Defense Infrastructure
Issues Need to Be Addressed in Managing and Funding Base Operations and Facilities Support Gao ID: GAO-05-556 June 15, 2005Concerns have surfaced in Congress and various media regarding the adequacy of funding for base operations support (BOS) functions of military installations as well as the quality and level of support being provided. As requested, this report addresses (1) the historical funding trends for BOS as contrasted with funding for facilities sustainment, restoration and modernization (S/RM); (2) how effectively the Department of Defense (DOD) and the military services have been able to forecast BOS requirements and funding needs; and (3) how the Army's and Navy's reorganizations for managing installations have affected support services, and whether the Air Force and Marine Corps could benefit from similar reorganizations.
Congress has designated increased funding for BOS programs in recent years, sometimes more than requested, but because those amounts were often less than the cost of BOS services provided at installations, hundreds of millions of dollars designated for S/RM and other purposes were redesignated by the military services to pay for BOS. As GAO has previously reported, such funding movements while permissible are disruptive to the orderly provision of services, contribute to the degradation of many installation facilities, and can adversely affect the quality of life and morale of military personnel. The problem appears to be greatest in the Army. Further, in fiscal year 2004, U.S. military installations faced additional pressures in managing available BOS and S/RM funding as the services redesignated varying amounts of these funds to help pay for the Global War on Terrorism. Similar problems are reportedly occurring in fiscal year 2005. While difficult to quantify, installation officials at the locations GAO visited voiced concerns about the potential for these conditions to adversely affect operations and readiness in the future. Moreover, such movements of funds add considerable uncertainty regarding actual BOS requirements and the extent of underfunding. The ability of DOD and its components to forecast BOS funding requirements has been hindered by the lack of a common terminology across the military services in defining BOS functions as well as the lack of a mature analytic process for developing credible and consistent requirements comparable to the model developed for facilities sustainment. The lack of common definitions among the services, particularly where one service resides as a tenant on an installation operated by another service, can lead to differing expectations for installation services, and it obscures a full understanding of the funding required for BOS services. Because the military services have often based future requirements estimates largely on prior expenditures, they do not necessarily know if BOS services were provided at appropriate levels. DOD and the military services have a strategic plan for installations and have multiple actions under way to address these problems, but they have not synchronized varying time frames for accomplishing related tasks. Until these problems are resolved, DOD will not have the management and oversight framework in place for identifying total BOS requirements, providing Congress with a clear basis for making funding decisions, and ensuring adequate delivery of services. While the Army's and Navy's creation of centralized installation management agencies can potentially create efficiencies and improve the management of the facilities through streamlining and consolidation, implementation of these plans has so far met with mixed results in quality and level of support provided to activities and installations. Until more experience yields perspective on their efforts to address the issues identified in this report, GAO is not in a position to determine whether the approach should be adopted by the other services.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-05-556, Defense Infrastructure: Issues Need to Be Addressed in Managing and Funding Base Operations and Facilities Support
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Report to the Subcommittee on Readiness, Committee on Armed Services,
House of Representatives:
June 2005:
Defense Infrastructure:
Issues Need to Be Addressed in Managing and Funding Base Operations and
Facilities Support:
GAO-05-556:
GAO Highlights:
Highlights of GAO-05-556, a report to the Subcommittee on Readiness,
Committee on Armed Services, House of Representatives:
Why GAO Did This Study:
Concerns have surfaced in Congress and various media regarding the
adequacy of funding for base operations support (BOS) functions of
military installations as well as the quality and level of support
being provided. As requested, this report addresses (1) the historical
funding trends for BOS as contrasted with funding for facilities
sustainment, restoration and modernization (S/RM); (2) how effectively
the Department of Defense (DOD) and the military services have been
able to forecast BOS requirements and funding needs; and (3) how the
Army‘s and Navy‘s reorganizations for managing installations have
affected support services, and whether the Air Force and Marine Corps
could benefit from similar reorganizations.
What GAO Found:
Congress has designated increased funding for BOS programs in recent
years, sometimes more than requested, but because those amounts were
often less than the cost of BOS services provided at installations,
hundreds of millions of dollars designated for S/RM and other purposes
were redesignated by the military services to pay for BOS. As GAO has
previously reported, such funding movements while permissible are
disruptive to the orderly provision of services, contribute to the
degradation of many installation facilities, and can adversely affect
the quality of life and morale of military personnel. The problem
appears to be greatest in the Army. Further, in fiscal year 2004, U.S.
military installations faced additional pressures in managing available
BOS and S/RM funding as the services redesignated varying amounts of
these funds to help pay for the Global War on Terrorism. Similar
problems are reportedly occurring in fiscal year 2005. While difficult
to quantify, installation officials at the locations GAO visited voiced
concerns about the potential for these conditions to adversely affect
operations and readiness in the future. Moreover, such movements of
funds add considerable uncertainty regarding actual BOS requirements
and the extent of underfunding.
The ability of DOD and its components to forecast BOS funding
requirements has been hindered by the lack of a common terminology
across the military services in defining BOS functions as well as the
lack of a mature analytic process for developing credible and
consistent requirements comparable to the model developed for
facilities sustainment. The lack of common definitions among the
services, particularly where one service resides as a tenant on an
installation operated by another service, can lead to differing
expectations for installation services, and it obscures a full
understanding of the funding required for BOS services. Because the
military services have often based future requirements estimates
largely on prior expenditures, they do not necessarily know if BOS
services were provided at appropriate levels. DOD and the military
services have a strategic plan for installations and have multiple
actions under way to address these problems, but they have not
synchronized varying time frames for accomplishing related tasks. Until
these problems are resolved, DOD will not have the management and
oversight framework in place for identifying total BOS requirements,
providing Congress with a clear basis for making funding decisions, and
ensuring adequate delivery of services.
While the Army‘s and Navy‘s creation of centralized installation
management agencies can potentially create efficiencies and improve the
management of the facilities through streamlining and consolidation,
implementation of these plans has so far met with mixed results in
quality and level of support provided to activities and installations.
Until more experience yields perspective on their efforts to address
the issues identified in this report, GAO is not in a position to
determine whether the approach should be adopted by the other services.
What GAO Recommends:
GAO is recommending that the Secretary of Defense revise the
department‘s previously issued installations strategic plan to resolve
long-standing inconsistencies among the military services‘ definitions
of BOS functions and help expedite development and consistent
application of an analytically sound model for determining BOS
requirements.
DOD agreed with the recommendations and indicated that actions were
under way or planned to implement them.
www.gao.gov/cgi-bin/getrpt?GAO-05-556.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Barry W. Holman at (202)
512-5581 or holmanb@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
While Historical Trends Show an Increase in BOS Funding, the Services
Have Redesignated Other Funds to Meet BOS Services:
Accurate Forecasts of BOS Requirements and Funding Needs Have Been
Hampered by Several Factors:
Centralized Installation Management Has Many Benefits, but More
Perspective Is Needed Before It Can Be Fully Evaluated:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Scope and Methodology:
Appendix II: BOS Functions and Activities Used by the Military
Services:
Appendix III: Army and Navy Base Operations Support Management
Structure:
Appendix IV: Impact of Funding Constraints on BOS and S/RM Activities:
Appendix V: Navy, Marine Corps, and Air Force Funding Trends:
Appendix VI: Comments from the Department of Defense:
Appendix VII: GAO Contact and Staff Acknowledgments:
Related GAO Products:
Figures:
Figure 1: Army BOS Funding, Fiscal Years 2001-04:
Figure 2: Army S/RM Funding, Fiscal Years 2001-04:
Figure 3: Army BOS Functions and Activities:
Figure 4: Navy BOS Functions and Activities:
Figure 5: Marine Corps BOS Functions and Activities:
Figure 6: Air Force BOS Functions and Activities:
Figure 7: Army Installation Management Agency Organization:
Figure 8: Army Installation Management Agency Locations:
Figure 9: CNI Organization:
Figure 10: CNI Locations:
Figure 11: Navy BOS Funding, Fiscal Years 2001-04:
Figure 12: Navy S/RM Funding, Fiscal Years 2001-04:
Figure 13: Marine Corps BOS Funding, Fiscal Years 2001-04:
Figure 14: Marine Corps S/RM Funding, Fiscal Years 2001-04:
Figure 15: Air Force BOS Funding, Fiscal Years 2001-04:
Figure 16: Air Force S/RM Funding, Fiscal Years 2001-04:
Abbreviations:
BOS: base operations support:
CNI: Commander, Navy Installations:
DOD: Department of Defense:
IMA: Installation Management Agency:
O&M: operation and maintenance:
OSD: Office of the Secretary of Defense:
S/RM: sustainment, restoration and modernization:
Letter June 15, 2005:
The Honorable Joel Hefley:
Chairman:
The Honorable Solomon P. Ortiz:
Ranking Minority Member:
Subcommittee on Readiness:
Committee on Armed Services:
House of Representatives:
The Department of Defense (DOD) manages nearly 517,000 buildings and
structures (replacement value of $650 billion) and over 46,000 square
miles of real estate at its bases and installations worldwide. At the
same time, DOD recognizes that it maintains infrastructure in excess of
its needs,[Footnote 1] and that it faces challenges in allocating
sufficient funds to maintain this infrastructure and supporting other
base operating needs. We have previously reported on the impact
resulting from such underfunding, including the deterioration of
facilities, and its negative effects on the quality of life for those
living and working at the installations and on their ability to
accomplish their mission activities.[Footnote 2] More recently, you and
others have expressed concerns about the adequacy of funding for
overall base operations and whether funds were being moved to meet
other pressing needs, leaving shortfalls in base operating accounts.
Operation and maintenance (O&M) funding is the primary category of
funds used to keep military installations running and the facilities in
good working order. Within O&M funding, there are distinct functional
areas, including (1) base operations support (BOS)--a term used to
describe a collection of day-to-day programs, activities, and services
needed to keep the bases and installations running;[Footnote 3] (2)
facilities sustainment, restoration and modernization (S/RM)--the
recurring maintenance and repairs needed to keep facilities in good
working order and in up-to-date condition; and (3) mission support--the
goods and services needed to prepare for and conduct combat and
peacetime missions, including training and weapons systems maintenance.
For fiscal year 2004 O&M activities, Congress appropriated about $83.5
billion for active duty forces and about $14.3 billion for reserve and
national guard forces, excluding DOD-wide and miscellaneous O&M
activities.[Footnote 4] Within the O&M appropriations, conference
report data show that Congress designated[Footnote 5] $14 billion for
BOS, $5.5 billion for facilities sustainment, and $78.3 billion for
mission and other support. These designations were based on the sum of
a set of defined program elements or activity groups and subactivity
groups supporting the appropriation bill's conference report, and are
not binding unless they are incorporated directly or by reference into
an appropriation act or other statute. Thus, DOD and its components
have considerable flexibility in using O&M funds and can redesignate
funds among activity and subactivity groups in various ways.
Accordingly, it is important to note that amounts designated in the
services' accounting records for O&M functional areas, such as BOS, do
not perfectly coincide with these congressional designations. For
example, according to historical data provided by the military
services, fiscal year 2004 O&M funds designated for BOS services
totaled $15.6 billion, about $1.6 billion more than data supporting the
conference report showed as being designated for BOS at the beginning
of the fiscal year. Service officials attributed the variance to their
accounting for the BOS services provided at their respective
installations--the number and names of which are different and expanded
from the BOS subactivity groups used for the conference report--and to
funding redesignations that occur during the year. Accordingly, this
report uses the congressional designations as adjusted by the services'
accounting and redesignations of O&M funds for BOS and S/RM to depict
funding trends.
Until recently, the Office of the Secretary of Defense (OSD) and the
military services have, for the most part, carried out installation
management functions at the local level, where installation commanders
have set priorities and regularly moved funds among BOS, S/RM, and
mission support accounts to pay for services and programs at their
respective installations. Increasingly, however, some of military
services are moving to centralize the management of these activities,
with the expectation that such efforts would help mitigate previous
problems of funds intended for installation management being
redesignated to other purposes.
This report addresses (1) the historical funding trends for BOS
functions, as contrasted with funding for S/RM; (2) how effectively DOD
and the military services have been able to forecast BOS requirements
and funding needs; and (3) how the Army's and the Navy's
reorganizations for managing installations have affected the quality
and level of support provided to individual activities and
installations, and whether the Air Force and Marine Corps would benefit
from similar reorganizations.
To address these questions, we met with officials in DOD's Office of
Installations and Environment and with Army, Air Force, Navy, and
Marine Corps headquarters officials and collected and analyzed
historical funding data. We obtained data on historic funding levels
from fiscal years 2001 through 2004 from the military services based on
their categorization of BOS functions, but we concentrated our analysis
principally on fiscal year 2004, the most recent year for which
obligation data were available. To ensure consistency in analyzing
funding trends from one year to the next, the historical data provided
by the services and used in this report do not include congressional
adjustments of a one-time nature or supplemental appropriations for O&M
that Congress provided during a particular fiscal year for such things
as hurricane damage cleanup and repairs or for the Global War on
Terrorism.[Footnote 6] We determined that the data were sufficiently
reliable for the purposes of this review in indicating broad trends and
comparisons between identified requirements, budget requests,
designated funding amounts, and subsequent obligations of funds for BOS
and S/RM functions. However, various data limitations are noted
throughout the report, such as differences between conference committee
designations for BOS funding and amounts categorized by the services.
We obtained information on the roles that OSD and the military services
play in the overall base operations process, requirements
determination, budgeting, and installations management. We visited two
Air Force bases; two Marine Corps bases; three Army bases; six Navy
bases; the Army's Installation Management Agency's (IMA) Headquarters
and Southwest and Northeast regions; and the Commander, Navy
Installations (CNI) Command's Headquarters and South and Southwest
regions. We performed our work in accordance with generally accepted
government auditing standards from April 2004 through April 2005. More
details on our scope and methodology are presented in appendix I.
