Military Housing
Opportunities That Should Be Explored to Improve Housing and Reduce Costs for Unmarried Junior Servicemembers Gao ID: GAO-03-602 June 10, 2003Each year, the Department of Defense (DOD) spends billions of dollars to house unmarried junior enlisted servicemembers, primarily in military barracks. Over the next several years, the Army, Navy, and Air Force plan to spend about $6 billion to eliminate barracks with multi-person bathroom facilities and provide private sleeping rooms for all permanent party members. Given the cost of the program, GAO looked at (1) the status of efforts to examine the potential for private sector financing, ownership, operation, and maintenance of military barracks; (2) the opportunity to reduce the construction costs of barracks through widespread use of residential construction practices; and (3) whether opportunities exist to make better use of existing barracks.
GAO found three areas where DOD could potentially reduce costs in its unmarried servicemember housing program. DOD and the services have not determined whether "privatization," or private sector financing, ownership, operation, and maintenance of military barracks is feasible and cost-effective. Barracks privatization involves a number of unique challenges ranging from the funding of privatization contracts to the location of privatized barracks. Recently, each service has independently given increased attention to developing privatization proposals. A collaborative, rather than independent, approach could minimize duplication and optimize lessons learned. DOD could reduce the construction costs of government-owned barracks through the widespread use of residential construction practices rather than traditional steel frame, concrete, and cement block. The Army estimated that residential type construction could reduce barracks construction costs by 23 percent or more. However, concerns about barracks durability and unanswered engineering questions have prevented widespread use of these practices. DOD's full use of required existing barracks space could reduce the cost of housing allowances paid to unmarried junior members to live off base in local communities. GAO found that the services have authorized housing allowances for unmarried members to live off base even when existing barracks space was available. This occurred because of lenient barracks utilization guidance, which in some cases does not require full use of existing barracks, and possible noncompliance with guidance. The Air Force could have potentially reduced annual housing allowances by about $20 million in fiscal year 2002 by fully using available barracks space.
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Report to the Secretary of Defense:
United States General Accounting Office:
GAO:
June 2003:
Military Housing:
Opportunities That Should Be Explored to Improve Housing and Reduce
Costs for Unmarried Junior Servicemembers:
GAO-03-602:
GAO Highlights:
Highlights of GAO-03-602, a report to the Secretary of Defense
Why GAO Did This Study:
Each year, the Department of Defense (DOD) spends billions of dollars
to house unmarried junior enlisted servicemembers, primarily in
military barracks. Over the next several years, the Army, Navy, and
Air Force plan to spend about $6 billion to eliminate barracks with
multi-person bathroom facilities and provide private sleeping rooms
for all permanent party members. Given the cost of the program, GAO
looked at (1) the status of efforts to examine the potential for
private sector financing, ownership, operation, and maintenance of
military barracks; (2) the opportunity to reduce the construction
costs of barracks through widespread use of residential construction
practices; and (3) whether opportunities exist to make better use of
existing barracks.
What GAO Found:
GAO found three areas where DOD could potentially reduce costs in its
unmarried servicemember housing program:
* DOD and the services have not determined whether ’privatization,“ or
private sector financing, ownership, operation, and maintenance of
military barracks is feasible and cost-effective. Barracks
privatization involves a number of unique challenges ranging from the
funding of privatization contracts to the location of privatized
barracks. Recently, each service has independently given increased
attention to developing privatization proposals. A collaborative,
rather than independent, approach could minimize duplication and
optimize lessons learned.
* DOD could reduce the construction costs of government-owned barracks
through the widespread use of residential construction practices
rather than traditional steel frame, concrete, and cement block. The
Army estimated that residential type construction could reduce
barracks construction costs by 23 percent or more. However, concerns
about barracks durability and unanswered engineering questions have
prevented widespread use of these practices.
DOD‘s full use of required existing barracks space could reduce the
cost of housing allowances paid to unmarried junior members to live
off base in local communities. GAO found that the services have
authorized housing allowances for unmarried members to live off base
even when existing barracks space was available. This occurred because
of lenient barracks utilization guidance, which in some cases does not
require full use of existing barracks, and possible noncompliance with
guidance. The Air Force could have potentially reduced annual housing
allowances by about $20 million in fiscal year 2002 by fully using
available barracks space.
What GAO Recommends:
GAO recommends that the Secretary of Defense promote a coordinated,
focused effort to determine the feasibility and cost effectiveness of
barracks privatization. GAO also recommends that DOD undertake
engineering studies to resolve questions about the use of residential
construction practices, issue guidance to direct the maximum use of
required existing barracks space, and identify and eliminate any
barracks space determined to be excess.
In commenting on a draft of this report, DOD generally agreed with the
recommendations.
www.gao.gov/cgi-bin/getrpt?GAO-03-602.
To view the full report, including the scope
and methodology, click on the link above.
For more information, contact Barry W. Holman at (202) 512-5581 or
holmanb@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
DOD and the Military Services Have Not Determined the Feasibility of
Barracks Privatization:
Residential Construction Practices Offer Opportunities to Reduce Costs
of Government-Owned Barracks:
Opportunities Exist to Make Better Use of Existing Barracks:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Photographs of Old and New Style Barracks and Quarters
Aboard Navy Ships:
Appendix III: Details on Cost Differences in Barracks Built with
Residential and Traditional Construction Practices:
Appendix IV: Comments from the Department of Defense:
Tables:
Table 1: Cost Comparison of Army Barracks with a Private Sector
Extended Stay Hotel:
Table 2: Cost Comparison of the Different Construction Practices at
Fort Meade, Maryland, and Fort Bragg, North Carolina:
Table 3: Utilization of Air Force Permanent Party Barracks in the
United States as of September 30, 2002:
Figures:
Figure 1: Photographs of the Fort Meade, Maryland, Barracks Project and
a Traditional Barracks at Langley Air Force Base, Virginia:
Figure 2: Old and New Style Barracks at Fort Eustis, Virginia:
Figure 3: Typical Living Quarters and Gang Latrines in Old Style
Barracks and Aboard Ship:
Figure 4: Typical Living Quarters in New Style Barracks:
Abbreviation:
DOD: Department of Defense:
United States General Accounting Office:
Washington, DC 20548:
June 10, 2003:
The Honorable Donald H. Rumsfeld Secretary of Defense:
Dear Mr. Secretary:
Each year the Department of Defense (DOD) spends billions of dollars to
house unmarried servicemembers at their permanent duty locations in the
United States. Unmarried junior enlisted members are normally required
to live on base in furnished living quarters commonly referred to as
barracks. If barracks space is unavailable, these members can be
authorized a housing allowance and live off base in local civilian
communities. Because DOD views housing as a key factor affecting
quality of life, the services have initiated plans to improve barracks
living conditions. Over the next several years, the services plan to
spend about $6 billion to eliminate barracks with multi-person bathroom
facilities, or "gang latrines," and provide private sleeping rooms for
all permanently assigned members.[Footnote 1] The Navy has an
additional goal to provide barracks for approximately 20,000 sailors
who currently live aboard ships even when in homeport. To improve
military housing faster than could be achieved if only traditional
military construction funds were used, legislation was enacted in 1996
at DOD's request to authorize private sector financing, ownership,
operation, and maintenance of military housing, including
barracks.[Footnote 2] Because of the cost of the program and the
importance of housing on servicemembers' quality of life, we examined,
on the basis of the Comptroller General's authority, DOD's housing
program for unmarried members and explored whether opportunities exist
to reduce costs.
Since 1998, we have issued six reports on DOD's military housing
program--three about the military housing privatization initiative, one
about the services' barracks design standard, one about DOD's process
for determining military housing requirements, and one about the
opportunity for the services to reduce future barracks construction
costs and improve quality of life by allowing more unmarried members to
live off base. This report examines additional opportunities for
reducing unmarried enlisted servicemember housing costs and discusses
(1) the status of DOD and military service efforts to examine the
potential for private sector financing, ownership, operation, and
maintenance of military barracks; (2) the opportunity to reduce the
construction costs of government-owned barracks through widespread use
of residential construction practices; and (3) whether opportunities
exist to make better use of existing barracks.
Our review included interviews with DOD and service housing officials;
analysis of DOD and service data; and site visits to Fort Eustis,
Virginia; Fort Meade, Maryland; Naval Station Norfolk, Virginia;
Langley Air Force Base, Virginia; and Marine Corps Base Quantico,
Virginia. A more detailed description of our scope and methodology is
included in appendix I.
Results in Brief:
Although the authority for private sector financing, ownership,
operation, and maintenance of military housing was initially approved
in 1996, DOD and the military services have not determined the
concept's feasibility and cost-effectiveness as it relates to military
barracks. In contrast, DOD has actively pursued this privatization
concept for its military family housing program. Compared to family
housing privatization, however, barracks privatization involves unique
challenges, such as the potentially higher amount of appropriated funds
needed to secure a privatization contract, differences in where private
developers and the military prefer barracks to be located, impacts from
unit deployments, and the availability of funds for housing allowances
paid to members occupying privatized barracks. While each service has
separately studied barracks privatization over the years, DOD has
concentrated on family housing privatization and has provided little
centralized direction and focus to help overcome these challenges.
