilities, there is no assurance that
achieving a minimal C-2 level would result in similar facility
conditions across the services.
Services Have Not Developed Comprehensive Performance Plans to
Implement DOD‘s Strategic Plan and Objectives:
The services have not developed plans that include quantifiable and
measurable performance goals that fully address DOD‘s objectives;
indicators to determine if programs are meeting the objectives; and the
necessary resources, particularly realistic and credible funding plans,
for achieving those objectives--elements of a comprehensive performance
plan. Of those services--the Army, the Air Force, and the Marine Corps-
-that have developed plans for facilities, their plans do not contain
comprehensive information for implementing DOD‘s facilities strategic
plan or achieving DOD‘s objectives for sustaining and improving
facility conditions. For example:
* While the Army has developed a installation plan, our analysis shows
that it is unlikely to meet any of DOD‘s objectives of fully funding
sustainment in the near term, achieving a 67-year average
recapitalization rate for facilities by 2007, and eliminating C-3 and
C-4 facility ratings, bringing them up to a minimal C-2 level by fiscal
year 2010.[Footnote 38] The Army‘s plan does not provide realistic and
credible funding plans to achieve DOD‘s objectives.
* The Air Force‘s facilities investment plan outlines the requirements
that must be addressed in order to meet DOD‘s objectives of fully
funding sustainment across the future years defense plan, reducing the
average recapitalization rate to 67 years by fiscal year 2007, and
eliminating C-3 and C-4 facility ratings by fiscal year 2010.[Footnote
39] The plan also lists metrics to be used to measure successful
implementation of the plan. However, the plan is vague in how it will
be implemented, and the funding strategy outlined in the plan to
achieve DOD‘s objectives is unrealistic. As the plan notes, ’projected
fiscal year 2004 restoration and modernization funding is almost double
that of fiscal year 2003, while fiscal year 2007 funding is nearly
quadruple the fiscal year 2004 level.“ In addition, in a 2002 report
the Secretary of the Air Force states that the Air Force must still
defer restoration and modernization with only the most urgent
requirements addressed and leaving important projects
postponed.[Footnote 40]
* Although the Navy does not have a plan for meeting DOD‘s objectives,
Navy officials told us the service is developing a plan to address both
the Navy‘s and Marine Corps‘s sustainment and restoration and
modernization programs. The Navy does not plan to meet DOD‘s objectives
of fully funding sustainment in the near term or eliminating C-3 and C-
4 ratings for facility classes by fiscal year 2010.
* While the Marine Corps issued a vision statement for its
installations in April 2001, the statement does not provide
comprehensive information on goals, actions, or time frames for
sustaining and improving facilities.[Footnote 41] The statement fails
to discuss any of DOD‘s objectives. In addition, the statement does not
provide specific metrics to measure performance or credible and
realistic funding plans to achieve these objectives.
DOD Has Taken Other Steps to Improve Facilities Management:
In addition to its strategic plan and objectives, DOD has taken other
steps to improve the management of its facilities, including the
demolition of obsolete facilities, and is attempting to build upon
these steps to further improve military facilities. At the same time,
the Army has implemented a new organizational structure to manage its
facilities in an attempt to better control the use of sustainment,
restoration, and modernization funds, and the Navy is moving toward a
more centralized structure of its regional management of facilities.
However, it is too soon to assess their likely impact.
DOD has put in place a number of changes intended to revamp its
facility management, enhance accountability, and better measure and
track performance. These changes have included:
* Facilities assessment database. In 1997, DOD created an integrated
facilities assessment database from stand-alone service inventories.
This database tracks key facility inventory and cost data, including
quantity, type, location, and status of buildings, structures, and all
other military facility assets.
* Cost factors handbook. In 1999, DOD issued its first defense
facilities cost factors handbook, which categorizes defense facilities
into approximately 400 categories and uses commercial benchmark costs
to determine the annual cost per square foot (or similar unit of
measure) to sustain each facility type. The purpose of the handbook was
to standardize the method by which the services would determine the
sustainment costs of their facilities and to establish a minimum
sustainment funding level for facilities.
* Facilities sustainment model. In 1999, DOD developed the facilities
sustainment model, which estimates the annual sustainment cost
requirement, adjusted for area costs, for each service and defense
agency, based on the number, type, location, and size of its total
inventory of facilities.
* Recapitalization metric. In 2001, DOD began using the facilities
recapitalization metric, which determines the rate of restoration and
modernization relative to the average expected service life of the
inventory. It is also developing a recapitalization funding model.
* Improved budgeting methods. In 2002, DOD changed the way that
facilities funding is reported and tracked, replacing real property
maintenance with sustainment, and restoration and modernization, having
already created a separate structure for demolition and disposal in
fiscal year 1999. By tracking each element separately, it is now
possible to link programs and budgets directly to program objectives
and to better track performance relative to the objectives. DOD gave
the Navy and the Marine Corps permission to delay this change until
fiscal year 2003.
DOD also developed and implemented the facilities demolition and
disposal program, in which more than 62 million square feet of excess
and obsolete facilities were demolished during fiscal years 1998 to
2001. According to DOD officials, one reason for the success of this
program is that the services‘ budgets were not reduced in advance by
the estimated maintenance costs of the facilities to be demolished.
Instead, as an incentive to dispose of what the services did not need,
their budgets were left intact and the forecasted savings were
reprogrammed by the services to other needs within their programs. By
closing some installations and consolidating overlapping activities
within and across the services, DOD also intends to further reduce its
inventory of facilities through an upcoming round of base realignments
and closures starting in 2005, as authorized by Congress in 2001. DOD
officials have testified that 20 to
25 percent of DOD‘s infrastructure is not needed to meet current
mission requirements. The process of realigning and closing bases,
however, will take some years to accomplish and, while it is expected
to produce significant long-term savings, typically it has required
considerable up-front expenses.