Results in Brief:
Congress has designated increased funding for BOS in recent years,
sometimes more than requested, but because the approved increases are
often less than the cost of BOS services provided at military
installations (particularly the Army's), hundreds of millions of
dollars designated for S/RM and other purposes have been redesignated
to meet BOS needs. In some respects this is a reversal of a trend we
saw a few years ago, where BOS funds were more likely to be
redesignated to fund facilities maintenance and mission training needs.
We found similar though less pronounced funding redesignations in the
Air Force, Navy, and Marine Corps data. Each service faced problems
because funds were moved among BOS and S/RM accounts during the year.
Further, in fiscal year 2004, U.S. military installations faced
additional pressures in managing available BOS and S/RM funding as the
services redesignated varying amounts of O&M funds that would have been
designated for BOS and S/RM to help instead pay for the Global War on
Terrorism. At the end of fiscal year 2004, installations received
additional funds to help offset shortfalls endured during the year. The
timing made it difficult for the installations to execute many of their
BOS and S/RM activities efficiently and effectively, however, and it
resulted in the Army underexecuting its S/RM funding designations by
$882 million in fiscal year 2004. Various indicators suggest that
similar funding redesignations are occurring in fiscal year 2005. Such
problems adversely affect efforts to maintain facilities and provide
base support services. Although these actions are disruptive to planned
maintenance and support programs and have the potential to adversely
affect quality of life and morale, it typically is difficult to
determine any immediate impact they may have on readiness. At the
installations we visited, however, officials often voiced concerns
about the potential impact on operations and readiness in the future
should these conditions continue. At the same time, such movements of
funds add considerable uncertainty regarding amounts required and the
degree to which BOS services may be underfunded.
DOD and the military services' ability to forecast BOS requirements and
funding needs has been hindered by the lack of a common terminology
across the military services in defining BOS functions, as well as by
the lack of a mature analytic process for developing BOS requirements
comparable to that developed for facilities sustainment requirements.
Lack of common definitions among the services, particularly where one
service resides as a tenant on an installation operated by another
service, can lead to differing expectations for services, and it
obscures a full understanding of the funding that is required for BOS
services. Each service has historically developed its own BOS
requirements and funding needs subject to its own definition of BOS and
the types and levels of services it deems necessary. Until recently,
each has relied heavily on previous expenditures as the basis for
stating future requirements. But while the military services can tell
Congress how much was spent in an area in the past, they do not
necessarily know whether BOS services were provided at appropriate
levels or how much it should cost to provide them in the future. Until
such problems are resolved, DOD will not have the management and
oversight framework in place that it needs for identifying total BOS
requirements and ensuring adequate delivery of services, particularly
in a joint environment. Various efforts are under way, either within
the military services or led by OSD, to strengthen their respective
abilities to forecast future requirements. OSD and the services
recognize, however, that additional efforts are needed. Within the past
year they have started working to develop common definitions,
standards, and performance metrics. However, as they are still in the
early stages of developing these initiatives, time frames for
accomplishing many of the specific actions under way or planned have
either not been established or vary among working groups. This creates
uncertainty about the accuracy of time frames being reported for
completing the respective tasks and raises questions about how well
coordinated and integrated these efforts will be. Improvements in these
areas will be important to ensuring consistency in identifying the base
operations services expected to be provided, particularly where
multiple military services with varying support needs are located on
individual military installations, and in providing Congress with a
clear basis for making funding decisions.
While many officials view the Army's and Navy's creation of centralized
installation management agencies as having the potential to create
efficiencies and improve the management of the facilities through
streamlining and consolidation, implementation of these plans has to
date met with mixed results in the quality and level of support
provided to activities and installations. A common concern voiced by
individuals at the installations we visited was that the centralized
management efforts had not sufficiently recognized the diverse needs of
the installations' many tenants who require quick reaction in the face
of changing circumstances. Navy and Army officials acknowledge such
problems as growing pains associated with implementing the new approach
and indicated that they are working to address them. Nevertheless,
until more experience is gained from efforts to address the issues
identified in this report, we are not in a position to recommend one
approach over the other. Using a more decentralized facilities
management approach at the time of our review, the Air Force and Marine
Corps were emphasizing selective consolidation and efficiency measures
to improve operations and achieve savings.
We are making recommendations in this report for DOD to update its
strategic plan and to include specific actions and establish time
frames to, first, resolve long-standing inconsistencies among the
definitions of BOS services and, second, help expedite the development
and implementation of an analytically sound and consistently applied
model for determining BOS requirements. In commenting on a draft of
this report, DOD agreed with our recommendations and indicated that
actions were under way or planned to implement them.
Background:
DOD manages nearly 517,000 buildings and structures (replacement value
of $650 billion) and over 46,000 square miles of real estate at its
bases and installations worldwide. These facilities must be properly
maintained or they are subject to premature deterioration. At these
bases and installations, DOD prepares for and conducts combat and
peacetime missions, including training and weapons systems maintenance.
Doing so requires significant amounts of BOS services, such as
information management; systems operations and maintenance; facilities
engineering; transportation; utilities; environmental, safety, and
health services; housing; food services; morale, welfare, and
recreation services; security and fire services; and disaster
preparedness.
Funding for O&M:
O&M funds finance the costs of operating and maintaining military
operations for active and reserve components, including related support
activities of DOD, but excluding military personnel costs. Included are
pay for civilians, services for maintenance of equipment and
facilities, fuel, supplies, and spare parts for weapons and equipment.
Funding requirements are influenced by many factors, including force
structure levels, such as the number of aircraft squadrons and Army and
Marine Corps divisions; installations; military personnel strength and
deployments; rates of operational activity; and the quantity and
complexity of equipment such as aircraft, ships, missiles, and tanks in
operation. For fiscal year 2004, Congress appropriated $114 billion for
O&M activities.[Footnote 7] DOD uses distinct activities and accounting
structures to manage O&M budgeting and funding for functional areas
such as the following:
* BOS--a term that derives from the "base operations" program area
(which includes installation transportation, supply, information
management, food services, legal and accounting services, and so forth)
to which the military services have added other program areas including
family and quality of life programs, force protection, environmental
compliance and conservation programs, communications services, and
grounds maintenance, as well as other facilities services such as
utilities, leases, and custodial services, which OSD has referred to as
real property services.[Footnote 8] Thus, in practice BOS is not a
single, well-defined program area but a collection of many diverse
programs, activities, and services. The different BOS functions and
activities used by the military services are shown in appendix II.
* S/RM--the maintenance and repairs needed to keep facilities in good
working order and in up-to-date condition. Sustainment funds cover
expenses for all recurring maintenance costs and contracts, as well as
for major repairs of nonstructural facility components (for example,
replacing the roof or repairing the air conditioning system) that are
expected to occur during a facility's life cycle. In addition to
facilities sustainment, O&M funds are sometimes used for facilities
restoration and modernization. Restoration includes repair and
replacement work needed to restore facilities damaged by inadequate
sustainment, excessive age, natural disaster, fire, accident, or other
causes. Modernization includes altering or modernizing facilities to
meet new or higher standards, accommodate new functions, or replace
structural components.
* Mission support--the goods and services needed to prepare for and
conduct combat and peacetime missions, including training and weapons
systems maintenance. O&M funds are used by the armed forces and defense
agencies to prepare for and conduct combat and peacetime missions. For
example, DOD uses O&M funds to increase combat proficiency through
flying and ground training operations; to acquire fuel, support
equipment, and spare parts for training operations; to pay supporting
civilian personnel; and to purchase supplies, equipment, and service
contracts for the repair of weapons and weapons systems.
According to historical data provided by the military services, fiscal
year 2004 O&M funds designated for BOS services totaled $15.6 billion,
about $1.6 billion more than data supporting the conference report
showed as being designated for BOS at the beginning of the fiscal year.
Service officials attributed the variance to their accounting for the
BOS services provided at their respective installations--the number and
names of which are different and expanded from the BOS subactivity
groups used for the conference report--and to funding redesignations
that occur during the year. Accordingly, this report uses the
congressional designations as adjusted by the services' accounting and
redesignations of O&M funds for BOS and S/RM to depict funding trends.
Further, to better project trend data consistently, the historical data
provided by the services included in this report do not include
congressional adjustments of a one-time nature or supplemental
appropriations for O&M that Congress provided during a particular
fiscal year for such things as hurricane damage cleanup and repairs or
for the Global War on Terrorism.
Services' Organizational Structures for Managing Installations:
Until recent years, the military services had, for the most part,
carried out installation management functions at the local level, where
the installation commanders received O&M funding for various
subactivities and set priorities among competing demands. They also had
the flexibility to make trade-offs in the face of funding limitations,
shifting funds among subactivities' competing priorities, and to meet
unanticipated demands. We have previously reported on the movement of
funds from BOS to alleviate shortfalls in S/RM, and we have also
reported instances where funds intended for maintaining facilities had
to be used to support base operations or to cover other mission costs.
However, such movements of funds often raised or aggravated concerns
about the adequacy of funding for each of these areas or about how
efficiently and effectively programs were executed during the year.
The Army and the Navy have recently taken steps to reorganize and
centralize their installation management activities. One of the
expectations established in setting up these centralized activities was
that they would curtail or prevent the movement of funds from
facilities and base operations to other priorities and create greater
stability in the execution of those activities. IMA was activated on
October 1, 2002, providing consolidated management of Army
installations worldwide. The services managed by IMA include
engineering, information technology, resource management, and other
installation support activities. The agency's objective is to
standardize installation management services, providing consistent and
equitable facilities and services via common standards. IMA is made up
of seven regional offices, four in the continental United States and
three overseas. To establish IMA, the Department of the Army worked
with its major commands to identify the activities, personnel, and
resources that provided facilities and base operations support. These
service activities and the associated workforce were then
organizationally realigned from the major commands and their
installation commanders to establish IMA. Under the reorganization, IMA
headquarters assumed control of the BOS and S/RM budgets in fiscal year
2004 and determined the funding for these programs and activities.
CNI was activated October 1, 2003, and is responsible for Navy-wide
installation management. Its mission is to provide uniform program,
policy, and funding management, along with oversight of shore
installation support. Prior to the activation of CNI, management of its
base operations support activities was conducted at regional levels.
With the activation of CNI, shore installation management and the
personnel associated with those functions were organizationally
realigned under CNI's control. CNI is made up of 16 regions, 10 in the
continental United States and 6 overseas. Consolidation of the
management of services provided at the regional and installation levels
was intended to reduce base operating support costs through the
elimination of unnecessary management layers, duplicative overhead and
redundant functions. The Army and Navy reorganizational management
structures are discussed further in appendix III.
The Marine Corps, because it is small, has always been somewhat
centrally managed, but it generally leaves to the individual base
commanders the decisions about the level of BOS services required and
issues regarding quality of life at an installation. The Air Force has
integrated BOS and installations management into its mission programs
and continues to manage in a decentralized manner, using Air Force-
level guidance. In the Air Force, major commands are actively engaged
with subordinate commanders in the funding and management of Air Force
installations.
Strategic Plan for Installations:
We have cited the need for and DOD has in recent years developed a
facilities strategic plan to guide future facilities efforts. Our
February 2003 report[Footnote 9] noted that DOD's strategic plan for
facilities had weaknesses that included a lack of comprehensive
information on specific actions, time frames, assigned
responsibilities, and resources--the elements of a well-developed
strategic plan--that are required to meet the plan's vision.
In September 2004, the Deputy Under Secretary of Defense for
Installations and Environment released the department's updated Defense
Installations Strategic Plan, which outlines a set of initiatives with
some milestones to sustain, restore, and modernize installation
assets.[Footnote 10] The vision set forth in the plan is to have
installation assets and services, including BOS, available when and
where needed, with the joint capabilities and capacities necessary to
support DOD missions effectively and efficiently.
Prior GAO Reports:
Since 1997, we have identified DOD support infrastructure as a high-
risk area. We have completed a number of reviews in which we identified
numerous examples of the services' moving O&M funds out of accounts
congressionally designated to support one functional area and into
another to meet competing needs. We examined the impacts on areas such
as facilities maintenance and BOS--areas that were already considered
to be underfunded against projected needs. For example, our February
2000 report compared the funding amounts that Congress had designated
for DOD's O&M subactivities, including BOS and S/RM, with DOD's
obligations for those same subactivities, and we showed that DOD
consistently obligated a different amount from what Congress had
designated.[Footnote 11] In February 2003, we reported that O&M funds
designated for facilities sustainment were reduced or held back at the
service headquarters, major command, and installation levels to cover
more pressing needs or emerging requirements.[Footnote 12] As a result
of these holdbacks and movements, we concluded that the amounts of
funds spent on facilities maintenance and repairs were not sufficient
to reverse the trend of facility deterioration. Our February 2003
report also noted the shifting of funds from one O&M functional account
to resolve funding shortfalls in another. For example, it noted the
difficulty that redesignating facilities sustainment funds to other
purposes makes for installations in implementing rational facilities
sustainment plans.
While Historical Trends Show an Increase in BOS Funding, the Services
Have Redesignated Other Funds to Meet BOS Services:
Congress has designated increased funding for BOS in recent years,
sometimes more than requested, but often to amounts that were lower
than the cost of BOS services provided at installations, particularly
in the Army. This has resulted in hundreds of millions of dollars
originally designated for facilities maintenance being redesignated by
the services to meet BOS needs. As a result, the Army has faced
problems in executing planned programs effectively. Supplemental
funding may be made available to installations late in the fiscal year,
as occurred in fiscal year 2004, making it difficult for an
installation to execute many of its BOS and S/RM activities promptly
and efficiently.[Footnote 13] For example, base services may be reduced
and routine maintenance and repair of facilities may be deferred. (App.
IV highlights some key impacts of funding shortfalls and redesignations
on BOS and S/RM activities and locations we visited.) Such problems
adversely affect efforts to maintain facilities, provide base support
services, and conduct mission training, but the overall impact is often
difficult to gauge in the short term. We found similar, though less
pronounced, funding redesignations in the Navy, Marine Corps, and Air
Force.