Recently, each service has independently given increased attention to
developing project proposals, with the Navy hoping to do so by the end
of 2003. Without more coordination of activities to address the
challenges associated with barracks privatization, efforts might be
duplicated and potential opportunities to optimize lessons learned
might be lost.
Construction costs of government-owned barracks built and operated on
military installations could be significantly reduced through
widespread use of residential construction practices. Traditional
barracks construction practices call for commercial-type construction
that includes the use of steel frame, concrete, and cement block.
Similar multi-unit housing in the private sector, such as apartments,
college dormitories, and extended stay hotels, normally use
residential-type construction practices that include the use of wood
frame construction. Compared to steel frame, concrete, and cement block
construction, the Army estimated that residential type construction
could reduce typical barracks construction costs by 23 percent or more.
For example, at its pilot barracks project under construction at Fort
Meade, Maryland, the Army estimates that using residential construction
practices will cost from $12,600 to $31,800 less per occupant. Army
analyses also indicate that a barrack's total costs over its lifetime
would be less if constructed with residential practices because of its
lower initial construction costs and comparable operations and
maintenance costs for many building components. Although the Army and
Navy have undertaken three pilot projects, barriers--including concerns
about durability and unanswered questions about the ability of wood-
frame barracks to meet all antiterrorism force protection requirements-
-have prevented widespread adoption of these cost-saving practices.
Additional DOD efforts to fully use existing government-owned barracks
space could reduce the cost of housing allowances paid to unmarried
junior members to live off base in local civilian communities. Our
review corroborated previous reviews from Army and Air Force audit
groups, which found that these services have authorized housing
allowances for unmarried junior members to live off base even when
existing barracks space was available. This occurred because of lenient
barracks utilization guidance, which in some cases do not require full
use of existing barracks, and possible noncompliance with guidance.
Simultaneously paying for unused barracks spaces and housing allowances
obviously wastes available resources. We estimated that the Air Force
alone could have potentially prevented about $20 million in annual
housing allowances in fiscal year 2002 by fully using available
barracks space. At the same time, if the services were to change their
barracks occupancy requirements and permit more junior members to live
off base, then the services could reduce costs by identifying and
eliminating excess barracks space.
We are recommending that the Secretary of Defense promote a
coordinated, focused effort to determine the feasibility and cost-
effectiveness of barracks privatization by addressing the associated
challenges and facilitating the development of pilot project proposals.
We also are recommending that DOD undertake engineering studies to
resolve questions about the use of residential construction practices
for barracks, issue guidance to direct the maximum use of required
existing barracks, and identify and eliminate any barracks space
determined to be in excess of needs. In comments on a draft of this
report, DOD generally agreed with the report's recommendations.
Background:
Under the overall direction of the Under Secretary of Defense for
Acquisition, Technology and Logistics, the military services provide
on-base furnished living quarters for over 200,000 unmarried enlisted
servicemembers at their permanent duty locations in the United States.
Commonly referred to as barracks, housing for unmarried members is
often cited by DOD officials as a problem area because many military
barracks are old, rundown, and otherwise do not meet contemporary DOD
standards for size, privacy, and other amenities designed to enhance
the quality of life of unmarried members. Junior unmarried members
often share dilapidated barracks rooms with one or two other members
and a gang latrine with occupants from several other rooms. Also, about
20,000 junior enlisted members assigned to Navy ships continue to live
in cramped onboard quarters even when their ships are in homeport. The
living conditions in barracks are far different from an apartment or
townhouse with two bedrooms, living area, bath, and full kitchen that
is the normal housing standard for junior enlisted married members.
The services have established specific goals and milestones for
improving the housing provided to unmarried junior enlisted members.
First, the services plan to eliminate permanent party barracks--i.e.,
barracks for servicemembers at their permanent duty locations--with
common bath and shower facilities, or "gang latrines," through barracks
replacement or renovation. The Air Force already has achieved this goal
and the Army, Navy, and Marine Corps plan to eliminate gang latrines by
fiscal years 2008, 2007, and 2005, respectively. Second, the Army and
the Navy plan to provide each junior enlisted member in the United
States a private sleeping room with a kitchenette and bath shared by
one other member--referred to as the 1+1 barracks design standard--by
fiscal years 2010 and 2013, respectively. The Air Force, which already
provides private sleeping rooms, plans to eliminate its barracks
deficit and replace its worst barracks by fiscal year 2009. The Marine
Corps, given a permanent waiver from the Secretary of the Navy to use a
different barracks design standard, plans to provide barracks with
sleeping rooms and baths shared by two junior members by fiscal year
2012. Third, the Navy plans to complete its homeport ashore initiative
by fiscal year 2008, which will provide barracks spaces for about
20,000 junior members who are currently required to live aboard their
ships while in homeport. To improve barracks conditions and achieve
these goals, the services plan to spend about $6 billion over the next
6 years. Appendix II shows photographs of old and new style barracks as
well as typical living conditions aboard Navy ships.
Service officials state that unmarried junior enlisted servicemembers
should live in barracks to help instill service core values, provide
for team building and mentoring, and meet operational requirements.
However, significant differences exist among the services regarding
personnel who are required to live in barracks. More specifically:
* the Army requires unmarried personnel in pay grades E1 through E6 to
live in barracks,
* the Navy requires unmarried personnel in pay grades E1 through E4
with fewer than 4 years of service to live in barracks,
* the Air Force requires unmarried personnel in pay grades E1 through
E4 to live in barracks, and:
* the Marine Corps requires unmarried personnel in pay grades E1
through E5 to live in barracks.
The Military Housing Privatization Initiative, authorized by law on
February 10, 1996, provided new authorities that, among other things,
allows DOD to provide direct loans, loan guarantees, and other
incentives to encourage private developers to construct and operate
military family and unaccompanied housing (barracks) either on or off
military installations.[Footnote 3] According to DOD, the initiative
was aimed at solving its inadequate housing problem faster and more
economically by taking advantage of the private sector's investment
capital and housing construction expertise. With private-sector
investment, DOD planned to obtain at least 3 dollars in military
housing improvements for each dollar that the government invested,
thereby reducing the amount of government funds initially required to
revitalize housing and accelerating the elimination of inadequate
housing. Although there can be exceptions, DOD's position is that the
government's estimated total costs for a privatization project also
should be equal to or less than the total costs for the same project
financed by military construction funding. Servicemembers who live in
privatized housing receive a housing allowance to pay for rent and
utilities. In fiscal year 1997, the Congress appropriated $5 million
for the services to use to initiate privatized barracks projects.
However, the Congress rescinded these funds in fiscal year 1999 because
the services had developed no plans for privatized barracks.
In June 1997, DOD and the Office of Management and Budget agreed to a
set of guidelines that would be used as a frame of reference for
scoring privatization projects.[Footnote 4] The guidelines state that
if a project provides an occupancy guarantee, then funds for the
project must be available and obligated "up front" at the time the
government makes the commitment of resources. In other words, if a
project provides an occupancy guarantee, then the value of the
guarantee--the cumulative value of the rents to be paid for the housing
over the entire contract term--must be obligated at the beginning of
the project. As a result, DOD officials stated that such a project
might not be financially attractive because the amount of appropriated
funds required would be approximately equivalent to the military
construction funding that would be required to build the barracks.
According to DOD officials, this issue has not been a problem for
family housing privatization projects because DOD does not provide
occupancy guarantees and does not mandatorily assign members to family
housing. Military families can choose where to live and the project
contracts include provisions for civilians to rent privatized housing
if military families choose not to live there.[Footnote 5]
Prior GAO Reports on the Military Housing Program:
Since 1998, we have issued six reports on DOD's military housing
program--three about the military housing privatization initiative, one
about the services' barracks design standard, one about DOD's process
for determining military housing requirements, and one about the
differences among the services concerning who is required to live in
barracks.
* In July 1998, we reported on several concerns related to the new
military housing privatization program.[Footnote 6] These included (1)
whether privatization would result in significant cost savings and
whether the long contract terms of many projects might result in
building housing that will not be needed in the future; (2) whether
controls were adequate to protect the government's interests in the
event developers might not operate and maintain the housing as
expected; and (3) whether DOD would face certain problems if privatized
housing units were not fully used by military members and were
subsequently rented to civilians, as the contracts permit.
* In March 1999, we reported on the status of the services'
implementation of the 1+1 barracks design standard.[Footnote 7] The
report also discussed DOD's rationale for adopting the standard, the
costs of alternatives to the standard, and service views of the impact
of the standard from a team-building, individual isolation, or similar
perspective.
* In March 2000, we reported that initial implementation progress for
the privatization program was slow, the services' life-cycle cost
analyses provided inaccurate cost comparisons because DOD had not
issued standardized guidance for preparing the analyses, and DOD lacked
a plan for evaluating the effectiveness of the program.[Footnote 8] DOD
subsequently quickened the pace of family housing privatization, issued
standard guidance for privatization life-cycle cost analyses, and
developed a program evaluation plan.
* In August 2001, we reported that despite earlier recommendations, DOD
had not implemented a standard process for determining military housing
requirements.[Footnote 9] In that report, we pointed out that the
initiative to increase housing allowances heightened the urgency for a
consistent process, because the initiative could lessen the demand for
military housing by making housing in local communities more
affordable. In January 2003, DOD approved a new standard family housing
requirements determination process.