To prevent major commands from moving funds to other priorities, the
Army centralized and streamlined its facility management in October
2002. The new Installation Management Agency, which reports directly to
the Army Assistant Chief of Staff for Installation Management, oversees
all facilities maintenance funds for Army installations and supervises
seven regional management centers worldwide that are responsible for 10
to
30 installations each. The key objectives of the new organizational
structure include ending the movement of sustainment funds and
restoration and modernization funds to other priorities by major
commands and implementing consistent standards across the Army for
allocating these funds. The organizational structure has a centralized
base operations funding process that funnels sustainment funds and
restoration and modernization funds directly to installations without
major commands moving funds away from facilities. Army officials said
that if the total funding allocated by the service for these purposes
continues to fall short of requirements, the new agency would be
greatly challenged in meeting its facilities goals. Officials believe
that the Army would likely continue to use sustainment, restoration,
and modernization funds to pay for legacy weapons programs and other
nonsustainment priorities.
The Navy has had a less centralized, regional-based installation
management program for several years but continues to underfund its
sustainment requirements and restoration and modernization
requirements. For example, the Naval Audit Service reported in August
2002 that funds intended for facility maintenance were being used for
nonsustainment purposes.[Footnote 42] Specifically, it noted that both
the Atlantic and Pacific Fleets were using sustainment funds and
restoration and modernization funds to resolve other base operating
support shortfalls. It concluded that this generally occurred because
sustainment, restoration, and modernization were not considered high
enough priorities within the Navy leadership to preclude movement of
funds away from these activities. While the Navy is now moving toward a
more centralized management structure similar to the Army‘s facility
management program, it is too early to assess the potential success of
either facility program.
Conclusions:
The military services have not made sustaining and improving facilities
a funding priority because of other defense programs and emerging
requirements. Funding for facility maintenance and recapitalization has
been inadequate for many years, resulting in deteriorated facilities
that negatively affect the quality of life and service for military and
civilian personnel and, in some cases, hindered the satisfactory
performance of their mission. Yet, the services do not meet all of
DOD‘s objectives for sustaining and improving facilities, nor have they
developed credible and realistic funding plans to do this in the
future. In addition, Congress, DOD, and the services do not have
consistent information on the condition of facilities to ensure that
their funding decisions are targeting facilities in greatest need, to
measure the progress in facility improvement, and to provide to
Congress for its oversight responsibilities. Along with these
inadequate data, weaknesses in DOD‘s Defense Facilities Strategic Plan
further impede DOD‘s efforts to sustain and improve facilities. In
developing a comprehensive strategic plan, it is important that DOD
clearly establish goals and milestones, assign responsibilities for
managing and coordinating its efforts, and identify needed funding to
sustain and recapitalize facilities. However, the Defense Facilities
Strategic Plan lacks comprehensive information on the specific actions,
time frames, assigned responsibilities, and resources that are needed
to meet DOD‘s vision for facilities. Moreover, it is unclear whether
DOD‘s stated objectives for sustaining and improving facility
conditions are to be achieved at the service or installation level. In
addition, the services have not developed plans that include
quantifiable and measurable performance goals that fully address DOD‘s
objectives; indicators to determine if programs are meeting the
objectives; and the necessary resources, particularly realistic and
credible funding plans, for achieving those objectives--elements of a
comprehensive performance plan.
Recommendations for Executive Action:
We recommend that the Secretary of Defense direct the secretaries of
the military services to reassess the funding priorities the services
have attached to sustaining and improving the condition of their
facilities relative to other needs and funding limitations. In
addition, we recommend that the Secretary of Defense (1) instruct the
military services to implement a departmentwide process to consistently
assess and validate facility conditions; (2) revise the Defense
Facilities Strategic Plan to identify specific actions needed, time
frames, responsibilities, and funding levels--elements of a
comprehensive strategic plan; (3) clarify DOD‘s guidance by specifying
the organizational level (service, major command, or installation) at
which its three objectives to fully fund sustainment, achieve a 67-year
average recapitalization rate, and eliminate C-3 and C-4 facility
ratings, bringing them up to a minimal C-2 level, should be achieved;
and (4) direct the services to develop comprehensive performance plans
implementing the Defense Facilities Strategic Plan, which would provide
specific metrics to measure performance and credible and realistic
funding plans to sustain and recapitalize facilities.
Agency Comments:
In commenting on a draft of this report, the Deputy Under Secretary of
Defense for Installations and Environment concurred with our
recommendations and indicated that actions were underway or planned to
deal with our recommendations. The comments are included in this report
in appendix IV. DOD also provided technical clarifications, which we
incorporated as appropriate.
We are sending copies of this report to the Secretaries of Defense, the
Army, the Navy, and the Air Force; the Commandant of the Marine Corps;
and the Director, Office and Management and Budget. We will also make
copies available to others upon request. In addition, the report will
available at no charge on GAO‘s Web site at www.gao.gov.
Please contact me on (202) 512-8412 if you or your staff have any
questions regarding this report. Other key contributors to this report
are listed in appendix V.