Army Funding Trends:
Available data show differences between the amounts the Army projected
as required for BOS and the amounts included in budget requests, the
congressionally designated amounts as adjusted by the Army, and the
amounts that were actually obligated for each fiscal year from 2001
through 2004. Congress gave the Army increasing funds for BOS in some
fiscal years, but these funds were less than the amounts projected by
the Army as being required and less than the amounts that were actually
obligated. As shown in figure 1, fiscal year 2004 data showed a spike
in projected requirements due at least in part to the Army's use of a
model that projected requirements at a higher level of service than was
previously used in projecting budget requirements. Obligations were
higher than funds initially provided, with funds being moved to BOS
from other accounts, such as S/RM, to permit this increase.[Footnote
14] At the same time, funding turbulence across BOS and facility
sustainment accounts was exacerbated in fiscal year 2004 as the Army
withheld funds that otherwise would have been designated to fund BOS
and S/RM, to help pay for the Global War on Terrorism, although some
funding was restored toward the end of the fiscal year. Such turbulence
occurring during the year makes it difficult to execute planned
programs effectively and, as noted later, resulted in the Army's
underexecuting its S/RM program in fiscal year 2004.
Figure 1: Army BOS Funding, Fiscal Years 2001-04:
[See PDF for image]
Notes:
(1) Dollars are in constant fiscal year 2004 dollars.
(2) As discussed in a later section of this report, Army officials
indicated they are taking steps to improve their requirements
determination process for BOS funding.
(3) Obligations exceeded adjusted congressionally designated amounts as
a result of authorized internal adjustments among accounts. For
example, as discussed below, the Army moved S/RM funds into the BOS
account.
[End of figure]
The data show that BOS funding provided by Congress increased in fiscal
year 2002, remained stable in fiscal year 2003, and declined in fiscal
year 2004. They also show that BOS obligations increased, particularly
in 2003 and 2004, and that the Army routinely obligates more for BOS
services than adjusted congressionally designated amounts, through
redesignations of funds from other accounts. For example, in fiscal
year 2004, the Army's request for BOS funding--$5.756 billion--was
about 65 percent of the amount it projected as being needed to provide
traditional levels of BOS services. According to Army officials, while
congressionally designated amounts as adjusted by the Army-- $6.009
billion--were somewhat more than they requested, during the year they
nevertheless had to reduce BOS programs because they did not have
sufficient funds to pay for traditional levels of BOS services since
they had to temporarily move some BOS funds to pay for the Global War
on Terrorism. To what extent the Army's actual needs increased over
prior years is difficult to fully gauge because, according to Army
officials, the requirements model used for fiscal year 2004 budget
requests reflected improved information on the resources needed to
provide BOS programs and services compared to what they had used in
prior years. At the same time, because many BOS programs involved bills
that must be paid in a timely manner (such as utilities and contracts),
during the year the Army moved $882 million from S/RM accounts and $816
million from other O&M accounts and used supplemental funding for the
Global War on Terrorism to cover its essential bills and BOS services
(total amount obligated was $7.707 billion).
In contrast with BOS requirements, S/RM trend data show that S/RM
requirements and President's budget requests have remained relatively
constant since fiscal year 2002. Army officials attributed this
consistency to improved facilities sustainment requirements forecasts
achieved by using DOD's facilities sustainment model and a cost factors
handbook, both of which were developed for this purpose in recent
years.[Footnote 15] However, as shown by figure 2, the Army has
consistently requested fewer funding dollars for S/RM services than it
had internally projected as being needed to provide levels of S/RM
services projected by the model. Furthermore, the Army obligated fewer
funding dollars for S/RM activities than adjusted congressionally
designated amounts in the last 3 years.
Figure 2: Army S/RM Funding, Fiscal Years 2001-04:
[See PDF for image]
Notes:
(1) Dollars are in constant fiscal year 2004 dollars.
(2) Army officials indicated they had improved S/RM requirements
forecasts by using the DOD facilities sustainment model developed in
1999.
(3) Obligations were less than congressionally designated amounts,
adjusted by the Army, as a result of authorized internal adjustments
among accounts. For example, as discussed below, the Army moved S/RM
funds into the BOS account.
[End of figure]
According to Army officials, the difference between the amounts
designated for S/RM services and the amounts obligated is made up of
funds moved from S/RM activities and redesignated to BOS activities to
pay for "must pay bills" (such as utilities and, increasingly,
obtaining services from contractors). This indicates a continuation of
the historic trend of funds being moved among various O&M subaccounts
during the year, but a reversal of a trend we saw a few years ago where
BOS funds were more likely to be redesignated to fund facilities
maintenance and other needs. S/RM services were also affected by the
Army's withholding O&M funds that otherwise would have been designated
to fund BOS and S/RM, to help pay for the Global War on Terrorism.
Similar problems reportedly are occurring in fiscal year 2005. The Army
ultimately was able to provide additional funds to installations late
in the fiscal year ($100 million in August 2004 and another $100
million on September 30, 2004), as supplemental funding was made
available to cover warfighting costs, but Army officials told us that
the timing made it difficult for the installations to execute many of
their BOS and S/RM activities promptly and efficiently. We noted that
this resulted in the Army's underexecuting its S/RM program by $882
million in fiscal year 2004. As we have previously reported, such
problems adversely affect efforts to maintain facilities and provide
base support services. End-of-year figures shown in figures 1 and 2
mask somewhat the level of turbulence that occurred during the year as
funds moved between accounts. Similar masking occurred in BOS and S/RM
accounts in the other military services.
Other Military Services Have Faced Similar Though Less Pronounced
Problems:
BOS and S/RM funding trends and problems identified in the Army also
occurred in the Navy, Marine Corps, and Air Force but were less
pronounced. Nevertheless, each of these services faced similar
challenges in its ability to execute planned programs effectively as a
result of its moving of funds among accounts. For example, we found the
following:
* Congress gave the Navy increased funding for BOS during some years,
though we found a smaller difference here than for the Army between
identified requirements and funding. The difference between the Navy's
obligations and its funding also appears to be smaller than that for
the Army, but the Navy's obligations for BOS still were greater than
were its congressionally designated amounts for BOS as adjusted by the
Navy. Navy officials said the difference between these adjusted
congressionally designated amounts and the amounts obligated is made up
of funds redesignated from S/RM activities to BOS activities to pay
essential BOS bills such as utilities and, increasingly, obtaining
contractor services.
* Navy S/RM funding trend data show a spike in congressionally
designated amounts adjusted by the Navy and in obligations for fiscal
year 2003. According to Navy officials, 2003 was simply a well-funded
year for Navy shore facilities. However, in fiscal year 2004, S/RM
services were negatively affected by the Navy's withholding of O&M
funds otherwise intended to fund BOS and S/RM to help pay for the
Global War on Terrorism. (Similar problems reportedly are occurring in
fiscal year 2005.) The Navy obligated fewer funding dollars for S/RM
activities in fiscal year 2004 than were initially designated. Although
the Navy also received supplemental funding for the Global War on
Terrorism for BOS and S/RM activities, such turbulence occurring during
the year makes it difficult to execute planned programs effectively and
resulted in the Navy's underexecuting its S/RM program by $393 million
in fiscal year 2004.
* The trend data for BOS obligations present a more mixed picture for
the Marine Corps. For half of the period (2 of 4 years), its
obligations were greater than both congressionally designated amounts,
as adjusted by the Marine Corps, and projected requirements. For
example, in fiscal year 2004, the Marine Corps' BOS obligations of
$1.164 billion were $54 million more than its designated funding
($1.110 billion), representing a movement of funds from other accounts
to support BOS activities.
* S/RM trend data show that the Marine Corps obligated more funding
than adjusted congressionally designated amounts in fiscal years 2001
and 2003, and it obligated less funding than adjusted congressionally
designated amounts in fiscal year 2004. Marine Corps officials said the
differences were due to funds being moved and redesignated among BOS
and S/RM accounts.
* Data were not readily available to provide a trend for the Air
Force's projected BOS requirements.[Footnote 16] Funding trend data for
BOS services and programs within the Air Force show that budgetary
requests, funding, and BOS obligations remained more closely aligned
than was the case for the other services in most years. Nevertheless,
some differences do exist among budget requests, funding, and
obligations.
* Air Force trend data for S/RM activities during fiscal years 2001
through 2004 show that obligations were greater than funding or budget
requests in each of the 4 years. According to Air Force officials, BOS
and other O&M activities' funds were redesignated by installation
commanders in fiscal year 2004 to supplement S/RM funds.
Additional details on funding trends for the Navy, Marine Corps, and
Air Force are included in appendix V.
Accurate Forecasts of BOS Requirements and Funding Needs Have Been
Hampered by Several Factors:
DOD and the military services' ability to forecast BOS requirements and
funding shortfalls have been hindered by the lack of a common
terminology across the services for defining BOS functions, as well as
by their lack of a mature analytic process for developing BOS
requirements comparable to the one developed for facilities sustainment
requirements. The lack of common definitions for BOS services among the
military services impairs the development of a complete picture of
total BOS requirements across the military services, and it can lead to
differing expectations where multiple military services are colocated
on a single installation. Historically, each service has developed its
own BOS requirements and funding needs, based on previous expenditure
levels and subject to its own definition of BOS and the types and
levels of services it has deemed necessary to provide. Various efforts
are under way to improve BOS management and strengthen the ability of
DOD and its components to forecast future requirements, provide
Congress with a clearer basis for making funding decisions, and ensure
adequate delivery of services, but OSD and the services recognize that
more are needed.
Lack of Common Definitions of BOS Functions and Services Leads to
Different Expectations:
In completing this review we found that what constitutes BOS functions
and services varies among the military services, thus contributing to
the existence of different expectations for the levels of BOS services
being provided.[Footnote 17] Also, this variation has carried over into
the support agreements and reimbursement practices used by the
different commands and military services located at the installations.
In visiting various military installations we found a variety of
instances where the lack of a common definition of BOS functions and
services was problematic, most often where multiple commands and
military services were colocated at a single installation.
For example, the Naval Air Station Corpus Christi, Texas, is host to
non-Navy tenants, including the Coast Guard, the U.S. Customs Service,
and an Army Depot. Coast Guard officials said that they enjoy numerous
benefits by being at the base, including no rent payments and better
security, housing, child care, and fitness centers--better conditions
than they had experienced before moving onto the base. Despite the
benefits afforded by their service agreement with the Navy base, Coast
Guard officials expressed concern over decreasing levels of BOS
services, including reductions that negatively impact their mission.
For example, Coast Guard officials said they cannot always meet their
30-minute launch requirement for nighttime air missions because the
base has cut back on operating hours, keeping the airfield open only
during the day. Therefore, Coast Guard officials said, when performing
after-hours missions, the flight crew must get out of their aircraft,
stop traffic, and manually unlock and open a gate to access the runway.
This process sometimes makes it impossible for the Coast Guard to meet
its 30-minute launch requirement. In addition, Coast Guard officials
said they could never be certain that runway lights would be on when
they needed to land late at night or whether the tower would answer,
and they are unable to conduct training at the base at night, when the
airfield is closed. Corpus Christi Army Depot, another of the Naval Air
Station's tenants, also has a service agreement with the base that
identifies which services are to be provided by the Navy at no cost and
which services the Army Depot must pay for (through reimbursements to
the Navy). Army Depot officials told us that they were incurring
increasing costs but receiving reduced BOS services from the Navy.
Corpus Christi officials said they had no choice but to reduce services
because they did not have the BOS and S/RM funds needed to maintain the
levels of services they had provided in the past.
Tinker Air Force Base, Oklahoma, houses multiple Air Force missions
across multiple commands and also hosts the Navy as a tenant activity
on the base. An Air Force official from a command other than the one
responsible for managing the base told us that its support agreement,
signed in 1996, did not clearly specify the quantity or quality of
services the base would provide and that the base did not have enough
money to provide all of the needed services. As a result, the tenant
said it spends from $55,000 to $75,000 a year on BOS services from its
O&M mission accounts and works personnel extended hours to meet some
needs. We found that the Navy tenant has an interagency support
agreement with the Air Force, regarding which services the Air Force is
to provide at no cost (such as food services), which services the Navy
will reimburse the Air Force for (such as utilities), and which
services the Air Force will not provide due to the uniqueness of
different approaches and governing regulations between the military
services (such as legal support personnel). The Air Force at Tinker has
contracted with the private sector for much of its BOS, and the Navy
shares in the cost of that contract, in accordance with its interagency
support agreement. While Navy officials stated that overall the BOS
services provided by the Air Force were adequate, they nonetheless
expressed concern about limitations in some base support services,
which forced them to pay separately for some BOS services, such as
security and education, out of other O&M funds. Navy officials also
expressed concern that some expected BOS services were being scaled
back; for example, mail service pickup and delivery were reduced from
twice to once per day, and fire department inspections and repair and
replacements of fire extinguishers were postponed. Navy officials
expressed further concern about service reductions in the facilities
sustainment area, compromising preventive maintenance and contributing
to further deterioration of the facilities.
According to Tinker Air Force Base officials, they do not have
sufficient funds to provide all BOS and S/RM services at the levels or
timing desired by their tenants, and they have worked to gain
efficiencies in their programs and have scaled back some programs that
are not mission critical. For example, they said that they can only
replace carpet once every 10 years; thus, if a tenant's carpet is worn
out in 8 or 9 years, the tenant must either wait 1 or 2 years or use
other funds to pay for new carpet. Tinker officials conceded that there
is not as much money available for preventive maintenance as they would
like, but they believe that the base has done a good job of fixing
things when they break. They acknowledged that the tenants might think
things do not get fixed fast enough, but stated that the base and its
contractor are in full compliance with Air Force standards for
performing such services. In addition, they are negotiating revisions
to their support agreements to help clarify which BOS and S/RM services
the tenants should pay for and which services should be the
responsibilities of the base.
