Military Base Closures
Updated Status of Prior Base Realignments and Closures Gao ID: GAO-05-138 January 13, 2005As the Department of Defense (DOD) prepares for the 2005 base realignment and closure (BRAC) round, questions continue to be raised about the transfer and environmental cleanup of unneeded property arising from the prior four BRAC rounds and their impact on cost and savings and on local economies. This report, which is being issued to the defense authorization committees that have oversight responsibility over defense infrastructure, describes DOD's progress in implementing prior BRAC postclosure actions. It addresses (1) the transfer of unneeded base property to other users, (2) the magnitude of the net savings accruing from the prior rounds, (3) estimated costs for environmental cleanup of BRAC property, and (4) the economic recovery of communities affected by base closures.
As of September 30, 2004, DOD had transferred about 72 percent of 504,000 acres of unneeded BRAC property to other entities. This amount represents an increase over the 42 percent that GAO previously reported in April 2002 and is primarily attributable to two large property transfers. When leased acreage is added to the transferred property, the amount of unneeded BRAC property in reuse rises to 90 percent. Transfer of the remaining acreage has been delayed primarily because of environmental cleanup requirements. DOD data show that the department had generated an estimated $28.9 billion in net savings or cost avoidances from the prior BRAC rounds through fiscal year 2003 and expects to save about $7 billion each year thereafter. These savings reflect money that DOD would likely have spent to operate military bases had they remained open. Although the savings are substantial, GAO found that the estimates are imprecise because the military services have not updated them regularly despite GAO's prior reported concerns on this issue. This issue needs to be addressed in the 2005 round. Further, the estimates do not reflect all BRAC-related costs, such as $1.9 billion incurred by DOD and other federal agencies for redevelopment assistance. While estimated costs for environmental cleanup at BRAC sites remain within the range of prior estimates, these costs may increase if unknown or undetermined future cleanup liabilities, such as additional unexploded ordnance or other harmful contaminants, emerge. Through fiscal year 2003, DOD had spent about $8.3 billion on BRAC environmental cleanup. It expects to spend another $3.6 billion to complete the cleanup work. While most nearby communities have recovered or continue to recover from base closures, they, as well as other communities, have felt some impact from the recent economic downturn where the strength of the national, regional, or local economy can affect recovery efforts. Yet, key economic indicators--unemployment rates and average annual real per capita income growth rates--show that BRAC communities are generally faring well when compared with average U.S. rates. Of 62 communities that GAO studied, 69 percent had unemployment rates equal to or lower than the U.S. average and 48 percent had income growth rates higher than the national average.
GAO-05-138, Military Base Closures: Updated Status of Prior Base Realignments and Closures
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
January 2005:
Military Base Closures:
Updated Status of Prior Base Realignments and Closures:
GAO-05-138:
GAO Highlights:
Highlights of GAO-05-138, a report to congressional committees:
Why GAO Did This Study:
As the Department of Defense (DOD) prepares for the 2005 base
realignment and closure (BRAC) round, questions continue to be raised
about the transfer and environmental cleanup of unneeded property
arising from the prior four BRAC rounds and their impact on cost and
savings and on local economies.
This report, which is being issued to the defense authorization
committees that have oversight responsibility over defense
infrastructure, describes DOD‘s progress in implementing prior BRAC
postclosure actions. It addresses (1) the transfer of unneeded base
property to other users, (2) the magnitude of the net savings accruing
from the prior rounds, (3) estimated costs for environmental cleanup of
BRAC property, and (4) the economic recovery of communities affected by
base closures.
What GAO Found:
As of September 30, 2004, DOD had transferred about 72 percent of
504,000 acres of unneeded BRAC property to other entities. This amount
represents an increase over the 42 percent that GAO previously reported
in April 2002 and is primarily attributable to two large property
transfers. When leased acreage is added to the transferred property,
the amount of unneeded BRAC property in reuse rises to 90 percent.
Transfer of the remaining acreage has been delayed primarily because of
environmental cleanup requirements.
Disposition of Unneeded BRAC Acreage:
[See PDF for image]
[End of figure]
DOD data show that the department had generated an estimated $28.9
billion in net savings or cost avoidances from the prior BRAC rounds
through fiscal year 2003 and expects to save about $7 billion each year
thereafter. These savings reflect money that DOD would likely have
spent to operate military bases had they remained open. Although the
savings are substantial, GAO found that the estimates are imprecise
because the military services have not updated them regularly despite
GAO‘s prior reported concerns on this issue. This issue needs to be
addressed in the 2005 round. Further, the estimates do not reflect all
BRAC-related costs, such as $1.9 billion incurred by DOD and other
federal agencies for redevelopment assistance.
While estimated costs for environmental cleanup at BRAC sites remain
within the range of prior estimates, these costs may increase if
unknown or undetermined future cleanup liabilities, such as additional
unexploded ordnance or other harmful contaminants, emerge. Through
fiscal year 2003, DOD had spent about $8.3 billion on BRAC
environmental cleanup. It expects to spend another $3.6 billion to
complete the cleanup work.
While most nearby communities have recovered or continue to recover
from base closures, they, as well as other communities, have felt some
impact from the recent economic downturn where the strength of the
national, regional, or local economy can affect recovery efforts. Yet,
key economic indicators”unemployment rates and average annual real per
capita income growth rates”show that BRAC communities are generally
faring well when compared with average U.S. rates. Of 62 communities
that GAO studied, 69 percent had unemployment rates equal to or lower
than the U.S. average and 48 percent had income growth rates higher
than the national average.
What GAO Recommends:
Although GAO is making no recommendations in this report, it believes
its prior recommendation on the need for a DOD-wide systematic approach
for updating savings estimates for the 2005 round, along with an
oversight mechanism to ensure that updates are accomplished, remains
valid.
DOD provided technical comments on a draft of this report and concurred
with the need to improve accounting for savings from the 2005 BRAC
round.
www.gao.gov/cgi-bin/getrpt?GAO-05-138.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Barry W. Holman at (202)
512-8412 or holmanb@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Most Unneeded BRAC Property Had Been Transferred:
BRAC Net Savings Are Substantial but Imprecise:
Environmental Cleanup Cost Estimates Have Remained Near Prior Projected
Estimates but May Change:
Most Communities Have Recovered or Are Recovering from the Economic
Impact of BRAC:
Concluding Observations:
Agency Comments:
Appendix I: Scope and Methodology:
Appendix II: Civilian Jobs Lost and Created at Major BRAC
Locations during the Prior Four BRAC Rounds:
Appendix III: Average Unemployment Rates of BRAC-Affected Areas
Compared with the U.S. Average Rate:
Appendix IV: Average Annual Real Per Capita Income Growth
Rates of BRAC-Affected Areas Compared with the U.S. Average Rate:
Appendix V: Comments from the Department of Defense:
Appendix VI: Key Prior GAO Reports on DOD's Base
Realignments and Closures:
Appendix VII: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Projected Future Environmental Cleanup Costs for Selected BRAC
Installations (Fiscal Year 2004 and Beyond):
Table 2: Major Transfers of BRAC Property by Service (as of September
30, 2004):
Table 3: Civilian Jobs Lost and Created at Major BRAC Locations (as of
October 31, 2003):
Figures:
Figure 1: DOD's Usual Procedures for Transferring Property:
Figure 2: BRAC Property Transfers as Reported in 2002 and 2004:
Figure 3: Disposition of Unneeded BRAC Acreage:
Figure 4: Methods Used to Transfer Unneeded BRAC Acreage to Nonfederal
Entities:
Figure 5: Cumulative BRAC Cost and Savings Estimates for the Prior
Rounds through Fiscal Year 2003:
Figure 6: Costs Incurred for Prior BRAC Rounds through Fiscal Year
2003:
Figure 7: Estimated Savings Breakout for Prior BRAC Rounds through
Fiscal Year 2003:
Figure 8: Comparison of the Percentage of BRAC-Affected Communities at
or below the Average National Unemployment Rate over Time:
Figure 9: Comparison of 2004 Unemployment Rates of 24 BRAC-Affected
Locations West of the Mississippi River with the U.S. Rate:
Figure 10: Comparison of 2004 Unemployment Rates of 38 BRAC-Affected
Locations East of the Mississippi River with the U.S. Rate:
Figure 11: Comparison of Average Annual Real Per Capita Income Growth
Rates of 24 BRAC-Affected Locations West of the Mississippi River with
the U.S. Rate (1999-2001):
Figure 12: Comparison of Average Annual Real Per Capita Income Growth
Rates of 38 BRAC-Affected Locations East of the Mississippi River with
the U.S. Rate (1999-2001):
Abbreviations:
BRAC: base realignment and closure:
CERCLA: Comprehensive Environmental Response, Compensation, and
Liability Act:
DERP: Defense Environmental Restoration Program:
DOD: Department of Defense:
MEC: munitions and explosives of concern:
USARSO: U.S. Army South:
USFWS: U.S. Fish and Wildlife Service:
UXO: unexploded ordnance:
United States Government Accountability Office:
Washington, DC 20548:
January 13, 2005:
The Honorable John W. Warner:
Chairman:
The Honorable Carl Levin:
Ranking Minority Member:
Committee on Armed Services:
United States Senate:
The Honorable Duncan L. Hunter:
Chairman:
The Honorable Ike Skelton:
Ranking Minority Member:
Committee on Armed Services:
House of Representatives:
While the Department of Defense (DOD) is currently preparing for the
2005 base realignment and closure (BRAC) round, it continues its work
on completing actions, such as the environmental cleanup and transfer
of unneeded property, arising from the base realignments and closures
from the 1988, 1991, 1993, and 1995 rounds. By the end of the 6-year
implementation period[Footnote 1] of the last round in fiscal year
2001, the department had significantly reduced its domestic
infrastructure through the realignment and closure of hundreds of bases
in these rounds and had reportedly generated billions in net savings or
cost avoidances during the process. Although these closure and
realignment actions have been completed, DOD continues the process of
cleaning up environmentally contaminated former base sites and
transferring unneeded property to other users; questions continue to be
raised concerning progress with these actions as well as cost and
savings estimates for these rounds. At the same time, the communities
surrounding the former defense bases have often faced long-term
challenges in the economic recovery process arising out of these prior
closure rounds.
This report is the third in a series of reports that details the
progress DOD has made in implementing the closures and realignments in
the prior BRAC rounds. We performed our work on the basis of the
authority of the Comptroller General to evaluate U.S. governmental
programs[Footnote 2] and are reporting the results to you because of
your oversight role of DOD's infrastructure and the BRAC initiative. In
our last update in 2002,[Footnote 3] we concluded that most former
unneeded base properties had not yet been transferred to other users,
the closure process was generating substantial savings (although the
savings estimates were imprecise), the total expected environmental
cleanup costs were still within range of the cost estimates made in
1996, and most communities surrounding closed bases were faring well
economically in relation to key national economic indicators. In this
report we updated those findings by addressing (1) DOD's progress in
transferring unneeded base property to other users, (2) the magnitude
of the estimated net savings accruing from the prior four BRAC rounds,
(3) DOD's costs to date and estimated future costs for environmental
cleanup on former base property, and (4) the economic recovery of
communities affected by base closures.