* In June 2002, we noted that by investing about $185 million of
military construction funds in the first 10 family housing
privatization projects, DOD should obtain housing improvements that
would have required about $1.19 billion in military construction funds
had only government funds been used.[Footnote 10] We also reported that
privatization projects were not supported by reliable or consistent
needs assessments, and the overall requirement for military housing was
not well defined. Further, although DOD had included provisions in
project contracts designed to protect the government's interests, our
report identified several areas where DOD could further enhance
protections to the government. DOD responded by outlining ongoing and
planned management actions to address the concerns noted in the report.
* In January 2003, we reported on the widely varying standards among
the services regarding who should live in barracks and the effect this
can have on program costs and quality of life.[Footnote 11] We noted
that requiring more personnel (more pay grades) to live in barracks
than is justified results in increased barracks program and
construction costs and has negative quality-of-life implications
because most junior servicemembers would prefer to live off base. We
noted that by allowing junior enlisted personnel already living off
base with a housing allowance to continue to live off base, the Air
Force could reduce planned barracks construction spending by $420
million. Accordingly, we recommended that the rationale behind the
services' barracks occupancy requirements be based, at least in part,
on the results of objective, systematic analyses that consider the
contemporary needs of junior servicemembers, quality-of-life issues,
the services' mission requirements, and other relevant data that would
help provide a basis for the services' barracks occupancy requirements.
While DOD agreed in principle with our recommendation, it reiterated
the importance of military judgment in such decisions and left unclear
the extent to which it is likely to make changes.
DOD and the Military Services Have Not Determined the Feasibility of
Barracks Privatization:
While the services have considered barracks privatization over the past
several years, they have not yet initiated pilot project proposals to
determine the feasibility and cost-effectiveness of private sector
financing, ownership, operation, and maintenance of military barracks.
According to DOD officials, barracks privatization involves unique
challenges compared to family housing privatization. These challenges
range from the potentially higher amount of appropriated funds needed
to secure a privatization contract (as a result of the services'
requirement that unmarried junior members live in barracks) to the
differences in where private developers and the military prefer
barracks to be located. Deferring to the individual services, DOD has
provided limited centralized direction and focus to help overcome the
challenges associated with barracks privatization. Recently, each
service has independently given increased attention to developing
project proposals, with the Navy hoping to do so by the end of 2003.
Still, there are unresolved issues associated with barracks
privatization and, without more coordination of activities to address
these issues, efforts might be duplicated and the benefits from
collaboration might be lost.
Barracks Privatization Involves Unique Challenges Compared to Family
Housing Privatization:
Compared to family housing privatization, barracks privatization
includes unique challenges that, thus far, have prevented the
development of pilot project proposals. DOD has actively pursued
privatization of military family housing and has awarded contracts to
construct or improve about 26,000 family housing units by the end of
fiscal year 2002 and has plans to privatize an additional 96,000 units
by the beginning of fiscal year 2006. The primary problem with
privatizing barracks lies in the services' mandatory assignment policy
for unmarried junior enlisted servicemembers and whether this policy
implies that DOD would provide private-sector housing developers with
an occupancy guarantee. Mandatory assignment, if viewed as an occupancy
guarantee, might make a proposed barracks privatization project
financially unattractive because a higher amount of appropriated funds
would be needed to secure the contract than would be needed for a
similar military construction project. Other challenges are related to
barracks locations, unit deployments, and funding for housing
allowances.
The current policy in each service requires mandatory assignment of
unmarried junior members to barracks located on base, provided that
space is available. According to DOD officials, most military leaders
support this policy because they believe that mandatory assignments
provide for military discipline and unit integrity. Mandatory
assignments, however, might result in the need for more appropriations-
-in comparison to military construction financing--to cover the
obligations that the Office of Management and Budget determines should
be recorded at contract award. This could make a proposed barracks
privatization project financially unattractive. The amount of
appropriations needed hinges on whether the mandatory assignment policy
would provide private-sector housing developers with a DOD guarantee of
occupancy.
Because there have been no barracks privatization project proposals to
date, it is unclear whether the services' mandatory barracks assignment
policies for junior members might be viewed as an occupancy guarantee.
Office of Management and Budget officials stated that having a
mandatory assignment policy alone would not necessarily guarantee that
the rent paid to the developer over the life of the project would have
to be scored up front. However, if the privatization contract
specifically stated that mandatory assignment would occur, the
officials stated that the office probably would view this as an
occupancy guarantee and the project's projected rent would be scored up
front.
As with family housing projects, Office of Management and Budget
officials stated that the scoring of a barracks project depends on the
details and circumstances involved in a proposed project and the
associated risk to the government. Key issues that might be considered
include whether the project allows the private developer enough
autonomy to manage the project without significant military control and
whether the contract includes provisions for civilians to rent vacant
barracks spaces in the event of reduced government demand. Obviously,
such issues present problems for the services--specifically, the
willingness of the services to relinquish their control of barracks and
allow civilians to occupy vacant barracks spaces. With a specific
barracks privatization proposal, the Office of Management and Budget
officials stated they would work with DOD to address the associated
scoring questions.
Although the potentially high amount of appropriated funds needed to
secure a contract appears to be the most significant challenge to
barracks privatization, there are other challenges as noted below.
* Barracks location. According to DOD officials, private developers
have indicated that they would prefer that privatized barracks be
located off base or along an installation's boundary and be severable
from the installation. Developers would then have greater flexibility
in renting the units to civilians in the event of reduced government
demand. However, the services do not want barracks located off-base or
near installations' perimeter fences largely for force protection
reasons and, currently, most existing barracks are not located along
installation boundaries.
* Deployments. In the event of unit deployments, many servicemembers
would not be in the barracks and possibly entire buildings could be
empty for months. As a result, the developer's normal rental income
could be reduced or eliminated even though the developer would still
need to pay for expenses such as mortgage payments and operations and
maintenance costs. This is less of a problem in privatized family
housing because family members normally continue to occupy the housing
and pay rent if the servicemember deploys.
* Funding for housing allowances. Service officials stated that
identifying and shifting funds to pay housing allowances to
servicemembers living in privatized barracks could be an administrative
problem. This is less of a problem with privatized family housing
because military family housing has a separate operations and
maintenance budget account. When a private developer takes over
existing military family housing, funds from the family housing
operations and maintenance account can be shifted to help pay for
housing allowances used to pay rent for the families living in the
housing. However, barracks operations and maintenance is not funded by
a similar separate account. Instead, barracks operations and
maintenance funds are included in each installation's overall base
operating budget. According to service officials, it is more difficult
to identify, break out, and shift barracks funding to the personnel
accounts to pay housing allowances for a privatized barracks project.
DOD Has Provided Limited Centralized Direction and Focus for Barracks
Privatization:
With its attention largely concentrated on initiating and managing
privatization of military family housing, DOD has provided limited
centralized direction and focus to help the services overcome the
challenges associated with barracks privatization and proceed with
pilot project proposals. Also, in August 1998, 2 years after the
military housing privatization legislation was enacted, DOD shifted
primary responsibility for implementing the privatization program to
the individual services. Since that time, the services have
independently studied the barracks privatization concept but have not
developed actual project proposals. More recently, the services have
given increased attention to exploring barracks privatization, but
their efforts continue to be independent and non-coordinated. The
status of barracks privatization in each service follows.
Navy and Marine Corps Efforts to Privatize Barracks:
While no service has yet initiated a barracks privatization project,
the Navy and the Marine Corps currently appear to be the most active
among the services in examining its potential use. Navy officials
stated that they believe barracks privatization offers an opportunity
for the Navy to more quickly meet its barracks improvement goals,
including the goal of providing barracks space for all junior sailors
currently required to live on their ships even while in homeport.
In order for barracks privatization to be feasible, Navy officials
believed that the Navy needed additional authorities not contained in
the Military Housing Privatization Initiative legislation.
Specifically, Navy officials believed that existing housing allowance
rates provided more money than would be needed to develop a privatized
barracks project. The housing allowance rate for unmarried junior
members is targeted to cover the costs of a one-bedroom apartment in
the civilian community. Yet, the barracks occupancy standard is based
on a lesser standard--the modern 1+1 barracks design standard where two
members share a module consisting of two small bedrooms with a
kitchenette and bath. As a result, Navy officials believe the current
housing allowance could provide more money than would be needed to pay
rent for a similar design standard in a privatized barracks, and the
rental income received by the private-sector developer would be more
than is needed to finance the construction and management of the
project. To address this situation, the Bob Stump National Defense
Authorization Act for Fiscal Year 2003 provided the Navy with specific
legislative authority to undertake three pilot projects to privatize
barracks.[Footnote 12] According to Navy officials, the legislation
will allow the Navy to pay occupants' allowances in the amounts needed
to provide the rental income to support the privatized barracks
projects and will allow junior sailors on ships to be assigned to
privatized barracks.
With this authority, Navy and Marine Corps officials stated that they
plan to develop specific proposals for privatization. Candidate
installations for barracks privatization include the Naval Station
Norfolk, Virginia; the Naval Station San Diego, California; and the
Marine Corps Base Camp Pendleton, California. Although remaining
challenges, such as those noted above, must be addressed, Navy
officials hope that specific proposals will be developed by the end of
calendar year 2003.