We found similar concerns at the other installations we visited,
particularly those with multiple commands represented on a single base
or with one service residing as a tenant at an installation operated by
another service. The potential magnitude of the problem of differing
expectations is significant, as the Army alone has about 1,200
agreements with the other military services to provide BOS services and
about 250 agreements with other agencies for this purpose. As DOD
increasingly emphasizes jointness and potentially joint basing,
problems such as those noted above are likely to increase in the
absence of clearer delineation of BOS service requirements and common
definitions of BOS functions.
Requirements and Funding Needs Have Historically Been Service Driven
and Based on Previous Expenditure Levels:
The Office of the Deputy Under Secretary of Defense for Installations
and Environment oversees the procedures that the military services use
to develop BOS requirements and funding needs, but each service has
historically developed its own BOS requirements and funding needs
subject to its own definition of BOS and the types and levels of
services it deems necessary to provide. Unlike the facilities
sustainment area, in which DOD has developed a model useful for
forecasting funding requirements, for BOS the services have had few
institutional-level requirements-forecasting tools. Until recently,
they have relied heavily on previous expenditures as the basis for
stating their future requirements. But while the services can tell
Congress how much was spent in an area in the past, they do not
necessarily know whether these services were provided at appropriate
levels or how much it would or should cost to provide them in the
future. DOD and the services have recognized this as a problem and have
various initiatives under way to better develop and calculate BOS
requirements and funding needs, similar to what they have done in the
facilities sustainment area.
As noted earlier, DOD has taken steps to improve its identification of
the funding required to maintain its facilities. For example, as we
previously reported, in 1999 DOD issued its first defense facilities
cost factors handbook. Based on the guidelines in the handbook, DOD
divides defense facilities into approximately 400 categories and uses
commercial benchmark costs to determine the annual cost per square foot
(or similar unit of measure) to sustain each facility type. The purpose
of the handbook was to standardize the methods by which the services
would determine the sustainment costs of their facilities and to
establish a minimum sustainment funding level for facilities. Likewise,
in 1999, DOD developed the facilities sustainment model, which
estimates the annual sustainment cost requirement, adjusted for area
costs, for each service and defense agency, based on the number, type,
location, and size of its total inventory of facilities. Because of
competing priorities, the services have not always funded sustainment
at 100 percent of requirements identified using these tools, and we
have reported instances where percentages of funding reaching
individual installations varied. Nonetheless, these tools offer a
superior basis for identifying requirements than existed previously.
Similar tools have not been developed for forecasting requirements in
the BOS area, although OSD and individual services are taking some
steps to improve forecasting BOS requirements.
Until recently, the Army relied heavily on historical expenditures as
the basis for stating its future BOS requirements. In the mid-1990s,
the Army developed a model that forecasts its BOS requirements based on
regression cost-estimating relationships derived using historical data,
demographics, pacing measures, and quality factors. According to Army
officials, they continually work to improve the model and to update the
information used in it. They indicated that since the model currently
reflects all the resources needed to provide BOS programs and services
at the highest standards without any shortcomings, the Army does not
expect to fully fund its requirements and is working instead to ensure
that the necessary and affordable services are provided. Army officials
told us that they are now working to develop common level of support
models that they will use to provide definitive guidance, performance
standards, and performance measures for the uniform delivery of various
BOS services at an affordable support level across Army installations
worldwide. The Army is evaluating 95 categories of services and plans
to implement its common level of support models incrementally,
beginning in fiscal year 2005, as it completes its evaluations of
selected service categories. For example, the Army analyzed the various
activities that constitute recreation services-- exercise programs,
libraries, movie theaters, and sporting events--and solicited the
users' priorities. It then determined which activities need no longer
be provided[Footnote 18] and developed common standards that it plans
to apply to remaining recreation services at each installation.
The Navy is also moving away from historical expenditures as the basis
for stating its future BOS requirements. In fiscal year 2004, the Navy
centralized its installations management and began costing out its BOS
services based on a selection of service capability options ranging
from 1 (most) to 4 (least). According to Navy officials, by providing a
range of service levels and funding requirements associated with those
levels for various BOS services, decision makers can see what risks
they face with selecting given levels of funding. In an effort to
reasonably balance the levels of services provided against risk and
affordability, Navy officials said that no capability level 1 or 4
options were selected in implementing fiscal year 2004 BOS programs and
services. Instead, BOS programs and services specifically tied to air
and port operations, utilities, and some recreational services at
remote overseas locations were to be funded at level 2. All other BOS
programs and services--including such things as environmental
compliance, public safety, and human resources--were to be funded at
level 3. However, officials at Navy bases we visited told us that there
were not enough funds available to the installations in fiscal year
2004 to provide services even at the reduced levels and that they were
experiencing degradation in the quality of some services, which in some
cases had gone to level 4. For example, Navy officials at Corpus
Christi said that although fire protection was to be funded at level 3
in fiscal year 2004, they received only 82 percent of the funding
needed to provide that level of service, resulting in the actual
service level provided being level 4. Navy officials stated that the
level of fire protection at Naval Air Station Corpus Christi is in full
compliance with DOD and Navy requirements.
The Marine Corps also has had few institutional-level tools for
forecasting requirements and, for the most part, has relied on
historical expenditures as the basis for stating its future BOS
requirements. Marine Corps officials told us that some BOS programs
have performance requirements, such as response times and minimum
staffing necessary for their fire protection and emergency response
teams to effectively and safely operate during emergencies. By
utilizing the performance requirements and their metrics, they can
evaluate their response times to forecast staffing requirements to
operate a fire department, which in turn drives the program's funding
requirement. Although based primarily on the previous year's execution
amounts, Marine Corps officials told us that most Marine Corps BOS
programs and services are executed as required by the base commanders,
who have many competing needs, many of which vary annually. For
example, if the installation has a heavy snow year, the commander may
reduce the requirement to cut the grass to stay within budget.
The Air Force has historically based its BOS requirements on the
average of the previous 4-year obligations, with programmatic
adjustments as necessary. However, beginning with the fiscal year 2006
budget submission, Air Force officials told us that BOS requirements
for the active Air Force major command installations were derived from
a BOS cost projection formula that used multiple linear regression
analysis involving BOS personnel, plant replacement value, and
contractor manpower equivalents.[Footnote 19] The Air Force Reserve and
Air National Guard BOS requirements are still based on the 4-year
average method. Air Force officials said that their major commands are
actively engaged with subordinate commanders in the funding and
management of BOS services and programs at their installations.
OSD Has Launched Some Initiatives to Improve BOS Management and Enhance
Requirements Determinations:
In addition to the military services' efforts to address BOS, OSD has
recognized BOS management as a problem and, in March 2004, the Office
of the Deputy Under Secretary of Defense for Installations and
Environment designated the improvement of BOS management as a priority.
According to office officials, DOD's and the military services' ability
to forecast BOS requirements and funding needs has been hindered by the
lack of a common terminology across the military services for defining
BOS functions and the lack of common definitions impairs the
development of a complete picture of total BOS requirements and can
lead to differing expectations for services where multiple military
services are collocated on a single installation. Office officials
explained that BOS is not a single program but instead comprises many
diverse functions and activities--the Army has identified 95 different
categories of BOS functions, the Navy has identified 124 categories,
and so forth. The different BOS functions and activities used by the
military services are shown in appendix II. Recognizing that
definitions of BOS functions varied among the military services,
officials in the Office of the Under Secretary told us that they are
working with the services to (1) develop a common definition of BOS
services and programs between the military services, (2) improve the
tracking of BOS funding, (3) model BOS requirements, and (4) measure
performance. Accomplishments through March 2005 include updating the
Defense Installations Strategic Plan to articulate the need to define
common standards and metrics, using commercial benchmarks as a starting
point to define and model each subfunction of facilities operations
(utilities, leases, custodial services, snow plowing, and the like) and
establishing cross-service working groups to examine definitions and
budget structures. Officials with the Office of the Under Secretary
said that common definitions and standards would be developed
incrementally, a process that could take several years for full
development and implementation.
In a related effort, in late 2004 a separate Senior Joint Basing
Group[Footnote 20] that was created to address installation management
issues at joint bases began efforts to resolve long-standing challenges
involving support agreements where one service is a tenant on an
installation operated by another service. Key enablers to this effort
are common definitions and DOD-wide standards, metrics, and
reimbursement and costing rules for BOS services and programs between
the military services. This group has its own set of time frames for
resolving the long-standing inconsistencies among the definitions of
BOS services. Specifically, a Senior Joint Basing Group official told
us that by the end of 2005, the four military services expect to have a
common set of BOS services and programs to use in support agreements at
joint bases. It appears that a difference between OSD and the group is
that OSD focuses on developing common definitions of BOS services for
use in benchmarking funding requirements for future-year programming
and budgeting purposes at the DOD component level, while the Senior
Joint Basing Group focuses on developing common definitions of BOS
services for use in executing the programs and services at the
installation level in a joint environment. Also, DOD has attempted to
gain managerial control and better oversight of facilities and
installations by establishing an Installations Capabilities Council
(formerly called the Installations Policy Board). The council, chaired
by the Deputy Under Secretary of Defense for Installations and
Environment, serves as the coordinator and integrator of all
installation tasks and activities. Collectively, these initiatives
offer an overall vision for resolving the long-standing inconsistencies
in the definitions of BOS services and the development of analytically
based requirements. Even so, we found that time frames for completing
BOS tasks were being reported differently by different groups which
raise questions about how well these efforts will be coordinated,
synchronized, and integrated.
Regarding DOD's efforts in modeling BOS requirements, the same official
with the Office of the Deputy Under Secretary of Defense for
Installations and Environment expressed doubt regarding whether there
could be a single BOS model because BOS, as it currently exists, has
too many diverse activities to model (see app. II). Also, because
various BOS functions are managed by various offices in DOD[Footnote
21] this official told us there is no single focal point, and
therefore, it is likely that a suite of BOS tools will evolve. It will
take some time to fully develop them and each office in DOD may
ultimately run its own model or metric. As a starting point, the Office
of the Deputy Under Secretary of Defense for Installations and
Environment is developing a facilities operation model that will
capture all the functions related to facilities (utilities, fire
protection, grounds maintenance, and so forth). The requirements in
this model will be driven by the facilities inventory, commercial
benchmarks, and local factors, including weather and labor rates. The
office has been building the cost factors for a few months and
simultaneously preparing the model. A prototype facilities operations
model, tested on March 31, 2005, is being validated and targeted for
implementation in fiscal year 2008. Next, the office expects to address
those installation services that are not related to facilities. These
functions include transportation, supply, and information management.
There will likely be a model or metric for each of these functions,
such as a "transportation activities model" or a "human resources
management metric." An official in the Office of the Deputy Under
Secretary of Defense for Installations and Environment told us that a
transportation activities model may be very much like the facilities
sustainment model, except that instead of being based on an inventory
of facilities, it could be based on an inventory of vehicles. The human
resources management metric may be like the facilities recapitalization
metric, except that instead of being based on a facilities inventory,
it may be based on an inventory of people. The Office of the Deputy
Under Secretary of Defense for Installations and Environment and the
Office of the Secretary of Defense for Program Analysis and Evaluation
will likely act as overseers of the whole process. Specific time frames
for developing the installations services models have not been
established.
Centralized Installation Management Has Many Benefits, but More
Perspective Is Needed Before It Can Be Fully Evaluated:
The Army's and Navy's creation of centralized installation management
agencies has resulted some operating efficiencies, according to many
officials at installations we visited, but their efforts to date have
met with mixed results in terms of the quality, level of support, and
flexibility needed to quickly respond to changing needs. A common
concern was that the centralized management efforts had not
sufficiently recognized the diverse needs of the installations' many
tenants who require quick reaction in the face of changing
circumstances. The centralized management approach seeks efficiencies,
and Army and Navy officials acknowledged the growing pains associated
with implementing the new approach. The Air Force and Marine Corps,
using a more decentralized facilities management approach at the time
of our review, also reported having achieved selective consolidations
and efficiency measures to improve operations and achieve savings.
Until more experience is gained under existing centralized approaches,
with opportunities to address issues identified herein, it is difficult
to recommend expanding the concept to the other military services.
Army's and Navy's Centralized Management Approaches Seek Efficiencies:
The Army's IMA implements a centralized and streamlined installations
management concept that oversees all base operations and S/RM funds for
Army installations and supervises seven regional management centers
worldwide that are responsible for 10 to 30 installations each. IMA is
designed to bring together all BOS services to ensure optimal care,
support, and training of the Army's fighting force at a standard level
across installations. Key objectives of the organizational structure
include ending the movement of funds among BOS, S/RM, and mission
accounts by major commands and implementing consistent standards across
the Army for designating these funds. IMA is also pursuing
opportunities for increased efficiencies and decreased expenditures at
its installations. IMA established a productivity improvement review
process to identify and implement hard savings and performance
enhancements.
During our visits to IMA-managed installations, we observed firsthand
the emphasis being placed on cost efficiencies and decreased
expenditures at the installations. Typical efficiency actions completed
or under way included consolidations of contracts and services.
Officials at IMA's Southwest Region told us that one benefit was the
ability to look across multiple major commands and then realize
benefits through consolidations or other efficiencies. For example,
common phone services at three of the region's installations, each
previously managed by a different major command, ranged from about $54
per month to more than $100 per month per employee. Officials said they
were in the process of combining the three contracts into a single
contract with reduced rates.
The Navy's installation management agency is an organizational concept
that through centralized management of its installations, is intended
to permit mission commanders to focus their energies on their
respective mission accomplishment. According to CNI officials,
consolidating eight offices into a single office responsible for
installation planning, programming, budgeting, and resource execution
enabled CNI to realize an immediate benefit. Through this consolidating
and streamlining event, the Navy increased its visibility over
installation management and resources and gained an ability to allocate
resources between functional programs, regions, and installations to
better support the overall Navy. As the single responsible office,
advocate, and point of contact for Navy installations, CNI is pursuing,
among other things, opportunities for increased efficiencies and
decreased expenditures at its installations.