To update this information, we compared recent data on overall property
transfers, BRAC costs and savings, environmental cleanup costs, and key
economic indicators for BRAC-affected communities with previously
reported data. In performing our work, we also interviewed DOD and
military service officials to clarify issues and obtain additional
documentation. We determined that the data we received from DOD and
other government agencies were sufficiently reliable for meeting our
reporting objectives. We conducted our work between November 2003 and
October 2004 in accordance with generally accepted government auditing
standards. Further details on the scope and methodology are described
in appendix I.
Results in Brief:
As of September 30, 2004, DOD data show that about 72 percent (about
364,000 acres) of the approximately 504,000 acres of unneeded BRAC
property from the prior four rounds had been transferred to other
federal and nonfederal entities,[Footnote 4] representing an increase
over the 42 percent transfer rate that we reported in April 2002. The
increase is primarily attributable to large property transfers at two
bases. When leased acreage is added to property that has already been
transferred, the amount of unneeded BRAC property that is in reuse
rises to 90 percent. However, leased property is not permanently
transferred, and many parcels have pending cleanup actions or other
issues to resolve before permanent transfer can take place. About
140,000 acres have not yet been transferred, primarily because of
delays resulting from environmental cleanup requirements, which DOD is
obligated to address to assure that former base property is cleaned up
to a level safe for its intended reuse. The military is working closely
with communities impacted by BRAC to expedite the transfer and reuse of
the remaining unneeded former base property.
Based on our analysis of DOD data, the department had generated
substantial net estimated savings (estimated total savings minus costs)
of about $28.9 billion through fiscal year 2003 from the prior four
closure rounds, and it expects to save about $7 billion annually
thereafter. Our work has shown that these savings actually reflect cost
avoidances, that is, money that DOD would likely have needed to operate
BRAC bases had they remained open. At the same time, our reviews have
found that the savings estimates are imprecise and are rough
approximations of the likely savings, in part because the military
services have not regularly updated their estimates over time and
because DOD's accounting systems are not oriented toward identifying
and tracking savings. Because the implementation of BRAC actions may
vary from the original plans, we expressed concern in prior reports
regarding the need for periodically updating savings estimates to
provide more accurate reports for DOD and congressional decision
makers. In addition, imprecision exists because some costs associated
with BRAC, including about $1.9 billion incurred by DOD and other
federal agencies for redevelopment assistance, are not reflected in the
savings estimates while some other costs attributed to BRAC, such as
environmental cleanup, may have occurred had the bases remained open.
While estimated environmental cleanup costs at BRAC sites have not
changed significantly from prior reported estimates, they are still
subject to some fluctuations because of unknown or undetermined future
cleanup liabilities or improved cleanup techniques. According to DOD
data, the department had spent about $8.3 billion on environmental
cleanup at BRAC sites through fiscal year 2003, and it estimates
spending an additional $3.6 billion to complete its cleanup work in
future years, for an overall estimated total of $11.9 billion. The
estimated liability for fiscal year 2004 and beyond is about $1 billion
less than DOD previously projected for fiscal year 2003 and beyond. The
decrease is attributable primarily to DOD spending about $761 million
in fiscal year 2003 for environmental cleanup and further refinement of
estimates at various BRAC locations.
While some communities surrounding closed bases are faring better than
others, most have recovered or are continuing to recover from the
impact of BRAC, with more mixed results recently, allowing for some
negative impact from the economic downturn nationwide in recent years.
DOD data show that almost 72 percent of local DOD civilian jobs that
were lost on bases as a result of realignments and closures have been
replaced. Two key economic indicators--the unemployment rate and the
average annual real per capita income growth rate--show that BRAC
communities are generally doing well when compared with average U.S.
rates. Unemployment rates for BRAC-affected communities have
consistently compared favorably with the national average since the
first round in 1988. Since 2002, given the economic downturn
nationwide, almost all of the 62 communities we reviewed experienced
increased unemployment, although 69 percent had average unemployment
rates equal to or lower than the U.S. rate, as compared to 71 percent
in 2002. Just under half (48 percent) of these communities had average
real per capita income growth rates higher than the U.S. rate for the
reporting period 1999-2001. For the reporting period 1996-1999
discussed in our last report, just over half (53 percent) had growth
rates higher than the national average. Still, as compared to 2002, the
per capita income growth rates decreased for almost 75 percent of all
BRAC-affected communities. As we have reported in the past, the
recovery process has not necessarily been easy with the strength of the
national, regional, and local economies having a significant bearing on
the recovery of any particular community facing a BRAC closure.
Although we are making no recommendations in this report, we believe
that our prior recommendation in April 2002 regarding the need for a
DOD-wide systematic approach for the periodic updating of savings
estimates for the 2005 round, along with an oversight mechanism to
ensure these updates are accomplished, remains valid. While DOD has
stated its intent to do so, it has not developed such an approach to
date. In commenting on a draft of this report, DOD concurred with the
need to improve the department's procedures for accounting for savings
from the 2005 BRAC round.
Background:
To enable DOD to close unneeded bases and realign others, Congress
enacted legislation that instituted BRAC rounds in 1988, 1991, 1993,
and 1995.[Footnote 5] A special commission established for the 1988
round made realignment and closure recommendations to the Senate and
House Committees on Armed Services. For the 1991, 1993, and 1995
rounds, special BRAC Commissions were set up, as required by
legislation, to make specific recommendations to the President, who in
turn sent the commissions' recommendations and his approval to
Congress. The four commissions generated 499 recommendations--97 major
closures and hundreds of smaller base realignments, closures, and other
actions.[Footnote 6] Of the 499 recommendations, 451 required action;
the other 48 were modified in some way by a later commission. DOD was
required to complete BRAC realignment and closure actions for the 1988
round by September 30, 1995, and for the 1991, 1993, and 1995 rounds
within 6 years from the date the President forwarded the recommended
actions to Congress. DOD reported that as of September 30, 2001, it had
taken all necessary actions to implement the recommendations of the
BRAC Commissions for the four rounds.[Footnote 7] As a result, DOD
estimated that it had reduced its domestic infrastructure by about
20 percent.
While DOD has closed or realigned bases as recommended by the various
BRAC Commissions, other actions, such as the cleanup of environmentally
contaminated property and the subsequent transfer of unneeded property
to other users, were allowed to continue beyond the 6-year
implementation period for each round. Once DOD no longer needs BRAC
property, the property is considered excess and is offered to other
federal agencies. As shown in figure 1, any property that is not taken
by other federal agencies is then considered surplus and is disposed of
through a variety of means to state and local governments, local
redevelopment authorities,[Footnote 8] or private parties.
Figure 1: DOD's Usual Procedures for Transferring Property:
[See PDF for image]
[End of figure]
The various methods as noted in figure 1 to convey unneeded property to
parties external to the U.S. government are targeted, in many cases, to
a particular end-use for the property. For example, under a public
benefit conveyance, state and local governments and local redevelopment
authorities acquire surplus DOD property for such purposes as schools,
parks, and airports for little or no cost. Under an economic
development conveyance, property is transferred for uses that promote
economic recovery and job creation. Conservation conveyances, which
were recently introduced in the Bob Stump National Defense
Authorization Act for Fiscal Year 2003,[Footnote 9] provide for the
transfer of property to qualified not-for-profit groups for natural
resource and conservation purposes. Property can, in other cases, also
be conveyed to nonfederal parties through the other cited methods as
shown in figure 1 without regard, in many cases, to a particular end-
use. Property can, for example, be sold or special congressional
legislation can dictate transfer to a particular entity.
In the early years of BRAC, DOD was projecting higher revenue from
land sales than it subsequently experienced. DOD had originally
projected about $4.7 billion in revenue from such sales for the four
closure rounds; however, according to the fiscal year 2005 budget,
total land sales and related revenue were about $595 million for those
rounds. The decrease in expected sales is attributable primarily to
national policy changes and legislation that emphasize assisting
communities that are losing bases. Nonetheless, in recent years the
Navy has expressed a renewed interest in the sale of BRAC property with
the sale of some unneeded property at the former Tustin Marine Corps
Air Station in California for $208.5 million. Moreover, the Navy has
also indicated that it intends to sell portions of the former Naval
Station Roosevelt Roads[Footnote 10] in Puerto Rico. To what extent
sales will play more of a role in disposing of unneeded property
arising from the 2005 BRAC round remains to be seen.
Reducing excess infrastructure and generating savings for the
department were the key reasons for conducting the prior BRAC rounds.
The net savings for implementing BRAC actions are arrived at by
deducting the costs necessary to implement those actions from the
estimated savings generated by the resulting reduction in excess
infrastructure. These savings are most often cost avoidances--costs
that DOD might have incurred if BRAC actions had not taken place. Some
of the savings are one-time (e.g., canceled military construction
projects), but most often represent an avoidance of recurring spending
(e.g., personnel reductions). In this respect, eliminating or reducing
recurring base support (e.g., physical security, fire protection,
utilities, property maintenance, accounting, payroll, and a variety of
other services) costs at closed and realigned bases is a major
component of BRAC savings. The value of these recurring savings has
become the largest and most important portion of BRAC's overall
estimated savings.
DOD must comply with cleanup standards and processes under applicable
laws, regulations, and executive orders in conducting assessments and
cleanup of its unneeded base property. The time needed to accomplish
cleanup activities can extend many years beyond the 6 years allowed
under BRAC legislation for ceasing military operations and closing
bases. The status of cleanup efforts can also affect the transfer of
title from DOD to other users. The Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA[Footnote 11])
provides the framework for responding to most contamination problems
resulting from hazardous waste disposal practices, leaks, spills, or
other activity that has created a public health or environmental risk.
DOD performs its cleanups in coordination with regulatory agencies and,
as appropriate, with other potentially responsible parties, including
current property owners. While CERCLA had originally authorized
property transfers only after cleanup actions had been taken, the act
was amended in 1996[Footnote 12] to expedite transfer of contaminated
property under certain conditions under a so-called early transfer
authority. While use of this authority does allow for the possible
concurrent cleanup and reuse of the property, the requirement remains
that contaminated sites must be cleaned up to ensure that transferred
BRAC property is not harmful to human health or the environment and
that it can support new use.
Prior GAO Reports Have Addressed BRAC Issues:
We have reported on base closure issues from the prior BRAC rounds on
several occasions (see app. VI). Although some of our reports have
focused on concerns about implementation actions at a specific
location, in December 1998 and April 2002 we issued two broader BRAC
status reports addressing DOD-wide closure issues.[Footnote 13] These
reports discussed the magnitude and precision of cost and savings
estimates, the progress of environmental cleanup and property transfer,
and the impact on communities and their recovery. We also issued
reports in July and August 2001 that updated closure-related
implementation data and reaffirmed the primary results of our prior
work.[Footnote 14] A brief summary of these reports is as follows:
* In our December 1998 report, we concluded that BRAC actions were on
track. Cost and savings estimates were substantial but not precise
because the services had not routinely updated their savings estimates,
as they had their cost estimates. Environmental cleanup was
progressing, but it was costly and time consuming. Property disposal
was progressing slowly because of factors that were not completely
under DOD's control and that were difficult to manage, such as
identifying recipients for the property and associated transfer
planning and addressing environmental concerns. Most communities where
bases had closed were recovering, and a majority was faring well
economically relative to key national economic indicators.
