Military Bases
Analysis of DOD's 2005 Selection Process and Recommendations for Base Closures and Realignments Gao ID: GAO-05-785 July 1, 2005On May 13, 2005, the Secretary of Defense submitted proposed base realignment and closure (BRAC) actions to an independent commission for its review. The Commission must submit its recommendations to the President by September 8, 2005, for his acceptance or rejection in their entirety. Congress has final action to accept or reject these recommendations in their entirety later this year. The law requires that GAO issue a report on the Department of Defense's (DOD) recommendations and selection process by July 1, 2005. GAO's objectives were to (1) determine the extent to which DOD's proposals achieved its stated BRAC goals, (2) analyze whether the process for developing recommendations was logical and reasoned, and (3) identify issues with the recommendations that may warrant further attention. Time constraints limited GAO's ability to examine implementation details of most of the individual recommended actions.
DOD had varying success in achieving its 2005 BRAC goals of (1) reducing excess infrastructure and producing savings, (2) furthering transformation, and (3) fostering jointness. While DOD proposed a record number of closures and realignments, exceeding all prior BRAC rounds combined, many proposals focused on reserve bases and relatively few on closing active bases. Projected savings are almost equally large, but most savings are derived from 10 percent of the recommendations. While GAO believes savings would be achieved, overall up-front investment costs of an estimated $24 billion are required, and there are clear limitations associated with DOD's projection of nearly $50 billion in savings over a 20-year period. Much of the projected net annual recurring savings (47 percent) is associated with eliminating jobs currently held by military personnel. However, rather than reducing end-strength levels, DOD indicates the positions are expected to be reassigned to other areas, which may enhance capabilities but also limit dollar savings available for other uses. Sizeable savings were projected from efficiency measures and other actions, but underlying assumptions have not been validated and could be difficult to track over time. Some proposals represent efforts to foster jointness and transformation, such as initial joint training for the Joint Strike Fighter, but progress in each area varied, with many decisions reflecting consolidations within, and not across, the military services. In addition, transformation was often cited as support for proposals, but it was not well defined, and there was a lack of agreement on various transformation options. DOD's process for conducting its analysis was generally logical, reasoned, and well documented. DOD's process placed strong emphasis on data, tempered by military judgment, as appropriate. The military services and seven joint cross-service groups, which focused on common business-oriented functions, adapted their analytical approaches to the unique aspects of their respective areas. Yet, they were consistent in adhering to the use of military value criteria, including new considerations introduced for this round, such as surge and homeland defense needs. Data accuracy was enhanced by the required use of certified data and by efforts of the DOD Inspector General and service audit agencies in checking the data. Time limitations and complexities introduced by DOD in weaving together an unprecedented 837 closure and realignment actions across the country into 222 individual recommendations caused GAO to focus more on evaluating major cross-cutting issues than on implementation issues of individual recommendations. GAO identified various issues that may warrant further attention by the Commission. Some apply to a broad range of recommendations, such as assumptions and inconsistencies in developing certain cost and savings estimates, lengthy payback periods, or potential impacts on affected communities. GAO also identified certain candidate recommendations, including some that were changed by senior DOD leadership late in the process that may warrant attention.
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-05-785, Military Bases: Analysis of DOD's 2005 Selection Process and Recommendations for Base Closures and Realignments
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Report to Congressional Committees:
July 2005:
Military Bases:
Analysis of DOD's 2005 Selection Process and Recommendations for Base
Closures and Realignments:
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-785]:
GAO Highlights:
Highlights of GAO-05-785, a report to congressional committees:
Why GAO Did This Study:
On May 13, 2005, the Secretary of Defense submitted proposed base
realignment and closure (BRAC) actions to an independent commission for
its review. The Commission must submit its recommendations to the
President by September 8, 2005, for his acceptance or rejection in
their entirety. Congress has final action to accept or reject these
recommendations in their entirety later this year. The law requires
that GAO issue a report on the Department of Defense‘s (DOD)
recommendations and selection process by July 1, 2005. GAO‘s objectives
were to (1) determine the extent to which DOD‘s proposals achieved its
stated BRAC goals, (2) analyze whether the process for developing
recommendations was logical and reasoned, and (3) identify issues with
the recommendations that may warrant further attention. Time
constraints limited GAO‘s ability to examine implementation details of
most of the individual recommended actions.
What GAO Found:
DOD had varying success in achieving its 2005 BRAC goals of (1)
reducing excess infrastructure and producing savings, (2) furthering
transformation, and (3) fostering jointness. While DOD proposed a
record number of closures and realignments, exceeding all prior BRAC
rounds combined, many proposals focused on reserve bases and relatively
few on closing active bases. Projected savings are almost equally
large, but most savings are derived from 10 percent of the
recommendations. While GAO believes savings would be achieved, overall
up-front investment costs of an estimated $24 billion are required, and
there are clear limitations associated with DOD‘s projection of nearly
$50 billion in savings over a 20-year period. Much of the projected net
annual recurring savings (47 percent) is associated with eliminating
jobs currently held by military personnel. However, rather than
reducing end-strength levels, DOD indicates the positions are expected
to be reassigned to other areas, which may enhance capabilities but
also limit dollar savings available for other uses. Sizable savings
were projected from efficiency measures and other actions, but
underlying assumptions have not been validated and could be difficult
to track over time. Some proposals represent efforts to foster
jointness and transformation, such as initial joint training for the
Joint Strike Fighter, but progress in each area varied, with many
decisions reflecting consolidations within, and not across, the
military services. In addition, transformation was often cited as
support for proposals, but it was not well defined, and there was a
lack of agreement on various transformation options.
DOD‘s process for conducting its analysis was generally logical,
reasoned, and well documented. DOD‘s process placed strong emphasis on
data, tempered by military judgment, as appropriate. The military
services and seven joint cross-service groups, which focused on common
business-oriented functions, adapted their analytical approaches to the
unique aspects of their respective areas. Yet, they were consistent in
adhering to the use of military value criteria, including new
considerations introduced for this round, such as surge and homeland
defense needs. Data accuracy was enhanced by the required use of
certified data and by efforts of the DOD Inspector General and service
audit agencies in checking the data.
Time limitations and complexities introduced by DOD in weaving together
an unprecedented 837 closure and realignment actions across the country
into 222 individual recommendations caused GAO to focus more on
evaluating major cross-cutting issues than on implementation issues of
individual recommendations. GAO identified various issues that may
warrant further attention by the Commission. Some apply to a broad
range of recommendations, such as assumptions and inconsistencies in
developing certain cost and savings estimates, lengthy payback periods,
or potential impacts on affected communities. GAO also identified
certain candidate recommendations, including some that were changed by
senior DOD leadership late in the process that may warrant attention.
What GAO Recommends:
GAO is making a recommendation to DOD aimed at tracking and
periodically updating savings, and is highlighting issues for the BRAC
Commission‘s consideration.
In providing oral comments on a draft of this report, DOD concurred
with the recommendation to establish a system to track and periodically
update BRAC savings estimates.
www.gao.gov/cgi-bin/getrpt?GAO-05-785.
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:
DOD's Recommendations Would Have Varying Degrees of Success in
Achieving Goals for the 2005 BRAC Round:
DOD Developed a Generally Logical and Reasoned Process for Making BRAC
Decisions:
Several Aspects of DOD's BRAC Recommendations and Rejected Proposals
May Warrant Further Attention:
Conclusions:
Recommendation for Executive Action:
Agency Comments:
Appendixes:
Appendix I: Scope and Methodology:
Appendix II: Glossary of BRAC-Related Terms:
Appendix III: The Department of the Army Selection Process and
Recommendations:
Appendix IV: The Department of the Navy Selection Process and
Recommendations:
Appendix V: The Department of the Air Force Selection Process and
Recommendations:
Appendix VI: Education and Training Joint Cross-Service Group Selection
Process and Recommendations:
Appendix VII: Headquarters and Support Activities Joint Cross-Service
Group Selection Process and Recommendations:
Appendix VIII: Industrial Joint Cross-Service Group Selection Process
and Recommendations:
Appendix IX: Intelligence Joint Cross-Service Group Selection Process
and Recommendations:
Appendix X: Medical Joint Cross-Service Group Selection Process and
Recommendations:
Appendix XI: Supply and Storage Joint Cross-Service Group Selection
Process and Recommendations:
Appendix XII: Technical Joint Cross-Service Group Selection Process and
Recommendations:
Appendix XIII: Cost of Base Realignment Actions Model:
Appendix XIV: Economic Impact Assessments:
Appendix XV: Draft DOD Transformational Options Recommended for
Approval:
Appendix XVI: Key GAO and Other Defense Audit Agency Products Related
to DOD's 2005 Base Realignments and Closures:
Appendix XVII: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Comparison of BRAC 2005 with Previous Rounds:
Table 2: Projected Costs and Savings from BRAC 2005 Recommendations:
Table 3: Major Recommendations Supporting Joint Activity:
Table 4: Payback Periods for BRAC Recommendations by DOD Component:
Table 5: Estimated Environmental Restoration Costs for DOD's
Recommended Major Base Closures:
Table 6: Military Installations That Would Receive a Net Gain of Over
2,000 Personnel due to BRAC Actions:
Table 7: Candidate Recommendations That Were Deleted or Significantly
Revised by the Infrastructure Executive Council:
Table 8: Excess Capacity Identified by the Army for Selected Mission
Areas:
Table 9: Army Military Value Criteria Weights:
Table 10: Financial Aspects of the Army's Recommendations:
Table 11: Excess Capacity Identified by the Navy, by Function:
Table 12: Navy Military Value Criteria Weights:
Table 13: Financial Aspects of the Navy's Recommendations:
Table 14: Comparison of Alternatives to Closing and Realigning Naval
Air Station Brunswick and Marine Corps Logistics Base Barstow:
Table 15: Excess Capacity Identified by the Air Force, by Function:
Table 16: Air Force Military Value Criteria Weights:
Table 17: Financial Aspects of the Air Force's Recommendations:
Table 18: Impact of Air Force BRAC Recommendations on Installations
with Flying Missions, by Component:
Table 19: Comparison of Alternatives to Closing or Realigning Grand
Forks Air Force Base:
Table 20: Excess Capacity Identified by the Education and Training
Joint Cross-Service Group:
Table 21: Education and Training Joint Cross-Service Group Military
Value Criteria Weights:
Table 22: Financial Aspects of the Education and Training Joint Cross-
Service Group's Recommendations:
Table 23: Excess Capacity Identified by the Headquarters and Support
Activities Joint Cross-Service Group:
Table 24: Headquarters and Support Activities Joint Cross-Service Group
Military Value Criteria Weights:
Table 25: Financial Aspects of the Headquarters and Support Activities
Joint Cross-Service Group's Recommendations:
Table 26: Impact of One-time Antiterrorism and Force Protection Savings
on Recommendations Involving Leased Space:
Table 27: Excess Capacity Identified by the Industrial Joint Cross-
Service Group:
Table 28: Industrial Joint Cross-Service Group Military Value Criteria
Weights:
Table 29: Financial Aspects of the Industrial Joint Cross-Service
Group's Recommendations:
Table 30: Excess Capacity Identified by the Intelligence Joint Cross-
Service Group:
Table 31: Intelligence Joint Cross-Service Group Military Value
Criteria Weights:
Table 32: Financial Aspects of the Intelligence Joint Cross-Service
Group's Recommendations:
Table 33: Excess Capacity Identified by the Medical Joint Cross-Service
Group:
Table 34: Medical Joint Cross-Service Group Military Value Criteria
Weights:
Table 35: Financial Aspects of the Medical Joint Cross-Service Group's
Recommendations:
Table 36: Excess Capacity Identified by the Supply and Storage Joint
Cross-Service Group:
Table 37: Supply and Storage Joint Cross-Service Group Military Value
Criteria Weights:
Table 38: Financial Aspects of the Supply and Storage Joint Cross-
Service Group's Recommendations:
Table 39: Excess Capacity Identified by the Technical Joint Cross-
Service Group:
Table 40: Technical Joint Cross-Service Group Military Value Criteria
Weights:
Table 41: Financial Aspects of the Technical Joint Cross-Service
Group's Recommendations:
Table 42: Comparison of Alternatives to Personnel Reductions for the
Recommendation to Create a Naval Integrated Weapons and Armaments
Research, Development and Acquisition, and Test and Evaluation Center:
Table 43: Estimated Costs and Savings for the Rejected Closure of Los
Angeles Air Force Base:
Table 44: Major Improvements to COBRA for the BRAC 2005 Round:
Table 45: Five Economic Areas with the Greatest Negative Impact on
Employment:
Table 46: Five Economic Areas with the Greatest Positive Economic
Impact on Employment:
Figures:
Figure 1: DOD's BRAC Leadership Structure:
Figure 2: DOD's Selection Criteria for BRAC 2005 Round:
Figure 3: DOD's BRAC 2005 Process:
Figure 4: Major Base Closures with Plant Replacement Values Exceeding
$100 Million:
Figure 5: Major Base Realignments with a Net Loss of 400 or More
Military and Civilian Personnel:
Figure 6: Estimated Net Annual Recurring Savings:
Figure 7: Analytical Process Leading to BRAC Recommendations:
Figure 8: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value for a Technical Facility:
Figure 9: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of an Army Installation:
Figure 10: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of Naval Aviation Operations:
Figure 11: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of Fighter Aircraft:
Figure 12: Realignment of Fighter Aircraft at Lambert-St. Louis Air
Guard Station and Otis Air National Guard Base:
Figure 13: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of Flight Training:
Figure 14: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of Major Administrative and Headquarters
Activities:
Figure 15: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of Depot Maintenance Activities:
Figure 16: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of an Intelligence Facility:
Figure 17: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of Health Care Services:
Figure 18: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of Supply and Storage Activities:
Figure 19: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of a Technical Facility:
Letter July 1, 2005:
Congressional Committees:
It has been 10 years since the Department of Defense (DOD) last
conducted a base realignment and closure (BRAC) round.[Footnote 1] As a
result of prior BRAC rounds in 1988, 1991, 1993, and 1995, DOD reports
that it has reduced its domestic infrastructure by about 20 percent in
terms of plant replacement value,[Footnote 2] transferred hundreds of
thousand of acres of unneeded property to other federal and nonfederal
entities, and saved billions of dollars on an annual recurring basis
for application to higher priority defense needs. Despite these
infrastructure reductions, DOD recognized the need for additional
closures and realignments following the 1995 closure round and made
repeated efforts to gain congressional authorization for an additional
closure round.
We too have frequently reported in recent years on the long-term
challenges DOD faces in managing its portfolio of facilities, halting
degradation of facilities, and reducing unneeded infrastructure to free
up funds to better maintain enduring facilities and meet other needs.
Because of these long-standing issues, DOD's management of its support
infrastructure has been included in our list of high-risk areas since
1997.
Congress authorized an additional BRAC round for 2005 with the passage
of the National Defense Authorization Act for Fiscal Year 2002 (the
Act).[Footnote 3] The 2002 Act essentially extended the authority of
the Defense Base Closure and Realignment Act of 1990,[Footnote 4] which
had authorized the 1991, 1993, and 1995 rounds, with some modifications
for the 2005 base closure round. The BRAC legislation provides for an
independent Defense Base Closure and Realignment Commission to review
the Secretary of Defense's realignment and closure recommendations,
which were publicly announced on May 13, 2005, and present its findings
and conclusions on the Secretary's recommendations, along with its own
recommendations to the President, by September 8, 2005. The President,
in turn, must either approve or disapprove the Commission's
recommendations in their entirety by September 23, 2005. If approved,
the recommendations are forwarded to Congress, which has 45 days or
until the adjournment of Congress to disapprove the recommendations on
an all-or-none basis; otherwise, they become binding.[Footnote 5] If
the President disapproves the recommendations, the Commission must
consider the President's objections and send a revised report back to
the President no later than October 20, 2005. The President then has
until November 7, 2005, to forward his approval of the revised
Commission recommendations to Congress for its review.
Considering changes in the national security environment and emerging
threats, along with ongoing changes in the United States defense
strategy to address these threats and protect our homeland, DOD has
come to realize the need to reshape its base structure to more
effectively support its military forces. In establishing goals for the
2005 BRAC round, the Secretary of Defense, in a November 15, 2002,
memorandum initiating the round, expressed his interest in (1) reducing
excess infrastructure, which diverts scarce resources from overall
defense capability, and producing savings; (2) transforming DOD by
aligning the infrastructure with the defense strategy; and (3)
fostering jointness by examining and implementing opportunities for
greater jointness across DOD.
In the submission of his recommendations to the BRAC Commission on May
13, 2005, the Secretary reported that his recommendations, if approved,
would accomplish these goals. DOD reported that its 222
recommendations, involving an unprecedented 837 closure and realignment
actions--including 33 major base closures and 30 major realignments,
plus numerous other closures and realignments would generate annual
recurring savings of about $5.5 billion beginning in fiscal year 2012.
Legislation authorizing the 2005 round maintained the requirement,
applicable to three previous rounds, that we provide a detailed
analysis of the Secretary's recommendations and the selection process.
Our objectives were to (1) determine the extent to which DOD achieved
its stated goals for BRAC 2005, (2) analyze whether DOD's selection
process in developing recommended actions was logical and reasoned, and
(3) identify issues regarding the recommendations that may warrant
attention by the BRAC Commission.
To analyze the selection process and the recommendations, we monitored
various aspects of the process as it evolved over time leading up to
and following the public release of the Secretary's recommendations. We
sought to assure ourselves that DOD followed a logical, reasoned, and
well-documented decision-making process leading to the proposed
recommendations. Prior to the release of the recommendations, we abided
by an agreement with DOD not to disclose details of the process due to
the sensitivity of the information while the process evolved. With the
approval of the large number of recommendations occurring in the final
weeks of the process, the broad scope and complexity of the
recommendations, and the limited time available for us to report our
results, we generally focused greater attention following the
announcement of the proposed closures and realignments on those issues
affecting more than one recommendation than on issues pertaining to the
implementation of individual recommendations. However, as time
permitted, we visited selected installations to better gauge the
operational and economic impact of the proposed recommendations. We
generally experienced good access to relevant documentation and to key
senior officials and staff involved in the BRAC process.
We performed our work primarily at the Office of the Secretary of
Defense (OSD), the military services' base closure offices, and the
offices of the seven joint cross-service groups that were established
by the Secretary to propose cross-service recommendations.[Footnote 6]
While we did not attend deliberative meetings, we had access to minutes
of meetings and relevant documentation, as well as opportunities to
meet periodically with senior leadership to provide observations or
concerns we had as the process was unfolding. We relied on DOD's Office
of the Inspector General, Army Audit Agency, Naval Audit Service, and
Air Force Audit Agency to validate the accuracy of the data used by the
military services and joint cross-service groups in their decision-
making process. We met with staff members of these audit agencies
periodically to discuss the results of their work as well as to observe
their data validation efforts at selected locations. Based on these
discussions and observations and a review of their reports, we believe
the DOD data are sufficiently reliable for the purposes of this report.
We conducted our work from October 2003, as DOD's process was
beginning, through June 2005, shortly after the Secretary of Defense
announced his proposed closures and realignments, in accordance with
generally accepted government auditing standards. Further details on
the scope and methodology are described in appendix I.
Results in Brief:
DOD's recommendations, if approved, would have varying degrees of
success in achieving goals that were set forth by the Secretary of
Defense, despite producing closure and realignment actions numbering
more than those of all four previous rounds combined. The department's
recommendations were dominated by relatively minor closures and
realignments, and many were related to the reserve components.[Footnote
7] DOD data indicate that implementing the proposed recommendations
would reduce the defense infrastructure by about 5 percent based on the
facilities' plant replacement value. We believe the recommendations
overall, if approved, would produce savings. However, overall up-front
investment costs of an estimated $24 billion are required, and there
are limitations associated with DOD's projection of nearly $50 billion
in net present value savings over a 20-year period.[Footnote 8] Most
projected savings are derived from 10 percent of the 222
recommendations. Also, much of the projected net annual recurring
savings (47 percent) are associated with eliminating jobs currently
held by military personnel. However, rather than reducing end-strength
levels, DOD indicates the positions are expected to be reassigned to
other areas, which may enhance capabilities but also limit dollar
savings available for other uses. Without recognition that these are
not dollar savings that can be readily applied elsewhere, this could
create a false sense of savings available for other purposes.
Furthermore, about $500 million of the net annual recurring savings is
based on business process reengineering efforts, but some of the
assumptions supporting the expected efficiency gains have not been
validated; while savings are likely to be realized, the precise
magnitude of savings is uncertain. For example, one of DOD's
recommendations--to create fleet readiness centers in the Navy by
integrating different levels of maintenance to reduce repair time--is
estimated to yield $215 million in annual recurring savings as a result
of overhead efficiencies, but such assumptions have not been validated
and actual savings will be shaped by how the recommendations are
implemented. We have previously reported on limitations in DOD's
efforts to track and update savings from prior BRAC rounds. Our
concerns over this issue are heightened in this BRAC round, with the
emphasis on business process reengineering efforts, because of past
tendencies to reduce related operating budgets in advance of actual
savings being known and fully realized. While DOD characterized many of
its recommendations as transformational--whereby infrastructure would
be aligned with the defense strategy--we found that the concept of
transformation is not well defined, and many of the recommendations
referencing it as support for the proposed BRAC actions are more
appropriately categorized as efforts to improve business processes.
Some proposed actions increase emphasis on jointness, such as
establishing a single site for initial training for the Joint Strike
Fighter aircraft. However, the extent of joint and transformational
progress varied, as shown by other DOD-proposed actions reflecting
preferences to consolidate functions within rather than across
services, and by a lack of agreement on transformational options
despite frequent references to them in support of proposed actions. We
are making a recommendation to the Secretary of Defense to establish
mechanisms for tracking and periodically updating savings estimates as
the BRAC recommendations are implemented.
DOD's decision-making process for developing its recommendations was
generally logical, well documented, and reasoned. DOD established a
structured and largely sequential process for obtaining and analyzing
data that provided an informed basis for identifying and evaluating
BRAC options. At the same time, initial difficulties in obtaining
complete and accurate data in a timely manner often added to overlap
and varying degrees of concurrency between data collection efforts and
other steps in the process. That notwithstanding, DOD's process relied
on certified data,[Footnote 9] as required by the BRAC legislation, and
the use of various analytical models to evaluate the data. Further, as
the military services and joint cross-service groups assessed the
importance of installations, facilities, and functions, they were
consistent in following the key considerations set forth in the BRAC
law--such as military value--although they varied somewhat in their
analytical approaches based on unique aspects of the functions being
evaluated. As Congress mandated, DOD updated and considered its 20-year
force structure plan in completing its BRAC analysis.[Footnote 10]
Further, DOD focused on the military value selection criteria as the
predominant decision-making factor, including legislatively mandated
emphasis for this BRAC round on such elements as homeland defense and
surge capability. Military judgment also played a role throughout the
process. While the effort to ensure the accuracy of the voluminous
amounts of data used in the process proved challenging for the services
and joint cross-service groups, the DOD Inspector General and the
military service audit agencies played key roles in pointing out data
limitations, fostering corrections, and improving the accuracy of the
data used in the process through their validation efforts, and
generally found the data sufficiently reliable to support BRAC decision
making.
We identified various issues regarding DOD's BRAC recommendations, as
well as candidate recommendations[Footnote 11] that were not included
on DOD's final list that may warrant further attention by the BRAC
Commission. These issues include instances of lengthy payback periods,
which is the time required to recoup up-front investment costs for
closing or realigning a facility or function; inconsistencies in
formulating cost and savings estimates; uncertainties in estimating
total costs to the government for implementing recommended actions; and
potential impacts on communities surrounding bases that are either
losing or gaining large numbers of personnel. With respect to the
latter issue, this BRAC round differs from prior rounds in that many
communities will be facing increased growth with the return of
thousands of forces from overseas locations and the consequent
challenges of addressing increased needs in areas such as schools and
housing. In a few instances, we identified implementation or
operational issues related to some recommendations. We are also
highlighting specific closure or realignment actions that were
projected as having the potential to generate significant savings that
the services or joint cross-service groups approved for further
consideration, but which were either deleted or substantially revised
by senior DOD leadership during the latter phases of the selection
process.
In providing oral comments on a draft of this report, DOD concurred
with the recommendation regarding the need for a system to track and
periodically update BRAC savings estimates.
Background:
As described at the beginning of this report, DOD recognized the need
for additional base closures and realignments following the 1995
closure round and made repeated efforts to gain congressional
authorization for an additional closure round. Congress authorized an
additional round for 2005 with the passage of the National Defense
Authorization Act for Fiscal Year 2002.[Footnote 12] The 2002 Act
essentially extended the authority of the Defense Base Closure and
Realignment Act of 1990,[Footnote 13] which had authorized the 1991,
1993, and 1995 rounds, with some modifications for the 2005 base
closure round.
In a memorandum dated November 15, 2002, the Secretary of Defense
issued initial guidance outlining goals and a leadership framework for
the 2005 BRAC round. In doing so, he noted that "At a minimum, BRAC
2005 must eliminate excess physical capacity; the operation,
sustainment and recapitalization of which diverts scarce resources from
defense capability." However, specific reduction goals were not
established.[Footnote 14] At the same time, the Secretary's guidance
for the 2005 round depicted the round as focusing on more than the
reduction of excess capacity. He said that "BRAC 2005 can make an even
more profound contribution to transforming the Department by
rationalizing our infrastructure with defense strategy." He further
noted that "A primary objective of BRAC 2005, in addition to realigning
our base structure to meet our post-Cold War force structure, is to
examine and implement opportunities for greater joint activity." Toward
that end, the Secretary indicated that organizationally the 2005 BRAC
analysis would be two pronged. Joint cross-service teams would analyze
common business-oriented functions, and the military departments would
analyze service-unique functions.
The Secretary of Defense established two senior groups to oversee and
guide the BRAC 2005 process from a departmental perspective. The first
was the Infrastructure Executive Council (IEC), which was designated
the policy-making and oversight body for the entire process, and the
second, a subordinate group, was the Infrastructure Steering Group
(ISG), created to oversee the joint cross-service analyses and
integrate that process with the military departments' own service-
unique analyses. Each of the military departments also established BRAC
organizations, which had oversight from senior leaders. Likewise, each
of the joint cross-service teams, under the purview of the ISG, was led
by senior military or civilian officials, with representation from each
of the services and relevant defense agencies. DOD's BRAC leadership
structure is shown in figure 1.
Figure 1: DOD's BRAC Leadership Structure:
[See PDF for image]
[End of figure]
DOD developed a draft set of 77 transformational options that once
approved, were expected to constitute a minimum analytical framework
upon which the military departments and joint cross-service groups
would conduct their respective BRAC analyses. Because of a lack of
agreement among the services and OSD, the draft options were never
formally approved, but they remained available for consideration by
analytical teams and were referenced by some groups in support of
various BRAC actions being considered.[Footnote 15] (See app. XV for a
list of the draft transformational options.) To some extent, the
analyses and recommendations of each of the services and joint cross-
service groups were also influenced by various guiding principles or
policy imperatives developed by the respective service or joint cross-
service groups, such as the need to preserve a particular capability in
a particular location.
The legislation authorizing the 2005 BRAC round, enacted as part of the
fiscal year 2002 Defense Authorization Act, required DOD to give
priority to selection criteria dealing with military value and added
elements of specificity to criteria previously used by DOD in prior
BRAC rounds. Subsequently, The Ronald W. Reagan National Defense
Authorization Act for Fiscal Year 2005[Footnote 16] codified the entire
selection criteria and added the word "surge" to one previously used
criterion related to potential future contingencies and mobilization
efforts. In large measure, the final criteria closely followed the
criteria DOD employed in prior rounds, with greater specificity added
in some areas, as required by Congress. Figure 2 shows DOD's selection
criteria for 2005, with changes from BRAC 1995 denoted in
bold.[Footnote 17]
Figure 2: DOD's Selection Criteria for BRAC 2005 Round:
* Military value criteria:
1. The current and future mission capabilities and the impact on
operational readiness of the total force of the Department of Defense,
including the impact on joint warfighting, training, and readiness;
2. The availability and condition of land, facilities, and associated
airspace (including training areas suitable for maneuver by ground,
naval, or air forces throughout a diversity of climate and terrain
areas and staging areas for the use of the Armed Forces in homeland
defense missions) at both existing and potential receiving locations;
3. The ability to accommodate contingency, mobilization, surge, and
future total force requirements at both existing and potential
receiving locations to support operations and training;
4. The cost of operations and the manpower implications.
* Other criteria:
5. The extent and timing of potential costs and savings, including the
number of years, beginning with the date of completion of the closure
or realignment, for the savings to exceed the costs;
6. The economic impact on existing communities in the vicinity of
military installations;
7. The ability of the infrastructure of both the existing and potential
receiving communities to support forces, missions, and personnel;
8. The environmental impact, including the impact of costs related to
potential environmental restoration, waste management, and
environmental compliance activities.
[See PDF for image]
Source: DOD and P.L. 101-510, section 2913.
Note: Bolding denotes changes from the 1995 BRAC round.
[End of figure]
To ensure that the selection criteria were consistently applied, OSD
established a common analytical framework to be used by each military
service and joint cross-service group. Each service and group adapted
this framework, in varying degrees, to its individual activities and
functions in evaluating facilities and functions and identifying
closure and realignment options. Despite the diversity of bases and
cross-service functions analyzed, each of the groups was expected to
first analyze capacity and military value of its respective facilities
or functions, and then to identify and evaluate various closure and
realignment scenarios and provide specific recommendations. Scenarios
were derived from data analysis and transformational options, as well
as from goals and objectives each group established for itself as it
began its work. Figure 3 depicts the expected progression of that
process.
Figure 3: DOD's BRAC 2005 Process:
[See PDF for image]
[End of figure]
An initial part of the process involved an overall capacity analysis of
specific locations or functions and subfunctions at specific locations.
The analysis relied on data calls to obtain certified data to assess
such factors as maximum potential capacity, current capacity, current
usage, excess capacity, and capacity needed to meet surge requirements.
The military value analysis consisted of assessments of operational and
physical characteristics of each installation, or specific functions on
an installation related to a specific joint cross-service group's area
of responsibility. These would include an installation's or function's
current and future mission capabilities, physical condition, ability to
accommodate future needs, and cost of operations. This analysis also
relied on data calls to obtain certified data on the various attributes
and metrics used to assess each of the four military value criteria and
permit meaningful comparisons between like installations/facilities
with reference to the collective military value selection criteria. DOD
officials used these data to develop comparative military value scores
for each installation/facility or for categories of facilities serving
like functions.
The scenario development and analysis phase focused on identifying
various realignment and closure scenarios for further analysis. These
scenarios were to be derived from consideration of the department's 20-
year force structure plan, capacity analysis, military value analysis,
and transformational options; applicable guiding principles,
objectives, or policy imperatives identified by individual military
services or joint cross-service groups; and military judgment. Each
component had available for its use an optimization or linear
programming model that could combine the results of capacity and
military value analyses and other information to derive scenarios and
sets of alternatives. The model could be used to address varying policy
imperatives or objectives, such as minimizing the number of sites,
minimizing the amount of excess capacity, or maximizing the average
military value. A BRAC review group could also direct variations that
would, for example, eliminate as much excess capacity as possible while
maintaining an average military value at least as high as the original
set of sites.
OSD policy guidance has historically specified that priority
consideration be given to military value in making closure and
realignment decisions, but that priority was specifically mandated by
the legislation authorizing the 2005 BRAC round. At the same time,
historic practice and the 2005 authorizing legislation both required
consideration of additional issues included in selection criteria 5
through 8, detailed below:
* Criterion 5--costs and savings: This criterion consists of measures
of costs and savings and the payback periods[Footnote 18] associated
with them. Each component assessed costs using the Cost of Base
Realignment Actions (COBRA) model that was used in each of the BRAC
rounds since 1988. Appendix XIII summarizes improvements that have been
made to the model over time and more recently for the 2005 round.
* Criterion 6--economic impact: This criterion measures the direct and
indirect impacts of a BRAC action on employment in the communities
affected by a closure or realignment. Appendix XIV provides a more
complete description of how economic impact was assessed and the
changes made to improve the assessment for this round.
* Criterion 7--community infrastructure: Selection criterion 7 examines
"the ability of the infrastructure of both the existing and potential
receiving communities to support forces, missions, and personnel." The
services and joint cross-service groups considered information on
demographics, childcare, cost of living, employment, education,
housing, medical care, safety and crime, transportation, and public
utilities of the communities impacted by a BRAC action.
* Criterion 8--environmental impact: Selection criterion 8 assesses
"the environmental impact, including the impact of costs related to
potential environmental restoration, waste management, and
environmental compliance activities" of closure and realignment
recommendations. In considering this criterion, the services and joint
cross-service groups focused mainly on potential environmental impacts
while acknowledging, when appropriate, known environmental restoration
costs associated with an installation recommended for closure or
realignment. Waste management and environmental compliance costs were
factored into criterion 5. However, under OSD policy guidance,
environmental restoration costs were not considered in the cost and
savings analyses for evaluating individual scenarios under criterion 5.
DOD is obligated to restore contaminated sites on military bases
regardless of whether they are closed, and such costs could be affected
by reuse plans that cannot be known at this time but would be budgeted
for at a later time when those plans and costs are better identified.
Each of the military departments produced reports with closure and
realignment recommendations, as did each of the joint cross-service
groups, the results of which are summarized in appendixes III through
XII. Figures 4 and 5 show, respectively, the 33 major closures and 30
major realignments that have been recommended by DOD where plant
replacement values exceed $100 million for major base closures and net
losses of 400 or more military and civilian personnel for major base
realignments.
Figure 4: Major Base Closures with Plant Replacement Values Exceeding
$100 Million:
[See PDF for image]
[End of figure]
Figure 5: Major Base Realignments with a Net Loss of 400 or More
Military and Civilian Personnel:
[See PDF for image]
[End of figure]
While the 2005 BRAC round, like earlier BRAC rounds, was chartered to
focus on United States domestic bases,[Footnote 19] DOD separately had
under way a review of overseas basing requirements that had
implications for the domestic BRAC process. In a September 2004 report
to Congress, the Under Secretary of Defense for Policy provided an
update on DOD's "global defense posture review." It noted that once
completed, the changes stemming from the review would result in the
most profound reordering of United States military forces overseas as
the current posture has been largely unchanged since the Korean War.
The report noted that over the next 10 years, it is planned that up to
70,000 military personnel would return to the United States, along with
approximately 100,000 family members and civilian employees. It further
noted that a net reduction of approximately 35 percent of overseas
sites--bases, installations, and facilities--is planned. DOD had
indicated that the domestic BRAC process would be used in making
decisions on where to relocate forces returning to the United States
from overseas bases.
Separately, Congress in 2003 mandated the creation of a special
commission to evaluate, among other things, the current and proposed
overseas basing structure of the United States military
forces.[Footnote 20] The Commission's observations are included in its
May 2005 report.[Footnote 21] Among other things, the Commission cited
the need for appropriate planning to ensure the availability of
community infrastructure to support returning troops and to mitigate
the impact on communities.
DOD's Recommendations Would Have Varying Degrees of Success in
Achieving Goals for the 2005 BRAC Round:
The recommendations proposed by the Secretary of Defense would have
varying degrees of success in achieving DOD's BRAC 2005 goals of
reducing infrastructure and achieving savings, furthering
transformation objectives, and fostering joint activity among the
military services. While DOD proposed a record number of closure and
realignment actions, exceeding those in all prior BRAC rounds combined,
many proposals focus on the reserve component bases and relatively few
on closing active bases. Projected savings are almost equally as large,
as all prior BRAC rounds combined, but about 80 percent of the
projected 20-year net present value savings (savings minus up-front
investment costs) are derived from only 10 percent of the
recommendations. While we believe the recommendations overall would
achieve savings, up-front investment costs of about $24 billion are
required to implement all recommendations to achieve DOD's overall
expected savings of nearly $50 billion over 20 years. Much of these
saving are related to eliminations of jobs currently held by military
personnel but are not likely to result in end-strength reductions,
limiting savings available for other purposes. Some proposed actions
represent some progress in emphasizing transformation and jointness,
but progress in these efforts varied without clear agreement on
transformational options to be considered, and many recommendations
tended to foster jointness by consolidating functions within rather
than across military services.
BRAC 2005 Round Differs from Past Rounds:
The BRAC 2005 round is different from previous base closure rounds in
terms of number of actions, projected implementation costs, and
estimated annual recurring savings. While the number of major closures
and realignments is just a little greater than individual previous
rounds, the number of minor closure and realignments, as shown in table
1, is significantly greater than those in all previous rounds combined.
Table 1: Comparison of BRAC 2005 with Previous Rounds:
Dollars in billions.
1988;
Major bases: Closures: 16;
Major bases: Realignments: 4;
Minor closures and realignments: 23;
Total actions: 43;
Costs: $2.7;
Net annual recurring savings: $0.9.
1991;
Major bases: Closures: 26;
Major bases: Realignments: 17;
Minor closures and realignments: 32;
Total actions: 75;
Costs: $5.2;
Net annual recurring savings: $2.0.
1993;
Major bases: Closures: 28;
Major bases: Realignments: 12;
Minor closures and realignments: 123;
Total actions: 163;
Costs: $7.6;
Net annual recurring savings: $2.6.
1995;
Major bases: Closures: 27;
Major bases: Realignments: 22;
Minor closures and realignments: 57;
Total actions: 106;
Costs: $6.5;
Net annual recurring savings: $1.7.
Total (for previous BRAC rounds);
Major bases: Closures: 97;
Major bases: Realignments: 55;
Minor closures and realignments: 235;
Total actions: 387;
Costs: $22.0;
Net annual recurring savings: $7.2.
Total (for 2005 BRAC round);
Major bases: Closures: 33;
Major bases: Realignments: 30;
Minor closures and realignments: 774;
Total actions: 837;
Costs: $24.4;
Net annual recurring savings: $5.5.
Source: DOD.
[End of table]
The large increase in minor closures and realignments is attributable
partly to actions involving the Army National Guard, Army Reserve, Air
National Guard, and vacating leased space.
The costs to implement the proposed actions are $24.4 billion compared
to a $22 billion total from the four previous rounds through 2001, the
end of the 6-year implementation period for the 1995 BRAC
round.[Footnote 22] The increase in costs is due partly to significant
military construction and moving costs associated with Army
recommendations to realign its force structure, and to recommendations
to move activities from leased space onto military installations. For
example, the Army projects that it will need about $2.3 billion in
military construction funds to build facilities for the troops
returning from overseas. Likewise, DOD projects that it will need an
additional $1.3 billion to build facilities for recommendations that
include activities being moved from leased space. Time will be required
for these costs to be offset by savings from BRAC actions and this in
turn affects the point at which net annual recurring savings can begin
to accrue.
Finally, the projected net annual recurring savings are $5.5 billion
compared to net annual recurring savings of $2.6 billion and $1.7
billion for the 1993 and 1995 rounds respectively. The increased
savings are partly attributable to significant reductions in the number
of military positions and business process reengineering efforts.
Infrastructure Would Likely Be Reduced with Some Limitations Noted:
DOD projects that the proposed recommendations would reduce excess
infrastructure capacity, indicating that the plant replacement value of
domestic installations would be reduced by about $27 billion, or 5
percent. However, the projected reductions in plant replacement value
did not account for the $2.2 billion in domestic military construction
projects associated with relocating forces from overseas. On the other
hand, reductions in leased space are not considered in the plant
replacement value analysis, since leased space is not government owned.
DOD estimates that its recommendations will reduce about 12 million
square feet of leased space.
DOD Projects Recommendations Would Produce Savings, but there are
Limitations Associated with the Savings Estimates:
DOD projects that its proposed recommendations will produce nearly $50
billion in 20-year net present value savings, with net annual recurring
savings of about $5.5 billion. There are limitations associated with
the savings claimed from military personnel reductions and we believe
there is uncertainty regarding the magnitude of savings likely to be
realized in other areas given unvalidated assumptions regarding
expected efficiency gains from business process reengineering efforts
and projected savings from sustainment, recapitalization, and base
operating support.[Footnote 23]
Table 2 summarizes the projected one-time cost, the cost or savings
anticipated during the 6-year implementation period for the closure or
realignment, the estimated net annual recurring savings, and the
projected 20-year net present value costs or savings of DOD's
recommendations.[Footnote 24]
Table 2: Projected Costs and Savings from BRAC 2005 Recommendations:
Fiscal year 2005 constant dollars in millions.
DOD component: Army;
One-time (cost): ($9,963.4);
Net implementation (cost) or savings: ($8,519.1);
Net annual recurring (cost) or savings[A]: $497.6;
20-year net present value (cost) or savings[B]: ($3,038.6).
DOD component: Navy;
One-time (cost): ($2,099.8);
Net implementation (cost) or savings: $440.7;
Net annual recurring (cost) or savings[A]: $753.5;
20-year net present value (cost) or savings[B]: $7,713.7.
DOD component: Air Force;
One-time (cost): ($1,883.1);
Net implementation (cost) or savings: $2,635.5;
Net annual recurring (cost) or savings[A]: $1,248.5;
20-year net present value (cost) or savings[B]: $14,560.3.
DOD component: Joint cross-service groups;
One-time (cost): ($10,466.1);
Net implementation (cost) or savings: $1,372.8;
Net annual recurring (cost) or savings[A]: $2,985.1;
20-year net present value (cost) or savings[B]: $29,569.1.
Total;
One-time (cost): ($24,412.4);
Net implementation (cost) or savings: ($4,070.1);
Net annual recurring (cost) or savings[A]: $5,484.7;
20-year net present value (cost) or savings[B]: $48,804.5.
Source: GAO analysis of DOD data.
[A] Projected annual recurring savings after the 6-year implementation
period.
[B] DOD used a 2.8 percent discount rate to calculate net present
value.
[End of table]
Table 2 also shows the Navy, Air Force, and joint cross-service groups
all projecting net savings within the 6-year implementation period, as
well as significant 20-year net savings. In contrast, because of the
nature of the Army's proposed actions and costs, such as providing
infrastructure for troops returning from overseas and the consolidation
and recapitalization of reserve facilities, the Army does not achieve
net savings either during the implementation period or within 20 years,
based on recommendations included in its BRAC report.
Notwithstanding these projected savings, we identified limitations or
uncertainties about the magnitude of savings likely to be realized. As
figure 6 shows, 47 percent of the net annual recurring savings can be
attributed to projected military personnel reductions. About 40 percent
($2.1 billion) of the projected net annual recurring savings can be
attributed to savings from operation and maintenance activities, which
include terminating or reducing property sustainment and
recapitalization, base operating support, and civilian payroll.
Furthermore, about $500 million of the "other" savings is based on
business process reengineering efforts, but some of the assumptions
supporting the expected efficiency gains have not been validated.
Figure 6: Estimated Net Annual Recurring Savings:
[See PDF for image]
Note: Analysis does not include data from one classified
recommendation.
[End of figure]
Military Personnel Savings:
Much of the projected net annual recurring savings (47 percent) are
associated with eliminating positions currently held by military
personnel; but rather than reducing end-strength levels, DOD indicates
the positions are expected to be reassigned to other areas, limiting
dollar savings available for other uses. For example, although the Air
Force projects net annual recurring savings of about $732 million from
eliminating about 10,200 military positions, Air Force officials stated
the active duty positions will be reinvested to relieve stress on high
demand career fields and the reserve positions to new missions yet to
be identified. Likewise, the Army is projecting savings from
eliminating about 5,800 military positions, but it has no plans to
reduce its end-strength. Finally, the Navy is projecting it will
eliminate about 4,000 active duty military positions, which a Navy
official noted will help it achieve the end-strength reductions already
planned. As we noted during our review of DOD's process during the 1995
BRAC round, since these personnel will be assigned elsewhere rather
than taken out of the force structure, they do not represent dollar
savings that can be readily reallocated outside the personnel
accounts.[Footnote 25] Without recognition that these are not dollar
savings that can be readily applied elsewhere, this could create a
false sense of savings available for use in other areas traditionally
cited as a beneficiary of BRAC savings, such as making more funds
available for modernization and better maintenance of remaining
facilities.
Sustainment, Recapitalization, and Base Operating Support Savings:
DOD is also projecting savings from the sustainment and
recapitalization of facilities that are scheduled to be demolished, as
well as from facilities that might remain in DOD's real property
inventory when activities are realigned from one base to another. For
example, the Industrial Joint Cross-Service Group is claiming about $20
million in annual recurring savings from the recapitalization of
facilities at installations responsible for destroying chemical weapons
at three locations recommended for closure.[Footnote 26] However, the
Army had already expected to demolish these chemical destruction
facilities upon completing the destruction of the chemical weapons at
each site and the Army has not identified future missions for these
installations. As a result, we do not believe it is appropriate for the
Industrial Joint Cross-Service Group to claim any recapitalization
savings related to these installations.
Likewise, DOD is projecting savings from the recapitalization and
sustainment of facilities in cases where functions or activities would
be realigned from one base to another. However, it is not clear to what
extent the proposed realignments would result in an entire building or
portion of a building being vacated, or if entire buildings are
vacated, whether they would be declared excess and removed from the
military services' real property inventory. Our analysis shows that the
supply and storage group's recommendations project about $100 million
in sustainment and recapitalization savings from realigning defense
distribution depots. The group estimates its recommendations will
vacate about 27 million square feet of storage space. Supply and
storage officials told us their goal is to vacate as much space as
possible by re-warehousing inventory and by reducing personnel spaces,
but they do not have a specific plan for what will happen to the space
once it is vacated. In addition, until these recommendations are
ultimately approved and implemented, DOD will not be in a good position
to know exactly how much space is available or how this space will be
disposed of or utilized. As a result, it is unclear as to how much of
the estimated $100 million in annual recurring savings will actually
occur.
Collectively, the issues we identified suggest the potential for
reduced savings that are likely to be realized in the short term during
the implementation period, which could further reduce net annual
recurring savings realized in the long term. The short-term impact is
that these reduced savings could adversely affect DOD's plans for using
these BRAC savings to help offset the up-front investment costs
required to implement the recommendations and could further limit the
amount of savings available for transformation and modernization
purposes.
Savings Based on Business Process Reengineering:
DOD projected net annual recurring savings in the "other" category as
shown in figure 6 include about $500 million that is based on business
process reengineering efforts. Our analysis indicates that four
recommendations--one from the Industrial Joint Cross-Service Group and
three from the Supply and Storage Joint Cross-Service Group--involve
primarily business process reengineering efforts. However, the expected
efficiency gains from these recommendations are based on assumptions
that are subject to some uncertainty and have not been validated. For
example, our analysis indicates that $215 million, or 63 percent, of
the estimated annual recurring savings from the Industrial Joint Cross-
Service Group recommendation to create fleet readiness centers within
the Navy is based on business reengineering efforts that would result
in overhead efficiencies. Although the data suggest there is the
potential for savings, we believe the magnitude of the savings is
somewhat uncertain because the estimates are based on assumptions that
have undergone only limited testing. Realizing the full extent of the
savings would depend on actual implementation of the recommended
actions and modifications to the Navy's supply system. The industrial
group and the Navy assumed that combining depot and intermediate
maintenance levels would reduce the time needed for an item to be
repaired at the intermediate level, which in turn would reduce the
number of items needing to be kept in inventory, as well as the number
of items being sent to a depot for repair. These assumptions, which
were the major determinant of the realignment savings, were reportedly
based on historical data and pilot projects and have not been
independently reviewed or verified by the Naval Audit Service, the DOD
Inspector General, or us.
Furthermore, our analysis indicates that $291 million, or about 72
percent, of the net annual recurring savings expected from the Supply
and Storage Joint Cross-Service Group's three recommendations are also
based on business process reengineering. In the COBRA model, the
savings are categorized as procurement savings and are based on the
expanded use of performance-based logistics[Footnote 27] and reductions
to duplicate inventory. Supply and storage group staff said that these
savings accrue from reduced contract prices because the Defense
Logistics Agency (DLA) will have increased buying power since it is
responsible for purchasing many more items that before were purchased
by each of the services. In addition, savings accrue from increased use
of performance-based agreements,[Footnote 28] a key component of
performance-based logistics. The group estimates DLA can save 2.8 cents
on each contract dollar placed on performance-based agreements. In
addition, savings result from reductions in the amount of stock that
must be held in inventory. Supply and storage staff said that these
savings are attributable to reductions in the cost of money, cost of
stock losses due to obsolescence, and cost of storage. Together the
group estimates these factors save about 17 percent of the estimated
value of the acquisition cost of the stock that is no longer required
to be held in inventory. These savings estimates, for the most part,
are based on historical documentation provided by DLA, which time did
not allow us to validate. The extent to which these same savings will
be achieved in the future is uncertain. As noted above, how these
actions are implemented could also affect savings. We are concerned
that this is another area that could lead to a false sense of savings
and lead to premature reductions in affected budgets in advance of
actual savings being fully realized, as has sometimes occurred in past
efforts to achieve savings through business process reengineering
efforts. We are also concerned that it could exacerbate a problem we
have previously identified regarding past BRAC rounds involving the
lack of adequate systems in place to track and update savings resulting
from BRAC actions--the focus of our recommendation for the Secretary of
Defense. These concerns are reinforced by limitations in DOD's
financial management systems that historically have made it difficult
to fully identify the costs of operations and provide a complete
baseline from which to assess savings.
Transformation Cited as Justification for Many Recommendations Despite
Lack of Clear Agreement on Transformational Options:
While furthering transformation was one of the BRAC goals, there was no
agreement between DOD and its components on what should be considered a
transformational effort. As part of the BRAC process, the department
developed over 200 transformational options for stationing and
supporting forces as well as for increasing operational efficiency and
effectiveness. The OSD BRAC office narrowed this list to 77 options,
but agreement was not reached within the department on these options,
so none of them were formally approved. Nonetheless, each service and
joint cross-service group was permitted to use the transformational
options as appropriate to support its candidate recommendations.
Appendix XV has a list of these 77 draft options.
Collectively, these draft options did not provide a clear definition of
transformation across the department. The options ranged from those
that seemed to be service specific to those that suggested new ways of
doing business. For example, some transformational options included
reducing the number of Army Reserve regional headquarters; optimizing
Air Force squadrons; and co-locating various functions such as
recruiting, military and civilian personnel training, and research,
development and acquisition and test and evaluation, across the
military departments. In contrast, some options suggested consideration
of new ways of doing business, such as privatizing some functions and
establishing a DOD agency to oversee depot-level reparables.
While the transformational options were never formally approved, our
analysis indicates that many of DOD's recommendations reference one or
more of the 77 transformational options. For example, 15 of the
headquarters and support activities group recommendations reference the
option to minimize leased space and move organizations in leased space
to DOD-owned space. Likewise, 37 of the Army reserve component
recommendations reference the option to co-locate guard and reserve
units at active bases or consolidate guard and reserve units that are
located in proximity to one another at one location.
Conversely, a number of the scenarios that were initially considered
but not adopted reference transformational options that could have
changed existing business practices. For example, the education and
training group developed a number of scenarios--privatizing graduate
education programs and consolidating undergraduate fixed and rotary
wing pilot training--based on the draft transformational options, but
none were ultimately approved by the department.
Some Progress Made in Fostering Joint Basing:
DOD's recommendations make some progress toward the goal of fostering
joint activity among the military services, based on a broad definition
of joint activity. We found that for DOD's recommendations, joint
activity included consolidating some training functions within the same
service, co-locating like organizations and functions on the same
installation, and moving some organizations or functions closer to
installations in order to further opportunities for joint training.
Although the recommendations achieve some progress in fostering
jointness, we found other instances where DOD ultimately adopted a
service-centric solution even though the joint cross-service groups
proposed a joint scenario. Table 3 shows the major recommendations that
foster joint activity.
Table 3: Major Recommendations Supporting Joint Activity:
Type of joint activity: Consolidation:
Recommended action: The education and training group is proposing to
consolidate:
* initial Joint Strike Fighter aircraft training for the Navy, Marine
Corps, and Air Force at Eglin Air Force Base;
* undergraduate navigator training for the Navy and Air Force at Naval
Air Station Pensacola; and;
* transportation management, religious studies, and culinary training
among the military services;
The medical group is proposing to establish;
* the Walter Reed National Military Medical Center, Bethesda, Maryland,
by consolidating the Walter Reed Army Medical Center and the National
Naval Medical Center, and;
* the San Antonio Regional Military Medical Center by relocating
inpatient care from Wilford Hall Medical Center to the Brooke Army
Medical Center;
The headquarters and support activities group is proposing to
consolidate the installation management functions across various bases.
Type of joint activity: Co-location:
Recommended action: The Army is proposing to move the Third Army
Headquarters (Army component command to Central Command) to Shaw Air
Force Base to be co-located with the Air Force component of Central
Command;
The Navy is proposing to move aircraft from Willow Grove Air Reserve
Station to McGuire Air Force Base, and from Naval Air Station Atlanta
to Robins Air Force Base;
The technical group is proposing to co-locate:
* the services' and defense agencies' extramural funding program
managers at the National Naval Medical Center, Bethesda, Maryland and;
* gun and ammunition research and development and acquisition to
Picatinny Arsenal;
The headquarters and support activities group is proposing to co-locate
DOD investigative agencies at Quantico Marine Corps Base.
Type of joint activity: Proximity;
Recommended action: The Air Force is proposing to move A-10 aircraft to
Moody Air Force Base to enhance training Army units at Fort Benning and
Fort Stewart;
The Army is proposing to move a special operations unit from Fort Bragg
to Eglin Air Force Base in proximity to the Air Force's Special
Operations Command headquarters at Hurlburt Field.
Source: GAO analysis of DOD data.
[End of table]
While the proposal to create joint bases by consolidating common
installation management functions is projected to create greater
efficiencies, our prior work suggests that implementation of these
actions may prove challenging. The joint-basing recommendation involves
one service being responsible for various installation management
support functions[Footnote 29] at bases that share a common boundary or
are in proximity to one another. For example, the Army would be the
executive agent for Fort Lewis, Washington, and McChord Air Force Base,
Washington, combined as Joint Base Lewis-McChord. However, as evident
from our recent visit to both installations and discussions with base
officials, concerns over obstacles such as seeking efficiencies at the
expense of the mission, could jeopardize a smooth and successful
implementation of the recommendation.
In some cases, the joint cross-service groups proposed scenarios that
would have merged various support functions among the services, but a
service solution was adopted by DOD. For example, the Headquarters and
Support Activities Joint Cross-Service Group proposed to (1)
consolidate civilian personnel offices under a new defense agency as
DOD implements the national security personnel system, and (2) co-
locate all military personnel centers in San Antonio, Texas, in
anticipation of a standard military personnel system being implemented
across the department. However, in both cases, DOD decided to
consolidate military and civilian personnel centers within each
service. Likewise, the Education and Training Joint Cross-Service Group
proposed scenarios to consolidate undergraduate fixed wing training
activities between the Air Force and the Navy and rotary wing training
activities between the Navy and the Army to eliminate excess capacity.
However, the proposals were not adopted because the Navy and the Air
Force expressed concerns that this recommendation would result in
significant permanent change of station costs for the services,
specifically the cost of students traveling to designated training
locations.
DOD Developed a Generally Logical and Reasoned Process for Making BRAC
Decisions:
Based on our analytical work, we believe DOD established and generally
followed a logical and reasoned process for formulating its list of
BRAC recommendations. The process was organized in a largely sequential
manner with a strong emphasis on ensuring that accurate data were
obtained and used. OSD established an oversight structure that allowed
the seven individual joint cross-service groups to play a larger, more
visible role in the 2005 BRAC process compared to BRAC 1995. Despite
some overlap in data collection and other phases of the process, these
groups and the military services generally followed the sequential BRAC
process designed to evaluate and subsequently identify recommendations
within their respective areas, with only the Army using a separate but
parallel process to evaluate its reserve components. DOD also
incorporated into its analytical process several key considerations
required by the BRAC legislation, including the use of certified data,
basing its analysis on its 20-year force structure plan and emphasizing
its military value selection criteria, which included homeland defense
and surge capabilities. In addition, DOD's Inspector General and the
military service audit agencies helped to ensure the data used during
the BRAC process were accurate and reliable.
BRAC Process Was Logical and Largely Sequentially Structured:
DOD provided overall policy guidance for the BRAC process, including a
requirement that its components develop and implement internal control
plans to ensure the accuracy and consistency of their data collection
and analyses. These plans also helped to ensure the overall integrity
of the process and the information upon which OSD considered each
group's recommendations. The BRAC recommendations, for the most part,
resulted from a data-intensive process that was supplemented by the use
of military judgment as needed. The process began with a set of
sequential steps by assessing capacity and military value, developing
and analyzing scenarios, then identifying candidate recommendations,
which led to OSD's final list of BRAC recommendations. Figure 7
illustrates the overall sequential analytical process DOD generally
employed to reach BRAC recommendations.
Figure 7: Analytical Process Leading to BRAC Recommendations:
[See PDF for image]
[A] A scenario is a proposal that has been declared for formal analysis
by a military department or joint cross-service group deliberative body
and is officially accounted for and tracked by OSD.
[End of figure]
It must be noted, however, that while the process largely followed the
sequential process established by the department, initial difficulties
associated with obtaining complete and accurate data in a timely manner
added to overlap and varying degrees of concurrency between data
collection efforts and other steps in the process.
During the 2005 BRAC process, the seven individual joint cross-service
groups played a larger, more visible role compared to their role during
the 1995 BRAC round. Our analysis indicates that many, although not
all, actions proposed by these groups were accepted by OSD and the
military services. Based on lessons learned, OSD empowered these groups
in 2005 to suggest BRAC recommendations directly to a senior-level
group that oversaw the BRAC 2005 analysis. Moreover, we noted a closer
coordination between these groups, the military services, and OSD than
existed during the 1995 round. OSD's efforts to integrate the process
among these seven joint cross-service groups with the military
services' own efforts led to increased discussions, greater visibility,
and more influence for the cross-service recommendations than in prior
BRAC rounds.
To assist in the process for analyzing and developing recommendations,
the military services and joint cross-service groups used various
analytical tools. These tools helped to ensure a more consistent
approach to BRAC analysis and decision making. For example, all of the
groups used the DOD-approved COBRA model to calculate costs, savings,
and return on investment for BRAC scenarios and, ultimately for the
final 222 BRAC recommendations. As noted in appendix XIII, the COBRA
model was designed to provide consistency across the military services
and the joint cross-service groups in estimating BRAC costs and
savings. DOD has used the COBRA model in each of the previous BRAC
rounds and, over time, has improved upon its design to provide better
estimating capability. In our past and current reviews of the COBRA
model, we found it to be a generally reasonable estimator for comparing
potential costs and savings among various BRAC options.
Furthermore, the military services and joint cross-service groups
generally used a consistent process to assess and formulate BRAC
recommendations, with one minor exception involving the Army reserve
components. The Army created a separate yet parallel approach in
reviewing its reserve components for several reasons, although it
generally followed the BRAC process. With respect to its reserve
components, the Army did not perform a military value rank-ordering of
these various installations across the country, but instead assessed
the relative military value that could be obtained by consolidating
various facilities into a joint facility in specific geographical
locales to support, among other things, reserve component training,
recruiting, and retention efforts. This approach provided an
opportunity for the Army reserve components to actively participate in
the BRAC process along with the voluntary participation of the states.
The Army reported that consulting with the states was crucial to ensure
the support of the state governors and staff Adjutants General for
issues related to recommendations that affected the National Guard. The
Army's recommendations affected almost 10 percent of the Army's 4,000
reserve components' facilities. More specifically, the Army recommended
176 Army Reserve closures with the understanding that the state
governors will close 211 Army National Guard facilities with the intent
of relocating their units into 125 new Armed Forces Reserve Centers.
The Army reports that 38 states and Puerto Rico voluntarily
participated in the BRAC process.
The Air Force and the Navy also reviewed their reserve components'
installations but did so within the common analytical structure
established by OSD, yet with some differences in approach in involving
affected stakeholders in the process. For example, the Air Force did
not involve state officials or its State Adjutants General as it
analyzed and developed its BRAC recommendations. However, senior Air
National Guard and Reserve leadership were in attendance as voting
members of the Air Force's Base Closure Executive Group, a senior
deliberative body for the BRAC process. The Navy also reviewed its
reserve components, including the Marine Corps Reserves, within the
BRAC process, and worked closely with representatives from the Navy and
Marine Corps reserve components to consolidate units within active duty
installations or armed forces reserve centers without affecting
recruiting demographics.