During our visits to CNI-managed installations, we observed firsthand
the emphasis being placed on cost efficiencies and decreased
expenditures at the installations. Typical efficiency actions completed
or under way included eliminating the installation-level management
structure and in its place installing a regionalized management
structure for such activities as housing management, contracting,
supply, business and administrative management, maintenance, and
warehousing. Officials at CNI's Southwest Region told us that
consolidated and centralized management would eliminate 2,175 civilian
personnel positions in the region. The officials had also consolidated
more than 50 contracts into 12. Similarly, officials at CNI's South
Region told us that regionalized management would generate $43 million
of savings and cost avoidances throughout the region over 5 years by
eliminating installation-level management and by consolidating
contracts and services.
Growing Pains in Implementing Army's and Navy's Centralized Management
Approaches:
Officials at the Army and Navy installations we visited expressed
concerns regarding the reduced levels of BOS and S/RM services they
were receiving, but they did not always distinguish between changes
brought about by a new management structure and changes necessitated by
funding shortfalls and the need to move funding to warfighting
priorities. The most critical issue involved the different major
commands' mission and support needs. Officials at the Army and Navy
installations we visited contended that a "one-size-fits-all" approach
was not working well; they expressed concern that although air and
ground operations and various training missions each required a
different level of BOS, they did not perceive that difference always
being recognized by the centralized management agencies. Officials from
commands on Navy bases stated that CNI needed to step back and identify
service levels appropriate for their customers' needs and recognize
changes in operations (such as increases in the sailor population), and
then fund to those levels. Officials from major commands claimed that a
disconnect existed between their mission needs for BOS and CNI's
perspective and that in their judgment CNI should not be responsible
for determining the relative priorities of various mission activities'
BOS needs. For example, Navy Mine Warfare Command officials told us
that in fiscal year 2004 they had to spend $327,000 of O&M mission
funds for BOS services because the command no longer received BOS funds
and CNI either delayed funding or did not pay for the services out of
its BOS funds.
Citing growing pains associated with the centralization of installation
management above the installation level, installation officials raised
concerns about staffing levels, cited delays in obtaining funding
guidance, and articulated concerns with IMA's ability to quickly
respond to shifting needs. For example, during fiscal year 2004, IMA
opted not to redesignate available S/RM funds to meet an emerging
funding need in BOS activities. At Fort Eustis, an installation
affected by IMA's decision, officials told us that the installation
commander had the flexibility to move funds where needed before the
creation of IMA, and the installation commander would have done so this
year but doing so would have caused significant facilities maintenance
work to be deferred. These officials explained that because IMA
directed installations to use existing S/RM funds for maintaining
facilities while BOS funds were depleted, Fort Eustis and other
installations had to request an additional $200 million of BOS funds
from IMA headquarters. They did not receive these funds until the end
of the fiscal year.
In visiting various military installations we found instances where a
lack of clarity existed concerning who or what source was responsible
for funding select base support functions--installation tenants and
their O&M funding or the installation's O&M funding. Furthermore, we
found many cases where delays in funding from the installation
management agency prompted an installation's tenants to fund BOS
services from mission funds. For example, installations in IMA's
Southwest Region and their tenants could not agree on who should pay
for such services as the following: information management services and
specialized information technology equipment (such as cell phones and
pagers), dedicated administrative use vehicles, long-distance phone
service, postage, dedicated copiers, hazardous waste disposal, and
tactical equipment maintenance.
Officials with major command organizations at Naval Base San Diego and
Naval Air Station Corpus Christi said that under CNI they are seeing
the closing of automobile hobby shops, libraries, swimming pools, and
other recreational activities. The officials said they were concerned
that the reduction or elimination of base services would encourage
military personnel to spend more time away from the bases and in less-
controlled or less-desirable places. In addition, officials said
mission operations have been affected by funding shortages. For
example, at Naval Base San Diego, tugboat operating hours were cut back
and the number of tugboats being used was reduced from six boats to
four boats, at CNI's direction. Although this action saved money on
fuel operations and overtime pay, once San Diego's port operations
demonstrated that they could not meet mission requirements with fewer
tugs, CNI authorized that an additional tugboat be returned to service.
Navy officials stated that some facility closures (e.g., auto hobby
shops) are due to lack of interest and are offset by facility openings
(e.g., cyber cafes).
Finally, officials at various installations expressed concern that they
were not receiving sufficient facilities sustainment funding to
maintain their facilities at levels they had expected relative to DOD's
facilities sustainment model, which was congressionally funded at 94
percent of the facilities sustainment requirement in fiscal year 2004.
For example, Naval Station Ingleside, Texas, provided documentation
showing that facilities sustainment funds available to it were only 62
percent of its facilities sustainment requirement under the model. An
official at another installation claimed facilities sustainment funding
to be as low as 45 percent of their facilities sustainment requirements
under the model. As we have previously reported, such funding
shortfalls adversely affect efforts to maintain facilities and provide
base support services. DOD officials stated that the facilities
sustainment model is a macro programming tool that establishes an
average annual investment across entire defense components for
categories of facilities over the life of those facilities and,
therefore, the actual requirement for a single facility or small set of
facilities can be expected to vary across sets of facilities or
installations and from year to year. They stated that when the
sustainment program is funded at 94 percent of requirements, they would
not expect every installation and every facility to be funded at 94
percent of its individual requirement. We recognize that facilities
sustainment funding levels at individual installations may vary from
overall funding levels in a given year, depending upon where the
facilities are in the sustainment cycle. However, this view was not
widely recognized at the installations we visited, particularly when an
installation's sustainment funding was significantly less than overall
sustainment funding levels. Military barracks and housing repairs were
frequently delayed due to lack of S/RM funding, according to
installation officials, and the following problems have been typical:
leaking roofs; peeling painting; worn carpet; lack of hot water in the
showers; energy inefficient windows; cracked sinks in bathrooms; broken
heating, ventilation, and air conditioning systems; and molded ceilings
and walls. Although funding shortfalls have been disruptive to planned
maintenance and support programs and have potentially caused adverse
effects on quality of life and morale, it is difficult to measure any
direct impact they may have on readiness. Officials with major command
operations at the installations we visited often voiced concerns about
the potential impact on operations and readiness in the future, should
these conditions continue. They were particularly concerned with the
cumulative impact of continually working military personnel extra hours
and weekends to make up for the lack of funding in S/RM and BOS
programs.
Army IMA and Navy CNI installation management officials we contacted
viewed these concerns and problems as being temporary in nature and
attributable to organizational growing pains and, to some extent, to
personnel's resistance to the changing the role of the installation
commander. They told us that while having consistent levels of services
from one installation to the next was their goal, they have made
exceptions when warranted. The officials also pointed to factors
outside their control--including unforeseen contract increases, cost of
war assessments, replacing military personnel with civilians, and
funding shortfalls--that either delayed or masked the real impact of
their efforts.
Marine Corps and Air Force Report Having Achieved Efficiencies without
Centralization:
Marine Corps officials said that the Marine Corps' BOS and S/RM
activities have always been somewhat centrally managed, but they
generally defer to the individual installation commanders the decisions
about the level of BOS services required and issues regarding quality
of life at installations. Marine Corps officials also emphasized
eliminating inefficiencies in the areas of installation management and
achieving success without changing the organizational structure used to
manage installations. The Marine Corps uses five broad activities to
manage its O&M appropriations--Pacific forces, Atlantic forces, reserve
forces, logistics, and other activities--and BOS is a crosscutting
program blended into several subactivity groups across these
activities.
Without the centralized installations management structure being used
by the Army and Navy, the Marine Corps has been able to achieve cost
savings and efficiencies. For example, during our visits to Marine
Corps bases Camp Pendleton and Miramar Air Station in California, we
found that in recent years increased management emphasis had been
placed on regionalizing and consolidating resources to reduce costs.
For example, Camp Pendleton is the site of several of the logistical
functions for Marine Corps bases in the region (such as 29 Palms and
Miramar), including a regional contracting office, a regional motor
pool, and a central supply center. According to officials at Camp
Pendleton, the regional approach has already produced savings of more
than $1.5 million dollars, and additional regionalization efforts are
being pursued.
The Air Force has integrated BOS and installations management into its
mission activities and continues to manage in a decentralized manner,
using Air Force-level guidance. The Air Force views centralized
installation management as less flexible in providing BOS services than
base-level organizations and less responsive to the urgency and
priorities of the bases' requirements. Air Force major commands are
actively engaged with subordinate commanders in the funding and
management of Air Force installations. The Air Force uses four broad
activities to manage its O&M appropriations--operating forces (air,
combat, and space); mobilization; training and recruiting; and
administration and servicewide operations (logistics, security,
international support, and other servicewide operations). BOS is a
crosscutting program blended into several subactivity groups across
these activities.
Without using a centralized installations management structure
comparable to those being used by the Army and Navy, the Air Force has
succeeded in achieving some cost savings and efficiencies. For example,
officials at Randolph Air Force Base, Texas, said they saved $190,000 a
year by consolidating a packaging process at the base's hazardous waste
accumulation facility and were pursuing additional savings by
consolidating and standardizing such services as cell phone contracts,
printers and copy machines, and garbage pickup. In addition, the base
had an active employee self-help program that performed a lot of
activities after hours, including painting walls and buildings,
standardizing workstations, and internal training.
Insufficient Basis for Expanding Centralized Management Concept at This
Time:
At each of the military installations we visited, we observed
reductions in BOS and S/RM services related to funding constraints.
(App. IV highlights some key impacts of funding shortfalls and
redesignations on BOS and S/RM activities and locations we visited.)
BOS services that were being scaled back or eliminated at the various
installations we visited included the numbers of rescue and firefighter
operations; port and airfield operating hours and accessibility; and
recreational and leisure facilities. We also observed the impacts of
delayed maintenance on facilities, including deterioration of buildings
(leaking roofs and ceilings, energy inefficient windows, and broken
stairwells and fire escapes); breakdown of equipment (heating,
ventilation, and air conditioning and boilers); cracked pavement at
airfields; damaged storm drains and sewer lines; and reduced structural
upgrades and replacements (painting, carpet, and furniture). We also
observed reductions in other O&M funded activities (medical and
emergency services). However, there are many unresolved questions
regarding the centralized management agencies' culpability for the
reductions in the levels of BOS and S/RM services that were being
provided at these installations.
As noted above, various Army and Navy installation officials cited
growing pains associated with the centralization of installation
management, including adequacy of funding, services provided, and
ability to quickly respond to shifting needs. At the same time, we
recognize that a centralized approach does offer opportunities to
obtain economies and efficiencies in providing services that may be
difficult to attain otherwise. Nevertheless, until more experience is
gained under the existing centralized approaches, with opportunities to
address concerns identified to date, we are not in a position to
endorse expanding the concept to the other services at this time.
Conclusions:
DOD's Office of the Deputy Under Secretary of Defense for Installations
and Environment and the services have acknowledged a lack of common
definitions for BOS and standards for BOS services, along with related
difficulties in identifying analytically based BOS funding
requirements. Until these problems are resolved, DOD will not have the
management and oversight framework in place that it needs for
identifying total BOS requirements, providing Congress with a clear
basis for making funding decisions, and ensuring adequate delivery of
services, particularly in a joint environment. Action is needed to
expedite development and consistent implementation of an analytically
sound and consistently applied model for determining BOS requirements
comparable to the approach used in defining facilities sustainment
requirements. Until this is done, uncertainties will remain concerning
actual requirements, and S/RM and other O&M funding will likely
continue to be redesignated to fund BOS costs rather than used for its
intended purpose. Furthermore, as we have previously reported and
continue to note in this report, DOD's installations and facilities
have been insufficiently maintained and recapitalized for several
years, a problem that is exacerbated when S/RM funds are redesignated
to cover BOS programs and services. Thus, the adverse effects on BOS
programs and facility maintenance efforts attributable to moving funds
among these activities can also negatively affect quality of life,
morale, and readiness should these conditions continue. Because DOD is
still in the early stages of developing its BOS initiatives, time
frames for accomplishing many of the specific actions under way or
planned have either not been established or have not been synchronized
among the working groups addressing them.
Recommendations for Executive Action:
To better synchronize the efforts and milestones of the various groups
working to improve the management and funding of BOS activities, we
recommend that the Secretary of Defense update DOD's Defense
Installations Strategic Plan to include specific actions and establish
time frames first, to resolve long-standing inconsistencies among the
definitions of BOS services and, second, to help expedite the
development and implementation of an analytically sound and
consistently applied model for determining BOS requirements.
Agency Comments and Our Evaluation:
In commenting on a draft of this report, the Deputy Under Secretary of
Defense for Installations and Environment concurred with our
recommendations and indicated that actions were under way or planned to
implement them. He noted that our draft report did not properly
differentiate sustainment programs from restoration and modernization
programs. As suggested, we revised our report to make clearer this
distinction. In addition, he commented that our draft report implied
that each installation should receive funding to match the overall
sustainment rate every year. We did not intend to imply that each
installation's sustainment funding should match exactly the overall
rate each year and we clarified our report accordingly. While we
recognize that sustainment funding at individual installations may vary
somewhat from year to year, we also note that it is often significantly
less than one might expect given the difference between projected
overall levels of funding and what is actually experienced at the
installation level. For example, one installation we visited received
funding for only 45 percent of its sustainment requirement.
The Deputy Under Secretary of Defense's comments are reprinted in
appendix VI. DOD also provided technical clarifications, which we
incorporated as appropriate.
We are sending copies of this report to interested congressional
committees and members; the Secretary of Defense; the Secretaries of
the Army, Air Force, and Navy; and the Commandant of the Marine Corps.
The report is also available at no charge on GAO's Web Site at
[Hyperlink, http://www.gao.gov].
If you or your staff have any questions on the matters discussed in
this report, please contact me at (202) 512-5581 or [Hyperlink,
holmanb@gao.gov]. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this
report. GAO staff who made major contributions to this report are
listed in appendix VII.