Air Force Efforts to Privatize Barracks:
In May 1997, the Air Force issued the results of a barracks
privatization feasibility study. The study concluded that privatization
was feasible and recommended that the Air Force pursue development of a
barracks privatization project at one base to further define the
concept. However, the study, which was performed prior to issuance of
the budgetary scoring guidelines for privatization projects, stated
that occupancy guarantees would be provided in order to facilitate
private financing. According to Air Force officials, the study
recommendation was not implemented because of the costs associated with
occupancy guarantees and the other challenges associated with barracks
privatization.
More recently, however, the Air Force has again begun to explore the
issue. In August 2002, an Air Force team was formed to establish a
baseline for an Air Force barracks privatization program including the
development of policy and guidance. Air Force officials also stated
that Air Force major commands have been asked to identify potential
privatization candidates. One potential candidate identified was
Elmendorf Air Force Base, Alaska, where a family housing privatization
project is already underway. However, officials stated that they do not
expect any privatized barracks proposals in the near future and that
they planned to monitor the Navy's progress under its pilot program.
Army Efforts to Privatize Barracks:
Army officials stated that they have explored the concept of barracks
privatization but that they have made relatively little progress toward
reaching a consensus that the concept should be pursued. They also
stated that they were not optimistic that the many challenges facing
barracks privatization could be overcome and did not expect any project
proposals in the near future. Nevertheless, the Army is continuing to
review the issue. For example, in an April 2002 memorandum, the Army
Assistant Secretary for Installations and Environment stated that the
time was right to pursue the issue and requested the support of the
Army's Training and Doctrine Command and the Army's Forces Command in
formal studies of barracks privatization. At the time of our review, no
studies had been completed. In addition, Fort Lewis, Washington, has a
barracks privatization study underway that is expected to be completed
in 2003.
Residential Construction Practices Offer Opportunities to Reduce Costs
of Government-Owned Barracks:
To the extent the services continue to rely on government built and
operated barracks on military installations, opportunities exist to
reduce costs of constructing those barracks through adoption of
residential construction practices. In the past, DOD policies generally
required that traditional barracks construction practices use
commercial-type construction including use of steel frame, concrete,
and cement block. Similar multi-unit residential housing in the private
sector, such as apartments, college dormitories, and extended stay
hotels, normally use residential construction practices that include
the use of wood frame construction. Compared to steel frame, concrete,
and cement block construction, Army analyses show that residential
construction practices could reduce typical barracks construction costs
by 23 percent or more. DOD policies now generally allow use of
residential construction practices. However, some barriers still exist
to DOD's adoption of these cost-reducing practices as a normal way of
doing business, including concern about durability and unanswered
questions about the ability of wood-frame barracks to meet all
antiterrorism force protection requirements.
Army Analyses Show That Residential Construction Practices Cost Less:
Concerned with the high construction costs of barracks built to the 1+1
design standard, the Army began to search for savings opportunities and
concluded that using residential construction practices to build
barracks would cost less than using traditional construction practices.
In June 2000, the Army revised its barracks construction guidance to
permit Army construction projects to be of any construction type.
Subsequently, the Army began a pilot barracks project using residential
construction practices at Fort Meade, Maryland.
Army Concern Over Barracks Costs Resulted in Search for Savings
Opportunities:
As the Army began building new barracks in accordance with the 1+1
barracks design standard adopted in 1995, Army officials became
concerned with the high construction costs of these barracks. To
explore reasons for the high costs and opportunities for savings, the
Army Corps of Engineers performed a study in 1996 that compared the
construction costs of three typical Army 1+1 barracks with the
construction costs of a similar private sector multi-unit project--
specifically a national brand, all suites, extended stay hotel. After
making adjustments to account for differences in geographic location
and dates of construction, the Army Corps of Engineers found
significant cost differences between the projects as shown in table 1.
Table 1: Cost Comparison of Army Barracks with a Private Sector
Extended Stay Hotel:
Factor: Construction cost per occupant; Average for Army barracks:
$48,700; Average for private extended stay hotel: $34,600; Difference:
Amount: $14,100; Difference: Percent: 29.
Factor: Construction cost per square foot; Average for Army barracks:
$131; Average for private extended stay hotel: $56; Difference: Amount:
$75; Difference: Percent: 57.
Factor: Key amenities and square feet per occupant; Average for Army
barracks: * Two occupants share a bath and kitchenette.; * Common area
for socializing.; * 372 square feet per occupant.; Average for private
extended stay hotel: * Private bath and full kitchen.; * Private living
room.; * 621 square feet per occupant.; Difference: Amount: [Empty];
Difference: Percent: [Empty].
Source: Army Corps of Engineers.
[End of table]
The extended stay hotel provided each occupant with more amenities and
space than the Army barracks at a construction cost per occupant of
$14,100, or 29 percent, less than the barracks' average construction
cost per occupant. The Army Corps of Engineers determined that although
many factors accounted for the cost difference between the projects,
the primary reason was the type of construction used to build the
projects. The barracks were constructed in accordance with Uniform
Building Code type I/II (commercial) standards that call for non-
combustible construction built from concrete, masonry, and/or steel.
The private extended stay hotel was constructed in accordance with
Uniform Building Code type V (residential) standards that permit use of
any building material allowed by the code, including wood. The Army
Corps of Engineers' data showed that if the barracks had been built
using residential construction practices instead of traditional
barracks construction practices, the Army's average construction cost
per occupant would have been about $37,500, a reduction of about
$11,200, or 23 percent, per occupant. This study did not address
differences in the barracks' total costs--i.e., construction costs and
operations and maintenance costs--over their lifetimes. However,
subsequent Army analyses indicate that a barrack's total costs over its
lifetime would be less if constructed with residential practices
because of its lower initial construction costs and comparable
operations and maintenance costs for many building components. (See
app. III for additional details on the Army's analyses.):
A subsequent Army study also concluded that the materials and methods
traditionally used to construct government-owned barracks were more
costly than the materials and methods normally used to construct
similar multi-unit residential buildings in the private sector. In a
joint February 2001 report, the Army's Assistant Chief of Staff for
Installation Management and the Army Corps of Engineers concluded that
using residential construction practices, similar to the practices used
to build apartment buildings, could achieve considerable cost
reductions without adversely impacting barracks' durability or
maintainability.[Footnote 13] The report included an additional example
comparing barracks built using traditional construction practices with
a residential condominium built using residential construction
practices. Specifically, the report cited an Army 1+1 barracks built in
fiscal year 2000 at Fort Leavenworth, Kansas. Each two-bedroom, bath,
and kitchenette module had 506 square feet and cost $193,000. During
this time frame, the construction cost of a 1,500 square foot
residential unit with two bedrooms, two baths, full kitchen, living
room, laundry room, and balcony in a new private condominium complex in
Maryland was $180,000. Although the condominium unit was almost three
times larger than the barracks module, it cost $13,000 less.
Army Revised Barracks Construction Guidance:
The Army revised its barracks construction guidance in recent years to
permit construction projects to be of any construction type, largely in
response to its analyses. When building barracks, the Army had been
following guidance in Military Handbook 1008C, which provides direction
on the design and construction of DOD facilities.[Footnote 14] The
handbook stated that construction of new buildings should be limited to
use of traditional barracks construction practices. However, in June
2000, the Army Corps of Engineers issued guidance that authorized Army
construction projects to be of any construction type as long as they
complied with the Uniform Building Code requirements for the
construction type used. Further, in a July 2002 memorandum, the Army
Vice Chief of Staff stated that use of less restrictive residential
practices in barracks construction would improve soldier quality of
life and provide better value to the Army. An enclosure to this
memorandum stated that, although Army barracks traditionally have been
designed in many cases to exceed industry codes and standards, such an
approach is not in the Army's best economic interests.
Fort Meade Barracks Project Is Army's First to Use Residential
Construction Practices:
A 1+1 barracks design project currently under construction at Fort
Meade, Maryland, is the Army's first barracks to be built using
residential construction practices. According to Army officials, the
project calls for eight new three-story barracks buildings with a total
of 576 private sleeping rooms. The project's initial design assumed use
of traditional construction practices. However, on the basis of this
design, the Army Corps of Engineers estimated that the project would
cost $48 million--about $11 million more than had been approved for the
project. In an effort to reduce construction costs, the Army decided to
redesign the project using multi-unit residential 1-hour fire resistive
construction practices. After the redesign and solicitation process,
the project was awarded for about $31 million. With the project 83
percent complete in January 2003, the Army Corps of Engineers estimated
that the final project cost--including supervision and overhead costs
and costs of changes and enhancements to the contracted design--would
be about $39 million. In addition, the project's estimated completion
date was about 8 months ahead of the contracted completion date of
January 2004.
In January 2003, we visited the Fort Meade barracks construction site.
Visually, we noted few differences in the appearance of these barracks
compared to traditional barracks. Figure 1 shows photographs of the
Fort Meade barracks project contrasted with a traditionally constructed
barracks at Langley Air Force Base, Virginia.