BRAC Process Incorporated Key Legislative Requirements:
DOD also incorporated into its analytical process the legal
considerations for formulating its realignment and closure
recommendations. As required by BRAC legislation, DOD based its
recommendations on (1) the use of certified data, (2) its 20-year force
structure plan, and (3) military value criteria as the primary
consideration in assessing and formulating its recommendations.
Use of Certified Data:
DOD collected capacity and military value data that were certified as
to their accuracy by hundreds of persons in senior leadership positions
across the country.[Footnote 30] These certified data were obtained
from corporate databases and from hundreds of defense installations.
DOD continued to collect certified data, as needed, to support follow-
up questions, cost calculations, and to develop recommendations. In
total, DOD projects that it collected over 25 million pieces of data as
part of the BRAC process.[Footnote 31] Given the extensive volume of
requested data from the 10 separate groups (3 military departments and
7 joint cross-service groups), we noted that the data collection
process was quite lengthy and required significant efforts to help
ensure data accuracy, particularly from joint cross-service groups that
were attempting to obtain common data across multiple military
components, which, because of the diverse nature of the functions and
activities, do not always use the same data metrics. In some cases,
coordinating data requests, clarifying questions and answers,
controlling database entries, and other issues led to delays in the
data-driven analysis DOD originally envisioned. As such, some groups
had to develop strategy-based proposals. As time progressed, however,
these groups reported that they obtained the needed data, for the most
part, to inform and support their scenarios. The DOD Inspector General
and the service's audit agencies played an important role in ensuring
that the data used in the BRAC analyses were accurate and certified by
cognizant senior officials.
Consideration of DOD's 20-year Force Structure Plan:
As congressionally mandated, each of the military services and the
seven joint cross-service groups considered DOD's 20-year force
structure plan in its analyses. DOD based its force structure plan for
BRAC purposes on an assessment of probable threats to national security
during a 20-year period beginning with fiscal year 2005. DOD provided
this plan to Congress in March 2004, and as authorized by the statute,
it subsequently updated it 1 year later in March 2005. Based on our
analysis, updates to the force structure affected some ongoing BRAC
analyses. For example, the Industrial Joint Cross-Service Group
reassessed its data pertaining to overhauling and repairing ships based
on the updated force structure outlook and decided that one of its two
smaller shipyards--Naval Shipyard Pearl Harbor or Naval Shipyard
Portsmouth--could close. Ultimately, the Navy decided to close the
Portsmouth shipyard in Maine. In addition, the Navy told us it
recalculated its capacity based on updates to the force structure plan
and determined that there was no significant change to its original
analysis. The other groups, such as those examining headquarters and
support activities, education and training, or technical functions,
considered updates to the defense 20-year force structure and
determined the changes would have no impact on their ongoing analyses
or the development of recommendations.
Primary Consideration of Military Value Criteria, Which Included
Homeland Defense and Surge:
DOD gave primary consideration to its military value selection criteria
in its process. Specifically, military value refers to the first four
selection criteria in figure 2 and includes an installation's current
and future mission capabilities, condition, ability to accommodate
future needs, and cost of operations. The manner in which each military
service or joint cross-service group approached its analysis of
military value varied according to the unique aspects of the individual
service or cross-service function. These groups typically assessed
military value by identifying multiple attributes or characteristics
related to each military value criterion, then identifying qualitative
metrics and measures and associated questions to collect data to
support the overall military value analysis. For example, figure 8
illustrates how the Technical Joint Cross-Service Group linked several
of its military value attributes, metrics, and data questions to the
mandated military value criteria.
Figure 8: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value for a Technical Facility:
[See PDF for image]
[A] The BRAC military value criteria are the first four BRAC selection
criteria.
[B] Military value attributes are characteristics of each criterion.
The technical group used a total of five military value attributes.
[C] Military value metrics are measures for the attribute. The
technical group used a total of 30 military value metrics.
[D] The technical group used a total of 44 data call questions.
[End of figure]
Quantitative scoring plans were developed by each military service or
joint cross-service group assigning relative weights to each of the
military value criteria for use in evaluating and ranking facilities or
functions in their respective areas. Appendixes III through XII
highlight the use and linkages of military value criteria by each
service and joint cross-service group.
As noted earlier, based on congressional direction, there was enhanced
emphasis on two aspects of military value--an installation's ability to
serve as a staging area for homeland defense missions and its ability
to meet unanticipated surge.[Footnote 32]
* Homeland defense: Each of the three military services considered
homeland defense roles in its BRAC analysis and coordinated with the
U.S. Northern Command--a unified command responsible for homeland
defense and civil support. In October 2004, the U.S. Northern Command
contacted the Chairman of the Joint Chiefs of Staff, requesting to play
a role in ensuring that homeland defense received appropriate attention
in the analytical process. Our analysis shows that all three military
departments factored in homeland defense needs, with the Air Force
recommendations having the most impact. According to Air Force
officials, the U.S. Northern Command identified specific homeland
defense missions assigned to the Air Force, which they incorporated
into its decision-making process. Navy officials likewise discussed the
impact of potential BRAC scenarios on its maritime homeland defense
mission with U.S. Northern Command, U.S. Strategic Command, and the
U.S. Coast Guard. In this regard, the Navy decided to retain Naval Air
Station Point Mugu, California, was influenced, in part, because the
U.S. Coast Guard wanted to consolidate its West Coast aviation assets
at this installation for homeland defense purposes. According to Army
officials, most of the their role in supporting homeland defense is
carried out by the Army National Guard. The U.S. Northern Command
reviewed the recommendations and found no unacceptable risk to the
homeland defense mission and support to civil authorities.
* Surge: DOD left it to each military service and joint cross-service
group to determine how surge would be considered in the their analysis.
Generally, all the groups considered surge by retaining a certain
percentage of infrastructure, making more frequent use of existing
infrastructure, or retaining difficult-to-reconstitute assets. For
example, the Technical Joint Cross-Service Group set aside 10 percent
of its facility infrastructure for surge, while the Industrial Joint
Cross-Service Group factored in additional work shifts in its analysis.
The military services retained difficult-to-reconstitute assets as the
primary driver to satisfying the statutory requirement to consider
surge capability. Both the Army and Navy gave strong consideration to
infrastructure that would be difficult to reconstitute, such as large
tracts of land for maneuver training purposes or berthing space for
docking ships. For example, the Navy has a finite number of ships and
aircraft and would likely have to increase operating tempo to meet
surge needs. The Air Force addressed surge by retaining sufficient
capacity to absorb temporary increases in operations, such as
responding to emergencies or natural catastrophic events like hurricane
damage, and the capacity to permanently relocate all of its aircraft
stationed overseas in the United States if needed.
Congress also mandated four other criteria to be considered in the
analytical process: cost and savings of the BRAC recommendations,
economic impact on affected communities, impact on communities'
infrastructure, and environmental impact. The extent these other
mandated considerations influenced recommendations varied. For example,
high cost was the primary reason the Army decided not to develop a
recommendation to restation troops returning from overseas to
installations with large tracts of undeveloped land that could
potentially accommodate these moves, such as Yuma Proving Ground,
Arizona, or Dugway Proving Ground, Utah. Despite these installations
having the capacity to provide large training ranges, they do not have
existing infrastructure to immediately house 3,000 to 5,000 troops
required for the Army's new modular combat brigades.[Footnote 33]
Initially, the Army assessed the possibility of building new
infrastructure at these locations, but Army BRAC officials told us it
would be too costly given that the Army's COBRA analysis showed that at
Yuma, for example, it would cost about $2 billion to build the required
infrastructure. As a result, the Army decided to place units returning
from overseas at installations currently used to base other operational
units, notwithstanding limitations in existing training capacities.
Although there was heavy reliance on data for completing analyses,
military judgment was also a factor throughout the entire process,
starting with an analytical framework to base analysis of the 20-year
force structure plan and ending with the finalized list of 222
recommendations submitted to the BRAC Commission. Military judgment
also played a role in decisions on how military value selection
criteria would be captured as attributes, with associated values or
weights. Military judgment was also applied in deciding which proposed
scenarios or actions should move forward for additional analysis.
Generally, military judgment was exercised at this stage to delete or
modify a potential recommendation for reasons such as strategic
importance, as shown in the following examples:
* Naval Shipyard Pearl Harbor, Hawaii, which has a lower military value
than other shipyards, was eliminated from closure consideration because
the shipyard was considered to have more strategic significance in the
Pacific Ocean area compared to other alternatives.
* Tripler Army Medical Center, Hawaii, which has a lower military value
than some other bases, was eliminated from closure consideration
because it is the only defense medical center of significant size in
the Pacific Ocean area.
* Naval Station Everett, Washington, which has a lower military value
than some other bases, was eliminated from closure consideration
because of strategic reasons regarding the number and the locations of
the Navy's aircraft carriers on the West Coast and in the Pacific.
* Grand Forks Air Force Base, North Dakota, which has a lower military
value than some other bases, was eliminated from closure consideration
because of the belief that a strategic presence was needed in the north
central United States. Even though Grand Forks Air Force Base was
retained for strategic reasons, Minot Air Force Base is also located in
North Dakota and is not affected by any BRAC recommendations.
DOD Audit Agencies Helped to Improve the Accuracy of Data Used during
the BRAC Process:
The oversight roles of the DOD Inspector General and the military
services' audit agency staff, given their access to relevant
information and officials as the process evolved, helped to improve the
accuracy of the data used in the BRAC process. The DOD Inspector
General and most of the individual service audit agencies' reports
generally concluded that the extensive amount of data used as the basis
for BRAC decisions was sufficiently valid and accurate for the purposes
intended. In addition, with limited exceptions, these reports did not
identify any material issues that would impede a BRAC recommendation.
The DOD Inspector General and the services' audit agencies played an
important role in ensuring that the data used in the BRAC analyses were
accurate and certified by cognizant senior officials. Their frontline
roles and the thousands of staff days devoted to reviewing the massive
data collection efforts associated with the BRAC process added an
important aspect to the quality and integrity of the data used by
military services and joint cross-service groups. Through extensive
audits of the capacity, military value, and scenario data collected
from field activities, these audit agencies notified various BRAC teams
of data discrepancies for corrective action. The audit activities
included validation of data, compliance with data certification
requirements employed throughout the chain of command, and examination
of the accuracy of the analytical data. While the auditors initially
encountered problems with regard to data accuracy and the lack of
supporting documentation for certain questions and data elements, most
of these concerns were resolved. In addition, the auditors worked to
ensure certified information was used for BRAC analysis. These audit
agencies also reviewed other facets of the process, including the
various internal control plans, the COBRA model, and other modeling and
analytical tools that were used in the development of recommendations.
Appendix XVI lists these organizations' audit reports related to BRAC
2005 to the extent they were available at the time this report was
completed. Overall, these organizational audit agencies reported the
following:
* The Naval Audit Service reported that it visited 214 sites, covering
45 data calls, and audited over 8,300 questions. It concluded that the
data appeared reasonably accurate and complete and the Navy complied
with statutory guidance and DOD policies and procedures.
* The Air Force Audit Agency officials told us they visited 104
installations, reviewed over 11,110 data call responses at 126 Air
Force locations, 8 major commands, the Air National Guard, and
Headquarters Air Force, and concluded that data used for Air Force BRAC
analysis were generally reliable.
* The Army Audit Agency reported that it visited 32 installations and 3
leased facilities and reviewed for accuracy over 2,342 responses. It
concluded that the data was reasonably accurate and that the Army BRAC
office had a sound process in place to collect certified data.
* DOD Inspector General officials told us they visited about 1,550
sites covering 29 defense agencies and organizations and reviewed over
15,770 responses. We were told that these responses were generally
supported, complete, and reasonable. The DOD Inspector General also
evaluated the validity, integrity, and documentation of data used by
the seven joint cross-service groups and found they generally used
certified data for the BRAC analysis.
We closely coordinated with the DOD Inspector General and the three
service audit agencies to maximize our individual and collective
efforts and avoid duplication. As part of this coordination, we
observed their audit efforts at selected military installations to
verify the scope and quality of coverage they provided throughout the
process and to give us insights into potential issues having broader
applicability across the entire process. We also observed the work of
these audit agencies to better familiarize ourselves with the types of
issues being identified and resolved, with a view toward determining
their materiality to the overall process.
Several Aspects of DOD's BRAC Recommendations and Rejected Proposals
May Warrant Further Attention:
We identified issues regarding DOD's recommendations, and other actions
considered during the selection process that may warrant further
attention by the BRAC Commission. Many of the issues relate to how
costs and savings were estimated while others relate to potential
impacts on communities surrounding bases that stand to gain or lose
missions and personnel as a result of BRAC actions. Further, we are
highlighting candidate recommendations that were presented during the
selection process by either the military services or the joint cross-
service groups to senior DOD leadership within the IEC that were
projected as having the potential to generate significant savings, and
which were substantially revised or deleted from further consideration
during the last few weeks or days of the selection process. Additional
discussion of issues targeted more specifically to the work and
recommendations of the military services and joint cross-service groups
is included in appendixes III through XII.
Issues with DOD's BRAC Recommendations:
We identified a number of issues, most of which apply to a broad range
of DOD's recommendations, that may warrant further attention by the
BRAC Commission. In addition to the issue previously discussed
regarding military personnel eliminations being claimed as savings to
the department, other issues include (1) instances of lengthy payback
periods (time required to recoup up-front investment costs), (2)
inconsistencies in how DOD estimated costs for BRAC actions involving
military construction projects, (3) uncertainties in estimating the
total costs to the government to implement DOD's recommended actions,
and (4) potential impacts on communities surrounding bases that are
expected to gain large numbers of personnel if DOD's recommendations
are implemented.
Some Lengthy Payback Periods:
Many of the 222 recommendations DOD made in the 2005 round are
associated with lengthy payback periods, which, in some cases, call
into question whether the department would be gaining sufficient
monetary value for the up-front investment cost required to implement
its recommendations and the time required to recover this investment.
Our analysis indicates that 143, or 64 percent, of DOD's
recommendations are associated with payback periods that are 6 years or
less while 79, or 36 percent, of the recommendations are associated
with lengthier paybacks that exceed the 6-year mark or never produce
savings. DOD officials acknowledge that the additional objectives of
fostering jointness and transformation have had some effect on
generating recommendations with longer payback periods. Furthermore,
our analysis shows that the number of recommendations with lengthy
payback periods varied across the military services and the joint cross-
service groups, as shown in table 4.
Table 4: Payback Periods for BRAC Recommendations by DOD Component:
DOD component: Army;
Number of recommendations: 56;
Payback period: Immediate to 6 years: 26;
Payback period: 7 to 9 years: 3;
Payback period: 10 years and greater: 22;
Payback period: Never: 5.
DOD component: Navy;
Number of recommendations: 53[A];
Payback period: Immediate to 6 years: 45;
Payback period: 7 to 9 years: 2;
Payback period: 10 years and greater: 6;
Payback period: Never: 0.
DOD component: Air Force;
Number of recommendations: 42;
Payback period: Immediate to 6 years: 29;
Payback period: 7 to 9 years: 6;
Payback period: 10 years and greater: 7;
Payback period: Never: 0.
DOD component: Education and training;
Number of recommendations: 9;
Payback period: Immediate to 6 years: 5;
Payback period: 7 to 9 years: 0;
Payback period: 10 years and greater: 3;
Payback period: Never: 1.
DOD component: Headquarters and support activities;
Number of recommendations: 21;
Payback period: Immediate to 6 years: 14;
Payback period: 7 to 9 years: 2;
Payback period: 10 years and greater: 5;
Payback period: Never: 0.
DOD component: Industrial;
Number of recommendations: 17;
Payback period: Immediate to 6 years: 13;
Payback period: 7 to 9 years: 3;
Payback period: 10 years and greater: 1;
Payback period: Never: 0.
DOD component: Intelligence;
Number of recommendations: 2;
Payback period: Immediate to 6 years: 0;
Payback period: 7 to 9 years: 2;
Payback period: 10 years and greater: 0;
Payback period: Never: 0.
DOD component: Medical;
Number of recommendations: 6;
Payback period: Immediate to 6 years: 3;
Payback period: 7 to 9 years: 1;
Payback period: 10 years and greater: 2;
Payback period: Never: 0.
DOD component: Supply and storage;
Number of recommendations: 3;
Payback period: Immediate to 6 years: 3;
Payback period: 7 to 9 years: 0;
Payback period: 10 years and greater: 0;
Payback period: Never: 0.
DOD component: Technical;
Number of recommendations: 13;
Payback period: Immediate to 6 years: 5;
Payback period: 7 to 9 years: 5;
Payback period: 10 years and greater: 3;
Payback period: Never: 0.
DOD component: Total;
Number of recommendations: 222;
Payback period: Immediate to 6 years: 143;
Payback period: 7 to 9 years: 24;
Payback period: 10 years and greater: 49;
Payback period: Never: 6.
DOD component: Percentage;
Number of recommendations: 100;
Payback period: Immediate to 6 years: 64;
Payback period: 7 to 9 years: 11;
Payback period: 10 years and greater: 22;
Payback period: Never: 3.
Source: GAO Analysis of DOD data.
[A] While the DOD BRAC report lists 21 Navy recommendations, several of
these have multiple actions, thus bringing the total to 53
recommendations.
[End of table]
As shown in table 4, the Army has five recommendations and the
education and training group has one recommendation that never payback,
as described below:
* Army realignment of a special forces unit from Fort Bragg, North
Carolina, to Eglin Air Force Base, Florida;
* Army realignment of a heavy brigade from Fort Hood, Texas, to Fort
Carson, Colorado;
* Army realignment of a heavy brigade to Fort Bliss, Texas, and
infantry and aviation units to Fort Riley, Kansas;
* Army reserve component consolidations in Minnesota;
* Army reserve component consolidations in North Dakota; and:
* Education and Training Joint Cross-Service Group's establishment of
Joint Strike Fighter aircraft training at Eglin Air Force Base,
Florida.
According to Army officials, their five recommendations have no payback
because, in part, they must build additional facilities to accommodate
the return of about 47,000 forces currently stationed overseas to the
United States as part of DOD's Integrated Global Presence and Basing
Strategy initiative (see app. III for further discussion of the
restationing initiative). According to the education and training
group, its one recommendation with no payback period is due to the high
military construction costs associated with the new mission to
consolidate initial training for the Joint Strike Fighter aircraft for
the Navy, the Marine Corps and the Air Force.
Similarly, the Army has nearly 50 percent of the total number of DOD
recommendations with payback periods of 10 years or longer. Our
analysis of Army data shows that these lengthy paybacks are
attributable to many of the recommendations regarding the reserve
components. These recommendations typically have a combination of
relatively high military construction costs and relatively low annual
recurring savings, which tend to lengthen the payback period.
We also identified some portions of DOD's individual recommendations
that are associated with lengthy payback periods for certain BRAC
actions but are embedded within larger bundled recommendations. The
following are a few examples:
* A proposal initially developed by the Headquarters and Support
Activities Joint Cross-Service Group to move the Army Matériel Command
from Fort Belvoir, Virginia, to Redstone Arsenal, Alabama, had more
than a 100-year payback period with a net cost over a 20-year period.
However, the proposal did not include some expected savings that, if
included, would have reduced the payback period to 32 years.
Concurrently, the group developed a separate proposal to relocate
various Army offices from leased and government-owned office space onto
Fort Sam Houston, Texas, which would have resulted in a 3-year payback
period. The headquarters group decided to combine these two stand-alone
proposals into one recommendation, resulting in an expected 20-year net
present value savings of about $123 million with a 10-year payback.
* Many of the individual Air Force proposals involving the Air National
Guard and Air Force Reserve had payback periods ranging from 10 to more
than 100 years. These individual proposals were subsequently revised by
combining them with other related proposals to produce recommendations
that had significant savings, minimized the longer payback periods, and
linked operational realignment actions. We found that this change
occurred in the realignment of Lambert-St. Louis International Airport
Air Guard Station, Missouri, which originally had a 63-year payback
period and resulted in a 20-year net present value cost of about $22
million. However, this realignment is now a part of the closure of Otis
Air National Guard Base, Massachusetts, and the realignment of Atlantic
City Air Guard Station, New Jersey. The combined recommendation results
in a 20-year net present value savings of $336 million and a 3-year
payback period.
Inconsistencies in DOD's Estimated Costs for Military Construction
Projects:
While the military services used the COBRA model to estimate the costs
for military construction projects needed to implement BRAC
recommendations, we found some inconsistencies in how they estimated
some costs associated with these projects. While the impact of these
inconsistencies on savings is likely not as great as others noted in
this report, it nevertheless contributes to the overall imprecision of
the cost estimates of DOD's recommended actions.
One area of inconsistent accounting involves the relative amounts of
estimated support costs--such as the cost of connecting a new facility
to existing water, sewage, and electrical systems--associated with
military construction projects across the services. In its estimates,
the Army considered these additional support costs as one-time costs
whereas the Navy and the Air Force included them in the cost of the
military construction projects for each project. By including these
support costs in the cost of each project, the Navy and Air Force
generally generated higher relative recurring costs than the Army for
the recapitalization of facilities over time. Specifically, the Army
increased its military construction cost estimates by 18.5 percent to
account for the connection of the projected new facilities' utilities.
The Air Force, on the other hand, increased its construction costs for
support services from 8 to 40 percent, depending on the type of
facility, while the Navy included support costs at only two locations.
According to the Special Assistant to the Secretary of the Navy for
BRAC, the Navy assigned teams to review all proposed military
construction projects by location to determine any support costs
necessary for connection of utilities. Our analysis shows that had the
Army used the same methodology as the Navy and the Air Force, the Army
would incur about $66 million in additional recapitalization costs for
all of its proposed military construction projects.
The services were also inconsistent in considering the costs associated
with meeting DOD's antiterrorism force protection standards in their
estimated costs for military construction projects.[Footnote 34] The
Air Force increased the expected costs of its military construction
projects by 2.3 percent, or about $18 million, to meet DOD's standards.
Air Force officials noted that these funds would provide enhancements
such as security barriers and blast proof windows. The Army and the
Navy, on the other hand, did not include additional costs to meet the
department's standards in their proposed military construction
projects. If the Army and the Navy estimated costs similarly to the Air
Force, the cost of their proposed military construction projects would
have increased by about $146 million and $25 million, respectively.
Uncertainties in Accounting for All Expected Costs or Savings to the
Federal Government:
DOD's cost and savings estimates for implementing its recommendations
do not fully reflect all expected costs or savings that may accrue to
the federal government. The BRAC legislation requires that DOD take
into account the effect of proposed closure or realignment on the costs
of any other activity of the department or any other federal agency
that may be required to assume responsibility for activities at
military installations.[Footnote 35] While the services and joint cross-
service groups were aware of the potential for these costs, estimated
costs were not included in the cost and savings analysis because it was
unclear what actions an agency might take in response to the BRAC
action. One such agency was the U.S. Coast Guard, which currently
maintains some of its ships or various units at several installations
that are slated to close. Navy BRAC officials briefed the U.S. Coast
Guard about its recommendations prior to the list being published, but
the Air Force did not meet with the Coast Guard. The U.S. Coast Guard
was still in the process of evaluating various responses to take as a
result of the proposed BRAC actions and did not complete its analysis
in time for it to be included in this report.
Further, as noted earlier, estimated costs for the environmental
restoration of bases undergoing closure or realignment are not included
in DOD's cost and savings analyses. Such costs would be difficult to
fully project at this point without planned reuse of the unneeded
property being known. Consistent with the prior BRAC rounds, DOD
excluded estimates for base environment restoration actions from its
costs and savings analysis and in determining payback periods, on the
premise that restoration is a liability that the department must
address regardless of whether a base is kept open or closed and
therefore should not be included in the COBRA analysis. Nevertheless,
DOD did give consideration to such costs in addressing selection
criterion 8, and included available information on estimated
restoration costs as part of the data supporting its BRAC
recommendations. DOD estimates that the restoration costs to implement
its major closures would be about $949 million, as shown in table 5.
(See fig. 4 in the Background section for a map of DOD's major base
closures.)
Table 5: Estimated Environmental Restoration Costs for DOD's
Recommended Major Base Closures:
Dollars in millions.
Army;
Number of major closures: 14;
Estimated environmental restoration costs[A]: $723.3.
Navy;
Number of major closures: 9;
Estimated environmental restoration costs[A]: $154.5.
Air Force;
Number of major closures: 10;
Estimated environmental restoration costs[A]: $71.3.
Total;
Number of major closures: 33;
Estimated environmental restoration costs[A]: $949.1.
Source: GAO analysis of DOD data.
[A] Estimated costs include some costs not specifically reported in
DOD's May 2005 report to the Defense Base Closure and Realignment
Commission. While the Army and Navy generally reported these costs, the
Air Force did not but its costs were noted in supporting documentation.
[End of table]
Based on the data provided, the Army would incur the largest share of
estimated restoration costs due to the closure of several ammunition
plants and chemical depots. The largest expected costs for any one
location across DOD, about $383 million, would be for restoration at
Hawthorne Army Depot, Nevada. While the DOD report does not
specifically identify the potential for some additional restoration
costs at its installations, available supporting documentation does
identify some additional costs. For example, the Army estimated the
range restoration at Hawthorne Army Depot could cost from about $27
million to $147 million, which is not included in the estimates in
table 5. Further, the Army recognizes that additional restoration costs
could be incurred at six additional locations that have ranges and
chemical munitions, but these costs have not yet been determined.
Our prior work has shown that environmental costs can be significant,
as evidenced by the nearly $12 billion in total cost DOD expected to
incur when all restoration actions associated with the prior BRAC
rounds are completed. Service officials told us that the projected cost
estimates for environmental restoration are lower, in general, because
the environmental condition of today's bases is much better than the
condition of bases closed during the prior BRAC rounds, primarily
because of DOD's ongoing active base environmental restoration program.
Nonetheless, our prior work has indicated that as closures are
implemented, more intensive environmental investigations occur and
additional hazardous conditions may be uncovered that could result in
additional, unanticipated restoration and higher costs. Finally, the
services' preliminary estimates are based on restoration standards that
are applicable for the current use of the base property. Because reuse
plans developed by communities receiving former base property sometimes
reflect different uses for the property this could lead to more
stringent and thus more expensive restoration in many cases.
Based on experiences from prior BRAC rounds, we believe other costs are
also likely to be incurred, although not required to be included in
DOD's cost and savings analysis but which could add to the total costs
to the government of implementing the BRAC round. These costs include
transition assistance, planning grants, and other assistance made
available to affected communities by DOD and other agencies. DOD
officials told us that such estimates were not included in the prior
rounds' analyses and that it was too difficult to project these costs,
given the unknown factors associated with the number of communities
affected and the costs that would be required to assist them.
Additionally, as we reported in January 2005,[Footnote 36] in the prior
four BRAC rounds, DOD's Office of Economic Adjustment, the Department
of Labor, the Economic Development Administration within the Department
of Commerce, and the Federal Aviation Administration provided nearly $2
billion in assistance through fiscal year 2004 to communities and
individuals, and according to DOD officials, these agencies are slated
to perform similar roles for the 2005 round. However, while the
magnitude of this assistance is unknown at this time, it is important
to note that assistance will likely be needed in this round, as
contrasted with prior rounds, for not only those communities that
surround bases losing missions and personnel but also for communities
that face considerable challenges dealing with large influxes of
personnel and military missions. For example, DOD stated in its 2005
BRAC report that over 100 actions significantly affect local
communities, triggering federal assistance from DOD and other federal
agencies. Also, as discussed more fully later, the number of bases in
the 2005 BRAC round that will gain several thousand personnel from the
recommended actions could increase pressure for federal assistance to
mitigate the impact on community infrastructure, such as schools and
roads, with the potential for more costs than in the prior rounds.
Finally, the BRAC costs and savings estimates do not include any
anticipated revenue from such actions as the sale of unneeded former
base property or the transfer of property to communities through
economic development conveyances.[Footnote 37] The potential for
significant revenue may exist at certain locations. For example, the
Navy sold some unneeded property from prior round actions in California
at the former El Toro Marine Corps Air Station for about $650 million
and the former Tustin Marine Corps Air Station for $208.5 million. The
extent to which sales will play a role in the disposal of unneeded
property arising from the 2005 BRAC round remains to be seen.
Impact of BRAC Recommended Actions on Communities:
The recommended actions for the 2005 BRAC round will have varying
degrees of impact on communities surrounding bases undergoing a closure
or realignment. While some will face economic recovery challenges as a
result of a closure and associated losses of base personnel, others,
which expect large influxes of personnel due to increased base
activity, face a different set of challenges involving community
infrastructure necessary to accommodate growth.
In examining the economic impact of the 222 BRAC recommendations as
measured by the percentage of employment, DOD data indicate that most
economic areas across the country are expected to be affected very
little but a few could face substantial impact. Almost 83 percent of
the 244 economic areas affected by BRAC recommendations fall between a
1 percent loss in employment and a 1 percent gain in
employment.[Footnote 38] Slightly more than 9 percent of the economic
areas had a negative economic impact of greater than 1 percent, but for
some of these areas, the projected impact is fairly significant,
ranging up to a potential direct and indirect loss of up to nearly 21
percent. Almost 8 percent of the economic areas had a positive economic
impact greater than 1 percent. Appendix XIV provides additional detail
on our economic analyses.
Of those communities facing potential negative economic impact, six
communities face the potential for a fairly significant impact. They
include communities surrounding Cannon Air Force Base, New Mexico;
Hawthorne Army Depot, Nevada; Naval Support Activity Crane, Indiana;
Submarine Base New London, Connecticut; Eielson Air Force Base, Alaska;
and Ellsworth Air Force Base, South Dakota, where the negative impact
on employment as a percent of area employment ranges from 8.5 percent
to 20.5 percent. Our prior work has shown that a variety of factors
will affect how quickly communities are able to rebound from the
negative economic consequences of closures and realignments. They
include such factors as the trends associated with the national,
regional, and local economies; natural and labor resources; effective
planning for reuse of base property; and federal, state, and local
government assistance to facilitate transition planning and execution.
In a series of reports that have assessed the progress in implementing
closures and realignments in prior BRAC rounds, we reported that most
communities surrounding closed bases have been faring well in relation
to key national economic indicators--unemployment rate and the average
annual real per capita income growth rates.[Footnote 39] In our January
2005 report for example, we further reported that while some
communities surrounding closed bases were faring better than others,
most have recovered or are continuing to recover from the impact of
BRAC, with more mixed results recently, allowing for some negative
impact from the economic downturn nationwide in recent years.
The 2005 round, however, also has the potential to significantly affect
a number of communities surrounding installations, which are expected
to experience considerable growth in the numbers of military, civilian,
and civilian support personnel. These personnel increases are likely to
place additional demands on community services, such as providing
adequate housing and schools, for which the communities may not have
adequate resources to address in the short term. The total gains can be
much more than just those personnel with the consideration of
accompanying families. Table 6 shows that 20 installations are expected
to realize gains of over 2,000 military, civilian, and mission support
contractor personnel for an aggregate increase of more than 106,000
personnel.
Table 6: Military Installations That Would Receive a Net Gain of Over
2,000 Personnel due to BRAC Actions:
Installation: Fort Belvoir, VA;
Net gain of military personnel to an installation: 4,521;
Net gain of civilians and mission support contractors to an
installation: 15,837;
Total net gain of personnel to an installation: 20,358.
Installation: Fort Bliss, TX;
Net gain of military personnel to an installation: 11,354;
Net gain of civilians and mission support contractors to an
installation: 147;
Total net gain of personnel to an installation: 11,501.
Installation: Fort Benning, GA;
Net gain of military personnel to an installation: 9,221;
Net gain of civilians and mission support contractors to an
installation: 618;
Total net gain of personnel to an installation: 9,839.
Installation: Fort Sam Houston, TX;
Net gain of military personnel to an installation: 7,648;
Net gain of civilians and mission support contractors to an
installation: 1,716;
Total net gain of personnel to an installation: 9,364.
Installation: Fort Lee, VA;
Net gain of military personnel to an installation: 6,139;
Net gain of civilians and mission support contractors to an
installation: 1,205;
Total net gain of personnel to an installation: 7,344.
Installation: Fort Meade, MD;
Net gain of military personnel to an installation: 682;
Net gain of civilians and mission support contractors to an
installation: 4,679;
Total net gain of personnel to an installation: 5,361.
Installation: Fort Carson, CO;
Net gain of military personnel to an installation: 4,178;
Net gain of civilians and mission support contractors to an
installation: 199;
Total net gain of personnel to an installation: 4,377.
Installation: Fort Bragg, NC;
Net gain of military personnel to an installation: 4,078;
Net gain of civilians and mission support contractors to an
installation: 247;
Total net gain of personnel to an installation: 4,325.
Installation: Little Rock Air Force Base, AR;
Net gain of military personnel to an installation: 3,579;
Net gain of civilians and mission support contractors to an
installation: 319;
Total net gain of personnel to an installation: 3,898.
Installation: Fort Sill, OK;
Net gain of military personnel to an installation: 3,444;
Net gain of civilians and mission support contractors to an
installation: 158;
Total net gain of personnel to an installation: 3,602.
Installation: Defense Finance and Accounting Service, IN;
Net gain of military personnel to an installation: 114;
Net gain of civilians and mission support contractors to an
installation: 3,381;
Total net gain of personnel to an installation: 3,495.
Installation: Submarine Base Kings Bay, GA;
Net gain of military personnel to an installation: 3,245;
Net gain of civilians and mission support contractors to an
installation: 122;
Total net gain of personnel to an installation: 3,367.
Installation: Marine Corps Base Quantico, VA;
Net gain of military personnel to an installation: 446;
Net gain of civilians and mission support contractors to an
installation: 2,567;
Total net gain of personnel to an installation: 3,013.
Installation: Fort Riley, KS;
Net gain of military personnel to an installation: 2,415;
Net gain of civilians and mission support contractors to an
installation: 440;
Total net gain of personnel to an installation: 2,855.
Installation: Naval Station Norfolk, VA;
Net gain of military personnel to an installation: 3,447;
Net gain of civilians and mission support contractors to an
installation: (640);
Total net gain of personnel to an installation: 2,807.
Installation: Naval Air Weapons Station China Lake, CA;
Net gain of military personnel to an installation: 154;
Net gain of civilians and mission support contractors to an
installation: 2,315;
Total net gain of personnel to an installation: 2,469.
Installation: Eglin Air Force Base, FL;
Net gain of military personnel to an installation: 2,140;
Net gain of civilians and mission support contractors to an
installation: 78;
Total net gain of personnel to an installation: 2,218.
Installation: Aberdeen Proving Ground, MD;
Net gain of military personnel to an installation: (3,411);
Net gain of civilians and mission support contractors to an
installation: 5,587;
Total net gain of personnel to an installation: 2,176.
Installation: Naval Shipyard Norfolk, VA;
Net gain of military personnel to an installation: 177;
Net gain of civilians and mission support contractors to an
installation: 1,859;
Total net gain of personnel to an installation: 2,036.
Installation: Naval Air Station Jacksonville, FL;
Net gain of military personnel to an installation: 1,902;
Net gain of civilians and mission support contractors to an
installation: 123;
Total net gain of personnel to an installation: 2,025.
Installation: Total;
Net gain of military personnel to an installation: 65,473;
Net gain of civilians and mission support contractors to an
installation: 40,957;
Total net gain of personnel to an installation: 106,430.
Source: GAO analysis of DOD data.
[End of table]
As shown in table 6, most of the gaining installations are Army
installations with the gains attributable to a number of actions,
including the return of large numbers of personnel from overseas
locations under DOD's integrated global presence and basing strategy
and the consolidation of various activities, such as combat-support
related activities at Fort Lee, Virgina. Fort Belvoir, Virginia, has
the largest expected growth, due in large measure to some consolidation
of various activities from lease space in the Washington, D.C. area.
The challenges facing communities surrounding gaining bases can be
many, including increased housing demand, increased demands for roads
and utilities, and adequate schools. These challenges can be formidable
as communities may be faced with inadequate resources to address
concerns in these areas as follows:
* Housing: If history is any indication, while some of the personnel
transferring into a base may live on-base, the majority may not, as the
military services are turning more to housing privatization.
Installation officials at Fort Riley, Kansas, told us about concerns
about the nearby availability of housing (within a 20-mile radius) to
support the expected influx of military and civilian personnel and
their families transferring to the base. For those installations where
adequate housing is not available in the surrounding communities
existing housing privatization projects would need to be revised and
expedited to provide for additional units. Fort Bliss, Texas, officials
told us that they expect the need to accelerate their existing housing
privatization efforts, but would require additional funds to do so.
Currently, housing privatization has taken place or is in the process
of taking place at several of these installations and similar efforts
may be needed there as well.
* Schools: Effects on bases with the greatest gain in personnel
resulting from BRAC vary between whether dependents attend schools
operated on base by DOD (Fort Benning, Fort Bragg, and Marine Corps
Base Quantico as shown in table 6) or schools operated by local
educational agencies. We recently reported on challenges likely to be
faced by both DOD operated schools and those operated by local
educational agencies in the post BRAC environment at these and other
locations.[Footnote 40] Recently, in visiting selected bases affected
by the BRAC recommendations, installation officials told us that while
local educational authorities should be able to absorb additional
students into their school systems, they are more concerned about the
potential shortage of teachers. Another concern is that make-shift
trailers or temporary modular facilities might be used. For example,
while Kings Bay, Georgia, officials told us that the local school
system should be able to accommodate the increase of students, it may
need to resort to the use of portable classrooms. All installations
that are expected to gain more than 2,000 personnel have local
community-administrated school systems with the exceptions of Fort
Benning, Fort Bragg, and Marine Corps Base Quantico which have DOD-
administrated school systems. If additional capacity is required at
these three locations, additional military constructions funds would
likely be needed.
* Other infrastructure: Installation officials we spoke to also
expressed some concern for the increased demand for various community
services, such as health care, transportation, and utilities to
accommodate personnel increases. Fort Carson, Colorado, officials told
us that with its expected personnel increases, the local community will
need more TRICARE providers to meet the expected demand. In other
cases, such as at Fort Belvoir, Virgina, discussion has ensued
regarding the need for increased mass transit capability, which may
involve requests for millions of dollars in federal grant assistance.
As previously noted, it is likely that these concerns may increase
federal governmental expenditures that are not included in the BRAC
cost and savings analyses.
Candidate Recommendations That Were Deleted or Revised during the Final
Weeks of the Selection Process:
We also identified several candidate recommendations that were
presented by the military services or joint cross-service groups to the
IEC--DOD's senior BRAC leadership group--that were substantially
revised or deleted from further consideration during the last few weeks
of the BRAC section process. In aggregate, based on projected savings,
these actions reduced the overall potential for estimated net annual
recurring savings by nearly $500 million and estimated 20-year net
present value savings by over $4.8 billion, as shown in table 7.
Table 7: Candidate Recommendations That Were Deleted or Significantly
Revised by the Infrastructure Executive Council:
Dollars in millions.
Proposals deleted by the IEC:
Candidate recommendations: Close Naval Postgraduate School, CA;
Initial proposal: Net annual recurring savings: $90;
Initial proposal: 20-year savings: $1,120;
IEC decision: Net annual recurring savings: $0;
IEC decision: 20-year savings: $0;
Change: Net annual recurring savings: ($90);
Change: 20-year savings: ($1,120).
Candidate recommendations: Close Uniformed Services of the University
of the Health Sciences, MD;
Initial proposal: Net annual recurring savings: $58;
Initial proposal: 20-year savings: $575;
IEC decision: Net annual recurring savings: $0;
IEC decision: 20-year savings: $0;
Change: Net annual recurring savings: ($58);
Change: 20-year savings: ($575).
Candidate recommendations: Close Natick Soldier Systems Center, MA;
Initial proposal: Net annual recurring savings: $20;
Initial proposal: 20-year savings: $114;
IEC decision: Net annual recurring savings: $0;
IEC decision: 20-year savings: $0;
Change: Net annual recurring savings: ($20);
Change: 20-year savings: ($114).
Candidate recommendations: Close Adelphi Laboratory Center, MD;
Initial proposal: Net annual recurring savings: $166;
Initial proposal: 20-year savings: $949;
IEC decision: Net annual recurring savings: $144;
IEC decision: 20-year savings: $1,026;
Change: Net annual recurring savings: ($22);
Change: 20-year savings: $77.
Candidate recommendations: Close Carlisle Barracks, PA;
Initial proposal: Net annual recurring savings: $50;
Initial proposal: 20-year savings: $555;
IEC decision: Net annual recurring savings: $0;
IEC decision: 20-year savings: $0;
Change: Net annual recurring savings: ($50);
Change: 20-year savings: ($555).
Candidate recommendations: Close Air Force Institute of Technology, OH;
Initial proposal: Net annual recurring savings: $8;
Initial proposal: 20-year savings: $14;
IEC decision: Net annual recurring savings: $0;
IEC decision: 20-year savings: $0;
Change: Net annual recurring savings: ($8);
Change: 20-year savings: ($14).
Proposals changed from closure to realignment by the IEC:
Close Marine Corps Logistics Base, Barstow, CA;
Initial proposal: Net annual recurring savings: $142;
Initial proposal: 20-year savings: $1,600;
IEC decision: Net annual recurring savings: $18;
IEC decision: 20-year savings: $231;
Change: Net annual recurring savings: ($124);
Change: 20-year savings: ($1,369).
Candidate recommendations: Close Naval Air Station, Brunswick, ME;
Initial proposal: Net annual recurring savings: $93;
Initial proposal: 20-year savings: $841;
IEC decision: Net annual recurring savings: $35;
IEC decision: 20-year savings: $239;
Change: Net annual recurring savings: ($58);
Change: 20-year savings: ($602).
Candidate recommendations: Close Grand Forks Air Force Base, ND;
Initial proposal: Net annual recurring savings: $226;
Initial proposal: 20-year savings: $2,656;
IEC decision: Net annual recurring savings: $173;
IEC decision: 20-year savings: $1,982;
Change: Net annual recurring savings: ($53);
Change: 20-year savings: ($674).
Candidate recommendations: Close Rome Laboratory, NY;
Initial proposal: Net annual recurring savings: $46;
Initial proposal: 20-year savings: $230;
IEC decision: Net annual recurring savings: $41;
IEC decision: 20-year savings: $357;
Change: Net annual recurring savings: ($5);
Change: 20-year savings: $127.
Total;
Initial proposal: Net annual recurring savings: $899;
Initial proposal: 20-year savings: $8,654;
IEC decision: Net annual recurring savings: $411;
IEC decision: 20-year savings: $3,835;
Change: Net annual recurring savings: ($488);
Change: 20-year savings: ($4,819).
Source: GAO analysis of DOD data.
[End of table]
Each of the cases highlighted in the table is described in additional
detail below.
* The educational and training group proposed to privatize graduate
education, which enabled the Navy to recommend the closure of the Naval
Postgraduate School, Monterey, California. The proposed closure
supported DOD's draft transformational option to privatize graduate-
level education. Navy officials, however, stated that they believed
professional military education was more important than ever given the
world climate. During the IEC deliberations, Navy officials expressed
concern about the loss of such a unique graduate military education
facility and the effect on international students who participate in
the school's programs. Further, in the IEC meeting the Navy stated its
belief that all education recommendations should be withdrawn because
education is a core competency of the department and relying on the
private sector to fulfill that requirement is too risky. The IEC agreed
and disapproved the recommendation.
* The Medical Joint Cross-Service Group recommended that the Uniformed
Services University of the Health Sciences associated with the National
Naval Medical Center in Bethesda, Maryland, be closed, citing that
educating physicians at the site was more costly than alternative
scholarship programs (about triple the cost) and that the department
could rely on civilian universities to educate military
physicians.[Footnote 41] We also reported previously that the
university is a more costly way to educate military
physicians.[Footnote 42] The IEC, subsequently disapproved the
recommendation, citing that education is a core competency for the
department, and therefore it was considered too risky to rely on the
private sector to provide this function. Also, a DOD official indicated
that, with the recommended action to realign Walter Reed Army Medical
Center to Bethesda, Maryland, it would be highly desirable to have a
military medical college associated with this medical facility in order
for it to be a world-class medical center.
* The Technical Joint Cross-Service Group, through the Army, proposed
that the Natick Soldier Systems Center, Massachusetts, be closed and
technical functions relocated to Aberdeen Proving Ground, Maryland, to
create an integrated command, control, communications, and computers,
intelligence, surveillance, and reconnaissance center. In its
presentation to the IEC, the Army noted that the cost for this
recommendation was high, but it would generate greater efficiencies and
faster transition from research and development through the acquisition
and fielding phases of the technology. Although the ISG initially
raised no concerns and approved the recommendation, the IEC disapproved
it in the last week of the BRAC selection process, citing the high cost
of the recommendation.
* The closure of the Adelphi Laboratory Center, Maryland, was
originally part of the recommendation to close Fort Monmouth, New
Jersey, and, along with Natick Soldier Systems Center, was part of the
Army's plan for an integrated command, control, communications, and
computers, intelligence, surveillance, and reconnaissance center. An
Army official told us that, as with the closure of Natick, no concerns
were originally raised and the recommendation was approved by the ISG,
but the IEC later removed it from the recommendation that includes the
closure of Fort Monmouth because of high cost.
* The proposed closure of Carlisle Barracks, Pennsylvania--home of the
Army War College--was initiated by the Education and Training Joint
Cross-Service Group and was aimed at creating synergy between the
college and Army's Command and General Staff College at Fort
Leavenworth, Kansas. The IEC approved the proposed recommendation when
it was initially briefed, but later rejected it, based on the Army's
argument that among other things, the Army War College's proximity to
Washington, D.C., provides access to key national and international
policymakers and senior military and civilian leaders within DOD.
* The Education and Training Joint Cross-Service Group recommended the
closure of the Air Force Institute of Technology at Wright-Patterson
Air Force Base, Ohio. The group recommended that graduate-level
education be provided by the private sector and that all other
functions of the institute be relocated to Maxwell Air Force Base,
Alabama. However, the IEC disapproved the recommendation based on the
risk involved in relying on the private sector for education
requirements, given that education is a core competency of the
department.
* The Industrial Joint Cross-Service Group recommended transferring the
workload of the Marine Corps' depot maintenance facility in Barstow,
California, which enabled the Department of the Navy to recommend
closure of the Marine Corps Logistics Base. The Marine Corps raised
concerns over the impact that the closure would have on Marine Corps
deployments from the West Coast. The IEC decided to downsize the base
and retain the depot, citing the Marine Corps' concerns.
* While the Navy recommended closure of the Naval Air Station
Brunswick, Maine, the IEC revised this to a realignment. Navy officials
stated that the senior Navy leadership had been reluctant to give up
the Navy's remaining air station in the Northeast region, but found the
potential savings significant enough to recommend closure. Navy
officials stated that the IEC relied on military judgment to retain
access to an airfield in the Northeast. Nonetheless, all aircraft and
associated personnel, equipment, and support as well as the aviation
intermediate maintenance capability will be relocated to another Navy
base. The Navy is maintaining its cold weather-oriented Survival,
Evasion, Resistance and Escape School, a Navy Reserve Center, and other
small units at the air station.
* While the Air Force had proposed to close Grand Forks Air Force Base,
North Dakota,[Footnote 43] the IEC revised this to a realignment a week
before OSD released its recommendations. The Air Force reported in its
submission to the BRAC Commission that over 80 percent of the base's
personnel are expected to be eliminated or realigned under the revised
proposal. The revision to keep the base open was made based on military
judgment to keep a strategic presence in the north central United
States, with a possible unmanned aerial vehicle mission for the base.
Even though Grand Forks Air Force Base was retained for strategic
reasons, Minot Air Force Base is also located in North Dakota and is
not affected by any BRAC recommendation.
* The closure of Rome Laboratory, New York, was originally part of a
Technical Joint Cross-Service Group recommendation to consolidate the
Defense Research Laboratories. No concerns were originally raised about
the closure, and it was approved by the IEC. However, the IEC
subsequently decided to realign rather than close the laboratory to
address strategic presence and cost concerns. The realignment of Rome
has a higher 20-year net present value savings than the closure
proposal because the closure would have required more military
construction and transfers of military and civilian personnel and
equipment.
Conclusions:
While we believe DOD's overall recommendations, if approved and
implemented would produce savings, there are clear limitations
associated with the projected savings, such as the lack of military end-
strength reductions and uncertainties associated with other savings
estimates. DOD's recommendations would provide net reductions in space
and plant replacement value, which would reduce infrastructure costs
once up-front investment costs have been recovered but the extent some
projected space reductions will be realized is unclear. Other DOD
savings estimates are based on what might be broadly termed business
process reengineering efforts and other actions, where savings appear
likely, but the magnitude of savings has not been validated and much
will depend on how the recommended actions are implemented.
Nevertheless, the savings could prove difficult to track over time. As
a result, DOD's projections may create a false sense of the magnitude
of the savings, with fewer resources available for force modernization
and other needs than might be anticipated, and there may be the
potential for premature budget reductions. Given problems in tracking
savings from previous BRAC rounds, and the large volume of BRAC actions
this round that are more oriented to realignments and business process
reengineering than closures, we believe it is of paramount importance
that DOD put in place a process to track and periodically update its
savings estimates.
Despite a fundamentally sound overall process, we identified numerous
issues regarding DOD's list of recommendations that may warrant further
attention by the BRAC Commission, as noted in this report and
appendixes III through XII. These include those recommendations having
lengthy payback periods, some with limited savings relative to
investment costs, and potential implementation difficulties. Given the
large number of such items for the Commission's consideration, we are
not addressing them as individual recommendations but simply referring
our report in its entirety for the Commission's consideration.
Recommendation for Executive Action:
We recommend that the Secretary of Defense take appropriate steps to
establish mechanisms for tracking and periodically updating savings
estimates in implementing individual recommendations, with emphasis
both on savings related to the more traditional realignment and closure
actions as well as those related more to business process
reengineering.
Agency Comments:
Cognizant officials of the military services and joint cross-service
groups reviewed drafts of the report providing us with informal
comments, permitting us to make technical changes, as appropriate, to
enhance the accuracy and completeness of the report. Subsequently, we
similarly provided complete drafts of the report to cognizant OSD
officials, obtaining and incorporating their comments as appropriate.
In providing oral comments on a draft of this report, the Deputy Under
Secretary of Defense for Installations and Environment concurred with
our recommendation.
We are sending copies of this report to Members of Congress; the
Secretaries of Defense, the Army, the Navy, and the Air Force; the
Commandant of the Marine Corps; the Director, Office of Management and
Budget; and the Chairman, Defense Base Closure and Realignment
Commission. We will also make copies available to others upon request.
In addition, the report will be available at no charge on GAO's Web
site at [Hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me on (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 XVII.
Signed by:
Barry W. Holman, Director:
Defense Capabilities and Management:
List of Congressional Committees:
The Honorable John W. Warner:
Chairman:
The Honorable Carl Levin:
Ranking Minority Member:
Committee on Armed Services:
United States Senate:
The Honorable Ted Stevens:
Chairman:
The Honorable Daniel K. Inouye:
Ranking Minority Member:
Subcommittee on Defense:
Committee on Appropriations:
United States Senate:
The Honorable Kay Bailey Hutchison:
Chairman:
The Honorable Dianne Feinstein:
Ranking Minority Member:
Subcommittee on Military Construction and Veterans Affairs:
Committee on Appropriations:
United States Senate:
The Honorable Duncan Hunter:
Chairman:
The Honorable Ike Skelton:
Ranking Minority Member:
Committee on Armed Services:
House of Representatives:
The Honorable C.W. Bill Young:
Chairman:
The Honorable John P. Murtha:
Ranking Minority Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives:
The Honorable James Walsh:
Chairman:
The Honorable Chet Edwards:
Ranking Minority Member:
Subcommittee on Military Quality of Life and Veterans Affairs, and
Related Agencies:
Committee on Appropriations:
House of Representatives:
[End of section]
Appendixes:
Appendix I: Scope and Methodology:
Prior to the release of the Department of Defense's (DOD) base
realignment and closure (BRAC) recommendations on May 13, 2005, we
monitored the BRAC process in a real-time environment beginning in
October 2003. We sought to assure ourselves that DOD followed an
objective and consistently applied process in which we could observe
logical decision making leading to defensible and well-documented
proposed closure and realignment recommendations. During this period,
we abided by an agreement with DOD to not disclose details of the
process due to the sensitivity of the information. Following the
release of the recommendations, we continued our analyses of the
process and recommendations. With the unprecedented large number of
recommendations and the finalization of many of these occurring in the
final weeks of the process, along with the limited time available for
us to report our results following DOD's May 13, 2005, release of the
recommendations, we were not able to review all recommendations in
detail. We focused more of our attention on cross-cutting issues than
on implementation issues of individual recommendations, but did review
individual recommendations as time permitted. Further, because of time
constraints, we had only limited opportunities to gain further insight
into some of the recommendations from officials at bases affected by
the recommendations.
We performed our work primarily at the Office of the Secretary of
Defense (OSD), the military services' base closure offices, and the
offices of seven joint cross-service groups[Footnote 44] that were
established by OSD to develop cross-service recommendations. While we
did not attend deliberative meetings, we had access to minutes of
meetings and relevant documentation and met periodically with key staff
and senior leadership to gain an understanding of each phase of the
process and to provide them with the opportunity to address our
concerns as the process was unfolding. We also visited selected bases
following the public disclosure of the Secretary's recommendations to
gain further insights into potential issues regarding specific
recommendations. Those bases included the Anniston Army Depot, Alabama;
Fort Bliss, Texas; Fort Carson, Colorado; Fort Sam Houston, Texas; Fort
Lewis, Washington; Fort Riley, Kansas; Lackland Air Force Base, Texas;
McChord Air Force Base, Washington; Marine Corps Air Station Cherry
Point, North Carolina; Naval Shipyard Portsmouth, Maine; Naval
Submarine Base Kings Bay, Georgia; Naval Submarine Base New London,
Connecticut; and Red River Army Depot, Texas. We also met with
officials of the U.S. Coast Guard to discuss the impact of BRAC actions
on their operations since they are tenants on several bases recommended
for closure or realignment. We relied on DOD's Office of the Inspector
General, Army Audit Agency, Naval Audit Service, and Air Force Audit
Agency to validate the data used by the military services and joint
cross-service groups in their decision-making processes. We met with
staff of these audit agencies periodically to discuss the results of
their work as well as to observe their data validation efforts at
selected locations across the country. The DOD Inspector General and
service audit agencies issued reports that generally concluded that the
extensive amount of data used as the basis for BRAC decisions was
sufficiently valid and accurate for the purposes intended. In addition,
with limited exceptions, these reports did not identify any material
issues that would impede a BRAC recommendation.[Footnote 45] Where
questions existed, we made further assessments and were able to satisfy
ourselves that issues raised would have limited, if any, impact on the
department's recommendations. Based on the audit agencies' extensive
validation efforts and our observation of their work, we believe the
data are sufficiently reliable for the purposes of this report.
To determine the extent to which DOD achieved its BRAC goals, we
interviewed key officials and collected and analyzed relevant
documentation generated by OSD, the military departments, and the joint
cross-service groups. We reviewed the Secretary of Defense's November
2002 memorandum that initiated the 2005 BRAC process and highlighted
DOD's goals and obtained DOD officials' views on the degree to which
the goals were accomplished. With respect to DOD's goal of reducing
excess capacity, we initially reviewed the capacity analysis reports of
the services and joint cross-service groups to gain insight into the
relative amounts of excess capacity within the department. We
subsequently reviewed major recommendations to determine the extent to
which these recommended actions would reduce infrastructure and excess
capacity. In this regard, we also assessed the changes in the overall
defense infrastructure's plant replacement value--a measure used by the
department to determine the cost to replace an existing facility with a
facility of the same size at the same location, using today's
standards--by reviewing supporting documentation for the
recommendations. We also analyzed the aggregated estimated costs and
savings associated with reducing DOD's unnecessary infrastructure, as
depicted in the Cost of Base Realignment Actions (COBRA) analyses for
the 222 recommendations proposed by the department, and compared these
estimates with similar data from the prior BRAC rounds to determine
similarities and differences in sources of costs and savings and
thereby identify potential areas for further review. With respect to
DOD's costs and savings estimates, we examined selected supporting
documentation to determine the basis for the estimates and identified
key elements, such as base operating support, personnel compensation,
or recapitalization of facilities, those estimates comprised.
We also performed a qualitative analysis of DOD's performance in
addressing its other BRAC goals--transforming the infrastructure and
fostering jointness--by examining DOD's proposed recommendations and
seeking views from key officials on the relative success of achieving
these initiatives. We also compared the justification narratives
supporting individual recommendations for closures and realignments
against draft transformation options developed by the department,
although not formally adopted, that were nonetheless used by the
individual military services and joint cross-service groups. Our
efforts in addressing this and other objectives were facilitated by
remote access to selected automated databases and tracking systems,
which gave us near real-time access to relevant briefings and other
documents, permitting us to broadly track the evolution of the BRAC
process and identify issues for further consideration.
To address whether DOD's selection process for developing
recommendations was logical and reasoned, we focused on key aspects of
the BRAC process, including capacity and military value analyses. In
doing so, we sought to determine whether DOD's selection process was
objective and in compliance with key considerations of BRAC
legislation. Our monitoring of the process from the start permitted us
to assess the extent to which the process followed was logical,
sequential, reasoned, and well documented. Our monitoring permitted us
to determine to what extent a logical and sequential flow existed among
all phases of DOD's selection process from the point at which data were
collected and analyzed through the compilation of the final
recommendations. We reviewed the services' determinations of which
installations to consider in the BRAC process and analyzed the
services' and joint cross-service groups' excess capacity analyses and
military value evaluation plans and analyses to determine if they were
developed in a reasoned fashion and supported by appropriate
documentation. In reviewing military value analyses, we reviewed
specific attributes established by the services and joint cross-service
groups and examined the linkage between the groups' methodologies and
the military value selection criteria (i.e., criteria 1 through 4) to
determine if these mandated selection criteria were addressed.
Regarding the development of recommendations, our focus was to
determine whether the recommendations were developed in a logical and
reasoned manner. We reviewed, among other things, the extent to which
the services and joint cross-service groups (1) considered various
alternative proposals for closure or realignment, (2) assessed proposed
recommendations using military value as the predominant decision-making
factor, and (3) considered the remaining four selection criteria as
mandated by law.
To address issues regarding DOD's recommendations, we focused more of
our attention on cross-cutting issues than on implementation issues of
individual recommendations, but did review individual recommendations
as time permitted. We reviewed recommendation justification packages
that included particulars on the benefits of implementing the
recommendations from an operational perspective, the estimated costs
and savings associated with implementing the recommendations, and their
degree of conformity to the mandated selection criteria. We discussed
perceived benefits with key officials and reviewed appropriate
supporting documentation. We also examined financial aspects of the
recommended actions, including expected up-front investment costs to
implement the actions, length of payback periods, net present value
savings or costs over a 20-year period, and annual recurring savings or
costs. In examining the expected costs and savings as generated by
DOD's COBRA model, we further examined assumptions and specific
calculations regarding specific recommendations to determine the
relative reasonableness of the estimates, given the data available to
the services and the joint cross-service groups using the COBRA model.
Further, we examined and discussed with DOD officials the economic and
community impact for selected closure and realignment actions,
including both adverse impacts associated with closing bases as well as
challenges facing bases and surrounding communities that stand to
receive large influxes of military personnel, civilian personnel, or
both. Additionally, we reviewed potential recommendations that were
approved by either the services or joint cross-service groups but
ultimately rejected by senior leadership, the Infrastructure Executive
Council, during the last few weeks of the BRAC process. We examined the
merits of these proposals as presented by the services or joint cross-
service groups in terms of addressing DOD's BRAC goals. We further
reviewed the rationale offered by senior leadership in its decisions to
reject or substantially revise the offered proposals. Because of time
limitations and complexities introduced by DOD in weaving together the
unprecedented 837 closures and realignment actions across the country
into 222 recommendations, we focused more on evaluating major issues
affecting more than one recommendation than on implementation issues of
individual recommendations. However, as time permitted, we did visit
several selected installations, as noted above, to better gauge the
operational and economic impact of the proposed recommendations.
Installations visited were selected on a judgment basis because of our
desire to have additional information on issues of concern, such as
those related to costs and savings, potential operational implications,
and potential economic impact. They included a number of bases with
industrial-type activities because of concerns in prior rounds about
how well the BRAC process and the COBRA model deal with such issues and
other aspects of those facilities that permitted us to address other
issues of concern.
We conducted our work from October 2003, as DOD's process was
beginning, through June 2005, shortly after the Secretary of Defense
announced his proposed base closures and realignments, in accordance
with generally accepted government auditing standards.