Signed by:
Barry W. Holman, Director:
Defense Capabilities and Management:
[End of section]
Appendixes:
Appendix I: Scope and Methodology:
To determine the historical funding trends for base operations support
(BOS) as contrasted with funding for facilities sustainment,
restoration and modernization (S/RM), we reviewed financial data, such
as budget requests, congressionally designated amounts as adjusted, and
obligations for fiscal years 2001 through 2004 that we obtained from
the Army, Air Force, Navy, and Marine Corps. We compared funding
requirements, budget requests, adjusted congressionally designated
amounts, and obligations across the services to identify historical
trends for BOS and how it compared with funding for S/RM from the
operation and maintenance (O&M) appropriation. We determined how actual
funding for BOS and S/RM compared with the projected funding
requirements identified by individual military services. We discussed
the differences we found with officials from the Office of the
Secretary of Defense (OSD) and the services to obtain a more thorough
understanding of BOS and S/RM funding.
For our historical analyses and for purposes of achieving consistency
in the analyses, we used data provided by each of the military
services. In doing so, we recognize that the funding amounts designated
in the services' accounting records for O&M functional areas such as
BOS do not coincide perfectly with the congressional conference report
designations[Footnote 22] that were based on a set of defined but
nonetheless diverse program elements and subactivity groups among the
services. Service officials attributed the variance to their accounting
for the BOS services provided at their respective installations--the
number and names of which are different and expanded from the BOS
subactivity groups used for the conference report--and to funding
redesignations that occur during the year. Accordingly, this report
uses the congressional designations as adjusted by the services'
accounting and redesignations of O&M funds for BOS and S/RM to depict
funding trends. (The Department of Defense (DOD) is currently seeking
to restructure these accounts with improved tracking mechanisms.)
Also, to project trend data more consistently, the historical data
provided by the services and included in this report do not include
congressional adjustments of a one-time nature or supplemental
appropriations for O&M that Congress provided during a particular
fiscal year for such things as hurricane damage cleanup and repairs or
for the Global War on Terrorism. We did not otherwise independently
determine the reliability of the reported financial information. To
determine the impact the funding trends had on the levels of BOS and
S/RM services being provided to individual activities and
installations, we visited and met with officials and viewed the
condition of facilities firsthand at 13 installations across the
country: Randolph Air Force Base, Texas; Tinker Air Force Base,
Oklahoma; Naval Air Station Corpus Christi, Texas; Naval Air Station
Kingsville, Texas; Naval Station Ingleside, Texas; Fort Sam Houston,
Texas; Fort Monroe, Virginia; Fort Eustis, Virginia; Marine Corps Base
Camp Pendleton, California; Miramar Air Station, California; Naval Base
San Diego, California; Naval Base Coronado, California; and Naval Base
Point Loma, California. In addition, we obtained a briefing from
officials with the Naval Air Station Joint Reserve Base at Carswell
Field, Fort Worth, Texas. We also interviewed these officials by
telephone. We selected these installations because they represent a
range of BOS programs, missions, major commands, and geographic
locations. We recognize that the conditions we observed at these 13
installations may not represent conditions at other DOD installations,
and we did not attempt to project the results of our visits to all
military installations.
To evaluate how DOD and the military services forecast BOS requirements
and funding needs, we reviewed OSD, Army, Air Force, Navy, and Marine
Corp information pertaining to base operations requirements and funding
and their roles in the overall base operations process. We reviewed the
processes, planning documents, and proposals that DOD and the services
use to forecast their needs. We interviewed officials from DOD's Office
of the Under Secretary of Defense for Installations and Environment and
Senior Joint Basing Group. To determine the services' definition of
BOS, we interviewed OSD officials and representatives from each of the
services and asked them to provide their working definition of BOS as
used to determine BOS funding requests.
To determine extent to which the Army and Navy reorganizations for
managing installations have affected the quality and level of support
provided to individual activities and installations and whether the
Marine Corps and Air Force would benefit from similar reorganizations,
we reviewed the guidance, procedures, and practices from the Army and
Navy that specifically address reorganization, including comparisons to
pre-reorganization data. We interviewed officials from the U.S. Army
Installation Management Agency (IMA); IMA Southwest Region; IMA
Northeast Region; Commander, Navy Installations (CNI) Command; CNI
Region South; and CNI Region Southwest. We discussed the processes used
in the incipient formation of centralized installation management
organizations. We discussed the effects these changes have had on the
planning and implementation of base operations support services as well
as on the personnel and quality of life at the local level. We
contrasted these data with information obtained from Marine Corps and
Air Force officials.
We conducted our review from April 2004 through April 2005 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: BOS Functions and Activities Used by the Military
Services:
Each of the military services has a different approach to BOS and uses
somewhat differing categories and definitions of services included in
BOS. For example, the Army has identified 95 different categories of
BOS functions, and the Navy has identified 124 different categories of
BOS functions. For each service, BOS is a complex group of programs
that support base operations and quality of life. The Office of the
Deputy Under Secretary of Defense for Installations and Environment
designated the improvement of BOS management as a priority and has
announced plans to develop a common definition of BOS services and
programs.
BOS Functions and Activities Used by the Army:
The Army categorizes BOS under nine major service areas. Within these
broad service areas are 38 specific functions, and within these
functions, the Army provides 95 different BOS services. The BOS
functions and activities used by the Army are shown in figure 3.
Figure 3: Army BOS Functions and Activities:
[See PDF for image]
[End of figure]
BOS Functions and Activities Used by the Navy:
The Navy categorizes BOS under operating forces support, community
support, and base support programs. Within these general categories,
nine major service areas are broken down into 29 functions. These
functions are broken down further to include 124 BOS services such as
food service contracts, recreation, and so forth. The BOS functions and
activities used by the Navy are shown in figure 4.
Figure 4: Navy BOS Functions and Activities:
[See PDF for image]
Note: Sustainment, restoration, and modernization are included under
the base support functional area to recognize the close
interrelationship that exists between them. For example, sustainment
funds may be used to fix a leaking roof in a building that houses a BOS
activity.
[End of figure]
BOS Functions and Activities Used by the Marine Corps:
The Marine Corps categorizes its BOS functions and activities under
seven major service areas. Within these broad service areas are 37 BOS
services. The BOS functions and activities used by the Marine Corps are
shown in figure 5.
Figure 5: Marine Corps BOS Functions and Activities:
[See PDF for image]
[End of figure]
BOS Functions and Activities Used by the Air Force:
The Air Force provides BOS functions and services within its four broad
mission areas--operating forces, mobilization, training and recruiting,
and administration and servicewide activities. Within these mission
areas are 11 functional areas. These functional areas are the framework
for 63 BOS services. The BOS functions and activities used by the Air
Force are shown in figure 6.
Figure 6: Air Force BOS Functions and Activities:
[See PDF for image]
[End of figure]
[End of section]
Appendix III: Army and Navy Base Operations Support Management
Structure:
Army Installation Management Agency:
Prior to the establishment of IMA, 15 major commands managed base
operations for the Army. IMA was created on October 1, 2002, to attain
efficiencies from consolidating BOS services for the Army worldwide. As
shown in figure 7, the activities, personnel, and services for base
operations previously associated with the major commands were realigned
under one organization with the establishment of IMA.
Figure 7: Army Installation Management Agency Organization:
[See PDF for image]
[End of figure]
Management decisions and funding designations now flow through IMA
headquarters and its seven regional offices, four in the continental
United States and three overseas, directly to installations for
execution. IMA's intent with this structure is to support and enable
mission commanders, achieve regional efficiencies, and provide
consistent and equitable facilities and services with common standards.
According to IMA officials, seven regions is the right size for
efficient management; however, they said they would revisit their
organizational structure following the outcome of the 2005 round of
base realignment and closure. Figure 8 shows IMA's current locations.
Figure 8: Army Installation Management Agency Locations:
[See PDF for image]
[End of figure]
Commander, Navy Installations:
A key event leading to the creation of CNI occurred in 1998 when the
Navy consolidated or "regionalized" installation management functions.
Regionalization was done to reduce BOS costs through the elimination of
unnecessary management layers, duplicative overhead, and redundant
functions. In conjunction with regionalization, the Navy reduced the
number of its major claimants involved in the installation management
business from 18 to 8. To further reduce costs the Navy stood up CNI in
October 2003, further consolidating the Navy's installation management
business under a single claimant. The CNI organization is shown in
figure 9.
Figure 9: CNI Organization:
[See PDF for image]
Note: Special assistants include Force Judge Advocate, Inspector
General, Safety, Command Master Chief, Chief Information Officer,
Public Affairs Officer, General Counsel, Chaplain, and Comptroller.
[End of figure]
As shown in figure 10, CNI is organized into 16 regions, 10 in the
continental United States and 6 overseas. At the time of this report
there was discussion regarding the possibility of further consolidating
CNI's regional structure. According to CNI officials, maintaining 16
regions may be more than is ultimately needed for the most efficient
management structure; however, they said any decision to consolidate
further would depend on the outcome of the 2005 round of base
realignment and closure.
Figure 10: CNI Locations:
[See PDF for image]
[End of figure]
[End of section]
Appendix IV: Impact of Funding Constraints on BOS and S/RM Activities:
At each of the military installations we visited, we observed
reductions in BOS and S/RM services related to funding constraints. BOS
services that were being scaled back or eliminated at the various
installations that we visited included the numbers of rescue and
firefighter operations, airfield and port operating hours and
accessibility, and recreational and leisure facilities. We also
observed the impacts of delayed maintenance on facilities, including
deterioration of buildings (leaking roofs and ceilings, energy
inefficient windows, and broken stairwells and fire escapes); breakdown
of equipment (heating, ventilation, and air conditioning and boilers);
cracked pavement at airfields; damaged storm drains and sewer lines;
and reduced structural upgrades and replacements (painting, carpet, and
furniture). We also observed reductions in other O&M funded activities
(medical and emergency services).
Observations at Army Installations:
Fort Eustis, Virginia:
Created in 1918, Fort Eustis is the home of the U.S. Army
Transportation Corps and the Transportation Corps Regiment. At Fort
Eustis and its satellite installation, Fort Story, officers and
enlisted soldiers receive education and on-the-job training in all
modes of transportation, aviation maintenance, logistics, and
deployment doctrine and research. Officials told us that BOS funding
shortfalls at Eustis have had some indirect impacts on training. For
example, reductions in dining hall support may be a contributing factor
to long lines in dining facilities, potentially causing soldiers to be
tardy for training classes.
We found indications of Fort Eustis's barracks needing repairs. Mold
and deteriorating stairwells were an issue in the older barracks.
Delayed barracks renovations include adding nonskid tracking to the
stairwells and replacing cracked sinks in the bathrooms. Officials also
said that Fort Eustis has deteriorated fencing, road paving, and
heating and air conditioning for training facilities. Officials also
showed us mission facilities with repair needs that have not been
completed due to funding issues. At Fort Eustis's third port, concrete
is crumbling and the repair of airfield hangar doors, roofs, and
heating and air conditioning systems and routine maintenance of
training facilities have yet to be completed.
Public works officials at Fort Eustis also told us about storm drains
that have been damaged and clogged by tree roots. They have similar
problems with their sewer lines.
Fort Monroe, Virginia:
Fort Monroe is located in the city of Hampton, Virginia, and is
headquarters of the Army's Training and Doctrine Command, which
supports the Army's fighting forces through the development of doctrine
and equipment requirements and training for combat. We observed a
training facility that had extensive termite damage; to keep the
facility in use, support beams had been added to the flooring to
prevent it from caving in. Fort Monroe also closed several fire escapes
due to eroding of the structures; had rusted and peeling metal
staircases; and had heating, ventilation, and air conditioning systems
that need to be overhauled.
At the installation's marina, we also saw evidence of delayed repairs
due to funding constraints. The foundation of the facility had rust and
cracks caused by high tides, and pieces of the building were falling
off. According to installation officials, the marina repairs, estimated
to cost at least $300,000, have been backlogged for 3 to 4 years.
Fort Sam Houston, Texas:
In 1876, the Army began to move its facilities to the present site of
Fort Sam Houston. Today, Fort Sam Houston is headquarters for various
activities including the Army Medical Command, Fifth U.S. Army, U.S.
Army South, and Brooke Army Medical Center. We observed some buildings
and roads in need of repairs. We obtained information showing that, due
to funding shortages in the BOS area, S/RM funds for painting projects,
electrical repairs, and other preventive maintenance were being
redesignated to pay for BOS services.
Observations at Navy Installations:
Naval Air Station Corpus Christi, Texas:
Naval Air Station Corpus Christi started its first flight training on
May 5, 1941. Its general command assignment is still pilot training, as
headquarters for the Chief of Naval Air Training. However, recent
cutbacks in BOS services reportedly constrained airfield operations,
leading to overdue repairs and reduced hours of operation. A Coast
Guard tenant representative told us about several airfield conditions
that need repair. For example, we were told that deteriorating power
systems were prone to failure, and when the power goes off, security
gates have to be opened manually to access runways. Aged and unreliable
hangar doors also delayed some launches. We were told that the naval
base has been closing its field operations at night to reduce
operational costs. As a result, Coast Guard tenants are uncertain
whether runway lights will come on when their aircraft are landing late
at night or whether the tower will answer their calls. Lastly, Corpus
Christi Air officials said that they could not afford to pay for the
required number of on duty firefighters at the airfield. To prevent the
cancellation of training efforts and other air operations, the airfield
operated under a safety waiver whereby no manned fire truck had to be
present on the landing strip.
Funding shortages also reportedly caused cutbacks in services at the
Naval Hospital at Corpus Christi. Officials told us that due to
decreased O&M funding, the hospital now operates as a clinic in terms
of the level of services it is able to provide and that it refers some
patients to other hospitals. Other reductions in services attributed to
cost-saving measures at Corpus Christi included reducing pool hours
from 42 to 20 hours per week (saving $50,000 for the year) and closing
the enlisted members club at the installation. Base officials said it
is less desirable for military personnel to go off base for
entertainment and leisure services.