Figure 1: Photographs of the Fort Meade, Maryland, Barracks Project and
a Traditional Barracks at Langley Air Force Base, Virginia:
[See PDF for image]
[End of figure]
For a comparison with the Fort Meade project, we asked the Army for
cost data on two 1+1 barracks projects under construction at Fort
Bragg, North Carolina. One project is building 960 rooms using
traditional non-combustible construction practices and the other
project is building 608 rooms using traditional 1-hour fire resistive
construction practices. Compared to the Fort Bragg projects, it appears
that use of the residential construction practices in the Fort Meade
project will result in considerable cost reductions--from $12,600 to
$31,800 per occupant (see table 2).
Table 2: Cost Comparison of the Different Construction Practices at
Fort Meade, Maryland, and Fort Bragg, North Carolina:
Project: Fort Meade; Type of construction: Residential: 1-Hour Fire
Resistive; Cost per square foot: $113; Cost per occupant: $38,800.
Project: Fort Bragg 1; Type of construction: Traditional: 1-Hour Fire
Resistive; Cost per square foot: 136; Cost per occupant: 51,400.
Project: Fort Bragg 2; Type of construction: Traditional: Non-
Combustible; Cost per square foot: 193; Cost per occupant: 70,600.
Project: Range of cost reductions using residential construction
practices; Type of construction: [Empty]; Cost per square foot: $23 to
$80; Cost per occupant: $12,600 to $31,800.
Source: Department of the Army.
Note: The Army provided costs directly related to the barracks portion
of the projects and adjusted the costs to account for the differences
in construction time frames and geographic locations of the projects.
We estimated cost per occupant by multiplying the cost per square foot
by the project's gross square feet per occupant. The Fort Meade, Fort
Bragg 1, and Fort Bragg 2 projects provided 343, 378, and 366 gross
square feet per occupant, respectively.
[End of table]
Barriers Exist to Greater Use of Residential Construction Practices:
There are barriers to DOD's widespread adoption of residential
construction practices as a normal way of doing business. Because Army
studies and the pilot project at Fort Meade indicate the potential to
reduce some costs by using residential construction practices, it would
seem that the services would be eager to adopt these practices for all
future barracks construction projects. However, this has not been the
case due to concerns about barracks durability and concerns related to
antiterrorism force protection issues.
According to Army officials, the services have been reluctant to change
construction practices because of the concern that switching to
residential construction practices would result in barracks that are
less attractive and less durable. However, the officials noted that the
exterior appearance of barracks constructed with residential and
traditional practices normally would be the same. Also, Army analyses
indicate that there is little difference in durability with each type
of construction and a barrack's total costs over its lifetime would be
less if constructed with residential practices because of its lower
initial construction costs and comparable operations and maintenance
costs for many building components. (See app. III for additional
details.) Still, the officials stated that the idea of switching
construction practices continues to face resistance. Because of this,
even the Army had no definite plans, as of February 2003, for
additional barracks construction using residential construction
practices. The Air Force also had no plans to use residential
construction practices for its barracks projects. The Navy, which has
completed two barracks projects using residential construction
practices, has no additional barracks projects underway or planned
using these practices.[Footnote 15]
Another barrier to widespread adoption of residential construction
practices for barracks relates to unresolved questions on whether use
of these practices would result in barracks that fully complied with
new antiterrorism guidance for force protection. In July 2002, DOD
finalized guidance requiring military components to adhere to common
criteria and minimum construction standards to mitigate antiterrorism
vulnerabilities and terrorist threats.[Footnote 16] The standards seek
to minimize the likelihood of mass casualties from terrorist attacks
against DOD personnel in the buildings where they work and live.
As applied to barracks construction, two standards in the antiterrorism
force protection guidance are particularly important--standoff
distance and prevention of building collapse. Standoff distance refers
to the minimum distance that buildings should be situated from roads,
parking lots, trash containers, and an installation's perimeter.
According to the guidance, the easiest and least costly way to achieve
appropriate levels of protection against terrorist threats is to
incorporate sufficient standoff distance into project designs. In
situations where the standoff distance standards cannot be achieved
because land is unavailable, the guidance calls for building hardening
or other techniques to mitigate possible blast effects. According to
Army officials, because most barracks projects in the United States
could be situated to meet required standoff distances, use of
residential construction practices and compliance with this standard
would not be a problem in most instances. Navy officials, however,
stated that enough land to meet required standoff distances was not
available at many of its installations.
The DOD standard for preventing building collapse applies to buildings
of three or more stories and requires that they be designed with
provisions that permit the structure to sustain local damage without
the entire building collapsing. According to Army officials, questions
remain as to whether barracks built using residential practices would
comply with the collapse standard. They stated that the primary issue
is lack of engineering data. Most available building collapse
information addresses structural systems typical of taller buildings
that were not built using residential construction practices. Army
officials also stated that complying with the collapse standard using
residential barracks construction practices might not be a problem or
might be solved with inexpensive adjustments to construction
techniques. Designers do not have sufficient data on exactly what, if
anything, needs to be done to ensure compliance with the standard when
using residential construction practices.
At the same time, some Army officials also questioned whether the
collapse standard should apply to low-rise three-story barracks
buildings. They noted that industry design standards usually make a
distinction in structural requirements at four stories and above--not
at three stories and above as required by the collapse standard. They
further noted that today's 1+1 barracks design standard provides
relatively low occupancy densities that are more similar to family
housing which is exempt from the force protection requirements as long
as a family housing building contains no more than 12 family units.
Opportunities Exist to Make Better Use of Existing Barracks:
The services could minimize housing costs by ensuring full use of
existing barracks space. Having unused government-owned barracks spaces
and paying housing allowances at the same time wastes available
resources. Air Force and Army barracks instructions, however, do not
require installations to use all vacant space before authorizing
housing allowances for junior members to live off base.[Footnote 17]
Our review, as well as previous reviews by military service audit
groups, found that the lenient barracks utilization guidance, and in
some cases noncompliance with the guidance, resulted in installations
paying housing allowances when barracks vacancies existed. The services
could also reduce costs by identifying and eliminating excess barracks
infrastructure if they were to change their barracks occupancy
requirements and permit more junior members to live off base.
Army and Air Force Instructions Do Not Require Full Utilization of
Barracks Space:
Army instructions allow its installations to authorize junior members
to live off base with a housing allowance when barracks occupancy
reaches 95 percent. Air Force instructions only require that 90 percent
of an installation's available barracks spaces be used before
authorizing junior members to live off base with a housing allowance.
Prior to June 1998, the Air Force required 95-percent occupancy. Air
Force officials stated that the change was made to facilitate
flexibility and to help maintain unit integrity in barracks
assignments. To put these instructions in perspective, such policies,
if practiced in the private sector, would be the equivalent of the
owner of a private apartment complex turning away prospective tenants
even though 5 to 10 percent of the apartments were vacant--an action
not likely to happen if the owner is concerned about costs and
revenues. Further, allowing 5 to 10 percent of barracks spaces to go
unused appears contrary to the services' policies requiring that all
unmarried junior members live in the barracks as long as space is
available.
In contrast to Army and Air Force instructions, Navy and Marine Corps
instructions state that maximum practical occupancy should be achieved
before junior members are authorized to live off base with a housing
allowance. The Navy instruction specifically states that barracks
utilization should routinely approach 100 percent.
Actual Barracks Utilization Varied:
In view of the differences in the services' barracks utilization
guidance, we attempted to review barracks utilization and payment of
housing allowances for unmarried junior members in each of the
services. However, our analysis was limited to the Air Force and the
Marine Corps because only those services require their installations to
collect and centrally report barracks utilization data and the number
of members authorized to live off base. The Navy requires barracks
utilization reports, but the reports do not include the number of
members authorized to live off base. Army officials stated that
although utilization data is maintained by each installation, they had
eliminated central reporting requirements years ago in order to reduce
paperwork costs. With centralized data only available from the Air
Force and the Marine Corps, we focused our review on an analysis of
that information.
Many Air Force Barracks Rooms Were Vacant:
The Air Force reported an inventory of about 43,400 adequate permanent
party barracks rooms in the United States as of September 30, 2002.
Table 3 shows that on September 30, 2002, about 4,700 of these rooms
were diverted from normal use for maintenance and other reasons. Of the
remaining rooms, about 35,300, or 91 percent, were occupied and about
3,400 rooms, or 9 percent, were vacant. Among major Air Force
installations, the occupancy rates for the available barracks rooms
ranged from 100 percent at Minot Air Force Base, North Dakota, to 82
percent at Tinker Air Force Base, Oklahoma.
Table 3: Utilization of Air Force Permanent Party Barracks in the
United States as of September 30, 2002:
Total; Number of rooms[A]: 43,400; Percentage of total rooms: 100;
Percentage of net available rooms: [Empty].
Diverted for maintenance; Number of rooms[A]: 1,900; Percentage of
total rooms: 4; Percentage of net available rooms: [Empty].
Diverted for other reasons; Number of rooms[A]: 2,800; Percentage of
total rooms: 6; Percentage of net available rooms: [Empty].
Net available; Number of rooms[A]: 38,700; Percentage of total rooms:
89; Percentage of net available rooms: 100.
Occupied; Number of rooms[A]: 35,300; Percentage of total rooms: 81;
Percentage of net available rooms: 91.
Vacant; Number of rooms[A]: 3,400; Percentage of total rooms: 8;
Percentage of net available rooms: 9.
Source: Department of the Air Force.