* In our July 2001 report, we concluded that estimated BRAC net savings
had reportedly increased to $15.5 billion from the $14 billion we
reported in our December 1998 report. Accumulated savings began to
surpass accumulated costs in fiscal year 1998. We observed that BRAC
savings were real and substantial, but limitations existed in DOD's
effort to track costs and savings that affect the precision of its
estimates.
* In our August 2001 report, we concluded that BRAC closing and
realignment actions were essentially completed, but the subsequent
transfer of unneeded base property was only partially completed.
Environmental cleanup was progressing but would require many years to
fully complete. Most communities were recovering from the economic
impacts of base closures because of several factors, such as a strong
national or regional economy and federal assistance programs.
* In our April 2002 report, we concluded that most (about 58 percent)
former unneeded base property had not yet been transferred to other
users, the closure process was generating substantial savings (about
$16.7 billion, although the savings estimates were imprecise), the
total expected environmental cleanup costs were still within range of
the cost estimates made in 1996, and most communities surrounding
closed bases were faring well economically in relation to key national
economic indicators.
Most Unneeded BRAC Property Had Been Transferred:
As of September 30, 2004, nearly 72 percent (364,000 acres) of the
approximately 504,000 acres[Footnote 15] of unneeded BRAC property from
the prior rounds had been transferred to other federal or nonfederal
entities. When leased land is added to this acreage, the amount of
unneeded BRAC property that is in reuse increases to 90 percent. The
remaining untransferred property (140,000 acres) has not been
transferred primarily because of environmental cleanup issues. DOD has
used and continues to use several methods to transfer property and
expedite its reuse.
Transfer of Unneeded BRAC Property Is More Than Two-Thirds Complete:
Of the approximately 504,000 unneeded acres available for disposal
external to DOD, 72 percent had been transferred to either federal or
nonfederal entities, while 28 percent, including leased acreage,
remains in DOD's inventory. DOD has made progress in transferring
property in the aggregate since our 2002 report, having increased the
transfer rate from 42 percent to 72 percent (see fig. 2). The transfers
of property at the Naval Air Facility in Adak, Alaska, and the Sierra
Army Depot, California, are the largest transfers since our April 2002
report, accounting for a combined total of nearly 129,000 acres. A
breakdown of the current status of unneeded BRAC property shows that
(1) 52 percent had been transferred to nonfederal entities, (2)
20 percent had been transferred to other federal agencies, (3)
18 percent had been leased but not transferred, and (4) 10 percent was
untransferred and is awaiting future disposition (see fig. 3).
Figure 2: BRAC Property Transfers as Reported in 2002 and 2004:
[See PDF for image]
Note: Acreage shown may vary slightly from our previous reports. As
property is transferred, more accurate surveys are being completed,
which changes the amount of available acres from one year to another.
Further, some acreage initially declared excess has been retained by
DOD, thus decreasing the acreage available for transfer.
[End of figure]
Figure 3: Disposition of Unneeded BRAC Acreage:
[See PDF for image]
Note: As part of the BRAC process, DOD retained an additional 343,000
acres at closing and realigning bases as needed for reserve component
use. Most of this property was converted from active component
management to the reserve component and is located at several Army
bases, including Fort Hunter Liggett, California; Fort Chaffee,
Arkansas; Fort Pickett, Virginia; Fort Dix, New Jersey; and Fort
McClellan, Alabama.
[End of figure]
Even though DOD has 140,000 acres of its BRAC property remaining to be
transferred, much of this land is in long-term lease with other users.
Altogether, the services have nearly 91,000 acres (65 percent) of their
untransferred property under lease, leaving 49,000 acres (35 percent)
that has not been transferred and not in reuse. The department expects
that this property will eventually be transferred to nonfederal users.
Leased property, while not transferred to the user, can afford the user
and DOD some benefits. Communities, for example, can opt for leasing,
while awaiting final environmental cleanup, as an interim measure to
promote property reuse and job creation. And, DOD can often gain an
advantage, in some cases, as the communities assume responsibility and
pay for protecting and maintaining the property. By adding leased acres
to the number of transferred acres, the amount of unneeded BRAC
property in reuse rises to 90 percent.
Most Property Transfer Delays Are Due to Environmental Cleanup Issues:
As we have reported in the past, environmental cleanup constraints have
and continue to delay the services from rapidly transferring unneeded
BRAC property. Army data show that about 82 percent of its approximate
101,000 untransferred acres has some kind of environmental impediment,
such as unexploded ordnance (UXO)[Footnote 16] or some level of
chemical contamination that requires cleanup before transfer can take
place. Navy data show that about 65 percent of the Navy's almost 13,000
untransferred acres could not be transferred because of environmental
reasons. Likewise, about 98 percent of the Air Force's approximately
24,000 untransferred acres is due to environmental cleanup issues.
Table 1 shows those BRAC installations with untransferred acreage that
had substantial estimated costs for fiscal year 2004 and beyond for
completing environmental cleanup actions. The estimated completion
costs for these BRAC installations account for nearly 60 percent of
DOD's future BRAC environmental cleanup estimates for the previous
rounds. Further detail on environmental costs for BRAC property is
included in the next section of this report.
Table 1: Projected Future Environmental Cleanup Costs for Selected BRAC
Installations (Fiscal Year 2004 and Beyond):
Dollars in millions.
Air Force;
Base: McClellan Air Force Base, Calif;
Affected acres: 1,739;
Estimated future costs for cleanup: $772.7.
Army;
Base: Ft. Ord, Calif;
Affected acres: 14,088;
Estimated future costs for cleanup: $321.7.
Air Force;
Base: Kelly Air Force Base, Tex;
Affected acres: 1,333;
Estimated future costs for cleanup: $208.7.
Air Force;
Base: Castle Air Force Base, Calif;
Affected acres: 2,010;
Estimated future costs for cleanup: $150.4.
Navy;
Base: Alameda Naval Air Station, Naval Aviation Depot, Calif;
Affected acres: 2,599;
Estimated future costs for cleanup: $138.2.
Air Force;
Base: Mather Air Force Base, Calif;
Affected acres: 1,747;
Estimated future costs for cleanup: $107.5.
Air Force;
Base: Loring Air Force Base, Maine;
Affected acres: 1,050;
Estimated future costs for cleanup: $106.7.
Navy;
Base: Hunters Point, Calif;
Affected acres: 792;
Estimated future costs for cleanup: $71.9.
Army;
Base: Seneca Army Depot, N.Y;
Affected acres: 1,789;
Estimated future costs for cleanup: $71.6.
Army;
Base: Savanna Depot Activity, Ill;
Affected acres: 2,616;
Estimated future costs for cleanup: $55.4.
Navy;
Base: Naval Ship Yard, Mare Island, Calif;
Affected acres: 1,132;
Estimated future costs for cleanup: $51.6.
Navy;
Base: El Toro Marine Corps Air Station, Calif;
Affected acres: 840;
Estimated future costs for cleanup: $49.3.
Navy;
Base: Naval Air Station, South Weymouth, Mass;
Affected acres: 808;
Estimated future costs for cleanup: $38.6.
Source: GAO's analysis of DOD data.
Note: Does not include acreage that has been transferred and which
still has ongoing environmental cleanup activities.
[End of table]
DOD Is Using Several Methods to Expedite Property Transfer:
As previously discussed, DOD has several options available to expedite
the transfer of its unneeded property for further reuse by other
entities. The following provides a brief summary of the various methods
that have been used to transfer BRAC property to nonfederal users:
* Public benefit conveyances: As noted earlier, this method is used to
transfer property primarily to state and local governments specifically
for an exclusive and protected public use, usually at little or no
cost. This type of conveyance is sponsored by a federal agency that is
closely aligned with its intended use. For example, the Federal
Aviation Administration handles public benefit conveyances of BRAC
airfields and facilities, and the National Park Service sponsors public
benefit conveyances for new public parks and recreation facilities.
Nearly 18 percent of the BRAC acreage transferred to nonfederal users
in the prior rounds was accomplished through this method.
* Economic development conveyances: As noted earlier, this method is
used to transfer property to local redevelopment authorities for the
purpose of creating jobs and promoting economic activity within the
local community. Under this transfer method, many communities could
receive property at fair market value or below, and at no cost to those
in rural areas. The National Defense Authorization Act for Fiscal Year
2000 required all future economic development conveyances to be no cost
and permitted those currently in-force to be converted to no-cost
conveyances if certain conditions were met.[Footnote 17] According to
DOD and community officials, this method had gained in popularity with
the adoption of the no-cost provision, which, in addition to saving
money for the new user, virtually eliminated the delays resulting from
prolonged negotiations over the fair market value of the property and
accelerated economic development and job creation. We note, however,
the National Defense Authorization Act for Fiscal Year 2002 included a
provision stipulating that DOD is to seek to obtain fair market value
for BRAC-related transfers of property in the upcoming 2005
round.[Footnote 18] Although the BRAC law still allows DOD to transfer
properties for economic development at no cost under certain
circumstances, the general requirement for the 2005 round to seek fair
market value may impact the use of this method of conveyance. Nearly
32 percent of the BRAC acreage transferred to nonfederal users in the
prior rounds was accomplished through economic development conveyances.
* Conservation conveyances: This method was used by DOD for the first
time in September 2003 to transfer property for natural resource and
conservation purposes. Under this method, the Army transferred almost
58,000 acres from the Sierra Army Depot, California, to the Honey Lake
Conservation Team, which is made up of two nonprofit organizations--the
Center for Urban Watershed Renewal and the Trust for Public Lands--and
two private-sector companies. This is the largest single transfer of
surplus BRAC property that the Army has undertaken. Nearly 22 percent
of the BRAC acreage transferred to nonfederal users in the prior rounds
was accomplished through this method.
* Other conveyances: Unneeded BRAC property can also be transferred
through special legislation, reversion, lease termination/expiration,
or sales. Congress can, through special legislation, determine the
terms and conditions for transferring specific BRAC properties. For
example, through special congressional legislation,[Footnote 19] the
Navy transferred over 47,000 acres of its 71,000-acre Adak, Alaska,
Naval Air Facility to a local redevelopment authority in March 2004
through the Department of the Interior in exchange for other land that
the Navy needed.[Footnote 20] Almost 19 percent of BRAC acreage was
transferred to nonfederal users through special legislation. DOD data
show that only 3 percent of the nonfederal conveyances were reversions.
Additionally, the termination or expiration of a lease on BRAC property
for nonfederal users accounted for about 4 percent of the transfers,
while negotiated and public sales accounted for only 4 percent of the
property transfers.
Figure 4 summarizes the acreage transfers by the various conveyance
methods.
Figure 4: Methods Used to Transfer Unneeded BRAC Acreage to Nonfederal
Entities:
[See PDF for image]
Notes: Acreage is rounded to the nearest 100 acres. Percentages may not
add due to rounding.
[End of figure]
In most cases, unneeded property on a BRAC base is divided into parcels
and transferred in this manner according to intended reuse plans. Thus,
most of the individual actual transfers are for less than 2,000 acres.
However, in some cases, the amounts can be larger. For example, the
transfers of Naval Air Facility Adak, Alaska (about 71,000 acres), and
Sierra Army Depot, California (about 58,000 acres), are two large
transfers that have occurred since our April 2002 report. Table 2 shows
the transfer methods used to convey the 5 largest tracts of BRAC
property for each service across the prior rounds to date.