Due to the lack of S/RM funding, base officials identified some
barracks that were in poor condition. Officials showed us buildings
with leaking roofs and water damage and mold. For example, a mold
problem at one newly constructed housing facility was attributed to a
design defect involving the placement of air conditioning vents, and
officials estimated it would cost $1.6 million, which they did not
have, to correct the problem.
Naval Base Coronado, California:
Established in 1917, Naval Base Coronado comprises two main units: the
Naval Air Station North Island and Naval Amphibious Base Coronado.
North Island itself plays host to 23 squadrons and 80 additional tenant
commands. Officials from tenant organizations told us that the number
of fire fighters had been reduced due to BOS funding constraints.
Specifically, they said that there are supposed to be a total of 10
firefighters on duty--6 for fire response to facilities and housing
areas and 4 for the airfield--but the number of firefighters on duty is
being reduced to 4. Officials said that when the firefighters have to
respond to a structural fire on base, the airfield would be without
fire protection and would have to shut down. Navy officials stated that
the level of fire protection at Naval Base Coronado is in full
compliance with DOD and Navy requirements.
Officials said that because they have not had the amounts of S/RM funds
needed to perform sufficient levels of maintenance and repairs, they
have the following conditions at their facilities: frayed carpeting and
rotted wood in barracks, broken water pipes, balcony railings with
corrosion, cracked shower doors, poor shower drainage, and mold.
Naval Air Station Kingsville, Texas:
Naval Air Station Kingsville was commissioned in July 1942, and its
primary mission is to train tactical jet pilots. Officials told us that
several safety and security projects supporting this mission were
eliminated due to lack of funding. For example, there is no longer an
emergency response team on base. Therefore, if an accident occurs
during a training operation, the base has to rely on emergency response
from the local community. Also, as a result of limited O&M funding,
there were no dentists at the dental clinic and no emergency services
available at the medical clinic.
Naval Base San Diego, California:
Naval Base San Diego was established on February 23, 1922, as a
destroyer base and later was named a naval repair base. Today, the base
provides a wide range of both direct and indirect fleet support,
including waterfront operations, security, supply, civil engineering,
and many other administrative and leisure functions. Officials cited
tugboat support as an example of a support program that has been scaled
back due to the lack of BOS-designated funding. They said that the base
had scaled back its number of operating tugs from six to four, but port
officials could not meet mission requirements with fewer tugs. The
number of tugs was subsequently increased to five. In other cost-saving
initiatives, San Diego has recently scaled back its transportation
service and uses vans instead of buses, has reduced the number of
firefighters on duty, and is considering closing its driving range and
officer's club. The library has also been closed, and due to mold
problems, the child development center has been closed.
Naval Base Point Loma, California:
On October 1, 1998, six installations were consolidated as Naval Base
Point Loma. Point Loma provides support services for submarines in the
U.S. Pacific Fleet. In carrying out its mission to provide quality of
life services for the operating forces, Point Loma is also the site of
the Navy Alcohol Rehabilitation Center. We found examples of reductions
in several leisure and recreational services due to BOS funding
shortages in fiscal year 2004. For example, Point Loma has closed two
libraries and an auto body shop, and is considering the possibility of
closing a chapel. Also closed are the outdoor equipment rental facility
and the leisure travel office.
We also found several unattended maintenance issues at Point Loma. For
instance, due to reduced maintenance, some barracks needed painting and
new carpet. Installation officials complained about brown water in the
drains of older barracks as well as leaking roofs. They also told us
that windows are not energy efficient, which drives up energy costs,
and that several parking lots needed to be repaved.
Naval Station Ingleside, Texas:
Naval Station Ingleside is one of three south Texas installations in
Naval Region South. Ingleside's mission is to provide logistics and
base support services to 41 commands--including 21 ships and 3,900
personnel--that make up the Mine Warfare forces. As a result of budget
constraints experienced in fiscal year 2004, Ingleside officials told
us they had to reduce port operations working hours from 24 hours a
day, 7 days per week, to 12 hours per day, 5 days per week; reduce
overtime for personnel involved ship movements in port by 30 percent;
and reduce personnel involved in various BOS programs.
Observations at Marine Corps Installations:
Marine Corps Air Station Miramar, California:
On October 1, 1997, Naval Air Station Miramar was renamed Miramar
Marine Corps Air Station as a part of a DOD realignment. Marine Corps
Air Stations El Toro and Tustin were closed and their assets moved to
Miramar by the end of 1999. Miramar is home for eight Hornet jet
squadrons, four Super Stallion helicopter squadrons, one KC-130
transport and refueling squadron, and nine station support aircraft.
Several unexpected expenses affected the BOS funding needs at Miramar
during fiscal year 2004. Although electricity rates increased by more
than 70 percent, there was no corresponding increase in BOS funding to
cover these unanticipated increases. To offset some of the costs,
Miramar and other Marine Corps installations increased tenant rates for
utility services and obtained $2.3 million in supplemental funding. In
an effort to stop programs from moving mission operations funds to pay
for BOS programs, the installation reduced services of less essential,
non-mission-related projects, such as furniture and carpet replacement.
Camp Pendleton, California:
Camp Pendleton was established in September 1942. Camp Pendleton is an
amphibious training facility and offers a wide array of training
facilities, including firing ranges, landing beaches, parachute drop
zones, and mock urban warfare towns. But in providing this training
support, Pendleton anticipates a shortfall in BOS funding for fiscal
year 2005. For example, utilities' costs are projected to be higher
than the budgeted amount. Disaster preparedness may also be constrained
because quantities of gas masks and advanced emergency communications
systems have also not been funded.
Other programs at Camp Pendleton have also been delayed due to funding
constraints. Base officials told us that some construction projects
have been funded, but the new infrastructure creates an additional
demand for BOS services that the installations are fiscally unable to
provide. For example, Marine Corps Headquarters has $750,000 of
military construction money to build permanent latrine facilities.
However, the installation cannot afford to install plumbing on that
side of the base nor does it have the money to furnish, service, or
maintain the new facility. Officials told us that several new vehicles
have been purchased, but no additional funding has been provided to
cover the associated costs of new maintenance tools, garages, or fuel.
In addition, there is a backlog in providing new furniture because
funding was being used to cover other BOS expenses.
Observations at Air Force Installations:
Randolph Air Force Base, Texas:
Randolph Air Force Base was dedicated on June 20, 1930 as a flying
training base and continues that mission today. More specifically, the
installation is one of the few bases that does instructor pilot
training, and it is also home to Joint Undergraduate Navigator and
Electronic Warfare Officer Training. To cut costs at the installation,
Randolph has implemented some changes to BOS services such as custodial
and dining hall support. For instance, Randolph increased waste
container sizes and reduced the number of waste collections to once per
week, performed custodial services after hours when they could be done
in less time by avoiding the presence of workers, and cut the dining
hall budget.
Shortfalls in S/RM funding have also led to the deferring of routine
facilities maintenance at Randolph. Officials told us about reports of
rusted drinking water pipes, oil in one of the water wells, and mold
and water damage from leaking water pipes.
Tinker Air Force Base, Oklahoma:
Tinker Air Force Base was established on April 8, 1941, as a
maintenance and repair depot. Today, Tinker's largest organization is
the Oklahoma City Air Logistics Center, one of three depot repair
centers in the Air Force Materiel Command. Tinker is also home to seven
major Department of Defense, Air Force, and Navy activities with
critical national defense missions. These activities include the 552nd
Air Control Wing (which flies the E-3 Sentry aircraft and is part of
the Air Force's Air Combat Command mobile strike force); the Navy's
Strategic Communications Wing ONE (a one of a kind unit in the Navy
that provides a vital, secure communications link to the submerged
fleet of ballistic missile submarines); and the 507th Air Refueling
Wing (an Air Force Reserve flying unit).
Tinker has contracted with the private sector for much of its BOS and
has reported selective consolidations and efficiency measures to
improve BOS operations and achieve savings. For instance, mail service
pickup and delivery were reduced from twice to once per day, fire
department inspections and repair and replacements of fire
extinguishers were postponed, and worn carpet was not being replaced.
[End of section]
Appendix V: Navy, Marine Corps, and Air Force Funding Trends:
Navy Funding Trends:
Available Navy data show differences between amounts the Navy projected
as required for BOS and amounts included in budget requests,
designated, and actually obligated each fiscal year from 2001 through
2004 (see fig. 11). As it did for the Army, Congress gave the Navy
increasing funding for BOS in some years, but we found a smaller
difference between identified requirements and funding here than in the
Army.
Figure 11: Navy BOS Funding, Fiscal Years 2001-04:
[See PDF for image]
Notes:
(1) Dollars are in constant fiscal year 2004 dollars.
(2) Navy officials indicated they had not had models for projecting
requirements during these budget years but, as discussed in an earlier
section of this report, are taking steps to improve their requirements
determination process for BOS funding.
(3) Obligations exceeded adjusted congressionally designated amounts as
a result of authorized internal adjustments among accounts. For
example, as discussed below, the Navy moved S/RM funds into the BOS
account.
[End of figure]
The difference between the Navy's congressionally designated funding
and obligations also appears to be smaller than that for the Army, but
the Navy's obligations for BOS still were greater than its
congressionally designated amounts for BOS as adjusted by the Navy. For
example, in fiscal year 2004, the Navy's BOS obligations-- $3.427
billion--were more than its BOS funding--$3.217 billion. As in the
Army, Navy officials said the difference between the congressionally
designated amounts for BOS services, as adjusted by the Navy, and the
amounts obligated is made up of funds moved from S/RM activities to BOS
activities to pay "must pay bills" such as utilities and, increasingly,
to obtain contractor services. This also indicates a continuation of the
historic trend of funds being moved among various O&M subaccounts
during the year. Navy installation officials also reported instances of
funds being withheld during the year and being redesignated to support
warfighting needs. More specifically, we were told that the Navy
withheld $300 million in O&M funds, including $199 million that
otherwise would have been designated to fund BOS and $101 million to
fund S/RM, to help pay for the Global War on Terrorism. Navy officials
told us that during the year they had to scale back and cut BOS
programs and move $504 million from S/RM to pay for essential BOS
services until supplemental funding became available and they could
move funds back to S/RM.
Navy S/RM funding trend data displayed in figure 12 show a spike in
congressionally designated amounts adjusted by the Navy and obligations
in fiscal year 2003. According to Navy officials, 2003 was simply a
better-funded year for Navy shore facilities infrastructure than other
years. However, in fiscal year 2004, S/RM services were affected by the
Navy's withholding of O&M funds during the year, that otherwise would
have been designated to fund BOS and facilities sustainment, to instead
help pay for the Global War on Terrorism. Similar problems are
reportedly occurring in fiscal year 2005. The Navy obligated fewer
funding dollars for facilities sustainment activities in fiscal year
2004 than were initially designated. Although the Navy also received
supplemental funding for the Global War on Terrorism for BOS and
facilities sustainment activities, such turbulence occurring during the
year makes it difficult to execute planned programs effectively and
resulted in the Navy's underexecuting its facilities sustainment
program by $393 million in fiscal year 2004. As we have previously
reported, such problems adversely affect efforts to maintain facilities
and provide base support services.
Figure 12: Navy S/RM Funding, Fiscal Years 2001-04:
[See PDF for image]
Notes:
(1) Dollars are in constant fiscal year 2004 dollars.
(2) Navy officials indicated they had improved S/RM requirements
forecasts by using the DOD facilities sustainment model developed in
1999.
(3) Obligations were different from congressionally designated amounts,
adjusted by the Navy, as a result of authorized internal adjustments
among accounts. For example, as discussed above, during fiscal year
2004 the Navy moved S/RM funds into the BOS account.
[End of figure]
Marine Corp Funding Trends:
Available data show some differences between amounts the Marine Corps
projected as required for BOS and amounts included in budget requests,
amounts designated, and amounts actually obligated each fiscal year
from 2001 through 2004, with some increase in projected requirements,
requests and funding occurring in recent years (see fig. 13).
Figure 13: Marine Corps BOS Funding, Fiscal Years 2001-04:
[See PDF for image]
Notes:
(1) Dollars are in constant fiscal year 2004 dollars.
(2) Marine Corps officials indicated they had not had models for
projecting requirements during these budget years but, as discussed in
an earlier section of this report, are taking steps to improve their
requirements determination process for BOS funding.
(3) Obligations fell short of congressionally designated amounts, as
adjusted by the Marine Corps, for fiscal years 2002 and 2003 and
exceeded adjusted congressionally designated amounts in fiscal years
2001 and 2004 as a result of authorized internal adjustments among
accounts. For example, as discussed below, the Marine Corps moved S/RM
funds into the BOS account.
[End of figure]
The trend data present more of a mixed picture for the Marine Corps in
terms of obligations when contrasted with data for the other military
services. In 2 of 4 years the Marine Corps' obligations were greater
than congressionally designated amounts, as adjusted by the Marine
Corps, as well as projected requirements. For example, in fiscal year
2004, the Marine Corps' BOS obligations of $1.164 billion were $54
million more than its designated funding ($1.110 billion), representing
a movement of funds from other accounts to support BOS activities.
S/RM trend data show that the Marine Corps obligated more funding than
adjusted congressionally designated amounts in fiscal years 2001 and
2003, and it obligated less funding than adjusted congressionally
designated amounts in fiscal year 2004. Marine Corps officials said the
differences were due to funds being moved and redesignated among BOS
and S/RM accounts (see fig. 14).
Figure 14: Marine Corps S/RM Funding, Fiscal Years 2001-04:
[See PDF for image]
Notes:
(1) Dollars are in constant fiscal year 2004 dollars.
(2) Marine Corps officials indicated they had improved S/RM
requirements forecasts in fiscal year 2004 by using DOD's facilities
sustainment model.
(3) Obligations were different from congressionally designated amounts
as adjusted by the Marine Corps, as a result of authorized internal
adjustments among accounts. For example, during fiscal year 2004 the
Marine Corps moved S/RM funds into the BOS account.