[A] Numbers rounded. Rooms diverted for reasons other than maintenance
include 1,219 rooms set aside for temporary and student lodging, 527
rooms set aside to temporarily house members arriving at an
installation until they are assigned to a permanent room, 275 rooms set
aside for offices, 218 rooms set aside for storage, 60 rooms set aside
for training, and 507 rooms set aside for other miscellaneous reasons.
[End of table]
The Air Force also reported that as of September 30, 2002, it had
authorized about 24,100 unmarried junior servicemembers in pay grades
E1 through E4 to live off base with a housing allowance. We analyzed
this data to estimate the housing allowance funds that the Air Force
could potentially have prevented if members living off base had been
assigned to the vacant barracks rooms. To do this, we compared--on an
installation-by-installation basis--the number of junior
servicemembers living off base with a housing allowance to the number
of barracks vacancies on September 30, 2002. Our analysis showed that
the vacant barracks spaces could have accommodated about 2,900 of the
junior members who were living off base--suggesting a practice at
variance with the Air Force's stated policy of requiring E1 through E4
to live on base in barracks. Had these members been assigned to the
barracks, the Air Force potentially could have reduced its annual
housing allowance costs by about $20 million. Because the data used in
this analysis reflected barracks use on a single date, September 30,
2002, our analysis reflects results as of this single date. Also,
because barracks occupancy can change daily, results would have
differed if utilization data on another date had been used or if data
had been available to show daily utilization over a period of time.
Although Air Force instructions require that 90 percent of an
installation's available barracks spaces be used before authorizing
junior members to live off base, some Air Force installations
apparently were not in compliance with this guidance. For example, data
for Kirtland Air Force Base, New Mexico, indicated an 85-percent
occupancy rate with 105 vacancies and 392 junior members living off
base with a housing allowance. Similarly, data for McChord Air Force
Base, Washington, indicated an 86-percent occupancy rate with 101
vacancies, and 118 junior members living off base with a housing
allowance. Air Force officials noted that installation occupancy rates
are reported only twice a year and represent a snapshot in time. Thus,
to determine whether installations reporting less than 90-percent
occupancy were not complying with policy would require a detailed
installation level review of occupancy rates over a period of time and
the reasons why members living off base were allowed to do so. Air
Force officials also noted that Air Force commands are reminded on a
regular basis of the importance of complying with utilization policy
and making full use of their barracks.
Nearly All Marine Corps Barracks Were Occupied:
The Marine Corps data as of September 30, 2002, showed that barracks at
most Marine Corps installations were fully used. Of the few major
installations that reported less than 100-percent utilization, only one
also reported unmarried junior enlisted members living off base with a
housing allowance. In this instance, however, the installation reported
only three junior members with a housing allowance.
Audit Groups Have Reported Noncompliance with Utilization Guidance:
Previous reports from service audit groups also have noted that
noncompliance with existing guidance has resulted in installations
paying housing allowances when barracks vacancies existed. For example,
in a February 1999 report on barracks management at Langley Air Force
Base, Virginia, the Air Force Audit Agency stated that housing managers
did not require individual barracks to meet the occupancy goal before
authorizing members to live off base.[Footnote 18] The report also
stated that maintaining barracks occupancy rates above the Air Force
goal would provide direct savings to the Air Force budget. The Army
Audit Agency reported in January 1997 that Fort Benning, Georgia, had
authorized members to live off base even though barracks utilization
was below the Army goal of 95 percent.[Footnote 19] The report stated
that the unnecessary authorizations were issued because Fort Benning
decentralized barracks management to the unit level and did not make
sure that each unit fully used its barracks before authorizing members
to live off base with a housing allowance.
Changing Occupancy Requirements Could Reduce the Need for Barracks
Spaces:
While it is important to make full use of existing barracks space, it
is also important that the services maintain an inventory of barracks
spaces only in the numbers actually required. In our January 2003
report, we discussed the widely varying standards among the services
regarding who should live in barracks and the effect this can have on
program costs and quality of life and recommended that the services
review the rationale behind their barracks occupancy
requirements.[Footnote 20] DOD has left unclear the extent to which it
is likely to make changes in its barracks occupancy requirements.
However, if the services were to change their barracks occupancy
requirements and permit more junior members to live off base with a
housing allowance, then the services could reduce housing costs by
identifying and eliminating excess barracks infrastructure. To use the
Air Force case as an illustration, instead of bringing junior members
back on base to fill up barracks vacancies, the Air Force could
officially decide that many of these members should be allowed to
continue to live off base. This decision would reduce barracks needs
and the Air Force could then consider vacant barracks spaces as excess
infrastructure that could be eliminated to reduce costs.
Conclusions:
DOD and the services have not fully explored barracks privatization to
determine whether the concept could provide a better economic value to
the government than the use of military construction financing.
Although the services have separately studied the issues and unique
challenges associated with barracks privatization, DOD has largely
concentrated on family housing privatization and not on promoting a
coordinated, focused effort to address the challenges and develop pilot
project proposals to determine the overall feasibility and merits of
barracks privatization. Without more coordination of activities to
address the challenges associated with barracks privatization, efforts
might be duplicated and potential opportunities to optimize lessons
learned might be lost.
For several reasons, DOD and the military services have not taken
advantage of opportunities to potentially reduce their housing costs
for unmarried servicemembers through use of residential construction
practices in government-owned barracks construction and better
utilization of existing government-owned barracks. First, widespread
adoption of residential construction practices in building government-
owned barracks has been hampered because of concerns about barracks
durability and unanswered questions about the ability of wood-frame
barracks to meet all antiterrorism force protection requirements.
Without engineering studies to resolve these questions and, if
appropriate, adoption of residential construction practices, the
services could be spending more than is needed on barracks
construction. Second, lenient barracks utilization guidance--which in
some cases does not require full use of existing government-owned
barracks before authorizing housing allowances for junior members to
live off base--and limited enforcement of existing guidance have led in
some cases to the routine acceptance of less than maximum use of
barracks and the payment of housing allowances when vacancies exist.
The establishment of and compliance with guidance that requires maximum
use of required existing barracks--specifically, utilization that
routinely approaches 100 percent before unmarried junior members are
authorized housing allowances--could result in reducing the services'
housing costs for junior members. It is also important that the
services maintain an inventory of barracks spaces only in the numbers
actually required. If the services were to change their barracks
occupancy requirements based on their review of the requirements'
rationale and permit more junior members to live off base, then they
could also reduce costs by identifying and eliminating barracks space
that is no longer needed.
Recommendations for Executive Action:
To capitalize on opportunities for reducing housing costs for unmarried
servicemembers, we recommend that the Secretary of Defense direct the
Under Secretary of Defense for Acquisition, Technology and Logistics
to:
* Promote a coordinated, focused effort among the military services to
determine the feasibility and cost-effectiveness of barracks
privatization by addressing the associated challenges and facilitating
the development of pilot project proposals. This effort should support
the Navy's use of the pilot housing privatization authority provided to
the Navy in the Fiscal Year 2003 Bob Stump National Defense
Authorization Act, with lessons learned applied to the other services'
efforts.
* Direct the Army Corps of Engineers and the Naval Facilities
Engineering Command to jointly undertake an engineering study to
resolve questions about use of residential construction practices for
barracks and compliance with antiterrorism force protection
requirements.
* Direct the military services to adopt residential construction
practices for future barracks construction projects to the maximum
extent practical, providing that the engineering studies show that
barracks built with residential construction practices can economically
meet all force protection requirements.
* Issue guidance directing that the services maximize use of required
existing barracks space--defined as utilization that routinely
approaches 100 percent--before authorizing unmarried junior members to
live off base with a housing allowance.
* Direct the military services to identify and eliminate excess
barracks infrastructure if, by reviewing the rationale behind their
barracks occupancy requirements, they determine that more unmarried
junior members should be permitted to live off base with a housing
allowance.
Agency Comments and Our Evaluation:
In commenting on a draft of this report, the Director, Competitive
Sourcing and Privatization, fully agreed with four and partially agreed
with one of our recommendations and indicated that actions were
underway or planned to deal with most of them. DOD stated that it was
supportive of initiatives to energize barracks privatization and
planned to build on lessons learned from the Navy's pilot project to
encourage barracks privatization. DOD also stated that it supports the
study and use of commercial and residential construction standards and
use of the privatization authorities to improve the living conditions
for unaccompanied members as quickly as possible. In addition, it
stated that the Army Corps of Engineers has already begun a study of
residential construction methods and compliance with antiterrorism
force protection requirements using the Fort Meade barracks project as
a basis for the study. Further, as the first step to maximizing use of
existing barracks, programming for new barracks, and divesting of
excess infrastructure, DOD stated that the actual need for barracks
space must be determined by establishing a common requirements process
consistent with individual service missions.
DOD partially agreed with our recommendation to issue guidance
directing the services to maximize use of required existing barracks
space. DOD stated that barracks requirements must first be determined
before issuing such guidance. We agree that the services should
maintain an inventory of barracks spaces only in the numbers actually
required and that if the services were to reduce their barracks
occupancy requirements and permit more junior members to live off base,
then they could reduce costs by identifying and eliminating barracks
space that is no longer needed, as DOD suggests in its comments.