[End of section]
Appendix II: Glossary of BRAC-Related Terms:
The following terms were used by DOD during the 2005 BRAC process.
* Annual recurring savings: Savings that are expected to occur annually
after the costs of implementing a BRAC action have been offset by
savings.
* Candidate recommendation: A scenario that a joint cross-service group
or military department has formally analyzed against all eight
selection criteria and which it recommends to the Infrastructure
Steering Group and Infrastructure Executive Council respectively for
approval by the Secretary of Defense. A joint cross-service group
candidate recommendation must be approved by the Infrastructure
Steering Group, the Infrastructure Executive Council, and the Secretary
of Defense before it becomes a DOD recommendation. A military
department candidate recommendation must be approved by the
Infrastructure Executive Council and the Secretary of Defense before it
becomes a DOD recommendation.
* Certified data: P.L. 101-510, section 2903 (c)(5) requires specified
DOD personnel to certify to the best of their knowledge and belief that
information provided to the Secretary of Defense or the 2005 Defense
Base Closure and Realignment Commission concerning the realignment or
closure of a military installation is accurate and complete.
* Closure: All missions of the installation have ceased or have been
relocated. All personnel positions (military, civilian, and contractor)
have either been eliminated or relocated, except for personnel required
for caretaking, conducting any ongoing environmental restoration, and
disposing of base property.
* COBRA: An analytical tool used to calculate the costs, savings, and
return on investment of proposed realignment and closure actions.
* Force structure plan: Numbers, size, and composition of the units
that comprise U.S. defense forces, for example, divisions, air wings,
aircraft, tanks, and so forth.
* Infrastructure Executive Council (IEC): One of two senior groups
established by the Secretary of Defense to oversee and operate the BRAC
2005 process. The IEC, chaired by the Deputy Secretary of Defense,
composed of the Secretaries of the military departments and their
chiefs of services, the Chairman of the Joint Chiefs of Staff, and
Under Secretary of Defense (Acquisition, Technology, and Logistics),
was the policy-making and oversight body of the entire BRAC 2005
process.
* Infrastructure Steering Group (ISG): The subordinate of two senior
groups established by the Secretary of Defense to oversee the BRAC 2005
process. The ISG, chaired by the Under Secretary of Defense
(Acquisition, Technology, and Logistics), and composed of the Vice
Chairman of the Joint Chiefs of Staff, the Service Vice Chiefs, Deputy
Under Secretary of Defense (Installations and Environment), and the
Military Department Assistant Secretaries of Defense (Installations and
Environment), provided oversight to joint cross-service group analyses
of common business and support functions and ensured the integration of
that process with the military departments' and defense agencies'
specific analyses of all other functions.
* Losing installation: An installation from which missions, units, or
activities would cease or be relocated pursuant to a closure or
realignment recommendation. An installation can be a losing
installation for one recommendation and a receiving installation for a
different recommendation.
* Military installation: A base, camp, post, station, yard, center,
homeport facility for any ship, or other activity under the
jurisdiction of the Department of Defense, including any leased
facility. The term does not include any facility used primarily for
civil works, river and harbor projects, flood control, or other
projects not under the primary jurisdiction or control of the
Department of Defense.
* Military value: Referring to one or more of the first four BRAC
selection criteria, which are collectively referred to as the military
value criteria and are expected to receive priority consideration in
the analytical process that results in recommendations for the closure
or realignment of military installations within the United States.
* Net present value: In the context of BRAC, net present value is
taking into account the time value of money in calculating the value of
future cost and savings.
* Payback period: The time required for cumulative estimated savings to
exceed the cumulative estimated costs incurred in net present value
terms as a result of implementing BRAC actions.
* Realignment: Includes any action that both reduces and relocates
functions and civilian personnel positions, but does not include a
reduction in force resulting from workload adjustments, reduced
personnel or funding levels, or skill imbalances.
* Receiving installation: An installation to which missions, units, or
activities would be relocated pursuant to a closure or realignment
recommendation. An installation can be a receiving installation for one
recommendation and a losing installation for a different
recommendation.
* Scenario: A proposal that has been declared for formal analysis by a
military department or joint cross-service group deliberative body. The
content of a scenario is the same as the content of a proposal. The
only difference is that it has been declared for analysis by a
deliberative body. Once declared, a scenario was registered at the ISG
by inputting it into the ISG BRAC Scenario Tracking Tool.
* Surge: A term incorporated in one of the military value selection
criteria for the 2005 BRAC round: "the ability to accommodate
contingency, mobilization, surge, and future total force requirements."
The term is not otherwise defined and application of the term can vary
by specific operational or support categories.
* Transformation: According to the department's April 2003
Transformation Planning Guidance document, transformation is "a process
that shapes the changing nature of military competition and cooperation
through new combinations of concepts, capabilities, people, and
organizations that exploit our nation's advantages and protect against
our asymmetric vulnerabilities to sustain our strategic position, which
helps underpin peace and stability in the world."
[End of section]
Appendix III: The Department of the Army Selection Process and
Recommendations:
The Army generally followed the common analytical framework established
by the Office of the Secretary of Defense (OSD) for reviewing its
active component installations and followed a separate parallel process
for its reserve components installations. Compared to prior rounds, the
Army's process produced a record number of 56 recommendations, with 44
of them directed to its reserve components and 12 directed to the
active component, recognizing that many of the individual
recommendations contain multiple closure and realignment actions. The
44 reserve components recommendations involved realignment or closure
actions that could have been approved outside of the BRAC process, but
the Army and DOD decided to include them as part of DOD's efforts to
aid transformation through the base realignment and closure
process.[Footnote 46] Unlike the other military services and joint
cross-service groups, the Army's recommendations, while producing
estimated net annual recurring savings of nearly $500 million after
2011, are not expected to achieve overall net savings over the 20-year
period typically used to measure net savings from BRAC actions. Over
this 20-year period, the Army expects to incur a net present value cost
over $3 billion, which is due primarily to the very large up-front
costs in a few recommendations that are necessary to return forces to
the United States under DOD's Integrated Global Presence and Basing
Strategy.[Footnote 47] However, the financial outlook for the Army
improves if joint cross-service recommendations involving Army bases
are considered--these separately reported actions are expected to
produce $10.7 billion in net present value savings over a 20-year
period. Payback periods--the time required for savings to offset
closure costs--for the active component recommendations are projected
to average 2.5 years with a range of immediate to no payback, and
average 12.3 years with a range of immediate to more than 100 years for
the reserve components. We believe some of the Army's recommendations
may warrant additional attention from the BRAC Commission due to the
likelihood of overstated savings projections associated with military
personnel eliminations, uncertainties regarding overseas restationing
of forces to the United States and other ongoing force structure
changes, challenges facing communities surrounding bases that are
gaining large numbers of personnel, the bundling of various
recommendations, various unknowns associated with implementing the
reserve components' recommendations, and issues regarding the proposed
closure of the Red River Army Depot in Texas. The Army Audit Agency,
which performed audits of the data used in the process, concluded that
the data were sufficiently reliable for use in BRAC.
Organization and Focus:
The Army established a Senior Review Group, headed by the Vice Chief of
Staff of the Army and the Under Secretary of the Army and comprising
senior Army military and civilian personnel, responsible for assessing
potential recommendations for consideration by the Secretary of the
Army, who in turn was to forward recommended actions to the
Infrastructure Executive Council (IEC) for approval.[Footnote 48] This
group was supported by The Army Basing Study Group, headed by the
Deputy Assistant Secretary of the Army for Infrastructure Analysis,
which was responsible for collecting and analyzing data and developing
recommendations. In addition, subject matter experts and
representatives from the Army's major commands provided expertise and
input throughout the BRAC process.
The Army's broadly stated goals for BRAC 2005 were to enhance the
capabilities of a transforming Army while aligning its infrastructure
to meet its post-Cold War force structure and eliminating excess
physical capacity to provide ready combat power to Combatant
Commanders. Some key planning and strategy documents provided guidance
in the pursuit of Army goals. The Army Stationing Strategy, for
example, provided an overall vision, principles, and goals relative to
future basing decisions while DOD's Strategic Planning Guidance helped
to define objectives regarding soldiers' well-being. In further
defining its goals, the Army identified the capabilities and missions
that its installations require to support its forces in the future.
With these needs in mind, the Army set out numerous objectives, such
as:
* locate Army forces and Matériel (at critical installations) to
enhance deployment and redeployment;
* relocate forces in accordance with the Integrated Global Presence and
Basing Strategy;
* reshape installations to support home station mobilization and
demobilization;
* reshape reserve components infrastructure to improve efficiency of
mobilization and demobilization; and:
* provide sufficient area and facilities (with varied terrain, climate,
and airspace) to support institutional training, combat development,
and doctrine development.
Framework for Analysis:
The Army's BRAC analysis included a review of 87 active component
installations and 10 leased facilities. A separate effort was
undertaken to review over 4,000 Army National Guard and Army Reserve
facilities to explore infrastructure consolidation opportunities that
would afford the reserve components better facilities and enhance,
among other things, training and operations.[Footnote 49] Army
officials indicated that differences in the objectives and the nature
of facilities associated with the active and reserve components
infrastructure made it impractical to use identical review and decision-
making processes. As with previous BRAC rounds, capacity and military
value analyses provided the starting point for the Army's decision-
making process. A key focus in the Army's efforts was to preserve large
maneuver areas to ensure that future training requirements could be met
and to relocate missions and personnel from small, single-function
installations to larger, multi-function installations. The Army Audit
Agency played an important role in helping to ensure data accuracy
through extensive audits of data gathered at various locations.
The Army's BRAC process was made more challenging by two ongoing force
structure and basing initiatives--the rebasing of thousands of Army
forces and their families to the United States as a result of the
Integrated Global Presence and Basing Strategy and the restructuring of
the Army's forces under its modularity[Footnote 50] program--that were
to be integrated into the BRAC process.
Capacity Analysis:
The Army initiated its capacity analysis by collecting capacity-related
data for its active duty installations (e.g., buildings, land) based on
28 capacity metrics, such as buildable acres, maneuver areas, and
instructional facilities. In calculating capacity excesses or shortages
through a comparison of the physical capacity data with requirements,
the Army considered a surge capability to ensure that sufficient
capacity existed to meet unforeseen military contingencies, future
threats, and future needs as outlined in DOD's 20-year force structure
plan. The Army's surge analysis also reinforced the importance of
preserving assets such as maneuver land that would be difficult to
reconstitute if eliminated. Table 8 shows selected Army's capacity
results for 7 of 12 mission areas, as presented in the Army's BRAC 2005
report.
Table 8: Excess Capacity Identified by the Army for Selected Mission
Areas:
Mission: Deployment;
Capacity metrics: Fixed wing runway, surfaced;
Percentage of excess capacity (shortage): 28.6%.
Mission: Deployment;
Capacity metrics: Aircraft apron, surfaced;
Percentage of excess capacity (shortage): (17.9%).
Mission: Mobilization;
Capacity metrics: Vehicle maintenance shop;
Percentage of excess capacity (shortage): (20.3%).
Mission: Mobilization;
Capacity metrics: Annual training/mobilization barracks;
Percentage of excess capacity (shortage): (56.9%).
Mission: Institutional training and education;
Capacity metrics: General instructional facilities;
Percentage of excess capacity (shortage): (8.4%).
Mission: Institutional training and education;
Capacity metrics: Applied instructional facilities;
Percentage of excess capacity (shortage): (18.6%).
Mission: Well-being;
Capacity metrics: Medical center/hospital;
Percentage of excess capacity (shortage): 9.2%.
Mission: Well-being;
Capacity metrics: Dental facility;
Percentage of excess capacity (shortage): (6.9%).
Mission: Well-being;
Capacity metrics: Enlisted unaccompanied personnel housing;
Percentage of excess capacity (shortage): (6.3%).
Mission: Well-being;
Capacity metrics: Education center;
Percentage of excess capacity (shortage): (4.5%).
Mission: Well-being;
Capacity metrics: Nursery and child care facility;
Percentage of excess capacity (shortage): (43.5%).
Mission: Joint logistics;
Capacity metrics: Depot maintenance;
Percentage of excess capacity (shortage): 24.7%.
Mission: Joint logistics;
Capacity metrics: Armaments production;
Percentage of excess capacity (shortage): 219.9%.
Mission: Joint logistics;
Capacity metrics: Ammunition storage;
Percentage of excess capacity (shortage): 65.9%.
Mission: Command, control, computers and communications/headquarters;
Capacity metrics: General administrative space;
Percentage of excess capacity (shortage): 4.9%.
Mission: Command, control, computers and communications/headquarters;
Capacity metrics: Small unit headquarters;
Percentage of excess capacity (shortage): (41.9%).
Mission: Command, control, computers and communications/headquarters;
Capacity metrics: Large unit headquarters;
Percentage of excess capacity (shortage): (11.5%).
Mission: Research, development, test and evaluation;
Capacity metrics: Specialized training facilities;
Percentage of excess capacity (shortage): 61.9%.
Source: GAO analysis of the Department of the Army data.
[End of table]
As shown in table 8, some areas, such as armaments production and
ammunition storage, had excess capacity ranging from about 5 percent to
about 220 percent while other areas had shortages. Further, the Army
reported that it had a service-wide excess of over 1.5 million square
feet of general administrative space even though 35 installations
reported shortages. While the Army's BRAC report did not indicate the
overall impact the Army's proposed closure and realignment
recommendations would have on reducing excess capacity, Army officials
projected that its proposed actions would reduce excess general
administrative space by over 1 million square feet while realigning
Army units to better match the remaining capacity.
While the overall capacity excesses and shortages, identified by
installation, provided insights for potential closures or realignments,
the Army subsequently conducted more detailed capacity analyses that
identified the types of facilities and training lands that were
required to support various units (e.g., light and heavy maneuver
brigades, small and large training schools). In this manner, the Army
had the ability to determine which installations could handle
additional missions and units and what infrastructure improvements and
additional military construction might be required to support those
units.
The Army did not perform a similar capacity assessment of the reserve
components' facilities because of the nature of their facilities and
differing objectives, but did collect and assess data related to, for
example, the condition and location of facilities, as well as expected
costs such as construction and force protection upgrades that may be
necessary to provide for viable reserve consolidation opportunities.
Prior to the collection of this data, the Army sought interest from the
state Adjutant Generals of the National Guards for units in each state
participating in such efforts on a voluntary basis.
Military Value Analysis:
The Army's military value analysis focused on a set of 40 attributes,
such as maneuver land, and housing availability for its soldiers and
dependents, that are characteristics the Army considered desirable for
its installations to meet Army needs. Attributes with less flexibility
for change, such as the availability of maneuver land or direct fire
ranges, were among those most highly valued in developing a scoring
plan for evaluating the military value for each of the Army's
installations. According to Army officials, this reflected their view
of the criticality of possessing adequate acreage to conduct unit
training, particularly in view of the expectation for an increase in
the number of brigades and return of various forces from overseas
locations. The Army's military value attributes also reflected
consideration of its role in supporting the global war on terrorism,
homeland defense, and transformation.[Footnote 51] Through a process of
weighting each of the Army's attributes, the Army derived relative
weights for the four legislatively-mandated military value selection
criteria. As shown in table 9, three of the four criteria had
relatively higher weights than the remaining criterion dealing with
cost and manpower implications. Embedded within these criteria was a
key focus on the need for availability of existing land and facilities
for expansion purposes to address the needs as cited in those specific
criteria. In this regard, the Army placed high value on these criteria
as a hedge against uncertain future requirements and to ensure that
they did not dispose of assets such as large tracts of land, which
would be difficult to reacquire.
Table 9: Army Military Value Criteria Weights:
Figures in percentages.
Criteria: 1. The current and future mission capabilities and the impact
on operational readiness of the total force of the Department of
Defense, including the impact on joint warfighting, training, and
readiness;
29%.
Criteria: 2. The availability and condition of land, facilities, and
associated airspace (including training areas suitable for maneuver by
ground, naval, or air forces throughout a diversity of climate and
terrain areas and staging areas for the use of the Armed Forces in
homeland defense missions) at both existing and potential receiving
locations;
29%.
Criteria: 3. The ability to accommodate contingency, mobilization,
surge, and future total force requirements at both existing and
potential receiving locations to support operations and training;
32%.
Criteria: 4. The cost of operations and the manpower implications;
10%.
Total: 100%.
Source: DOD and Department of the Army.
Note: The system of weights provided a basis for assigning relative
value to data collected and tabulated across each military value
dimension.
[End of table]
In performing its military value assessment, the Army assessed each
active duty installation and ranked each of them across the four
military value selection criteria to more fully evaluate the potential
for realignment and closure actions. This contrasted with the approach
the Army used in the 1995 BRAC round when it developed a military value
ranking for individual installations under one of 13 mission
categories, which made it more difficult to assess an installation for
use in a different mission area. For this round, the Army assessed the
military value of each of its installations based on a common framework
that linked attributes, metrics, and data call questions to military
value as shown in figure 9.
Figure 9: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of an Army Installation:
[See PDF for image]
[A] The BRAC military value criteria are the first four BRAC selection
criteria.
[B] Military value attributes are characteristics of each criterion.
The Army used a total of 40 attributes.
[C] Military value metrics are measures for the attributes. The Army
used over 80 metrics.
[D] The Army used over 80 data call questions.
[End of figure]
During its assessment, the Army stressed multi-function capabilities
for installations. To account for the unique capabilities that some
Army single-function installations provided, the Army applied military
judgment to modify the initial ranking of its installations to better
identify installations that the Army believed were best suited to meet
its current and future capabilities. For example, the Tripler Army
Medical Center in Hawaii, which initially ranked low in military value,
is DOD's only medical center of significant size in the Pacific and
therefore was retained for strategic reasons. Ultimately, the Army
moved nine installations higher in the list based on their unique
capabilities.[Footnote 52] Subsequently, those installations with a
lower military value ranking became more vulnerable to closure or
realignment actions.
With respect to its reserve components, the Army did not perform a
military value rank-ordering of these various installations across the
country, but instead assessed the relative military value that could be
obtained by consolidating various facilities into a joint facility in
specific geographical locales to support, among other things, the
reserve components' training, recruiting, and retention efforts.
Army Audit Agency's Role in the Process:
Throughout the BRAC process, the Army Audit Agency advised the Army on
the development and implementation of its internal control procedures;
performed audits of the Army's conduct of the process, including the
validation of data and various models used to assist in decision
making. During the capacity and military value data calls, the Army
Audit Agency performed on-site audits of data collection efforts at
various installations on a sample basis to validate the data being
gathered. Instances of inaccurate data or inadequate source
documentation identified during these audits were generally corrected
by the Army. As a result, the auditors generally found the data to be
sufficiently reliable for use in the BRAC process.
Identification and Assessment of Alternate Scenarios and Selection of
Recommendations:
The Army used the results of its capacity and military value analyses,
along with the 20-year force structure plan, as the foundation for the
development of hundreds of potential closure and realignment scenarios.
Scenarios under consideration were refined using various models--
primarily an optimization model and the Cost of Base Realignment
Actions (COBRA) model--along with military judgment. The optimization
model, using capacity data, military value scores, and other data,
provided the Army with various competing, plausible alternatives
associated with the restationing of various missions and forces within
the infrastructure. The model provided for alternative scenarios and
their impact on overall military value as functions were moved to
higher ranked installations. The COBRA model, which was used by all
military services and joint cross-service groups to address the fifth
selection criterion regarding costs and savings, provided the Army with
the relative cost and savings estimates of these various alternatives.
The Army further assessed the various scenarios in terms of the
remaining selection criteria 6 through 8, regarding the economic impact
on communities affected by BRAC, the ability of the infrastructure
within communities to support military missions, and the environmental
impact of the BRAC actions, respectively. The Army used input from
various DOD-generated models in assessing its scenarios against these
criteria, which, while important and mandated by the BRAC legislation,
played less of a role than that of military value. However, the Army
considered these criteria in order to ensure that there were no
insurmountable challenges that would derail the implementation of any
particular scenario. In addition, they were used to differentiate
between competing scenarios. For example, the Army determined its final
stationing of modular brigades based in part on its assessment of the
environmental impact these brigades would have on the receiving
installations.
The Army also integrated into the overall process those scenarios that
had been generated for the reserve components in the parallel process
referred to previously. Those scenarios were developed through a series
of meetings with state officials across the country. As with the active
component, the reserve component scenarios were assessed using the
COBRA model and other models.
The Army also worked closely with the joint cross-service groups as
they developed recommendations that affected Army installations. In
some cases, the Army developed scenarios that were provided to the
joint cross-service groups for further consideration. For example, the
Army developed initial scenarios proposing to close three chemical
demilitarization facilities, which were subsequently provided to the
Industrial Joint Cross-Service Group, which ultimately developed and
processed recommendations for these closures. Alternatively, some
scenarios which ultimately became Army recommendations were developed
in conjunction with the joint cross-service groups. For example, the
Industrial Joint Cross-Service Group's scenario regarding the
realignment of the depot maintenance workload out of the Red River Army
Depot in Texas, was instrumental in leading to an ultimate Army
recommendation to close the depot. Similarly, the Education and
Training Joint Cross-Service Group developed a scenario to realign the
Army's Armor Center and School from Fort Knox, Kentucky to Fort
Benning, Georgia, an action that was later folded into the Army's
broader realignment of Fort Knox. As the Army and cross-service group
recommendations were being finalized, the Army held a series of
meetings with the joint cross-service groups to ensure that all
recommended actions involving Army installations were properly
integrated and corresponding impacts were considered in their entirety.
Recommendations Approved by DOD:
The Army produced 56 recommendations[Footnote 53] that were approved by
DOD--6 closures of active component installations, 6 realignments of
active component installations, and 44 recommendations consisting of
multiple reserve components closure and realignment actions grouped by
state or region. These recommendations, along with other Army-related
recommendations produced by the joint cross-service groups, align, for
the most part, with the Army's objectives of reducing the number of
primarily single-function, smaller installations and transforming the
infrastructure to better meet current and expected future Army needs.
Table 10 provides the financial implications of the Army's
recommendations.
Table 10: Financial Aspects of the Army's Recommendations:
Fiscal year 2005 constant dollars in millions.
Installations: Reserve Components[C];
DOD report page: Army-25 to 120;
One-time (costs): ($2,856.8);
Net implementation (costs) or savings[A]: ($1,557.4);
Net annual recurring (costs) or savings: $322.8;
Payback period (years): 12.3 average;
20-year net present value (costs) or savings[B]: $1,598.6.
Installations: Close Fort Monmouth, NJ;
DOD report page: Army-11;
One-time (costs): ($822.3);
Net implementation (costs) or savings[A]: ($395.6);
Net annual recurring (costs) or savings: $143.7;
Payback period (years): 6;
20-year net present value (costs) or savings[B]: $1,025.8.
Installations: Realign Maneuver Training[D];
DOD report page: Army-20;
One-time (costs): ($773.1);
Net implementation (costs) or savings[A]: ($244.1);
Net annual recurring (costs) or savings: $123.3;
Payback period (years): 5;
20-year net present value (costs) or savings[B]: $948.1.
Installations: Close Fort McPherson, GA;
DOD report page: Army-8;
One-time (costs): ($197.8);
Net implementation (costs) or savings[A]: $111.4;
Net annual recurring (costs) or savings: $82.1;
Payback period (years): 2;
20-year net present value (costs) or savings[B]: $895.2.
Installations: Close Fort Monroe, VA;
DOD report page: Army-19;
One-time (costs): ($72.4);
Net implementation (costs) or savings[A]: $146.9;
Net annual recurring (costs) or savings: $56.9;
Payback period (years): 1;
20-year net present value (costs) or savings[B]: $686.6.
Installations: Close Red River Army Depot, TX;
DOD report page: Army-16;
One-time (costs): ($456.2);
Net implementation (costs) or savings[A]: ($216.6);
Net annual recurring (costs) or savings: $76.5;
Payback period (years): 4;
20-year net present value (costs) or savings[B]: $539.0.
Installations: Close Fort Gillem, GA;
DOD report page: Army-6;
One-time (costs): ($56.8);
Net implementation (costs) or savings[A]: $85.5;
Net annual recurring (costs) or savings: $35.3;
Payback period (years): 1;
20-year net present value (costs) or savings[B]: $421.5.
Installations: Close U.S. Army Garrison (Selfridge) MI;
DOD report page: Army-106;
One-time (costs): ($9.5);
Net implementation (costs) or savings[A]: $91.4;
Net annual recurring (costs) or savings: $18.1;
Payback period (years): immediate;
20-year net present value (costs) or savings[B]: $260.9.
Installations: Realign Single Drill Sergeant School[E];
DOD report page: Army-105;
One-time (costs): ($1.8);
Net implementation (costs) or savings[A]: $7.6;
Net annual recurring (costs) or savings: $2.5;
Payback period (years): immediate;
20-year net present value (costs) or savings[B]: $31.3.
Installations: Realign Fort Wainwright, AK;
DOD report page: Army-5;
One-time (costs): ($0.1);
Net implementation (costs) or savings[A]: $0.2;
Net annual recurring (costs) or savings: $0.1;
Payback period (years): 2;
20-year net present value (costs) or savings[B]: $0.7.
Installations: Realign Fort Bragg, NC;
DOD report page: Army-10;
One-time (costs): ($334.8);
Net implementation (costs) or savings[A]: ($446.1)[F];
Net annual recurring (costs) or savings: ($23.8);
Payback period (years): never;
20-year net present value (costs) or savings[B]: ($639.2).
Installations: Realign Fort Hood, TX;
DOD report page: Army-15;
One-time (costs): ($435.8);
Net implementation (costs) or savings[A]: ($579.5);
Net annual recurring (costs) or savings: ($45.3);
Payback period (years): never;
20-year net present value (costs) or savings[B]: ($980.4).
Installations: Realign Operational Army (IGPBS)[G];
DOD report page: Army-22;
One-time (costs): ($3,946.0);
Net implementation (costs) or savings[A]: ($5,229.0);
Net annual recurring (costs) or savings: ($294.7);
Payback period (years): never;
20-year net present value (costs) or savings[B]: ($7,826.7).
Total;
One-time (costs): ($9,963.4);
Net implementation (costs) or savings[A]: ($8,519.1);
Net annual recurring (costs) or savings: $497.6;
20-year net present value (costs) or savings[B]: ($3,038.6).
Source: GAO analysis of DOD data.
[A] This represents net costs or savings within the 6-year
implementation period required to implement BRAC recommendations.
[B] DOD used a 2.8 percent discount rate to calculate net present
value.
[C] The Army produced 44 recommendations realigning its reserve
components, which are combined into one entry in the table.
[D] This recommendation primarily stations a modular brigade and some
overseas forces at Fort Knox, Kentucky while realigning the Armor
Center and School to Fort Benning, Georgia.
[E] This recommendation realigns the drill sergeant schools from Fort
Benning, Georgia and Fort Leonard Wood, Missouri to Fort Jackson, South
Carolina.
[F] The Army BRAC 2005 report mistakenly reported this figure as a
savings rather than a cost. The Army subsequently issued a correction.
[G] This recommendations primarily restations some overseas forces at
Fort Bliss, Texas and Fort Riley, Kansas.
[End of table]
As shown in table 10, the Army's recommendations are expected to
produce nearly $500 million in estimated net annual recurring savings
beginning in 2012, but have a large 20-year net present value cost of
about $3 billion, rather than savings which are typically expected in
that timeframe; this is due primarily to very large up-front costs,
nearly $10 billion in expected one-time costs, that are required to
implement the recommendations. A few of the recommendations,
particularly the one involving the redeployment of Army forces to the
United States under DOD's Integrated Global Presence and Basing
Strategy, are responsible for the high costs and negative returns.
The recommended closures of 6 active duty installations, which are
largely installations of lower military value within the Army, have the
greatest potential for savings with a combined estimated net present
value savings over the next 20 years of about $3.8 billion and payback
periods of 6 years or less. Most of the expected savings from these
recommendations are due to reductions in personnel costs and overhead
(e.g., base operations support). Expected personnel savings from these
6 recommendations are driven by the elimination of nearly 3,500
personnel of which nearly 25 percent, or over 800, are military.
While 3 of the remaining 6 active duty base realignment recommendations
as shown in table 10 also produce savings, 3 recommendations account
for more than $9.4 billion in 20-year net present value costs and will
never payback. The largest of these three latter recommendations
involves the rebasing of Army forces to the United States from overseas
locations. The Army projected that this realignment alone has a one-
time cost of about $4 billion and annual recurring costs of almost $300
million and will never produce savings. Army officials note that a
contributory factor to these high costs is the fact that the Army could
not claim the estimated savings that would accrue from the expected
closure of the overseas installations and the departure of Army forces
from those locations. The Army estimates that had these estimated
savings been accounted for in BRAC, the recommended actions would have
produced substantial net savings rather than the costs as indicated. We
did not validate the Army's savings estimates for the overseas
closures, and it is not clear to us that sufficient information is
available at this time to fully assess the total changes in overseas
basing costs since much of the detail regarding these plans has not
been finalized. Further, we agree with DOD that it would not be
appropriate for the Army to include these particular savings in BRAC as
BRAC provisions in existing legislation do not contemplate
consideration of savings from the closure or realignments that take
place outside of the United States.[Footnote 54]
With regard to the reserve components, the Army adopted 44
recommendations, which taken as a whole, would provide a net present
value savings of over $1.5 billion over the next 20 years but have an
average payback period of over 12 years. Five of the recommendations
involve the realignment of the Army Reserve's command and control
structure within five regional areas. The remaining recommendations
realign reserve components facilities in 38 states and Puerto Rico by
constructing 125 new armed forces reserve centers while closing 176
Army Reserve centers and with the understanding that various states
would close 211 National Guard armories and centers.[Footnote 55] These
closures represent about 10 percent of the over 4,000 existing Army
reserve components' facilities across the country. While most of the
Army's projected savings associated with the reserve components'
recommendations result from reductions in personnel costs by
eliminating over 4,000 personnel, about 80 percent of these
eliminations are military personnel.
Issues Identified with Approved Recommendations:
Time did not permit us to assess the operational impact of each
recommendation, particularly recommendations that included multiple
closure and realignment actions across multiple locations. However, we
offer a number of broad-based observations about the proposed
recommendations. Some recommendations may warrant additional attention
from the BRAC Commission based primarily on issues associated with the
projected savings from military personnel reductions, uncertainties
regarding the rebasing of overseas forces and modularity, potential
impact of expected increase in the use of training ranges, the impact
on gaining communities, uncertainties regarding the reserve component
recommendations, the bundling of various recommendations, and concerns
over the transfer of workload from Red River Army Depot, Texas.
Military Personnel Reductions:
Our analysis showed that about $450 million of the Army's projected
annual recurring savings from its recommended closure and realignment
actions are based on claimed savings from eliminating military
personnel. Army officials acknowledged that a large portion of their
annual recurring savings were derived from military personnel
eliminations but noted that the Army's financial outlook improved if
joint cross-service group recommendations involving Army bases are
considered. Nevertheless, the Army does not plan to reduce its active
or reserve component end-strength in implementing these
recommendations. According to Army officials, these personnel are being
redistributed within the Army. While we believe that the potential
exists for these personnel to provide a benefit to the Army in their
new positions, it represents a savings to the Army in the sense of
potentially avoiding costs that otherwise might be incurred in
increasing authorized end strength levels. They do not represent dollar
savings that might be shifted to other appropriations to meet other
priority needs such as equipment modernization or improving remaining
facilities, areas typically cited as likely beneficiaries of BRAC
savings. Further, because DOD envisions BRAC savings in general to be
used to partially fund up-front investment costs associated with
implementing BRAC actions, the Army may be forced to find other sources
of funding as military personnel savings will not likely be available
for this purpose. The Commission may wish to consider this issue in
evaluating the BRAC recommendations.
Uncertainties regarding the Rebasing of Army Overseas Forces to the
United States and Force Structure Changes due to Modularity:
Uncertainties over plans to realign thousands of soldiers and their
families to the United States as a result of the Integrated Global
Presence and Basing Strategy as well as the Army's modularity efforts
to create new modular brigades have the potential to change the
expected costs and savings associated with the Army's BRAC
recommendations. The Army's BRAC recommendations incorporate about
15,000 of the 47,000 Army personnel currently expected to return as a
result of the global basing study.[Footnote 56] The Army also
incorporated the stationing of five of ten brigades being created under
the Army's modular restructuring effort.[Footnote 57] Estimated BRAC
costs and savings are typically calculated based on assumptions for
specific units or missions that are expected to realign to specific
installations in specific years. Changes to these assumptions can alter
the costs and savings associated with the actions being undertaken.
Existing Army plans for the return of overseas forces and modularity
were the basis for the assumptions used to calculate estimated costs
and savings and to determine potential impacts to the environment and
communities surrounding the affected installations. However, our
analysis identified several areas of uncertainty that could affect the
assumptions contained in those recommendations:
* Army officials told us that DOD has been and is continuing to modify
its overseas restationing plans, even as the Army BRAC recommendations
were being finalized. Because of BRAC reporting requirements, the Army
had to finalize its recommendations before the overseas rebasing plans
were finalized. Army officials indicated that the major overseas
restationing actions included in the BRAC recommendations are expected
to occur as currently envisioned. However, as plans continue to evolve,
the specific details regarding the rebasing could be adjusted, with
corresponding adjustments in costs and savings being required.
* In a May 2005 report produced by the Commission on Review of the
Overseas Military Facility Structure of the United States,[Footnote 58]
the Commission recommended slowing down the Army's entire overseas
restationing process. If DOD heeds this recommendation, the timing of
some planned restationing actions could be affected with the potential
risk of not completing BRAC closure or realignment actions within the 6-
year implementation period with a 2011 completion date as established
by the BRAC legislation. Further, over half of the Army's forces
returning from overseas are expected to be folded into the new modular
brigades being formed in the United States. Uncertainties over the
timing of their return could also impact the costs and savings
associated with those brigades.
* In a March 2005 congressional testimony, we reported that the design
configuration of the Army's modular brigades had not been finalized at
that time.[Footnote 59] In this regard, the Army is considering adding
an additional combat battalion to each of its modular brigades and has
not finalized the design of higher echelon and support units. Any such
changes to the design that was used in deriving the cost and savings
estimates and potential impacts to the environment and communities of
the recommended actions are likely to impact the estimates and may
alter the potential impacts as well.
The Commission may wish to ensure that it has the Army's latest plans
regarding the overseas rebasing and modularity efforts in reviewing the
Army's recommendations.
Potential Impact on Training Ranges:
The Army's BRAC recommendations provide for the stationing of returning
overseas forces and new modular brigades on existing Army
installations. Our review of Army documentation shows these
installations are already facing environmental and encroachment issues
that constrain their ability to meet unit training requirements. These
issues raise concerns that currently constrained installations may face
additional challenges and unexpected costs in meeting the training
requirements of the additional forces the Army plans to station at
these installations. As we reported in June 2005, several of the Army's
training ranges already face challenges resulting from inadequate
maintenance and modernization and may also require substantial
investment for modernization to support the training requirements of
the new brigades.[Footnote 60] Army officials stated they reviewed
their BRAC recommendations to ensure that there were no insurmountable
environmental or encroachment obstacles. They also noted that their
recommendations included costs for training range upgrades. However, we
have not validated whether these costs will adequately address training
range limitations. Further, we have concerns as to whether the Army
will need to acquire additional training range land at existing bases
that are already experiencing range limitations--a potential cost not
identified in the current BRAC recommendations.
Concerns over the ability of existing training ranges to meet training
requirements are exacerbated by uncertainties over the final number and
composition of the modular brigades as well as the potential for
additional forces returning from overseas. Because of existing
constraints on training ranges, the Army developed scenarios to examine
the possibility of stationing operational Army units on other
installations, including installations belonging to other military
services and Army installations with considerable acreage such as the
Yuma Proving Ground in Arizona. The Army deemed none of these scenarios
feasible for various reasons, such as the configuration of other
service installations and their associated training ranges did not meet
Army training requirements. For other scenarios, such as use of the
Yuma Proving Ground, the lack of adequate infrastructure and the
associated high military construction costs that would be required
essentially made them infeasible. However, Army officials told us that
should the Army decide to create an additional five modular brigades or
bring additional forces back from overseas, it may become necessary to
station these units at installations such as the Yuma Proving Ground,
which has large tracts of land, because existing Army installations
might not be able to support these additional units. The Commission may
wish to review the Army's plan for addressing training range issues and
the potential need to acquire additional land to mitigate likely
challenges the Army faces in the probable increased use of its training
ranges.
Impact on Gaining Communities:
Several of the Army's recommendations involve relocating significant
numbers of forces and their families to various installations, which
raises concerns about the ability of local communities to adapt to
these changes and absorb these personnel increases. For example, Fort
Bliss, Texas is expected to receive a net gain of over 11,000 military
and civilian personnel. The full impact of such increases on
surrounding communities, particularly on schools, housing, and other
community infrastructure, is unclear at this time. According to Army
officials, its analysis for the selection criterion regarding community
impact (criterion seven) provided an overall assessment of the ability
of local communities impacted by a potential BRAC action to handle
additional personnel and their families, including the identification
of potential obstacles that could prevent a recommendation from being
implemented. For example, in assessing the impact of the return of
forces from overseas, the Army's review of community infrastructure for
Fort Bliss and Fort Riley indicated the importance of working with
these communities to assess and implement housing and schooling
requirements. However, the Army concluded that these issues did not
represent impediments to implementing recommendations involving these
bases.
Addressing the challenges that these communities face may require
significant investments, particularly with regard to available housing
and schools, which would increase pressures for federal assistance from
various agencies to help mitigate these needs. While such costs might
be borne outside the defense budget to some extent, they would
nevertheless represent additional costs to the federal government.
These potential costs, although not required to be captured in DOD's
cost and savings analyses for the various recommended actions, could be
substantial, given the number of Army installations with expected
personnel gains. Army officials stated that they expect to resolve
these issues during implementation and that by staggering the movement
of units being moved to these installations, they believe they will be
able to reduce adverse impacts and enable communities to better prepare
for their arrival. Nevertheless, some communities may lack the
infrastructure to easily absorb these forces. This could impact the
timing of the movement of forces to these communities, which in turn
could alter current BRAC cost and savings estimates from a
governmentwide perspective. The Commission may want to review the
Army's plans for addressing these issues.
Uncertainties regarding State Involvement in the Reserve Components'
Recommendations:
We identified a number of uncertainties associated with the Army's
reserve components' recommendations. Most of these recommendations, as
detailed in the Army's 2005 BRAC report, are contingent upon certain
actions that have either yet to take place or be decided. For example,
the Army expects to build 125 Armed Forces Reserve Centers, which are
currently expected to be able to accommodate National Guard units as
well as Army Reserve units and some reserve units from the other
military services. However, the decision to relocate these National
Guard units lies with state authorities. While the states with Guard
units that are affected by BRAC recommendations have agreed, on a
voluntary basis, to be included in the process, they can opt out at any
time, thereby creating uncertainties over future state actions and
their impact on the precision of current cost and savings estimates for
these recommendations. Should state authorities decline to relocate
some or all of these units, the costs and savings associated with these
armed forces reserve centers could change. Some of the reserve
components' recommendations have other contingencies as well. For
example, the recommendation for the Texas reserve components calls, in
part, for an Armed Forces Reserve Center to be located in Amarillo,
Texas, if the Army is able to acquire land suitable for the
construction of facilities there. Many others are like this as well.
Should the land not be available, these recommendations will need to be
adjusted as well as the related costs and savings estimates. While the
Army's reserve components' recommendations as a whole are projected to
generate more than $1.5 billion in net savings over a 20-year period if
implemented, the uncertainties regarding some of the actions these
recommendations are relying on could result in increases or decreases
to this estimate. The Commission may wish to seek clarifications as to
the status of these state-based actions and the potential consequences
if some of those actions are not executed as currently planned.
Bundling of Various Recommendations Lessens Visibility of Costs:
Most of the Army's recommendations involve the bundling of multiple
closure and realignment actions under one recommendation, which reduces
the visibility of the estimated costs and savings as well as the
payback periods of the individual actions that are embedded within the
recommendation. While the the Army only produced six recommendations
for the realignment of its active component installations, most of
these recommendations have several components to them. For example, one
Army recommendation involves the realignment of the Armor Center and
School from Fort Knox, Kentucky, to Fort Benning, Georgia;
the activation of a new modular brigade at Fort Knox; the relocation of
various combat service support and other units from Europe and Korea to
the United States; and the relocation of a reserve training center from
Fort McCoy, Wisconsin, to Fort Knox. Similarly, the Army packaged all
of its proposed reserve components' realignments and closures within a
state into a single recommendation for that state. As a result, there
may be components within a recommendation that have relatively high
costs or long pay-back periods (or never produce savings) even though
the recommendation taken as a whole appears to have relatively higher
savings or a shorter payback period. The Commission may therefore wish
to request and examine information on the costs and savings associated
with these individual actions. The following examples highlight these
potential issues:
* The Army's maneuver training recommendation would realign Fort Knox
by incorporating several elements of scenarios the Army and the
Education and Training Joint Cross-Service Group developed over time.
The DOD-approved recommendation includes the stationing of a new
modular brigade at Fort Knox. However, the Army's original scenario for
realigning Fort Knox, which did not include stationing the modular
brigade or realigning the Armor Center and School, would have generated
a 20-year net savings of almost $225 million. The Education and
Training Joint Cross-Service Group's related scenario involving the
relocation of the Armor Center and School from Fort Knox to Fort
Benning would have generated a 20-year net savings of over $1.3
billion. The Army's approved recommendation combined most of the
elements of these two scenarios but generated 20-year savings of about
$950 million, or about $500 million less than one might have expected.
The difference may be largely attributed to the inclusion of the new
modular brigade in the Army's final recommendation.
* The Army's reserve components' transformation recommendation in
Arizona is expected to have a payback period of 5 years and generate a
net savings of almost $52 million over a 20-year period. However, one
action contained within this recommendation involves the creation of an
Armed Forces Reserve Center at the Buckeye Training Site, Arizona. A
previous scenario, which focused solely on this action, indicated that
the Army would incur a net cost of almost $9 million over the 20-year
period and that it would take more than 100 years to produce savings.
By bundling this action with others, the net costs of this action are
obscured by the net savings of the recommendation's other actions.
Red River Army Depot, Texas:
We are raising several issues with the recommended closure of the Red
River depot and the transfer of its functions to other locations that
may warrant further review by the Commission. The issues relate to the
transfer of the Red River combat vehicle workload to the Anniston Army
Depot, Alabama; the transfer of certain munitions to the McAlester Army
Ammunition Plant, Oklahoma; and the replication of Red River's
capability to remove and replace rubber pads for vehicle track and road
wheels.
Potential Transformation Opportunity for Depot Maintenance:
As discussed in appendix VIII, the Industrial Joint Cross-Service
Group, when developing its maintenance proposals, completed its depot
workloading analysis on the basis of one and a half shifts per workday
(60 hour workweek) rather than the one shift per day (40 hour workweek)
under the current system, thus increasing available capacity and
allowing it to consider depot closures. Industrial group officials told
us that use of more than one shift, which is a common private
industrial better business practice, would enhance transformational
opportunities in that it would provide for more efficient use of
facilities and equipment. Industrial group officials stated that the
expanded shift concept, although transformational, was only a "sizing
or planning tool" to examine ways to increase depot capacity and that
it would be left up to each depot to decide whether or not to employ
the expanded shift concept. In other words, it was a way to see if a
depot could accommodate the incoming transfer of additional workload.
We were also told that no policy changes were envisioned to actually
implement the expanded shift concept. Available information indicates
that the closure recommendation may not be implemented based on the
concept of a one and a half shift operation at the Anniston Army Depot,
which is to receive the combat vehicle workload from Red River. In our
visit to Anniston Army Depot, officials told us that, with additional
construction to increase capacity as provided for in the supporting
documentation for the recommendation, they would be able to accommodate
this additional workload without much difficulty and without working
under the expanded shift concept. Industrial group officials
acknowledged that, while some one and a half shift operations may be
implemented at other activities, only a one shift operation was
envisioned at Anniston, given the uncertainty associated with future
requirements and the need to minimize risk by providing for additional
capacity if a contingency arises. As such, it appears that there is
essentially no substantive transformational changes occurring with the
closure of the Red River Army Depot.
Uncertainties on Munitions Storage:
The BRAC recommendation to close the Red River Depot also dictates the
transfer of its munitions storage mission to another Army depot--
McAlester Army Ammunition Plant, Oklahoma. However, officials at Red
River told us they were concerned about whether storage capacity at
McAlester was sufficient to handle all of Red River's munitions.
Specifically, Red River officials told us during a recent visit that
available excess storage capacity at McAlester has decreased since BRAC
data were gathered, thus raising concerns whether all of Red River's
munitions can be stored there. Further, Red River officials asserted
that McAlester did not have sufficient storage capacity for special
types of munitions without constructing new storage facilities.
According to Red River officials, certain munitions (category I and II)
require different storage capacity and that McAlester currently does
not have enough storage capacity for Red River's entire category I
munitions. However our analysis of the closure recommendation
supporting documentation does not include any provision for military
construction funds. Industrial group officials told us, however, that
it expects that the McAlester plant will demilitarize much of its
ammunition and thus free up space for the munitions stored at Red
River. However, given that some diversion of demilitarization funds for
other purposes has occurred in recent years, it raises questions as to
the extent of the demilitarization that will occur. Nonetheless, in
their opinion, this potential issue is not of concern to them. Time did
not permit us to fully resolve the conflicting information regarding
the extent to which the munitions may be transferred and McAlester's
ability to sufficiently accommodate the storage of any transferred
munitions.
Transfer of Rubber Production Capabilities:
Red River officials also raised concerns about the complexities
associated with replicating its rubber production capability, which
consists of removing and replacing rubber pads for vehicle track and
road wheels, at Anniston Army Depot, Alabama, and that it is currently
the only source for road wheels for the Abrams M1 tank. Specifically,
Red River officials told us this capability is not an easy process to
reproduce, including obtaining the required certification associated
with the rubber production capability and that the processes must be
qualified through rigorous testing. The complexities with replicating
the rubber production capability was also echoed by officials at
Anniston Army Depot, Alabama--the installation which is expected to
absorb most of Red River's combat vehicle workload. Officials at
Anniston told us they expect a long certification process in order to
perform the required rubber repair process and that this represents the
most serious challenge in the workload transfer of Red River's work. As
to the Abrams Ml tanks road wheels, Red River officials told us that if
the capability to produce road wheels is interrupted, the ability to
sustain the warfighter is diminished and overall readiness could be
degraded. To mitigate this risk, officials at Red River told us that it
is imperative that the Army construct a new rubber production facility
at Anniston, establish its processes and qualify its product before
ceasing rubber production at Red River. Industrial group officials told
us that, should a problem arise in this area, that commercial sources
are available to purchase rather than repair these parts. We did not
independently verify their assertion.
The Commission may want to review the extent to which these concerns
associated with Red River are valid and whether they were adequately
considered by DOD.
[End of section]
Appendix IV: The Department of the Navy Selection Process and
Recommendations:
The Navy followed the common analytical framework established by the
Office of the Secretary of Defense (OSD) for reviewing its functions
and facilities. The Navy's process produced 21 base closure and
realignment recommendations, which cover 63 active and reserve
installations. The Navy projects that its recommendations would realize
about $7.7 billion in net present value savings over a 20-year period.
Payback periods--the time required for savings to offset closure costs-
-range from immediate to 15 years and average 3.5 years. At the same
time, there are limitations associated with the projected savings
related to the lack of planned reductions in military personnel end-
strength associated with the savings. Some of the Navy's
recommendations may warrant additional attention from the BRAC
Commission based on projected force structure changes, decisions to
realign versus close some bases, and extended payback periods. The
Naval Audit Service, which performed audits of the data, concluded that
the data were sufficiently reliable for use during the BRAC process.
Organization and Focus:
The Navy established an organization to conduct the closure and
realignment analysis similar to the one it used in the 1995 round. The
Secretary of the Navy established a group of senior military officers
and civilian executives, the Infrastructure Evaluation Group (IEG),
chaired by the Assistant Secretary of the Navy (Installations and
Environment) to conduct the process, and a related team, the
Infrastructure Analysis Team, to support the IEG. The Secretary
subsequently established a second senior-level group, the Department of
the Navy Analysis Group, chaired by the Special Assistant to the
Secretary of the Navy for BRAC, that was subordinate to the IEG, and he
directed it to conduct the Navy's analysis for Navy-unique
functions.[Footnote 61] Another associated group, the Functional
Advisory Board, consisted of the Navy and Marine Corps principal
members of the seven joint cross-service groups and was responsible for
ensuring that the Navy leadership was informed of matters relevant to
those groups and for articulating the Navy's position on common
business-oriented support functions for Navy leaders.
The Navy established numerous goals for BRAC, organized around such
considerations as (1) facilitating recruitment and training, (2)
providing quality of life, (3) matching force structure to national
defense strategy, (4) adequately equipping the force, (5) ensuring
access to an optimally integrated logistical and industrial
infrastructure, and (6) maintaining secure and optimally located
installations for mission accomplishment (including homeland defense).
With these and other considerations in mind, the Navy established
numerous objectives corresponding to DOD's BRAC principles, examples
include:
* Optimize access to critical maritime training facilities.
* Accommodate the 20-year force structure plan.
* Facilitate active/reserve integration and synchronization.
* Leverage opportunities for joint basing and training.
* Enable further installation management regional alignment.
* Optimize regional management structure for recruiting districts and
reserve readiness command.
* Minimize use of long-term leased administrative space.
* Provide flexible research, development, test, and evaluation
infrastructure to adapt to Navy transformational mission changes and
joint operations.
* Consolidate aircraft basing to minimize sites while maintaining
ability to meet operational requirements.
* Rely on private-sector support services where cost-effective and
feasible.
* Retain sufficient organic capability to effectively support maritime-
unique operation concepts.
* Align Navy infrastructure to efficiently and effectively support
Fleet Response Plan and Sea-basing concepts.
* Realign assets to maximize use of capacity in fleet concentration
areas while maintaining fleet dispersal and viable antiterrorism/force
protection capability.
Framework for Analysis:
In executing its BRAC process, the Navy sought to eliminate excess
capacity and reconfigure its current infrastructure so that operational
capacity maximized warfighting capability and efficiency. The IEG
approved four major areas for analyses: operations, education and
training, headquarters and support activities, and other activities.
These major areas were then further divided into functions to ensure
that installations performing comparable functions were compared with
one another and to allow identification of total capacity and military
value for an entire category of installations.
The Navy's BRAC process included a review of 889 reporting activities-
-765 Navy and 124 Marine Corps--of which 673 were active component and
216 reserve component activities (reserve centers, reserve forces
headquarters, reserve recruiting areas, and reserve personnel centers).
As with previous BRAC rounds, capacity and military value analysis
provided the starting point for the Navy's BRAC process. The Naval
Audit Service served an important role in ensuring the accuracy of data
used in these analyses through extensive audits of data gathered at
various locations.
Capacity Analysis:
For its capacity analysis, the Navy universe was defined at the
activity or function level, and a capacity data call was distributed to
the 889 reporting activities. Capacity analysis for each activity
consisted of comparing the current Department of the Navy base
structure to the future force structure requirements to determine
whether excess base structure capacity existed within the Department of
the Navy. Current force requirements were based on the existing force
structure, and future force requirements were derived from the 20-year
force structure plan.
All Navy and Marine Corps bases were placed into one of four categories
for capacity analysis: operations, headquarters and support activities,
education and training, and other activities. Each category used a
different metric to analyze capacity. Almost all of the Navy's bases
were contained in the operations function category. In evaluating air
operations activities the Navy used hangar modules,[Footnote 62] while
in evaluating surface/subsurface operations activities it used a
cruiser-equivalent concept,[Footnote 63] the same measures that were
used in BRAC 1995.[Footnote 64] In evaluating ground operations
activities, the Navy used a battalion-equivalent concept that
considered the amount of administrative space, covered storage space,
and maintenance space required to support a generic Marine Corps
battalion. In evaluating munitions storage and distribution, the Navy
used throughput (loading and unloading) and short-term storage
functions to conduct its analysis. The Navy identified excess capacity
in all four categories, as shown in table 11.
Table 11: Excess Capacity Identified by the Navy, by Function:
Function: Aviation;
Percentage of excess capacity: 19%.
Function: Surface/subsurface;
Percentage of excess capacity: 25%.
Function: Ground:
* Administrative;
Percentage of excess capacity: 0%;
Function: Ground:
* Storage;
Percentage of excess capacity: 12%;
Function: Ground:
* Maintenance;
Percentage of excess capacity: 11%.
Function: Munitions storage and distribution (naval weapons stations);
Percentage of excess capacity: 24%.
Source: Department of the Navy.
[End of table]
In completing its capacity analysis, the Navy assumed that it would be
necessary to home base all aircraft and ships at the same time. The
Navy did not include additional infrastructure requirements to
accommodate surge capability. According to Navy BRAC officials, the
force structure--number of ships and aircraft--is finite in number, and
additional ships or aircraft could not be quickly produced in the event
of a contingency. The officials stated that their analysis also ensured
that sufficient flexibility was retained to handle surge represented by
operational tempo changes or unanticipated operational requirements.
For example, for surface/subsurface operations, the Navy concluded that
there was sufficient berthing space available in nonoperational bases
(shipyards and weapon stations) to meet surge or other unanticipated
operational requirements.
Navy officials projected that their closure recommendations, if
approved, would reduce excess capacity in aviation operations from 19
percent to 16 percent, in surface/subsurface operations from 25 percent
to 17 percent, and in munitions storage and distribution[Footnote 65]
operations from 24 percent to 16 percent, but they would not reduce
excess ground operations capacity. The Navy did not recommend closing
any ground operations facilities, citing cost considerations and noting
that planned force structure changes would further increase its
requirements.
Military Value Analysis:
In completing its military value analysis, the Navy targeted military
value questions to specific activities in order to rank installations
in the four operational subgroups from highest to lowest in military
value. Each of the four operational subgroups had overarching concepts
by which military value scoring plans were then developed to measure
and rank each installation. Military values were assigned to 35 Navy
and Marine Corps installations under air operations, 29
surface/subsurface installations, and 11 ground operations
installations. Table 12 shows how the Navy weighted military value
criteria in its analyses of operational functions.
Table 12: Navy Military Value Criteria Weights:
Figures in percentages.
Military value criteria: 1. The current and future mission capabilities
and the impact on operational readiness of the total force of the
Department of Defense, including the impact on joint warfighting,
training, and readiness;
50%.
Military value criteria: 2. The availability and condition of land,
facilities, and associated airspace (including training areas suitable
for maneuver by ground, naval, or air forces throughout a diversity of
climate and terrain areas and staging areas for the use of the Armed
Forces in homeland defense missions) at both existing and potential
receiving locations;
20%.
Military value criteria: 3. The ability to accommodate contingency,
mobilization, surge, and future total force requirements at both
existing and potential receiving locations to support operations and
training;
15%.
Military value criteria: 4. The cost of operations and the manpower
implications;
15%.
Total: 100%.
Source: DOD and Department of the Navy.
Note: The system of weights provided a basis for assigning relative
values to data collected and tabulated across each military value
dimension.
[End of table]
Key factors considered in evaluating the military value of aviation
operations activities included size and versatility of the facilities,
proximity to training opportunities, and the strategic location of
airfields. In considering surface/subsurface activities, key factors
were the size and versatility of ship berthing, maintenance and support
capabilities, and proximity to naval shipyards. Additional value was
given for strategic nuclear submarine homeport capability and Nimitz-
class nuclear powered berthing capability. Also considered was the
proximity to training facilities, ranges, and operations areas as well
as strategic location. Likewise, in considering ground operations
activities, key factors were facilities and services, operational staff
buildings, ordnance storage depots, and organic maintenance shops.
Additional value was given for capability to receive and stage onward
movement and integration of forces. Also considered was proximity to
ranges, maneuver areas and training areas as well as proximity to
aerial and seaports of debarkation. Key factors in the munitions
storage and distribution operations activities were storage capability,
throughput capability, strategic factors, environment and encroachment,
and personnel support. Figure 10 illustrates how the Navy linked its
analysis to the military value criteria for the naval aviation
function.
Figure 10: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of Naval Aviation Operations:
[See PDF for image]
[A] The BRAC military value criteria are the first four BRAC selection
criteria.
[B] Military value attributes are characteristics of each criterion.
The Navy used a total of five military value attributes.
[C] Military value metrics are measures for the attributes. The Navy
used a total of 31 military value metrics.
[D] The Navy used a total of 73 data call questions.
[End of figure]
The same process was used to analyze military value with the other
operational and functional areas.
Naval Audit Service's Role in the Process:
The Naval Audit Service played an important role in ensuring that the
data used in the Navy's analyses were certified. Through extensive
audits of the capacity, military value, and scenario data collected
from field activities, the audit service notified the Navy of any data
discrepancies for the purpose of follow-on corrective action.[Footnote
66] While the process of validating data was quite lengthy and
challenging, the Naval Audit Service deemed the Navy data was
sufficiently reliable for use in the BRAC process.
Identification and Assessment of Alternative Scenarios and Selection of
Recommendations:
The Navy used results from the capacity and military value analyses as
the inputs to its optimization model to help identify initial scenarios
for realignment and closure.[Footnote 67] In some circumstances, such
as closure of naval reserve centers, military judgment and
transformation provided the basis for scenarios and later decisions.
For example, Navy officials said it was necessary to retain naval
reserve centers for naval air reservists near major airline hubs and
activities in order to retain the demographic profile necessary to
recruit and retain personnel for these units. The Navy identified 187
scenarios for consideration; 82 involved Navy and Marine Corps reserve
centers. The scenarios were then further assessed through more detailed
scenario analyses, cost and savings considerations, risk assessments,
and the Navy's IEG deliberations, which resulted in 53 candidate
recommendations being forwarded to DOD's IEC. After some consolidation
and bundling, DOD approved 21 Department of the Navy recommendations
and forwarded them to the BRAC Commission.
The Navy eliminated scenarios for strategic reasons, to maintain
operational flexibility, and for cost considerations. For example,
various scenarios proposing to close Submarine Base San Diego,
California, were dropped because a closure would have eliminated the
sole capability for berthing attack submarines on the West Coast.
Likewise, scenarios proposing to close Naval Station Everett,
Washington, were dropped because of the strategic importance of this
seaport. Various proposals to close active naval air stations were
dropped because of operational concerns. For example, the Navy analyzed
the potential to close Marine Corps Air Station Beaufort, South
Carolina, and relocate its squadrons to Marine Corps Air Station Cherry
Point, North Carolina. However, the Navy leadership concluded that
Marine Corps Air Station Beaufort should be retained for future
tactical aviation basing flexibility, especially in light of concerns
about the continued viability of basing aviation units at Naval Air
Station Oceana, Virginia. Due to increasing environmental and
encroachment issues surrounding Naval Air Station Oceana, the Navy also
analyzed various scenarios to close it. However, the analyses indicated
a long payback period for achieving return on investment, high one-time
costs, and operational issues at receiving sites. Therefore, the Navy
determined that the closure of Naval Air Station Oceana was not
feasible. Another complicating factor for basing of East Coast tactical
aircraft is the Navy's attempt to purchase approximately 33,000 acres
in eastern North Carolina to build a new outlying landing field to
provide simulated aircraft carrier landings for aircraft stationed at
Naval Air Station Oceana and Marine Corps Air Station Cherry Point. The
purchase is currently being challenged in federal court over
environmental concerns.
The Navy also did not pursue some scenarios because of cost
considerations and extended payback periods. For example, Navy data
showed a one-time cost of $838 million to close Construction Battalion
Center Gulfport, Mississippi, and relocate it to Camp Lejeune, North
Carolina, and a one-time cost of $643 million to close Marine Corps
Recruit Depot San Diego, California, and relocate all recruit training
to Parris Island, South Carolina. The Navy leadership determined that
these costs did not justify closing either the Construction Battalion
Center Gulfport or the Marine Corps Recruit Depot San Diego.
The Navy also considered alternatives to homeport an additional carrier
strike group forward in the Pacific theater through the BRAC process to
accommodate Integrated Global Presence and Basing Strategy decisions.
The Navy analyzed moving a carrier to Pearl Harbor, Hawaii, and Guam,
and found that other than cost, there was no clear BRAC preference for
either the losing or the gaining base.[Footnote 68] The Navy leadership
postponed any decision until the ongoing Quadrennial Defense Review is
completed.