[End of figure]
As shown by figure 14, in fiscal year 2004, adjusted congressionally
designated amounts were about 98 percent of the projected S/RM
requirement. However, the Marine Corps underexecuted its S/RM program
by $59.2 million in fiscal year 2004. This underexecution occurred
because, as noted above, the Marine Corps redesignated millions of
dollars of S/RM funds to cover the difference between designated BOS
funding and BOS obligations.
Air Force Funding Trends:
Data were not readily available to provide a trend in the Air Force's
projected BOS requirements.[Footnote 23] Funding trend data for BOS
services and programs within the Air Force show that budgetary
requests, designated funding, and BOS obligations remained more closely
aligned than was the case for the other services in most years.
Nevertheless, some differences do exist between budget requests,
designated funding, and obligations. As shown by figure 15, only in
fiscal year 2004 were BOS obligations--$4.896 billion--less than the
congressionally designated amounts, as adjusted by the Air Force--
$5.260 billion. This indicates that BOS funds were being redesignated
to meet other needs in that year, but funds from other O&M accounts
were redesignated to BOS in earlier years. Air Force headquarters
officials told us that rather than being headquarters directed, the Air
Force relied on its major commands to redesignate BOS and S/RM funds as
needed for the Global War on Terrorism and to decide which BOS programs
and services would be scaled back.
Figure 15: Air Force BOS Funding, Fiscal Years 2001-04:
[See PDF for image]
Notes:
(1) Dollars are in constant fiscal year 2004 dollars.
(2) Air Force officials indicated they had not had models for
projecting requirements during these budget years but, as discussed in
an earlier section of this report, are taking steps to improve their
requirements determination process for BOS funding.
(3) Obligations were different from congressionally designated amounts,
as adjusted by the Air Force, as a result of authorized internal
adjustments among accounts. For example, as discussed below, the Air
Force moved BOS funds into the S/RM account.
[End of figure]
Air Force trend data for S/RM activities during fiscal years 2001
through 2004 show that obligations were greater than designated funding
or budget requests in each of the 4 years. According to Air Force
officials, BOS funds were redesignated by installation commanders in
fiscal year 2004 to supplement S/RM funds. Since both BOS and S/RM
obligations exceeded their funding designations in fiscal years 2001,
2002, and 2003, this would suggest that funds were redesignated to
these areas from other O&M activities in those years (see fig. 16).
Figure 16: Air Force S/RM Funding, Fiscal Years 2001-04:
[See PDF for image]
Notes:
(1) Dollars are in constant fiscal year 2004 dollars.
(2) Obligations exceeded adjusted congressionally designated amounts as
a result of authorized internal adjustments among accounts. For
example, as discussed above, in fiscal year 2004, the Air Force moved
BOS funds into the S/RM account.
[End of figure]
[End of section]
Appendix VI: Comments from the Department of Defense:
OFFICE OF THE UNDER SECRETARY OF DEFENSE:
ACQUISITION, TECHNOLOGY AND LOGISTICS:
3000 DEFENSE PENTAGON:
WASHINGTON, DC 20301-3000:
JUN 06 2005:
Mr. Barry W. Holman:
Director, 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 (DoD) response to the GAO draft
report, "DEFENSE INFRASTRUCTURE: Issues Need to Be Addressed in
Managing and Funding Base Operations and Facilities Support" dated May
5, 2005. (GAO CODE 350535/GAO-05-556). The report is well-researched,
generally accurate, and pertinent in its recommendation. We concur with
its recommendation.
I have included some technical comments for your consideration prior to
publishing the final report. I would like to underscore our technical
comments concerning facilities sustainment. First, the draft report
does not properly differentiate sustainment programs from restoration
and modernization (recapitalization) programs, and I recommend that you
make the proper distinction before publishing the report. Second, the
draft report implies that each facility or installation should receive
funding to match the corporate funded sustainment rate every year. The
sustainment rate is a corporate headquarters-level budgeting metric,
while sustainment execution requirements at the level of individual
facilities vary from year to year - so when visiting bases, you should
expect to see differences compared to the funded corporate rate. The
facility problems identified by the report are due to under-sustainment
over a prolonged period, not normal fluctuations in local sustainment
requirements.
Sincerely,
Signed by:
Philip W. Grone:
Deputy Under Secretary of Defense (Installations and Environment):
Enclosure:
GAO DRAFT REPORT - DATED MAY 5, 2005 GAO CODE 350535/GAO-05-556:
"DEFENSE INFRASTRUCTURE: Issues Need to Be Addressed in Managing and
Funding Base Operations and Facilities Support"
DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATIONS:
RECOMMENDATION 1: The GAO recommended that the Secretary of Defense
update DoD's Defense Installations Strategic Plan to include specific
actions and establish time frames first, to resolve long-standing
inconsistencies among the definitions of BOS services and, second, to
help expedite the development and implementation of an analytically
sound and consistently applied model for determining BOS requirements.
(p. 33/GAO Draft Report):
DOD RESPONSE: Concur. The 2004 Defense Installations Strategic Plan
already contains actions and timeframes for several related tasks (for
one example, see objective 5.4 in the published plan). In addition, our
2005 update to the 2004 plan lists recent accomplishments, including
the completion of initial cost factors to support a new facilities
operation model. Since the 2005 update, we have tested a beta model and
are on track to release a finished facilities operation model by
December 1, 2005, for use in developing the FY 2008 program and budget.
For other installation services, the Department completed a base
operations assessment study in March 2005, and funded an extensive
cross-Department initiative to develop definitions for the common
delivery of installation services. That effort is ongoing and is
expected to be completed in December 2005. We anticipate the results of
these efforts to lead to a suite of analytical tools for determining
funding needs for other installation services. The next update to the
Defense Installations Strategic Plan, currently planned for release
during 2006, will contain additional details.
[End of section]
Appendix VII: GAO Contact and Staff Acknowledgments:
GAO Contact:
Barry W. Holman (202) 512-5581:
Acknowledgments:
In addition to the individual named above, Latasha Brown, Erica Haley,
Mark Little, Erica Miles, Tanisha Stewart, Roger Tomlinson, Cheryl
Weissman, and Michael Zola made key contributions to this report.
[End of section]
Related GAO Products:
Defense Infrastructure: Long-term Challenges in Managing the Military
Construction Program.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-288]
Washington, D.C.: February 24, 2004.
Defense Infrastructure: Changes in Funding Priorities and Management
Processes Needed to Improve Condition and Reduce Costs of Guard and
Reserve Facilities.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-516]
Washington, D.C.: May 15, 2003.
Defense Infrastructure: Changes in Funding Priorities and Strategic
Planning Needed to Improve the Condition of Military Facilities.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-274]
Washington, D.C.: February 19, 2003.
Defense Management: Army Needs to Address Resource and Mission
Requirements Affecting Its Training and Doctrine Command.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-214]
Washington, D.C.: February 10, 2003).
Defense Budget: Real Property Maintenance and Base Operations Fund
Movements.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/T-NSIAD-00-101]
Washington, D.C.: March 1, 2000.
Defense Budget: Analysis of Real Property Maintenance and Base
Operations Fund Movements.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-00-87]
Washington, D.C.: February 29, 2000.
Defense Budget: DOD Should Further Improve Visibility and
Accountability of O&M Fund Movements.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-00-18]
Washington, D.C.: February 9, 2000.
DOD Budget: Budgeting for Operation and Maintenance Activities.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/T-NSIAD-97-222]
Washington, D.C.: July 22, 1997.
Depot Maintenance: Some Funds Intended for Maintenance Are Used for
Other Purposes.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-95-124]
Washington, D.C.: July 6, 1995.
Army Training: One-Third of 1993 and 1994 Budgeted Funds Were Used for
Other Purposes.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-95-71]
Washington, D.C.: April 7, 1995.
(350535):
FOOTNOTES
[1] Retaining and underutilizing installations and facilities result in
inefficiencies and additional costs for base services and programs.
Congress authorized a base realignment and closure round in 2005 to
deal with this issue.
[2] See the following reports: GAO, Defense Infrastructure: Changes in
Funding Priorities and Strategic Planning Needed to Improve the
Condition of Military Facilities, GAO-03-274 (Washington, D.C.: Feb.
19, 2003); Defense Infrastructure: Changes in Funding Priorities and
Management Processes Needed to Improve Condition and Reduce Costs of
Guard and Reserve Facilities, GAO-03-516 (Washington, D.C.: May 15,
2003); Defense Budget: Real Property Maintenance and Base Operations
Fund Movements, GAO/NSIAD-00-101 (Washington, D.C.: Mar. 1, 2000); and
Defense Management: Army Needs to Address Resource and Mission
Requirements Affecting Its Training and Doctrine Command, GAO-03-214
(Washington, D.C.: Feb. 10, 2003).
[3] BOS is a term that derives from the "base operations" program area
(which includes installation transportation, supply, information
management, food services, legal and accounting services, and so forth)
to which the military services have added other program areas including
family and quality of life programs, force protection, environmental
compliance and conservation programs, communications services, and
grounds maintenance, as well as other facilities services such as
utilities, leases, and custodial services, which OSD has referred to as
real property services. Thus, in practice BOS is a collection of many
diverse programs, activities, and services. Beginning with fiscal year
2006 O&M budget submissions, OSD has started referring to real property
services as "facilities operations" and to other base support programs
as "installations services." Collectively, installation services and
facilities operations will be known as DOD's "installations support"
functional area.
[4] See Department of Defense Appropriations Act, 2004, Pub. L. No. 108-
87 (2003). Congress appropriated an additional $16.2 billion for DOD-
wide and miscellaneous O&M activities.
[5] We use the terms "congressionally designated," "congressional
designation," or variations of these terms throughout to refer to
amounts set forth at the budget activity, activity group, and
subactivity group level in an appropriation bill's conference report.
These recommended amounts are not binding unless they are also
incorporated directly or by reference into an appropriation act or
other statute.
[6] For example, the S/RM-adjusted congressional designations and the
obligations we used in our analyses for the Navy did not include $168
million in fiscal year 2003 congressional adjustments to upgrade the
Navy's facilities to meet antiterrorism and force protection standards
(such as vehicle inspection shelters, pop-up barriers, fencing and gate
improvements, and so forth) or $223 million in supplemental
appropriations for hurricane damage and repairs, and the fiscal year
2004 amounts did not include supplemental amounts for the Global War on
Terrorism.
[7] See Department of Defense Appropriations Act, 2004, Pub. L. No. 108-
87 (2003). This amount, and the amounts we used in our historical
funding trend analyses for this report, does not include supplemental
appropriations for O&M that Congress provided for such things as the
Global War on Terrorism.
[8] Beginning with fiscal year 2006 O&M activities, DOD refers to base
operations, family and quality of life programs, force protection,
environmental compliance and conservation programs, communications
services, food services, grounds maintenance, and so forth as
"installations services" and to real property services (utilities,
leases, custodial services, snow plowing, and the like) as "facilities
operations." Collectively, installations services and facilities
operations will be known as DOD's "installations support" functional
area.
[9] GAO-03-274.
[10] U.S. Department of Defense, 2004 Defense Installations Strategic
Plan (Washington, D.C.: September 2004).
[11] GAO, Defense Budget: DOD Should Further Improve Visibility and
Accountability of O&M Fund Movements, GAO/NSIAD-00-18 (Washington,
D.C.: Feb. 9, 2000).
[12] GAO-03-274.
[13] End-of-year obligations provided by the services include funding
that was restored near the end of the fiscal year. This masks the
degree of turbulence affecting programs and delivery of services during
the fiscal year.
[14] Army efforts to improve its projection of budget requirements are
discussed more fully in a subsequent section of this report.
[15] This model, developed by DOD in 1999, estimates the annual
sustainment cost requirement, adjusted for area costs, for each service
and defense agency, based on the number, type, location, and size of
total inventory of facilities. The cost factors handbook uses
commercial benchmark costs to determine the annual cost per square foot
(or similar unit of measure) to sustain each facility type.
[16] Although the Army, Navy, and Marine Corps were able to provide
information on requirements, Air Force officials indicated that to do
so would require extraordinary efforts to accumulate data from
individual installations and commands, and they did not view such
unrefined requirements data as necessarily representative of true
requirements.
[17] This makes it difficult to determine the totality of BOS
requirements across DOD.
[18] According to an Army official, the Army's intention is to fully
fund fewer services as opposed to partially funding a larger number of
services as it has done in the past.
[19] Air Force officials told us that requirements data for fiscal
years 2001 through 2004 (the years that we used in our funding
analyses) would have to be accumulated from data from individual
installations and commands, and they did not view such unrefined
requirements data as necessarily representative of true requirements.
[20] The Senior Joint Basing Group, an initiative of the Deputy Under
Secretary of Defense for Installations and Environment, is made up of
senior officials from the Army, Navy, Air Force, and Marine Corps. Its
purpose is to enhance joint basing and to more efficiently use joint
assets. In late 2004, the group began addressing installation support
agreements and the development of common definitions and standards for
services such as child care, galleys, and grounds maintenance at joint
bases, using the facilities sustainment model as an archetype. In
addition, the group seeks ideas to achieve economies of scale for
services that are in proximity to one another.
[21] For example, the Under Secretary of Defense (Personnel and
Readiness) manages human resources; the Assistant Secretary of Defense
(Special Operations and Low Intensity Conflict) manages physical
security and force protection; the Under Secretary of Defense
(Comptroller) manages community services; and the Assistant Secretary
of Defense (Networks and Information Integration) manages base
communications.
[22] For example, according to historical data provided by the military
services, fiscal year 2004 O&M funding designated for BOS services
totaled $15.6 billion, about $1.6 billion more than Office of the
Secretary of Defense data showed as being designated for BOS at the
beginning of the fiscal year.
[23] Although the Army, Navy, and Marine Corps were able to provide
information on requirements, Air Force officials indicated that to do
so would require extraordinary efforts to accumulate data from
individual installations and commands, and they did not view such
unrefined requirements data as necessarily representative of true
requirements.
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