Signed by Barry W. Holman:
Barry W. Holman, Director
Defense Capabilities and Management:
List of Congressional Committees:
The Honorable John Warner
Chairman
The Honorable Carl Levin
Ranking Member
Committee on Armed Services
United States Senate:
The Honorable Ted Stevens
Chairman
The Honorable Daniel K. Inouye
Ranking Member
Subcommittee on Defense
Committee on Appropriations
United States Senate:
The Honorable Kay Bailey Hutchison
Chairman
The Honorable Dianne Feinstein
Ranking Member
Subcommittee on Military Construction
Committee on Appropriations
United States Senate:
The Honorable Duncan L. Hunter
Chairman
The Honorable Ike Skelton
Ranking Member
Committee on Armed Services
House of Representatives:
The Honorable Jerry Lewis
Chairman
The Honorable John P. Murtha
Ranking Member
Subcommittee on Defense
Committee on Appropriations
House of Representatives:
The Honorable Joe Knollenberg
Chairman
The Honorable Chet Edwards
Ranking Member
Subcommittee on Military Construction
Committee on Appropriations
House of Representatives:
[End of section]
Appendix I: Scope and Methodology:
To examine the historical funding trends for facility maintenance and
military construction and their impact on the condition of the active
forces‘ facilities, we examined the Department of Defense‘s (DOD)
budget requests, congressional designations, and obligation data for
facility operation and maintenance and military construction for fiscal
years 1998 through 2002. Because they are responsible for developing
and implementing policies regarding the condition of defense
facilities, we interviewed and were briefed by facility management
officials from DOD‘s Office of Installations and Environment and from
each service‘s headquarters. We also examined key documents related to
the funding and condition of defense facilities from DOD and the
services. These documents included funding requests, initial
congressional designations, and obligations for sustainment,
restoration and modernization, and military construction;
Installations‘ Readiness Reports compiled by DOD; assessments of the
condition of facilities produced by each service; congressional
testimony by DOD and service officials; documentation of unfunded
requirements within each service; and other relevant reports and
documents. We compared the operation and maintenance amounts that DOD
requested in its budget submissions with the amounts that Congress
designated in its conference reports for DOD‘s appropriation acts and
with DOD‘s reported obligations. We discussed any differences we found
with officials from DOD and the services to obtain a better
understanding about overall fund movements.
To determine the impact of historical funding on the condition of DOD‘s
facilities and to view the condition of facilities firsthand, we
visited and met with officials from 10 military installations across
the country: Fort Bragg, North Carolina; Fort Leavenworth, Kansas; Pope
Air Force Base, North Carolina; Whiteman Air Force Base, Missouri; Los
Angeles Air Force Base, California; Naval Station Norfolk, Virginia;
Naval Air Station Oceana, Virginia; Naval Station San Diego,
California; Naval Base Coronado, California; and Marine Corps Quantico
Base, Virginia. We recognize that the conditions we observed at these
10 installations may not represent conditions at other DOD
installations, and we did not attempt to project the results of our
visits to all military installations.
To determine the perspective of the major commands on the impact of
historical and current funding on the condition of DOD‘s facilities,
the factors that have led to the deterioration of facility conditions,
and the effect of deteriorated facilities on personnel and overall
mission, we met with officials from Army Forces Command, Air Force Air
Mobility Command, Air Force Space Command, Air Force Air Combat
Command, Navy Atlantic Fleet, and Navy Pacific Fleet.
To evaluate the consistency of the services‘ information on facility
conditions, we reviewed each service‘s system for assessing facility
conditions and compared this information within and across each service
to identify differences in facility raters and procedures, assessment
scopes and frequencies, appraisal scales, computation methods, and
validation procedures. We also interviewed officials at DOD, the
services‘ headquarters, and major commands to identify the processes
they used to assess facilities and collect information to support the
condition rating and the underlying reasons for the current condition
of the facilities. During our visits to installations, we discussed the
evaluation methods and condition assessment process with the facility
raters and reviewers and toured facilities to observe and compare their
physical condition and deficiencies with the facilities‘ C-ratings.
During these visits, we also interviewed engineering staffs to discuss
the cause of the deficiencies we observed, the actions needed to
correct the deficiencies, and the impact of the deficiencies on the
quality of life of military personnel and their families and on
military operations and military mission achievement.
To assess DOD‘s long-term strategic plan and objectives to sustain and
improve the condition of facilities, we reviewed DOD‘s Defense
Facilities Strategic Plan and other strategic planning documents for
evidence of the critical elements of a strategic plan and performance
plan--as embodied in the Government Performance and Results Act of 1993
and in our prior reports.[Footnote 43] These elements include
information on (1) the specific actions that are needed to achieve each
of the four goals identified in DOD‘s strategic plan; (2) the methods
or processes that will be used to achieve each goal; (3) the amount of
funding or other resources needed to reach the goals; (4) the time
frames and milestones; (5) the assignment of responsibilities, in other
words what entity is accountable for completing each goal; and (6) the
performance measurement tools to determine the progress being made
toward each goal. In examining DOD‘s three objectives for sustaining
and improving facility conditions, we identified funding metrics
designed by DOD to address the condition of facilities, including the
implementation of a facilities sustainment model and the development of
a recapitalization metric. We did not attempt to validate the
facilities sustainment model.
To assess the services‘ plans to implement DOD‘s strategic plan and
achieve its objectives, we compared the plans with key elements of a
comprehensive performance plan and reviewed projected funding levels
for sustaining and recapitalizing facilities for fiscal years 2002
through 2009. In computing sustainment obligations as a percentage of
requirements at the 10 installations visited, we divided each
installation‘s reported sustainment obligation for fiscal year 2002 by
its sustainment requirement generated by DOD‘s facilities sustainment
model for the same year. In addition, we interviewed service
headquarters officials responsible for managing installations and
programming operation and maintenance and military construction funds.
We also examined the services‘ initiatives, such as the Army‘s new
regional facilities management plan. We discussed DOD‘s objectives for
sustainment and recapitalization with service and installation
officials to determine whether they are viable and attainable within
the time frames DOD has set forth, impediments to achieving the goals,
and other approaches to sustaining and improving facility conditions.
Also, we evaluated the services‘ ability to meet DOD‘s objectives and
initiatives regarding the sustainment and improvement of facility
conditions by determining the magnitude of each service‘s facility
problems through our site visits and reviews of rating reports.