Table 2: Major Transfers of BRAC Property by Service (as of September
30, 2004):
Service: Army;
BRAC installation: Sierra Army Depot, Calif;
Acres: 57,633;
Major transfer methods: Conservation conveyance.
Service: Army;
BRAC installation: Ft. McClellan, Ala;
Acres: 9,909;
Major transfer methods: Economic development conveyance.
Service: Army;
BRAC installation: Ft. Meade, Md;
Acres: 8,102;
Major transfer methods: Federal-to-federal transfer.
Service: Army;
BRAC installation: Ft. McClellan, Ala;
Acres: 7,843;
Major transfer methods: Federal-to-federal transfer.
Service: Army;
BRAC installation: Ft. Ord, Calif;
Acres: 7,229;
Major transfer methods: Federal-to-federal transfer.
Service: Navy;
BRAC installation: Adak, Alaska;
Acres: 71,176;
Major transfer methods: Special legislation/reversion.
Service: Navy;
BRAC installation: Cecil Field, Fla;
Acres: 16,481;
Major transfer methods: Public benefit conveyance; Economic development
conveyance.
Service: Navy;
BRAC installation: Salton Sea, Calif;
Acres: 13,553;
Major transfer methods: Reversion; Lease expiration.
Service: Navy;
BRAC installation: Chase Field, Tex;
Acres: 3,333;
Major transfer methods: Economic development conveyance; Negotiated
sale.
Service: Navy;
BRAC installation: Barbers Point, Hawaii;
Acres: 2,037;
Major transfer methods: Public benefit conveyance.
Service: Air Force;
BRAC installation: Loring Air Force Base, Maine;
Acres: 8,262;
Major transfer methods: Federal-to-federal transfer; Economic
development conveyance.
Service: Air Force;
BRAC installation: Williams Air Force Base, Ariz;
Acres: 3,840;
Major transfer methods: Public benefit conveyance.
Service: Air Force;
BRAC installation: March Air Force Base, Calif;
Acres: 3,792;
Major transfer methods: Public benefit conveyance; Economic development
conveyance.
Service: Air Force;
BRAC installation: Pease Air Force Base, N.H;
Acres: 3,770;
Major transfer methods: Federal-to- federal transfer; Public benefit
conveyance.
Service: Air Force;
BRAC installation: Wurtsmith Air Force Base, Mich;
Acres: 3,733;
Major transfer methods: Public benefit conveyance; Economic development
conveyance; Lease expiration.
Source: GAO's analysis of DOD data.
[End of table]
Early Transfer Authority:
DOD has the authority to transfer unneeded BRAC property, even if all
environmental cleanup actions have not been completed, through a
special authority granted by Congress called early transfer
authority.[Footnote 21] The authority must be used in conjunction with
one of the conveyance methods, such as an economic development
conveyance, authorized to transfer BRAC property. The department
credits early transfer authority for allowing it to put BRAC property
into reuse much faster by conveying the property through one of its
transfer authorities while concurrently meeting cleanup obligations.
We initially reported in 2002 that several factors were working against
the widespread application of this authority, to include community
adversity to taking risks, absence of ready to implement reuse plans,
and lack of support from local and state regulators. Furthermore, we
cited that exercising the authority might require DOD to commit more
funds, in the short term, than what is available to meet environmental
cleanup requirements. Regardless of when or how BRAC property is
transferred, liability for cleanup in compliance with applicable
federal and state regulatory requirements remains with DOD. Cleanup of
property subject to the early transfer authority does not necessarily
have to be conducted exclusively by DOD. DOD can share cleanup actions
with the transferee, or the transferee can conduct and pay for cleanup
actions. DOD can also enter into agreements with a transferee, usually
a local redevelopment authority, for the privatization of cleanup
efforts. In either case, the department funds the cleanup and generally
retains liability for future costs associated with the discovery of
additional environmental contamination associated with prior DOD
activities.
As the early transfer process has evolved over its short history, the
use of the authority has increased.[Footnote 22] The Army has
transferred almost 8,300 acres; the Navy has transferred over 9,500
acres; and the Air Force has transferred over 700 acres using early
transfer authority. These figures represent more than twice the
combined acreage (about 8,225 acres) that we reported in 2002 as being
transferred under this authority.
BRAC Net Savings Are Substantial but Imprecise:
According to DOD financial data, the four prior BRAC rounds generated
an estimated $28.9 billion in net savings through fiscal year
2003.[Footnote 23] Moreover, DOD expects to accrue additional annual
recurring savings or cost avoidances of about $7 billion in fiscal year
2004 and thereafter. As we have previously reported, however, the cost
and savings projections that DOD uses to estimate net savings are
imprecise because the military services have not regularly updated
their savings projections and DOD's accounting systems do not track
estimated savings. Moreover, DOD has not incorporated all base closure-
related costs in its estimates, thus tending to overestimate savings.
On the other hand, the estimated net savings could be greater than DOD
has reported because some costs attributed to the closures, such as
environmental cleanup, may have occurred even if the bases remained
open. DOD has a legal obligation to conduct environmental cleanup
irrespective of closing or realigning an installation.
BRAC Net Savings Estimates Remain Substantial:
Our analysis of DOD data shows that the department had accrued an
estimated $28.9 billion in net savings or cost avoidances through
fiscal year 2003 for the four prior BRAC rounds. This amount, which
includes costs and estimated recurring savings from fiscal years 2002
and 2003, represents an increase over the $16.7 billion in net savings
accrued as of fiscal year 2001 that we cited in our 2002 report. In
calculating net savings, DOD deducts the costs of implementing BRAC
actions for the four closure rounds from the estimated savings. As
figure 5 shows, the cumulative estimated savings surpassed the
cumulative costs to implement BRAC actions in 1998, and the net savings
have grown and will continue to grow from that point, even though some
costs (e.g., environmental cleanup) have been incurred after that time
and some costs will continue well beyond 2003.
Figure 5: Cumulative BRAC Cost and Savings Estimates for the Prior
Rounds through Fiscal Year 2003:
[See PDF for image]
Note: The cost figures do not include about $1.9 billion expended by
several federal agencies to provide redevelopment assistance to BRAC-
affected communities.
[End of figure]
Our analysis shows that the rate of net savings accumulation increased
because the cumulative BRAC costs flattened out just before the 6-year
implementation period for the last round ending in fiscal year 2001.
Most expenses associated with closures and realignments were incurred
through fiscal year 2001; most of the expenses beyond fiscal year 2001
were primarily for environmental cleanup. Through fiscal year 2003, the
cumulative costs to implement the four prior round actions amounted to
about $23.3 billion (see fig. 5). As shown in figure 6, approximately
one-third ($7.8 billion) of this amount was spent for operations and
maintenance, such as the maintenance and repair to keep facilities and
equipment in good working order, as well as civilian severance and
relocation costs. A little more than one-third ($8.3 billion) was spent
on environmental cleanup and compliance activities, for example, to
reduce, remove, and recycle hazardous wastes and remove unsafe
buildings and debris from closed bases. Finally, a little less than
one-third ($6.7 billion) was used for military construction, including
renovating existing facilities and constructing new buildings at
military bases that were not closed to accommodate relocating military
units and various functions.
Figure 6: Costs Incurred for Prior BRAC Rounds through Fiscal Year
2003:
[See PDF for image]
[End of figure]
According to DOD data, BRAC cumulative savings or cost avoidances will
rise steadily for an indefinite period as BRAC actions are completed.
As figure 7 shows, DOD estimates that it accrued BRAC savings of
$52.2 billion through fiscal year 2003 as a result of eliminating or
reducing operation and maintenance costs, including base support costs,
and eliminating or reducing military and civilian personnel costs. Of
this amount, about half ($26.8 billion) can be attributed to savings
from operation and maintenance activities, such as terminating or
reducing physical security, fire protection, utilities, property
maintenance, accounting, civilian payroll, and a variety of other
services that have associated costs. An additional $14.7 billion in
estimated savings resulted from military personnel reductions.
Figure 7: Estimated Savings Breakout for Prior BRAC Rounds through
Fiscal Year 2003:
[See PDF for image]
[End of figure]
Moreover, DOD expects to accrue an estimated $7 billion in annual
recurring savings in fiscal year 2004 and beyond for the four BRAC
rounds. This amount represents an increase of approximately
$486 million from our prior reporting in 2002 and is attributable to
inflation over that time period.
Precision of Cost and Savings Estimates Is Limited:
The savings and cost estimates used by DOD to calculate the net savings
at its BRAC-affected bases are imprecise, primarily because the
military services have not periodically updated their savings estimates
and DOD does not include all costs associated with BRAC closures in its
estimates. Further, net savings may be larger than DOD estimates
because some environmental and construction costs associated with
ongoing environmental and facility recapitalization programs at BRAC-
affected bases would have at least partially offset future costs at
those locations if they were not closed or realigned.
BRAC Savings Estimates Were Not Updated Periodically:
The results of our prior work showed that the military services,
despite DOD guidance that directs them to update savings estimates in
their annual budget submissions, had not periodically updated these
estimates, thereby contributing to imprecision in overall BRAC
estimated net savings figures. Moreover, a fundamental limitation
exists in DOD's accounting systems, which, like other accounting
systems, are not oriented toward identifying and tracking savings.
Other reasons cited by service officials are that updating savings has
not been a high priority and that it is a labor-intensive process that
could be costly. Nonetheless, the periodic updating of estimates is
important, especially in view of the upcoming 2005 BRAC round, in order
to increase their accuracy for DOD and congressional decision makers.
As early as 1998, DOD reported[Footnote 24] it had plans to improve its
savings estimates for the implementation of future BRAC rounds. In
addition, in our April 2002 report, we recommended that DOD develop a
DOD-wide systematic approach for the periodic updating of initial
closure savings estimates, along with an oversight mechanism to ensure
these updates are accomplished for the upcoming 2005 BRAC round. We
continue to believe this recommendation remains valid. DOD has not yet
acted on our recommendation, but DOD officials told us that they intend
to implement a system to better track savings for implementing the
upcoming round actions.
BRAC Costs Are Not Comprehensive:
Prior BRAC round costs are not comprehensive because they do not
include certain costs related to BRAC activities that are incurred
either by DOD or by other governmental agencies. For example, DOD's
calculation of one-time estimated net savings does not include BRAC-
related economic assistance costs, most of which are incurred by
federal agencies other than DOD. As of September 30, 2004, federal
agencies reported that they had spent about $1.9 billion (an increase
from the $1.5 billion in our 2002 report) to assist BRAC-affected
communities and individuals for such purposes as base reuse planning,
airport planning, job training, infrastructure improvements, and
community economic development. These activities include the following:
* About $611 million was provided by the Department of Commerce's
Economic Development Administration to assist communities with
infrastructure improvements, building demolition, and revolving fund
loans.
* About $760 million was provided by the Federal Aviation
Administration to assist with converting former military airfields to
civilian use.
* About $223 million was provided by the Department of Labor to help
communities retrain workers who lost their jobs. The Department of
Labor has not provided additional funding since we last reported in
2002.