However, on the basis of their current barracks occupancy requirements
and construction plans, the services have individually determined that
most of their existing barracks spaces are needed. Unless stated
barracks occupancy requirements are reduced, we believe that these
spaces should be fully used before authorizing housing allowances for
junior members to live off base and that additional DOD guidance is
needed now to help achieve this. To do otherwise, results in having
unused government-owned barracks spaces and paying housing allowances
at the same time, which wastes available resources.
DOD's comments are included in appendix IV of this report.
As you know, 31 U.S.C. 720 requires the head of a federal agency to
submit a written statement of the actions taken on our recommendations
to the Senate Committee on Governmental Affairs and the House Committee
on Government Reform not later than 60 days after the date of this
report. A written statement must also be sent to the House and Senate
Committees on Appropriations with the agency's first request for
appropriations made more than 60 days after the date of this report.
We are sending copies of this report to the appropriate congressional
committees, and it will be available at no charge on GAO's Web site at
http://www.gao.gov. If you or your staff have any questions on the
matters discussed in this letter, please contact me at (202) 512-8412,
or my Assistant Director, Mark Little, at (202) 512-4673. Gary
Phillips, Jim Ellis, Sharon Reid, Harry Knobler, and R.K. Wild were
major contributors to this report.
Sincerely yours,
Barry W. Holman, Director Defense Capabilities and Management:
Signed by Barry W. Holman:
[End of section]
Appendix I: Scope and Methodology:
Our review of DOD's housing program for unmarried servicemembers
focused on enlisted members at their permanent assignment locations in
the United States--after the members completed recruit and advanced
individual training. We interviewed DOD and service headquarters
housing officials; reviewed applicable DOD and military service
policies and procedures; reviewed barracks improvement plans and
milestones; and visited selected installations to view barracks
conditions and discuss local management practices. Specifically, we
visited the Naval Station Norfolk, Virginia; Langley Air Force Base,
Virginia; Fort Eustis, Virginia; and Marine Corps Base Quantico,
Virginia.
To examine opportunities for reducing costs through barracks
privatization and the barriers to developing barracks privatization
project proposals, we examined the laws authorizing and funding the
program, reviewed DOD's experiences with family housing privatization,
interviewed DOD and service officials, and reviewed available
documentation to identify past efforts and current plans related to
barracks privatization. We also discussed privatization plans and
challenges with local officials at the installations visited and
discussed budget scoring issues for barracks privatization with
officials at the Office of Management and Budget.
To examine opportunities for reducing costs through adoption of
residential construction practices for barracks construction, we
reviewed Army studies and analyses in this area. We also obtained and
compared selected cost information for barracks constructed using
traditional practices and for barracks constructed using residential
practices. We did not attempt to validate this cost information.
Further, we interviewed service officials to discuss the services' use
of residential construction practices for barracks and to determine the
reasons why the concept has not been widely adopted. We also visited
Fort Meade, Maryland, to observe construction progress on the Army's
first barracks project that has incorporated residential construction
practices.
To examine opportunities for reducing costs through better utilization
of barracks, we reviewed the services' policies and instructions
related to barracks use, occupancy goals, and justification for
authorizing unmarried junior members to live off base with a housing
allowance. To determine whether greater use of barracks could reduce
housing allowance costs, we obtained and analyzed readily available
data showing the number of barracks vacancies and the number of junior
servicemembers living off base with a housing allowance on September
30, 2002. To estimate the potential cost reductions, we multiplied the
number of members who could have been assigned to the barracks
vacancies by the national average basic allowance for housing rate. We
also reviewed prior audit reports related to barracks utilization from
military service audit organizations.
We conducted our review between May 2002 and April 2003 in accordance
with generally accepted government auditing standards.
[End of section]
Appendix II: Photographs of Old and New Style Barracks and Quarters
Aboard Navy Ships:
The military services are replacing old barracks, where junior members
often share a sleeping room with one or two others and share a gang
latrine with occupants from several other rooms, with new barracks,
where in most cases junior members have a private sleeping room and
share a bath and kitchenette with one other member. The Navy's
"homeport ashore" initiative intends to provide barracks spaces on base
for junior members who are currently required to live in cramped
quarters aboard their ships even when their ships are in homeport.
During our visits to installations, we observed a variety of barracks
in conditions ranging from outdated to newly constructed. Figure 2
shows photographs of typical old and new style barracks.
Figure 2: Old and New Style Barracks at Fort Eustis, Virginia:
[See PDF for image]
[End of figure]
At the older barracks, we saw cramped living quarters, peeling paint,
damaged walls and ceilings, and poor heating, ventilation, and air
conditioning systems. On board ship, the space was cramped. Some
examples of the living quarters and gang latrines in old style barracks
and aboard ship are shown in figure 3.
Figure 3: Typical Living Quarters and Gang Latrines in Old Style
Barracks and Aboard Ship:
[See PDF for image]
[End of figure]
In contrast, we observed several newly constructed barracks that
provided living quarters using the 1+1 barracks design standard. Some
examples of the bedrooms, shared baths, and shared kitchenettes are
shown in figure 4.
Figure 4: Typical Living Quarters in New Style Barracks:
[See PDF for image]
[End of figure]
[End of section]
Appendix III: Details on Cost Differences in Barracks Built with
Residential and Traditional Construction Practices:
Compared to traditional steel frame, concrete, and cement block
construction, Army analyses show that use of residential construction
can reduce typical barracks construction costs by 23 percent or more.
Army analyses also indicate that a barrack's total costs over its
lifetime--i.e., initial construction costs and annual operations and
maintenance costs--would be less if constructed with residential
practices. The lower "life-cycle costs" from use of residential
construction practices results not only from the lower initial
construction costs, but also from comparable operations and maintenance
costs for many building components regardless of the type of
construction practices used--traditional or residential. Use of
residential construction practices to build barracks could also reduce
renovation costs and result in additional cost reductions in labor
construction costs.
Army officials noted that actual differences in barracks operations and
maintenance costs are dependent on the particular building designs. In
general, however, the officials stated that there should be no
significant operations and maintenance cost differences with use of
either traditional or residential construction practices in many
architectural features, such as exterior and interior finishes,
electrical and plumbing systems, doors and hardware, and windows. For
other building components, such as roofs and heating, ventilation, and
air conditioning systems, operations and maintenance costs could be
lower with traditional construction. But, because of the lower initial
construction costs, use of residential construction practices for such
components could still result in lower costs over the life of the
barracks. For example, the roof system for many traditionally
constructed barracks consists of metal and concrete that would normally
last for the entire life of the barracks. When using residential
construction practices, the barracks roof system would normally consist
of heavy-duty shingles that would require replacement during the life
of the barracks. Yet, Army analyses show that a shingle roof system
would have lower life-cycle costs than a metal and concrete roof system
because of its lower initial construction costs.
Army officials also noted that use of residential construction
practices for barracks would result in buildings that could be
renovated at lower costs than traditionally constructed barracks. They
stated that many military buildings, including barracks, become
functionally obsolete in 25 years or less because of changed missions
or design standards, such as the change in the barracks design standard
in 1995 from multi-person to private sleeping rooms. The costs to
renovate and reconfigure a traditionally constructed barracks with
masonry interior walls would normally be greater than the costs to
renovate and reconfigure a barracks built with residential construction
practices using wood frame and sheetrock walls.
According to Army officials, use of residential construction practices
to build barracks could result in additional reductions in construction
labor costs. Federal statutes, commonly referred to as the Davis-Bacon
Act and related legislation, require that workers on most government
construction projects be paid according to the prevailing local wage
rates as determined by the Department of Labor. However, there are
different prevailing local wage rate scales depending on the type of
construction being performed. Traditionally, barracks construction has
been considered commercial construction and the commercial wage rate
scale has been used for these projects. In contrast, military family
housing construction has been considered residential construction and
the residential wage rate scale has been used for these projects.
According to Army officials, the residential wage rate scale is
normally 5 to 30 percent less than the commercial wage rate scale.
Thus, using residential construction practices in a low-rise (three
stories or less) barracks construction project and application of the
residential, instead of commercial, wage rate scale, could result in
additional reductions in barracks construction costs.
[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 United States General Accounting
Office Washington, DC 20548:
MAY 27 2003:
Dear Mr. Holman:
This is the Department of Defense (DoD) response to the GAO draft
report, GAO-03-602, "MILITARY HOUSING: Opportunities That Should Be
Explored to Improve Housing and Reduce Costs for Unmarried Junior
Servicemembers," dated April 17, 2003 (GAO Code 350215).
The Department has reviewed the draft report and concurs with
recommendations 1, 2, 3, and 5. We believe the Military Services are
aggressively and efficiently managing their housing infrastructure to
eliminate all inadequate barracks. The Department supports their
efforts to
study and use commercial and residential construction standards and use
barracks privatization authorities to improve the living conditions for
unaccompanied members as quickly as possible.
The Department partially concurs with recommendation 4 - to issue
guidance to direct maximum use of the required existing barracks spaces
before allowing single junior members to live off base with a housing
allowance. While DoD supports the optimal use of existing barracks
spaces, the actual requirement for barracks space must first be
established before issuing guidance mandating assignment of
unaccompanied service members to on base housing. Otherwise, DoD could
maintain and operate barracks spaces that may be in excess to our
requirements. The more appropriate course of action would be to
demolish excess barracks spaces.