Finally, we compared the services‘ prior obligations for facility
maintenance with their future funding projections designed to reach
DOD‘s objectives to determine whether the services‘ plans to address
these issues are credible and realistic.
We performed our work at the Office of the Secretary of Defense and the
headquarters of each military service. Additionally, we met with
officials from Army Forces Command, Air Force Air Mobility Command, Air
Force Space Command, Air Force Air Combat Command, Navy Atlantic Fleet,
and Navy Pacific Fleet. We also met with officials from the 10
installations visited: Fort Bragg, North Carolina; Fort Leavenworth,
Kansas; Pope Air Force Base, North Carolina; Whiteman Air Force Base,
Missouri; Los Angeles Air Force Base, California; Naval Station
Norfolk, Virginia; Naval Air Station Oceana, Virginia; Naval Station
San Diego, California; Naval Base Coronado, California; and Marine
Corps Quantico Base, Virginia. We selected these installations because
they represent a range of facility conditions, missions, major
commands, and geographic locations. During the review, we focused on
the services‘ active force facilities in the United States. These
facilities ranged from administrative offices, airfields and terminals,
and piers to classrooms and other training buildings, water treatment
plants, warehouses, barracks, and child development centers. Our review
covered only those facilities funded by operation and maintenance and
military construction monies and not by other sources, such as
revolving and management funds, military family housing and overseas
facilities funds, and the defense health program (hospitals and medical
clinics).
In performing this review, we used the same accounting records and
financial reports DOD and the military services use to manage and
justify budgets for their facilities. We did not independently
determine the reliability of the reported financial information.
However, our recent audit of the federal government‘s financial
statements, including DOD‘s and the services‘ statements, questioned
the reliability of reported financial information because not all
obligations and expenditures are recorded to specific financial
accounts.[Footnote 44] In addition, we did not validate DOD‘s reported
requirements for the sustainment of its facilities, nor did we validate
its facility inventory database. Also, our prior reports have
highlighted DOD‘s inability to sufficiently track funding status.
[End of section]
Appendix II: DOD‘s Facilities Life-Cycle Management Model:
DOD‘s facilities life-cycle model calls for fully funding sustainment
activities and regularly investing in restoration and modernization
projects to maintain high performance and extend the useful service
life of facilities (see fig. 17).
Figure 17: Projected Facilities Service Life and Performance with Full
Sustainment and Modernization:
[See PDF for image]
[End of figure]
Sustainment funding provides resources for maintenance and repair
activities to keep facilities effectively functioning throughout an
expected life cycle. Restoration and modernization funding is designed
to recapitalize facilities after normal aging occurs or to update
facilities to meet new mission standards. Restoration includes repair
and replacement work to restore facilities damaged by inadequate
sustainment activities, excessive age, natural disasters, fire,
accidents, and other causes. Modernization includes the alteration of
facilities solely to implement new or higher standards, to accommodate
new functions, or to replace standard building components. At the end
of the life cycle in figure 17, a facility may be worn out or
functionally obsolete or will require recapitalization by either
replacement or large-scale renovation.
According to DOD‘s facilities life-cycle model, full sustainment and
restoration and modernization investments are necessary to maintain the
condition and performance of facilities. Without full funding of
sustainment activities, facilities can deteriorate more quickly than
would be expected under their average life cycle, requiring premature
recapitalization of facilities (see fig. 18). As facilities deteriorate
without full sustainment, their level of performance also diminishes.
For example, Naval Station San Diego, California, has deferred a
project to repair quay walls and pier fenders for the past 4 years,
resulting in continued deterioration and increased costs to maintain
service. In 2 of these years, the installation spent more than $100,000
annually for temporary repairs to fenders. DOD estimates that, with
full sustainment funding, facilities should have an expected average
life of 67 years. Expected service life is defined as the number of
years a fully sustained inventory provides service before requiring a
major restoration or replacement project.
Figure 18: Lost Facilities Service Life and Performance without Full
Sustainment:
[See PDF for image]
[End of figure]
[End of section]
Appendix III: How Operation and Maintenance Funds Are Moved during the
Fiscal Year:
DOD has considerable flexibility in using and moving operation and
maintenance funds. After Congress passes the operation and maintenance
appropriation, the conferees make an initial congressional designation
of the appropriation by program activity, such as real property
maintenance. However, after the initial appropriation is made, DOD can
adjust funding through adjustments directed by Congress in conference
reports on appropriations acts and fact-of-life adjustments DOD
believes are necessary due to changes, such as unplanned force
structure changes, that have occurred since the budget was
formulated.[Footnote 45]
After making these initial fund movements, DOD establishes an adjusted
congressional designation that it refers to as ’appropriated amount.“
Using the initial congressional designation as the baseline, the
following actions can occur:
* congressional adjustments,
* fact-of-life adjustments that DOD believes are necessary due to
changes, such as unplanned force structure changes, which have occurred
since the budget was formulated,
* reprogramming actions to move funds from one budget activity to
another within the same account,
* statutorily authorized transfers to move funds from other DOD
appropriations (such as procurement),
* transfers from congressionally established, centrally managed
accounts (such as for drug interdiction),
* supplemental appropriations by Congress that provide additional funds
during the year, and:
* rescissions by which Congress cancels appropriated funds.
These movements in operation and maintenance funds and the time frames
within which they can occur are illustrated in figure 19.
Figure 19: DOD‘s Budget and Obligation Process for Operation and
Maintenance Funds:
[See PDF for image]
[End of figure]
Note: GAO‘s analysis based on Department of Defense Financial
Management Regulation
7000.14-R, conference reports on the appropriations acts, and
interviews with officials from the Office of the Under Secretary of
Defense (Comptroller).