* About $280 million was provided by DOD's Office of Economic
Adjustment to help communities plan and implement the reuse of BRAC
bases.
While these costs represent a relatively small percentage (about
7 percent) of the overall net savings estimate through 2003, it does
demonstrate the imprecision of the overall BRAC savings estimate.
However, our analysis of DOD and other federal agencies' data shows
that this percentage will most likely diminish over time as the net
savings continue to grow.
Cost Avoidances May Be Greater Than Estimated:
While the noninclusion of certain costs, as noted above, has the
tendency of overstating savings or cost avoidances, DOD's difficulty in
providing precise estimates is further complicated by the fact that
some BRAC actions could produce savings that are not captured in its
net savings estimates. For example, the inclusion of BRAC environmental
cleanup costs in calculating net savings has the effect of overstating
costs and understating net savings for DOD because the department has a
legal obligation to conduct environmental cleanup irrespective of
closing or realigning an installation. A similar case can be made for
military construction projects in the BRAC program. While DOD had
expended significant BRAC funds (about $6.7 billion through fiscal year
2003) on military construction at its receiving bases, it would have
likely incurred many of these costs over time under its facilities
capital improvement initiatives if the closing bases had remained open.
Environmental Cleanup Cost Estimates Have Remained Near Prior Projected
Estimates but May Change:
Our analyses of DOD data show that although environmental cleanup cost
estimates at BRAC sites are within the range of prior projections, they
may fluctuate because of unknown or undetermined future environmental
cleanup responsibilities or improved cleanup techniques. DOD expected
to spend an estimated $3.6 billion in fiscal year 2004 and beyond to
complete environmental cleanup on BRAC properties, bringing the total
BRAC environmental costs to $11.9 billion, which is still within prior
estimates. The estimates of future projected liabilities have decreased
since last year as a result of reported focused management oversight
and review of restoration costs and schedules, completion of more
cleanup actions, and reevaluation of some sites. However, the estimated
liabilities may change due to unforeseen or undetermined environmental
liabilities, such as the discovery of additional UXO or contaminants,
which may exist on BRAC properties. Moreover, revisions to cleanup
standards or the intended reuse of the land not yet transferred could
prompt the need to change cleanup requirements, which would in turn
affect costs.
Environmental Cleanup Costs Have Remained Near Prior Projected
Estimates:
Our analysis shows that the total estimated environmental cleanup cost
of about $11.9 billion for the prior BRAC rounds is within the range of
prior program estimates. The cost estimate is slightly higher than
DOD's previous estimate of $10.5 billion in 2002 and $11.3 billion in
1996.[Footnote 25] DOD had obligated approximately $8.3 billion in BRAC
environmental cleanup and compliance costs through fiscal year 2003,
and it estimates that future costs for fiscal year 2004 and beyond will
now amount to $3.6 billion.
The $3.6 billion estimate for future BRAC environmental liabilities is
about $1 billion less than DOD had previously projected for fiscal year
2003 and beyond. The decrease is attributable primarily to about
$761 million that DOD spent on environmental cleanup and compliance in
fiscal year 2003 and to a number of actions taken by the services. For
example, the Air Force reportedly applied more focused management
oversight and review of estimated restoration costs and schedules to
the Air Force Restoration Information Management System, accounting for
a $174.7 million decrease; the Navy reduced its estimates based largely
on conservative project execution rates, accounting for a
$137.4 million decrease; and the Army recharacterized some of its
cleanup sites, accounting for a $56.5 million reduction.
However, DOD acknowledged in its 2003 Performance and Accountability
Report that the total future environmental liability estimates for
remaining BRAC sites may need to be adjusted because the DOD Inspector
General questioned the reliability of DOD environmental cost estimates,
primarily citing incidents of a lack of supporting documentation for
the estimates and incomplete audit trails.[Footnote 26]
Unforeseen or Undetermined Environmental Hazards May Change Future
Cleanup Costs:
Estimating the costs of future environmental cleanup on BRAC properties
is complicated by the possibility that these properties might contain
unknown or emerging environmental hazards, which could change cleanup
costs. For example, costs could change as the result of the discovery
of additional UXO or of previously unregulated chemical contaminants or
waste in the ground or groundwater. Estimates of future liabilities may
also change if certain federal environmental standards change, the
intended use of yet-to-be-transferred BRAC property is revised, or
cleanup techniques are improved.
As of the end of fiscal year 2003, DOD stated that about 78 percent of
cleanup activities on BRAC sites with identified hazardous waste were
reportedly complete and met the CERCLA standards. However, there are
questions about the extent of additional potential cleanup costs
associated with UXO and perchlorate contamination on various DOD sites,
including BRAC installations. The following provides an update on DOD's
activities concerning these particular hazards:
* UXO: While clearing BRAC property of UXO for further reuse has
presented a difficult and costly challenge for the department, DOD is
making progress through its Military Munitions Response
Program.[Footnote 27] This program is designed to address UXO hazards
not only on BRAC property but all DOD property, with the exception of
operational ranges. Through fiscal year 2003, the department had
addressed UXO problems on 148 of the 196 BRAC sites (76 percent) on 32
BRAC installations where UXO was identified. It completed UXO cleanup
on 126 of the total sites (64 percent), and it is currently working on
the other 22 sites that were addressed. While all sites were identified
prior to fiscal year 2001, DOD had not yet completed establishing
program goals or developing metrics to track projects, assess risks,
and prioritize the remaining cleanup sites. The Navy estimates that its
BRAC UXO cleanup costs for fiscal year 2004 and beyond will be about
$32.3 million and will involve 2,353 acres. Similarly, the Army
estimates that its remaining UXO cleanup costs will approach
$496 million on 21,000 acres, with the largest costs (about
$266 million on 4,500 acres) forecasted at the former Fort Ord base in
California. The Air Force estimates that it will spend nearly
$2.3 million on UXO cleanup costs affecting 180 BRAC acres, of which
$2 million will likely be spent on the cleanup of the former Carswell
Air Force Base, Texas.
* Perchlorate: Perchlorate is a chemical munitions constituent that is
present on some BRAC bases and which may cause adverse health effects
by contaminating drinking water. Health experts have not conclusively
determined what amount of perchlorate poses a health risk for humans,
and no federal standard exists for allowable levels of perchlorate in
drinking water. Nonetheless, the existence of perchlorate does pose a
potential future liability for DOD, but that liability would depend on
the standard that may be set in the future as well as the extent of its
presence on BRAC installations and the intended reuse of the property.
However, it should be noted that this issue could affect open as well
as closing bases. In September 2003, DOD required the military
components to assess the extent of perchlorate occurrence at active and
closed installations and at its formerly used defense sites.[Footnote
28] In addition, DOD invested $27 million to conduct research on the
potential health effects, environmental impacts, and treatment
processes for perchlorate. In a report directed by Congress, DOD was
required to identify the sources of perchlorate on BRAC properties and
describe its plans to clean up perchlorate contamination on these
sites.[Footnote 29] DOD officials stated that they assessed 14 sites,
which did not include any BRAC property already transferred or deeded
to other entities. The department issued its assessment in July 2004
and concluded that while it had adopted a perchlorate sampling policy
that includes untransferred BRAC properties, DOD stated it will commit
to integrating perchlorate remediation into its cleanup program once a
regulatory standard is established.[Footnote 30]
Most Communities Have Recovered or Are Recovering from the Economic
Impact of BRAC:
Most communities have recovered or are recovering from the impact of
base closures, with more mixed results recently, allowing for some
negative impact from the national economic downturn of recent years.
DOD data indicate that the percentage of local DOD civilian jobs that
were lost at the bases and have been replaced by reuse has increased
since our 2002 report. Moreover, recent economic data show that
affected BRAC communities are faring well when compared to national
economic indicators. Although the average unemployment rate increased
for most of the 62 BRAC communities we reviewed in 2002, nearly
70 percent had unemployment rates lower than the national average. In
addition, 48 percent of communities had annual real per capital income
growth rates above the U.S. average, as compared with the 53 percent
stated in our last report. The growth rate declined for 74 percent of
all BRAC communities as compared to our 2002 report. As we have
reported in the past, the recovery process has not necessarily been
easy with the strength of the national, regional, and local economies
having a significant bearing on the recovery of any particular
community facing a BRAC closure.
Percentage of Local Jobs Replaced Has Increased:
The redevelopment of base property is widely viewed as an important
component of economic recovery for BRAC-affected communities. While not
the only determinant[Footnote 31] of economic recovery for surrounding
communities, it can, nevertheless, be an important catalyst for
recovery efforts. The closure or realignment of military bases creates
job losses at these facilities, but subsequent redevelopment of the
former bases' property provides opportunities for creating new jobs.
As DOD last reported, as of October 31, 2003, almost 72 percent
(92,921)[Footnote 32] of the 129,649 DOD civilian jobs lost on military
bases as a result of realignments or closures in the prior BRAC rounds
had been replaced at these locations. This is 10 percent higher than
the 62 percent (79,740) we reported in 2002 and over time, the number
of jobs created will likely increase as additional redevelopment
occurs. See appendix II for a detailed listing of jobs lost and created
at major BRAC locations during the prior four rounds.
Unemployment Rates Compare Favorably with National Average:
Unemployment rates in BRAC-affected communities continue to compare
favorably with the national average. Since 1997 (after completion of
the implementation periods for the first two rounds in 1988 and 1991)
and through the implementation periods of the last two rounds (1993 and
1995), about 70 percent of the 62 BRAC-affected communities have
consistently been at or below the national unemployment rate (see
fig. 8).
Figure 8: Comparison of the Percentage of BRAC-Affected Communities at
or below the Average National Unemployment Rate over Time:
[See PDF for image]
[End of figure]
According to our analysis of the annual unemployment rates for the
7-month period ending July 31, 2004, most of the 62 BRAC-affected
communities compared favorably with the national average and were
consistent with the results we reported in 2002. During this period, 43
of the 62 communities (69 percent) affected by base closures had
unemployment rates at or below the average 7-month national rate of
5.8 percent. This is one less community than in our 2002 report when
44 communities (71 percent) had average unemployment rates lower than
the (then) average 9-month national rate of 4.6 percent. For all BRAC
communities with higher-than-average calendar year 2004 unemployment
rates through July 2004, four had double-digit rates: Merced County,
California (Castle Air Force Base), 15.8 percent; Mississippi County,
Arkansas (Eaker Air Force Base), 13.0 percent; Salinas, California
(Fort Ord Army Base), 11.1 percent; and Iosco County, Michigan
(Wurtsmith Air Force Base), 10.2 percent. Salinas, California, is the
one addition to the other three communities that we also cited in our
2002 report for having double-digit unemployment rates. Appendix III
provides additional detail on the average unemployment rates for the 62
communities.
Average Annual Real Per Capita Income Growth Rates Show Mixed Results:
Annual real per capita income growth rates for BRAC-affected
communities exhibit mixed results. The latest available data (1999-2001
time frame) show that 30 (48 percent) of the 62 communities we studied
had an estimated average real per capita income growth rate that was
above the national average of 2.2 percent.[Footnote 33] This is a
decline from our 2002 report in which 33 communities (53 percent)
matched or exceeded the national rate of 3.03 percent during the 1996-
1999 time frame. Additionally, our current analysis shows that of the
32 communities below the national average, 6 communities (10 percent)
had average annual per capita income growth rates that were close to
the national average (defined as within 10 percent), while the
remaining 26 communities (42 percent) were below the national average
growth rate. Forty-six (74 percent) of the 62 communities had lower per
capita income growth rates than when we last reported on them in 2002.