Enclosed are the Department's specific responses to the
recommendations. Thank you for the opportunity to provide comments on
the draft report. My point of contact for this action is Ms. Phyllis
Newton. She can be reached at (703) 614-5356.
Sincerely,
Joseph K. Sikes:
Director, Competitive Sourcing and Privatization:
Signed by Joseph K. Sikes:
Attachment: As stated:
GAO-03-602/GAO CODE 350215:
"MILITARY HOUSING: OPPORTUNITIES THAT SHOULD BE EXPLORED TO IMPROVE
HOUSING AND REDUCE COSTS FOR UNMARRIED JUNIOR SERVICEMEMBERS":
DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATIONS:
RECOMMENDATION 1: The GAO recommended that the Secretary of Defense
direct the Under Secretary of Defense for Acquisition, Technology, and
Logistics to promote a coordinated, focused effort among the Military
Services to determine the feasibility and cost-effectiveness of
barracks privatization by addressing the associated challenges and
facilitating the development of pilot project proposals. This effort
should support the Navy's use of the pilot housing privatization
authority provided to the Navy in the Fiscal Year 2003 Bob Stump
National Defense Authorization Act, with lessons learned applied to the
other Services' efforts. (Page 31/Draft Report):
DoD RESPONSE: Concur. Like family housing, there are common issues that
affect all Services with respect to barracks privatization. DoD has
been very receptive and extremely supportive of a number of initiatives
to energize barracks privatization efforts amongst the Services. We
have worked with the Department of the Navy in their efforts in this
regard and plan to build on the lessons learned from their pilot
project to encourage barracks privatization in all the Military
Services.
RECOMMENDATION 2: The GAO recommended that the Secretary of Defense
direct the Under Secretary of Defense for Acquisition, Technology, and
Logistics to direct the Army Corps of Engineers and the Naval
Facilities Engineering Command to jointly undertake an engineering
study to resolve questions about use of residential construction
practices for barracks and compliance with antiterrorism force
protection requirements. (Page 31/Draft Report):
DoD RESPONSE: Concur. The Army Corps of Engineer, Omaha District
Protective Design Center, is currently conducting a study of the Fort
Meade barracks to determine if they meet the progressive collapse
requirements for antiterrorism/force protection. That study could
possibly form the basis for a more comprehensive review of residential
construction practices for barracks. and associated cost and benefits.
RECOMMENDATION 3: The GAO recommended that the Secretary of Defense
direct the Under Secretary of Defense for Acquisition, Technology, and
Logistics to direct the Military Services to adopt residential
construction practices for future barracks construction projects to the
maximum extent practical, providing that the engineering studies show
that barracks built with residential construction practices can
economically meet all force protection requirements. (Page 31/Draft
Report):
DoD RESPONSE: Concur. Consistent with our response to Recommendation 2,
the study should be completed and results validated first before
determining what direction should be taken.
RECOMMENDATION 4: The GAO recommended that the Secretary of Defense
direct the Under Secretary of Defense for Acquisition, Technology, and
Logistics to issue guidance directing that the Services maximize use of
required existing barracks space - defined as utilization that
routinely approaches 100 percent - before authorizing unmarried junior
members to live off base with a housing allowance. (Page 31/Draft
Report):
DoD RESPONSE: Partially concur. While DoD supports the optimal use of
existing barracks spaces, the actual requirement for barracks space
must first be established before issuing guidance mandating assignment
of unaccompanied service members to on base housing. Otherwise, DoD
could maintain and operate barracks spaces that may be in excess to our
requirements. The more appropriate course of action would be to
demolish or divest of excess barracks spaces as noted in response to
Recommendation 5.
RECOMMENDATION 5: The GAO recommended that the Secretary of Defense
direct the Under Secretary of Defense for Acquisition, Technology, and
Logistics to direct the Military Services to identify and eliminate
excess barracks infrastructure if, by reviewing the rationale behind
their barracks occupancy requirements, they determine that more
unmarried junior members should be permitted to live off base with a
housing allowance. (Page 32/Draft Report):
DoD RESPONSE: Concur. As noted in the previous recommendation,
establishing a common requirements process for barracks, consistent
with individual Service missions, is the first step to maximizing use
of existing assets, programming for new needs, and divesting of excess
infrastructure.
FOOTNOTES
[1] For reasons of unit cohesion, the Marine Corps plans to provide
barracks rooms shared by two junior enlisted members.
[2] The National Defense Authorization Act for Fiscal Year 1996 (P.L.
104-106), Feb. 10, 1996. The "alternative authority for construction
and improvement" (i.e., the military housing privatization program)
provided in this legislation was to expire 5 years after the date of
enactment on February 10, 2001. However, authority for the program was
first extended by the National Defense Authorization Act for Fiscal
Year 2001 (P.L. 106-398), Oct. 30, 2000, from February 10, 2001, to
December 31, 2004. Subsequently, the authority for the program was
extended by the National Defense Authorization Act for Fiscal Year 2002
(P.L. 107-107), Dec. 20, 2001, from December 31, 2004, to December 31,
2012.
[3] The National Defense Authorization Act for Fiscal Year 1996 (P.L.
104-106), Feb. 10, 1996.
[4] Each privatization contract that DOD enters into must be scored for
budget purposes. Scoring seeks to determine the cost that should be
recognized and recorded as an obligation of DOD at the time the
contract is signed. The Office of Management and Budget's Circular A-11
provides guidelines on how obligations should be recorded in the
budget. The guidelines are designed to ensure that the budget records
the full amount of the government's commitments when a commitment is
made.
[5] In February 2003, the Congressional Budget Office issued a report,
The Budgetary Treatment of Leases and Public/Private Ventures, on
budget scoring. The office concluded that (1) DOD's family housing
privatization projects have been treated in the budget in a manner
inconsistent with federal budgeting principles that require federal
financial commitments to be recognized up front in the budget, and (2)
military housing privatization projects that result in the construction
of family housing on military bases should be reflected in the budget
as if they were investments. This would require the up-front scoring
including the value of the rental payments that will be made over the
life of the project. The report also noted that the Office of
Management and Budget disagrees with this view because DOD may have
little, if any, equity ownership in privatized housing, DOD may not be
legally liable for the projects' debts, and the rental payments are
made by individual servicemembers. The report made no recommendations,
stating that the report's purpose was to identify the challenges that
financing federal projects through leases and public/private ventures,
such as the military housing privatization program, pose for
congressional control over spending as well as for the transparency of
the budget and its ability to facilitate cost-effective investment
decisions.
[6] U.S. General Accounting Office, Military Housing: Privatization Off
to a Slow Start and Continued Management Attention Needed, GAO/
NSIAD-98-178 (Washington, D.C.: July 17, 1998).
[7] U.S. General Accounting Office, Military Housing: Status of the
Services' Implementation of the Current Barracks Design Standard, GAO/
NSIAD-99-52 (Washington, D.C.: Mar. 24, 1999).
[8] U.S. General Accounting Office, Military Housing: Continued
Concerns in Implementing the Privatization Initiative, GAO/NSIAD-00-71
(Washington, D.C.: Mar. 30, 2000).
[9] U.S. General Accounting Office, Military Housing: DOD Needs to
Address Long-Standing Requirements Determination Problems, GAO-01-889
(Washington, D.C.: Aug. 3, 2001).
[10] U.S. General Accounting Office, Military Housing: Management
Improvements Needed As the Pace of Privatization Quickens, GAO-02-624
(Washington, D.C.: June 21, 2002).
[11] U.S. General Accounting Office, Military Housing: Opportunity for
Reducing Planned Military Construction Costs for Barracks, GAO-03-257R
(Washington, D.C.: Jan. 7, 2003).
[12] The Bob Stump National Defense Authorization Act for Fiscal Year
2003 (P.L. 107-314), Dec. 2, 2002.
[13] U.S. Department of the Army, Report on the Barracks Mid-Program
Review (Washington, D.C.: Feb. 2, 2001).
[14] U.S. Department of Defense, Military Handbook: Fire Protection For
Facilities Engineering, Design, And Construction, Military Handbook
1008C (Washington, D.C.: June 10, 1997). Because the handbook provided
an exception for Navy and Marine Corps barracks, the handbook's
requirements for barracks construction applied only to the Army and the
Air Force.
[15] The Navy used residential construction practices to build barracks
projects at Naval Air Station Brunswick, Maine, and Naval Station
Newport, Rhode Island. Compared to the use of traditional construction
practices, Navy officials stated that the use of residential
construction practices reduced the cost per occupant by about one-
third.
[16] U.S. Department of Defense, Unified Facilities Criteria: DOD
Minimum Antiterrorism Standards For Buildings, UFC 4-010-01
(Washington, D.C.: July 31, 2002).
[17] Service instructions also permit installation commanders to
authorize junior members to live off base with a housing allowance for
certain reasons other than lack of barracks space, such as for personal
hardship reasons or for members with extensive household goods.
[18] U.S. Air Force Audit Agency, Installation Report of Audit:
Dormitory Management 1st Fighter Wing, Langley Air Force Base,
Virginia, EL099036 (Langley Air Force Base, Va.: Feb. 3, 1999).
[19] U.S. Army Audit Agency, Space Utilization: U.S. Army Infantry
Center and Fort Benning, Georgia, AA 97-97, (Alexandria, Va.: Jan. 6,
1997).
[20] See GAO-03-257R.
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