The Navy worked closely with the joint cross-service groups as they
developed recommendations that affected Navy installations. In some
cases, a joint cross-service group recommendation or series of
recommendations relocated a majority of the functions, workload,
equipment, or personnel from a Department of the Navy installation,
thereby enabling closure of the entire installation. Where the DAG
determined that the aggregate of joint cross-service group actions were
of such magnitude that it affected the "critical mass" of the
installation, e.g., impact on the major mission, a substantial number
of personnel, and/or a substantial amount of acreage, a Navy closure
scenario was developed. The closure of Portsmouth Naval Shipyard, Maine
is an example of such a closure. The ISG and IEC approved an industrial
joint cross-service group recommendation to relocate the ship overhaul
and repair function at Portsmouth Naval Shipyard to Norfolk Naval
Shipyard, Puget Sound Naval Shipyard, and Pearl Harbor Naval Shipyard,
and to relocate the Submarine Maintenance Engineering, Planning and
Procurement Activity at Portsmouth Naval Shipyard to the Norfolk Naval
Shipyard. This recommendation eliminated Portsmouth Naval Shipyard's
primary mission and moved or eliminated approximately 90 percent of its
workforce. After conducting criteria 5-8 analyses, the Navy recommended
closing Portsmouth Naval Shipyard in its entirety.
Recommendations Approved by DOD:
The Navy projects that its 21 recommendations will produce about $754
million in net annual recurring savings and, after savings have offset
implementation costs, a 20-year net present value savings of $7.7
billion. Table 13 provides a summary of the financial aspects of the
Navy's recommendations.
Table 13: Financial Aspects of the Navy's Recommendations:
Fiscal year 2005 constant dollars in millions.
Recommended actions: Close Submarine Base New London, CT;
DOD report page: DON-10;
One-time (costs): ($679.6);
Net implementation (costs) or savings[A]: ($345.4);
Net annual recurring savings: $192.8;
Payback period: 3 years;
20-year net present value[B]: $1,576.4.
Recommended actions: Close Naval Shipyard Portsmouth, Kittery, ME;
DOD report page: DON-23;
One-time (costs): ($448.4);
Net implementation (costs) or savings[A]: $21.4;
Net annual recurring savings: $128.6;
Payback period: 4 years;
20-year net present value[B]: $1,262.4.
Recommended actions: Close Naval Air Station Atlanta, GA;
DOD report page: DON-13;
One-time (costs): ($43.0);
Net implementation (costs) or savings[A]: $289.9;
Net annual recurring savings: $66.1;
Payback period: immediate;
20-year net present value[B]: $910.9.
Recommended actions: Close and realign Naval Station Ingleside, TX and
Naval Air Station Corpus Christi, TX respectively;
DOD report page: DON-26;
One-time (costs): ($178.4);
Net implementation (costs) or savings[A]: $100.0;
Net annual recurring savings: $75.6;
Payback period: 2 years;
20-year net present value[B]: $822.2.
Recommended actions: Close and realign Naval Air Station Willow Grove,
PA and Cambria Regional Airport, Johnstown, PA respectively;
DOD report page: DON-21;
One-time (costs): ($126.3);
Net implementation (costs) or savings[A]: $134.7;
Net annual recurring savings: $60.6;
Payback period: 2 years;
20-year net present value[B]: $710.5.
Recommended actions: Close Naval Station Pascagoula, MS;
DOD report page: DON-20;
One-time (costs): ($17.9);
Net implementation (costs) or savings[A]: $220.0;
Net annual recurring savings: $47.4;
Payback period: immediate;
20-year net present value[B]: $665.7.
Recommended actions: Close Naval Support Activity New Orleans, LA;
DOD report page: DON-15;
One-time (costs): ($164.6);
Net implementation (costs) or savings[A]: ($86.1);
Net annual recurring savings: $36.5;
Payback period: 3 years;
20-year net present value[B]: $276.4.
Recommended actions: Realign Naval Air Station Brunswick, ME;
DOD report page: DON-18;
One-time (costs): ($147.2);
Net implementation (costs) or savings[A]: ($112.6);
Net annual recurring savings: $34.9;
Payback period: 4 years;
20-year net present value[B]: $238.8.
Recommended actions: Close Navy Reserve Centers;
DOD report page: DON-37;
One-time (costs): ($3.2);
Net implementation (costs) or savings[A]: $87.1;
Net annual recurring savings: $16.1;
Payback period: immediate;
20-year net present value[B]: $236.6.
Recommended actions: Realign Marine Corps Logistics Base Barstow, CA;
DOD report page: DON-6;
One-time (costs): ($26.0);
Net implementation (costs) or savings[A]: $56.5;
Net annual recurring savings: $18.4;
Payback period: immediate;
20-year net present value[B]: $230.6.
Recommended actions: Close Navy Recruiting Districts;
Indianapolis, IN; Omaha, NE; Buffalo, NY; Montgomery, AL; Kansas City,
MO;
DOD report page: DON-34;
One-time (costs): ($2.4);
Net implementation (costs) or savings[A]: $78.3;
Net annual recurring savings: $14.5;
Payback period: immediate;
20-year net present value[B]: $214.5.
Recommended actions: Close Naval Weapons Station, Seal Beach, Concord,
CA;
DOD report page: DON-9;
One-time (costs): ($14.0);
Net implementation (costs) or savings[A]: $43.2;
Net annual recurring savings: $16.4;
Payback period: 1 year;
20-year net present value[B]: $199.7.
Recommended actions: Realign Navy Reserve Readiness Commands;
DOD report page: DON-44;
One-time (costs): ($2.6);
Net implementation (costs) or savings[A]: $30.9;
Net annual recurring savings: $6.5;
Payback period: immediate;
20-year net present value[B]: $91.7.
Recommended actions: Close Naval Facilities Engineering Field
Division/Activity;
DOD report page: DON-28;
One-time (costs): ($37.9);
Net implementation (costs) or savings[A]: ($9.1);
Net annual recurring savings: $9.3;
Payback period: 4 years;
20-year net present value[B]: $81.8.
Recommended actions: Close Navy and Marine Corps Reserve Centers;
DOD report page: DON-29;
One-time (costs): ($62.4);
Net implementation (costs) or savings[A]: $17.0;
Net annual recurring savings: $9.9;
Payback period: 7 years (average);
20-year net present value[B]: $76.8.
Recommended actions: Close Marine Corps Support Activity Kansas City,
MO;
DOD report page: DON-19;
One-time (costs): ($23.3);
Net implementation (costs) or savings[A]: ($8.0);
Net annual recurring savings: $5.8;
Payback period: 3 years;
20-year net present value[B]: $49.8.
Recommended actions: Close Navy Regions;
DOD report page: DON-35;
One-time (costs): ($3.2);
Net implementation (costs) or savings[A]: $8.9;
Net annual recurring savings: $2.7;
Payback period: 1 year;
20-year net present value[B]: $34.6.
Recommended actions: Close Navy Supply Corps School Athens, GA;
DOD report page: DON-14;
One-time (costs): ($23.8);
Net implementation (costs) or savings[A]: ($13.6);
Net annual recurring savings: $3.5;
Payback period: 7 years;
20-year net present value[B]: $21.8.
Recommended actions: Realign Officer Training Command, Naval Air
Station Pensacola, FL;
DOD report page: DON-12;
One-time (costs): ($3.6);
Net implementation (costs) or savings[A]: $1.4;
Net annual recurring savings: $0.9;
Payback period: 4 years;
20-year net present value[B]: $10.0.
Recommended actions: Realign Naval Station Newport, RI;
DOD report page: DON-25;
One-time (costs): ($11.8);
Net implementation (costs) or savings[A]: ($8.3);
Net annual recurring savings: $1.0;
Payback period: 13 years;
20-year net present value[B]: $2.1.
Recommended actions: Close Naval Support Activity Corona, CA;
DOD report page: DON-7;
One-time (costs): ($80.2);
Net implementation (costs) or savings[A]: ($65.5);
Net annual recurring savings: $6.0;
Payback period: 15 years;
20-year net present value[B]: $0.4.
Total;
One-time (costs): ($2,099.8);
Net implementation (costs) or savings[A]: $440.7;
Net annual recurring savings: $753.5;
Payback period: 3.5 avg;
20-year net present value[B]: $7,713.7.
Source: GAO analysis of DOD data.
[A] This represents net costs or savings within the 6-year
implementation period required to implement BRAC recommendations.
[B] DOD used a 2.8 percent discount rate to calculate net present
value.
[End of table]
The Navy's recommendations include 16 closures and 5 realignment
actions, affecting 63 installations. Much of the projected annual
recurring savings are based on military and civilian personnel
reductions. The Navy has two recommendations with payback periods
greater than 10 years--the realignment of Naval Station Newport, Rhode
Island, and the closure of the Naval Support Activity Corona,
California.
Issues Identified with Approved Recommendations:
Time did not permit us to assess the operational impact of each
recommendation, particularly individual recommendations that include
multiple closure and realignment actions at multiple locations outside
of a single geographic area. Nonetheless, we offer a number of broad-
based observations about the proposed recommendations. These
recommendations may warrant additional attention from the BRAC
Commission based on issues associated with projected savings from
military personnel reductions, force structure changes, decisions to
realign versus close some bases, extended payback periods, and
potential impact on the U.S. Coast Guard.
There remains uncertainty as to what the Navy's future force structure
will actually look like, particularly with battle force ships. While
the Navy's force structure plan that accompanies its BRAC report gives
a range of 341 to 370 ships in the fleet in 2024, the Navy's 30-year
shipbuilding plan identifies a possible lower limit of 314 ships in
2024 (including all type surface ships and submarines). Additionally,
the shipbuilding plan provides a fleet profile in the decade afterward
(to the year 2035) with as few as 260 to 325 ships. This includes a
decrease in aircraft carriers from the current 12 to 10 in 2035, as
projected in the Navy's shipbuilding plan.
Military Personnel Reductions:
Our analysis showed that about $386 million, or about 51 percent, of
the projected $753.5 million in net annual recurring savings are based
on savings from eliminating almost 4,000 active duty military personnel
positions. A Navy official indicated that these reductions will help
the Navy achieve the projected 21,000 active military personnel
reductions already programmed between fiscal year 2006 and 2011.
However, the Navy has already reduced the military personnel account to
reflect the savings associated with the projected 21,000 end-strength
reduction. While the projected almost 4,000 reductions associated with
BRAC actions might help the Navy achieve their overall programmed end
strength reductions, it will not generate any additional dollar savings
that could be reallocated for other higher priority needs.
Projected Changes in Navy Force Structure:
While the recommendations to close Submarine Base New London,
Connecticut, and Portsmouth Naval Shipyard, Maine, project significant
savings, both are based on projected decreases in the number of
submarines in the future force structure. However, as mentioned
earlier, there is uncertainty over the number of submarines and surface
ships required for the future force.
Submarine Base New London:
The proposed closure of Submarine Base New London is based on reducing
existing excess capacity in the surface/subsurface category and planned
reductions in the submarine force. Both the 25 percent excess capacity
identified in the surface/subsurface infrastructure and the projected
21 percent reduction in the submarine force led the Navy to analyze
various proposals to close submarine bases. As previously noted, the
Navy's BRAC scenario analysis focused on East Coast submarine bases
because attack submarines are single-sited on the West Coast. The Navy
considered three alternatives: (1) moving all submarines at Naval
Station Norfolk, Virginia, to New London, Connecticut;
(2) moving all submarines at Submarine Base New London and the
Submarine School New London to Naval Station Norfolk;
and (3) moving submarines at Submarine Base New London to both Naval
Station Norfolk and Submarine Base Kings Bay, Georgia, and moving the
submarine school to Kings Bay or Naval Station Newport, Rhode Island.
The Navy analysis showed that only the option to relocate submarines
from New London to Norfolk and Kings Bay achieved a reduction in
capacity and savings resulting from a base closure. Navy officials
noted that Submarine Base New London had a lower military value than
both Norfolk and Kings Bay. As we also discuss in appendix XIV, this
recommendation has the largest economic impact on any community in
terms of the number of job losses (8,457 direct jobs and 7,351 indirect
jobs). These direct and indirect job losses would result in a negative
change of 9.4 percent in unemployment for the economic area around
Submarine Base New London.
The majority of the projected savings would result from the elimination
of about 80 percent of the civilian personnel positions at New London.
Officials at New London we met with concurred with the projected number
of civilian positions that could be eliminated based on coordination
with both receiving locations--Kings Bay, Georgia, and Norfolk,
Virginia, and on the number of personnel that would be needed to
support the missions being relocated. However, a separate issue of
concern relates to the proposed move of the Navy's submarine school
from New London to Kings Bay. In our discussions with officials at New
London, we found while the Navy's BRAC cost and savings analysis
includes one-time costs to move the specialized equipment associated
with the submarine school, the Navy analysis does not appear to have
included an assessment of the time it would take to pack, move, and
unpack the equipment, and the potential impact on the training pipeline
and the certification of crews for submarines. In subsequent
discussions with Navy headquarters officials, we were told that the
submarine school would be the last activity to move from New London to
ensure that facilities at Kings Bay are ready to start training.
Furthermore, they noted that the implementation plan will ensure that
the Navy will be able to perform crew certification and maintain the
training pipeline. The BRAC Commission may want to assure itself that
the Navy has developed a transition plan to satisfy the training and
certification requirements until the receiving sites are able to
perform this training, without unduly interrupting the training
pipeline.
Portsmouth Naval Shipyard:
The proposed closure of the Portsmouth Naval Shipyard assumes that the
remaining three shipyards[Footnote 69] could perform all of the
projected depot level maintenance workload based on planned reductions
in the number of attack submarines and the Navy's proposal to
decommission an aircraft carrier.[Footnote 70] The Navy, with agreement
from the Industrial Joint Cross-Service group, which initially had
assessed depot functions, selected the Portsmouth Naval Shipyard for
closure, despite Pearl Harbor Shipyard's having a slightly lower
military value score, because it determined that Portsmouth was the
only closure that would both eliminate excess capacity and satisfy the
Combatant Commander's and Navy's strategic objective to place ship
maintenance capabilities close to the fleet.
The Navy BRAC and Industrial Joint Cross-Service Groups analyzed
scenarios closing each of the four shipyards, and determined that only
the potential closure of Portsmouth or Pearl Harbor was feasible due to
cost and capacity considerations. Initially, based on capacity data and
the 20-year force structure plan submitted in March 2004, the
Industrial Joint Cross-Service Group determined that there was
sufficient excess capacity in the aggregate across the four shipyards
to close either Pearl Harbor or Portsmouth. However, the group
determined that there was insufficient excess capacity in certain
commodities[Footnote 71] in the remaining three shipyards to accept all
the workload from the closing shipyard. As such, the group initially
determined that no shipyard should be closed. However, based on changes
in the DOD's 20-year force structure plan it submitted to Congress in
March 2005--reductions in the number of submarines and the
decommissioning of an aircraft carrier--the industrial group's analysis
indicated that workload for all commodities at Portsmouth or Pearl
Harbor could be accommodated by the remaining three shipyards. A Naval
Sea Systems Command analysis of dry dock availability indicates that
the three remaining Navy shipyards could handle the projected ship
repair and overhauls in the future. However, the analysis indicates
that within the next three years there would not be much, if any, room
for unanticipated ship repairs. According to Navy officials, any
unanticipated requirements would be addressed by a combination of
delaying and re-prioritizing scheduled overhaul work, and authorizing
additional overtime, which they noted is no different than how they
manage these requirements in the current operating environment.
In selecting Portsmouth over Pearl Harbor for closure, the Navy noted
that Pearl Harbor is in a fleet concentration area in the Pacific
theater and is the homeport for many ships, while Portsmouth is not in
a fleet concentration area or a homeport for any ships. In addition,
closing Pearl Harbor would require the ships that are homeported there
to transit back to the east coast, in some cases, for maintenance,
which the Navy would essentially view as a deployment and, for quality
of life reasons, would want to avoid if possible. Another strategic
objective was to maintain dry docks for aircraft carriers on both
coasts and in the central Pacific. Pearl Harbor has aircraft carrier
dry-docking capability, but Portsmouth does not.
In our meeting with employees at the Portsmouth Naval Shipyard in June
2005, they raised questions about several issues regarding the cost and
savings analysis developed to support the proposed action. First, they
objected to the industrial group and the Navy disallowing about $281
million in costs ($205 million one-time and $76 million recurring) that
they believed would be incurred if the shipyard were to close. About
$52 million of the recurring costs are associated with sustainment of
facilities and power plant from fiscal year 2008, when the base is
projected to close, until 2011. While some of these costs are likely
valid, overall they appear high in relation to the Navy's projected
savings of about $120 million over the same period from reduced base
operating support and sustainment of facilities. The majority of the
one-time costs are associated with closure of the buildings, historical
preservation of buildings, and write-off of undepreciated assets of the
working capital fund. While it is questionable whether all of these
costs should be included, our analysis shows that if they are all
included, the projected 20-year savings would decrease by $192 million,
or 15 percent.
Portsmouth employees were also concerned that the cost and savings
analysis did not adequately capture the widely recognized efficiencies
of their shipyard, which, if adopted, could translate into additional
costs that the Navy would incur by shifting its workload to the
remaining three Navy shipyards. The employees estimated that they
perform submarine overhaul and depot maintenance work at about $54
million per year less than the average of the other three shipyards, an
efficiency which was not included in the Navy's analysis. Department of
Navy officials recognized that the Portsmouth Naval shipyard is
presently more efficient than the Puget Sound and Pearl Harbor
shipyards, but noted that it is very difficult to quantify the impact
of this efficiency. Navy officials noted that the scope of work
performed is not always the same, depending on the condition of each
submarine, and wages, especially in Pearl Harbor, are higher than in
Portsmouth. Navy officials told us they were reviewing the efficiency
analysis developed by the Portsmouth Naval Shipyard;
however, their analysis was not completed in time to be included in
this report. The Commission may wish to consider the views of the
shipyard employees and the results of the Navy's review in their
analysis of this recommendation.
Decisions to Realign Rather Than Close Some Bases:
The Navy initially recommended the closure of Naval Air Station
Brunswick, Maine, and Marine Corps Logistics Base Barstow, California.
However, based on direction from the IEC, these closure recommendations
were changed to realignments. As a result, the 20-year savings
decreased by almost $2 billion, as shown in table 14.
Table 14: Comparison of Alternatives to Closing and Realigning Naval
Air Station Brunswick and Marine Corps Logistics Base Barstow:
Dollars in millions.
One-time (costs);
Brunswick: Closure: ($192.9);
Brunswick: Realignment: ($147.2);
Brunswick: Difference: ($45.7);
Barstow: Closure: ($316.6);
Barstow: Realignment: ($26.0);
Barstow: Difference: ($290.6).
Net implementation (costs) or savings;
Brunswick: Closure: $73.4;
Brunswick: Realignment: ($112.6);
Brunswick: Difference: ($39.2);
Barstow: Closure: ($248.3);
Barstow: Realignment: ($56.5);
Barstow: Difference: ($191.8).
Net annual;
recurring savings;
Brunswick: Closure: $92.7;
Brunswick: Realignment: $34.9;
Brunswick: Difference: $57.8;
Barstow: Closure: $141.9;
Barstow: Realignment: $18.4;
Barstow: Difference: $123.5.
Payback period;
Brunswick: Closure: 1 year;
Brunswick: Realignment: 4 years;
Barstow: Closure: 1 year;
Barstow: Realignment: immediate.
20-year net present value savings;
Brunswick: Closure: $840.7;
Brunswick: Realignment: $238.8;
Brunswick: Difference: $601.9;
Barstow: Closure: $1,600.0;
Barstow: Realignment: $230.6;
Barstow: Difference: $1,369.4.
Source: GAO analysis of Navy data.
[End of table]
According to Navy BRAC officials, the senior Navy leadership was
reluctant to give up the Navy's remaining air station in the Northeast
but found the potential savings significant enough to recommend closure
of Brunswick. However, the judgment of the IEC changed the closure to a
realignment to retain access to the strategic airfield in the
Northeast. As a result, the base will become a naval air facility with
an operational runway, but all aircraft and associated personnel,
equipment, and support will be relocated to Naval Air Station
Jacksonville, Florida, and the Aviation Intermediate Maintenance will
be consolidated with Fleet Readiness Center Southeast Jacksonville,
Florida. The Navy is maintaining its cold weather-oriented Survival,
Evasion, Resistance, and Escape School, a Navy Reserve Center, and
other small units at Brunswick. Navy officials also stated that
Brunswick would provide a base from which to carry out potential
homeland defense missions should those missions not be able to be
carried out from other military or civilian airfields in the Northeast.
The Industrial Joint Cross-Service Group had proposed to close the
depot maintenance functions at Barstow because of its low military
value and to increase opportunities for joint maintenance at Army
depots doing similar work. However, the Marine Corps objected to the
closure because that would eliminate its only West Coast ground vehicle
depot maintenance presence and would increase repair cycle times for
the Marine's West Coast equipment by increasing rail transit and
customer turnaround time by 10 to 30 days. In response to the Marine
Corps' concerns, the IEC directed the Industrial Joint Cross-Service
Group to develop several alternative recommendations that would have
closed Barstow but still realigned its workload to other West Coast
activities. The Industrial Joint Cross-Service Group estimated that all
of these options would result in higher net annual recurring and 20-
year net present savings than would the realignment option. The
Commission may want to assess DOD's rationale for changing the
recommendation from a closure to realignment in light of the projected
reductions in savings.
Extended Payback Periods:
The Navy has two recommendations for which the payback period is
greater than 10 years, much longer than typically associated with
recommendations in the 1995 BRAC round, and the one-time costs are
significantly greater than the projected 20-year savings by which BRAC
rounds are typically measured. The Navy's proposal to realign Naval
Station Newport by relocating the Navy Warfare Development Command to
Naval Station Norfolk has a 13-year payback period and a projected one-
time cost of about $12 million, primarily to rehabilitate existing
structures and move 111 personnel. According to Navy officials, this
recommendation places the Navy Warfare Development Command closer to
Fleet Forces Command and the Second Fleet Battle Lab it supports.
Likewise, the Navy recommendation to close Naval Support Activity
Corona has a payback period of 15 years, one-time cost of about $80
million, and 20-year savings of about $400,000. Navy data shows that
the one-time cost is primarily to rehabilitate existing facilities and
relocate personnel from Corona to Naval Air Station Point Mugu,
California. Navy officials stated the closure had merit because the
Corona facility was a single-function facility whose mission could be
performed at other multifunction bases.
Potential Impact on the U.S. Coast Guard:
Several Navy recommendations to close bases could affect the U.S. Coast
Guard. However, the Navy's cost and savings analysis did not consider
any costs that could be incurred by the Coast Guard if the bases are
closed. Navy officials recognized that the Coast Guard would be
affected by several of its recommendations and considered the impact in
its deliberations. However, they determined that it was unreasonable to
include any cost estimates for the Coast Guard because the Navy could
not assume the final disposition of the facility and how much, if any,
of the facility the Coast Guard would opt to retain. Coast Guard
officials stated that the Navy briefed them on their potential
recommendations several months prior to the public announcement of the
recommendations. The Coast Guard is in the process of developing
potential basing alternatives, to include cost impacts, for each
affected location. However, the Coast Guard had not completed these
estimates in time for us to include them in our report.
[End of section]
Appendix V: The Department of the Air Force Selection Process and
Recommendations:
The Air Force followed the common analytical framework established by
the Office of the Secretary of Defense (OSD) for reviewing its
functions and facilities. The Air Force's process produced 42
recommendations. Most of the recommendations are devoted to reserve
component bases, including several realignment actions reallocating
aviation assets to multiple locations. In comparison with the other
services, its recommendations contain the smallest number of closures
(three) of active component bases. It had two major realignments,
however, that left the bases in a reduced active duty status, and
another where the base was transferred to the Army, with the Air Force
retaining a limited presence as a tenant. The Air Force recommendations
project the greatest savings of any of the services--$14.6 billion in
20-year net present value savings. Payback periods--the time required
for savings to offset closure and realignment costs--for active
component bases range from immediate to 14 years, and average 3 years,
and for reserve component bases they range from immediate to 18 years,
and average 6 years. However, our analysis indicates that these
projected savings in each of their categories could have some
limitations, primarily due to the lack of personnel end-strength
reductions associated with claimed savings. In addition, some Air Force
recommendations may warrant additional attention by the BRAC Commission
because of uncertainty regarding future mission requirements for
adversely affected reserve component personnel, and because of lengthy
payback periods associated with some recommendations having been merged
with other recommendations that have shorter payback periods, thus
making the former appear more acceptable. The Air Force Audit Agency,
which performed audits of the data, concluded that the data were
sufficiently reliable for use during the BRAC process.
Organization and Focus:
The Secretary of the Air Force established a group of senior Air Force
military and civilian personnel to form an executive deliberative body
responsible for conducting the Air Force base closure and realignment
analyses. The Base Closure Executive Group was led by a Deputy
Assistant Secretary and a General Officer from Plans and Programs, who
served as co-chairs. This group's working-level staff made up the Base
Closure Working Group, which provided direct support for data
collection, validation, and analysis in the development of base closure
and realignment recommendations.[Footnote 72]
The Air Force 2005 BRAC goals were to transform by maximizing
warfighting capability of each squadron and realigning infrastructure
with future defense strategy, maximizing operational capability by
eliminating excess physical capacity, and to capitalize on
opportunities for joint activity. To guide the BRAC process, the Air
Force developed the following principles, to be applied to both active
and reserve components:
* Maintain squadrons within operationally efficient proximity to DOD-
controlled airspace, ranges, military operations areas, and low-level
routes.
* Optimize the size of Air Force squadrons in terms of aircraft models,
aircraft assigned, and crew ratios applied.
* Retain enough domestic capacity to base the Air Force entirely within
the United States and its territories.
* Retain aerial refueling bases in optimal proximity to their missions.
* Better meet the needs of the Air Force by maintaining or placing Air
Reserve Component (Air National Guard or Air Force Reserve Command)
units in locations that best meet the demographic and mission
requirements unique to the Air Reserve Component.
* Ensure joint basing realignment actions (in comparison with the
status quo) either increased the military value of a function or
decreased the cost for the same military value of that function.
* Ensure that long-range strike bases provide flexible strategic
response and strategic force protection.
* Support the Air Expeditionary Forces framework by keeping two
geographically separate munitions sites.
* Retain enough surge capacity to support deployments, evacuations, and
base repairs.
* Consolidate or co-locate legacy fleets (such as A-10, B-1, B-52, F-
15, and F-16 aircraft).
* Ensure global mobility by retaining two air mobility bases and one
additional wide-body-capable base on each coast.
Several of the above principles were included in an Expeditionary Air
Force Principles White Paper,[Footnote 73] which outlined principles to
shape future force development and basing. This document, discussed the
increased effectiveness and efficiency of consolidating smaller
squadrons into larger units. The significant reduction in aircraft
based on the future force structure plan of 2025 will reduce the Air
Force infrastructure, including that of the Air Reserve and the Air
National Guard to select the best combination of bases, while
accommodating use of reserve components for emerging missions, such as
homeland defense and unmanned aerial systems.
Framework for Analysis:
The Air Force BRAC process included a review of 154 installations--70
active and 84 reserve. As with previous BRAC rounds, capacity and
military value analyses provided the starting point for analysis.
However, in this BRAC round the Air Force concentrated its analysis on
operational aircraft and space missions, since joint cross-service
groups developed capacity and military value analyses and
recommendations for various commonly held business-oriented categories,
such as education and training, headquarters, and technical functions.
The Air Force Audit Agency performed an important role in ensuring the
accuracy of data used in these analyses through extensive audits of
data gathered at various locations.
Capacity Analysis:
The Air Force collected information on key capacity areas, such as
physical capacity (buildings and utilities), environmental issues (air
emissions and water resources), encroachment (constraints and noise
safety), airfields, airspace and ranges (operational capacity of
runways, ramp space, and fuel storage), communications
(telecommunications), and personnel. The capacity data call was
designed to provide information to assess bases for current and future
missions in the following mission areas: (1) airlift; (2) space
operations; (3) bombers; (4) tankers; (5) command and control and
intelligence, surveillance and reconnaissance; (6) unmanned aerial
vehicles; (7) fighter aircraft; and (8) Special Operation Forces and
Combat, Search, and Rescue. The Air Force also considered surge
requirements in its capacity analysis. According to Air Force
officials, surge was defined as the ability to domestically "bed down"
all aircraft, including those currently stationed overseas, as well as
the ability to respond to natural disasters, emergencies, and runway
repairs.[Footnote 74]
Following the collection of the capacity data call, the Air Force
requested that its eight major commands[Footnote 75] and the Air
National Guard estimate each installation's capacity to acquire
additional squadrons, taking into consideration existing conditions,
facilities, additional construction requirements, and operational and
environmental infrastructure.
The capacity analysis incorporated information from the 20-year force
structure plan to serve as a baseline and to further define
requirements in the future. Although this analysis indicated the
ability of bases to bed down additional aircraft, according to Air
Force officials, it did not provide a specific excess capacity
percentage by installation or major command. Accordingly, an overall
capacity analysis report was not made available to us, comparable to
that provided by the other military departments. However Air Force
officials said they considered capacity information in their assessment
of installations. Air Force officials did provide limited capacity
information in their final BRAC report. Table 15 provides excess
capacity percentages that were calculated for two areas.
Table 15: Excess Capacity Identified by the Air Force, by Function:
Function: Flight line and ramp;
Percentage of excess capacity: 25%.
Function: Building and facilities;
Percentage of excess capacity: 14%.
Source: Department of the Air Force.
[End of table]
According to Air Force officials, their recommendations if implemented
are projected to reduce excess capacity by 37 percent for flight line
and ramp space and 75 percent in buildings and facilities.
Military Value Analysis:
In completing its military value data calls, the Air Force evaluated
each of its bases in each of the eight mission categories, regardless
of the base's current use. Military value data analysis was directly
linked to the four DOD military value selection criteria required by
the BRAC process and legislation. As shown in table 16, the Air Force
developed a weighting system for the military value criteria with the
first two criteria having larger weights, or importance, than the
remaining two criteria.
Table 16: Air Force Military Value Criteria Weights:
Figures in percentages.
Military value criteria: 1. The current and future mission capabilities
and the impact on operational readiness of the total force of the
Department of Defense, including the impact on joint warfighting,
training, and readiness;
46%.
Military value criteria: 2. The availability and condition of land,
facilities, and associated airspace (including training areas suitable
for maneuver by ground, naval, or air forces throughout a diversity of
climate and terrain areas and staging areas for the use of the Armed
Forces in homeland defense missions) at both existing and potential
receiving locations;
41%.
Military value criteria: 3. The ability to accommodate contingency,
mobilization, surge, and future total force requirements at both
existing and potential receiving locations to support operations and
training;
10%.
Military value criteria: 4. The cost of operations and the manpower
implications;
3%.
Total: 100%.
Source: DOD and Department of the Air Force.
[End of table]
The Air Force used various military value attributes (characteristics,
factors, etc), metrics (measures), and questions related to each of the
four military value criteria. Key military value attributes included
operating environment, geographic-location factors, key mission
infrastructure, operating areas, mobility/surge, growth potential, and
cost. Other installation-specific attributes included such factors as
electromagnetic spectrum and bandwidth, munitions storage and handling,
runway dimensions, ramp area, space launch, proximity to (and quality
of) airspace and ranges, and geographical factors.
Figure 11 shows how the attributes, metrics, and military value data
questions were linked to the military criteria for the fighter aircraft
mission category.
Figure 11: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of Fighter Aircraft:
[See PDF for image]
[A] The BRAC military value criteria are the first four BRAC selection
criteria.
[B] Military value attributes are characteristics of each criterion.
The Air Force used a total of seven military value attributes.
[C] Military value metrics are measures for the attributes. The Air
Force used a total of 23 military value metrics for the fighter mission
compatibility index.
[D] The Air Force used a total of 23 out of a total of 154 military
value data call questions for the Fighter Mission Compatibility Index.
The Air Force commonly referred to metrics as questions.
[End of figure]
The Air Force followed a similar process for all eight mission
categories. Likewise, each base was evaluated against metrics
associated with each of the eight mission categories, which resulted in
multiple military values for each base. Air Force officials stated that
the resulting military value scores enabled them to determine which
bases were best to retain and which were less desirable. This enabled
them to produce mission compatibility indexes for their bases related
to each of the four military value criteria.[Footnote 76] However, the
Air Force did not develop one composite score for each base across all
eight mission areas, which might have allowed for a clearer distinction
between lower and higher military value rankings. Instead of developing
one composite score, the Air Force established an overall mission
compatibility index score within each of the eight mission areas, which
provided each installation with eight entirely different scores for the
various mission areas. According to Air Force officials, this approach
was used to apply military judgment to select the best combination of
bases to retain.
Air Force Audit Agency's Role in the Process:
During both the capacity and the military value data collection and
analysis processes, the Air Force Audit Agency provided the Air Force
with real-time evaluations of BRAC 2005 policies, procedural controls,
systems, and data to ensure accurate data and analyses support for BRAC
recommendations. One of its primary efforts involved three audits to
verify the Air Force data call responses submitted during the BRAC
process. Although the auditors found errors or inadequate source
documentation, they reported that most discrepancies were subsequently
corrected. In addition to these nationwide audits, the Air Force Audit
Agency produced audit reports on other facets of the BRAC process,
including the Air Force Internal Control Plan, COBRA data, and various
modeling and analysis tools that were used in development of
recommendations.[Footnote 77] The final Air Force Audit Agency reports
on BRAC data concluded that overall the Air Force data were reliable
for the purpose of developing recommendations.
Identification and Assessment of Alternate Scenarios and Selection of
Recommendations:
The Air Force identified over 100 scenarios, which were later reduced
to 42 recommendations.[Footnote 78] The Air Force scenario
teams[Footnote 79] identified potential scenario groups of like weapons
systems, and then the Base Closure Executive Group selected scenarios
for analysis. While the Air Force relied on certified data to identify
proposed closure and realignment recommendations, other factors were
instrumental in guiding decisions for closures and realignments,
including changes in unit sizing, a decreased force structure, the
active and reserve mix and future total force initiatives such as those
discussed in the Expeditionary Air Force White Paper. Toward the end of
the BRAC process, the Air Force eliminated and scaled back several
recommendations because they did not actually result in net savings. In
addition, the Air Force combined several interrelated recommendations
(some that provide savings and some that do not) to present a
consolidated recommendation with savings and a shorter payback period
than would otherwise appear had some recommendations.
The military value data were analyzed by a computer-generated
optimization model called the Air Force cueing tool. This model used
the military value data and the 20-year force structure plan to create
a starting point for Base Closure Executive Group deliberations by
allocating aircraft to the fewest bases while conserving the greatest
military value. This model also included Air Force imperatives. For
example, to ensure unimpeded access to polar and equatorial earth
orbits for U.S. satellites, the Air Force decided that Vandenberg Air
Force Base, California, and Patrick Air Force Base, Florida, must be
retained. Likewise, the Air Force retained Andrews Air Force Base,
Maryland, to provide support to the President of the United States.
According to Air Force officials, the cueing tool results were the
starting point for analysis in allocating its inventory of aircraft.
The model had various limitations, such as its inability to factor the
active/reserve force mix for specific types of aircraft or the
different types of aircraft at an installation. Furthermore, it assumes
that all aircraft are bedded down at bases ranked highest in military
value, which generally were active bases. To address these limitations,
the Base Closure Executive Group relied on military judgment in some
cases to overrule the results of the model to preserve the existing
active/reserve force mix, a ratio expectation to be maintained through
2011.
In reviewing alternatives for BRAC recommendations, the Air Force went
through various iterations of the BRAC recommendations (called second
look, third look, and so forth) in order to provide force structure
alignments that conformed to the Air Force principles and improved
military capability and efficiency, consistent with sound military
judgment. Air Force scenario teams analyzed the results of the
analytical tools, including information to be considered with each
recommendation--for example, force structure reductions from the future
year force structure plan, new missions, military construction
requirements, homeland defense missions, and other areas. Furthermore,
the scenario teams were responsible for identifying any "showstoppers,"
in terms of capacity or environmental characteristics that would make a
recommendation difficult to implement. These consisted of running a
potential recommendation through the COBRA model and developing the
information for selection criteria 6 (economic impact), 7 (community
infrastructure), and 8 (environmental impact) to help identify or
evaluate possible closure and realignment actions.
The majority of the candidate recommendations had various components
derived from using the optimization model; however, a few of the
recommendations did not. For example, a few of the candidate
recommendations involved realigning aircraft from an active base to an
Air National Guard station with a lower military value score in order
to achieve the appropriate mix between active and reserve forces and to
increase the standard squadron size. Further, in some recommendations
Air National Guard aircraft were realigned to other Air National Guard
stations with a lower military value to align common versions of weapon
system types, and for strategic interests.[Footnote 80]
Four other recommendations were not derived from an optimization model
because the model primarily focused on the bedding down of aircraft
rather than specific functional areas, such as repair facilities. These
recommendations involved logistics support centers, standard air
munitions packages (munitions storage), and avionics intermediate
repair and maintenance facilities. Air Force officials told us they had
requested that the Industrial Joint Cross-Service Group consider the
above candidate recommendations in its process, but the group declined
and deferred to the Air Force because it was considering scenarios at a
joint operational level rather than at the installation level. As a
result, Air Force officials told us that they applied either a Mission
Compatibility Index approach to these scenarios in deliberative session
to assess installations for future missions or they recommended certain
functions to follow the placement of aircraft in other Air Force
recommendations.
Recommendations Approved by DOD:
The Air Force recommended closing 10 installations (3 active, 3 Air
Reserve, and 4 Air National Guard bases) and realigning 62 other
installations.[Footnote 81] In total, the Air Force projected its BRAC
recommendations to result in 20-year net present value savings of over
$14 billion--the largest projected savings of any service or Joint
Cross-Service Group--and net annual recurring savings of $1.2 billion.
Table 17 shows the financial aspect of the Air Force recommendations.
Table 17: Financial Aspects of the Air Force's Recommendations:
Fiscal year 2005 constant dollars in millions.
Realign Eielson Air Force Base, AK;
DOD report page: AF-6;
One-time (costs): ($141.4);
Net implementation (costs) or savings[A]: $594.0;
Net annual recurring savings: $229.4;
Payback period: immediate;
20-year net present value savings[B]: $2,780.6.
Close Cannon Air Force Base, NM;
DOD report page: AF-32;
One-time (costs): ($90.1);
Net implementation (costs) or savings[A]: $815.6;
Net annual recurring savings: 200.5;
Payback period: immediate;
20-year net present value savings[B]: $2,706.8.
Realign Pope Air Force Base, NC[C];
DOD report page: AF-35;
One-time (costs): ($218.1);
Net implementation (costs) or savings[A]: $652.5;
Net annual recurring savings: 197.0;
Payback period: immediate;
20-year net present value savings[B]: $2,515.4.
Realign Grand Forks Air Force Base, ND;
DOD report page: AF-37;
One-time (costs): ($131.5);
Net implementation (costs) or savings[A]: $322.5;
Net annual recurring savings: 173.3;
Payback period: 1 year;
20-year net present value savings[B]: $1,982.0.
Close Ellsworth Air Force Base, SD;
DOD report page: AF-43;
One-time (costs): ($299.1);
Net implementation (costs) or savings[A]: $316.4;
Net annual recurring savings: 161.3;
Payback period: 1 year;
20-year net present value savings[B]: $1,853.3.
Realign Mountain Home Air Force Base, ID;
DOD report page: AF-18, 47;
One-time (costs): ($74.2);
Net implementation (costs) or savings[A]: $21.2;
Net annual recurring savings: 37.8;
Payback period: immediate;
20-year net present value savings[B]: $389.0.
Close Otis Air National Guard Base, MA;
DOD report page: AF-25;
One-time (costs): ($103.0);
Net implementation (costs) or savings[A]: $12.2;
Net annual recurring savings: 33.6;
Payback period: 3 years;
20-year net present value savings[B]: $336.1.
Close Onizuka Air Force Station, CA;
DOD report page: AF-12;
One-time (costs): ($123.7);
Net implementation (costs) or savings[A]: ($45.3);
Net annual recurring savings: 25.9;
Payback period: 5 years;
20-year net present value savings[B]: $211.0.
Close Niagara Falls Air Reserve Station, NY;
DOD report page: AF-33;
One-time (costs): ($65.2);
Net implementation (costs) or savings[A]: $5.3;
Net annual recurring savings: 20.1;
Payback period: 2 years;
20-year net present value savings[B]: $199.4.
Realign Robins Air Force Base, GA;
DOD report page: AF-16;
One-time (costs): ($6.7);
Net implementation (costs) or savings[A]: $31.9;
Net annual recurring savings: 15.0;
Payback period: immediate;
20-year net present value savings[B]: $175.1.
Close W.K. Kellogg Air Guard Station, MI;
DOD report page: AF-27;
One-time (costs): ($8.3);
Net implementation (costs) or savings[A]: $46.7;
Net annual recurring savings: 12.7;
Payback period: immediate;
20-year net present value savings[B]: $166.8.
Close Kulis Air Guard Station, AK;
DOD report page: AF-7;
One-time (costs): ($81.4);
Net implementation (costs) or savings[A]: ($20.6 );
Net annual recurring savings: 17.3;
Payback period: 4 years;
20-year net present value savings[B]: $146.7.
Realign New Castle Air Guard Station, DE;
DOD report page: AF-15;
One-time (costs): ($15.5);
Net implementation (costs) or savings[A]: $29.1;
Net annual recurring savings: 9.6;
Payback period: 1 year;
20-year net present value savings[B]: $120.1.
Realign Nashville Air Guard Station, TN;
DOD report page: AF-44;
One-time (costs): ($25.4);
Net implementation (costs) or savings[A]: ($16.7);
Net annual recurring savings: 13.7;
Payback period: 2 years;
20-year net present value savings[B]: $120.0.
Realign Portland Air Guard Station, OR;
DOD report page: AF-41;
One-time (costs): ($85.5);
Net implementation (costs) or savings[A]: ($36.2);
Net annual recurring savings: 14.0;
Payback period: 7 years;
20-year net present value savings[B]: $100.2.
Realign Martin State Air Guard Station, MD;
DOD report page: AF-24;
One-time (costs): ($9.4);
Net implementation (costs) or savings[A]: $13.7;
Net annual recurring savings: 8.7;
Payback period: 1 year;
20-year net present value savings[B]: $97.1.
Close Mansfield-Lahm Air Guard Station, OH;
DOD report page: AF-39;
One-time (costs): ($33.4);
Net implementation (costs) or savings[A]: $3.1;
Net annual recurring savings: 8.7;
Payback period: 3 years;
20-year net present value savings[B]: $86.2.
Realign Hill Air Force Base, UT;
DOD report page: AF-47;
One-time (costs): ($28.2);
Net implementation (costs) or savings[A]: $8.2;
Net annual recurring savings: 8.1;
Payback period: 4 years;
20-year net present value savings[B]: $85.9.
Realign Andrews Air Force Base, MD;
DOD report page: AF-23;
One-time (costs): ($21.7);
Net implementation (costs) or savings[A]: $12.2;
Net annual recurring savings: 7.5;
Payback period: 2 years;
20-year net present value savings[B]: $83.1.
Realign Naval Air Station New Orleans Air Reserve Station, LA;
DOD report page: AF-22;
One-time (costs): ($50.2);
Net implementation (costs) or savings[A]: ($32.5);
Net annual recurring savings: 11.3;
Payback period: 5 years;
20-year net present value savings[B]: $80.7.
Establish Air Force logistics support centers;
DOD report page: AF-53;
One-time (costs): ($9.3);
Net implementation (costs) or savings[A]: $19.2;
Net annual recurring savings: 6.1;
Payback period: 1 year;
20-year net present value savings[B]: $77.0.
Close General Mitchell Air Reserve Station, WI;
DOD report page: AF-52;
One-time (costs): ($38.4);
Net implementation (costs) or savings[A]: ($14.3 );
Net annual recurring savings: 6.5;
Payback period: 5 years;
20-year net present value savings[B]: $50.2.
Realign Lackland Air Force Base, TX;
DOD report page: AF-46;
One-time (costs): ($8.1);
Net implementation (costs) or savings[A]: $4.7;
Net annual recurring savings: 2.9;
Payback period: 2 years;
20-year net present value savings[B]: $32.4.
Realign Bradley Air Guard Station, CT;
DOD report page: AF-14;
One-time (costs): ($3.2);
Net implementation (costs) or savings[A]: $6.1;
Net annual recurring savings: 2.0;
Payback period: 2 years;
20-year net present value savings[B]: $25.2.
Realign Reno-Tahoe Air Guard Station, NV;
DOD report page: AF-31;
One-time (costs): ($22.9);
Net implementation (costs) or savings[A]: ($12.2);
Net annual recurring savings: 3.6;
Payback period: 9 years;
20-year net present value savings[B]: $22.7.
Realign Great Falls Air Guard Station, MT;
DOD report page: AF-30;
One-time (costs): ($9.3);
Net implementation (costs) or savings[A]: $0.7;
Net annual recurring savings: 1.8;
Payback period: 4 years;
20-year net present value savings[B]: $18.1.
Realign March Air Reserve Base, CA;
DOD report page: AF-11;
One-time (costs): ($10.8);
Net implementation (costs) or savings[A]: ($1.9);
Net annual recurring savings: 1.8;
Payback period: 5 years;
20-year net present value savings[B]: $15.5.
Realign Richmond Air Guard Station, VA;
DOD report page: AF-50;
One-time (costs): ($24.2);
Net implementation (costs) or savings[A]: ($11.6);
Net annual recurring savings: 2.5;
Payback period: 10 years;
20-year net present value savings[B]: $13.2.
Realign Hector Air Guard Station, ND;
DOD report page: AF-38;
One-time (costs): ($1.8);
Net implementation (costs) or savings[A]: $3.3;
Net annual recurring savings: 1.0;
Payback period: 2 years;
20-year net present value savings[B]: $12.9.
Realign Fairchild Air Force Base, WA;
DOD report page: AF-51;
One-time (costs): ($6.4);
Net implementation (costs) or savings[A]: ($1.6);
Net annual recurring savings: 1.0;
Payback period: 7 years;
20-year net present value savings[B]: $8.3.
Establish centralized intermediate repair facility-F-15 Avionics
(Langley Air Force Base, VA);
DOD report page: AF-49;
One-time (costs): ($1.8);
Net implementation (costs) or savings[A]: $1.5;
Net annual recurring savings: 0.7;
Payback period: 3 years;
20-year net present value savings[B]: $8.3.
Realign Duluth Air Guard Station, MN;
DOD report page: AF-28;
One-time (costs): ($2.1);
Net implementation (costs) or savings[A]: $0.2;
Net annual recurring savings: 0.8;
Payback period: 5 years;
20-year net present value savings[B]: $7.8.
Establish F100 engine centralized intermediate repair facilities;
DOD report page: AF-55;
One-time (costs): ($9.2);
Net implementation (costs) or savings[A]: ($3.8);
Net annual recurring savings: 1.1;
Payback period: 9 years;
20-year net present value savings[B]: $7.1.
Realign Beale Air Force Base, CA;
DOD report page: AF-10;
One-time (costs): ($45.4);
Net implementation (costs) or savings[A]: ($34.6);
Net annual recurring savings: 3.9;
Payback period: 14 years;
20-year net present value savings[B]: 6.4.
Realign Capital Air Guard Station, IL;
DOD report page: AF-20;
One-time (costs): ($19.9);
Net implementation (costs) or savings[A]: ($13.3);
Net annual recurring savings: 2.0;
Payback period: 13 years;
20-year net present value savings[B]: $6.3.
Realign Ellington Air Guard Station, TX;
DOD report page: AF-45;
One-time (costs): ($1.6);
Net implementation (costs) or savings[A]: $0.1;
Net annual recurring savings: 0.4;
Payback period: 5 years;
20-year net present value savings[B]: $3.6.
Realign Key Field Air Guard Station, MS;
DOD report page: AF-28;
One-time (costs): ($10.7);
Net implementation (costs) or savings[A]: ($6.9);
Net annual recurring savings: 0.9;
Payback period: 13 years;
20-year net present value savings[B]: $2.5.
Realign Schenectady Air Guard Station, NY;
DOD report page: AF-34;
One-time (costs): ($3.5);
Net implementation (costs) or savings[A]: ($3.3);
Net annual recurring savings: 0.6;
Payback period: 8 years;
20-year net present value savings[B]: $2.4.
Realign Fort Smith Air Guard Station, AR;
DOD report page: AF-8;
One-time (costs): ($17.6);
Net implementation (costs) or savings[A]: ($12.4);
Net annual recurring savings: 1.4;
Payback period: 16 years;
20-year net present value savings[B]: $2.0.
Realign Boise Terminal Air Guard Station, ID;
DOD report page: AF-17;
One-time (costs): ($2.5);
Net implementation (costs) or savings[A]: ($1.6);
Net annual recurring savings: 0.3;
Payback period: 8 years;
20-year net present value savings[B]: $1.7.
Realign Springfield-Beckley Air Guard Station, OH;
DOD report page: AF-40;
One-time (costs): ($11.4);
Net implementation (costs) or savings[A]: ($8.4);
Net annual recurring savings: 0.9;
Payback period: 17 years;
20-year net present value savings[B]: $0.7.
Realign Birmingham Air Guard Station, AL;
DOD report page: AF-5;
One-time (costs): ($11.0);
Net implementation (costs) or savings[A]: ($7.7);
Net annual recurring savings: 0.8;
Payback period: 18 years;
20-year net present value savings[B]: $0.5.
Total;
DOD report page:
;
One-time (costs): ($1,883.1);
Net implementation (costs) or savings[A]: $2,635.5;
Net annual recurring savings: $1,248.5;
Payback period:
20-year net present value savings[B]: $14,560.3.
[End of table]
Source: GAO analysis of DOD data.
[A] This represents net costs or savings within the 6-year
implementation period required to implement BRAC recommendations.
[B] DOD used a 2.8 percent discount rate to calculate net present
value.
[C] The Pope Air Force Base recommendation includes the closure of
Pittsburgh Air Reserve Station and the realignment of Yeager Air Guard
Station and Little Rock Air Force Base.
Over 80 percent of the projected 20-year savings are based on the first
5 recommendations shown in table 17, which involve closing two and
realigning three active bases and have payback periods of 1 year or
less. Conversely, the one-time costs of over $1.8 billion to implement
all recommendations are primarily comprised of new military
construction to implement the recommendations. Most of the Air Force's
recommendations involve realignment of Air Guard facilities with
limited savings. For example, the Air Force is proposing to realign
five Air National Guard stations, with payback periods greater than 10
years and $12 million in 20-year savings, with onetime costs of about
$71 million. According to Air Force officials, these proposals were
necessary because the Air Force recommendations are interwoven,
depending on realignment actions from other recommendations. For
example, 72 realignment and closure recommendations involving active
and reserve installations were combined to create 42 candidate
recommendations. At least one segment of all but 3 of the 42 Air Force
recommendations that were combined[Footnote 82] affects the Air Force
Reserve Command or Air National Guard.
Based on our analysis we noted that the majority of the net annual
recurring savings (60 percent) are cost avoidances from military
personnel eliminations. However, eliminations are not expected to
result in reductions to active duty, Air Reserve and Air National Guard
end strengths, limiting savings available for other purposes.
None of the recommendations included in the Air Force's report involve
consolidation or integration of activities or functions with those of
another military service.[Footnote 83] However, the Air Force believes
that its recommendations to realign Pope Air Force Base, North
Carolina, and Eielson Air Force Base, Alaska, and to move A-10 aircraft
to Moody Air Force Base, Georgia, will provide an opportunity for joint
close air support training with Army units stationed at Forts Benning
and Stewart, Georgia. Furthermore, the Air Force's recommendations
support transformation efforts by optimizing (increasing) squadron size
for most fighter and mobility aircraft.[Footnote 84] According to the
Air Force BRAC report, the recommendations maximize warfighting
capability by fundamentally reshaping the service, effectively
consolidating older weapons systems into fewer but larger squadrons,
thus reducing excess infrastructure and improving the operational
effectiveness of major weapons systems. We have previously reported
that the Air Force's could not only reduce infrastructure by increasing
the number of aircraft per fighter squadron but could also save
millions of dollars annually.[Footnote 85]
Issues Identified with Approved Recommendations:
Time did not permit us to assess the operational impact of each
recommendation, particularly where recommendations involve multiple
locations. Nonetheless, we offer a number of broad-based observations
about the proposed recommendations and selected observations on some
individual recommendations. Our analysis of the Air Force
recommendations identified some issues that the BRAC Commission may
wish to consider, such as the projected savings from military personnel
reductions; impact on the Air National Guard, impact on other federal
agencies; and other issues related to the realignments of Pope Air
Force Base, North Carolina; Eielson Air Force Base, Alaska; and Grand
Forks Air Force Base, North Dakota and the closure of Ellsworth Air
Force Base, South Dakota.
Military Personnel Savings:
Our analysis showed that about $732 million, or about 60 percent, of
the projected $1.2 billion net annual recurring savings are based on
savings from eliminating military personnel positions. Initially, the
Air Force counted only military personnel savings that resulted in a
decrease in end strength. However, at the direction of OSD, the Air
Force included savings for all military personnel positions that were
made available through realignment or closure recommendations. The Air
Force was unable to provide us documentation showing at the present
time to what extent each of these positions will be required to support
future missions. According to Air Force officials, they envision that
most active slots will be needed for formal training, and all the Air
Reserve and Air National Guard personnel will be assigned to stressed
career fields and emerging missions. Furthermore, Air Force officials
said that positions will also be reviewed during the Quadrennial
Defense Review, which could decrease end strength. Either way, claiming
such personnel as BRAC savings without reducing end strength does not
provide dollar savings that can be reapplied outside personnel accounts
and could result in the Air Force having to find other sources of
funding for up-front investment costs needed to implement its BRAC
recommendations.
Impact on the Air National Guard and Reserve Components:
At least one segment of all but 3 of the 42 Air Force recommendations
that were combined[Footnote 86] affects the Air Force Reserve Command
or Air National Guard. The Air Force BRAC report lists 7 closures and
35 Air Reserve and Air National Guard realignments.[Footnote 87]
Overall, 68 Reserve Command (12) and Air National Guard (56)
installations were affected by a closure or realignment, or they
received aircraft or missions from these actions. According to Air
Force officials, its BRAC recommendations have resulted in a reduction
of 29 installations with flying missions. Of these reduced
installations with flying missions, over 75 percent, or 22, are from
the Air National Guard. If implemented the BRAC recommendations will
affect over 30 percent of the 70 Air National Guard and 13 Air Reserve
installations with air flying units, respectively. Table 18 shows the
reduction of flying units in the BRAC process by active force, Air
Force Reserve Command, and the Air National Guard.
Table 18: Impact of Air Force BRAC Recommendations on Installations
with Flying Missions, by Component:
Component: Active;
Installations with flying missions: Pre-BRAC: 59;
Installations with flying missions: Post-BRAC: 56;
Change: Number: 3;
Change: Number: 2.
Component: Air Force Reserve;
Installations with flying missions: Pre-BRAC: 13;
Installations with flying missions: Post-BRAC: 9;
Change: Number: 4;
Change: Number: 3.
Component: Air National Guard;
Installations with flying missions: Pre-BRAC: 70;
Installations with flying missions: Post-BRAC: 48;
Change: Number: 22;
Change: Number: 15.
Total;
Installations with flying missions: Pre-BRAC: 142;
Installations with flying missions: Post-BRAC: 113;
Change: Number: 29;
Change: Number: 20.
Source: Department of the Air Force.
[A] All percentage changes were calculated by using the change in
number of installations with air flying units divided by the pre-BRAC
total installation number of 142.
[End of table]
Based on our analysis of COBRA data, we estimate that more than 1,419
positions in the Air Reserve and 5,700 positions in the Air National
Guard will be affected by the proposed recommendations, in terms of
military personnel and civilians eliminated and realigned. In
recommendations affecting active installations, over 26,000 positions
are affected (eliminated and realigned); however, since the Air Force
has combined active and reserve component actions in some
recommendations those positions also include additional Air National
Guard and Air Reserve personnel.[Footnote 88] Also the Air Force
recognizes that in moving Air National Guard and Air Reserve units,
part-time military (commonly referred to as drill) personnel will also
be affected since they will not be moved.[Footnote 89] A significant
portion of the personnel associated with these units must be replaced
at the gaining installation and will require training. At Air National
Guard installations with flying units, over 30 percent have been
recommended for realignment or retirement; many of the personnel
positions associated with the units do not have missions. Air Force
officials said they plan to use these positions for emerging missions
in such areas as homeland security, unmanned aerial vehicles, and
intelligence, which they expect to further refine as part of the
ongoing Quadrennial Defense Review.
Initially, many of the Air Force proposals involving the Air National
Guard and Air Force Reserve with payback periods ranging from 10 to
more than 100 years were stand-alone recommendations. Those
recommendations linked by related operational realignment actions were
grouped together to produce recommendations that had significant
savings and minimized the longer payback periods. We found that this
occurred in the realignment of Lambert-St. Louis International Airport
Air Guard Station, Missouri, which originally had a 63-year payback
period and resulted in a 20-year net present value cost of $22 million.
However, this realignment is now a part of the closure of Otis Air
National Guard Base, Massachusetts, and the realignment of Atlantic
City Air Guard Station, New Jersey because of related operational
realignment actions. The current combined recommendation results in a
20-year net present value savings of $336 million and a 3-year payback
period. Figure 12 shows the various BRAC actions in this
recommendation. For example, 18 F-15 fighter aircraft are realigned
from Otis Air National Guard Base and Lambert-St. Louis Air Guard
Station to Atlantic City Air Guard Station. Furthermore, all three Air
Guard Stations also realign other aircraft to three separate
installations, Nellis Air Force Base, Nevada; Burlington Air Guard
Station, Vermont; and Jacksonville Air Guard Station, Florida.
Figure 12: Realignment of Fighter Aircraft at Lambert-St. Louis Air
Guard Station and Otis Air National Guard Base:
[See PDF for image]
[End of figure]
Finally, questions have been raised by various state officials whether
the Secretary of Defense is authorized to close or realign Air National
Guard bases without the consent of the state governor. DOD's Office of
General Counsel has not issued a legal opinion on this issue. According
to an Air Force official, as of the date of this report, there have
been no legal challenges brought against DOD regarding this issue.
Impact on the Coast Guard:
The Air Force recommendation to close Otis Air National Guard Base
could impact the U.S. Coast Guard.[Footnote 90] While the Air Force
officials recognized the Coast Guard could be affected if the base was
closed, their cost and savings analysis did not consider any costs that
could be incurred by the Coast Guard. Air Force officials stated they
didn't have access to credible cost data during the BRAC process since
cost estimates would have been speculative; the Air Force could not
assume the final disposition of the facility and how much, if any, of
the facility the Coast Guard would opt to retain. The Coast Guard is in
the process of developing potential basing alternatives, to include
costs impacts, for each affected location. Subsequent to the
recommendations being made public, the Coast Guard estimated that they
would incur about $17 million in additional annual operating costs to
remain at Otis Air National Guard Base.
Realignment of Selected Active Bases:
The realignment of Pope Air Force Base[Footnote 91] involves the
transfer of 100 percent of the acres and facilities to the Army to
become part of Fort Bragg, with a C-130 active/reserve associate unit
remaining to support the Army. Our analysis indicates that there is a
significant difference between the savings claimed by the Air Force and
the costs projected by the Army regarding base operations support,
recapitalization, and sustainment for facilities on Pope Air Force
Base. For example, the Air Force claimed total net annual recurring
savings of about $36 million for not providing base operations support
and recapitalization and sustainment of facilities on Pope Air Force
Base. However, the Army estimated total annual recurring costs for
these areas to be about $19.5 million. This estimated cost comprises
over $13 million from the Army as well as over $5.5 million from the
Air Force to remain as tenant at Fort Bragg. According to Army
officials, their estimated costs included taking ownership for all
facilities on Pope Air Force Base.
The Air Force is also proposing to realign Eielson Air Force Base by
moving all active duty units, leaving the Air National Guard units, and
hiring contractors to provide base operating support and maintenance
and repair of the facilities. The Air Force projects this action would
produce a 20-year net present value savings of $2.8 billion, the most
of any Air Force recommendation. Air Force officials said the decision
to realign Eielson was made because of the high cost of operating the
base and its value as major training site. The officials noted that the
realignment will enable the Air Force to expand an annual training
exercise as well as provide opportunities for increase use of the
training area by other Air Force units. However, we have some question
about the facilities that need to be retained to support the training
mission and Air National Guard units. While the Air Force plans to give
up the base family housing, it appears that all other base facilities
would be retained. For example, Air Force COBRA data indicates that
there will be no reduction in the square feet of facilities. The data
also indicates that 64 percent of the facilities will be sustained at
current funding.