Three communities--Merced, California (Castle Air Force Base); Austin-
San Marcos, Texas (Bergstrom Air Force Base); and Carroll County,
Illinois (Savanna Army Depot)--had negative growth rates. By
comparison, our 2002 report showed that no communities experienced a
negative growth rate. Appendix IV provides additional detail on the
average annual real per capita income growth rates for the 62
communities.
Concluding Observations:
As DOD prepares to undertake another round of base realignments and
closures in 2005, we note that the department has made progress in
completing postrealignment and closure actions from the prior four
rounds since our last update in 2002. Seventy-two percent of former
base property has been transferred and about 90 percent is in reuse if
leased property is considered. And, as reported in the past,
environmental cleanup requirements present the primary challenge to
transferring the remaining property. Although we are making no
recommendations in this report, we believe that our April 2002 report
recommendation underscoring the need for a DOD-wide systematic approach
for the periodic updating of savings estimates, along with an oversight
mechanism to ensure these updates are accomplished for the 2005 BRAC
round recommendations, remains valid. More specifically, we recommended
that the Under Secretary of Defense for Acquisition, Technology, and
Logistics, in consultation with the Under Secretary of Defense
(Comptroller and Chief Financial Officer), develop (1) a DOD-wide
systematic approach for the periodic updating of initial closure
savings estimates and (2) an oversight mechanism to ensure that the
military services and components update such estimates in accordance
with the prescribed approach. While DOD has stated its intent to do so,
it has not acted on this recommendation.
Agency Comments:
The Deputy Under Secretary of Defense (Installations and Environment)
provided technical comments on a draft of this report that were
incorporated as appropriate. DOD concurred with the need to improve the
department's procedures for accounting for savings from the 2005 BRAC
round, as we had previously recommended in our April 2002 report. DOD's
comments are included in this report as appendix V.
We are sending copies of this report to interested congressional
committees; the Secretaries of Defense, Army, Navy, and Air Force; and
the Director, Office of Management and Budget. We will also make copies
available to others upon request. In addition, the report will be
available at no charge on GAO's Web site at http://www.gao.gov.
Please contact me at (202) 512-8412, or my Assistant Director, James
Reifsnyder, at (202) 512-4166 if you or your staff have any questions
concerning this report. Key reports related to base closure
implementation issues are listed in appendix VI. Staff acknowledgements
are provided in appendix VII.
Signed by:
Barry W. Holman, Director:
Defense Capabilities and Management:
[End of section]
Appendix I: Scope and Methodology:
To assess the reliability of data received from the Department of
Defense (DOD), Department of Commerce, Department of Labor, and other
federal agencies and used in this report, we reviewed available
Inspector General and internal audit reports, internal reviews and
studies, and contractor and consultant studies related to these
databases. We also reviewed available reports of congressional hearings
or copies of congressional testimony related to the data and summaries
of ongoing or planned audits, reviews, and studies of the systems or
the data and requested documentation related to quality practices
inherent in the data systems, such as edit checks, data entry
verification, and exception reports. Finally, we interviewed department
and agency officials knowledgeable about their information systems to
assess the reliability of those systems and the data they provide.
Based on these steps and the steps discussed in the following
paragraphs, we determined the data to be sufficiently reliable for the
purposes of this report.
To determine DOD's progress in transferring unneeded base property to
other users, we reviewed base realignment and closure (BRAC) property
disposition plans and actual property transfers as of September 30,
2004, and compared them with similar data presented in our April 2002
report. We discussed property transfer reporting systems with each
service to validate the reliability of the data reported to DOD. We
also categorized the property disposition data into the various
transfer methods (e.g., economic development conveyances) used to gain
a sense of the predominant method being used. With regard to the
untransferred acreage, we determined the primary impediments to
property transfers by examining data for those former bases where
unneeded BRAC property had not yet been transferred as of September 30,
2004. We also collected data and obtained the military services' views
on the use of the so-called early transfer authority in which property
can be transferred under certain conditions before an environmental
cleanup remedy is in place. Furthermore, we collected and analyzed data
on the use of no-cost economic development conveyances to transfer
property and stimulate its reuse. Finally, because leasing is often
used as an interim measure to make property available to users while
awaiting property transfer, we collected and analyzed data related to
leased property.
To determine the magnitude of the net savings from the four prior BRAC
rounds, we reviewed DOD's annual BRAC budget submissions and
interviewed BRAC and financial officials from the services and the
Office of the Secretary of Defense. To ascertain the extent to which
cost and savings estimates have changed over time, we compared the data
contained in DOD's fiscal year 2005 BRAC budget submission and related
documentation with similar data in DOD's fiscal year 2002 submission,
which was the latest budget documentation available when we produced
our last update report in April 2002. Through this comparison, we
identified where major changes had occurred in the various cost and
savings categories within the BRAC account and interviewed DOD
officials regarding the rationale for the changes. To gain a sense of
the accuracy of the cost and savings estimates, we relied primarily on
our prior BRAC reports and reviewed reports issued by the Congressional
Budget Office, DOD, DOD Inspector General, and service audit agencies.
We also reviewed the annual military service budget submissions for
fiscal years 2002 through 2005 to determine how frequently changes were
made to the cost and savings estimates. In assessing the completeness
of the cost and savings data, we reviewed the component elements
considered by DOD in formulating overall BRAC cost and savings
estimates. Because DOD did not include in its estimates federal
expenditures to provide economic assistance for communities and
individuals affected by BRAC, we collected these data from the
Department of Labor, the Federal Aviation Administration, the
Department of Commerce (Economic Development Administration), and DOD's
Office of Economic Adjustment. Also, we reviewed the cost estimates for
environmental cleanup activities beyond fiscal year 2003 because they
had the effect of reducing the expected annual recurring savings for
the four rounds.
To assess the economic recovery of communities affected by the BRAC
process, we assessed the same communities that we analyzed in our April
2002 report where more than 300 civilian jobs on military bases were
eliminated during the prior rounds. We used unemployment and real per
capital income growth rates as measures to analyze changes in the
economic condition of communities over time and in relation to national
averages. We used unemployment and real per capita income as key
performance indicators because (1) DOD used these measures in its
community economic impact analysis during the BRAC location selection
process and (2) economists commonly use these measures in assessing the
economic health of an area over time. While our assessment provides an
overall picture of how these communities compare with the national
averages, it does not necessarily isolate the condition, or the changes
in that condition, that may be attributed to a specific BRAC action.
We performed our review from November 2003 through October 2004 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: Civilian Jobs Lost and Created at Major BRAC
Locations during the Prior Four BRAC Rounds:
The closure or realignment of military bases creates job losses at
these facilities, but subsequent redevelopment of the former bases'
property provides opportunities for creating new jobs. The data
presented in table 3 include civilian jobs lost and created at major
base realignments and closures during the prior four BRAC rounds, as of
October 31, 2003. The data do not include the job losses that may have
occurred elsewhere in a community, nor do they capture jobs created
from other economic activity in the area.
Table 3: Civilian Jobs Lost and Created at Major BRAC Locations (as of
October 31, 2003):
Major base: Alameda Naval Air Station and Naval Aviation Depot, Calif;
BRAC round: 1993;
Estimated jobs lost: 3,228;
Estimated jobs created: 2,228;
Recovery (percent): 69.
Major base: Barbers Point Naval Air Station, Hawaii;
BRAC round: 1993;
Estimated jobs lost: 618;
Estimated jobs created: 33;
Recovery (percent): 5.
Major base: Bayonne Military Ocean Terminal, N.J;
BRAC round: 1995;
Estimated jobs lost: 2,015;
Estimated jobs created: 477;
Recovery (percent): 24.
Major base: Bergstrom Air Force Base, Tex;
BRAC round: 1991;
Estimated jobs lost: 927;
Estimated jobs created: 2,820;
Recovery (percent): 304.
Major base: Carswell Air Force Base, Tex;
BRAC round: 1991;
Estimated jobs lost: 869;
Estimated jobs created: 630;
Recovery (percent): 72.
Major base: Castle Air Force Base, Calif;
BRAC round: 1991;
Estimated jobs lost: 1,149;
Estimated jobs created: 2,183;
Recovery (percent): 190.
Major base: Cecil Field Naval Air Station, Fla;
BRAC round: 1993;
Estimated jobs lost: 995;
Estimated jobs created: 1,125;
Recovery (percent): 113.
Major base: Chanute Air Force Base, Ill;
BRAC round: 1988;
Estimated jobs lost: 1,035;
Estimated jobs created: 1,782;
Recovery (percent): 172.
Major base: Charleston Naval Complex, S.C;
BRAC round: 1993;
Estimated jobs lost: 6,272;
Estimated jobs created: 3,339;
Recovery (percent): 53.
Major base: Chase Field Naval Air Station, Tex;
BRAC round: 1991;
Estimated jobs lost: 956;
Estimated jobs created: 1,153;
Recovery (percent): 121.
Major base: Eaker Air Force Base, Ark;
BRAC round: 1991;
Estimated jobs lost: 777;
Estimated jobs created: 493;
Recovery (percent): 63.
Major base: El Toro Marine Corps Air Station, Calif;
BRAC round: 1993;
Estimated jobs lost: 979;
Estimated jobs created: 252;
Recovery (percent): 26.
Major base: England Air Force Base, La;
BRAC round: 1991;
Estimated jobs lost: 682;
Estimated jobs created: 1,530;
Recovery (percent): 224.
Major base: Fitzsimmons Army Medical Center, Colo;
BRAC round: 1995;
Estimated jobs lost: 1,612;
Estimated jobs created: 2,714;
Recovery (percent): 168.
Major base: Ft. Benjamin Harrison, Ind;
BRAC round: 1991;
Estimated jobs lost: 1,050;
Estimated jobs created: 1,171;
Recovery (percent): 112.
Major base: Ft. Devens, Mass;
BRAC round: 1991;
Estimated jobs lost: 2,178;
Estimated jobs created: 2,288;
Recovery (percent): 105.
Major base: Ft. McClellan, Ala;
BRAC round: 1995;
Estimated jobs lost: 2,156;
Estimated jobs created: 1,058;
Recovery (percent): 49.
Major base: Ft. Ord, Calif;
BRAC round: 1991;
Estimated jobs lost: 2,835;
Estimated jobs created: 2,020;
Recovery (percent): 71.
Major base: Ft. Pickett, Va;
BRAC round: 1995;
Estimated jobs lost: 245;
Estimated jobs created: 309;
Recovery (percent): 126.
Major base: Ft. Ritchie, Md;
BRAC round: 1995;
Estimated jobs lost: 1,373;
Estimated jobs created: 52;
Recovery (percent): 4.
Major base: Ft. Sheridan, Ill;
BRAC round: 1988;
Estimated jobs lost: 1,681;
Estimated jobs created: 0;
Recovery (percent): 0.
Major base: Gentile Air Force Station, Ohio;
BRAC round: 1993;
Estimated jobs lost: 2,804;
Estimated jobs created: 1,515;
Recovery (percent): 54.