[End of section]
Appendix IV: Comments from the Department of Defense:
OFFICE OF THE UNDER SECRETARY OF DEFENSE:
3000 DEFENSE PENTAGON WASHINGTON, DC 20301-3000:
ACQUISITION, TECHNOLOGY AND LOGISTICS:
Mr. Barry W. Holman:
Director, Defense Capabilities and Management U.S. General Accounting
Office:
441 G Street, N.W. Washington, D.C. 20548:
Mr. Holman,
This is the Department of Defense (DoD) response to the GAO draft
report, …Defense Infrastructure: Changes in Funding Priorities and
Strategic Planning Needed to Improve the Condition of Military
Facilities,‘ dated December 12, 2002 (GAO Code 350142/GAO-03-274). The
report is well-researched, generally accurate, and pertinent in its
recommendations. We concur with all the major recommendations.
Although the report emphasizes the need to assess and validate the
condition of facilities, there is a history of problems - including
high implementation costs, unmanageable subjectivity, and lack of
timeliness - with using condition assessments as a basis for future
funding requirements. Fortunately, the bulk of funding requirements for
facilities can be predicted with good accuracy using other tools and
benchmarks.
Facilities are made of components (roofs or interior finishes, for
example) for which normal maintenance tasks, maintenance schedules, and
typical service life expectancies are known in advance. So most life-
cycle costs to sustain and recapitalize facilities can be forecasted in
the absence of detailed information about current conditions. In an
ideal facilities management scenario, there is no need for expensive
annual condition assessments since conditions are known to be good due
to regular adherence to appropriate sustainment and recapitalization
rates. DoD is moving in this direction.
Sincerely,
Signed by Raymond F. DuBois:
Raymond F. DuBois Deputy Under Secretary of Defense (Installations and
Environment):
GAO DRAFT REPORT - DATED DECEMBER 12, 2002 GAO CODE 350142/GAO-03-274:
’DEFENSE INFRASTRUCTURE: Changes in Funding Priorities and Strategic
Planning Needed to Improve the Condition of Military Facilities“:
DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATIONS:
RECOMMENDATION 1: The GAO recommended that the Secretary of Defense
direct the Secretaries of the Military Services to reassess their
funding priorities the Services have attached to sustaining and
improving the condition of their facilities relative to other needs and
funding limitations. (p. 59/GAO Draft Report):
DOD RESPONSE: Concur.
DoD is already implementing this recommendation. In January 2003, we
completed the FY04 program-budget review. OSD directed the Services and
Defense Agencies to provide adequate funding to achieve a sustainment
rate of 93 % in FY04, and we plan to achieve full sustainment in FY06.
In addition, we plan funding to achieve a 67-year recapitalization rate
DoD-wide by FY08.
RECOMMENDATION 2: The GAO recommended that the Secretary of Defense
instruct the Military Services to implement a department-wide process
to consistently assess and validate facility conditions. (p. 59/GAO
Draft Report):
DOD RESPONSE: Concur.
DoD is moving now to require common condition reporting in the regular
facilities inventories for the update due October 1, 2004. However,
condition assessments are more valuable for prioritizing work rather
than for forecasting funding needs. The DoD strategy and funding for
facilities will continue to emphasize preventive maintenance through
full annual sustainment and life-cycle based recapitalization rates.
This is superior to a strategy that includes continuous and expensive
monitoring of small changes in condition coupled with periodic
emergency interventions. DoD prefers the preventive approach for three
reasons:
(1) It is less costly and delivers better performance over a life
cycle:
(2) It is more objective and easier to benchmark than condition -
determination of a condition always involves a subjective judgment:
(3) It is more forward looking and timely, and therefore more useful -
condition assessments by definition represent past investments and are
often outdated before the next round of program and budget decisions
can be made.
RECOMMENDATION 3: The GAO recommended that the Secretary of Defense
revise the Defense Facilities Strategic Plan to identify specific
actions needed, time frames, responsibilities, and funding levels -
elements of a comprehensive strategic plan. (p. 59/GAO Draft Report):
DOD RESPONSE: Concur. Target date for update: Dee 31, 2003.
RECOMMENDATION 4: The GAO recommended that the Secretary of Defense
clarify DoD‘s guidance by specifying the organizational level (service,
major command, or installation) at which its three objectives to fully
fund sustainment, achieve a 67-year average recapitalization rate, and
eliminate C-3 and C-4 facility ratings, bringing them up to a minimal
C-2 level should be achieved. (p. 59/GAO Draft Report):
DOD RESPONSE: Concur.
The Facilities Sustainment Model (FSM) and Facilities Recapitalization
Metric (FRM) are each macro level resource programming tools. They have
been specifically developed for application at the level of the DoD
Components. These tools are based on averages and long term life
cycles, and are accurate for annual budgeting when applied to a large
population of facilities. Although they can be applied at lower levels
of the organization, accuracy and confidence is lost as the population
of facilities decreases, unless the timeframe under consideration is
extended. These tools have no use whatsoever for understanding annual
requirements for an individual facility or for a handful of facilities,
since year-to-year sustainment and recapitalization benchmarks vary by
orders-of-magnitude at that level. We have not yet determined a precise
level of confidence for smaller populations and extended timeframes,
but it is our judgment that for a one-year analysis the general FSM/FRM
tools should never be applied below the level of a large major command/
claimant. In the future, these tools could possibly be applied at
larger installations over a multi-year period, but DoD does not support
that use at this time. The table below summarizes our judgment of
confidence (low, medium, and high) when applying FSM and FRM tools to
smaller inventories over alternative planning periods:
[Empty]; [Empty]; Alternative Planning Periods.
Inventor Size; 1 Year; 10 Years; Alternative Planning Periods: 50
Years.