The Air Force proposed to close Grand Forks Air Force Base[Footnote 92]
but this was changed to a realignment by the Infrastructure Executive
Council a week before the recommendations were finalized within the
department. As a result, the projected savings were significantly
reduced, as shown in table 19.
Table 19: Comparison of Alternatives to Closing or Realigning Grand
Forks Air Force Base:
Fiscal year 2005 constant dollars in millions.
One-time costs;
Closure recommendation: ($128.6);
Realignment recommendation: ($131.5);
Difference: ($2.9).
6-year net savings;
Closure recommendation: $490.0;
Realignment recommendation: $322.5;
Difference: $167.5.
Net implementation (costs) or savings;
Closure recommendation: $226.6;
Realignment recommendation: $173.3;
Difference: $53.3.
Payback period;
Closure recommendation: immediate;
Realignment recommendation: 1 year;
Difference: 1 year.
20-year net present value savings;
Closure recommendation: $2,656.3;
Realignment recommendation: $1,982.0;
Difference: $674.3.
Source: GAO analysis of Air Force data.
[End of table]
The decision to realign rather than close the base did not affect the
need to move current aircraft and associated personnel to other bases
to achieve the active and reserve mix. According to the Air Force BRAC
report, this change to a realignment was based on military judgment to
keep a strategic presence in the north central United States and on the
fact that Grand Forks Air Force Base ranked high for acquiring a
possible unmanned aerial vehicle mission.[Footnote 93] Even though
Grand Forks Air Force Base was retained for strategic reasons, Minot
Air Force Base is also located in North Dakota and is not affected by
any BRAC recommendation. Furthermore, Minot Air Force Base scored only
3.4 points less than Grand Forks Air Force Base in the unmanned aerial
vehicle mission area.
Closure of Ellsworth Air Force Base:
The Air Force is proposing to close Ellsworth Air Force Base, South
Dakota, and move its 24 B-1 bomber aircraft to Dyess Air Force Base,
Texas to achieve operational efficiencies at one location. Ellsworth
Air Force Base ranked lower in the military value than Dyess Air Force
Base. In the 1995 BRAC round,[Footnote 94] the Air Force considered but
chose not to close Ellsworth Air Force Base out of concern over placing
all B-1 aircraft at a single location. In contrast, one of the Air
Force principles which guided the BRAC 2005 process emphasized
consolidating or co-locating legacy fleets such as the B-1 aircraft.
Air Force officials stated that they no longer had concerns about
consolidating the B-1 fleet in one location because it does not have
the same operational mission requirements it had 10 years ago.
[End of section]
Appendix VI: Education and Training Joint Cross-Service Group Selection
Process and Recommendations:
The Education and Training Joint Cross-Service Group followed the
common analytical framework established by the Office of the Secretary
of Defense (OSD) for reviewing its functions and facilities. The group
produced a relatively small number of recommendations (nine) compared
with the amount of excess capacity it identified. The group reported
that the Infrastructure Steering Group (ISG) or the Infrastructure
Executive Council (IEC) had each disapproved two recommendations for
various reasons, and four recommendations were rolled into military
department recommendations and are discussed in appendixes related to
these groups. The group's recommendations are projected to produce $1.3
billion in net present value savings over a 20-year period. For these
recommendations, the length of time required for the savings to offset
closure costs varied widely, with two recommendations expected to take
just 1 year, two other recommendations requiring 13 and 16 years,
respectively, and one never having any payback. We identified issues
regarding the projected savings and extended payback periods with some
recommendations that may warrant further attention by the BRAC
Commission. The DOD Inspector General and service audit agencies, which
performed audits of the data used in the process, concluded that the
data were sufficiently reliable for use during the BRAC process.
Organization and Focus:
The overarching goal of the Education and Training Joint Cross-Service
Group was to pursue those educational and training economies and
efficiencies that enhance readiness and promote academic synergies for
more joint or interservice education. The group was chaired by the
Principal Deputy Under Secretary of Defense (Personnel and Readiness),
with senior-level members from Air Force Manpower and Reserve Affairs,
Marine Corp Training and Education Command, Army and Naval Personnel,
and the Joint Staff. This cross-service group was organized into four
subgroups,[Footnote 95] focusing on (1) flight training, (2)
specialized skill training, (3) professional development education, and
(4) ranges.
The group identified five principles that were used to provide focus to
its work:
* Advance jointness: Declare jointness paramount for specific
functions. Establish Joint National Training Capability.
* Achieve synergy: Jointly construct, co-locate or put in close
proximity multiple functions that are mutually supportive. Increase
cross-functional use of training and testing ranges.
* Capitalize on technology: Leverage distance learning capability to
significantly reduce residential requirements.
* Exploit best practices: Establish centers of excellence. Outsource to
alternative providers.
* Minimize redundancy: Identify common functional areas and eliminate
duplication, reduce or avoid costs, standardize instruction, and
increase efficiency.
The organizational structure and the above guiding principles provided
a framework to evaluate the potential of a broad series of
transformational options to improve DOD education and training.
Framework for Analysis:
Capacity and military value analysis became the starting point for the
group's analyses. The DOD Inspector General and service audit agencies
performed an important role in ensuring the accuracy of data used in
these analyses through selective audits of data gathered at various
locations.
Capacity Analysis:
To form the basis for its analyses, the group developed metrics in each
of the functional areas to measure capacity and subsequently collected
certified data linked to these metrics from various defense activities
whose missions resided within these categories. Each subgroup developed
metrics to analyze capacity and to compare the various functions. The
major standards used by each subgroup are described below:
* For undergraduate fixed and rotary flight training, runway and
airspace capacity were the primary metrics used to analyze capacity.
Runway capacity for fixed wing aircraft was calculated using Federal
Aviation Administration standards to define the number of runway
operations that could be conducted during daylight hours for 244
training days, at 12 hours per day. This approach accounted for weather
conditions, the number and configuration of runways, the mix of
aircraft, and the percentage of touchdown/takeoff operations. Other
metrics included the amount of ramp (apron) space and ground-training
facilities, such as classrooms and simulators.
* For professional development education, capacity was based on
classroom equivalent hours available on a 6-hour training day basis for
244 days a year. Classroom equivalent hours represent the number of 1-
hour classes (15 students per class) that can be held in designated
facilities, and they are based on available classroom space and
instructor office space.
* For specialized skill training, capacity was measured by the student
population that can be sustained by the number of available dormitory
rooms, dining facilities, and classrooms. This figure was based on an 8-
hour training day for 244 days per year.
* For ranges, capacity was based on the volume and time for training
and open air testing at ground, air, and sea levels.
Each subgroup focused its capacity analysis on the existing capability
to perform specific functions. Surge requirements, where applicable,
were determined by military judgment. Excess capacity was defined as
current capacity less current usage plus surge capacity. As seen in
table 20, significant excess capacity was identified across all
education and training functions except for the ranges subgroup.
Table 20: Excess Capacity Identified by the Education and Training
Joint Cross-Service Group:
Subgroup/function: Flight training; Undergraduate fixed wing:
Capacity metric: Runway;
Percentage of excess capacity (shortage): 45%.
Capacity metric: Airspace;
Percentage of excess capacity (shortage): 51%.
Capacity metric: Ramp space;
Percentage of excess capacity (shortage): 23%.
Capacity metric: Classrooms;
Percentage of excess capacity (shortage): 62%.
Capacity metric: Simulator;
Percentage of excess capacity (shortage): 48.
Subgroup/function: Undergraduate rotary wing:
Capacity metric: Runway;
Percentage of excess capacity (shortage): 76%.
Capacity metric: Ramp space;
Percentage of excess capacity (shortage): 52%.
Capacity metric: Classrooms;
Percentage of excess capacity (shortage): 73%.
Capacity metric: Simulator;
Percentage of excess capacity (shortage): 71%.
Subgroup/function: Undergraduate navigator/naval flight officer:
Capacity metric: Runway;
Percentage of excess capacity (shortage): 57%.
Capacity metric: Airspace;
Percentage of excess capacity (shortage): 35%.
Capacity metric: Ramp space;
Percentage of excess capacity (shortage): 48%.
Capacity metric: Classrooms;
Percentage of excess capacity (shortage): 84%.
Capacity metric: Simulator;
Percentage of excess capacity (shortage): 55%.
Subgroup/function: Professional development education:
Capacity metric: Classroom equivalent hours;
Percentage of excess capacity (shortage): 58%.
Subgroup/function: Specialized skill training:
Capacity metric: Dormitory rooms;
Percentage of excess capacity (shortage): 10%.
Capacity metric: Dining facilities;
Percentage of excess capacity (shortage): (45%).
Capacity metric: Classrooms;
Percentage of excess capacity (shortage): 42%.
Subgroup/function: Ranges: Training:
Capacity metric: Ground acreage;
Percentage of excess capacity (shortage): 0%.
Capacity metric: Air nautical miles;
Percentage of excess capacity (shortage): 0%.
Capacity metric: Sea nautical miles;
Percentage of excess capacity (shortage): 28%.
Subgroup/function: Ranges: Test and evaluation:
Capacity metric: Open air testing;
Percentage of excess capacity (shortage): 9%.
Source: Education and Training Joint Cross-Service Group.
[End of table]
The percentage of excess capacity includes consideration of surge
requirements for all functions except professional development
education.[Footnote 96] According to service officials, in the event of
a mobilization, postgraduate educational institutions and facilities
would cease to operate and the students would revert back to their
warfighting duties. The surge requirements for the remaining functions
were based on military judgment. For example, the flight and
specialized skill training subgroups used a 20 percent surge factor
based on a review of current planning documents and military judgment.
Likewise, a 25 percent surge factor was used for training ranges and a
10 percent factor for test and evaluation ranges, based on military
judgment. According to service officials, a higher surge factor was
used for training ranges to meet anticipated training needs for
contingencies and mobilization, while test and evaluation are more
measured and predictable and less likely to generate large surge loads
on test and evaluation missions.
The group did not analyze the extent to which its proposed
recommendations would reduce excess capacity across all education and
training functions. Nonetheless, the Air Force estimated that the
recommendation to consolidate undergraduate pilot training would reduce
excess capacity by 2 percent. At the same time, the excess capacity
identified will remain in undergraduate rotary wing training because
the Navy could not agree on a scenario to consolidate training. Since
there were no recommendations involving training ranges, there was no
reduction in excess capacity in the sea and open air testing areas.
Military Value Analysis:
Each subgroup developed military value scoring plans to analyze and
rank each training facility using DOD's four military value selection
criteria. The subgroups assigned weighted values to each of the four
criteria based on relative importance in assessing the military value
of a site under each subgroup and related functions. Table 21 shows the
weights for each subgroup.
Table 21: Education and Training Joint Cross-Service Group Military
Value Criteria Weights:
Figures in percentages.
Military value criteria: 1. The current and future mission capabilities
and the impact on operational readiness of the total force of the
Department of Defense, including the impact on joint warfighting,
training, and readiness;
Flight training: 40%;
Specialized skill training: 44%;
Professional development education: 40%;
Ranges: 25%.
Military value criteria: 2. The availability and condition of land,
facilities, and associated airspace (including training areas suitable
for maneuver by ground, naval, or air forces throughout a diversity of
climate and terrain areas and staging areas for the use of the Armed
Forces in homeland defense missions) at both existing and potential
receiving locations;
Flight training: 35%;
Specialized skill training: 32%;
Professional development education: 25%;
Ranges: 50%.
Military value criteria: 3. The ability to accommodate contingency,
mobilization, surge, and future total force requirements at both
existing and potential receiving locations to support operations and
training;
Flight training: 5%;
Specialized skill training: 9%;
Professional development education: 10%;
Ranges: 15%.
Military value criteria: 4. The cost of operations and the manpower
implications;
Flight training: 20%;
Specialized skill training: 15%;
Professional development education: 25%;
Ranges: 10%.
Total;
Flight training: 100%;
Specialized skill training: 100%;
Professional development education: 100%;
Ranges: 100%.
Source: DOD and Education and Training Joint Cross-Service Group.
Note: The system of weights provided a basis for assigning relative
value to data collected and tabulated across each military value
dimension.
[End of table]
Some key assumptions used by the subgroups in developing scoring plans
for military value include the following:
* Installations with larger capacities are of comparatively greater
military value for flight training and specialized skill training.
* Managed training areas (particularly airspace) would be extremely
hard to reconstitute if lost due to the BRAC process.
* Existing service qualitative training requirements must be
maintained.
* Retain unique, one-of-a-kind assets or capabilities.
Attributes varied by subgroup. For example, the flight training
subgroup identified six attributes that included airfield capacity,
weather, environmental constraints (air quality, noise abatement, and
encroachment), quality of life, managed training areas, and ground
training facilities. The professional development subgroup applied
location (access to senior political and military decision makers),
educational output, facilities, educational staff, and quality of life.
The specialized skill training subgroup attributes included location,
quality of life issues, training facilities/resources (number of
classrooms and available housing), support for other missions, training
mission/throughput, and environmental constraints/expansion potential.
Finally, the attributes for the ranges subgroup included personnel
(experience and education), workload, physical plant (available space
and range features), synergy with other ranges, and encroachment.
Figure 13 gives an example of how the flight training subgroup was
linked to the military value criteria.
Figure 13: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of Flight Training:
[See PDF for image]
[A] The BRAC military value criteria are the first four BRAC selection
criteria.
[B] Military value attributes are characteristics of each criterion.
The flight training subgroup used a total of six military value
attributes.
[C] Military value metrics are measures for the attributes. The flight
training subgroup used a total of 22 military value metrics.
[D] The flight training subgroup used a total of 70 data call
questions.
[End of figure]
The specialized skill training, professional development education, and
ranges subgroups used similar approaches of attributes, metrics, and
data call questions to link analysis back to the military value
criteria.
DOD Inspector General's and Service Audit Agencies' Roles in the
Process:
The DOD Inspector General and service audit agencies reviewed the data
and processes used by each subgroup to develop their recommendations.
The overall objective was to evaluate the validity, integrity, and
documentation of the data used by the subgroups. The DOD Inspector
General and service audit agencies used real-time audit coverage of
data collection and analyses processes to ensure that the data used in
the Education and Training Joint Cross-Service Group capacity analysis
and military value analysis were reliable and certified. Through
extensive audits of the data collected by each subgroup from field
activities during the process, the Inspector General and service audit
agencies notified the group about identified data discrepancies for the
purpose of follow-on corrective action. While the process for
validating data was quite lengthy and challenging, the Inspector
General and the service audit agencies ultimately determined the
education and training-related data to be sufficiently reliable for use
in the BRAC process once the subgroups made corrections to all the
discrepancies.
Identification and Assessment of Alternate Scenarios and Selection of
Recommendations:
Although corrections were later made, the group did not have accurate
and complete capacity and military value data when it started
developing potential closure and realignment scenarios, and therefore,
it had to rely on incomplete data, military judgment, and
transformation options[Footnote 97] in developing initial scenarios for
consideration. However, certified capacity and military value data and
results of COBRA analyses were subsequently used to support the group's
final candidate recommendations. The group initially identified 64
scenarios and selected 17 candidate recommendations that were forwarded
to the ISG. Four of the recommendations were rejected by the ISG and
IEC and 4 of the group's recommendations were integrated into military
service recommendations. Ultimately, 9 recommendations were approved by
the IEC.
Generally, scenarios were eliminated because they were alternatives to
a recommendation that was selected or because the services objected to
the scenario and the group leadership decided to delete it. For
example, the professional development education subgroup developed
three scenarios to streamline graduate education courses--two to
consolidate these functions at existing military facilities and another
to obtain graduate-level education at civilian colleges and
universities. The group selected the privatization option because of
the significant savings; however, it was rejected by the IEC, as
discussed later. The professional development education subgroup also
developed nine scenarios to realign the senior-level education courses
provided by the service war colleges. The group elected to relocate the
service war colleges under the National Defense University as the "best
choice" option because it establishes a joint strategic center of
excellence in the National Capitol Region. However, the IEC rejected
this option, as discussed later. Finally, the flight subgroup developed
eight alternatives to consolidate undergraduate pilot training.
However, the Navy and the Air Force objected to these scenarios because
they believed they would result in too much disruption to the pilot
production pipeline.
The flight training subgroup was the only subgroup that used an
optimization model in its scenario analysis. The subgroup used it to
identify potential locations to consolidate undergraduate fixed wing
pilot training functions among 11 installations. According to flight
subgroup officials, the model was not used for rotary wing pilot
training because there are only two locations where this training is
conducted. Likewise, they noted that it was not used to select sites
for the Joint Strike Fighter and Unmanned Aerial Vehicle training
because there were limited sites selected for this training. Officials
from the other three subgroups stated they did not use the model
because of the limited number of facilities or functions reviewed. For
example, the professional development education subgroup compared from
two to six locations within each scenario, so the team manually
developed scenarios by maximizing military value and capitalizing on
excess capacity.
Recommendations Approved by DOD:
The group estimated that its recommendations will produce $1.3 billion
in 20-year savings and $236 million in net annual recurring savings.
Table 22 provides a summary of the financial aspects of the group's
recommendations, all of which are realignment actions.
Table 22: Financial Aspects of the Education and Training Joint Cross-
Service Group's Recommendations:
Fiscal year 2005 constant dollars in millions.
Recommended actions: Realignment to establish Combat Service Support
Center at Fort Lee;
DOD report page: E&T-6;
One-time (costs): ($754.0);
Net implementation (costs) or savings: $352.4;
Net annual recurring (costs) or savings: $131.8;
Payback period[A]: (years): 6;
20-year net present value (costs) or savings[B]: $934.2.
Recommended actions: Realignment to relocate Air Defense Artillery
Center and School to Fort Sill;
DOD report page: E&T-12;
One-time (costs): ($247.0);
Net implementation (costs) or savings: ($93.0);
Net annual recurring (costs) or savings: $42.6;
Payback period[A]: (years): 6;
20-year net present value (costs) or savings[B]: $319.1.
Recommended actions: Realignment to establish Joint Strike Fighter
initial joint training site at Eglin Air Force Base;
DOD report page: E&T-10;
One-time (costs): ($199.1);
Net implementation (costs) or savings: ($209.6);
Net annual recurring (costs) or savings: ($3.3);
Payback period[A]: (years): never;
20-year net present value (costs) or savings[B]: ($226.3).
Recommended actions: Realignment of various installations to
consolidate undergraduate pilot and navigator training;
DOD report page: E&T-14;
One-time (costs): ($71.7);
Net implementation (costs) or savings: ($1.6);
Net annual recurring (costs) or savings: $18.3;
Payback period[A]: (years): 4;
20-year net present value (costs) or savings[B]: $174.2.
Recommended actions: Realignment to relocate Aviation Logistics School
to Fort Rucker;
DOD report page: E&T-5;
One-time (costs): ($492.3);
Net implementation (costs) or savings: ($348.1);
Net annual recurring (costs) or savings: $42.9;
Payback period[A]: (years): 13;
20-year net present value (costs) or savings[B]: $77.4.
Recommended actions: Realignment to establish Joint Center of
Excellence for consolidated transportation management training at Fort
Lee;
DOD report page: E&T-7;
One-time (costs): ($1.5);
Net implementation (costs) or savings: ($5.8);
Net annual recurring (costs) or savings: $1.3;
Payback period[A]: (years): 1;
20-year net present value (costs) or savings[B]: $18.0.
Recommended actions: Realignment to establish Joint Center of
Excellence for culinary training at Fort Lee;
DOD report page: E&T-8;
One-time (costs): ($5.4);
Net implementation (costs) or savings: ($2.6);
Net annual recurring (costs) or savings: $1.4;
Payback period[A]: (years): 2;
20-year net present value (costs) or savings[B]: $15.7.
Recommended actions: Realignment to establish Joint Center of
Excellence for religious training and education at Fort Jackson;
DOD report page: E&T-9;
One-time (costs): ($1.0);
Net implementation (costs) or savings: $4.0;
Net annual recurring (costs) or savings: $0.8;
Payback period[A]: (years): 1;
20-year net present value (costs) or savings[B]: $11.9.
Recommended actions: Realignment to relocate Army Prime Power School
training to Fort Leonard Wood;
DOD report page: E&T-13;
One-time (costs): ($6.0);
Net implementation (costs) or savings: ($3.9);
Net annual recurring (costs) or savings: $0.5;
Payback period[A]: (years): 16;
20-year net present value (costs) or savings[B]: $0.8.
Total;
One-time (costs): ($1,778);
Net implementation (costs) or savings: ($308.2);
Net annual recurring (costs) or savings: $236.3;
20-year net present value (costs) or savings[B]: $1,325.
Source: GAO analysis of DOD data.
[A] Payback period refers to the length of time required for the
savings to offset closure costs.
[B] DOD used a 2.8 percent discount rate to calculate net present
value.
[End of table]
Our analysis indicates that $1.3 billion, or over 95 percent, of the
group's projected 20-year savings results from two recommendations that
involve only the Army--the combat service support center and the air
defense artillery center. The greater part of the projected savings
from these two recommendations is based on military personnel
reductions.
While five of the nine recommendations would foster jointness, they
have limited projected savings. For example, the three recommendations
that would establish joint centers of excellence for training
(culinary, transportation management, and religious studies) are
projected to produce only $45.6 million, or less than 1 percent, of the
projected 20-year savings. Furthermore, the recommendation to
consolidate the Joint Strike Fighter training has a payback period of
never and a 20-year net present value cost of $226 million.
Issues Identified with Approved Recommendations:
Time did not permit us to assess the operational impact of each of the
Education and Training Joint Cross-Service group's recommendations,
particularly where operations proposed for consolidation extend across
multiple locations outside of a single geographic area. While available
data supporting the recommendations suggest that their implementation
should provide for more efficient operations within DOD, the BRAC
Commission may wish to consider the basis for the group's assumptions
about military personnel reductions, because these have a significant
impact on the recommendations' annual recurring savings and the
potential benefits in relation to the investment costs for
recommendations with longer payback periods.
Military Personnel Reductions:
Significant portions of the savings in three recommendations--combat
service support, air defense, and aviation logistics--are related to
military personnel reductions. These recommendations represent $217
million, or 92 percent of the Education and Training Joint Cross-
Service Group's projected net annual recurring savings. Our analysis
indicates that about $174 million of the net annual recurring savings
is based on eliminating over 2,000 military positions within the Army.
However, the Army does not plan to reduce its end strength by 2,000 in
implementing these actions. These projected revenues do not represent
dollar savings that can be readily reallocated to other accounts and
applied to other priorities such as modernization, an area typically
cited as a potential beneficiary of BRAC savings. Our analysis shows
that without the savings from the military personnel reductions, the
payback for the combat service support recommendation increases to 35
years, and for both the air defense and aviation logistics
recommendations there would be no payback.
Extended Payback Periods:
The group has proposed one recommendation that has no expected payback
period and two others that have payback periods that exceed 10 years,
far longer than the average payback typically associated with
recommendations in the 1995 BRAC round. The recommendation to establish
an integrated training center for the Joint Strike Fighter at Eglin Air
Force Base, Florida, has no expected payback period, one-time cost of
$199 million ($168 million is for military construction), and annual
recurring cost of $3.3 million. This recommendation calls for the
realignment of nearly 800 military positions--675 maintenance and 115
pilot--from five military installations to Eglin Air Force Base to
train entry-level aviators and maintenance technicians from the Navy,
Marine Corps, and Air Force in how to operate and maintain the new
Joint Strike Fighter aircraft when produced and deployed. According to
the chairman of the flight training subgroup, the recommendation does
not provide the opportunity to generate savings through the
consolidation and alignment of similar personnel because it is a new
mission. However, this recommendation would establish a baseline
program in a consolidated/joint school with a curriculum that brings a
joint perspective to the learning process.
The two recommendations with payback periods greater than 10 years
affect the Army. For example, the recommendation to relocate the Army
Prime Power School from Fort Belvoir, Virginia to Fort Leonard Wood,
Missouri, has a 16-year payback period, onetime cost of $6 million, and
a 20-year net present value savings of less than $1 million. According
to the DOD BRAC report, implementation of this recommendation
consolidates engineer courses at Fort Leonard Wood, since the common-
core phase of engineer courses are already taught at Fort Leonard Wood.
Likewise, the recommendation to realign Fort Eustis, Virginia by
relocating the Aviation Logistics School and consolidating it with the
Aviation Center and School at Fort Rucker, Alabama has a 13-year
payback period, one-time cost of $492.3 million, and a 20-year net
present value savings of only $77.4 million. According to the DOD BRAC
report, consolidating aviation logistics training with the Aviation
Center and School fosters consistency, standardization, and training
proficiency.
Proposals Eliminated from Consideration:
The proposed recommendations do little to reduce the significant excess
capacity (see table 20) that was identified in undergraduate pilot
training for both fixed and rotary wing aircraft. The Education and
Training Joint Cross-Service group identified several scenarios to
consolidate undergraduate pilot training that could have enabled some
base closures, but the group was unable to get the military services to
agree to a joint solution. As a result, the Air Force made a proposal
to realign its undergraduate pilot training and consolidate its
navigator training with the Navy, which DOD adopted. However, the
approved recommendation did not include rotary wing flight training.
According to the chairman of the flight training subgroup, the capacity
and military value analysis clearly showed that sufficient space is
available at Fort Rucker for the Navy undergraduate rotary wing program
to relocate from Naval Air Station Whiting Field, Florida, to Fort
Rucker with limited renovation or military construction. However, the
chairman noted that his group could not get the Navy to agree to the
consolidation because of the Navy's concerns over how such actions
would affect other training schedules, so it was not pursued.
The Education and Training Joint Cross-Service group also developed a
proposal to privatize graduate education that was conducted at the
Naval Postgraduate School at Monterey, California, and the Air Force
Institute of Technology at Wright-Patterson Air Force Base, Ohio. The
group estimated that the proposal would produce $14 million in 20-year
savings, with payback in 13 years, and enable the closure of the
Monterey location. However, the IEC removed this recommendation late in
the process because they believed that relying on the private sector to
fulfill this requirement is too risky. According to the Navy's Special
Assistant for BRAC, the Chief of Naval Operations did not want to lose
the synergy and interaction between U.S. and foreign students who
attended the postgraduate school, and there were questions over whether
all graduate-level courses would be available at civilian institutions.
The group also developed a recommendation to consolidate all the
military services' senior war colleges at Fort McNair, Washington,
D.C., making them one college of the National Defense University. The
group estimated that the proposal would produce $213 million in 20-year
savings, with payback in 2 years. All of the military services voiced
concerns about this recommendation. The Air Force believed that this
recommendation would significantly degrade its Center of Excellence for
Professional Military Education that includes extensive curriculum for
air centric studies located at Maxwell Air Force Base, Alabama. The
Navy believed that the existing system already has joint educational
forums to address executive-level interchange, and it is unclear what
would be gained by creating a single senior war college. Finally, the
Army opposed the recommendation because it would move senior leaders
and their families to the National Capital Region for 10 months. Based
on the services' concerns, the IEC rejected the proposal. However, the
group, with the Army's concurrence, developed a recommendation to move
the Army War College, Pennsylvania, to Fort Leavenworth, Kansas, and
consolidate it with the Army Command and General Staff College at a
single location. This proposal would have enabled the closure of
Carlisle Barracks in Pennsylvania, with projected 20-year savings of
$555 million and a 2-year payback period. However, the IEC rejected
this proposal because it wanted to maintain the proximity to
Washington, D.C. that provides access to key national and international
policy makers as well as senior military and civilian leaders.
Finally, the group developed eight scenarios to promote joint
management of the military services' training ranges. These options
included utilizing a joint national urban operations training center
and establishing three joint regional range coordination centers. The
group ultimately proposed one recommendation to establish three
regional joint range coordination centers, which it projected would
have a 20-year cost of $138 million and no payback. The ISG rejected
this recommendation because it deals with a program action as opposed
to a BRAC-related issue.
[End of section]
Appendix VII: Headquarters and Support Activities Joint Cross-Service
Group Selection Process and Recommendations:
The Headquarters and Support Activities Joint Cross-Service Group
followed the common analytical framework established by the Office of
the Secretary of Defense (OSD) for reviewing its functions and
facilities. The group produced 21 recommendations, each of which
resulted in multiple closures or realignments of activities, mostly
from leased space onto military bases intended to consolidate commands,
reduce costs, and enhance force protection. Nine other recommendations
were referred to other joint cross-service groups or military services
for inclusion in their reports. The group's 21 recommendations are
projected to realize $9.5 billion in net present value savings over 20
years. The payback period, or length of time required for the savings
to offset closure costs for the recommendations discussed here, varied
widely, from immediate to up to 16 years. We have identified some
issues that suggest uncertainty about the level of savings likely to be
realized, which the BRAC Commission may want to consider in its
analysis of the proposed recommendations. The DOD Inspector General and
service audit agencies, which performed audits of the data, concluded
that the data were sufficiently reliable for use during the BRAC
process, but did raise issues of concern impacting some
recommendations.
Organization and Focus:
The Headquarters and Support Activities Joint Cross-Service Group
comprised six senior-level principal members, representing each
service, the Office of the Secretary of Defense, and the Joint Chiefs
of Staff. The group was chaired by the Army Assistant Deputy Chief of
Staff for Programs, and principal members included the Commandant,
Naval District Washington; the Marine Corps Assistant Deputy Commandant
for Manpower and Reserve Affairs; the Administrative Assistant to the
Secretary of the Air Force; the Office of the Secretary of Defense
Deputy Director for Administration and Management; and the Chief of the
Forces Division, Joint Staff.[Footnote 98] The group analyzed common
headquarters-, administration-, and business-related functions across
DOD, covering the military services, and defense agencies and
activities. The group's objectives were to:
* improve jointness;
* eliminate redundancy, duplication, and excess capacity;
* enhance force protection;
* utilize best business practices;
* increase effectiveness, efficiency, and interoperability; and:
* reduce costs.
Framework for Analysis:
The group organized itself into three subgroups: (1) major
administrative and headquarters activities, (2) geographic clusters and
functional, and (3) mobilization. The major administrative and
headquarters activities subgroup focus included headquarters activities
in leased and DOD-owned space within and outside a 100-mile radius of
the Pentagon, combatant, service component, and supporting commands,
and reserve and recruiting headquarters. The geographic clusters and
functional subgroup examined installation management within geographic
clusters,[Footnote 99] Defense Finance and Accounting Services
headquarters and field offices, correctional facilities, and civilian
and military personnel centers. The mobilization subgroup looked at the
potential for joint mobilization sites. Capacity analysis identified
the current inventory of administrative space, while the military value
analysis became the starting point for developing recommendations as
they applied to the four military value selection criteria. The DOD
Inspector General and service audit agencies performed an important
role in ensuring the accuracy of data used in these analyses through
extensive audits of data gathered at various locations.
Capacity Analysis:
To form the basis for its analyses, the group developed metrics in each
of the functional areas to measure capacity and subsequently collected
certified data from the military services and defense agencies and
activities. In most cases, the group used a single metric, a standard
factor of 200 gross square feet per person in analyzing existing
administrative space requirements.[Footnote 100] The group also used
fiscal year 2003 inmate population and current and maximum operational
capacities for correctional facilities, and it used fiscal year 2004
personnel processing numbers and peak processing capacities at military
installations serving as reserve component mobilization sites to
estimate mobilization excess capacity figures.
The capacity analysis identified excess capacity across all functions
analyzed--even when surge requirements were considered. As shown in
table 23, excess capacity ranged from 14 percent to 87 percent across
various capacity metrics in functional categories after applying a
surge factor to figures for major administrative and headquarters
installations and facilities and correctional facilities. The table
provides the amount of the aggregate excess capacity for each of the
functional categories; however, the amount of excess capacity varies by
individual installation and activity.
Table 23: Excess Capacity Identified by the Headquarters and Support
Activities Joint Cross-Service Group:
Figures in gross square feet.
Subgroup: Major administrative and headquarters activities:
Category: Installations;
Maximum potential capacity: 112,006,087;
Current usage: 87,566,988;
Surge: 362,760;
Excess capacity: 24,076,339;
Percentage of excess capacity: 22%.
Category: Activities;
Maximum potential capacity: 26,576,615;
Current usage: 20,269,800;
Surge: 6,350;
Excess capacity: 6,300,465;
Percentage of excess capacity: 24%.
Subgroup: Geographic clusters and functional:
Category: Installation management;
Maximum potential capacity: 9,381,190;
Current usage: 8,009,278;
Surge: 0;
Excess capacity: 1,371,912;
Percentage of excess capacity: 15%.
Category: Defense Finance and Accounting Service;
Maximum potential capacity: 3,245,808;
Current usage: 2,530,240;
Surge: 0;
Excess capacity: 715,568;
Percentage of excess capacity: 22%.
Category: Correctional facilities;
Maximum potential capacity: 2,975;
Current usage: 2,141;
Surge: 410;
Excess capacity: 424;
Percentage of excess capacity: 14%.
Category: Civilian personnel centers;
Maximum potential capacity: 1,278,040;
Current usage: 969,000;
Surge: 0;
Excess capacity: 309,040;
Percentage of excess capacity: 24%.
Category: Military personnel centers;
Maximum potential capacity: 2,293,495;
Current usage: 1,748,400;
Surge: 0;
Excess capacity: 545,095;
Percentage of excess capacity: 24%.
Subgroup: Mobilization:
Category: Mobilization/demobilization;
Maximum potential capacity: 106,929;
Current usage: 13,592;
Surge: 0;
Excess capacity: 93,337;
Percentage of excess capacity: 87%.
Source: Headquarters and Support Activities Joint Cross-Service Group.
Note: Group officials noted the high percentage of excess capacity for
mobilization is due to differences in the required maximum potential
capacity and the different service standards for mobilizations.
[End of table]
In calculating excess capacity estimates for each of the eight
categories, the group analyzed the data call responses pertaining to
current capacity, maximum potential capacity, current usage, and space
required for surge, using a standard factor of 200 gross square feet
per employee. Subtracting current usage and surge space requirements
from maximum potential capacity resulted in the excess capacity
estimates. The group used a variety of approaches to consider surge
requirements. For example, the major administrative and headquarters
activities subgroup determined surge requirements through specific data
call questions and then used these requirements in the capacity
analysis in terms of requirement and space evaluations. The
correctional facilities function within the geographic clusters and
functional subgroup considered surge as a function of demand against
maximum potential capacity. At the same time, the geographic clusters
and functional subgroup determined that military personnel centers had
been operating in a surge mode for the past several years and did not
require additional surge capacity to be retained. The group did not
determine the aggregate impact its recommendations had on reducing
excess capacity.
Military Value Analysis:
The group's military value analysis was directly linked to the four
military value selection criteria, as required by the BRAC legislation.
The group assigned military values to 25 civilian personnel offices, 10
military personnel centers, 17 correctional facilities, 26 Defense
Finance and Accounting Service sites, 65 installation management sites,
334 major administrative and headquarters installations and activities,
and 66 mobilization sites. Each functional group developed weighted
values for each selected criteria by first asking each group member to
assess weights across the military value selection criterion, ranking
them from highest to lowest in importance to military value. Once the
rankings were determined, the weights generated for each group member
were compared and, if they were close, the weights were adopted. If
not, the group discussed the differences and reached agreement. Table
24 shows the various weights assigned to each of the four military
value selection criteria.
Table 24: Headquarters and Support Activities Joint Cross-Service Group
Military Value Criteria Weights:
Figures in percentages.
Military value criteria: 1. The current and future mission capabilities
and the impact on operational readiness of the total force of the
Department of Defense, including impact on joint warfighting, training,
and readiness;
Major administrative and headquarters activities: 40%;
Geographic clusters and functional[A]: 37%;
Mobilization: 11%.
Military value criteria: 2. The availability and condition of land,
facilities, and associated airspace (including training areas suitable
for maneuver by ground, naval, or air forces throughout a diversity of
climate and terrain areas and staging areas for the use of the Armed
Forces in homeland defense missions) at both existing and potential
receiving locations;
Major administrative and headquarters activities: 44%;
Geographic clusters and functional[A]: 20%;
Mobilization: 7%.
Military value criteria: 3. The ability to accommodate contingency,
mobilization, surge, and future total force requirements at both
existing and potential receiving locations to support operations and
training;
Major administrative and headquarters activities: 11%;
Geographic clusters and functional[A]: 20%;
Mobilization: 77%.
Military value criteria: 4. The cost of operations and the manpower
implications;
Major administrative and headquarters activities: 5%;
Geographic clusters and functional[A]: 24%;
Mobilization: 5%.
Total;
Major administrative and headquarters activities: 100%;
Geographic clusters and functional[A]: 100%[B];
Mobilization: 100%.
Source: DOD and Headquarters and Support Activities Joint Cross-Service
Group.
[A] The geographic clusters and functional subgroup military value
scorings are a cumulative average of its five functional areas,
including civilian personnel, military personnel, correctional
facilities, Defense Finance and Accounting Service, and geographic
clusters. The system of weights provided a basis for assigning relative
value to data collected and tabulated across each military value
dimension.
[B] Individual entries do not sum to total because of rounding.
[End of table]
The group's assessment of military value included development of
attributes (characteristics, facts, etc.), metrics or measures, and
data call questions for each of the three subgroups. Figure 14
demonstrates an example of how attributes, metrics, and data call
questions were linked back to the BRAC military value selection
criteria for the major administrative and headquarters activities
subgroup.
Figure 14: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of Major Administrative and Headquarters
Activities:
[See PDF for image]
[A] The BRAC military value criteria are the first four BRAC selection
criteria.
[B] Military value attributes are characteristics of each criterion.
The major administrative and headquarters activities subgroup used a
total of 14 military value attributes.
[C] Military value metrics are measures for the attributes. The major
administrative and headquarters activities subgroup used a total of 20
military value metrics.
[D] The major administrative and headquarters activities subgroup used
a total of 31 data call questions.
[End of figure]
The geographic clusters and functional subgroup and the mobilization
subgroup used similar approaches of attributes, metrics, and data call
questions to link the analysis back to the military value selection
criteria. For example, the geographic clusters and functional, and
major administive and headquarters subgroups developed metrics and data
call questions addressing force protection issues.
Using mostly certified data, the headquarters group examined the
capabilities of each function from questions developed to rank
activities from most valued to least valued. Exceptions occurred where
military value responses were slow in arriving, contained obvious
errors, or were incomplete, and in these cases judgment-based data were
used. For example, in about 30 cases, activities in leased space did
not respond to particular data call questions addressed to the leased
space building manager nor did they identify what entity managed the
building. After numerous follow-ups with the activities and meetings
with representatives of the Washington Headquarters Service and Army
Corps of Engineers--property agents for DOD--the group decided to use
judgment-based data derived from functional subject matter experts, in
consultation with the military departments and defense agencies. In an
October 2004 memorandum to the Infrastructure Steering Group describing
military value scoring plan changes, the Headquarters and Support
Activities Joint Cross-Service Group concluded that based on an
analysis of the effect of the missing, wrong, and incomplete data on
proposals, there were some data issues that could affect the generation
and comparison of proposals by the group members. However, improvements
to the data occurred over time, and as of May 2005, when the military
value analysis was completed, the group reported that a vast majority
of its data were certified. We were told by a group operations research
analyst that 99 percent of the analysis was determined by certified
data and less than 1 percent by judgment-based data.
DOD Inspector General's and Service Audit Agencies' Role in the
Process:
The DOD Inspector General and service audit agencies reviewed the data
and processes used by each subgroup to develop their recommendations;
the military service audit agencies reviewed data inputs from the
services, and the Inspector General reviewed data inputs from defense
agencies and activities. Their objectives were to validate the data and
the adequacy of the supporting documentation. The process for detecting
and correcting data errors was quite lengthy and challenging. Through
their audits of the data collected from field activities during the
process, audit agencies notified the group as data discrepancies were
discovered so that follow-on corrective actions could be initiated. The
military service audit agencies concluded that the information was
sufficiently reliable for its intended purpose. Assessments by the DOD
Inspector General's office of the data it reviewed were more mixed. In
its June 10, 2005 draft report on the Headquarters and Support
Activities Joint Cross-Service Group's data integrity and internal
control process for BRAC,[Footnote 101] the DOD Inspector General's
office concluded that after corrections were made, the group generally
used certified data and created an adequate audit trail for its
capacity, military value, and cost of base realignment actions.
However, the Inspector General's office raised issues involving
estimated one-time savings associated with vacating leased space and
consistency in rounding to estimate personnel savings. According to
group officials, the Inspector General's issues were discussed with
group leadership, and they decided in deliberative session that the
approaches taken by the group were the most fair and accurate
approaches available and should be retained.
Our analysis indicates that the two issues identified by the Inspector
General would reduce projected savings. Our analysis shows that if the
one-time cost savings associated with antiterrorism and force
protection are excluded, the 20-year net present value savings would be
reduced by $268.4 million, the payback periods for 7 of the 15 affected
recommendations would be extended by 1 year, and 3 years for one
recommendation. Also, for the two recommendations[Footnote 102]
identified by the Inspector General as using abnormal rounding
techniques[Footnote 103] to estimate personnel reductions, the
projected 20-year net present value savings in one case would be
reduced from $13.5 million to a $749,000 cost, and for the other
recommendation, the 20-year net present value savings drops from
approximately $4.9 million to $2.6 million.
Identification and Assessment of Alternate Proposals and Selection of
Recommendations:
The Headquarters and Support Activities Joint Cross-Service Group
developed proposals without receiving all the data they had requested
from numerous activities. As such, the group relied on transformational
goals and military judgment to develop its initial proposals. The group
also used certified data to support or reject its proposals, data which
the DOD Inspector General audited for accuracy. The group used the
optimization model on a limited basis for a few functional areas
because potential for those functional realignment possibilities was
generally slight.
The following transformation options helped guide the group in
developing initial proposals:
* Consolidate management at installations with shared boundaries and in
geographic clusters.
* Consolidate or co-locate civilian and military personnel offices.
* Consolidate Defense Finance and Accounting Service central and field
offices.
* Establish and consolidate mobilization sites and establish joint
deployment processing sites.
* Justify locations for headquarters, commands, and activities within
100 miles of the Pentagon.
* Eliminate leased space.
* Consolidate multi-location headquarters at single locations, and
eliminate stand-alone headquarters.
* Consolidate corrections facilities.
* Co-locate reserve and active component recruiting headquarters, and
eliminate reserve force management organizations.
* Regionalize common headquarters, administrative, and business-related
common support activities.
The group initially developed 117 proposals, based on these
transformational options and military judgment, to include alternative
proposals being requested by the Infrastructure Steering Group (ISG).
The group settled on 50 recommendations that were initially forwarded
to the ISG. Seventeen of them were subsequently consolidated with other
recommendations; 2 were rejected by the ISG and one by the
Infrastructure Executive Council. Also, 9 recommendations were
transferred to other cross-service groups or military departments for
inclusion in their reports.[Footnote 104] That left 21 recommendations
that the group addressed in its report and accordingly are addressed in
this appendix.
Recommendations Approved by DOD:
The Headquarters and Support Activities Joint Cross-Service Group
projects that its 21 recommendations will produce a 20-year net present
value savings of $9.5 billion, net annual recurring savings of about
$914 million, and payback, or length of time required for the savings
to offset closure costs for the recommendations, that varies widely
from immediate to up to 16 years. Table 25 provides a summary of the
financial aspects of the group's recommendations.
Table 25: Financial Aspects of the Headquarters and Support Activities
Joint Cross-Service Group's Recommendations:
Fiscal year 2005 constant dollars in millions.
Recommended action: Joint basing;
DOD report page: H&SA-41;
One-time (costs): ($50.6);
Net implementation (costs) savings[A]: $601.3;
Net annual recurring savings: $183.8;
Payback period: immediate;
20-year net present value savings[B]: $2,342.5.
Recommended action: Consolidate/co-locate active and reserve personnel
and recruiting centers for Army and Air Force;
DOD report page: H&SA-33;
One-time (costs): ($119.3);
Net implementation (costs) savings[A]: $463.0;
Net annual recurring savings: $152.8;
Payback period: immediate;
20-year net present value savings[B]: $1,913.4.
Recommended action: Defense Finance and Accounting Service;
DOD report page: H&SA-37;
One-time (costs): ($282.1);
Net implementation (costs) savings[A]: $158.1;
Net annual recurring savings: $120.5;
Payback period: immediate;
20-year net present value savings[B]: $1,313.8.
Recommended action: Consolidate transportation command components;
DOD report page: H&SA-31;
One-time (costs): ($101.8);
Net implementation (costs) savings[A]: $339.3;
Net annual recurring savings: $99.3;
Payback period: immediate;
20-year net present value savings[B]: $1,278.2.
Recommended action: Consolidate Defense Information Systems Agency;
DOD report page: H&SA-27;
One-time (costs): ($220.0);
Net implementation (costs) savings[A]: ($102.1);
Net annual recurring savings: $59.4;
Payback period: 2 years;
20-year net present value savings[B]: $491.2.
Recommended action: Co-locate Missile and Space Defense agencies;
DOD report page: H&SA-15;
One-time (costs): ($178.2);
Net implementation (costs) savings[A]: $13.0;
Net annual recurring savings: $36.1;
Payback period: 1 year;
20-year net present value savings[B]: $359.1.
Recommended action: Co-locate miscellaneous Army leased locations;
DOD report page: H&SA-10;
One-time (costs): ($44.1);
Net implementation (costs) savings[A]: $59.5;
Net annual recurring savings: $27.8;
Payback period: 1 year;
20-year net present value savings[B]: $322.0.
Recommended action: Co-locate miscellaneous Air Force leased locations
and National Guard Headquarters leased locations;
DOD report page: H&SA-3;
One-time (costs): ($90.5);
Net implementation (costs) savings[A]: ($10.8);
Net annual recurring savings: $30.8;
Payback period: 1 year;
20-year net present value savings[B]: $308.3.
Recommended action: Co-locate miscellaneous OSD, defense agency, and
field activity leased locations;
DOD report page: H&SA-12;
One-time (costs): ($539.0);
Net implementation (costs) savings[A]: ($376.9);
Net annual recurring savings: $63.3;
Payback period: 9 years;
20-year net present value savings[B]: $257.6.
Recommended action: Consolidate civilian personnel offices within
military department and defense agencies;
DOD report page: H&SA-19;
One-time (costs): ($97.5);
Net implementation (costs) savings[A]: ($46.4);
Net annual recurring savings: $24.4;
Payback period: 4 years;
20-year net present value savings[B]: $196.7.
Recommended action: Co-locate military department investigation
agencies with DOD Counterintelligence and Security Agency;
DOD report page: H&SA-8;
One-time (costs): ($174.0);
Net implementation (costs) savings[A]: ($88.0);
Net annual recurring savings: $26.3;
Payback period: 7 years;
20-year net present value savings[B]: $172.7.
Recommended action: Relocate miscellaneous Department of the Navy
leased locations;
DOD report page: H&SA-49;
One-time (costs): ($61.9);
Net implementation (costs) savings[A]: ($12.8);
Net annual recurring savings: $18.0;
Payback period: 1 year;
20-year net present value savings[B]: $164.0.
Recommended action: Consolidate Army Test and Evaluation Command
Headquarters;
DOD report page: H&SA-18;
One-time (costs): ($7.1);
Net implementation (costs) savings[A]: $44.0;
Net annual recurring savings: $8.7;
Payback period: immediate;
20-year net present value savings[B]: $125.7.
Recommended action: Relocate Army headquarters and field operating
activities;
DOD report page: H&SA-46;
One-time (costs): ($199.9);
Net implementation (costs) savings[A]: ($111.8);
Net annual recurring savings: $23.9;
Payback period: 10 years;
20-year net present value savings[B]: $122.9.
Recommended action: Consolidate media organizations into new agency for
media and publications;
DOD report page: H&SA-30;
One-time (costs): ($42.0);
Net implementation (costs) savings[A]: ($2.9);
Net annual recurring savings: $9.5;
Payback period: 4 years;
20-year net present value savings[B]: $89.0.
Recommended action: Create joint mobilization sites;
DOD report page: H&SA-35;
One-time (costs): ($0.1);
Net implementation (costs) savings[A]: $30.9;
Net annual recurring savings: $0.8;
Payback period: immediate;
20-year net present value savings[B]: $37.9.
Recommended action: Co-locate Navy Education and Training Command and
Navy Education and Training Professional Development and Technology
Center;
DOD report page: H&SA-17;
One-time (costs): ($33.3);
Net implementation (costs) savings[A]: ($23.6);
Net annual recurring savings: $3.7;
Payback period: 10 years;
20-year net present value savings[B]: $14.4.
Recommended action: Co-locate defense and military department
adjudication activities;
DOD report page: H&SA-5;
One-time (costs): ($67.1);
Net implementation (costs) savings[A]: ($47.5);
Net annual recurring savings: $5.7;
Payback period: 13 years;
20-year net present value savings[B]: $11.3.
Recommended action: Relocate Air Force Real Property Agency;
DOD report page: H&SA-44;
One-time (costs): ($4.5);
Net implementation (costs) savings[A]: ($0.9);
Net annual recurring savings: $0.9;
Payback period: 5 years;
20-year net present value savings[B]: $7.9.
Recommended action: Consolidate Defense Commissary Agency Eastern and
Midwestern Regions, and Hopewell, VA, offices;
DOD report page: H&SA-26;
One-time (costs): ($47.2);
Net implementation (costs) savings[A]: ($35.4);
Net annual recurring savings: $3.9;
Payback period: 14 years;
20-year net present value savings[B]: $4.9.
Recommended action: Consolidate correctional facilities into joint
regional correctional facilities;
DOD report page: H&SA-22;
One-time (costs): ($178.8);
Net implementation (costs) savings[A]: ($149.4);
Net annual recurring savings: $14.6;
Payback period: 16 years;
20-year net present value savings[B]: $2.3.
Total;
One-time (costs): ($2,539.0);
Net implementation (costs) savings[A]: $700.6;
Net annual recurring savings: $914.2;
20-year net present value savings[B]: $9,535.8.
Source: GAO analysis of DOD data.
Note: After DOD released its BRAC recommendations on May 13, 2005, the
Headquarters and Support Activities Joint Cross-Service Group
discovered errors in cost and savings data for 6 of its 21
recommendations. At the time of this report, the impact resulting from
these recommendations increased the 20-year net present value savings
by $34.6 million. For 3 of the recommendations, 20-year net present
value savings increased, while the remaining 3 decreased. The issue was
still in the process of being corrected at the time of this report.
[A] This represents net costs or savings within the 6-year
implementation period required to implement BRAC recommendations.
[B] DOD used a 2.8 percent discount rate to calculate net present
value.
[End of table]
In total, the group estimates that its recommendations will require a
total investment of $2.5 billion, primarily for new military
construction and moving personnel from leased space onto military
bases, and will ultimately result in net annual recurring savings of
$914.2 million. Our analysis indicates that about 92 percent of the
annual recurring savings results from reductions in military and
civilian employment levels (about $270 million, and about $267 million
respectively) and the elimination of future lease payments for
administrative office space ($300 million). Eighteen of the group's
recommendations are expected to realize savings within 10 years of
completing the BRAC realignment and closure actions, while 3 have a
payback period greater than 10 years.
Issues Identified with Approved Recommendations:
Time did not permit us to assess the operational impact of each
recommendation, particularly where operations are proposed for
consolidation across multiple locations outside a single geographic
area. However, we offer a number of broad-based observations about the
proposed recommendations. While available data supporting the
recommendations suggest that their implementation should provide for
more efficient operations within DOD, the BRAC Commission may wish to
consider the basis of the group's assumptions for personnel reductions
because they have a significant impact on the recommendations' savings;
the assumptions regarding vacating leased facilities because including
antiterrorism and force protection savings also has an impact on the
recommendations' savings; challenges to implementing joint basing;
cases where realignment actions with long payback periods were combined
with actions with shorter durations; stand-alone actions where the
payback period exceeded 10 years; and proposals eliminated prior to
release of the final recommendations.
Personnel Reductions:
Approximately $537 million, or about 59 percent, of the group's
projected net annual recurring savings are based on reductions in the
number of military and civilian personnel eliminated as a result of the
BRAC actions.[Footnote 105] The process used raises questions about the
projected savings. The group initially used generic savings factors to
estimate the number of personnel positions that could be eliminated
when organizations were co-located or consolidated. These factors were
developed on the basis of comments from subject matter experts and
research of various databases available through the Pentagon library or
the Internet. The group found that personnel reductions from 14 percent
to 30 percent resulted from consolidation of organizations and 7
percent to 15 percent when they were co-located. The group adopted
these personnel savings factors because the information it did collect
on the number of personnel performing common support functions within
the affected organizations could not be used and believed it did not
have sufficient time to perform more precise manpower studies. The
group used these savings factors consistently as starting points in
negotiating the number of personnel reductions with the military
departments and defense agencies and activities. In most cases the
negotiated estimates were accepted, but in some cases the group imposed
a personnel reduction percentage when negotiations failed. For example,
in analyzing the costs and savings associated with relocating the Army
Matériel Command from temporary lease space on Fort Belvoir, Virginia,
to Redstone Arsenal, Alabama, the group leadership decided to impose a
7 percent personnel elimination based on expected economies of scale
from co-locating the command with one of its major subordinate
activities. Our analysis showed that the percentage factor used to
estimate personnel reductions for all recommendations ranged from zero
percent to about 42 percent.
A separate area of concern involves savings reported for military
personnel. Our analysis indicates that the group's recommendations
propose to eliminate 2,479 military positions, which would result in
about $270 million in net annual recurring savings. However, service
officials indicate that they do not plan to reduce their end-strength
based on these proposed eliminations but rather reallocate these
positions elsewhere within the force structure. Since these military
personnel will be assigned elsewhere rather than removed from the force
structure, the projected savings do not represent dollars that can be
readily allocated outside the personnel accounts to other purposes.
Leased Space:
Fifteen of the group's recommendations include a one-time savings of
over $300 million from moving activities from leased space onto
military installations. For example, these recommendations, if
approved, would reduce total DOD leased space within the National
Capital Region[Footnote 106] from 8.3 million square feet to about 1.7
million square feet, or by 80 percent. While our prior work generally
supports the premise that leased property is more expensive than
government owned property, the recommendations related to vacating
leased space also raises questions about a limitation in projected
savings and impact on local communities.
The one-time cost savings represents costs expected to be avoided in
the future by moving from leased facilities onto government owned and
protected facilities rather than upgrading existing leased space to
meet DOD's antiterrorism and force protection standards.[Footnote 107]
According to a DOD official, the department put together a task force
after the June 1996 Khobar Tower bombing incident in Dhahran, Saudi
Arabia, of mostly engineers to develop minimum force protection
standards for all DOD-occupied locations. The official also stated that
application of the standards in BRAC was not the result of a threat or
vulnerability assessment of the affected facilities. The Pentagon Force
Protection Agency will shortly begin a 10-month antiterrorism and force
protection vulnerability assessment of about 60 DOD-occupied leased
buildings in the National Capital Region. This assessment will provide
DOD with information to estimate the costs and feasibility of upgrading
leased facilities to the antiterrorism and force protection standards.
The force protection standards for leased buildings apply only where
DOD personnel occupy at least 25 percent of the net interior usable
area; only to the portion of the building occupied by DOD personnel;
and to all new leases executed on or after October 1, 2005, and to
leases renewed or extended on or after October 1, 2009. Initially, the
group prepared military value data call questions that could determine
whether a leased location met the force protection requirements.
However, group officials stated that most of these questions were
discarded because of inconsistencies in how the questions were answered
except for the percentage of DOD personnel occupying buildings.
The group applied the cost avoidance factor consistently to all leased
locations but did not collect data that would indicate whether existing
leases met the standards, which could possibly result in application of
the factor at locations meeting the force protection requirements. For
example, the group applied over $2 million in one-time force protection
cost avoidance to relocate a Navy human resources service center from
the Stennis Space Center, Mississippi, to the Naval Support Activity,
Pennsylvania, even though the Stennis Space Center may be as secure as
any military installation. If these one-time savings, as shown in the
final recommendations forwarded to the BRAC Commission, are not
considered in the cost and savings analysis, our analysis shows that
the projected 20-year net present value savings decrease by 3 percent
($268.4 million), the payback period increases by 1 year for 7 of 15
recommendations, and by 3 years for one recommendation as shown in
table 26. After the final recommendations were released to the BRAC
Commission, the group found errors in some recommendations, affecting
one-time estimated savings and other costs and savings, which were
still in the process of being corrected at the time of this report.
Table 26: Impact of One-time Antiterrorism and Force Protection Savings
on Recommendations Involving Leased Space:
Fiscal year 2005 constant dollars in millions.
Recommended action: Consolidate transportation command components;
DOD proposed recommendation: 20-year net present value savings:
$1,278.2;
DOD proposed recommendation: Payback period: immediate;
GAO analysis without antiterrorism and force protection savings: 20-
year net present value savings: $1,273.4;
GAO analysis without antiterrorism and force protection savings:
Payback period: immediate.
Recommended action: Consolidate/co-locate active and reserve personnel
and recruiting centers for Army and Air Force;
DOD proposed recommendation: 20-year net present value savings:
$1,909.0[A];
DOD proposed recommendation: Payback period: immediate;
GAO analysis without antiterrorism and force protection savings: 20-
year net present value savings: $1,880.7;
GAO analysis without antiterrorism and force protection savings:
Payback period: immediate.
Recommended action: Consolidate Army Test and Evaluation Command
Headquarters;
DOD proposed recommendation: 20-year net present value savings: $125.7;
DOD proposed recommendation: Payback period: immediate;
GAO analysis without antiterrorism and force protection savings: 20-
year net present value savings: $122.8;
GAO analysis without antiterrorism and force protection savings:
Payback period: immediate.
Recommended action: Co-locate Missile and Space Defense agencies;
DOD proposed recommendation: 20-year net present value savings: $359.1;
DOD proposed recommendation: Payback period: 1 year;
GAO analysis without antiterrorism and force protection savings: 20-
year net present value savings: $282.6;
GAO analysis without antiterrorism and force protection savings:
Payback period: 4 years.
Recommended action: Co-locate miscellaneous Army leased locations;
DOD proposed recommendation: 20-year net present value savings: $322.0;
DOD proposed recommendation: Payback period: 1 year;
GAO analysis without antiterrorism and force protection savings: 20-
year net present value savings: $300.3;
GAO analysis without antiterrorism and force protection savings:
Payback period: 2 years.
Recommended action: Co-locate miscellaneous Air Force leased locations
and National Guard Headquarters leased locations;
DOD proposed recommendation: 20-year net present value savings:
$308.2[A];
DOD proposed recommendation: Payback period: 1 year;
GAO analysis without antiterrorism and force protection savings: 20-
year net present value savings: $294.7;
GAO analysis without antiterrorism and force protection savings:
Payback period: 2 years.
Recommended action: Relocate miscellaneous Department of the Navy
leased locations;
DOD proposed recommendation: 20-year net present value savings: $164.0;
DOD proposed recommendation: Payback period: 1 year;
GAO analysis without antiterrorism and force protection savings: 20-
year net present value savings: $151.2;
GAO analysis without antiterrorism and force protection savings:
Payback period: 2 years.
Recommended action: Co-locate military department investigation
agencies with DOD Counterintelligence and Security Agency;
DOD proposed recommendation: 20-year net present value savings: $172.7;
DOD proposed recommendation: Payback period: 7 years;
GAO analysis without antiterrorism and force protection savings: 20-
year net present value savings: $161.6;
GAO analysis without antiterrorism and force protection savings:
Payback period: 7 years.
Recommended action: Consolidate Defense Information Systems Agency;
DOD proposed recommendation: 20-year net present value savings: $491.2;
DOD proposed recommendation: Payback period: 2 years;
GAO analysis without antiterrorism and force protection savings: 20-
year net present value savings: $475.1;
GAO analysis without antiterrorism and force protection savings:
Payback period: 3 years.
Recommended action: Consolidate civilian personnel offices within
military department and defense agencies;
DOD proposed recommendation: 20-year net present value savings: $196.7;
DOD proposed recommendation: Payback period: 4 years;
GAO analysis without antiterrorism and force protection savings: 20-
year net present value savings: $189.6;
GAO analysis without antiterrorism and force protection savings:
Payback period: 4 years.
Recommended action: Consolidate media organizations into new agency for
media and publications;
DOD proposed recommendation: 20-year net present value savings: $89.0;
DOD proposed recommendation: Payback period: 4 years;
GAO analysis without antiterrorism and force protection savings: 20-
year net present value savings: $86.5;
GAO analysis without antiterrorism and force protection savings:
Payback period: 4 years.