Major base: George Air Force Base, Calif;
BRAC round: 1988;
Estimated jobs lost: 506;
Estimated jobs created: 1,383;
Recovery (percent): 273.
Major base: Glenview Naval Air Station, Ill;
BRAC round: 1993;
Estimated jobs lost: 389;
Estimated jobs created: 3,262;
Recovery (percent): 839.
Major base: Griffiss Air Force Base, N.Y;
BRAC round: 1993;
Estimated jobs lost: 1,341;
Estimated jobs created: 1,086;
Recovery (percent): 81.
Major base: Grissom Air Force Base, Ind;
BRAC round: 1991;
Estimated jobs lost: 792;
Estimated jobs created: 1,003;
Recovery (percent): 127.
Major base: Guam Naval Complex;
BRAC round: 1993;
Estimated jobs lost: 2,193;
Estimated jobs created: 549;
Recovery (percent): 25.
Major base: Homestead Air Force Base, Fla;
BRAC round: 1993;
Estimated jobs lost: 136;
Estimated jobs created: 622;
Recovery (percent): 457.
Major base: Hunters Point Annex Naval Shipyard, Calif;
BRAC round: 1991;
Estimated jobs lost: 93;
Estimated jobs created: 1,495;
Recovery (percent): 1608.
Major base: Indianapolis Naval Air Warfare Center, Ind;
BRAC round: 1995;
Estimated jobs lost: 2,196;
Estimated jobs created: 1,574;
Recovery (percent): 72.
Major base: Jefferson Proving Ground, Ind;
BRAC round: 1988;
Estimated jobs lost: 387;
Estimated jobs created: 179;
Recovery (percent): 46.
Major base: Kelly Air Force Base, Tex;
BRAC round: 1995;
Estimated jobs lost: 10,912;
Estimated jobs created: 5,108;
Recovery (percent): 47.
Major base: K.I. Sawyer Air Force Base, Mich;
BRAC round: 1993;
Estimated jobs lost: 788;
Estimated jobs created: 1,088;
Recovery (percent): 138.
Major base: Letterkenny Army Depot, Pa;
BRAC round: 1995;
Estimated jobs lost: 2,512;
Estimated jobs created: 704;
Recovery (percent): 28.
Major base: Lexington Army Depot, Ky;
BRAC round: 1988;
Estimated jobs lost: 1,131;
Estimated jobs created: 1,072;
Recovery (percent): 95.
Major base: Long Beach Naval Complex, Calif;
BRAC round: 1991;
Estimated jobs lost: 4,487;
Estimated jobs created: 200;
Recovery (percent): 4.
Major base: Loring Air Force Base, Maine;
BRAC round: 1991;
Estimated jobs lost: 1,311;
Estimated jobs created: 1,048;
Recovery (percent): 80.
Major base: Louisville Naval Ordnance Station, Ky;
BRAC round: 1995;
Estimated jobs lost: 1,435;
Estimated jobs created: 737;
Recovery (percent): 51.
Major base: Lowry Air Force Base, Colo;
BRAC round: 1991;
Estimated jobs lost: 2,275;
Estimated jobs created: 3,106;
Recovery (percent): 137.
Major base: March Air Force Base, Calif;
BRAC round: 1993;
Estimated jobs lost: 997;
Estimated jobs created: 572;
Recovery (percent): 57.
Major base: Mare Island Naval Shipyard, Calif;
BRAC round: 1993;
Estimated jobs lost: 7,567;
Estimated jobs created: 1,363;
Recovery (percent): 18.
Major base: Mather Air Force Base, Calif;
BRAC round: 1988;
Estimated jobs lost: 1,012;
Estimated jobs created: 4,498;
Recovery (percent): 444.
Major base: McClellan Air Force Base, Calif;
BRAC round: 1995;
Estimated jobs lost: 8,828;
Estimated jobs created: 3,823;
Recovery (percent): 43.
Major base: Memphis Defense Distribution Depot, Tenn;
BRAC round: 1995;
Estimated jobs lost: 1,289;
Estimated jobs created: 1,036;
Recovery (percent): 80.
Major base: Memphis Naval Air Station, Tenn;
BRAC round: 1993;
Estimated jobs lost: 250;
Estimated jobs created: 116;
Recovery (percent): 46.
Major base: Myrtle Beach Air Force Base, S.C;
BRAC round: 1991;
Estimated jobs lost: 784;
Estimated jobs created: 838;
Recovery (percent): 107.
Major base: New York (Staten Island) Naval Station, N.Y;
BRAC round: 1993;
Estimated jobs lost: 1,001;
Estimated jobs created: 0;
Recovery (percent): 0.
Major base: Newark Air Force Base, Ohio;
BRAC round: 1993;
Estimated jobs lost: 1,760;
Estimated jobs created: 944;
Recovery (percent): 54.
Major base: Norton Air Force Base, Calif;
BRAC round: 1988;
Estimated jobs lost: 2,133;
Estimated jobs created: 2,022;
Recovery (percent): 95.
Major base: Oakland Military Complex, Calif;
BRAC round: 1993;
Estimated jobs lost: 2,834;
Estimated jobs created: 659;
Recovery (percent): 23.
Major base: Ogden Defense Distribution Depot, Utah;
BRAC round: 1995;
Estimated jobs lost: 1,105;
Estimated jobs created: 611;
Recovery (percent): 55.
Major base: Orlando Naval Training Center, Fla;
BRAC round: 1993;
Estimated jobs lost: 1,105;
Estimated jobs created: 1,631;
Recovery (percent): 148.
Major base: Pease Air Force Base, N.H;
BRAC round: 1988;
Estimated jobs lost: 400;
Estimated jobs created: 5,124;
Recovery (percent): 1,281.
Major base: Philadelphia Defense Distribution Supply Center, Pa;
BRAC round: 1993;
Estimated jobs lost: 1,485;
Estimated jobs created: 500;
Recovery (percent): 34.
Major base: Philadelphia Naval Complex, Pa;
BRAC round: 1988;
Estimated jobs lost: 8,119;
Estimated jobs created: 2,732;
Recovery (percent): 34.
Major base: Plattsburgh Air Force Base, N.Y;
BRAC round: 1993;
Estimated jobs lost: 352;
Estimated jobs created: 1,001;
Recovery (percent): 284.
Major base: Presidio of San Francisco, Calif;
BRAC round: 1988;
Estimated jobs lost: 3,150;
Estimated jobs created: 1,087;
Recovery (percent): 35.
Major base: Red River Army Depot, Tex;
BRAC round: 1995;
Estimated jobs lost: 386;
Estimated jobs created: 186;
Recovery (percent): 48.
Major base: Reese Air Force Base, Tex;
BRAC round: 1995;
Estimated jobs lost: 1,238;
Estimated jobs created: 588;
Recovery (percent): 47.
Major base: Sacramento Army Depot, Calif;
BRAC round: 1991;
Estimated jobs lost: 3,164;
Estimated jobs created: 1,700;
Recovery (percent): 54.
Major base: San Diego Naval Training Center, Calif;
BRAC round: 1993;
Estimated jobs lost: 402;
Estimated jobs created: 71;
Recovery (percent): 18.
Major base: Savanna Army Depot, Ill;
BRAC round: 1995;
Estimated jobs lost: 436;
Estimated jobs created: 126;
Recovery (percent): 29.
Major base: Seneca Army Depot, N.Y;
BRAC round: 1995;
Estimated jobs lost: 273;
Estimated jobs created: 1,256;
Recovery (percent): 460.
Major base: Sierra Army Depot, Calif;
BRAC round: 1995;
Estimated jobs lost: 374;
Estimated jobs created: 5;
Recovery (percent): 1.
Major base: Stratford Army Engineering Plant, Conn;
BRAC round: 1995;
Estimated jobs lost: 1,400;
Estimated jobs created: 66;
Recovery (percent): 5.
Major base: Tooele Army Depot, Utah;
BRAC round: 1993;
Estimated jobs lost: 1,942;
Estimated jobs created: 844;
Recovery (percent): 43.
Major base: Treasure Island Naval Station, Calif;
BRAC round: 1993;
Estimated jobs lost: 454;
Estimated jobs created: 382;
Recovery (percent): 84.
Major base: Tustin Marine Corps Air Station, Calif;
BRAC round: 1991;
Estimated jobs lost: 348;
Estimated jobs created: 2;
Recovery (percent): 1.
Major base: Vint Hill Farms Station, Va;
BRAC round: 1993;
Estimated jobs lost: 1,472;
Estimated jobs created: 800;
Recovery (percent): 54.
Major base: Warminster Naval Air Warfare Center, Pa;
BRAC round: 1991;
Estimated jobs lost: 2,311;
Estimated jobs created: 767;
Recovery (percent): 33.
Major base: Watertown AMTL, Mass;
BRAC round: 1988;
Estimated jobs lost: 540;
Estimated jobs created: 1,061;
Recovery (percent): 196.
Major base: Williams Air Force Base, Ariz;
BRAC round: 1991;
Estimated jobs lost: 728;
Estimated jobs created: 2,519;
Recovery (percent): 346.
Major base: Wurtsmith Air Force Base, Mich;
BRAC round: 1991;
Estimated jobs lost: 690;
Estimated jobs created: 603;
Recovery (percent): 87.
Total: 73 bases;
Estimated jobs lost: 129,649;
Estimated jobs created: 92,921;
Recovery (percent): 72.
Source: DOD Office of Economic Adjustment.
[End of table]
[End of section]
Appendix III: Average Unemployment Rates of BRAC-Affected Areas
Compared with the U.S. Average Rate:
As figure 9 shows, 18 (75 percent) of the 24 BRAC-affected localities
situated west of the Mississippi River had unemployment rates equal to
or less than the U.S. average rate of 5.8 percent during January
through July 2004. The other 6 locations had unemployment rates greater
than the U.S. rate.
Figure 9: Comparison of 2004 Unemployment Rates of 24 BRAC-Affected
Locations West of the Mississippi River with the U.S. Rate:
[See PDF for image]
[End of figure]
As figure 10 shows, 26 (66 percent) of the 38 BRAC-affected localities
situated east of the Mississippi River had unemployment rates that were
less than or equal to the U.S. rate of 5.8 percent during January
through July 2004. The other 12 locations had unemployment rates that
were greater than the U.S. rate.
Figure 10: Comparison of 2004 Unemployment Rates of 38 BRAC-Affected
Locations East of the Mississippi River with the U.S. Rate:
[See PDF for image]
[End of figure]
[End of section]
Appendix IV: Average Annual Real Per Capita Income Growth
Rates of BRAC-Affected Areas Compared with the U.S. Average Rate:
As figure 11 shows, 11 (46 percent) of the 24 BRAC-affected localities
situated west of the Mississippi River had average annual real per
capita income growth rates that were greater than the U.S. average
growth rate of 2.2 percent during 1999 through 2001. The other 13
locations had rates that were below the U.S. average rate, of which 2
locations experienced a negative growth rate.
Figure 11: Comparison of Average Annual Real Per Capita Income Growth
Rates of 24 BRAC-Affected Locations West of the Mississippi River with
the U.S. Rate (1999-2001):
[See PDF for image]
[End of figure]
As figure 12 shows, 19 (50 percent) of the 38 BRAC-affected localities
situated east of the Mississippi River had average annual real per
capita income growth rates that were greater than the U.S. average
growth rate during 1999-2001. The other 19 locations had rates that
were below the U.S. average rate, of which 1 had a negative growth
rate.