1 facility; Low; Medium; Alternative Planning Periods: High.
1,000 facilities; Medium; High; Alternative Planning Periods: High.
100,000 facilities; Hi; High; Alternative Planning Periods: High.
[End of table]
RECOMMENDATION 5: The GAO recommended that the Secretary of Defense
direct the Services to develop comprehensive performance plans
implementing the Defense Facilities Strategic Plan, which would provide
specific metrics to measure performance and credible and realistic
funding plans to sustain and recapitalize facilities. (p. 59/GAO Draft
Report):
DOD RESPONSE: Concur.
[End of section]
Appendix V: GAO Contact and Staff Acknowledgments:
GAO Contact:
Mark A. Little (202) 512-4673:
Acknowledgments:
In addition to the individuals named above, Nancy Benco, Rebecca
Gambler, David Keefer, Adam Roye, and Jonathan R. Tumin made key
contributions to this report.
[End of section]
Glossary:
Advance appropriation: An advance appropriation is one made to become
available one fiscal year or more beyond the fiscal year for which the
appropriation act is passed. For instance, advance appropriations in
fiscal year 2000 appropriations acts became available for programs in
fiscal year 2001 and beyond. Since these appropriations were not
available until after fiscal year 2000, the amounts were not included
in fiscal year 2000 budget totals.
Commanding Officer‘s Readiness Reporting System: The Commanding
Officer‘s Readiness Reporting System is a decision support system
designed to help commanders and other decision makers evaluate the
quality and quantity of facilities on Marine Corps installations. The
system compares the quantity of on-hand facilities to requirements and
evaluates the quality of facilities with respect to Marine Corps
standards.
Congressionally designated: Congressionally designated refers to
amounts set forth at the budget activity, activity group, and
subactivity group level in an appropriation act‘s conference report.
These recommended amounts are not binding unless they are also
incorporated directly or by reference into an appropriation act or
other statute.
Expected service life (recapitalization target): The expected service
life is the number of years that facilities are expected to provide
adequate performance, given full sustainment, before wearing out or
becoming obsolete. The number is usually applied as an average to the
total inventory of facilities. In the absence of incremental
recapitalization investments, facilities typically must be replaced or
extensively renovated at the end of their expected service life.
Facility Investment Metric: The Facility Investment Metric was
developed by the Air Force to identify and prioritize operation and
maintenance restoration and modernization funding requirements based on
the impact of requirements in four mission areas: mission, mission
support, base support, and community support.
Facilities sustainment model: DOD‘s facilities sustainment model
generates an annual sustainment funding requirement for facilities
based on the expected life cycle of those facilities. The model uses
standard facility-specific cost factors, based on commercial benchmarks
and variable area costs, to compute a sustainment cost for each type of
military facility.
Installations‘ Readiness Report: DOD issued its first Installations‘
Readiness Report in fiscal year 1999 to give an overall assessment of
the condition of all military installations and facilities and their
ability to support military mission. DOD developed the Installations‘
Readiness Report to fulfill its reporting requirement to Congress under
section 117 of title 10 of the United States Code, which specifies that
DOD measure the capability of defense installations and facilities to
provide appropriate support to forces in the conduct of their wartime
missions. Major commands rate each of the nine facility classes, using
standard readiness definitions, and use these ratings to help decide
how to allocate repair and construction funds.
Installation Readiness Reporting System: The Installation Readiness
Reporting System is a decision support system developed by the Navy to
help commanders and other decision makers evaluate the quality and
quantity of facilities on Navy installations. The system allows an
installation to compare the quantity of its on-hand facilities to its
requirements and evaluate the quality of these facilities with respect
to Navy standards.
Installation Status Report: The Installation Status Report was
developed by the Army as a way to assess installation-level conditions
against Army-wide standards.
Military construction: The military construction appropriation is DOD‘s
source of funding for the repair or replacement of facilities, as well
as for construction of facilities for new missions.
Modernization: Modernization funding provides funds for improving
facilities. Modernization includes altering facilities solely to
implement new or higher standards, to accommodate new functions, or to
replace standard building components. Modernization activities are
funded by operation and maintenance and military construction funds.
New footprint military construction: New footprint military
construction funds are used for the construction of new facilities.
These are not recapitalization resourcesæthey are not used to replace
or modernize existing facilities.
Obligations: Obligations are binding agreements that will result in
outlays, immediately or in the future. Budgetary resources must be
available before obligations can be incurred legally.
Operation and maintenance: Operation and maintenance is DOD‘s single
largest appropriation group. It funds training, maintenance, and other
key readiness-related activities, as well as other expenses, such as
maintaining and operating bases.
Plant replacement value: Plant replacement value is the cost to replace
an existing facility with a facility of the same size at the same
location, using today‘s building standards.
Quality of life enhancements: The quality of life enhancements defense
appropriation was established by Congress to fund DOD‘s backlog of
facility maintenance, including minor construction and major
maintenance and repair of barracks, dormitories, and related
facilities.
Recapitalizable plant replacement value: This is a subset of the whole
plant replacement value. Some types of facilities excluded are:
* facilities for which there is no recapitalization requirement, such
as one-time use facilities and facilities scheduled for demolition or
disposal, and:
* facilities that currently are recapitalized using specialized methods
or metrics, or for which future recapitalization funding cannot
currently be estimated, such as family housing; privatized facilities;
and missile, aircraft, and ammunition production facilities.
Recapitalization: Recapitalization includes major renovation or
reconstruction activities (including facility replacements) needed to
keep facilities modern and efficient in an environment of changing
standards and missions. Recapitalization extends the expected service
life of facilities or restores lost service life and includes the
restoration and modernization of existing facilities but not the
acquisition of new facilities or the demolition of old ones.