Recommended action: Co-locate miscellaneous OSD, defense agency, and
field activity leased locations;
DOD proposed recommendation: 20-year net present value savings: $257.6;
DOD proposed recommendation: Payback period: 9 years;
GAO analysis without antiterrorism and force protection savings: 20-
year net present value savings: $200.1;
GAO analysis without antiterrorism and force protection savings:
Payback period: 10 years.
Recommended action: Relocate Army headquarters and field operating
activities;
DOD proposed recommendation: 20-year net present value savings: $122.9;
DOD proposed recommendation: Payback period: 10 years;
GAO analysis without antiterrorism and force protection savings: 20-
year net present value savings: $115.4;
GAO analysis without antiterrorism and force protection savings:
Payback period: 10 years.
Recommended action: Consolidate Defense Commissary Agency Eastern and
Midwestern Regions, and Hopewell, VA, offices;
DOD proposed recommendation: 20-year net present value savings: $4.9;
DOD proposed recommendation: Payback period: 14 years;
GAO analysis without antiterrorism and force protection savings: 20-
year net present value savings: $2.3;
GAO analysis without antiterrorism and force protection savings:
Payback period: 15 years.
Recommended action: Co-locate defense/military department adjudication
activities;
DOD proposed recommendation: 20-year net present value savings:
$13.5[A];
DOD proposed recommendation: Payback period: 13 years;
GAO analysis without antiterrorism and force protection savings: 20-
year net present value savings: $10.0;
GAO analysis without antiterrorism and force protection savings:
Payback period: 14 years.
Total;
DOD proposed recommendation: 20-year net present value savings:
$5,814.7;
GAO analysis without antiterrorism and force protection savings: 20-
year net present value savings: $5,546.3.
Difference;
GAO analysis without antiterrorism and force protection savings: 20-
year net present value savings: $268.4.
Source: GAO analysis of DOD data.
[A] The 20-year net present value savings for these proposed
recommendations differ from the amount in the final BRAC report because
of errors found in the COBRA reports after release of the final BRAC
report.
[End of table]
Furthermore, four of the Headquarters and Support Activities Joint
Cross-Service Group's recommendations involve moving personnel from
leased space to Fort Belvoir, Virginia, mostly at the engineering
proving ground, increasing Fort Belvoir's population by about
10,700.[Footnote 108] The recommendations include military construction
projects to build facilities for these personnel on Fort Belvoir. In
addition, the recommendations include a $55 million Army estimate to
improve roads and other infrastructure in the area surrounding the
fort. However, it is uncertain at this time whether this will be
sufficient to fully support the impact on the surrounding community's
infrastructure, or the likelihood that federal assistance is likely to
be sought by local governments to help communities reduce the impact--
costs that will have the effect of increasing one-time costs and
offsetting short-term savings from the recommendations.
Implementation Challenges:
While the proposal to create joint bases by consolidating common
installation management functions is projected to create greater
efficiencies, our prior work suggests that implementation of these
actions may prove challenging. The joint-basing recommendation involves
one service being responsible for various installation management
support functions[Footnote 109] at bases that share a common boundary
or are in proximity to one another. For example, the Army would be the
executive agent for Fort Lewis, Washington, and McChord Air Force Base,
Washington, combined as Joint Base Lewis-McChord. However, as evident
from our recent visit to both installations and discussions with base
officials, concerns over obstacles such as seeking efficiencies at the
expense of the mission, could jeopardize a smooth and successful
implementation of the recommendation. Further, Air Force officials
stated that most military personnel at McChord are mission critical and
deployable, increasing the difficulty to identify possible Air Force
military personnel reductions. The group projects 20-year net present
value savings of about $2.3 billion, with net annual recurring savings
of about $184 million. More than 90 percent of the recurring savings
reported represent military (54 percent) and civilian (37 percent)
personnel reductions. The group applied personnel reductions ranging
from 1 to 10 percent for each of the 12 locations included in the joint
basing recommendation. The actual percentage used for each location was
negotiated between the group and the military departments based on the
size of base populations and the kind of services provided.
In our June 2005 report[Footnote 110] we noted that DOD and the
military services' ability to forecast base operations support
requirements and funding needs has been hindered by the lack of a
common terminology for defining base support functions, as well as by
the lack of a mature analytic process for developing base support
requirements. We also reported challenges in maintaining adequate
funding to meet base operating support requirements and facility
upkeep. We concluded that until such problems are resolved, DOD will
not have in place the management and oversight framework needed for
identifying total base support requirements and ensuring adequate
delivery of services, particularly in a joint environment. In its
comments to a draft of our June report, DOD indicated that it expects
to release a new facilities operation model by December 1, 2005, and
use it to develop the fiscal year 2008 program and budget. DOD stated
that it is also conducting a cross-department initiative to develop
definitions for the common delivery of installation services and
expects to complete this effort by December 2005. However, regarding
modeling efforts, a Senior Joint Basing Group[Footnote 111] official
expressed doubt during our review whether there would be a single
funding model because base operating support, as it currently exists,
has too many diverse activities to model. He indicated that it is more
likely that a suite of tools will evolve over time.
Bundling Lessens Visibility of Costs:
The headquarters group consolidated some recommendations with more than
10-year payback periods, far longer than typical payback periods in the
1995 BRAC round, with other proposals having shorter returns on
investment. In total, 8 of the 21 final recommendations were actually
packages that consolidated two or more recommendations approved by the
joint cross-service group as stand-alone candidate recommendations. We
found that in 7 instances, the more than 10-year payback periods of
initially stand-alone proposals tended to be masked after they were
combined in such packages. For example, the group developed a proposal
to move the Army Matériel Command from Fort Belvoir, Virginia, to
Redstone Arsenal, Alabama, which showed a 20-year net present cost and
a 100-year payback period by not having to spend about $71 million to
construct a permanent facility for the headquarters at Fort Belvoir.
Had the construction savings been included in the recommendation, the
payback period would have been 32 years. Concurrently, the group
developed a separate proposal to relocate various Army offices from
leased and government-owned office space mostly onto Fort Sam Houston,
Texas, which would result in a 20-year net present value savings of
about $277.4 million and a 3-year payback period. The group decided to
combine these two stand-alone proposals so that all Army headquarters
related activities were addressed in one recommendation with an
estimated 20-year net present value savings of about $123 million with
a 10-year payback.
Extended Payback Periods:
The group proposed three recommendations that have an estimated payback
period exceeding 10 years and one-time costs for implementation that
greatly exceeds the expected 20-year net present value savings. The
cost, savings, and expected benefits for these recommendations are
described below:
* The recommendation to co-locate military department and DOD security
clearance adjudication and appeals activities to Fort Meade, Maryland,
has an estimated payback of 13 years, one-time cost exceeding $67
million, and 20-year net present value savings of only $11.3 million.
According to the DOD final BRAC report, implementation of this
recommendation would co-locate adjudication activities, reduce lease
costs, and enhance security.
* The recommendation to consolidate the Defense Commissary Agency
Eastern and Midwestern regions and a leased site in Hopewell, Virginia,
to Fort Lee, Virginia, has an estimated 14-year payback period, one-
time cost exceeding $47 million, and 20-year net present value savings
of only $4.9 million. According to the DOD BRAC report, implementation
of this recommendation would consolidate headquarters operations at
single locations, enhance security, and reduce lease costs.
* The recommendation to establish joint regional correctional
facilities has an estimated 16-year payback period, one-time cost of
almost $179 million, and 20-year net present value savings of only $2.3
million. For example, the recommendation would establish the Midwest
Joint Regional Correctional Facility by relocating correctional
functions currently located at Lackland Air Force Base, Texas; Fort
Knox, Kentucky; and Fort Sill, Oklahoma, to Fort Leavenworth, Kansas.
According to the DOD BRAC report, implementation of this recommendation
would improve jointness, centralize corrections training, and eliminate
or significantly reduce old inefficient facilities.
Proposals Eliminated from Consideration:
Three recommendations were initially approved by the group; two were
later rejected by the ISG and another by the IEC. The ISG rejected the
recommendation to relocate U.S. Southern Command, Miami, Florida, from
its leased space to a state-owned leased space also in Miami with no
explanation. Group officials stated the ISG rejected the U.S. Southern
Command recommendation because costs associated with the relocation
were too high. The ISG also rejected the relocation of U.S. Army
Pacific Headquarters from Fort Shafter, Hawaii, to Pearl Harbor,
Hawaii, because of Pacific Command Combatant Commander and the Army
concerns regarding future requirements of U.S. Army Pacific
Headquarters. The recommendation rejected by the IEC to co-locate
military department and DOD medical activities to the National Medical
Center, Bethesda, Maryland was discarded because of cost and long
payback issues.
In other cases, Headquarters and Support Activities Joint Cross-Service
Group members considered proposals that could have fostered jointly
operated support activities, but they were later dropped on the basis
of cost considerations and perceived operational risks. For example,
the group considered co-locating all military personnel offices at one
location. However, in analyzing this proposal, the group determined
that implementing the joint proposal would be very costly, while also
citing concerns about the uncertain availability of skilled employees
at a single location to operate the joint facility. Therefore, the
group concluded that it was better to co-locate or consolidate
personnel centers within the individual military departments.
Similarly, for civilian personnel centers the group developed a
proposal to consolidate 25 offices that are currently operated by the
military departments and defense agencies into 10 DOD "joint" offices.
However, the proposal was dropped after concerns were raised by one
military department that the risks associated with implementing joint
personnel offices concurrently with processing paperwork supporting
other BRAC-related personnel moves and implementing a new standardized
personnel data system were too high. Consequently, the IEC directed the
group to revise its proposal. The group revised its proposal to provide
for consolidating the 25 current offices into 12 offices--4 to be
operated by the Army, 4 by the Navy, 1 by the Air Force, and 3 by a
single agency providing support to the defense agencies. While DOD did
not recommend the creation of joint military personnel offices or joint
civilian personnel offices, it is important to note that each of the
initial proposals included justifications citing ongoing efforts within
the department to establish standardized personnel processes and
systems.
The recommendation to co-locate components of the U.S. Transportation
Command[Footnote 112] does not include the Navy Military Sealift
Command, one of the service component organizations. The group
developed a proposal to move the Army and Navy component of the
Transportation Command to Scott Air Force Base, Illinois. While the
Army agreed to the proposal, the Navy did not believe that the group
should be proposing to move the Military Sealift Command because it was
considered an operational headquarters and not an administrative
function under the purview of the Headquarters and Support Activities
Joint Cross-Service Group. The ISG agreed with the Navy and deleted the
Military Sealift Command from the recommendation, which reduced
projected 20-year net present value savings from $1.30 billion to $1.28
billion.
[End of section]
Appendix VIII: Industrial Joint Cross-Service Group Selection Process
and Recommendations:
The Industrial Joint Cross-Service Group followed the common analytical
framework established by the Office of the Secretary of Defense (OSD)
for completing its review. The group initially produced 34 candidate
recommendations; 3 were disapproved by the Infrastructure Executive
Council (IEC); and several were subsequently integrated into larger
military service recommendations. As a result, the group had 17
remaining recommendations that are addressed in this appendix. These 17
recommendations represent a mixture of closures and realignments with
the realignments often encompassing the consolidation of various types
of industrial workloads at fewer locations. Although some of the
recommendations may be considered transformational, limited progress
was made in recommending major actions to foster greater interservicing
among the services. Industrial group officials said this was due to
economic and military value considerations as well as the downsizing of
maintenance facilities in prior BRAC rounds. Altogether, DOD projects
these recommendations to produce about $7.6 billion in net present
value savings over a 20-year period; nearly all are projected to have
short payback periods (time required to recoup up-front investment
costs) with expected savings offsetting expected implementation costs
either immediately or within a few years. One recommendation has a
payback period exceeding 10 years. However, uncertainty exists about
the precision of the savings estimates because many estimates are based
on efficiency gains that are yet to be validated and other factors.
Further scrutiny by the BRAC Commission of this and other
recommendations may be warranted to assess the impact of reductions
against future force structure needs or capacity constraints. The DOD
Inspector General and the military service audit agencies, which
performed audits of the data, concluded that the data were sufficiently
reliable for use during the BRAC process.
Organization and Focus:
The industrial group was composed of senior-level principal members
from the installations directorates for each service, the Defense
Logistics Agency (DLA), and the Joint Chiefs of Staff and was supported
by staff from these organizations. The Under Secretary of Defense
(Acquisition, Technology and Logistics) chaired the group, which in
turn forwarded its proposed recommendations to the Infrastructure
Steering Group (ISG) for its review and approval.[Footnote 113] The
group organized its BRAC analyses around three subgroups: (1)
maintenance, (2) ship overhaul and repair, and (3) munitions and
armaments. All of the subgroups focused their work similarly on
identifying opportunities for reducing excess capacity.
Framework for Analysis:
The industrial group's analytical process included a review of nine
distinct industrial areas across each of the military services. They
included: (1) ground vehicles, aircraft, and other depot maintenance;
(2) ground vehicles, aircraft, and other intermediate maintenance; (3)
ship depot maintenance; (4) ship intermediate maintenance; (5)
munitions production; (6) munitions storage; (7) munitions
demilitarization; (8) munitions maintenance; and (9) armaments
production. As per the BRAC process outlined by OSD, capacity analysis
and military value analysis provided the starting point for the cross-
service group's work. The DOD Inspector General and service audit
agencies performed an important role in ensuring the accuracy of data
used in these analyses through extensive audits of data gathered at
various locations.
Capacity Analysis:
To form the basis for its analysis, the group developed metrics in each
of the nine industrial areas to measure current capacity and
subsequently collected certified data linked to these metrics from
various defense activities across the country whose missions resided
within these categories. While the most predominate metric was direct
labor hours--used by both the maintenance and ship overhaul and repair
subgroups exclusively and by the munitions and armaments subgroup in
some instances--the munitions and armaments subgroup also used other
metrics for measuring capacity. For example, for measuring munitions
production, the subgroup used pounds and units, and for measuring
munitions storage, the subgroup used square feet and short tons. The
disparate nature of the functions analyzed by the group did not lend
itself to a "one size fits all" analytical approach and each of the
three subgroups conducted its own capacity analysis.
The munitions and armaments and ship overhaul and repair subgroups
defined excess capacity as the difference between current capacity and
current usage. For depot maintenance, the maintenance subgroup defined
excess capacity as the difference between current capacity and the
larger of current usage or core requirements. Core requirements are
those workload needs that must be performed in organic rather than
contractor facilities. For intermediate maintenance, the maintenance
subgroup defined excess capacity as the difference between current
capacity and current usage. The cross-service group's capacity analysis
showed that excess capacity existed within many of functional areas it
examined, especially in those of munitions and armaments functions. As
shown in table 27, the estimates of excess capacity ranged from 7
percent to 91 percent among individual functional categories.
Table 27: Excess Capacity Identified by the Industrial Joint Cross-
Service Group:
Subgroup: Maintenance:
Function: Ground vehicles, aircraft, and other depot maintenance;
Capacity measure: Direct labor hours;
Percentage of excess capacity: 7%.
Function: Ground vehicles, aircraft, and other intermediate
maintenance;
Capacity measure: Direct labor hours;
Percentage of excess capacity: 16%.
Subgroup: Ship overhaul and repair:
Function: Ship depot maintenance;
Capacity measure: Direct labor hours;
Percentage of excess capacity: 20%.
Function: Ship intermediate maintenance;
Capacity measure: Direct labor hours;
Percentage of excess capacity: 17%.
Subgroup: Munitions and armaments:
Function: Munitions production;
Capacity measure: Pounds/units;
Percentage of excess capacity: 36%.
Function: Munitions storage;
Capacity measure: Square feet/short tons;
Percentage of excess capacity: 40%.
Function: Munitions demilitarization;
Capacity measure: Short tons;
Percentage of excess capacity: 91%.
Function: Munitions maintenance;
Capacity measure: Direct labor hours;
Percentage of excess capacity: 35%.
Function: Armaments production;
Capacity measure: Direct labor hours;
Percentage of excess capacity: 44%.
Source: Industrial Joint Cross-Service Group.
Note: These excess capacity figures are based on one eight-hour shift
and current capacity.
[End of table]
The three subgroups addressed surge requirements in their capacity
analyses to varying degrees. For the maintenance subgroup, the excess
percentages represent excess capacity above surge requirements, because
the collected core requirements data included surge requirements and
the excess capacity calculations were based on the larger of current
usage or core requirements. For the munitions and armaments subgroup,
the excess capacity percentages represent the capacity available to
meet surge requirements. According to munitions and armaments subgroup
officials, there are no over-arching, quantified, DOD-wide surge
requirements for munitions and armaments. Instead, surge becomes a
factor of how much excess capacity is available and can be addressed
through multiple work shifts. Conversely, the percentages for ship
repair and overhaul do not address surge requirements. According to
ship overhaul and repair subgroup officials, because the Navy's surge
requirements are dictated by emergent deployments or ship repair
requirements and because shipyards are normally workloaded to their
workforce capacity, surge capability is limited to the use of overtime
and delaying previously planned work.
As table 27 shows, the data indicate that there was not much excess
capacity in the ground vehicles, aircraft, and other depot maintenance
area. Therefore, in that area the group focused much of its attention
on minimizing sites by redistributing and consolidating workload. On
the other hand, while many of the group's ship overhaul and repair and
munitions and armaments recommendations were directed toward reducing
excess capacity, group officials did not calculate a percentage for the
reduction in excess capacity made possible by implementing the
recommendations.
Military Value Analysis:
The military value of activities within the group played a predominant
role in formulating recommendations. In completing its military value
assessment, the industrial group assessed each activity across the four
established military value criteria to more fully evaluate the
potential for realignment and closure actions. As was the case with
capacity analysis, the disparate nature of the industrial areas
analyzed by the group precluded a uniform analytical approach among the
three subgroups. As a result, the subgroups differed in the methodology
they used to develop relative weights for the military value criteria
for each of their functions. Table 28 shows the various weights
assigned to each of the four military value criteria by the subgroups
for their functions.
Table 28: Industrial Joint Cross-Service Group Military Value Criteria
Weights:
Figures in percentages.
Military value criteria: 1. The current and future mission capabilities
and the impact on operational readiness of the total force of the
Department of Defense, including impact on joint warfighting, training,
and readiness;
Maintenance weight: Depot: 39%;
Maintenance weight: Intermediate: 50%;
Ship overhaul and repair weight: Depot: 25%;
Ship overhaul and repair weight: Intermediate: 50%;
Munitions and armaments weight: Munitions production: 35%;
Munitions and armaments weight: Munitions maintenance, storage, and
demilitarization: 25%;
Munitions and armaments weight: Armaments manufacturing and production:
45%.
Military value criteria: 2. The availability and condition of land,
facilities, and associated air space (including training areas suitable
for maneuver by ground, naval, or air forces throughout a diversity of
climate and terrain areas and staging areas for the use of the Armed
Forces in homeland defense missions) at both existing and potential
receiving locations;
Maintenance weight: Depot: 30%;
Maintenance weight: Intermediate: 30%;
Ship overhaul and repair weight: Depot: 25%;
Ship overhaul and repair weight: Intermediate: 15%;
Munitions and armaments weight: Munitions production: 15%;
Munitions and armaments weight: Munitions maintenance, storage, and
demilitarization: 20%;
Munitions and armaments weight: Armaments manufacturing and production:
15%.
Military value criteria: 3. The ability to accommodate contingency,
mobilization, surge, and future total force requirements at both
existing and potential receiving locations to support operations and
training;
Maintenance weight: Depot: 21%;
Maintenance weight: Intermediate: 15%;
Ship overhaul and repair weight: Depot: 30%;
Ship overhaul and repair weight: Intermediate: 25%;
Munitions and armaments weight: Munitions production: 45%;
Munitions and armaments weight: Munitions maintenance, storage, and
demilitarization: 50%;
Munitions and armaments weight: Armaments manufacturing and production:
35%.
Military value criteria: 4. The cost of operations and the manpower
implications;
Maintenance weight: Depot: 10%;
Maintenance weight: Intermediate: 5%;
Ship overhaul and repair weight: Depot: 20%;
Ship overhaul and repair weight: Intermediate: 10%;
Munitions and armaments weight: Munitions production: 5%;
Munitions and armaments weight: Munitions maintenance, storage, and
demilitarization: 5%;
Munitions and armaments weight: Armaments manufacturing and production:
5%.
Total;
Maintenance weight: Depot: 100%;
Maintenance weight: Intermediate: 100%;
Ship overhaul and repair weight: Depot: 100%;
Ship overhaul and repair weight: Intermediate: 100%;
Munitions and armaments weight: Munitions production: 100%;
Munitions and armaments weight: Munitions maintenance, storage, and
demilitarization: 100%;
Munitions and armaments weight: Armaments manufacturing and production:
100%.
Source: DOD and the Industrial Joint Cross-Service Group.
Note: The system of weights provided a basis for assigning relative
value to data collected and tabulated across each military value
dimension. The munitions maintenance, storage and demilitarization
functions were combined because the munitions and armaments subgroup
applied the same weights for these functions.
[End of table]
The group's military value analysis also included the development of
attributes, metrics, and data call questions for each of the nine
functional areas represented in the categories in the chart above which
were linked back to the four military criteria. Figure 15 provides
examples of these attributes, metrics, and data questions and shows how
each of these was linked back to the criteria.
Figure 15: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of Depot Maintenance Activities:
[See PDF for image]
[A] The BRAC military value criteria are the first four BRAC selection
criteria.
[B] Military value attributes are characteristics of each criterion.
The industrial group used a total of 27 military value attributes.
[C] Military value metrics are measures for the attributes. The
industrial group used a total of 58 military value metrics.
[D] The industrial group used a total of 89 data call questions.
[End of figure]
Because of the disparate nature of the industrial areas analyzed by the
industrial group, the subgroups also differed in the way they assigned
military value scores to their respective activities. For instance, the
maintenance subgroup determined military value by commodity[Footnote
114] only and did not develop an overall military value score for
activities in the depot and intermediate maintenance functions. Because
military value scores were only determined for activities by commodity,
activities were only ranked within their respective commodities. For
example, Rock Island Arsenal, Illinois, received a military value score
for its combat vehicle maintenance workload and was ranked accordingly
against all the other depot level activities that perform combat
vehicle maintenance. In addition, because most activities involve
multiple commodities, such as major maintenance functions like aircraft
engines, electronics, etc., many of the activities received multiple
military value scores. In the case of Rock Island Arsenal, it not only
received a military value score for its combat vehicle maintenance work
but also for its tactical vehicle maintenance work and its other
equipment maintenance work. These military value scores were then used
in an optimization model to determine the best locations to consolidate
various like commodities among the three services. In all cases, the
subgroup examined redistributing the workload to activities with a
higher military value score for that commodity. According to the
maintenance subgroup, determining military value by commodity allowed
for more opportunities to create interservicing[Footnote 115] and
consolidations of workload among the services. The maintenance
subgroup's process was focused on military value and available capacity
without regard to service. The final recommendations were tempered by
financial and operational considerations. However, as we discuss later,
our analysis shows that while some interservicing may be achieved, most
of the group's recommendations remained relatively service-centric. The
ship overhaul and repair and munitions and armaments subgroups, on the
other hand, developed overall military value scores for activities
within their respective functions and ranked their activities within
those functions accordingly. For example, all shipyards were ranked
together under the depot maintenance function, and all industrial
activities that perform munitions production were ranked together under
the munitions production function.
DOD Inspector General's and Service Audit Agencies' Role in the
Process:
The DOD Inspector General and the service audit agencies played
important roles in ensuring that the data used in the industrial
group's data analyses were certified and properly supported. Through
extensive audits of the data collected from field activities during the
process, these audit agencies notified the group regarding any
identified data discrepancies for the purpose of follow-on corrective
action. While the process for detecting and correcting data errors was
quite lengthy, the audit agencies ultimately deemed the industrial data
to be sufficiently accurate for use in the BRAC process.
Identification and Assessment of Alternate Scenarios and Selection of
Recommendations:
The industrial group did not have complete capacity or military value
data when it initiated the development of potential closure and
realignment scenarios. Therefore, it had to rely on incomplete data as
well as military judgment to determine which industrial areas had
excess capacity and which could receive new workloads. As time
progressed, however, the group obtained the needed data to inform and
support its scenarios. The DOD Inspector General validated the data.
The maintenance and munitions and armaments subgroups used an
optimization model to help facilitate scenario development, while the
ship overhaul and repair subgroup, which had similar data problems,
also relied on incomplete data as well as military judgment to help
formulate scenarios for consideration. This subgroup did not rely on
the optimization model as extensively as the other subgroups due to the
relatively small number of activities analyzed. Collectively, the
subgroups initially developed 120 proposals and scenarios and with the
maturation of the data, completion of Cost of Base Realignment Actions
(COBRA) analyses, and elimination of alternative scenarios, the
industrial group settled on 34 recommendations that were forwarded to
the ISG with all but 3 being ultimately approved by the IEC.
Despite having incomplete data, the maintenance subgroup began its
scenario development by generating several ideas as potential
scenarios. In testing the feasibility of these ideas, the maintenance
subgroup found it useful to use an optimization model, because the
subgroup was dealing with a universe of 57 commodities across 28 depot
level activities and 11 commodities across over 200 intermediate level
activities which made it extremely difficult to determine where
workload could be consolidated or redistributed. For realignment
considerations, officials told us the preferred method was to
consolidate workload at the highest military value sites that remained
open in the optimization results, but military judgment also played a
role in finalizing the sites. In some instances, military judgment was
used to override the results of the optimization model. For example,
the subgroup chose not to realign the rotary aircraft workload from the
Naval Air Depot at Cherry Point, North Carolina, to the Corpus Christi
Army Depot, Texas, even though it was proposed for realignment under
the optimization model because of concerns about establishing a single
point of failure or vulnerability for DOD's rotary aircraft workload.
One issue that the maintenance subgroup dealt with during its scenario
development was that the current DOD capacity baseline for its
maintenance work was based on a single shift 40 hours per week
workload. According to the subgroup, when using the optimization model,
it found that existing capacity as measured on this basis would
constrain its ability to identify options for achieving more economical
operations. Further, recognizing that such a baseline was inconsistent
with industry practice, the subgroup modified the capacity baseline to
one and a half shifts with a 60 hours weekly workload, thus increasing
available capacity at its industrial activities and the potential for
consolidating work at fewer locations. As we reported after the 1995
BRAC round, a capacity baseline of a single shift 40 hours per week
workload is a conservative projection of capacity because the private
sector frequently uses a capacity baseline of two or two and a half
shifts.[Footnote 116] In addition, based on more current information of
private sector capacity utilization, we still believe that a single
shift is a conservative projection of capacity, since many firms today
work multiple shifts.
Like the maintenance subgroup, the munitions and armaments subgroup
also used the optimization model to test the feasibility of its ideas
and to facilitate its scenario development and analysis. Its emphasis
was on increasing multi-functional activities, (i.e., those activities
that have the capability to do more than one munitions and armaments
function). During scenario development, the subgroup's preference was
to eliminate excess capacity through closure versus realignment.
The ship overhaul and repair subgroup, on the other hand, used mostly
capacity and military value data in combination with military judgment
in developing and analyzing its scenarios. Due to the small number of
activities analyzed--22 depot and intermediate level ship overhaul and
repair activities--the subgroup did not have to rely on the
optimization model to determine where workload could be potentially
consolidated or redistributed. While it did use the model primarily to
check the feasibility and rationalization of scenarios, military
judgment was required because most of the subgroup's scenarios were
influenced by Navy force structure changes and planned changes in the
homeports of ships. According to industrial group officials, expected
out-year changes in Navy force structure--specifically expected
reductions in the number of ships--allowed them to recommend the
closure of a shipyard. Expected changes in the homeports of ships also
influenced the subgroup's intermediate level scenarios because the
Navy's intermediate level maintenance is generally performed where
ships are homeported.
Recommendations Approved by DOD:
The industrial group's 17 recommendations are estimated to produce an
estimated $7.6 billion in 20-year net present value savings. Table 29
provides a summary of the financial aspects of the group's
recommendations.
Table 29: Financial Aspects of the Industrial Joint Cross-Service
Group's Recommendations:
Fiscal year 2005 constant dollars in millions.
Recommended action: Realign to establish Navy Fleet Readiness Centers;
DOD report page: Ind-19;
One-time (costs): ($298.1);
Net implementation (costs) or savings[A]: $1,528.2;
Net annual recurring (costs) or savings: $341.2;
Payback period (years): immediate;
20-year net present value (costs) or savings[B]: $4,724.2.
Recommended action: Close Hawthorne Army Depot, NV;
DOD report page: Ind-12;
One-time (costs): ($180.3);
Net implementation (costs) or savings[A]: $59.2;
Net annual recurring (costs) or savings: $73.4;
Payback period (years): immediate;
20-year net present value (costs) or savings[B]: $777.7.
Recommended action: Close Umatilla Chemical Depot, OR;
DOD report page: Ind-14;
One-time (costs): ($15.5);
Net implementation (costs) or savings[A]: $89.1;
Net annual recurring (costs) or savings: $61.0;
Payback period (years): immediate;
20-year net present value (costs) or savings[B]: $681.1.
Recommended action: Close Newport Chemical Depot, IN;
DOD report page: Ind-8;
One-time (costs): ($7.1);
Net implementation (costs) or savings[A]: $95.6;
Net annual recurring (costs) or savings: $35.7;
Payback period (years): immediate;
20-year net present value (costs) or savings[B]: $436.2.
Recommended action: Close Deseret Chemical Depot, UT;
DOD report page: Ind-17;
One-time (costs): ($4.4);
Net implementation (costs) or savings[A]: $65.1;
Net annual recurring (costs) or savings: $30.3;
Payback period (years): immediate;
20-year net present value (costs) or savings[B]: $356.4.
Recommended action: Close Lone Star Army Ammunition Plant, TX;
DOD report page: Ind-16;
One-time (costs): ($29.0);
Net implementation (costs) or savings[A]: ($4.7);
Net annual recurring (costs) or savings: $17.3;
Payback period (years): immediate;
20-year net present value (costs) or savings[B]: $164.2.
Recommended action: Realign Ship Intermediate Maintenance Activity
Norfolk, VA;
DOD report page: Ind-18;
One-time (costs): ($10.6);
Net implementation (costs) or savings[A]: $26.8;
Net annual recurring (costs) or savings: $8.2;
Payback period (years): 1;
20-year net present value (costs) or savings[B]: $104.3.
Recommended action: Close Kansas Army Ammunition Plant, KS;
DOD report page: Ind-9;
One-time (costs): ($25.2);
Net implementation (costs) or savings[A]: $2.1;
Net annual recurring (costs) or savings: $10.3;
Payback period (years): 2;
20-year net present value (costs) or savings[B]: $101.4.
Recommended action: Realign Sierra Army Depot, CA;
DOD report page: Ind-6;
One-time (costs): ($33.4);
Net implementation (costs) or savings[A]: ($7.2);
Net annual recurring (costs) or savings: $7.5;
Payback period (years): 7;
20-year net present value (costs) or savings[B]: $66.7.
Recommended action: Close Riverbank Army Ammunition Plant, CA;
DOD report page: Ind-5;
One-time (costs): ($25.2);
Net implementation (costs) or savings[A]: ($10.4);
Net annual recurring (costs) or savings: $6.5;
Payback period (years): 3;
20-year net present value (costs) or savings[B]: $53.3.
Recommended action: Close Mississippi Army Ammunition Plant, MS;
DOD report page: Ind-11;
One-time (costs): ($32.4);
Net implementation (costs) or savings[A]: ($10.8);
Net annual recurring (costs) or savings: $5.1;
Payback period (years): 7;
20-year net present value (costs) or savings[B]: $38.6.
Recommended action: Realign Lackland Air Force Base, TX;
DOD report page: Ind-15;
One-time (costs): ($10.2);
Net implementation (costs) or savings[A]: $0.1;
Net annual recurring (costs) or savings: $2.9;
Payback period (years): 3;
20-year net present value (costs) or savings[B]: $28.0.
Recommended action: Realign Lima Army Tank Plant, OH;
DOD report page: Ind-10;
One-time (costs): ($0.2);
Net implementation (costs) or savings[A]: $5.9;
Net annual recurring (costs) or savings: $1.7;
Payback period (years): immediate;
20-year net present value (costs) or savings[B]: $22.3.
Recommended action: Realign Naval Shipyard Detachments;
DOD report page: Ind-26;
One-time (costs): ($12.5);
Net implementation (costs) or savings[A]: $0.9;
Net annual recurring (costs) or savings: $2.3;
Payback period (years): 4;
20-year net present value (costs) or savings[B]: $20.7.
Recommended action: Realign Naval Weapons Station Seal Beach, CA;
DOD report page: Ind-4;
One-time (costs): ($4.1);
Net implementation (costs) or savings[A]: $2.3;
Net annual recurring (costs) or savings: $1.6;
Payback period (years): 1;
20-year net present value (costs) or savings[B]: $17.7.
Recommended action: Realign Rock Island Arsenal, IL;
DOD report page: Ind-7;
One-time (costs): ($27.0);
Net implementation (costs) or savings[A]: ($16.2);
Net annual recurring (costs) or savings: $3.1;
Payback period (years): 9;
20-year net present value (costs) or savings[B]: $13.8.
Recommended action: Realign Watervliet Arsenal, NY;
DOD report page: Ind-13;
One-time (costs): ($63.7);
Net implementation (costs) or savings[A]: ($46.8);
Net annual recurring (costs) or savings: $5.2;
Payback period (years): 18;
20-year net present value (costs) or savings[B]: $5.2.
Total;
One-time (costs): ($778.9);
Net implementation (costs) or savings[A]: $1,779.2;
Net annual recurring (costs) or savings: $613.3;
20-year net present value (costs) or savings[B]: $7,611.8.
Source: GAO analysis of DOD data.
[A] This represents net costs or savings within the 6-year
implementation period required to implement BRAC recommendations.
[B] DOD used a 2.8 percent discount rate to calculate net present
value.
[End of table]
Most of the projected savings from the group's recommendations are
concentrated in relatively few recommendations and nearly all have an
immediate or moderately short payback period where projected savings
are anticipated to offset the implementation costs either immediately
or within a few years. The recommendation regarding the establishment
of Navy fleet readiness centers is by far the largest in terms of
overall savings, accounting for about $341 million, or about 56
percent, of the total estimated net annual recurring savings. As
discussed later, only one recommendation--the realignment of the
Watervliet Arsenal, New York, has a lengthy payback period exceeding 10
years.
Of the industrial joint cross-service group's 17 recommendations, 8 are
closures and 9 are realignments. However, contained within these
recommendations are 40 smaller, individual realignment actions and
several recommendations involve installations with less than 300
personnel that could be but were not required to be proposed under
BRAC. The following summarizes some of our overall observations about
the group's recommendations.
* Interservicing: Despite setting up its military value scoring for
maintenance by commodity to foster opportunities for interservicing,
the industrial group actually developed few recommendations that
proposed greater interservicing. Of the 9 realignment recommendations,
we consider only three to involve interservicing--(1) realigning the
Air Force's depot maintenance workload at Lackland Air Force Base,
Texas, to Tobyhanna Army Depot, Pennsylvania, (2) realigning the Navy's
depot maintenance at Naval Weapons Station Seal Beach, California to
several other service depots, and (3) realigning Lima Army Tank Plant,
Ohio, to support, in part, the future manufacturing of the Marine Corps
expeditionary force vehicle. DOD has stated recently that there is some
interservicing of ground maintenance work already being performed at
the major depots. However, while there is significant interservicing of
electronics work at Tobyhanna Army Depot, Pennsylvania and of rotary
work at Corpus Christi Army Depot, Texas, our analysis shows that
interservicing at the major ground vehicle maintenance depots is very
limited. For example, in fiscal year 2003, only 3 percent of Anniston
Army Depot's total workload was for the Marine Corps and only 3 percent
of Marine Corps Logistics Base Barstow's and Marine Corps Logistics
Base Albany's workloads was for the Army. Moreover, out of 17 major
maintenance depots across the services, the group only proposed the
closure of three--Portsmouth Naval Shipyard, Maine, Red River Army
Depot, Texas and Marine Corps Logistics Base Barstow, California--with
Barstow ultimately becoming a realignment. No recommendations were
developed regarding the Air Force's three relatively large air
logistics centers and only Navy-centric recommendations were developed
regarding the Navy's three naval air depots, despite that the
industrial group had registered scenarios consolidating similar types
of work from a naval air depot into air logistics centers. According to
group officials, they decided not to propose these as recommendations
because of the Navy's desire to combine its aircraft depot and
intermediate work into fleet readiness centers and because this
recommendation offered greater financial benefits. As a result, this
essentially removed the naval air depots from the BRAC analysis in
considering opportunities for more interservicing. While not considered
an industrial group recommendation or otherwise addressed in this
appendix, the industrial group's work also helped the Navy develop a
recommendation realigning some of the workload at Marine Corps
Logistics Base Barstow to Army depots. This recommendation is discussed
in appendix IV.
* Closures: Regarding eight closures, four involve underutilized Army
ammunition facilities, and three are chemical demilitarization
facilities where the primary mission is slated to disappear in the
coming years.
* Savings: Essentially all of the projected savings from the group's
recommendations are based on reducing overhead and eliminating civilian
and military personnel as installations are closed and functions are
realigned between installations. For example, 63 percent of the group's
total projected net annual recurring savings is from reductions in
overhead and 37 percent is from personnel eliminations with civilians
making up 21 percent of total net annual recurring savings and military
personnel 16 percent.
Taken individually, the recommendation that the industrial group
expects will generate the greatest amount of savings is the
establishment of the Navy's fleet readiness centers, which is estimated
to produce net annual recurring savings of $341 million or 56 percent
of the group's total net annual recurring savings and an estimated 20-
year net present value savings of $4.7 billion or 62 percent of the
group's estimated total net present value savings. This realignment
recommendation differs from the other realignments in that it proposes
a significant business process reengineering effort to integrate the
Navy's non-deployable, intermediate and depot level aircraft
maintenance rather than a consolidation or realignment of workload.
While the changes proposed would appear to have the potential for
significant savings, as explained below, some uncertainty exists about
the full magnitude of the savings estimate for this recommendation
because most of the group's projected savings are based on efficiency
gains that have yet to be validated. For example, based on our
analysis, over 63 percent of the estimated net annual recurring savings
for this recommendation are miscellaneous recurring savings projected
to accrue from overhead efficiencies, such as reduced repair time and
charges, while 12 percent of the annual recurring savings is produced
from reductions in military personnel and 24 percent of the savings is
derived from reductions in civilian personnel. These efficiencies are
expected to be gained from integrating intermediate and depot levels of
maintenance and not having to ship as many items to faraway depots for
repair. In addition, 34 percent of the group's net implementation
savings for this recommendation is derived from other one-time unique
savings accrued from one-time reductions in spare parts inventories.
Issues Identified with Approved Recommendations:
Time did not permit us to assess the operational impact of each of the
industrial group's recommendations that was approved by DOD,
particularly those with minimal financial impact and where minimal
realignment and consolidation of workload was proposed. At the same
time, however, we offer a number of broad-based observations about
selected proposed recommendations regarding high payback periods and
uncertain savings that the BRAC Commission may want to consider in its
review.
Navy's Fleet Readiness Centers:
The recommendation on fleet readiness centers is essentially a Navy
business process reengineering effort to transform the way the Navy
conducts aircraft maintenance by integrating existing, non-deployable,
intermediate and depot maintenance levels into a single, seamless
maintenance level. The fleet readiness center construct focuses on the
philosophy that some depot level maintenance actions are best
accomplished at or near the operational fleet. Although the data
suggests the potential for savings, we believe there is some
uncertainty regarding the magnitude of the industrial group's expected
savings for these readiness centers because its estimates are based on
assumptions that have undergone limited testing, and full savings
realization depends upon the transformation of the Navy's supply
system. In determining the amount of savings resulting from the
establishment of the fleet readiness centers, the industrial group and
the Navy made a series of assumptions that focused on combining depot
and intermediate maintenance in a way that would reduce the time an
item is being repaired at the intermediate level, which in turn, would
simultaneously reduce the number of items needed to be kept in
inventory and the number of items sent to a depot for repair. These
assumptions, which were the major determinant of realignment savings,
were based on historical data and pilot projects and have not been
independently reviewed or verified by the Naval Audit Service, DOD
Inspector General, or us. Moreover, how well these actions, if
approved, are implemented will be key to determining the amount of
savings realized.
According to the group, two types of savings account for the majority
of the projected savings from the fleet readiness center
recommendation. First, one-time savings are projected to accrue from
reductions in inventory maintained at several Navy shore locations
because item repair cycle time for components is reduced with more
depot level maintenance being performed at or near the fleet, generally
at an intermediate facility. According to group officials, this
reduction is accomplished by stationing several depot level repair
personnel at an intermediate facility to assist in repairing an item on
site rather that spending time re-packing and shipping the item to a
depot for repair. By reducing the turnaround time for an item--that is,
time spent in transit to and from a depot level repair facility, group
officials estimate that the average time an item is in the repair
pipeline will decrease from 28 hours to 9 hours, with nearly all that
time spent on the actual repair. The industrial group maintains this
reduction in turnaround time will allow for savings since fewer items
will need to be kept in the shore based aviation consolidated inventory
because items will be getting repaired quicker and returned to the
inventory faster.[Footnote 117] The second type of savings is recurring
overhead savings that are projected to accrue from fewer items being
sent to depots for repair. According to group officials, establishing
fleet readiness centers will result in fewer items being sent to a
depot to be repaired, thus reducing per item maintenance costs. These
savings are captured in the COBRA model under overhead as miscellaneous
recurring savings. As explained by group officials, when an item is
sent to a depot, two charges are applied to the cost to repair the
item--a component unit price and a cost recovery rate. So, if fewer
items are sent to a depot, then fewer repair charges are incurred and
less overhead costs are incurred.
However, according to an industrial group official, since the depots
will have fewer items to repair, they will have fewer opportunities to
generate revenue to support their working capital fund
operations.[Footnote 118] This situation, in turn, could create an
incentive for the depot to increase its cost recovery rate for items it
does repair to make up for reduced revenues. If this were to occur,
then the projected savings would not materialize because most of the
fleet readiness center savings are based on a reduction in the number
of items sent to depots and are contingent on the supply system not
drastically raising the cost recovery rate. According to industrial
group officials, it will be important to overall transformation efforts
that DOD follow through on eliminating management structures and
duplicate layers of inventory in the supply system. Also, according to
these officials, some of this supply-side transformation is already
underway at the retail level in the form of a partnership between fleet
industrial supply centers and the naval air depots where material
management for the depots was handed over to the supply centers to
standardize supply chain processes, improve material availability, and
reduce the material excesses that have been a difficult problem for the
naval air depots. In addition, group officials stated that the supply
and storage joint cross-service group's recommendation to realign
supply, storage, and distribution management should also further this
transformation by eliminating unnecessary redundancies and duplication
and by streamlining supply and storage processes, which will reduce
costs and help prevent a large increase in the cost recovery rate.
In addition, we believe there is some potential risk in properly
accounting for depot level work to meet legislatively mandated
reporting requirements on the percentage of depot workload performed in
government and contractor facilities,[Footnote 119] absent efforts to
ensure adequate differentiation of work completed for intermediate and
depot level maintenance. We previously reported on similar difficulties
in 2001 involving a consolidation of intermediate and depot level work
at Pearl Harbor Naval Shipyard, Hawaii.[Footnote 120] We noted that,
prior to consolidation, the Navy's determination of depot and
intermediate maintenance work was based on which facility performed it-
-the former Pearl Harbor shipyard performed depot work, and the former
intermediate maintenance facility performed intermediate work. However,
because Pacific Fleet and Pearl Harbor officials asserted that all work
was considered and classified the same at the consolidated facility,
the management and financial systems did not differentiate between
depot and intermediate categories of work. As a result, the lines
between what was considered intermediate and depot maintenance became
blurred, making it harder to report what was intermediate and depot
maintenance. The industrial group maintains that during the first few
years of implementing the fleet readiness center recommendation, the
Navy will continue to operate depot maintenance within the working
capital fund (setting up a separate holding account) and perform
intermediate maintenance with mission funding. During this period,
depot maintenance will be reported as depot maintenance and
intermediate maintenance will be reported as intermediate maintenance.
While this should mitigate the accounting issue in the short-term, it
is unclear to what extent longer term measures will be needed to ensure
proper reporting of depot work to meet statutory requirements.
Savings for Chemical Depots after Implementation:
The net annual recurring savings may be overstated for the three
chemical depots recommended for closure--Newport, Umatilla, and
Deseret--and it is unclear whether such facilities are appropriately
included in the BRAC process.[Footnote 121] The industrial group
estimated net annual recurring savings of $127 million for the three
chemical demilitarization facilities, $20 million of which is from
anticipated savings by not recapitalizing these closed BRAC
installations. However, the current missions of each of these
installations are focused on the destruction of existing chemical
weapons stockpiles, and after the stockpiles are destroyed, the
destruction facilities themselves are scheduled to be dismantled and
disposed of in accordance with applicable laws and agreements with the
governors of the states in which they are located. With the exception
of the recommended transfer of storage igloos and magazines from
Deseret to Tooele Army Depot, Utah, Army officials have not identified
any existing plans for future missions at these depots once the
chemical destruction mission is complete. Consequently, it is unclear
how the closure of the depots will result in recapitalization savings.
Additionally, given the general delays in the Army's chemical weapons
destruction program[Footnote 122] it is uncertain that it will be able
to complete the chemical weapons destruction mission and close these
depots within the 6-year BRAC statutory implementation period.
Hawthorne Army Depot:
There is uncertainty surrounding the Army's ability to close the
Hawthorne Army Depot, Nevada, by 2011, the final year as prescribed by
the BRAC legislation for implementing BRAC actions. The Army may be
unable to demilitarize all the unserviceable munitions stored at the
depot by 2011, thereby placing the Army at risk for closing the depot
by that date. Army officials told us that demilitarization funds have
not been fully used for demilitarization purposes in recent years, but
for other purposes. As a result, the stockpile of unserviceable
munitions is growing. The funding situation is of such concern that an
Army official told us they intend to request the DOD Comptroller issue
a memorandum that would administratively "fence" funding in the
demilitarization account to better ensure that the funds will be used
for reducing the stockpiles of unserviceable munitions. This official
also told us that this funding situation could be further exacerbated
with the potential for the return to the United States of additional
unserviceable munition stockpiles that are currently stored in Korea,
even though the group considered these stocks in its analysis. This
official stated that if these unserviceable munitions are returned for
demilitarization to Hawthorne, there will be added pressure to finish
the demilitarization process in time to close the facility by 2011.
Closure of Ammunition Plants:
Currently, the Army leases some property at its ammunition plants
through the Army's program called the Armament Retooling and
Manufacturing Support Initiative. DOD has recommended for closure four
ammunition plants that are part of this initiative--Mississippi,
Kansas, Lone Star, and Riverbank. We previously reported that, while
this initiative has offset some of the Army's maintenance costs,
maintaining ammunition plants in an inactive status still represents a
significant cost to the federal government.[Footnote 123] Through this
initiative, the Army contracts with an operating contractor that
conducts maintenance, repair, restoration, and remediation in return
for use of the inactive part of the facility. The operating contractor,
in turn, locates and negotiates with tenants regarding lease rates,
facility improvements, and contract terms. However, the effect on these
tenants of closing the four ammunition plants involved with the
initiative is currently unknown. Army officials responsible for the
initiative told us that past transfers of such property outside of the
BRAC process have been handled poorly in that the General Services
Administration or Army Corps of Engineers, the agencies responsible for
transferring excess property, evicted the tenants and then sold the
property separately, as was the case in past closures such as the
Indiana Army Ammunition Plant. Army officials said that property
transfers conducted in this manner could be costly because the
government must incur some costs that were paid by the tenants, such as
for security and maintenance. For example, an Army analysis showed that
retaining the ARMS tenants on Indiana Army Ammunition plant rather than
evicting them would have saved about $41 million. Additionally, DOD may
incur some costs if leases are terminated early. An industrial group
official told us that the group included termination costs for leases
that extended past the proposed closure date but only for tenants
performing DOD work, not for other tenants. We believe that lease
termination costs should have been included for any tenant's lease that
extends past the proposed closure date, since there may be a cost
incurred for breaking the lease early. However Army officials said that
it would be difficult to estimate such potential costs at this time.
Watervliet Arsenal, New York:
Despite having a payback period of 18 years, the industrial group
proposed the realignment of Watervliet Arsenal, New York, because it
has considerable excess capacity and DOD will no longer require some of
its capabilities. The group had originally considered either moving the
entire workload of the arsenal to Rock Island Arsenal, Illinois, or
moving the entire workload of Rock Island Arsenal to Watervliet
Arsenal. However, according to industrial group officials environmental
issues regarding potential chromium discharges into the Mississippi
River and costs associated with moving heavy industrial equipment
precluded a cost-effective realignment of moving the work at Watervliet
Arsenal to Rock Island Arsenal. Similarly, air quality issues regarding
sulfur dioxide emissions along with the costs to move equipment
precluded a cost-effective realignment of moving the work at Rock
Island Arsenal work to Watervliet Arsenal, since the Northeast region
already exceeds allowable limits for sulfur dioxide emissions. As shown
in the table 29, the Watervliet recommendation has a payback period of
18 years, with about $63.7 million in one time unique costs and only
$5.2 million in net annual recurring savings. According to industrial
group officials, these one-time costs reflect the costs of "shrinking
the footprint," (i.e., moving out of buildings and eliminating and
moving excess equipment at both the arsenal and the accompanying
research laboratories also located at the arsenal).
[End of section]
Appendix IX: Intelligence Joint Cross-Service Group Selection Process
and Recommendations:
The Intelligence Joint Cross-Service Group followed the common
analytical framework established by the Office of the Secretary of
Defense (OSD) in reviewing its functions and facilities. The
Intelligence Joint Cross-Service Group produced two recommendations
that it projects will yield about $588 million in 20-year net present
value savings, with a payback period of 8 years for each
recommendation. The majority of savings in the two recommendations
result from lease terminations. Unlike the services or other groups,
there is little savings projected from personnel reductions because,
according to officials, almost all of the personnel will relocate and
end strength is projected to increase as a result of program growth.
The DOD Inspector General and service audit agencies, which performed
audits of the data, concluded that the data were sufficiently reliable
for use during the BRAC process.
Organization and Focus:
The intelligence group was responsible for reviewing intelligence
functions throughout DOD. Previous BRAC rounds did not involve the
participation of any joint cross-service group dedicated to analyzing
intelligence functions. The intelligence group was chaired by the
Deputy Under Secretary of Defense (Counterintelligence &
Security).[Footnote 124] The Group's principals included senior members
from the Defense Intelligence Agency, National Geospatial-Intelligence
Agency, National Reconnaissance Office, National Security Agency, each
military department, and the Joint Staff Directorate for Intelligence,
along with representation from the offices of the Director, Central
Intelligence Community Management Staff, and the Department of Defense
Inspector General.
The intelligence group formed four functional subgroups: Sources and
Methods; Correlation, Collaboration, Analysis, and Access; Management
Activities; and National Decisionmaking and Warfighting Capabilities.
The first three subgroups each created an analytical construct for
measuring defense intelligence capacity that resulted in a capacity
data call. These subgroups were eventually replaced by a single Core
Team that included membership from each organization represented in the
Intelligence Joint Cross-Service Group. This team created a single,
consolidated analytical construct for measuring the military value of
defense intelligence facilities. The team also performed detailed
capacity and military value analysis, evaluated scenario ideas,
executed scenario data calls, and prepared Intelligence Joint Cross-
Service Group candidate recommendations for deliberation.
The overarching intelligence principle the group worked to support was
that DOD needs intelligence capabilities to support the National
Military Strategy by delivering predictive analyses, warning of
impending crises, providing persistent surveillance of our most
critical targets, and achieving "horizontal" (that is, interagency)
integration of networks and databases. To do so, the group focused on
four key objectives:
* Locating and upgrading facilities on protected installations as
appropriate.
* Reducing vulnerable commercial leased space.
* Realigning selected intelligence functions/activities and
establishing facilities to support continuity of operations and mission
assurance requirements.
* Providing infrastructure to facilitate robust information flow
between analysts, collectors, and operators at all echelons and achieve
mission synergy.
The group conducted an assessment of defense intelligence for
buildings, facilities, and personnel performing the intelligence
function. The objective was to project an alignment of present
capabilities, with current organizational compositions and business
processes, to desired future operational capabilities, using DOD's
transformational concepts and preferred organizational construct.
Framework for Analysis:
The intelligence group initially identified five broad functions to
analyze in defense intelligence: Sources and Methods (Acquisition and
Collection); Analysis; Dissemination; Management Activities; and
Sustainability. Based on subsequent Infrastructure Steering Group
guidance, these five broad functions were consolidated into a single
function--defense intelligence--in the final military value scoring
plan. Capacity analysis and then military value analysis were the
starting points for the BRAC analytical process. The DOD Inspector
General and service audit agencies performed an important role in
ensuring the accuracy of data used in these analyses through extensive
audits of data gathered at various locations.
Capacity Analysis:
To assess capacity, the intelligence group identified buildings and
facilities performing the intelligence function and developed related
attributes, metrics, and questions for analysis. Data calls were issued
to the defense intelligence community to gather certified data on
intelligence buildings and facilities. The capacity analysis identified
limited excess capacity in some organizations, but no overall excess
capacity, as shown in table 30.
Table 30: Excess Capacity Identified by the Intelligence Joint Cross-
Service Group:
Organization: Air Force;
Percentage of excess capacity (shortage): 0.01%.
Organization: Army;
Percentage of excess capacity (shortage): (3%).
Organization: Marine Corps;
Percentage of excess capacity (shortage): (20%).
Organization: Navy;
Percentage of excess capacity (shortage): (4%).
Organization: Under Secretary of Defense, Intelligence;
Percentage of excess capacity (shortage): (17%).
Organization: Counter Intelligence Field Agency;
Percentage of excess capacity (shortage): 2%.
Organization: Joint Staff (Combatant Commands);
Percentage of excess capacity (shortage): (58%).
Organization: Defense Intelligence Agency;
Percentage of excess capacity (shortage): (24%).
Organization: National Geospatial-Intelligence Agency;
Percentage of excess capacity (shortage): 11%.
Organization: National Reconnaissance Office;
Percentage of excess capacity (shortage): 2%.
Organization: National Security Agency;
Percentage of excess capacity (shortage): 0.3%.
Organization: Total;
Percentage of excess capacity (shortage): (1.9).
Source: Intelligence Joint Cross-Service Group.
Note: Excess capacity measured in square feet.
[End of table]
The negative excess capacity shown in table 30 differs from the group's
initial capacity data results, which showed an overall excess capacity
of 18 percent. However, after reviewing the initial data, the
intelligence group made two adjustments. First, the group removed
buildings with no direct intelligence mission, such as barracks, pump
houses, tunnels, or warehouses. Then the group increased its estimate
of the area of square feet required for personnel temporarily working
at another intelligence entity and for contractor personnel by 50
percent.[Footnote 125] The group did not identify any known documented
requirements for the defense intelligence community to set aside space
or facilities for surge. The intelligence community has historically
handled surge operations by reassigning and reallocating existing
resources within the current square footage.
Military Value Analysis:
All BRAC 2005 selection criteria were applied by the intelligence group
across the defense intelligence functional support area and used with
the force structure plan and infrastructure inventory to perform
analyses. Priority consideration was given to military value by
evaluating and scoring activities based on the first four selection
criteria. Table 31 below shows the weighted value the intelligence
group gave to the criteria, based on a 100-point scale.
Table 31: Intelligence Joint Cross-Service Group Military Value
Criteria Weights:
Figures in percentages.
Military value criteria: 1. The current and future mission capabilities
and the impact on operational readiness of the total force of the
Department of Defense, including the impact on joint warfighting,
training, and readiness; 40%.
Military value criteria: 2. The availability and condition of land,
facilities, and associated airspace (including training areas suitable
for maneuver by ground, naval, or air forces throughout a diversity of
climate and terrain areas and staging areas for the use of the Armed
Forces in homeland defense missions) at both existing and potential
receiving locations; 30%.
Military value criteria: 3. The ability to accommodate contingency,
mobilization, surge, and future total force requirements at both
existing and potential receiving locations to support operations and
training; 20%.
Military value criteria: 4. The cost of operations and the manpower
implications; 10%.
Total; 100%.
Source: DOD and the Intelligence Joint Cross-Service Group.
Note: The system of weights provided a basis for assigning relative
value to data collected and tabulated across each military value
dimension.
[End of table]
The intelligence group assessed the military value of its facilities
based on those facilities' capabilities to support the intelligence
function. A single scoring plan measured the value of both the
infrastructure and the personnel performing the defense intelligence
function at a given facility. Attributes and weighted metrics were used
to compute the military value of a building by assessing the facility's
physical infrastructure and locations as they related to selection
criteria 1 through 4. After computing military value scores, a rank-
ordered listing of the 267 intelligence facilities was developed for
the defense intelligence function. Subsequently, strategy-driven
scenarios were validated by analyses of military value data and
military judgment. Figure 16 illustrates how the military value
attributes, metrics, and data questions were linked to the military
value criteria using selected attributes, metrics, and questions.
Figure 16: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of an Intelligence Facility:
[See PDF for image]
[A] The BRAC military value criteria are the first 4 BRAC selection
criteria.
[B] Military value attributes are characteristics of each criterion.
The Intelligence Joint Cross-Service Group used a total of 2 military
value attributes.
[C] Military value metrics are measures for the attributes. The
Intelligence Joint Cross-Service Group used a total of 12 military
value metrics.
[D] The Intelligence Joint Cross-Service Group used a total of 59 data
call questions.
[End of figure]
A similar process was followed for all of the 267 intelligence
facilities.
DOD Inspector General's and Service Audit Agencies' Role in the
Process:
The DOD Inspector General and service audit agencies reviewed the data
and processes used by the Intelligence Joint Cross-Service Group to
develop its recommendations. The overall objective was to evaluate the
validity, integrity, and documentation of data used by the subgroups.
The DOD Inspector General and service audit agencies used real-time
audit coverage of data collection and analysis processes to ensure that
the data used in the groups' capacity analysis, military value
analysis, and use of optimization models was certified and was used as
intended. Through extensive audits of the data collected from field
activities during the process, the DOD Inspector General notified the
group of data discrepancies for the purpose of follow-on corrective
action. The DOD Inspector General ultimately determined, once the
corrections to all the discrepancies were noted, the intelligence data
to be sufficiently reliable for use in the BRAC process.
Identification and Assessment of Alternate Scenarios and Selection of
Recommendations:
The Intelligence Joint Cross-Service Group developed 13 scenarios,
which after further analysis led to 6 candidate recommendations being
presented to the Infrastructure Steering Group and the Infrastructure
Executive Council, the latter of which approved 3 candidate
recommendations. One of these 3 approved candidate recommendations was
subsequently incorporated into a recommendation proposed by the
headquarters group.
Some scenarios were eliminated because they were alternatives to a
proposed recommendation. Other scenarios were eliminated because of
concerns over high implementation costs and long payback periods--that
is, the length of time required for the savings to offset closure
costs. For example, the group developed a scenario to establish
selected continuity of operations and mission assurance functions at
White Sands Missile Range, New Mexico, but it was disapproved by the
Infrastructure Executive Council because it had a one-time cost of $1.8
billion and a projected payback period of never.
Recommendations Approved by DOD:
The Intelligence Joint Cross-Service Group projects that its two
recommendations will produce almost $588 million in 20-year net present
value savings, and almost $138 million in net annual recurring savings.
Table 32 below provides a summary of the financial aspects of the
group's recommendations.
Table 32: Financial Aspects of the Intelligence Joint Cross-Service
Group's Recommendations:
Fiscal year 2005 constant dollars in millions.
Recommended action: Close National Geospatial-Intelligence Agency
leased locations, relocate to Fort Belvoir, VA;
DOD report page: Int-4;
One-time (costs): ($1,117.3);
Net: implementation: (costs) savings[A]: ($796.7);
Net annual recurring savings: $127.7;
Payback: period: (years): 8 years;
20-year net present: value savings[B]: $535.1.
Recommended action: Realign Defense Intelligence Agency functions;
DOD report page: Int-3;
One-time (costs): ($96.7);
Net: implementation: (costs) savings[A]: ($48.8);
Net annual recurring savings: $10.1;
Payback: period: (years): 8 years;
20-year net present: value savings[B]: $52.8.