Figure 12: Comparison of Average Annual Real Per Capita Income Growth
Rates of 38 BRAC-Affected Locations East of the Mississippi River with
the U.S. Rate (1999-2001):
[See PDF for image]
[End of figure]
[End of section]
Appendix V: Comments from the Department of Defense:
OFFICE OF THE UNDER SECRETARY OF DEFENSE:
ACQUISITION TECHNOLOGY AND LOGISTICS:
3000 DEFENSE PENTAGON:
WASHINGTON, DC 20301-3000:
JAN 03 2005:
Mr. Barry Holman:
Defense Capabilities and Management:
U.S. Government Accountability Office:
441 G Street, N.W.
Washington, D.C. 20548:
Dear Mr. Holman,
This is the Department of Defense response to the GAO draft report,
GAO-05-138, "MILITARY BASE CLOSURES: Updated Status of Prior Base
Realignments and Closures," dated November 19, 2004 (GAO Code 350441).
The Department previously provided technical corrections for this
report to your staff the week of November 29, 2004. The GAO offered no
new recommendations in this draft report. However, as stated in its
response to your April 2002 report on the same topic, the Department
intends to establish a more effective system for updating savings
estimates for the 2005 Base Realignment and Closure round.
The Department appreciates the opportunity to comment on the draft
report.
Sincerely,
Signed by:
Philip W. Grone:
Deputy Undersecretary of Defense (Installations and Environment):
[End of section]
Appendix VI: Key Prior GAO Reports on DOD's Base
Realignments and Closures:
Military Base Closures: Assessment of DOD's 2004 Report on the Need for
a Base Realignment and Closure Round. GAO-04-760. Washington, D.C.: May
17, 2004.
Military Base Closures: Observations on Preparations for the Upcoming
Base Realignment and Closure Round. GAO-04-558T. Washington, D.C.:
March 25, 2004.
Military Base Closures: Better Planning Needed for Future Reserve
Enclaves. GAO-03-723. Washington, D.C.: June 27, 2003.
Military Base Closures: Progress in Completing Actions from Prior
Realignments and Closures. GAO-02-433. Washington, D.C.: April 5, 2002.
Military Base Closures: DOD's Updated Net Savings Estimate Remains
Substantial. GAO-01-971. Washington, D.C.: July 31, 2001.
Military Bases: Status of Prior Base Realignment and Closure Rounds.
GAO/NSIAD-99-36. Washington, D.C.: December 11, 1998.
Military Bases: Review of DOD's 1998 Report on Base Realignment and
Closure. GAO/NSIAD-99-17. Washington, D.C.: November 13, 1998.
Military Bases: Lessons Learned from Prior Base Closure Rounds. GAO/
NSIAD-97-151. Washington, D.C.: July 25, 1997.
Military Bases: Closure and Realignments Savings Are Significant, but
Not Easily Quantified. GAO/NSIAD-96-67. Washington, D.C.: April 8,
1996.
Military Bases: Analysis of DOD's 1995 Process and Recommendations for
Closure and Realignment. GAO/NSIAD-95-133. Washington, D.C.: April 14,
1995.
Military Bases: Analysis of DOD's Recommendations and Selection Process
for Closures and Realignments. GAO/NSIAD-93-173. Washington, D.C.:
April 15, 1993.
Military Bases: Observations on the Analyses Supporting Proposed
Closures and Realignments. GAO/NSIAD-91-224. Washington, D.C.: May 15,
1991.
Military Bases: An Analysis of the Commission's Realignment and Closure
Recommendations. GAO/NSIAD-90-42. Washington, D.C.: November 29, 1989.
[End of section]
Appendix VII: GAO Contact and Staff Acknowledgments:
GAO Contact:
James R. Reifsnyder (202) 512-4166:
Acknowledgments:
In addition to the individual named above, Nancy Benco, Paul Gvoth,
Warren Lowman, Tom Mahalek, Dave Mayfield, Charles Perdue, Stephanie
Stokes, and Dale Weinholt made key contributions to this report.
Public Affairs:
Susan Becker, Acting Manager, BeckerS@gao.gov (202) 512-4800 U.S.
Government Accountability Office, 441 G Street NW, Room 7149
Washington, D.C. 20548:
FOOTNOTES
[1] The implementation period is the time allotted (6 years for the
1991, 1993, and 1995 rounds) for actual base realignments or closures
following approval of such recommended actions. Actions related to
disposing of BRAC properties, such as environmental cleanup and
transfer of properties determined to be surplus to DOD needs, can
extend beyond that time.
[2] 31 U.S.C. § 7.17.
[3] GAO, Military Base Closures: Progress in Completing Actions from
Prior Realignments and Closures, GAO-02-433 (Washington, D.C.: Apr. 5,
2002).
[4] In this report, "transferred property" refers to property that has
been deeded to another user; it does not include leased property.
[5] The 1988 round was completed under the Defense Authorization
Amendments and Base Closure and Realignment Act (P.L. 100-526, Title
II, Oct. 24, 1988, as amended). The last three rounds were completed
under the Defense Base Closure and Realignment Act of 1990 (P.L. 101-
510, Title XXIX, Nov. 5, 1990, as amended).
[6] The number of recommendations may vary depending on how they are
categorized. In this report, the recommendations include closures,
realignments, disestablishments, relocations, and redirections. In a
closure, all missions that are carried out at a base either cease or
relocate, while in a realignment, a base remains open but loses and
sometimes gains missions. "Disestablishments" and "relocations" refer
to missions; those disestablished cease operations, while those
relocated are moved to another base. "Redirections" refer to cases in
which a BRAC Commission changes the recommendation of a previous
commission.
[7] The 1995 BRAC round recommendation to close family housing units on
Fort Buchanan, Puerto Rico, was not implemented because DOD's
Appropriations Act for Fiscal Year 1999 (P.L. 105-262) authorized the
Secretary of Defense to retain all or a portion of the units in support
of the U.S. Army South's (USARSO) relocation from Panama to Fort
Buchanan. On September 30, 2003, USARSO officially completed a further
restationing from Puerto Rico to Texas.
[8] A local redevelopment authority is any authority or instrumentality
established by a state or local government and recognized by the
Secretary of Defense, through the Office of Economic Adjustment, as the
entity responsible for developing the redevelopment plan with respect
to an installation or for directing implementation of the (land reuse)
plan.
[9] P.L. 107-314, § 2811, 2812 (Dec. 2, 2002).
[10] While Naval Station Roosevelt Roads was closed under special
legislation (P.L. 108-87 § 8132 (Sept. 30, 2003)) rather than under the
prior BRAC rounds, the legislation directed that the disposal of the
property follow the BRAC property disposal process.
[11] 42 U.S.C. § 9601 et. seq.
[12] 42 U.S.C. § 9620(h)(3)(c).
[13] GAO-02-433 and GAO, Military Bases: Status of Prior Base
Realignment and Closure Rounds, GAO/NSIAD-99-36 (Washington, D.C.: Dec.
11, 1998).
[14] GAO, Military Base Closures: Overview of Economic Recovery,
Property Transfer, and Environmental Cleanup, GAO-01-1054T
(Washington, D.C.: Aug. 28, 2001) and GAO, Military Base Closures:
DOD's Updated Net Savings Estimate Remains Substantial, GAO-01-971
(Washington, D.C.: July 31, 2001).
[15] The unneeded acreage does not include property at the Pueblo
Chemical Depot, Colorado, and the Umatilla Chemical Depot, Oregon,
which, although designated as unneeded, will not be available for
further disposition until the chemical demilitarization mission at
these bases is completed.
[16] Ordnance that remains unexploded either through malfunction or
design and can injure personnel or damage material. Types of UXO
include bombs, missiles, rockets, artillery rounds, ammunition, or
mines. DOD, Defense Environmental Restoration Program Annual Report to
Congress--Fiscal Year 2003 (Washington, D.C., April 2004), Appendix F,
page F-21. In this report UXO also refers to munitions and explosives
of concern (MEC).
[17] P.L. 106-65, § 2821 (Oct. 5, 1999).
[18] P.L. 107-107, § 3006 (Dec. 28, 2001).
[19] See P.L. 107-239 (Oct. 11, 2002).
[20] [0] The Navy occupied the property comprising the former Naval Air
Facility, Adak, Alaska, under a public land withdrawal within a
national wildlife refuge. Special legislation ratified a land transfer
agreement among the Navy, the U.S. Fish and Wildlife Service (USFWS),
and The Aleut Corporation (an Alaska Native regional corporation) under
which the Navy relinquished 47,000 acres of the public land withdrawal
to the Department of the Interior, which in turn conveyed the property
to The Aleut Corporation in exchange for other lands within the
national wildlife refuge boundaries. The Navy relinquished an
additional 24,000 acres to USFWS, which resumed full custody as part of
the wildlife refuge.
[21] 42 U.S.C. § 9620 (h) (3) (c).
[22] For more information, see DOD's Early Transfer Guide (http://
www.dtic.mil/envirodod/Policies/BRAC/ETA_Guide.pdf).
[23] At the time of our review, the latest available budget execution
data were through fiscal year 2003.
[24] See DOD, Report of the Department of Defense on Base Realignment
and Closure (Washington, D.C.: April 1998).
[25] GAO, Military Base Closures: Reducing High Costs of Environmental
Cleanup Requires Difficult Choices, GAO/NSIAD-96-172 (Washington,
D.C.: Sept. 5, 1996).
[26] DOD Inspector General, Independent Auditor's Report on the
Department of Defense Fiscal Year 2003 Agency-Wide Principal Financial
Statements, D-2004-036 (Arlington, Va.: Dec. 10, 2003) and Financial
Management: Environmental Liabilities Required To Be Reported on Annual
Financial Statements, D-2004-080 (Arlington, Va.: May 5, 2004).
[27] DOD established the Military Munitions Response Program under the
Defense Environmental Restoration Program (DERP) in September 2001.
Initial program requirements and management structure are set out in
"Management Guidance for the Defense Environmental Restoration Program,
September 2001."
[28] Improving DOD Infrastructure and Facilities: Hearing on Defense
Budget Before the Readiness Subcommittee of the House Armed Services
Committee, 108th Cong. (Feb. 26, 2004) (statement of Raymond F. Dubois,
Deputy Undersecretary of Defense, Installations and Environment).
[29] H.R. Conf. Rpt. No. 108-342 at 17 (2003).
[30] DOD letter to Congress dated July 7th, 2004, on plans to address
perchlorate at BRAC properties as directed by H.R. Conf. Rpt. No. 108-
342 at 17 (2003).
[31] Our prior work has shown that a number of factors, including
national, regional, and local economic trends; leadership and teamwork;
public confidence; and government assistance may also play important
roles in the economic recovery process.
[32] The figures do not include jobs lost or created in the civilian
communities surrounding the realigned or closed bases.
[33] Average annual real per capita income rates for 2002-2003 or later
incorporate new Office of Management and Budget metropolitan area
definitions that are not consistent with those for the communities we
have assessed in this and previous BRAC update reports.
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