Recapitalization rate: This is the number of years required to replace
or renovate facilities at a given level of investment. The
recapitalization rate is computed by dividing recapitalizable plant
replacement value by total restoration and modernization investments.
Restoration: Restoration funding provides funds for improving
facilities. Restoration includes repair and replacement work to restore
facilities damaged by inadequate sustainment, excessive age, natural
disaster, fire, accident, or other causes. Restoration activities are
funded by operation and maintenance and military construction funds.
Supplemental appropriation: A supplemental appropriation is an act
appropriating funds in addition to those in an annual appropriations
act. Supplemental appropriations are enacted when the need for funds is
too urgent to be postponed until the next regular annual appropriations
act.
Sustainment: Sustainment funding provides resources primarily from
operation and maintenance funds for recurring maintenance and repair
activities necessary to keep an inventory of facilities in good working
order. Sustainment includes regularly scheduled maintenance as well as
anticipated major repairs or replacement of components that occur
periodically during a facility‘s life cycle. Due to obsolescence,
sustainment alone does not keep facilities like new indefinitely, nor
does it extend their service life.
FOOTNOTES
[1] Since fiscal year 1999, DOD has reported annually to Congress the
condition of its facilities and ability to support military mission. In
these reports, each military facility falls under one of nine facility
classes, which are groupings of like facilities, such as operations and
training, mobility, and supply. Major commands assign condition
ratings, or C-ratings, to each facility class.
[2] As authorized by Congress in 2001, DOD intends to reduce its
inventory of facilities as the result of closing some installations and
by consolidating overlapping activities within and across the services
through a round of base realignments and closures in fiscal year 2005.
DOD officials have testified that 20 to 25 percent of the department‘s
infrastructure is not needed to meet current mission requirements.
Consequently, as a result of the round of base realignments and
closures in fiscal year 2005, the department and the military services
will have to adjust their facility maintenance and recapitalization
plans.
[3] We use the terms ’congressionally designated“ and ’congressional
designation“ or variations of these terms throughout to refer to
amounts set forth at the budget activity, activity group, and
subactivity group level in an appropriation act‘s conference report.
These recommended amounts are not binding unless they are also
incorporated directly or by reference into an appropriation act or
other statute.
[4] The installations we visited include Quantico Marine Corps Base,
Naval Station Norfolk, and Naval Air Station Oceana, Virginia; Pope Air
Force Base and Fort Bragg, North Carolina; Whiteman Air Force Base,
Missouri; Fort Leavenworth, Kansas; and Los Angeles Air Force Base,
Naval Station San Diego, and Naval Base Coronado, California. The six
major commands include Army Forces Command, Air Force Air Combat
Command, Air Force Air Mobility Command, Air Force Space Command, Navy
Atlantic Fleet, and Navy Pacific Fleet.
[5] In fiscal year 2002, DOD replaced its real property maintenance
program with a program comprised of two distinct activities: (1)
sustainment and (2) restoration and modernization. A separate structure
for demolition and disposal was created in fiscal year 1999. Fiscal
year 2002 data are not included in this report because obligations data
were not available during our review.
[6] During fiscal years 1998 through 2000, DOD reported that its
deferred maintenance increased by $14.1 billion. In 2001, DOD stopped
reporting deferred maintenance because it found the metric to be
inaccurate, subjective, and unverifiable. In the meantime, the
department has developed or is developing other tools for generating
maintenance and military construction requirements, such as its
facilities sustainment model to calculate annual sustainment costs for
military facilities and its recapitalization metric to measure the
amount of restoration and modernization funding for facilities.
[7] DOD defines recapitalization rate as the number of years required
to replace or renovate facilities at a given level of investment. The
rate is computed by dividing recapitalizable plant replacement value by
total restoration and modernization investments.
[8] As a point of reference, the military services intended to fund
sustainment between 78 and 98 percent of requirements and reach an
average recapitalization rate between 63 and 163 years in fiscal year
2002, and DOD-wide facility ratings show that 68 percent of facility
classes are in such poor condition that they affect military mission
achievement.
[9] The Marine Corps base at Quantico, Virginia; Pope Air Force Base,
North Carolina; and Los Angeles Air Force Base, California; which
funded 97, 95, and 113 percent, respectively, of sustainment
requirements in fiscal year 2002, were the exceptions to the funding
levels at the other installations, which funded from 35 to 77 percent
of their sustainment requirements during the same period.
[10] DOD defines plant replacement value as the cost to replace an
existing facility with a facility of the same size at the same
location, using today‘s building standards.
[11] This review does not cover military family housing, which is
funded by a separate congressional appropriation. We recently issued a
report on DOD‘s privatization of military family housing--Military
Housing: Management Improvements Needed As the Pace of Privatization
Quickens, GAO-02-624 (Washington, D.C.: June 21, 2002).
[12] New footprint military construction funds are used for the
construction of new facilities. These are not recapitalization
resourcesæthey are not used to replace or modernize existing
facilities.
[13] U.S. Department of Defense, Financial Management Regulation
7000.14-R, Budget Formulation and Presentation, vol. 2B, ch. 8, §
080201 (June 2002).
[14] DOD‘s recapitalization rate is based on an assessment of the
expected service life of different types of facilities. Expected
service life is defined as the number of years a properly sustained
facility should provide service before requiring a major restoration or
replacement project.
[15] The Navy and the Marine Corps report C-ratings for eight of the
nine facility classes. They do not report C-ratings for the mobility
class.
[16] U.S. Department of Defense, Defense Installations 2001: The
Framework for Readiness in the 21st Century (Washington, D.C.: August
2001).
[17] DOD‘s facilities sustainment model generates an annual sustainment
funding requirement for facilities based on the expected life cycle of
those facilities. The model uses standard facility-specific cost
factors, based on commercial benchmarks and variable area costs, to
compute a sustainment cost for each type of military facility.