Total;
One-time (costs): ($1,214.0);
Net: implementation: (costs) savings[A]: ($845.5);
Net annual recurring savings: $137.8;
20-year net present: value savings[B]: $587.9.
Source: GAO analysis of DOD data.
[A] This represents net costs or savings within the 6-year
implementation period required to implement BRAC recommendations.
[B] DOD used a 2.8 percent discount rate to calculate net present
value.
[End of table]
The majority of the net annual recurring savings in the two
recommendations is from the avoidance of future leased cost when
activities move from leased space to military installations.
Intelligence Joint Cross-Service Group officials noted that about one-
half of the estimated $1.1 billion one-time costs for the National
Geospatial-Intelligence Agency move will be paid from National
Intelligence Program funds.
Issue Identified with Approved Recommendations:
The recommendation to move the National Geospatial-Intelligence Agency
from various leased sites to Fort Belvoir, Virginia, will have a
significant impact on the local community when added to other proposals
to move activities to Fort Belvoir.[Footnote 126] This one proposal
would move about 8,500 personnel to Fort Belvoir from Bethesda,
Maryland, Washington, DC and the northern Virginia area. The BRAC
Commission may wish to consider the impact on the local community
infrastructure, such as roads and public transportation, when
evaluating this and other proposals affecting Fort Belvoir.
[End of section]
Appendix X: Medical Joint Cross-Service Group Selection Process and
Recommendations:
The Medical Joint Cross-Service Group followed the common analytical
framework established by the Office of the Secretary of Defense (OSD)
for reviewing the military health care system. It produced 22 candidate
recommendations; one was disapproved late in the process by the
Infrastructure Executive Council (IEC), and one was integrated with a
service recommendation. The remaining 20 recommendations were combined
into 6 recommendations that were ultimately approved by DOD. These 6
recommendations are projected to produce about $2.7 billion in
estimated net present value savings over a 20-year period. The expected
payback period, or length of time for the savings to offset costs
associated with the recommendations, varies from immediately to 10
years. We have identified various issues regarding the recommendations
that may warrant further attention by the BRAC Commission. These
include the likelihood that some estimated savings could be less than
projected, lengthy or no payback periods for certain proposed actions
embedded within the more complex recommendations, and uncertainties
about future requirements and their impact on the viability of the
recommendations. While the group encountered some challenges in
obtaining accurate and consistent certified data on a cross-service
basis, the DOD Inspector General and the military service audit
agencies ultimately concluded that the data used by the medical group
were sufficiently reliable for use in the BRAC process.
Organization and Focus:
The medical group was chaired by the Surgeon General of the Air Force
and included the Surgeon General of the Navy, the Deputy Surgeon
General of the Army, the Medical Officer of the Marine Corps, and the
Acting Deputy Assistant Secretary for Health Budgets and Financial
Policy. In carrying out its BRAC analyses, the medical group
established functional area working groups and subgroups consisting of
subject matter experts and analysts from each of the military services
and the OSD Health Affairs.[Footnote 127] The group's objectives were
to develop recommendations to:
* support the warfighters and their families,
* maximize military value while reducing infrastructure and maintaining
an adequate surge capability,
* maintain and improve access to care for all beneficiaries, including
military retirees,
* enhance jointness,
* identify and maximize synergies from co-location or consolidation,
and:
* examine outsourcing opportunities, such as increasing the use of
civilian care providers, to allow DOD to leverage its efforts across
the overall United States health care system.
Framework for Analysis:
The medical group organized and conducted its BRAC analyses of DOD's
military health care system focusing on three broad functions: (1)
health care services; (2) health care education and training; and (3)
medical and dental research, development, and acquisition. As with
other military services and joint cross-service groups, capacity and
military value analyses were the starting points for the group's
analyses. The DOD Inspector General and service audit agencies
performed an important role in ensuring the accuracy of data used in
these analyses through extensive audits of data gathered at various
locations.
Capacity Analysis:
In establishing the analytical framework for developing its
recommendations, the medical group analyzed the military health
system's capacity in terms of services, workloads, and facilities. The
group developed specific functional area metrics for measuring capacity
and collected certified data associated with these metrics from
military installations across the country. It used a range of metrics,
depending on the functional area being assessed, such as military
health care population and workloads, number of hospital beds,
available and currently used building space, length and frequency of
education and training programs, personnel requirements, and equipment
usage, to measure capacity.
Based on the group's capacity analysis, the military health system was
found to have excess capacity within two of the three functional areas
it reviewed. As shown in table 33, the excess capacity resides
predominantly in the health care services and education and training
functions. Within the health care services function, the analysis
showed that dental care has virtually no excess capacity because of the
use of contract providers and substantial infrastructure adjustments
since previous BRAC rounds. The group's capacity analysis report
acknowledged that even though adjustments have been made to the health
care system since the BRAC 1995 round, the medical system
infrastructure is still generally based on a Cold War strategy with
minimal reliance on civilian health care providers.
Table 33: Excess Capacity Identified by the Medical Joint Cross-Service
Group:
Functional areas[A]: Health care services: Health care-primary care;
Percentage of excess capacity: 38%.
Functional areas[A]: Health care services: Health care-specialty care;
Percentage of excess capacity: 14%.
Functional areas[A]: Health care services: Health care inpatient;
Percentage of excess capacity: 48%.
Functional areas[A]: Health care services: Health care dental;
Percentage of excess capacity: 0%.
Functional areas[A]: Health care education and training: Laboratories;
Percentage of excess capacity: 77%.
Functional areas[A]: Health care education and training: Clinical;
Percentage of excess capacity: 15%.
Functional areas[A]: Health care education and training: Classrooms;
Percentage of excess capacity: 56%.
Functional areas[A]: Health care research, development, and
acquisition: Personnel;
Percentage of excess capacity: 3%.
Source: Medical Joint Cross-Service Group data.
[A] A variety of metrics was used depending on the functional areas
being assessed. For example, the number of procedures was used for
assessing health care services while the number of full-time
equivalents was used in assessing health care research, development,
and acquisition functions.
[End of table]
The group developed surge factors for its analysis of inpatient and
research, development, and acquisition functions, which are part of the
percentages in table 33. It determined that the high operational tempo
would be maintained for 30 days. However, the group determined that
surge factors were not necessary for other functional areas because of
their inherent surge capabilities to handle potential workload
increases. It assumed that potential workload surge requirements could
be handled through various sources, such as the use of civilian
providers in the TRICARE network,[Footnote 128] civilian medical
education and training programs, and extended operations.
According to DOD medical officials, the Department of Health and Human
Services, rather than DOD, is responsible for domestic homeland medical
support, but defense medical personnel and infrastructure could be used
to assist in handling domestic medical emergency situations. According
to DOD officials, since this support is not part of DOD's defined
mission, it was not included in the medical group's analysis. However,
DOD officials also told us that the Joint Chiefs of Staff and the OSD
had coordinated the BRAC analysis with major commands that would be
impacted by BRAC proposals, including the U.S. Northern Command, which
is responsible for the homeland defense mission.
DOD is in the process of reviewing the military health care system's
ability to meet future medical readiness requirements, including an
evaluation of medical infrastructure at various levels of operations
from contingencies to full operational surges. DOD intends to include
Department of Homeland Security policies in this review. According to
DOD officials, the results of this ongoing assessment were not included
in the medical group's capacity analysis because the assessment is not
expected to be completed until after the BRAC recommendations are
finalized, following reviews by the BRAC Commission, the President, and
Congress. Nevertheless, the medical group made a determination that the
current medical force size[Footnote 129] was adequate to meet the
requirements of various war plans, and after reviewing the fiscal year
2006 program objective memorandum and the 20-year force structure plan,
it decided to use the current force structure for its analysis.
Further, the group concluded that deployment force sizing, a readiness
issue, did not have direct influence on determining excess facility
capacity.
The medical group estimates that its recommendations, if adopted, would
result in a 12 percent reduction in excess inpatient medical capacity
and an approximately 7.4 million square feet net reduction in overall
facility space.
Military Value Analysis:
The medical group's assessment of military value, like its excess
capacity assessment, focused on the same three functional areas: (1)
health care services; (2) health care education and training; and (3)
medical and dental research, development, and acquisition.
The military value analysis helped to establish the basis for
realigning medical functions across the various installations or
closing specific activities within the medical infrastructure. It also
helped to gauge the impact of the group's proposed scenarios on the
overall DOD health care system. The military value methodology for this
BRAC round was similar, in many respects, to the one used in the 1995
round, especially for medical functions. For example, both rounds
identified affected populations and local civilian providers within
catchment areas.[Footnote 130] In both rounds, military value played a
predominant role in formulating recommendations. Moreover, during the
2005 round, the medical group considered the impact on local
beneficiaries, such as military retirees, from downsizing or
eliminating medical facilities, which included input from a DOD-
chartered military health benefit working group.[Footnote 131] This
working group included independent members who represented TRICARE
regions throughout the United States.
The medical group's functional military value analysis assessed the
relative capabilities of various activities and facilities supporting
the military health care system's mission and operational needs. Its
military value analysis was directly linked to the four military value
criteria required by the BRAC legislation. For example, the military
value analysis gave greater weight to services supporting active duty
members in order to emphasize force readiness. Table 34 shows the
relative weights that the group developed for each of the four
selection criteria that relate to military value.
Table 34: Medical Joint Cross-Service Group Military Value Criteria
Weights:
Figures in percentages.
Military value criteria: 1. The current and future mission capabilities
and the impact on operational readiness of the total force of the
Department of Defense, including the impact on joint warfighting,
training, and readiness;
Health care services weight: 45%;
Health care education and training weight: 45%;
Medical and dental research, development, and acquisition weight: 55%.
Military value criteria: 2. The availability and condition of land,
facilities, and associated airspace (including training areas suitable
for maneuver by ground, naval, or air forces throughout a diversity of
climate and terrain areas and staging areas for the use of the Armed
Forces in homeland defense missions) at both existing and potential
receiving locations;
Health care services weight: 25%;
Health care education and training weight: 20%;
Medical and dental research, development, and acquisition weight: 5%.
Military value criteria: 3. The ability to accommodate contingency,
mobilization, surge, and future total force requirements at both
existing and potential receiving locations to support operations and
training;
Health care services weight: 10%;
Health care education and training weight: 25%;
Medical and dental research, development, and acquisition weight: 23%.
Military value criteria: 4. The cost of operations and the manpower
implications;
Health care services weight: 20%;
Health care education and training weight: 10%;
Medical and dental research, development, and acquisition weight: 17.
Total;
Health care services weight: 100%;
Health care education and training weight: 100%;
Medical and dental research, development, and acquisition weight: 100.
Source: DOD and Medical Joint Cross-Service Group.
Note: The system of weights provided a basis for assigning relative
value to data collected and tabulated across each military value
dimension.
[End of table]
In developing its analysis in accordance with the criteria above, the
group developed specific functional area attributes, metrics, and data
call questions to assist in assessing military value. Figure 17
provides an example of such analysis for the health care services
functional area and its linkage to the BRAC legislation.
Figure 17: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of Health Care Services:
[See PDF for image]
[A] The BRAC military value criteria are the first four BRAC selection
criteria.
[B] Military value attributes are characteristics of each criterion.
The medical group used a total of six military value attributes in its
health care services functional area analysis.
[C] Military value metrics are measures for the attributes. The medical
group used a total of 16 military value metrics in its military value
analysis of health care services functions.
[D] The medical group used a total of 24 data call questions in its
health care services military value analysis.
[End of figure]
DOD Inspector General's and Service Audit Agencies' Roles in the
Process:
The DOD Inspector General and the service audit agencies played
important roles in ensuring that the data used in the medical group's
analyses were certified and properly supported. The involvement of
these audit groups included validation of data submitted by the
military services, compliance with data certification requirements, the
integrity of the group's databases, accuracy of the analytical process
in terms of calculations, and the adequacy of supporting documentation.
These audit groups conducted extensive audits of the data collected
from the military installations, and in some instances data
discrepancies were identified for follow-on corrective actions. While
the process for detecting and correcting data errors was quite lengthy,
the DOD Inspector General and audit agencies determined that the
medical-related data were sufficiently reliable for use in the BRAC
process.
Identification and Assessment of Alternate Scenarios and Selection of
Recommendations:
The medical group's study objectives, military judgment, and capacity
and military value analyses helped to identify closure and realignment
scenarios for consideration. Identification and evaluation of scenarios
was also facilitated by use of an optimization model to identify
recommendations that could aid in optimizing medical health care
workloads and infrastructure.[Footnote 132] The group also developed
scenarios that included establishing a minimum level of average daily
patient workload for inpatient facilities and by reducing excess
capacity in multiservice markets to achieve efficiencies.[Footnote 133]
It also used the Cost of Base Realignment Actions (COBRA) model to
estimate the potential net costs or savings for its scenario proposals.
The group also considered the scenarios' impact on the local economy,
the DOD medical beneficiary population and graduate medical education
requirements, and the environment.
The medical group submitted 22 recommendations to the IEC, which
disapproved one of the recommendations--the proposal to close the
Uniformed Services University of the Health Sciences at Bethesda,
Maryland. This matter is discussed further in the next section of this
appendix. Further, another recommendation was integrated with a service
realignment and closure action. The remaining 20 recommendations were
combined into 6 recommendations that were ultimately approved by DOD.
Recommendations Approved by DOD:
The group produced 6 recommendations which they reported will yield an
estimated $2.7 billion in 20-year net present value savings and $412
million in net annual recurring savings. Table 35 below provides a
summary of the financial aspects of the group's recommendations.
However, the group acknowledges that it incorrectly reported certain
financial data for its recommendation involving the Walter Reed Army
Medical Center. Based on our analysis, the revised estimates are shown
as a note to table 35.
Table 35: Financial Aspects of the Medical Joint Cross-Service Group's
Recommendations:
Fiscal year 2005 constant dollars in millions.
Recommended action: Close Brooks City-Base, San Antonio, TX, by
relocating functions to Randolph Air Force Base, Wright-Patterson Air
Force Base, Lackland Air Force Base, Fort Sam Houston, and Aberdeen
Proving Ground;
DOD report page: Med-6;
One-time (costs): ($325.3);
Net implementation: (costs) or savings[A]: ($45.9);
Net annual recurring (costs) or savings: $102.1;
Payback period (years): 2;
20-year net present value (costs) or savings[B]: $940.7.
Recommended action: Realign various activities by converting inpatient
services to clinics at Marine Corps Air Station Cherry Point, Fort
Eustis, U.S. Air Force Academy, Andrews Air Force Base, MacDill Air
Force Base, Keesler Air Force Base, Scott Air Force Base, Naval Station
Great Lakes, and Fort Knox;
DOD report page: Med-12;
One-time (costs): ($12.9);
Net implementation: (costs) or savings[A]: $250.9;
Net annual recurring (costs) or savings: $60.2;
Payback period (years): immediate;
20-year net present value (costs) or savings[B]: $818.1.
Recommended action: Establish San Antonio Regional Medical Center at
Fort Sam Houston, Brooke Army Medical Center; and realign basic and
specialty enlisted medical training to Fort Sam Houston;
DOD report page: Med-10;
One-time (costs): ($1,040.9);
Net implementation: (costs) or savings[A]: ($826.7);
Net annual recurring (costs) or savings: $129.0;
Payback period (years): 10;
20-year net present value (costs) or savings[B]: $476.2.
Recommended action: Realign Walter Reed Army Medical Center (all
tertiary care to Bethesda National Naval Medical Center and primary and
specialty care to Fort Belvoir)[C];
DOD report page: Med-4;
One-time (costs): ($988.8);
Net implementation: (costs) or savings[A]: ($724.2);
Net annual recurring (costs) or savings: $99.6;
Payback period (years): 10;
20-year net present value (costs) or savings[B]: $301.2.
Recommended action: Realign McChord Air Force Base by relocating all
medical functions to Fort Lewis;
DOD report page: Med-9;
One-time (costs): ($1.1);
Net implementation: (costs) or savings[A]: $55.1;
Net annual recurring (costs) or savings: $11.6;
Payback period (years): immediate;
20-year net present value (costs) or savings[B]: $164.4.
Recommended action: Realign various activities to create joint centers
of excellence for chemical, biological, and medical research,
development, and acquisition (at Fort Sam Houston, Walter Reed Army
Medical Center--Forrest Glen Annex, Wright-Patterson Air Force Base,
Fort Detrick, and Aberdeen Proving Ground);
DOD report page: Med-15;
One-time (costs): ($73.9);
Net implementation: (costs) or savings[A]: ($45.9);
Net annual recurring (costs) or savings: $9.2;
Payback period (years): 7;
20-year net present value (costs) or savings[B]: $46.0.
Recommended action: Total;
One-time (costs): ($2,442.9);
Net implementation: (costs) or savings[A]: ($1,336.7);
Net annual recurring (costs) or savings: $411.7;
20-year net present value (costs) or savings[B]: $2,746.6.
Source: GAO analysis of DOD data.
[A] This represents net costs or savings within the 6-year
implementation period required to implement BRAC recommendations.
[B] DOD used a 2.8 percent discount rate to calculate net present
value.
[C] The medical group acknowledges inaccuracies in calculating its
reported estimates. Our analysis indicates that the revised estimated
net annual recurring savings are about $145 million, the payback year
is 6 years, and the 20-year net present value savings is about $831
million.
[End of table]
The payback period, or length of time for the savings to offset
implementation costs for these recommendations, ranged from immediately
to 10 years. Four of the six recommendations are expected to result in
nearly all of the expected savings--over 90 percent of the total
estimated 20-year net present value savings of about $2.7 billion, and
of the net annual recurring savings of about $411.7 million. Two of the
six recommendations have high one-time upfront costs--about $2 billion,
or over 80 percent of the total one-time costs for the six
recommendations.
Two multiservice market area recommendations--the establishment of the
San Antonio Regional Medical Center in Texas and realignment of the
Walter Reed Army Medical Center in Washington, D.C.--are ultimately
expected to (1) produce over 50 percent of the net annual recurring
savings and (2) incur most of the up-front costs for the
recommendations as a whole. The group's primary motivation for these
recommendations was to transform the existing medical infrastructure
into premier modernized joint operational medical centers. In the case
of the Walter Reed Medical Center recommendation, the group also
justified the recommendation based on a shift in the beneficiary
population from the northern tier of the Washington, D.C., area to the
southern tier near Fort Belvoir, Virginia.
Another recommendation with substantial estimated net annual recurring
savings is the closure of the Brooks City-Base in Texas, which is
projected to achieve efficiencies in research, development, and
acquisition by relocating similar functions to a single location.
However, as discussed below, a significant portion of the savings from
this as well as other recommendations involve claimed military
personnel savings, which are somewhat uncertain. The recommendation
that involves the downsizing of inpatient facilities at nine locations
is expected to achieve efficiencies and reduce personnel as well as
provide enhanced training opportunities for medical personnel
transferring to other locations.
The medical group included within its recommendations various
realignments that were described or partially justified as promoting
jointness, such as those in the centers of excellence for chemical,
biological, and medical research, development, and acquisition. Our
review of the documentation showed that the supporting analysis was not
always clear with respect to how these actions would result in
jointness. For example, the group anticipated that jointness would
emerge from recommendations that co-located but did not integrate
research, development, and acquisition functions among services at an
installation. It appears that they primarily will result in the co-
locating of similar military services' functional areas rather than
creating integrated joint medical operations with joint management
structures. However, according to a DOD official, the co-location of
military services with similar functions on a base will help foster
jointness in the long term. Based on our analysis, it is not obvious
whether some of these proposed realignments will truly result in joint
military operations.
Issues Identified with Recommendations:
Time did not permit us to assess the operational impact of each of the
medical group's recommendations, particularly where operations proposed
for consolidations or realignments extend across functional areas,
geographical areas, or both. At the same time, we offer a number of
broad-based observations about some of the proposed recommendations as
they relate to military medical personnel savings, payback periods,
jointness, and medical wartime requirements that may warrant further
review by the BRAC Commission.
Military Medical Personnel Savings:
Our analysis shows that military personnel savings account for about
$201 million or nearly 50 percent of the group's estimated net annual
recurring savings. However, the amount of projected dollar savings is
uncertain because the medical group indicated that reductions in end
strength are not planned. Indirectly, some savings could occur based on
the group's expectation that medical personnel would be reassigned on
an individual basis to specific and varied locations, depending on
where the need exists for military medical specialists. In some cases,
the group noted that these military personnel reassignments could
displace civilian and/or contractor medical providers. When or to what
extent these reallocations would occur has not yet been determined. At
the time of the group's analysis, these specific moves had not been
identified and thus the group did not estimate costs related to such
potential moves in its cost and savings analysis.
Bundling of Recommendations:
Some of the earlier proposed recommendations with lengthy or no payback
periods were integrated with ones having shorter paybacks, therefore
concealing the amount of time it would take for the savings to offset
costs. For example, the group developed a stand alone recommendation co-
locating initial enlisted medical education and training to Fort Sam
Houston, Texas, which, by itself, had a payback period of 21 years.
However, the group later bundled it with the recommendation
establishing the San Antonio Regional Medical Center that downsized
inpatient care at Lackland Air Force Base also in Texas and expanded
medical facilities at nearby Fort Sam Houston. This recommendation had
a payback period of 11 years. When the two recommendations were
combined, the payback period was determined to be 10 years. The common
linkage of the two recommendations is location, with the expectation
that the enlisted medics will benefit from the location of the Brooke
Army Medical Center in Texas, which has a trauma center suited for
combat casualty training. Another example is the initial realignment of
medical research, development, and acquisition functions at Brooks City-
Base, which had no payback before DOD combined this recommendation with
other related recommendations to close the base.
Future Wartime Medical Requirements:
DOD's ongoing assessment of its future wartime medical requirements, as
mentioned earlier, will not be completed until after BRAC decisions are
finalized, following reviews by the BRAC Commission, the President, and
Congress; therefore, this assessment was not included in the medical
group's analysis. Without having such requirements available during the
BRAC process, it is difficult for DOD to identify the appropriate
medical infrastructure changes that are needed or to determine the
appropriate size of the military health care system. Also, the group
recognized that medical operations are changing with casualties rapidly
moved to medical facilities outside the theater of operations and that
these changes may affect the future sizing of medical forces.
Nevertheless, the group expressed belief that the current medical force
size was adequate to meet the requirements of the various war plans
despite the group's recommendations that will reduce system-wide excess
inpatient capacity by 622 beds.
Use of Veterans' Hospitals:
While the medical group examined the capacity and proximity of
Department of Veterans Affairs' (VA) hospitals to existing military
medical facilities in its analysis, it did not coordinate with VA to
determine whether military beneficiaries who normally receive care at
military medical facilities could also receive care at VA hospitals in
the vicinity. During the scenario development phase, the group intended
to develop a recommendation for a partnership involving VA facilities,
but group officials noted that the BRAC nondisclosure agreements and
the need to negotiate costs under such a partnership made it difficult
to seriously plan for VA involvement prior to the announcement of the
recommendations. However, a DOD official told us that during the BRAC
implementation phase, negotiations with VA at the local levels are
possible regarding the potential use of its services for military
beneficiaries in various locations, especially those locations where
DOD intends to eliminate inpatient care in existing medical
facilities.[Footnote 134] While the official told us that VA
involvement had the potential for providing services and benefiting the
department, another official added that the group's analysis indicated
that sufficient capacity exists, without VA support, within the private
sector to accommodate military beneficiaries in those locations where
inpatient care at the military facilities is being eliminated. However,
we were unable to verify the results of this analysis because the group
did not fully document its analysis.
Closure of the Uniformed Services University of the Health Sciences
Rejected by IEC:
The medical group had initially developed a candidate recommendation to
close DOD's medical school, known as the Uniformed Services University
of the Health Sciences, which is located on the grounds of the National
Naval Medical Center in Bethesda, Maryland.[Footnote 135] The group had
concluded that it was more costly than alternative scholarship
programs, and that the department could rely on civilian universities
to educate military physicians. The group projected the closure will
yield net annual recurring savings of about $58 million, and 20-year
net present value savings of approximately $575 million. In a series of
reports from 1995 through 2000, we also concluded at the time that the
university was a more costly way to educate military
physicians.[Footnote 136]
However, late in the deliberative process, the IEC rejected this
candidate recommendation citing education as a core competency for the
department and therefore it was considered too risky to rely on the
private sector to provide this function. A DOD official indicated that
with the recommendation to realign Walter Reed Army Medical Center to
Bethesda, Maryland, it would be highly desirable to have a military
medical college associated with this medical facility in order for it
to be a world-class medical center. According to another official, DOD
will need to make investments in the university in order to elevate its
status and attract leading medical scholars who could make the
university more competitive.
[End of section]
Appendix XI: Supply and Storage Joint Cross-Service Group Selection
Process and Recommendations:
The Supply and Storage Joint Cross-Service Group followed the common
analytical framework established by the Office of the Secretary of
Defense (OSD) for reviewing the supply, storage, and distribution
system within DOD. The group initially produced five recommendations
that were presented to the Infrastructure Steering Group (ISG) and the
Infrastructure Executive Council (IEC). Three of the five
recommendations were merged into one recommendation by the IEC. If
adopted, the three approved recommendations are projected to generate
about $5.6 billion in estimated 20-year net present value savings and
$406 million in net annual recurring savings for the department with an
immediate payback (i.e., time required to recoup up-front investment
costs) on the cost of implementing these recommendations. While the
number of recommendations is small, each encompasses multiple
realignment actions of workloads affecting many locations. Our analysis
shows that the anticipated savings would result primarily from business
process reengineering--expanded use of performance-based
logistics[Footnote 137]--, infrastructure and inventory reductions, and
reduced civilian personnel costs. We identified a number of issues
associated with several recommendations that may warrant additional
attention by the BRAC Commission. The group encountered some challenges
in obtaining accurate and consistent certified data, but the DOD
Inspector General and the military service audit agencies, which
performed audits of the data, ultimately concluded that the data were
sufficiently reliable for use during the BRAC process.
Organization and Focus:
The supply and storage group consisted of six senior-level principal
members from the logistics directorates for each service, the Defense
Logistics Agency (DLA), and the Joint Chiefs of Staff, and was
supported by staff from these organizations.[Footnote 138] The
Director, DLA, chaired the group, following the retirement of the
original chairman from the Joint Staff. The group's overarching goal
was to identify potential closures, realignments, or both that would
enhance economies and efficiencies in operations as traditional
military forces and logistics processes become more joint and
increasingly take on expeditionary characteristics.
Framework for Analysis:
The group organized its BRAC efforts around the three core logistics
functions of supply, storage, and distribution. These functions are
inherent in the military services' operations as well as for DLA, whose
mission is to provide wholesale-level support in these functions for
the services in common supply classes. In collecting and analyzing data
to formulate its recommendations, the group sought to assess the supply
and storage infrastructure in the following four distinct activity
areas: (1) military service and DLA inventory control points (2)
defense distribution depots, (3) defense reutilization and marketing
offices and (4) other activities such as installation-level supply
operations. As with other military services and joint cross-service
groups, capacity and military value analyses served as starting points
for the group's analyses. While the group initially tried to analyze
both the wholesale[Footnote 139] and retail supply and storage
activities, it later terminated most retail-level efforts because of
difficulties in collecting reliable data and a desire by the group's
principals to not impact the retail support to operational and other
deploying units. The DOD Inspector General and service audit agencies
performed an important role in ensuring the accuracy of data used in
these analyses through extensive audits of data gathered at various
locations.
Capacity Analysis:
To form the basis for its analysis, the group developed metrics in each
of the functional areas (supply, storage, and distribution) to measure
capacity and subsequently sought to collect certified data linked to
these metrics from various defense activities whose missions resided
within these functional categories. The group developed 14 separate
reporting metrics within these categories that included, for example,
special indoor storage space and technical labor work hours, and
measured excess capacity under normal demand as well as under surge
conditions of 10 and 20 percent. Because of its general inability to
collect reliable retail-level data and a desire not to impact
operational support to deploying units whose support comes from the
retail area, the group dropped this area, with one exception,[Footnote
140] from further consideration in the succeeding analyses leading to
recommended actions.
The group's capacity analysis showed that excess capacity[Footnote 141]
exists, even when surge factors were considered, within three of the
four supply and storage activity areas it examined. As shown in table
36, the excesses ranged from 20 percent to 75 percent under normal
demand conditions across various capacity metrics in the functional
areas, with the excesses somewhat less under surge conditions.
Table 36: Excess Capacity Identified by the Supply and Storage Joint
Cross-Service Group:
Functional/activity category: Supply/inventory control points:
Capacity metric: Purchasing labor (FTE)[A];
Percentage of excess capacity: Normal demand: 29%;
Percentage of excess capacity: 10 percent surge: 22%;
Percentage of excess capacity: 20 percent surge: 14%.
Capacity metric: Supply labor (FTE);
Percentage of excess capacity: Normal demand: 35%;
Percentage of excess capacity: 10 percent surge: 29%;
Percentage of excess capacity: 20 percent surge: 22%.
Capacity metric: Technical labor (FTE);
Percentage of excess capacity: Normal demand: 75%;
Percentage of excess capacity: 10 percent surge: 72%;
Percentage of excess capacity: 20 percent surge: 69%.
Capacity metric: Work space (square feet);
Percentage of excess capacity: Normal demand: 47%;
Percentage of excess capacity: 10 percent surge: 42%;
Percentage of excess capacity: 20 percent surge: 37%.
Functional/activity category: Storage and distribution/defense
distribution depots:
Capacity metric: Regular covered storage (cubic feet);
Percentage of excess capacity: Normal demand: 32%;
Percentage of excess capacity: 10 percent surge: 25%;
Percentage of excess capacity: 20 percent surge: 19%.
Capacity metric: Special covered storage (cubic feet);
Percentage of excess capacity: Normal demand: 37%;
Percentage of excess capacity: 10 percent surge: 31%;
Percentage of excess capacity: 20 percent surge: 24%.
Capacity metric: Open storage (square feet);
Percentage of excess capacity: Normal demand: 43%;
Percentage of excess capacity: 10 percent surge: 38%;
Percentage of excess capacity: 20 percent surge: 32%.
Capacity metric: Distribution capacity (number of loading bays);
Percentage of excess capacity: Normal demand: 39%;
Percentage of excess capacity: 10 percent surge: 33%;
Percentage of excess capacity: 20 percent surge: 27%.
Functional/activity category: Supply and storage/defense reutilization
and marketing offices:
Capacity metric: Wage grade labor (FTE);
Percentage of excess capacity: Normal demand: 46%;
Percentage of excess capacity: 10 percent surge: 40%;
Percentage of excess capacity: 20 percent surge: 35%.
Capacity metric: Supply labor (FTE);
Percentage of excess capacity: Normal demand: 40%;
Percentage of excess capacity: 10 percent surge: 34%;
Percentage of excess capacity: 20 percent surge: 28%.
Capacity metric: Work space (square feet);
Percentage of excess capacity: Normal demand: 53;
Percentage of excess capacity: 10 percent surge: 48%;
Percentage of excess capacity: 20 percent surge: 44%.
Capacity metric: Regular covered storage (cubic feet);
Percentage of excess capacity: Normal demand: 57%;
Percentage of excess capacity: 10 percent surge: 52%;
Percentage of excess capacity: 20 percent surge: 48%.
Capacity metric: Special covered storage (cubic feet);
Percentage of excess capacity: Normal demand: 20%;
Percentage of excess capacity: 10 percent surge: 12%;
Percentage of excess capacity: 20 percent surge: 4%.
Capacity metric: Open storage (square feet);
Percentage of excess capacity: Normal demand: 58%;
Percentage of excess capacity: 10 percent surge: 54%;
Percentage of excess capacity: 20 percent surge: 50%.
Source: Supply and Storage Joint Cross-Service Group.
[A] FTEs are full-time equivalents and are used as measures of work
hours performed. One FTE is equivalent to 2,080 hours of work per year.
[End of table]
According to the group's staff, its recommendation regarding
restructuring of defense distribution depots, if approved and
implemented, is expected to reduce current covered storage of about 51
million square feet (both regular and special) by over 50 percent, or
about 27 million square feet. In addition, the recommendation regarding
inventory control points is expected to increase infrastructure by
about 4,700 square feet because the inventory control points would be
absorbing more space than they would be vacating. The group has no
recommendations that would affect the capacity of DLA's defense
marketing and reutilization offices.
Military Value Analysis:
The supply and storage group's assessment of military value, like its
excess capacity assessment, focused on the same three core logistics
functions of supply, storage, and distribution. By linking its military
analysis directly to OSD's four military selection criteria required by
the BRAC legislation, the group established a sound basis for
developing its recommendations. As shown in table 37, the group
developed a weighting system for the military value criteria with the
first and third criteria having relatively larger weights, or
importance, than the remaining two criteria.
Table 37: Supply and Storage Joint Cross-Service Group Military Value
Criteria Weights:
Figures in percentages.
Military value criteria: 1. The current and future mission capabilities
and the impact on operational readiness of the total force of the
Department of Defense, including impact on joint warfighting, training,
and readiness; 35%.
Military value criteria: 2. The availability and condition of land,
facilities, and associated airspace in (including training areas
suitable for maneuver by ground, naval, or air forces throughout a
diversity of climate and terrain areas and staging areas for the use of
the Armed Forces in homeland defense missions in) at both existing and
potential receiving locations; 20%.
Military value criteria: 3. The ability to accommodate contingency,
mobilization, surge, and future total force requirements at both
existing and potential receiving locations to support operations and
training; 35%.
Military value criteria: 4. The cost of operations and the manpower
implications; 10%.
Total; 100%.
Source: DOD and Supply and Storage Joint-Cross-Service Group.
Note: The system of weights provided a basis for assigning relative
value to data collected and tabulated across each military value
dimension.
[End of table]
As with the capacity analysis, the group's assessment of military value
included development of attributes and metrics in each of the core
functional areas to measure military value, and it subsequently sought
to collect certified data linked to these metrics from various defense
activities whose missions resided within these categories. The group
developed 55 individual metrics within the three functional areas,
addressing information such as the percentage of demand for stocked
items and cost of operations per person. The attributes and metrics
were linked back to the military value selection criteria, as
illustrated in figure 18.
Figure 18: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of Supply and Storage Activities:
[See PDF for image]
[A] The BRAC military value criteria are the first four BRAC selection
criteria.
[B] Military value attributes are characteristics of each criterion.
Four of 28 military value attributes used by the group.
[C] Military value metrics are measures for the attributes. Four of 55
military value metrics used by the group.
[D] Four of 55 military value data call questions used by the group.
Many of these questions have multiple parts.
[End of figure]
Using certified data collected during the BRAC process and applying the
weighting system, the group developed military value scores and
rankings for 16 inventory control points, 19 defense distribution
depots, and 67 defense reutilization and marketing offices. As with the
capacity analysis, the group was generally unable to develop sufficient
reliable data at the retail level to complete a military value analysis
at that level. In many respects, the military value methodology for
this round was comparable to that used in the 1995 BRAC round,
particularly for DLA activities. In both BRAC rounds, the military
value ranking of an activity played a predominant role in formulating
recommendations.
DOD Inspector General's and Service Audit Agencies' Roles in the
Process:
The DOD Inspector General and the service audit agencies played
important roles in helping to ensure that the data used in the group's
data analyses were certified and properly supported and that decision-
making models (e.g., military value and optimization) were logically
designed and operating as intended. Through extensive audits of the
data collected from field activities during the process, these audit
agencies notified the group when they identified data discrepancies for
follow-on corrective action. While the process for detecting and
correcting data errors was quite lengthy and challenging, the audit
agencies ultimately deemed the supply and storage-related data to be
sufficiently reliable for use in the BRAC process.
Identification and Assessment of Alternate Scenarios and Selection of
Recommendations:
The Supply and Storage Joint Cross-Service Group did not have accurate
and complete capacity and military value data when it initially started
developing potential closure and realignment scenarios and, therefore,
had to rely on incomplete data, as well as military judgment based on
the group's collective knowledge of the supply and storage area, to
formulate its initial closure and realignment scenarios for evaluation.
Although the data improved as additional information was requested and
received from field locations, the lack of usable data initially
limited the use of an optimization model to help identify and analyze
scenarios. As time progressed, however, the group obtained the needed
data, for the most part, to inform and support its scenarios. The DOD
Inspector General validated the data. The group also focused on a
number of OSD supplied transformational options, as outlined below, to
guide its efforts in the recommendation development process:
* Establishing a consolidated multi-service supply, storage, and
distribution system focused on creating joint activities in areas with
heavy DOD concentration.
* Privatizing the wholesale storage and distribution processes.
* Migrating oversight and management of all service depot-level
reparables to a single DOD agency/activity.[Footnote 142]
* Establishing a single inventory control point within each service or
consolidate into a joint activity.
* Examining the effect of reducing functions by 20, 30, and 40 percent
from the existing baseline, or reducing excess capacity by an
additional 5 percent beyond the analyzed excess capacity.
The group developed a total of 51 scenarios based on these
transformational options. With the maturation of the data and the
application of the COBRA model to estimate costs and savings, along
with military judgment, the group was able to narrow its proposals to
five candidate recommendations that were forwarded to the ISG and
ultimately approved by the IEC. Further integration of three of these
recommendations into a single recommendation left the group with three
approved recommendations.
Recommendations Approved by DOD:
The group's recommendations are projected to produce substantial
savings--about $406 million in estimated net annual recurring savings
and about $5.6 billion in estimated net present value savings for DOD
over the next 20 years. All are realignment actions, even though one of
the recommended actions will close two defense distribution depots at
Columbus, Ohio, and Texarkana, Texas and another one will close four
inventory control points at Fort Huachuca, Arizona; Fort Monmouth, New
Jersey; Rock Island, Illinois; and Lackland Air Force Base, Texas,
while, at the same time, opening a new one at Aberdeen Proving Ground,
Maryland. The group's recommendations also helped facilitate the
closures of Fort Monmouth, New Jersey, and Red River Army Depot, Texas,
both of which are reported in the Army's BRAC report. Table 38 provides
a summary of the financial aspects of the group's three DOD-approved
recommendations.
Table 38: Financial Aspects of the Supply and Storage Joint Cross-
Service Group's Recommendations:
Fiscal year 2005 constant dollars in millions.
Recommendations: Realign supply, storage, and distribution management;
DOD report page: S&S-13;
One time (costs): ($192.7);
Net implementation (costs) or savings[A]: $1,047.3;
Net annual recurring (costs) or savings: $203.2;
Payback period (years): immediate;
20-year net present value (costs) or savings[B]: $2,925.8.
Recommendations: Realign inventory control points and consolidate depot-
level reparable procurement management;
DOD report page: S&S-7;
One time (costs): ($127.0);
Net implementation (costs) or savings[A]: $369.8;
Net annual recurring (costs) or savings: $159.3;
Payback period (years): immediate;
20-year net present value (costs) or savings[B]: $1,889.6.
Recommendations: Realign management of select commodities;
DOD report page: S&S-5;
One time (costs): (6.4);
Net implementation (costs) or savings[A]: $333.7;
Net annual recurring (costs) or savings: $43.8;
Payback period (years): immediate;
20-year net present value (costs) or savings[B]: $735.9.
Total;
One time (costs): ($326.1);
Net implementation (costs) or savings[A]: $1,750.8;
Net annual recurring (costs) or savings: $406.3;
20-year net present value (costs) or savings[B]: $5,551.3.
Source: GAO analysis of DOD data.
[A] This represents net cost or savings within the 6-year
implementation period required to implement BRAC recommendations.
[B] DOD used a 2.8 percent discount rate to calculate net present
value.
[End of table]
Most of the projected net annual recurring savings--about $291 million
or nearly 72 percent of the total--are expected to result from business
process reengineering improvements in the form of expanded use of
performance-based logistics and reductions to duplicate inventory. Most
of the remaining net annual savings are expected to materialize from
reductions to infrastructure costs at the wholesale supply and storage
level (about $100 million annually) and from reductions in civilian
personnel costs (about $68 million annually), with adjustments of about
$54 million in annual recurring costs to reflect additional contract
support costs. Further, the recommendations are expected to have
immediate paybacks with relatively low up-front costs and savings over
the 6-year implementation period. We believe that implementation of
these recommendations could result in more efficient operations within
DOD, and we consider the recommendation involving DLA management of the
inventory control points and depot-level reparables to be
transformational because it advances DOD's goal of having one DOD
activity manage these activities, although, as discussed later, the
full magnitude of savings likely to be realized is somewhat uncertain.
The recommendation regarding the realignment of supply, storage, and
distribution management creates four support regions across the
country. Each region will have one strategic distribution site that
will supply the region and multiple forward distribution points that
will solely support industrial customers, such as maintenance depots,
shipyards, and air logistics centers. The strategic distribution sites
are located at Susquehanna, Pennsylvania; Warner Robins, Georgia;
Oklahoma City, Oklahoma; and San Joaquin, California. It is also
designed to realign service retail supply and storage functions along
with personnel and infrastructure for these industrial customers in an
"in-place, no-cost transfer" to DLA. This recommendation supports the
closures of the defense distribution depots at Columbus, Ohio, and
Texarkana, Texas, and realigns each of the remaining 17 defense
distribution depots.
The recommendation regarding the realignment of the inventory control
points transfers certain inventory control point functions, such as
contracting, budgeting and inventory management, to DLA and allows
further consolidation of service and DLA inventory control points by
the supply chains they manage.[Footnote 143] In addition, it supports
the movement of the management of essentially all service consumable
items[Footnote 144] and the procurement management and related support
functions for the procurement of essentially all depot level reparables
from the military services to DLA. This recommendation realigns all 16
of the current DLA and service inventory control points and closes 4
through consolidation--Fort Huachuca, Arizona; Fort Monmouth, New
Jersey; Rock Island, Illinois; and Lackland Air Force Base, Texas--
while opening a new inventory control point at Aberdeen Proving Ground,
Maryland. The recommendation also supports the Army's closure of Fort
Monmouth by moving supply and storage functions to other locations.
The recommendation regarding the realignment of commodity management
disestablishes the wholesale supply, storage, and distribution
functions within the department for all tires; packaged petroleum,
oils, and lubricants; and compressed gases used by DOD. As a result,
these commodities will be supplied directly by private industry, which
will free up space and personnel used to manage these items. It
realigns all of the remaining defense distribution depots by
disestablishing all storage and distribution for the commodities.
Issues Identified with Approved Recommendations:
Although time did not permit us to fully assess the operational impact
of each recommendation, particularly where operations proposed
consolidation across multiple and varied locations, available
information suggests these recommendations have the potential for more
efficient operations within DOD. At the same time, there are some
issues we identified that we believe the BRAC Commission may wish to
consider during its review process because of potentially overstated
savings estimates. In this regard, the supply and storage group claimed
savings for future cost avoidances for sustainment and facilities'
recapitalization related to the facilities' space that is expected to
be vacated under the recommended actions. However, as discussed below,
it is uncertain whether these savings will actually materialize if
these facilities are not closed and remain open--even with reduced
usage of the space. Additionally, the group did not develop
recommendations for several areas within the scope of its
responsibility that may have further contributed to the accomplishment
of DOD's BRAC objectives, such as additional consolidations in DLA and
service inventory control points.
Estimated Savings Related to Business Process Improvements Are
Uncertain:
The largest portion of the supply and storage group's savings--about
$291 million out of total net annual recurring savings of $406 million-
-comes from business process reengineering improvements in the form of
expanded use of performance-based logistics and reductions to duplicate
inventory. According to supply and storage staff, these savings accrue
from reduced contract prices because DLA will have increased buying
power since it is responsible for purchasing many more items that had
been purchased by each of the services. In addition, savings accrue
from increased use of performance-based agreements,[Footnote 145] a key
component of performance-based logistics. The group estimates DLA can
save 2.8 cents on each contract dollar placed on performance-based
agreements. In addition, savings come from reductions in the amount of
stock that must be held in inventory. Supply and storage staff said
that the savings component for the cost to hold this inventory has
three parts: (1) cost of money, (2) cost of stock losses due to
obsolescence, and (3) cost of storage. The group estimates that
together these three factors save about 17 percent of the estimated
value of the acquisition cost of the stock that is no longer required
to be held in inventory. Although the group had some supporting
documentation for its assumptions, time did not allow us to fully
evaluate the documentation. Nevertheless, the full magnitude of savings
likely to be realized will depend on how well the actions, if approved,
are implemented in line with the assumptions made.
Estimated Savings Related to Vacated Facility Space May Be Overstated:
All of the supply and storage group's recommendations taken together
show significant projected savings from expected reductions to excess
or unnecessary infrastructure. According to the group's estimates, it
is claiming BRAC savings on about 27 million square feet of vacated
space--an estimated savings of about $100 million annually or about 25
percent of the group's total net annual recurring savings. In
developing its costs and savings estimates, the group assumed that all
of the excess infrastructure that was made possible by the
recommendations would generate BRAC savings because it was further
assumed that the infrastructure would no longer be used and therefore
would not require sustainment and recapitalization funding. However, we
believe these assumptions are not necessarily valid because it is not
clear that the freed-up infrastructure will be eliminated and could
potentially be occupied by other users following the BRAC process. At
present the group does not have plans for this space. Under the BRAC
process, if these vacated facilities or portions thereof are reoccupied
by other defense organizations, there is a corresponding cost for this
reoccupation. Likewise, additional BRAC costs are required for
facilities that remain empty to minimally maintain them, and costs are
incurred if buildings are demolished. Supply and storage officials told
us they were aware of this issue and said that their goal is to vacate
as much space as possible by re-warehousing inventory and by reducing
personnel spaces, but they do not have a specific plan for what will
happen to the space once it is vacated. In addition, until these
recommendations are ultimately approved and implemented, it will not be
known exactly how much space is available or how this space will be
disposed of or utilized. As a result, it is unclear as to how much of
the estimated $100 million net annual recurring savings will actually
occur.
Potential for Additional Savings Exists:
The recommendation that was approved by the IEC to consolidate some
service inventory control point functions within DLA will move about
1,345 of the services' staff performing inventory control point
functions to DLA and is estimated by the supply and storage group to
save about $1.9 billion over the next 20 years. However, the group also
analyzed a scenario that would have moved more inventory control point
functions and more than 6,500 service staff to DLA and was estimated by
the group to save $2.9 billion over the same 20-year period. The latter
scenario would leave nearly 3,900 service technical and engineering
support personnel of the more than 10,300 service staff at existing
service inventory control points. Senior-level principal members of the
supply and storage group consider the technical and engineering support
personnel positions to be more closely related to weapon system
readiness and support to the warfighter than other inventory control
point functions, such as contracting, budgeting, and inventory
management, which are being transferred to DLA. These officials were
not willing to suggest transferring the technical positions to DLA
because of the perceived additional risk involved of not being able to
supply the critical parts to the warfighter when needed. Therefore,
they approved the recommendation that generated less savings, but also
less risk to weapon system readiness and moved fewer inventory control
point functions and fewer service staff to DLA. The Commission may wish
to further examine the potential for greater savings regarding the
transfer of more inventory control point functions versus the potential
risk of not being able to supply critical parts when needed.
The group also did not pursue the development of recommendations
regarding the defense reutilization and marketing office activities,
even though considerable excess capacity exists, as shown in table 36,
in that area. Group officials told us that these activities, which are
managed by DLA, are considered follower organizations[Footnote 146]
that are currently undergoing an extensive A-76[Footnote 147]
initiative outside the BRAC process that is expected to either close or
consolidate several activities and reduce staff levels at others. DLA
data indicate that 61 of the 67 reutilization and marketing office
activities analyzed by the supply and storage group are involved in the
effort and that the agency expects to save about $36 million through
2011 with the A-76 effort.
[End of section]
Appendix XII: Technical Joint Cross-Service Group Selection Process and
Recommendations:
The Technical Joint Cross-Service Group followed the common analytical
framework established by the Office of the Secretary of Defense (OSD)
in reviewing its functions and facilities. The group included in its
report 13 recommendations that it projects would generate about $2.2
billion in 20-year net present value savings for DOD. These 13
recommendations incorporate a total of 6 closures, 62 realignments, and
1 disestablishment action. Additionally, the technical group
transferred parts of nine recommendations to other joint cross-service
groups or military services, which combined with other actions
resulting in three additional closures.[Footnote 148] The majority of
the projected annual recurring savings result from eliminating civilian
and contractor personnel and vacating leased space. The recommendations
have payback periods--the time required for savings to offset closure
and realignment costs--ranging from 1 to 26 years. Limited progress was
made to foster greater jointness and transformation. The DOD Inspector
General and the military service audit agencies, which performed audits
of the data used in the process, concluded that the data were
sufficiently reliable for use during the BRAC process. While available
data supporting the recommendations suggest their implementation should
provide for more efficient operations within the department, we believe
there are some issues that the BRAC Commission may wish to examine more
closely during its review process.
Organization and Focus:
The technical group was chaired by the Director, Defense Research and
Engineering; it consisted of senior members from each military
department and the Joint Chiefs of Staff.[Footnote 149] The group
created five subgroups to evaluate the technical facilities: (1)
Command, Control, Communications, and Computers, Intelligence,
Surveillance, and Reconnaissance (C4ISR); (2) Air, Land, Sea, and Space
Systems; (3) Weapons and Armaments; (4) Innovative Systems; and (5)
Enabling Technologies. In addition, the group also created a
Capabilities Integration Team and an Analytical Team to support the
efforts of the subgroups.
Framework for Analysis:
The technical group established two principles to guide its analysis
and recommendation development: (1) provide efficiency of operations by
consolidating technical facilities to enhance synergy and reduce excess
capacity and (2) maintain competition of ideas by retaining at least
two geographically separated sites. The group analyzed three functional
areas within DOD: research, development and acquisition, and test and
evaluation.[Footnote 150] It focused its analysis of the 3 functions
across 13 technical capability areas--air platforms; battlespace
environments; biomedical; chemical and biological defense; ground
vehicles; human systems; information systems; materials and processes;
nuclear technology; sea vehicles; sensors, electronics, and electronic
warfare; space platforms; and weapons and armaments.[Footnote 151] Each
of the military services and some defense agencies perform work in the
functions and technical capability areas. The group developed a
strategic framework based on its two principles that focused on
establishing multifunctional and multidisciplinary centers of
excellence,[Footnote 152] which served as the starting point for
developing scenarios. These strategy-driven scenarios were later
confirmed by capacity and military value data and military judgment.
The DOD Inspector General and service audit agencies performed an
important role in ensuring the accuracy of data used in these analyses
through extensive audits of data gathered at various locations.
Capacity Analysis:
The technical group's analysis of DOD's technical infrastructure across
each of the 3 functions and 13 technical capability areas resulted in a
total of 39 "technical facility categories" around which the group
focused its analysis.[Footnote 153] The group used two capacity
measures--work years, as quantified by the number of full-time staff,
and the number of test hours--and subsequently collected certified data
on these measures from the technical facilities performing work in each
of the technical facility categories. Excess capacity was defined as
the difference between current usage plus a surge factor and peak
capacity. Current usage was defined as the average usage for fiscal
years 2001 through 2003, and peak capacity was defined as the maximum
capacity for the measure. The group set the surge factor at 10 percent
of current capacity, based on military judgment of how the technical
community has approached surge in the past.
The group calculated excess capacity for each of the 39 technical
facility categories; however, the aggregated data provide more insight
into the amount of excess capacity. Table 39 shows the excess capacity
that the technical group found through its analysis.
Table 39: Excess Capacity Identified by the Technical Joint Cross-
Service Group:
Figures in work years.
Research;
Peak capacity: 31,168;
Current usage plus surge: 28,069;
Excess capacity: 3,099;
Percentage of excess capacity: 11.0%.
Development and acquisition;
Peak capacity: 106,944;
Current usage plus surge: 101,208;
Excess capacity: 5,736;
Percentage of excess capacity: 5.7%.
Test and evaluation;
Peak capacity: 44,852;
Current usage plus surge: 40,319;
Excess capacity: 4,533;
Percentage of excess capacity: 11.2%.
Total;
Peak capacity: 182,964;
Current usage plus surge: 169,596;
Excess capacity: 13,368;
Percentage of excess capacity: 7.9%.
Source: Technical Joint Cross-Service Group.
[End of table]
The group reported that the current required capacity, including surge,
across all technical capability areas and functions is 169,596 work
years. The group found the equivalent of 13,368 work years, or 7.9
percent, excess capacity across the three functions. The group reports
that its recommendations eliminate approximately 3,000 work years.
Based on these calculations, approximately 6 percent excess capacity
would remain if all of the group's recommended actions are implemented.
The work year reductions include the reductions made through the
technical group's 13 recommendations. The work year reductions do not
include reductions in technical excess capacity through the closure of
Fort Monmouth, New Jersey, and Brooks City-Base, Texas, for example,
which are included in the Army and Medical Joint Cross-Service Group
recommendations, respectively.
Military Value Analysis:
As with capacity analysis, the technical group's assessment of military
value included an assessment of the technical infrastructure across the
39 technical facility categories. The group weighted each of the four
military value criteria based on the importance of the criterion to the
technical function. The group used the same weights for the research
and development and acquisition functions, but different weights for
the test and evaluation function due to differences in the type of work
conducted at these facilities. Table 40 shows the weights for the three
functions.
Table 40: Technical Joint Cross-Service Group Military Value Criteria
Weights:
Figures in percentages.
Military value criteria: 1. The current and future mission capabilities
and the impact on operational readiness of the total force of the
Department of Defense, including impact on joint warfighting, training,
and readiness;
Research, development and acquisition: 53%;
Test and evaluation: 53%.
Military value criteria: 2. The availability and condition of land,
facilities, and associated airspace (including training areas suitable
for maneuver by ground, naval, or air forces throughout a diversity of
climate and terrain areas and staging areas for the use of the Armed
Forces in homeland defense missions) at both existing and potential
receiving locations;
Research, development and acquisition: 12%;
Test and evaluation: 18%.
Military value criteria: 3. The ability to accommodate contingency,
mobilization, surge, and future total force requirements at both
existing and potential receiving locations to support operations and
training;
Research, development and acquisition: 25%;
Test and evaluation: 19%.
Military value criteria: 4. The cost of operations and the manpower
implications;
Research, development and acquisition: 10%;
Test and evaluation: 10%.
Total;
Research, development and acquisition: 100%;
Test and evaluation: 100%.
Source: DOD and the Technical Joint Cross-Service Group.
Note: The system of weights provided a basis for assigning relative
value to data collected and tabulated across each military value
dimension.
[End of table]
The group developed attributes and metrics across each of the four
military value criteria to measure military value and subsequently
collected certified data for these capacity measures from the technical
facilities performing work in each of the technical facility
categories. The group examined the capabilities of each technical
facility based on five attributes:
* people, which measures intellectual capital;
* physical environment, which measures special features of technical
facilities;
* physical structures and equipment, which measure the presence of
physical structures unique within DOD and the value, condition, and use
of these structures;
* operational impact, which measures the output of the three functional
areas (research, development and acquisition, and test and evaluation);
and:
* synergy, which measures working on multiple technical capability
areas and functions and jointness.
The technical group developed weights for the 5 attributes that were
applied to each of the criteria and 30 metrics divided among the 5
attributes. While the group allowed the evaluative weights for the
metrics to vary across its subgroups, it used the same weights for the
five attributes. The evaluative weight assigned to attributes varied
among the three functions because a particular attribute could have
greater importance for one function than another. For example, the
technical group weighted the people attribute for criterion 1 at 17
percent of the total military value score for research, 13 percent for
development and acquisition, and 16 percent for test and evaluation.
While the attribute weights were the same for activities across
subgroups, the metric weights varied by subgroup. For example, the Air,
Land, Sea, and Space Systems subgroup weighted the patents,
publications, and awards metric of criterion 1 for the research
function at 30 percent of the total for the people attribute, while the
Weapons and Armaments subgroup weighted the same metric at 18 percent.
Figure 19 provides an example of the technical group's military value
attributes, metrics, data sources, and their link to the four BRAC
military value criteria.
Figure 19: Selected Attributes, Metrics, and Data Questions Used to
Assess Military Value of a Technical Facility:
[See PDF for image]
[A] The BRAC military value criteria are the first four BRAC selection
criteria.
[B] Military value attributes are characteristics of each criterion.
The technical group used a total of five military value attributes.
[C] Military value metrics are measures for the attributes. The
technical group used a total of 30 military value metrics.
[D] The technical group used a total of 44 data call questions.
[End of figure]
All technical facilities were analyzed using the technical group's
military value approach, regardless of whether the recommendation ended
up with the technical group's 13 recommendations or in another
services' or joint cross-service groups' recommendations. For example,
part of the Army's recommendation to close Fort Monmouth relocates the
information systems research and development and acquisition to
Aberdeen Proving Ground, Maryland. The technical group followed the
same process in gathering data and calculating a military value score
for these functions as they did all other technical functions.
DOD Inspector General's and Service Audit Agencies' Role in the
Process:
The DOD Inspector General and the service audit agencies played
important roles in ensuring that the data used in the technical group's
data analyses were certified. To determine the validity of the group's
data, the DOD Inspector General examined (1) whether the group used
certified data and created an adequate audit trail for capacity and
military value analyses and (2) whether the group created an adequate
audit trail for inputting data into the Cost of Base Realignment
Actions (COBRA) model. The DOD Inspector General found that certified
data were used for the group's capacity and military value analyses,
and there was an adequate audit trail for the capacity and military
value analyses, and COBRA input data. Through extensive audits of the
data collected from technical facilities during the process, the
service audit agencies notified the technical facility of identified
data discrepancies and the technical facility was to take corrective
action. While the process for detecting and correcting data errors was
quite lengthy and challenging, the DOD Inspector General and service
audit agencies deemed the technical data to be sufficiently reliable
for use in the BRAC process.
Identification and Assessment of Alternate Scenarios and Selection of
Recommendations:
The technical group used its strategic framework to identify 69
potential closure or realignment scenarios and then select 23 candidate
recommendations. The group confirmed its scenarios and recommendations
with its capacity and military value data and military judgment. In
most cases, each scenario that did not become a candidate
recommendation was one of several alternatives for moving the same work
to different locations. The ISG and IEC accepted 22 of the technical
group's candidate recommendations. One recommendation, which realigned
technical functions at Naval Support Activity Corona, California, to
several different bases, was disapproved by the ISG because the Navy
wanted to keep these functions together, according to a technical group
official. The official said that the ISG allowed the Navy to construct
a different recommendation, which moved these functions to Naval Air
Station Point Mugu, California, and this recommendation was approved
and is presented with the Navy's recommendations.[Footnote 154] Nine of
the group's recommendations were transferred to the services or other
joint cross-service groups, which left the technical group with 13
recommendations. The 13 recommendations included in the group's report
result in a total projected net savings of $2.2 billion over 20 years,
with net annual recurring savings of $265.5 million per year and
payback periods ranging from 1 to 26 years. Personnel savings account
for over half of the group's projected annual recurring savings, three-
quarters of which comes from civilian personnel savings. While
available data supporting the recommendations suggest their
implementation should provide for more efficient operations within the
department, we believe there are some issues that the BRAC Commission
may wish to examine more closely during its review process.
Recommendations Approved by DOD:
The technical group's proposed recommendations result in a total
projected net savings of $2.2 billion over 20 years, with net annual
recurring savings of $265.5 million per year. Table 41 provides a
summary of the financial aspects of the group's recommendations, most
of which are realignment actions.
Table 41: Financial Aspects of the Technical Joint Cross-Service
Group's Recommendations:
Fiscal year 2005 constant dollars in millions.
Recommendations: Realign and close to co-locate extramural research
program managers (at the National Naval Medical Center, Bethesda)[C];
DOD report page: Tech-5;
One-time costs: ($153.5);
Net implementation (costs) or savings[A]: $107.1;
Net annual recurring (costs) or savings: $49.4;
Payback period (years): 2;
20-year net present value (costs) or savings[B]: $572.7.
Recommended action: Realign to consolidate maritime C4ISR RDAT&E (at
Naval Amphibious Base, Little Creek; Naval Surface Warfare Center,
Dahlgren Division; Naval Station Newport; Naval Submarine Base Point
Loma; Naval Weapons Station Charleston; and Naval Station Norfolk);
DOD report page: Tech-9;
One-time costs: ($106.1);
Net implementation (costs) or savings[A]: $88.6;
Net annual recurring (costs) or savings: $38.7;
Payback period (years): 1;
20-year net present value (costs) or savings[B]: $455.1.
Recommended action: Realign to create a naval integrated weapons and
armaments RDAT&E center (at Naval Air Weapons Station China Lake, Naval
Surface Warfare Center Indian Head, and Naval Surface Warfare Center
Dahlgren);
DOD report page: Tech-15;
One-time costs: ($358.1);
Net implementation (costs) or savings[A]: ($148.7);
Net annual recurring (costs) or savings: $59.7;
Payback period (years): 7;
20-year net present value (costs) or savings[B]: $433.4.