[18] U.S. General Accounting Office, High-Risk Series: An Update,
GAO-01-263 (Washington, D.C.: January 2001).
[19] U.S. General Accounting Office, High-Risk Series: An Update,
GAO-03-119 (Washington, D.C.: January 2003) and High-Risk Series:
Federal Real Property, GAO-03-122 (Washington, D.C.: January 2003).
[20] U.S. General Accounting Office, Military Infrastructure: Real
Property Management Needs Improvement, GAO/NSIAD-99-100 (Washington,
D.C.: Sept. 7, 1999).
[21] U.S. General Accounting Office, Defense Budget: DOD Should Further
Improve Visibility and Accountability of O&M Fund Movements, GAO/
NSIAD-00-18 (Washington, D.C.: Feb. 9, 2000).
[22] U.S. General Accounting Office, Defense Infrastructure: Most
Recruit Training Barracks Have Significant Deficiencies, GAO-02-786
(Washington, D.C.: June 13, 2002).
[23] In fiscal year 2002, DOD replaced its real property maintenance
program with a program comprised of two distinct activities: (1)
sustainment and (2) restoration and modernization, having already
created a separate structure for demolition and disposal in fiscal year
1999. Sustainment and restoration and modernization are discussed later
in this report.
[24] Operating tempo includes active and reserve component ground and
air training requirements for fuel, repair parts, and other
consumables; training range modernization; combat training center
modernization; training ammunition; and training support and
operations.
[25] Congress established the quality of life enhancements defense
appropriation to fund DOD‘s backlog of real property maintenance of
barracks, dormitories, and related facilities, including minor
construction and major maintenance and repair.
[26] Total appropriations for military construction in fiscal year 2003
were $4.07 billion.
[27] An advance appropriation is one made to become available one
fiscal year or more beyond the fiscal year for which the appropriation
act is passed. For instance, advance appropriations in the fiscal year
2000 appropriation act became available for programs in fiscal year
2001 and beyond. Since these appropriations were not available until
after fiscal year 2000, the amounts were not included in fiscal year
2000 budget totals.
[28] U.S. Department of the Air Force, Office of the Civil Engineer,
United States Air Force Facilities Investment Plan (Washington, D.C.:
Aug. 14, 2002).
[29] U.S. Department of the Navy, Naval Audit Service, Management of
the Navy‘s Sustainment, Restoration, and Modernization Program, N2002-
0067 (Washington, D.C.:
Aug. 6, 2002).
[30] According to Navy criteria, a deficiency is classified as critical
if the maintenance and repair need requires corrective action within
the current year or poses a serious risk for environmental damage,
interference or loss of mission, life safety, or quality of life.
[31] According to Atlantic Fleet criteria, a deficiency is classified
as either critical or deferrable depending on two factors: the severity
of the deficiency or the probability of the deficiency causing a
mishap. These two factors are considered in four impact areas:
environment, mission, life safety, and quality of life.
[32] See GAO-02-786.
[33] The Secretary of Defense and his staff prepare the Defense
Planning Guidance, issue policy, and articulate strategic objectives
that reflect the national military strategy. The Defense Planning
Guidance includes the Secretary‘s force and resource guidance to the
military departments, other combat support agencies, and the unified
combatant commands.
[34] U.S. Department of Defense, Report to Congress: Identification of
the Requirements to Reduce the Backlog of Maintenance and Repair of
Defense Facilities (Washington, D.C.: April 2001).
[35] See GAO-02-786.
[36] DOD defines recapitalizable plant replacement value as the cost of
replacing an existing facility with a facility of the same size at the
same location using today‘s building standards, but it does not include
facilities planned for demolition, disposal by transfer to other
entities, and one-time use, as well as facilities recapitalized by
appropriations other than regular military construction or operation
and maintenance funds (such as family housing), and facilities
recapitalized by sources outside DOD (such as facilities in Japan).
[37] U.S. Department of the Army, Army Program Objective Memorandum for
Fiscal Years
04-09 (Washington, D.C.: Aug. 22, 2002).
[38] U.S. Department of the Army, U.S. Army Installation Long-Range
Plan (Washington, D.C.: February 2003).
[39] U.S. Department of the Air Force, United States Air Force
Facilities Investment Plan (Washington, D.C.: Aug. 14, 2002).
[40] U.S. Department of Defense, Annual Report to the President and the
Congress (Washington, D.C.: 2002).
[41] U.S. Marine Corps, Marine Corps Installations 2020 (Washington,
D.C.: Apr. 28, 2001).
[42] See N2002-0067.
[43] U.S. General Accounting Office, Agencies‘ Strategic Plans under
GPRA: Key Questions to Facilitate Congressional Review, GAO/GGD-10.1.16
(Washington, D.C.: May 1997); Agencies‘ Annual Performance Plans under
the Results Act: An Assessment Guide to Facilitate Congressional
Decisionmaking, GAO/GGD/AIMD-10.1.18 (Washington, D.C.: February
1998); The Results Act: An Evaluator‘s Guide to Assessing Agency Annual
Performance Plans, GAO/GGD-10.1.20 (Washington, D.C.: April 1998); and
Financial Management: DOD Improvement Plan Needs Strategic Focus,
GAO-01-764 (Washington, D.C.: Aug. 17, 2001).
[44] U.S. General Accounting Office, Major Management Challenges and
Program Risks: Department of Defense, GAO-03-98 (Washington, D.C.:
January 2003).
[45] DOD‘s financial management regulations, which reflect agreements
between DOD and the authorization and appropriation committees, provide
general guidelines for various reprogramming actions. For example,
congressional notification was required for operation and maintenance
reprogramming actions of $15 million or more in fiscal year 2002.
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