Recommended action: Realign and close to consolidate defense research
service-led laboratories (at Wright-Patterson Air Force Base, Kirtland
Air Force Base, Hanscom Air Force Base, and Aberdeen Proving Ground);
DOD report page: Tech-22;
One-time costs: ($164.6);
Net implementation (costs) or savings[A]: ($45.0);
Net annual recurring (costs) or savings: $41.1;
Payback period (years): 4;
20-year net present value (costs) or savings[B]: $357.3.
Recommended action: Realign to consolidate air and space C4ISR RDAT&E
(at Hanscom Air Force Base and Edwards Air Force Base);
DOD report page: Tech-6;
One-time costs: ($254.4);
Net implementation (costs) or savings[A]: ($115.3);
Net annual recurring (costs) or savings: $36.2;
Payback period (years): 8;
20-year net present value (costs) or savings[B]: $238.0.
Recommended action: Realign to consolidate Navy strategic T&E (at
Strategic Weapons Facility Atlantic, Kings Bay);
DOD report page: Tech-12;
One-time costs: ($86.4);
Net implementation (costs) or savings[A]: ($76.7);
Net annual recurring (costs) or savings: $13.4;
Payback period (years): 7;
20-year net present value (costs) or savings[B]: $61.4.
Recommended action: Realign to create an integrated weapons and
armaments specialty site for guns and ammunition (at Picatinny
Arsenal);
DOD report page: Tech-19;
One-time costs: ($116.3);
Net implementation (costs) or savings[A]: ($81.2);
Net annual recurring (costs) or savings: $11.3;
Payback period (years): 13;
20-year net present value (costs) or savings[B]: $32.6.
Recommended action: Realign to establish centers for fixed wing air
platform RDAT&E (at Wright-Patterson Air Force Base and Naval Air
Weapons Station China Lake);
DOD report page: Tech-24;
One-time costs: ($17.7);
Net implementation (costs) or savings[A]: ($7.9);
Net annual recurring (costs) or savings: $2.7;
Payback period (years): 9;
20-year net present value (costs) or savings[B]: $17.9.
Recommended action: Realign to create an air integrated weapons and
armaments RDAT&E center (at Eglin Air Force Base);
DOD report page: Tech-18;
One-time costs: ($2.7);
Net implementation (costs) or savings[A]: $4.9;
Net annual recurring (costs) or savings: $1.4;
Payback period (years): 2;
20-year net present value (costs) or savings[B]: $17.9.
Recommended action: Realign to consolidate ground vehicle D&A in a
joint center (at Detroit Arsenal)[D];
DOD report page: Tech-7;
One-time costs: ($3.8);
Net implementation (costs) or savings[A]: ($1.9);
Net annual recurring (costs) or savings: $1.9;
Payback period (years): 2;
20-year net present value (costs) or savings[B]: $17.1.
Recommended action: Realign to create a Navy sensors, electronic
warfare, and electronics RDAT&E center (at Naval Air Warfare Center,
Weapons Division, China Lake);
DOD report page: Tech-28;
One-time costs: ($72.7);
Net implementation (costs) or savings[A]: ($50.9);
Net annual recurring (costs) or savings: $6.7;
Payback period (years): 12;
20-year net present value (costs) or savings[B]: $16.9.
Recommended action: Realign to consolidate sea vehicle D&A (at Naval
Surface Warfare Center Carderock and Naval Sea Systems Command,
Washington Navy Yard);
DOD report page: Tech-13;
One-time costs: ($1.5);
Net implementation (costs) or savings[A]: ($0.1);
Net annual recurring (costs) or savings: $0.2;
Payback period (years): 7;
20-year net present value (costs) or savings[B]: $2.0.
Recommended action: Realign to establish centers for rotary wing air
platform DAT&E (at Patuxent River and Redstone Arsenal);
DOD report page: Tech-26;
One-time costs: ($49.4);
Net implementation (costs) or savings[A]: ($40.2);
Net annual recurring (costs) or savings: $2.8;
Payback period (years): 26;
20-year net present value (costs) or savings[B]: ($11.8).
Total;
One-time costs: ($1,387.2);
Net implementation (costs) or savings[A]: ($367.4);
Net annual recurring (costs) or savings: $265.5;
Payback period (years): [Empty];
20-year net present value (costs) or savings[B]: $2,210.5.
Source: GAO analysis of DOD data.
Notes: R denotes the research functions, D&A denotes the development
and acquisition functions, and T&E denotes the test and evaluation
functions. C4ISR denotes command, control, communications, and
computers, intelligence, surveillance, and reconnaissance.
[A] This represents net costs or savings within the 6-year
implementation period required to implement BRAC recommendations.
[B] DOD used a 2.8 percent discount rate to calculate net present
value.
[C] We identified an additional $12.8 million that was included as a
one-time savings but should have been an annual recurring savings for
the recommendation to co-locate extramural research program managers.
If this amount were included, the annual recurring savings increases to
$62.2 million and the 20-year net present value increases to a savings
of $698.6 million.
[D] We identified errors, including antiterrorism force protection
savings listed as a recurring, rather than a one-time, savings, that
overstated the annual recurring savings for the recommendation to
consolidate ground vehicle development and acquisition in a joint
center. When these errors are corrected, there is an annual recurring
cost of $59,000, a 20-year net present value a cost of $4.3 million,
and the recommendation never pays back.
[End of table]
The majority of the projected net annual recurring savings are based on
eliminating civilian and contractor personnel ($167.7 million) as
functions are realigned between installations and vacating leased space
($51.8 million). On the other hand, the majority of the projected costs
are for constructing new facilities ($644.6 million) and moving
personnel and equipment ($326.7 million) to the gaining installations.
The group's 13 recommendations include 6 closures, 62 realignments, and
1 disestablishment for a total of 69 actions. For example, the group's
recommendation to consolidate maritime C4ISR research, development and
acquisition, and test and evaluation includes 16 realignment actions
and 1 disestablishment action.
The technical group's recommendations support, to a limited extent, the
goals of maximizing jointness and furthering transformation efforts
within the department. Eight of the group's 13 recommendations move
functions from one service or defense agency's installation to another
service's installation. For example, the recommendation to create an
integrated weapons and armaments specialty site for guns and ammunition
moves seven Navy functions to an Army installation. While the chairman
of the group's Capabilities Integration Team told us that all of the
group's recommendations were transformational, the supporting
information often suggested the recommendations were more focused on
combining like work at a single location without a clear indication of
how it provided for transformation. Two of the group's recommendations
specifically mention transformation in their justification statements,
but the transformational effects are not clear in the documentation.
For example, the recommendation to create an air integrated weapons and
armaments research, development and acquisition, and test and
evaluation center states that it supports transformation because it
moves and consolidates smaller weapons and armaments efforts into high
military value integrated centers and leverages synergy among the three
functions; however, the documentation does not discuss how these
actions are transformational.
Issues Identified with Approved Recommendations:
Time did not permit us to assess the operational impact of each of the
technical group's recommendations, particularly where operations
proposed for consolidation extend across multiple locations outside of
a single geographic area. At the same time, we offer a number of broad-
based observations about the proposed recommendations.
While available data supporting the recommendations suggest their
implementation should provide for more efficient operations within DOD,
there are some issues that the BRAC Commission may wish to consider
during its review process. Specifically, the Commission may want to
consider whether the level of personnel reductions is attainable,
issues related to projected savings from vacating leased space, the
long payback period and relatively small savings for some
recommendations, and the economic impact of one recommendation.
Personnel Reductions:
The technical group developed a standard assumption to eliminate 15
percent of military and civilian personnel affected by the
recommendation for consolidation and joint actions based on personnel
eliminations at technical facilities in previous BRAC rounds.[Footnote
155] The group used a different assumption (5.5 percent reduction in
affected military and civilian personnel) for co-location actions
because it is believed that there are likely to be fewer efficiency
gains for co-locations than consolidations or joint actions. A
technical group official told us that in some cases the group used
higher personnel reduction estimates than the standard because the
military department provided for higher estimated personnel reductions
in the certified data, and the military services agreed with all
personnel eliminations in the group's recommendations. We believe there
is some uncertainty regarding the magnitude of the group's expected
savings for these personnel reductions because its estimates are based
on assumptions that have undergone limited testing and full savings
realization depends upon the attainment of these personnel reductions.
Eight of the group's 13 recommendations eliminate at least 15 percent
of military and civilian personnel positions affected by the
recommendation. Personnel savings account for at least 40 percent, and
as much as 100 percent, of the group's projected annual recurring
savings for each of these 8 recommendations. Almost three-quarters of
all personnel savings come from civilian personnel eliminations.
Similar to military and civilian personnel, the technical group
developed a standard assumption that the subgroups could eliminate 15
percent of contractor personnel and could take $200,000 in recurring
savings for each contractor position eliminated. It is unclear from the
data what percentage of contractor positions were eliminated because
the total number of contractor personnel is not included in the COBRA
data. Seven of the group's recommendations include savings from
eliminating contractor personnel, for a total of $53.9 million in net
annual recurring savings.[Footnote 156] In contrast, the data on
economic impact (criterion 6 of the BRAC selection criteria) show a net
loss of 508 contractor personnel in 10 recommendations, which would
have totaled $101.6 million in net annual recurring savings. Technical
group officials told us that both sets of numbers are based on
certified data from the services; however, they added that the
contractor data were difficult to collect because they were provided by
the services through the scenario data calls, rather than as standard
data in the COBRA model.
It is unclear to what extent the personnel reductions assumed in the
group's recommendations will be attained, largely because of
uncertainties associated with the group's assumptions. For example, the
group's recommendation to create a naval integrated weapons and
armaments research, development and acquisition, and test and
evaluation center includes the reduction of 15 percent of military and
civilian personnel. As mentioned above, the technical group assumed a
standard 15 percent reduction in military and civilian personnel for
consolidation and joint actions and a 5.5 percent reduction in military
and civilian personnel for co-location actions. Because we are
uncertain whether the 15 percent reduction in military and civilian
personnel for consolidations and joint actions is attainable, we
determined the costs and savings of the recommendation with the 5.5
percent personnel reduction for co-locations. Table 42 shows the
financial aspects of DOD's original recommendation with a 15 percent
reduction in military and civilian personnel, our analysis of the
recommendation with a 5.5 percent reduction in military and civilian
personnel, and the difference between the two recommendations.
Table 42: Comparison of Alternatives to Personnel Reductions for the
Recommendation to Create a Naval Integrated Weapons and Armaments
Research, Development and Acquisition, and Test and Evaluation Center:
Fiscal year 2005 constant dollars in millions.
DOD's recommendation;
Net annual recurring savings: $59.7;
Payback period (years): 7;
20-year net present value savings (cost): $433.4.
Recommendation: GAO's analysis (5.5 percent military and civilian
personnel reduction);
Net annual recurring savings: $42.0;
Payback period (years): 10;
20-year net present value savings (cost): $201.8.
Difference;
Net annual recurring savings: $17.7;
Payback period (years): ($3);
20-year net present value savings (cost): $231.6.
Source: GAO analysis of DOD data.
[End of table]
Leased Space:
Our analysis identified some inconsistencies in projecting annual
recurring savings and one-time savings in three
recommendations[Footnote 157] to move activities from leased
space.[Footnote 158] The technical group used two different
methodologies to project annual recurring savings from vacating leased
space. In one recommendation, the group projected annual recurring
savings based on future leased costs[Footnote 159] while in the other
two, the group used actual lease costs data provided by the military
services and defense agencies. Furthermore, the recommendation to co-
locate the extramural research program managers also includes $2.7
million in annual recurring savings for the Defense Threat Reduction
Agency vacating leased space; however, the agency is already scheduled
to move to Fort Belvoir, Virginia, in January 2006.
The technical group also included $14.5 million in one-time savings for
seven of the eight activities[Footnote 160] vacating leased space for
the cost of upgrading existing leased space to meet DOD's antiterrorism
and force protection standards.[Footnote 161] The group did not collect
data that would indicate whether existing leases met the antiterrorism
and force protection standards. Our analysis indicates that excluding
these one-time savings would have minimal impact on the overall
projected savings of the technical group's recommendations.
Limited Savings during Implementation Period:
Only 3 of the 13 recommendations achieve savings during the 6-year
implementation period, and 3 of the group's recommendations take longer
than 10 years to achieve savings, far longer than typically occurred in
the 1995 BRAC round. According to a technical group official, the
recommendation to establish a center for rotary wing air platform
research, development and acquisition, and test and evaluation, which
has a 26-year payback, was retained because it realigns the technical-
related work away from a test range at Fort Rucker, Alabama, which will
provide for expanded training space. An Army official agreed that a
potential benefit of realigning the test range at Fort Rucker is that
it would make available hangars, facilities, and airspace for trainers.
For example, the Army said that the vacated hangar space could
potentially be used to accommodate the Aviation Logistic School's
proposed move to Fort Rucker and the reduced demand for airspace will
make additional airspace available to meet the current and future needs
for manned and unmanned aviation training.
The group's recommendation to create an integrated weapons and
armaments specialty site for guns and ammunition, which has one-time
costs of $116.3 million and a 20-year net present value savings of
$32.6 million, has a payback of 13 years. Technical group officials
told us that this recommendation was determined to be worth the costs
and longer payback period because it provides synergy and jointness, as
well as eliminating some duplication, in research and development and
acquisition of guns and ammunition for the Army and Navy.
According to a group official, the group's recommendation regarding
Navy sensors, electronic warfare, and electronics research, development
and acquisition, and test and evaluation, which has a 12-year payback
period, is beneficial because it consolidates similar work currently
performed at locations that are in proximity to each other and clears
out laboratory space at Naval Air Station Point Mugu, California, that
is needed for personnel moving in from Naval Support Activity Corona,
California, through a Navy recommendation. The official added that
while the payback for this recommendation is long, it should be put
into perspective with the savings from closing Naval Support Activity
Corona because the savings from closing that facility (net annual
recurring savings of $6.0 million and a 20-year net present value of
$0.4 million) would be smaller had the laboratory space not been
available at Point Mugu.[Footnote 162]
Economic Impact:
One of DOD's BRAC selection criteria, criterion 6, required the
department to consider the economic impact on existing communities in
the vicinity of military installations when determining realignments
and closures. In most cases, the group's recommendations had a
cumulative impact on communities of less than 1 percent as measured by
direct and indirect job loss as a percentage of employment for the
economic area of the military installation. However, the exception is
the recommendations that realign activities from Naval Surface Warfare
Center Crane, Indiana, which would result in an economic impact of 9.3
percent. A technical group official stated that realigning the
technical infrastructure to respond to defense needs over the next 20
years took priority over the economic impact of the proposed
recommendation. Two of the group's recommendations realign or eliminate
approximately 460 military and civilian personnel and 80 contractor
personnel from Naval Surface Warfare Center Crane, for a cumulative
reduction of 9.3 percent of employment in Martin County, Indiana, when
direct and indirect jobs are considered.[Footnote 163]
Personnel Realignments from Point Mugu:
There is some uncertainty on the number of civilian personnel that
would be realigned in the technical group's recommendation to create a
naval integrated weapons and armaments research, development and
acquisition, and test and evaluation center. The recommendation
proposes to realign about 1,400 civilian employees from Naval Air
Station Point Mugu, California, to Naval Air Weapons Station China
Lake, California. However, in its data call submission, Naval Air
Station Point Mugu identified 505 civilian employees that operate or
support an outdoor range that it believes should remain at Point Mugu;
however the technical group's recommendation proposes to move these
personnel to China Lake.[Footnote 164] A Navy official said that if the
recommendation is approved the Navy will decide the best way to manage
the range, including the appropriate number of employees to retain at
Point Mugu, during implementation. Our analysis indicates that if the
505 civilian employees remain at Point Mugu, the 20-year net present
value savings decreases by about $87.4 million but the payback period
remains at 7 years.
Scenario Eliminated from Consideration:
The technical group developed a scenario that would have allowed the
Air Force to close Los Angeles Air Force Base, California, which may
have further contributed to the accomplishment of BRAC objectives;
however, the Air Force Base Closure Executive Group did not approve
this scenario due to the base's relatively high military value and
perceived operational risk due to a potential for schedule and
performance disruption. Table 43 provides a summary of the financial
aspects of this scenario.
Table 43: Estimated Costs and Savings for the Rejected Closure of Los
Angeles Air Force Base:
Fiscal year 2005 constant dollars in millions.
Scenario: Close Los Angeles Air Force Base and do not provide work
space for contractors at Peterson Air Force Base;
One-time costs: ($305.1);
Net implementation (costs) or savings[A]: ($161.1);
Net annual recurring (costs) or savings: $52.9;
Payback period (years): 6;
20-year net present value (costs) or savings[B]: $358.5.
Source: DOD.
[A] This represents net costs or savings within the 6-year
implementation period required to implement BRAC recommendations.
[B] DOD used a 2.8 percent discount rate to calculate net present
value.
[End of table]
The technical group developed a scenario to realign space development
and acquisition from Los Angeles Air Force Base, California, to
Peterson Air Force Base, Colorado, among other actions, which would
allow the Air Force to close the base. However, the group deleted the
scenario based on military judgment before it finished its analysis.
While the group's meeting minutes do not provide the specific reason
that the scenario was deleted, the minutes say moving the Space and
Missile Center from Los Angeles Air Force Base to Peterson Air Force
Base would involve the movement of the federally funded research and
development center,[Footnote 165] there was no compelling reason to
move the Space and Missile Center to Peterson Air Force Base, and the
Air Force did not support the scenario. Toward the end of the process
the ISG requested that the technical group finish its analysis. The
group completed its analysis and presented the information to the Air
Force Base Closure Executive Group.[Footnote 166] The Air Force Base
Closure Executive Group decided not to close Los Angeles Air Force Base
because (1) Los Angeles Air Force Base has the highest military value
in space development and acquisition--its military value in space
development and acquisition is four times higher than that of Peterson-
-and (2) the closure has a near-term operational risk due to a
potential for schedule and performance disruption to development and
acquisition programs and activities, intellectual capital, and synergy
with industry based in Los Angeles and surrounding areas.
Technical group officials told us that there are several reasons to
close Los Angeles Air Force Base in addition to the net recurring
savings ($52.9 million) and relatively high 20-year net present value
savings ($358.5 million). Los Angeles Air Force Base is a single-
service installation that primarily performs one function in one
technical capability area--development and acquisition of space
platforms. The technical group sought to identify opportunities to
consolidate smaller single-function locations to larger multifunction
facilities, so closing Los Angeles Air Force Base would meet this goal.
The group proposed to move the functions at Los Angeles Air Force Base
to Peterson Air Force Base to co-locate the development and acquisition
function with the operational user. Other alternatives could achieve
other goals. For example, moving the space development and acquisition
function from Los Angeles Air Force Base to Kirtland Air Force Base,
New Mexico, which performs research on space platforms, could expedite
the transition of technology from the research phase to development and
acquisition. Alternatively, there could be increased jointness among
the services if the functions at Los Angeles Air Force Base were moved
to Redstone Arsenal, Alabama, where much of the Army's space platform
development and acquisition work is done.
[End of section]
Appendix XIII: Cost of Base Realignment Actions Model:
DOD used a quantitative model, known as the Cost of Base Realignment
Actions (COBRA) model, to provide consistency across the military
services and the joint cross-service groups in estimating the costs and
savings associated with BRAC recommendations. DOD has used the COBRA
model in all previous BRAC rounds and over time has made improvements
designed to provide better estimating capability. Similarly, DOD has
continued to improve the model for its use in the 2005 BRAC round. We
have examined COBRA in the past and during this review and have found
it to be a generally reasonable estimator for comparing potential costs
and savings among candidate alternatives. As with any model, the
quality of the output is a direct function of the input data. Also, as
in previous rounds, the COBRA model, which relies to a large extent on
standard factors and averages, does not represent budget quality
estimates that will be developed once BRAC decisions are made and
detailed implementation plans are developed. The COBRA model also does
not include estimated costs of environmental restoration as DOD
considers these costs a liability that must be addressed whether or not
an installation is closed.
COBRA Used as Tool to Estimate Costs and Savings Associated with BRAC
Recommendations:
DOD used the COBRA model to address the BRAC 2005 selection criterion
related to costs and savings associated with the various proposed BRAC
recommendations.[Footnote 167] It was designed to model the estimated
costs and savings associated with actions that are necessary to
implement BRAC recommendations over the 6-year implementation period
set by the BRAC statute,[Footnote 168] and recurring costs or savings
thereafter.[Footnote 169] COBRA provides for several key outputs that
may influence the decision-making process, including (1) estimated
costs for such factors as personnel severance, moving costs, or
military construction over the implementation period; (2) estimated
savings for personnel reductions or eliminations, or reduced operations
and maintenance costs over that same period; (3) the "payback" time
required for estimated cumulative savings to outweigh cumulative costs
for the actions; (4) annual recurring savings; and (5) the net present
value of BRAC actions, calculated over a 20-year time frame.[Footnote
170] Collectively, this financial information provides important input
into the selection process as decision makers weigh the financial
implications for various BRAC actions along with military value and
other factors (for example, military judgment) in arriving at final
decisions regarding the suitability of BRAC recommendations.
The COBRA model uses a set of formulas, or algorithms, that rely on
standardized data as well as base-and scenario-dependent data to
perform its calculations. Standard factors are common to a class of
bases and are applicable for all recommendations that involve those
bases. Some standard factors apply only to one DOD component or a
subset of a component's bases, while others are applicable to all bases
DOD-wide. Typical standard factors include, for example, average
personnel salaries and costs per mile and per ton for moving personnel
and equipment. Base-and recommendation-specific data, which were to be
certified in accordance with the BRAC statute, include, for example,
the number of authorized personnel on a base, the size of the base, and
annual sustainment costs. As with any model, the quality of the output
is a direct function of the quality of the input data. For this reason,
the data used in COBRA were to be certified, in a manner similar to
that employed for the capacity and military value data, as to their
accuracy.
COBRA Improvements over Time:
The COBRA model has been used in the base closure process since 1988,
and in the intervening years it has been consistently revised to
address the problems we and others have identified after each round.
DOD has once again made improvements to the model, as shown in table
44, that are designed to further refine its estimating capability.
Table 44: Major Improvements to COBRA for the BRAC 2005 Round:
BRAC 1995 shortcomings: Inconsistencies across services in developing
BRAC-related facility construction cost estimates;
BRAC 2005 improvements: Consistency for construction cost estimates
established through use of DOD-wide standards for facility categories
and costs per square foot[A].
BRAC 1995 shortcomings: Facility maintenance cost estimates often
overstated because actual maintenance was typically underfunded;
BRAC 2005 improvements: Facility maintenance (sustainment) cost
estimates adjusted to reflect historical service-specific funding of
maintenance accounts.
BRAC 1995 shortcomings: Facility rehabilitation cost estimates did not
specify existing facility condition;
BRAC 2005 improvements: Facility condition included as a factor in
developing rehabilitation cost estimates.
BRAC 1995 shortcomings: Facility recapitalization costs and cost
avoidances limited to the short term;
BRAC 2005 improvements: Facility recapitalization costs and cost
avoidances considered over the longer term using average service-
specific base recapitalization costs.
BRAC 1995 shortcomings: Estimated costs for operating and maintaining
retained reserve enclaves on closing bases were not identified;
BRAC 2005 improvements: Provisions to consider reserve enclave-related
estimated costs were included.
BRAC 1995 shortcomings: Average civilian personnel pay cost estimates
excluded locality pay differentials;
BRAC 2005 improvements: Locality pay was included in median civilian
pay costs.
BRAC 1995 shortcomings: Civilian housing-related relocation cost
estimates were based on adjusted national median housing costs;
BRAC 2005 improvements: Housing-related relocation cost estimates were
targeted to local housing costs associated with base-specific actions.
BRAC 1995 shortcomings: Algorithms for base operating support costs
were not properly supported;
BRAC 2005 improvements: Algorithms were revised, based on service-
specific factors for base operating support.
BRAC 1995 shortcomings: Limited consideration was given to overall
medical costs for the government upon closure of military treatment
facilities;
BRAC 2005 improvements: Increased consideration was given to medical-
related costs through use of base-specific data related to medical
beneficiary costs.
BRAC 1995 shortcomings: No specific consideration was given to storage-
in-transit costs or information technology costs for personnel-related
moves;
BRAC 2005 improvements: Standard factors were developed for storage and
information technology costs.
Source: GAO analysis of DOD data.
[A] Square footage requirements were service specific for areas such as
administrative office space.
[End of table]
The improvements were made by a COBRA Joint Process Action Team that
was established early in the 2005 BRAC round process. The Joint Process
Action Team, consisting of officials from the Office of the Secretary
of Defense, the military services, and representatives from the joint
cross-service groups, met frequently over several months in late 2003
to improve the model. We also attended most of these meetings as
observers in an oversight role, and we shared our observations and
raised issues of concern as appropriate. The Joint Process Action Team,
on many occasions, addressed our concerns by making appropriate changes
to the model. For example, we reported in June 2003 that COBRA did not
include estimated costs for operating and maintaining the reserve
component enclaves created during the prior BRAC rounds,[Footnote 171]
thereby having the effect of overstating the savings for those
particular BRAC actions. Consequently, the Joint Process Action Team
provided for the inclusion of these costs in the COBRA model. In
another case, the Joint Process Action Team developed an approach to
incorporate longer term estimated facility recapitalization costs in
COBRA, thus overcoming a COBRA shortcoming that we identified in our
1997 report on lessons learned from the prior BRAC rounds.[Footnote 172]
As was done in the 1995 BRAC round, the Army Audit Agency examined the
improved COBRA model to determine whether the model accurately
calculated cost and savings estimates as described in the user's
manual. The Army Audit Agency assumed this responsibility at the
request of The Army Basing Study Group since the Army serves as the
executive agent for the COBRA model. The Army Audit Agency tested all
340 algorithms in the model as presented in the user's manual and
reported in September 2004 that COBRA accurately calculated costs and
savings as prescribed in the manual.[Footnote 173] Following the audit,
however, multiple revisions were made to the model to include changes
to the TRICARE and privatization algorithms because of programming
errors in the model. The Army Audit Agency subsequently reexamined the
revisions where these algorithms were modified and concluded in a
similar fashion that the model accurately calculated the estimates. In
addition, the Army Audit Agency validated the certified data and
documentation supporting the standard factors used in the model.
Application of COBRA in the 2005 BRAC Round:
Although the COBRA model serves as a common tool with many standardized
features across DOD for analyzing costs and savings for alternative
recommendations, its actual application and results depend heavily on
the DOD guidance on what constitutes costs or savings, accuracy of the
input data, and the flexibility provided to users of the model to
consider additional input data that can affect cost and savings
estimates. The following are examples of cases where the specific
application of the model can have an effect on the estimates:
* The COBRA model generates a dollar amount attributable to the
reduction or elimination of military personnel at realigning or closing
bases. While it has been DOD's practice to classify these reductions or
eliminations as recurring savings, we have consistently taken the view
that these actions should not be counted as savings that can be used
outside the military services' personnel accounts unless commensurate
reductions are made in the affected military services' end strengths.
We acknowledge that these actions may afford DOD the opportunity to
redirect these personnel to serve in other roles that would benefit
DOD. Our analysis of DOD data indicate that about 47 percent--about
$2.6 billion--of the expected net annual recurring savings of nearly
$5.5 billion for the 2005 round are attributable to these military
personnel actions, for which reductions in the military personnel end-
strength levels are not planned.
* The COBRA model provides users with considerable flexibility in
estimating one-time and miscellaneous recurring costs or savings of
various recommendations by allowing them to consider what actions might
constitute a cost or savings and what the expected dollar amounts
should be. Validating the level of projected savings is less clear-cut
for recommendations that, instead of closing facilities, realign
workloads from one location to another, or that estimate savings in
overhead or other consolidation efficiencies. The dollar amounts could
be based on specific assumptions as well as certified data but
nonetheless be subject to greater degrees of uncertainty pending
implementation than would be actions resulting in facility closures
where expected reductions are more clear-cut. Our analysis of the BRAC
recommendations showed inconsistencies across some of the services and
joint cross-service groups in applying COBRA in this area.
* The COBRA model uses authorized base personnel levels in its
calculations to estimate costs and savings arising from DOD's
recommendations. DOD decided to use authorized rather than actual
personnel levels because of difficulties in collecting data on actual
levels. This decision could create more imprecision in the estimates;
for example, in cases where the actual personnel levels are higher or
lower than those authorized for bases that are closing, the savings
estimates would be either understated or overstated. Time did not
permit us to determine the extent to which this might be the case in
the proposed recommendations.
Comparability of COBRA Estimates and Actual Costs and Savings:
Although COBRA has provided DOD with a standard quantitative approach
enabling it to compare the estimated costs and savings associated with
various proposed BRAC recommendations, it should be noted that it does
not necessarily reflect with a high degree of precision the actual
costs or savings that are ultimately associated with the implementation
of a particular BRAC action. COBRA is not intended to produce budget-
quality data and is not used to develop the budgets for implementing
BRAC actions, which are formulated following the BRAC decision-making
process. COBRA estimates may vary from the actual costs and savings of
BRAC actions for a variety of reasons, including the following:
* COBRA estimates, particularly those based on standard cost factors,
are imprecise and are later refined during implementation planning for
budget purposes. The use of averages has an effect on precision. For
example, as noted previously, COBRA uses authorized, rather than
actual, base civilian personnel figures in its calculations. Our work
has shown that the actual number of personnel may be lower or higher
than that which is authorized. The authorized personnel levels are
documented estimates, which can be readily audited. COBRA also uses a
median national civilian personnel salary figure (adjusted by locality
pay), rather than average pay at a particular base, in its
calculations. Further, COBRA estimates are expressed in constant-year
dollars, whereas budgets are expressed in then-year dollars.
* Some costs are not fully captured in COBRA. For example, COBRA
estimates do not include the cost of environmental restoration for BRAC-
affected bases, in keeping with DOD's long-standing policy of not
considering such costs in its BRAC decision making.[Footnote 174] We
reported in January 2005 that these costs can be substantial,[Footnote
175] accounting for about 36 percent, or $8.3 million, of the $23.3
million in costs incurred through fiscal year 2003 for implementing
BRAC actions for the previous four BRAC rounds. Further, COBRA does not
include estimates for some other costs to the federal government,
particularly those related to other federal agencies or DOD providing
assistance to BRAC-affected communities. That is because assistance
costs depend on specific implementation plans that are unknown at the
time COBRA estimates are developed. In our January 2005 report on the
previous BRAC rounds, we noted that about $1.9 billion in such costs
had been incurred through fiscal year 2004.
* Some savings are not fully captured in COBRA as well. COBRA does not
include estimates, for example, for anticipated sales of BRAC surplus
property or other revenue that may be collected in the future through
property leasing arrangements with BRAC-affected entities. These
revenues can help offset some of the costs incurred in implementing
BRAC actions. While such estimates had been included in COBRA in the
previous rounds, the Joint Process Action Team decided not to include
any such estimates for the 2005 round because of the difficulty in
estimating the amount of these revenues.
Nonetheless, while COBRA estimates do not necessarily reflect the
actual costs and savings ultimately attributable to BRAC, we have
recognized in the past and continue to believe that COBRA is a
reasonably effective tool for the purpose for which it was designed: to
aid in BRAC decision making. It provides a means for comparing cost and
savings estimates across alternative closure and realignment
recommendations.
[End of section]
Appendix XIV: Economic Impact Assessments:
One of the eight selection criteria used to make BRAC decisions was the
economic impact on existing communities in the vicinity of military
installations coming from BRAC recommendations. DOD measured the
economic impact of BRAC recommendations on the affected community's
economy in terms of total potential job change--measured both in
absolute terms (estimated total job changes) and relative terms (total
job changes as a percentage of the economic area's total employment).
This approach to measuring economic impact is essentially the same
approach DOD used in the 1995 BRAC round. In a series of reports, that
examine the progress in implementing closures and realignments in prior
BRAC rounds,[Footnote 176] we examined how the communities surrounding
closed bases were faring in relation to key national indicators. In our
last status report,[Footnote 177] we observed that most communities
surrounding closed bases were faring well economically in relation to
key national economic indicators. While some communities surrounding
closed bases were faring better than others, most have recovered or are
continuing to recover from the impact of BRAC, with more mixed results
recently, allowing for some negative impact from the 2001 recession.
While there will be other economic impacts from 2005 BRAC actions that
DOD did not consider, such as changes in the value of real estate or
changes in the value of businesses in the economic area, we believe
that the magnitude of job changes would be correlated with the changes
in these other dimensions of economic impact. Although not a precise
predictor of the economic impact, we and an independent panel of
experts assembled by DOD agree that the methodology used by DOD makes a
reasonable attempt to measure economic impact of BRAC actions, both in
terms of communities losing and gaining jobs as a result of BRAC
actions.[Footnote 178]
Economic Impact Methodology:
DOD assessed the economic impact of realignments and closures using a
methodology that sought to estimate the total direct and indirect job
changes. To perform its assessment, DOD established the Economic Impact
Joint Process Action Team with members of the services and the Office
of the Secretary of Defense (OSD) to develop an economic impact model
for the services and joint cross-service groups to use as they
considered potential recommendations. The team met many times to
develop the economic methodology. We attended and observed those
meetings as the methodology was developed. DOD also retained a private
firm, Booz Allen Hamilton, to provide technical assistance in
developing the methodology and computer database used by the military
services and joint cross-service groups in calculating economic impacts
in communities for which they were considering closure or realignment
actions.
Using a list of candidate bases provided by the representatives from
each service and OSD, the primary counties in which the bases were
located were derived and the regions of economic influence (economic
areas) for those bases were determined from those counties.[Footnote
179] The economic area for each base was defined as the Metropolitan
Statistical Area (MSA) or Micropolitan Statistical Area in which the
base's primary county or counties lie.[Footnote 180] For bases in MSAs
that are divided into Metropolitan Divisions, the economic area is
defined as the Metropolitan Division in which the base's primary county
or counties lie.[Footnote 181] For bases in counties not in a MSA,
Micropolitan Statistical Area, or a Metropolitan Division the economic
area was defined as the county itself.
The economic impact of a potential action on an area was measured in
terms of direct and indirect job changes estimated from 2006 through
2011 as shown below.
Estimated Total Job Changes = Direct Job Changes x (1 + indirect
multiplier + induced multiplier).
Direct job changes are the estimated net addition or loss of jobs for
military personnel, military students, civilian employees, and
contractor mission support employees.[Footnote 182] The indirect job
changes are the estimated net addition or loss of jobs in each economic
area that could potentially occur as a result of the direct job
changes. DOD considered two types of indirect job changes: (1) indirect
job changes that are associated with the production of goods or the
provision of services that are direct inputs to a product, such as a
subcontractor producing components for a weapon system and (2) induced
job changes that are affected as a result of local spending by direct
and indirect workers, such as retail sales.
DOD used multipliers to estimate the indirect and induced job changes.
Employment multipliers for various civilian industry sectors were
obtained from the Minnesota IMPLAN Group, Inc. (MIG) for each MSA,
Micropolitan Statistical Area, Metropolitan Division, and county in
which a candidate base was located.[Footnote 183] Indirect multipliers
were estimated by mapping Military Occupational Specialties (MOSes) to
economically similar civilian sectors.[Footnote 184] Each of these
similar economic sectors multipliers were weighted by the number of
military personnel mapped to each sector divided by the total number of
employees in the sector. Examples of these economically similar sectors
are educational services, administration and support services,
scientific research and development services, aerospace product and
parts manufacturing, and electronic repair and maintenance. Judgment
was used to place all MOSes into one of the industrial sectors. A
weighted average of the indirect multipliers, based on the weights
discussed above, for each base was used to estimate the indirect job
changes from military personnel. This weighted average of indirect
multipliers used to estimate the military indirect multiplier for each
base was used to estimate the indirect job changes from civilian
personnel job changes, as well as the indirect job changes for mission-
support contractors for each base.
Estimating the induced job changes from military and civilian job
changes was more straightforward. For each economic area, MIG used one
induced multiplier for military personnel job changes and one for
nonmilitary government jobs changes. These multipliers were used to
estimate the induced job changes for each base in that economic area.
Summing the products of the weights for each of the civilian industries
calculated for the military indirect multipliers, and the induced
multipliers for each of the industries from MIG, produced the induced
multiplier used for mission support contractor job changes.
Because of a concern about the lower spending of military trainees at
recruit training facilities, an adjustment was made to reduce the
values of the induced multipliers used for job changes of military
trainees at recruit training bases. The Economic Impact Joint Process
Action Team was also concerned about overestimating induced job changes
for military trainees at recruit training bases and thought that
military trainees at such bases have a smaller economic impact than
civilian employees and regular military personnel, including those
military personnel who receive more advanced training. The team thought
this because such students receive a relatively smaller income and are
generally transient. Student multipliers for bases with recruit
training programs were estimated by multiplying the military induced
multiplier for an economic area by the ratio of basic training wages to
average military wages (slightly more than a third). Student induced
multipliers for bases without basic training programs were set equal to
the military induced multiplier for the base's economic area. The team
thought that these more advanced students were likely to have incomes
and spending habits similar to the average military in the economic
area.
Some of the joint cross-service groups subsequently considered a small
number of bases (leased spaces or Reserve/Guard centers) that were not
included in the initial set of defined economic areas. For these
economic areas, a generic set of multipliers was developed by averaging
each of the multipliers of the five categories (military, civilian,
contractor, student, and recruit training student) over the existing
economic areas.[Footnote 185]
The calculation of job change either positive or negative could be
performed in three ways:
* by individual actions for one specific action for a base,
* by base (net result of multiple actions for a base), and:
* by economic area (net result of all actions for the economic area).
The total potential job change and the total potential job changes as a
percentage of total in an economic area were to be considered in the
context of historical economic data. For historical context, the
services and the joint cross-service groups considered the following
for each economic area:
* total employment: 1988 to 2002,
* annual unemployment rates: 1990 to 2003, and:
* real per capita income: 1988 to 2002.
In addition, the latest available numbers on population would be
provided. These dates were chosen to reflect the latest available data
from federal sources.
In the 1995 BRAC round, DOD developed a separate method of assessing
cumulative economic impact because some of the closures and
realignments from the prior rounds had not been fully implemented, so
special consideration was given to the economic impacts that were yet
to occur. However in 2005, given the passage of time since all four of
the previous BRAC rounds, which extended from 1988 to 1995, and other
factors contributing to changing economic conditions in the interim
period, DOD decided not to consider the cumulative economic impact of
the prior BRAC rounds in assessing the impact of the current round. We
believe DOD's decision not to assess a cumulative economic impact for
the 2005 round has merit.
DOD had extensive documentation controls to protect how documents for
economic impact were prepared, handled, and processed. Procedures were
used to ensure that the inputs, such as the values of the multipliers,
used to make calculations on job changes were correct. A review by
qualified analysts who did not participate in the initial calculations
was also conducted.
Methodology Has Limitations but Is Reasonable for BRAC Purposes:
DOD's approach to measuring economic impact did not measure all the
dimensions of the economic impact coming from a BRAC action. There will
be other economic impacts on the economic area, such as changes in the
value of real estate or the value of businesses in the area. The DOD
approach did not estimate these effects, but it is reasonable to assume
that the magnitude of job losses would be correlated with the changes
in these values.
DOD's methodology does have some limitations. Specifically, it tended
to overstate the employment impact for economic areas. One of DOD's
goals for the methodology was to produce credible estimates but to err
on the side of overstating the actual impacts in order to prevent
others from arguing that DOD was underestimating economic impact. The
Joint Process Action Team was aware that the methodology had factors
that might offset the estimated job losses. For example, the
methodology assumed that that jobs are lost all at once and does not
recognize that employees may be released over the 6-year implementation
period and be reemployed in other local businesses or outside the
economic area, which would reduce the estimated job loss. The
methodology does not recognize the possible civilian reuse of the
affected base and the resulting reemployment of workers, which would
reduce the estimated job losses.
In examining the construction of the indirect multipliers, it is
possible to question how they were created. The indirect multiplier
being used to estimate job changes from military job changes for a base
is constructed as a weighted average multiplier where the weights are
the fraction of total base personnel being judged to be similar to a
particular civilian industry. Questions could be raised about judgments
made to map particular Military Occupation Specialties to activities in
civilian industries. In some cases, the mapping from military jobs to
industries was easier, such as military jobs in the medical area being
mapped to the medical industry. However, in other areas where the jobs
are uniquely military, such as infantry, the mapping would be more
problematic. If a mistake was made in mapping a job that is uniquely
military to a civilian sector, the result would depend on the relative
size of the multiplier of the correct civilian sector versus the
civilian sector used. It could lead to overestimation or
underestimation of the indirect job change. Time did not permit us to
examine this mapping. Nonetheless, we believe the overall approach
seemed to be a sound attempt to produce a credible multiplier.
Finally, in using the ratio of estimated job losses from 2006 through
2011 to total employment as of 2002 (the latest figure for total
employment) as a measure of economic impact, the economic impact was
likely overstated. This occurs because total employment is likely to
grow for many economic areas over the 2006-2011 implementation period
as local economies grow, which would reduce the overall percentage of
job losses.
DOD's methodology for assessing economic impact was reviewed by an
independent panel of four economists and policy analysts from the
private and academic sectors in August 2004.[Footnote 186] DOD formed
the panel of four members to review the methodology and to determine if
it conformed to accepted economic practices. Three of the panel members
were Ph.D. economists and the other was a policy analyst. All four were
experienced in conducting local economic impact studies and were not
otherwise associated with the BRAC process. The panel found the
methodology to be reasonable. The experts agreed that the use of direct
and indirect job changes was a logical method to characterize the
impact of proposed closures and realignments. The reviewers also
concluded that DOD's methodology represents a "worst-case" estimate of
economic impact. We contacted each member of the panel to discuss their
review of the methodology to ensure that DOD had adequately summarized
the results of the panel meeting and that they agreed that the
methodology was sound. We and the experts agreed that DOD had
adequately summarized the review meeting and agreed that the
methodology was reasonable to use.
Economic Areas Most Impacted and Least Impacted by BRAC
Recommendations:
In examining the economic impact of the 222 proposed recommendations as
measured by the percent of employment, most economic areas were
affected very little. Almost 83 percent of the 244 economic areas
affected by BRAC recommendations fell between a one percent loss and a
one percent gain in employment.[Footnote 187] Slightly more than 9
percent of the economic areas had a negative economic impact of greater
than one percent. Almost 8 percent of the economic areas had a positive
economic impact greater than one percent. Tables 45 and 46 show the
five economic areas with the greatest negative employment change and
the greatest positive employment change.
Table 45: Five Economic Areas with the Greatest Negative Impact on
Employment:
Economic area: Clovis, NM Micropolitan Statistical Area;
Changes as percentage of employment: -20.5%;
Reason for change: Closure of Cannon Air Force Base, NM.
Economic area: Martin County, IN;
Changes as percentage of employment: -11.6%;
Reason for change: Realignment of Naval Support Activity Crane, IN.
Economic area: Norwich-New London, CT Metropolitan Statistical Area;
Changes as percentage of employment: -9.4%;
Reason for change: Closure of Submarine Base New London, CT.
Economic area: Fairbanks, AK Metropolitan Statistical Area;
Changes as percentage of employment: -8.6%;
Reason for change: Realignment of Eielson Air Force Base, AK.
Economic area: Rapid City, SD Metropolitan Statistical Area;
Changes as percentage of employment: -8.5%;
Reason for change: Closure of Ellsworth Air Force Base, SD.
Source: DOD.
Note: Subsequent to the issuance of the recommendations, DOD identified
an error with the economic impact reported for Hawthorne Army Depot,
Nevada. The revised economic impact is -13.6 percent of employment and
not-0.1 percent as DOD initially reported.
[End of table]
Table 46: Five Economic Areas with the Greatest Positive Economic
Impact on Employment:
Economic area: St. Mary's, GA Micropolitan Statistical Area;
Changes as percentage of employment: 21.9%;
Gaining installation: Submarine Base Kings Bay, GA.
Economic area: Lawton, OK Metropolitan Statistical Area;
Changes as percentage of employment: 9.0%;
Gaining installation: Fort Sill, OK.
Economic area: Columbus, GA-AL Metropolitan Statistical Area;
Changes as percentage of employment: 8.5%;
Gaining installation: Fort Benning, GA.
Economic area: Enterprise-Ozark, AL Micropolitan Statistical Area;
Changes as percentage of employment: 7.4%;
Gaining installation: Fort Rucker, AL.
Economic area: Manhattan, KS Micropolitan Statistical Area;
Changes as percentage of employment: 6.5%;
Gaining installation: Fort Riley, KS.
Source: DOD.
[End of table]
As noted in prior reports, we examined how the communities surrounding
closed bases were faring in relation to two key national economic
indicators--the national unemployment rate and the average annual real
per capita income growth rate. In our last status report, we observed
that most communities surrounding closed bases were faring well
economically in relation to these key national economic indicators.
While some communities surrounding closed bases were faring better than
others, most have recovered or are continuing to recover from the
impact of BRAC, with more mixed results recently, allowing for some
negative impact from the 2001 recession.
[End of section]
Appendix XV: Draft DOD Transformational Options Recommended for
Approval:
THE UNDER SECRETARY OF DEFENSE:
ACQUISITION, TECHNOLOGY AND LOGISTICS:
3010 DEFENSE PENTAGON:
WASHINGTON, DC 20301-3010:
SEP 8 2004:
MEMORANDUM FOR INFRASTRUCTURE STEERING GROUP MEMBERS CHAIRMEN, JOINT
CROSS SERVICE GROUPS:
SUBJECT: Transformational Options for BRAC 2005:
The Secretary of Defense, in his November 15, 2002, memorandum
initiating the BRAG process, asked for a broad series of options for
stationing and supporting forces and functions to increase efficiency
and effectiveness. The memo tasked the Infrastructure Steering Group to
provide options to the Infrastructure Executive Council (IEC) for the
Secretary's final approval. Once approved by the Secretary, these
options will constitute a minimum analytical framework upon which the
Military Departments and Joint Cross-Service Groups (JCSGs) will
conduct their respective BRAC analyses.
In my June 21, 2004, memorandum, I asked for a review of previously
submitted options and/or for your suggested modifications, additions,
or deletions. The BRAC Deputy Assistant Secretaries (DASs) participated
in refining these submissions to eliminate duplications and to array
them as transformational options recommended for approval or deletion
based on whether the proposed option could be readily translated into
scenarios, was actionable within the BRAC 2005 process, or possessed an
identifiable effect on infrastructure.
The attachment provides the list of transformational options
categorized with a recommendation for approval or deletion to forward
to the IEC. I would appreciate receiving your formal concurrence and
comments on these lists by September 17, 2004. Please provide your
input to Mr. Peter Potochney, Director, Base Realignment and Closure in
Room 3D814.
Signed by:
Michael W. Wynne:
Acting USD (Acquisition, Technology & Logistics):
Chairman, Infrastructure Steering Group:
Attachment As stated:
Transformational Options:
Recommend Approval:
1. Consolidate Management at Installations with Shared Boundaries.
Create a single manager for installations that share boundaries. Source
& Application: H&SA.
2. Regionalize Installation Support. Regionalize management of the
provision of installation support activities across Military
Departments within areas of significant Department of Defense (DoD)
concentration, identified as Geographic Clusters. Option will evaluate
designating organizations to provide a range of services, regionally,
as well as aligning regional efforts to specific functions. For
example, a possible outcome might be designation of a single
organization with the responsibility to provide installation management
services to DoD installations within the statutory National Capital
Region (NCR). Source and Application: H&SA.
3. Consolidate or collocate Regional Civilian Personnel Offices to
create joint civilian personnel centers. Source and Application: H&SA.
4. Consolidate active and Reserve Military Personnel Centers of the
same service. Source and Application: H&SA.
5. Collocate active and/or Reserve Military Personnel Centers across
Military Departments. Source and Application: H&SA.
6. Consolidate same service active and Reserve local Military Personnel
Offices within Geographic Clusters. Source and Application: H&SA.
7. Collocate active and/or Reserve local Military Personnel Offices
across Military Departments located within Geographic Clusters. Source
and Application: H&SA.
8. Consolidate Defense Finance and Accounting Service (DFAS) Central
and Field Sites. Consolidate DFAS business line workload and
administrative/staff functions and locations. Source and Application:
H&SA.
9. Consolidate Local DFAS Finance & Accounting (F&A). Merge/consolidate
local DFAS F&A within Geographic Clusters. Source and Application:
H&SA.
10. Consolidate remaining mainframe processing and high capacity data
storage operations to existing Defense Mega Centers (Defense Enterprise
Computing Centers). Source and Application: H&SA.
11. Establish and consolidate mobilization sites at installations able
to adequately prepare, train and deploy service members. Source and
Application: H&SA.
12. Establish joint pre-deployment/re-deployment processing sites.
Source and Application: H&SA.
13. Rationalize Presence in the DC Area. Assess the need for
headquarters, commands and activities to be located within 100 miles of
the Pentagon. Evaluation will include analysis of realignment of those
organizations found to be eligible to move to DoD-owned space outside
of a 100-miles radius. Source and Application: H&SA.
14. Minimize leased space across the US and movement of organizations
residing in leased space to DoD-owned space. Source and Application:
H&SA.
15. Consolidate HQs at Single Locations. Consolidate multi-location
headquarters at single locations. Source and Application: H&SA.
16. Eliminate locations of stand-alone headquarters. Source and
Application: H&SA.
17. Consolidate correctional facilities into fewer locations across
Military Departments. Source and Application: H&SA.
18. Collocate Reserve Component (RC) Headquarters. Determine
alternative facility alignments to support RC headquarters'
administrative missions. Alternatives could consider collocation and/or
movement of RC headquarters to operational bases. Source: H&SA;
Application: MILDEPS.
19. Collocate Recruiting Headquarters. Analyze alternative Recruiting
Headquarters alignments. Consider co-location of RC and Active
Component (AC) Recruiting headquarters. Source and Application: H&SA.
20. Establish a consolidated multi-service supply, storage and
distribution system that enhances the strategic deployment and
sustainment of expeditionary joint forces worldwide. Focus the analysis
on creating joint activities in heavy (US) DoD concentration areas,
i.e. locations where more than one Department is based and within close
proximity to another. Source: Supply & Storage; Application: Supply and
Storage and Industrial.
21. Privatize the wholesale storage and distribution processes from DoD
activities that perform these functions. Source and Application: Supply
& Storage.
22. Migrate oversight and management of all service depot level
reparables to a single DoD agency/activity. Source and Application:
Supply & Storage.
23. Decentralize Depot level maintenance by reclassifying work from
depot-level to I-level. Source and Application: Industrial.
24. Centralize I-level maintenance and decentralize depot-level
maintenance to the existing (or remaining) depots.
* Eliminate over-redundancy in functions.
* Consolidate Intermediate and Depot-level regional activities Source
and Application: Industrial.
25. Regionalize severable and similar work at the intermediate level.
Source and Application: Industrial.
26. Partnerships Expansions. Under a partnership, have government
personnel work in contractor owned/leased facilities and realign or
close facilities where personnel are currently working. Source and
Application: Industrial.
27. Collocate depots: Two Services use the same facility(s). Separate
command structures but shared common operations. Source and
Application: Industrial.
28. Consolidate similar commodities under Centers of Technical
Excellence. Source and Application: Industrial.
29. Implement concept of Vertical Integration by putting entire life
cycle at same site to increase synergies, e.g. production of raw
materials to the manufacture of finished parts, co-locating storage,
maintenance and demil. Source and Application: Industrial.
30. Implement concept of Horizontal Integration by taking some of the
most costly elements of the M&A processes and put them at the same site
to increase efficiencies, e.g. put Load, Assemble and Pack (LAP) of all
related munitions at same site. Source and Application: Industrial.
31. Maintain a multi-service distribution and deployment network
consolidating on regional joint service nodes. Source and Application:
Industrial.
32. Evaluate Joint Centers for classes and types of weapons systems
and/or technologies used by more than one Military Department.
* Within a Defense Technology Area Plan (DTAP) Capability Area.
* Across multiple functions (Research; Development & Acquisition; Test
& Evaluation).
* Across multiple DTAP capability areas. Source and Application:
Technical.
33. Evaluate Service-Centric concentration, i.e. consolidate within
each Service.
* Within a Defense Technology Area Plan (DTAP) capability area.
* Across multiple functions (Research; Development & Acquisition; Test
& Evaluation).
* Across multiple DTAP capability areas. Source and Application:
Technical.
34. Privatize graduate-level education. Source and Application:
Education & Training.
35. Integrate military and DoD civilian full-time professional
development education programs. Source and Application: Education &
Training.
36. Establish Centers of Excellence for Joint or Inter-service
education and training by combining or co-locating like schools (e.g.,
form a "DoD University" with satellite training sites provided by
Service-lead or civilian institutions). Source and Application:
Education & Training.
37. Establish "joint" officer and enlisted specialized skill training
(initial skill, skill progression & functional training). Source and
Application: Education & Training.
38. Establish a single "Center of Excellence" to provide Unmanned
Aerial Vehicle initial (a.k.a. undergraduate) training. Source and
Application: Education & Training.
39. Establish regional Cross-Service and Cross-Functional ranges that
will support Service collective, interoperability and joint training as
well as test and evaluation of weapon systems. Source and Application:
Education & Training.
40. Integrate selected range capabilities across Services to enhance
Service collective, interoperability and joint training, such as Urban
Operations, Littoral, training in unique settings (arctic, mountain,
desert, and tropical). Source and Application: Education & Training.
41. Combine Services' T&E Open Air Range (OAR) management into one
joint management office. Although organizational/managerial, this
option could engender further transformation. Joint management of OAR
resources could encourage a healthy competition among OARs to increase
efficiency and maximum utility DoD-wide. Source and Application:
Education & Training.
42. Consolidate or collocate at a single installation all services'
primary phase of pilot training that uses the same aircraft (T-6).
Source and Application: Education & Training.
43. Locate (division/corps) UEx and (corps/Army) UEy on Joint bases
where practical to leverage capabilities of other services (e.g.,
strategic lift to enhance strategic responsiveness). Source and
Application: Army.
44. Locate (brigades) Units of Action at installations DoD-wide,
capable of training modular formations, both mounted and dismounted, at
home station with sufficient land and facilities to test, simulate, or
fire all organic weapons. Source and Application: Army.
45. Collocate Army War College and Command and General Staff College at
a single location. Source: Army; Application: Education & Training.
46. Locate Special Operations Forces (SOF) in locations that best
support specialized training needs, training with conventional forces
and other service SOF units and wartime alignment deployment
requirements. Source and Application: Army.
47. Collocate or consolidate multiple branch schools and centers on
single locations (preferably with MTOE units and RDTE facilities) based
on warfighting requirements, training strategy, and doctrine, to gain
efficiencies from reducing overhead and sharing of program-of-
instruction resources. Source and Application: Army.
48. Reshape installations, RC facilities and RC major training centers
to support home station mobilization and demobilization and implement
the Train/Alert/Deploy model. Source and Application: Army.
49. Increase the number of multi-functional training areas able to
simultaneously serve multiple purposes and minimize the number of
single focus training areas for the Reserve Components where possible.
Source and Application: Army.
50. Collocate institutional training, MTOE units, RDTE organizations
and other TDA units in large numbers on single installations to support
force stabilization and enhance training. Army.
51. Locate units/activities to enhance home station operations and
force protection. Source and Application: Army.
52. Consolidate aviation training with sister services for like-type
aircraft to gain efficiencies. Source: Army; Application: all services.
53. Collocate functions and headquarters in "Joint Campuses" to enhance
interoperability and reduce costs. Source: Army; Application: H&SA.
54. Consolidate Army RDT&E organizations to capitalize on technical
synergy across DoD, academia and industry. Source: Army; Application:
Technical.
55. Reduce the number of USAR regional headquarters to reflect Federal
Reserve Restructuring Initiative (FRRI). Source and Application: Army.
56. Consolidate RDT&E functions on fewer installations through inter-
service support agreements to enable multidisciplinary efforts to
increase efficiencies and reduce redundancy within DoD. Source: Army;
Application: Technical, MilDeps.
57. Establish a single inventory control point (ICP) within each
Service or consolidating into joint ICPs. Application: Supply and
Storage.
58. Expand Guard and Reserve force integration with the Active force.
Examples:
(1) Blended organizations,
(2) Reserve Associate, Guard Associate, and Active Associate,
(3) Sponsored Reserve,
(4) Blending of Guard units across state lines to unify mission areas,
reduce infrastructure, and improve readiness. Application: MilDeps.
59. Consolidate National Capital Region (NCR) intelligence community
activities now occupying small government facilities and privately
owned leased space to fewer, secure DoD-owned locations in the region.
Application: Intel.
60. Collocate Guard and Reserve units at active bases or consolidate
the Guard and Reserve units that are located in close proximity to one
another at one location if practical, i.e., joint use facilities.
Application: MilDeps.
61. Consolidate the Army's five separate Active Component recruit
training sites and the Marine Corps' two Active Component recruit
training sites into one recruit training installation each. Source:
Education and Training; Application: Army & Marine Corps.
62. Privatize Household Goods and Personal Property Shipping function.
Source: BENS; Application: Supply and Storage, MilDeps.
63. Privatize long-haul communications in the Defense Information
Systems Agency (DISA). Source: BENS; Application: H&SA.
64. Collocate Joint Strike Fighter graduate flight training and
maintenance training.
65. Collocate Joint Strike Fighter graduate flight training.
66. Collocate Joint Strike Fighter maintenance training.
67. Consolidate aviation assets of two or more Military Services on the
same base. Application: MilDeps.
68. Collocate Service special operations units where they further
reduce infrastructure requirements and enable improved training
opportunities.
69. Collocate Service Professional Military Education (PME) schools at
the intermediate and senior levels. Application: E&T.
70. Consolidate/Collocate Service specific test pilot schools.
Application: MilDeps.
71. Collocate ground and signals intelligence systems. Application:
Intel & MilDeps.
72. Collocate ground and airborne intelligence systems. Application:
Intel & MilDeps.
73. Consolidate pilot training and maintenance training for rotary wing
and fixed wing aircraft using Executive Agency. Application: Education
and Training.
74. Each Military Department and Joint Cross Service Group will look at
the effects of either reducing their functions by 20%, 30%, and 40%
from the current baseline, or reducing excess capacity by an additional
5% beyond the analyzed excess capacity, whichever is greater. The
objective of this analysis is to uncover ways in which additional gains
could be achieved, rather reasons why they could not. Source: DON;
Application: MilDeps and JCSGs.
75. Establish a "space test range" for satellite ground testing, threat
assessment, and tactics development. Elements of the "range" should be
networked using a minimum number of ground facilities to virtually
simulate on-orbit operations. Source and Application: Air Force.
76. Establish an Army Joint Network Science Technology and
Experimentation Center to fully realize the transformational
capabilities of interdependent Joint Network Centric Warfare. Source:
Army; Application: Technical.
77. Air Force use optimum flying squadron sizing and organizational
constructs to disproportionately increase combat capability and
transform the capability of its AEFs. Source and Application: Air
Force.
[End of section]
Appendix XVI: Key GAO and Other Defense Audit Agency Products Related
to DOD's 2005 Base Realignments and Closures:
Government Accountability Office:
Military Base Closures: Observations on Prior and Current BRAC Rounds.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-614]
Washington, D.C.: May 3, 2005.
Military Base Closures: Updated Status of Prior Base Realignments and
Closures.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-138]
Washington, D.C.: January 13, 2005.
Military Base Closures: Assessment of DOD's 2004 Report on the Need for
a Base Realignment and Closure Round.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-760]
Washington, D.C.: May 17, 2004.
Military Base Closures: Observations on Preparations for the Upcoming
Base Realignment and Closure Round.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-558T]
Washington, D.C.: March 25, 2004.
Military Base Closures: DOD's Updated Net Savings Estimate Remains
Substantial.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-01-971]
Washington, D.C.: July 31, 2001.
Military Bases: Lessons Learned from Prior Base Closure Rounds.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-97-151]
Washington, D.C.: July 25, 1997.
Military Bases: Analysis of DOD's 1995 Process and Recommendations for
Closure and Realignment.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-95-133]
Washington, D.C.: April 14, 1995.
Department of Defense Office of Inspector General:
Infrastructure and Environment: Technical Joint Cross-Service Group
Data Integrity and Internal Control Processes for Base Realignment and
Closure 2005. D-2005-086. Washington, D.C.: June 17, 2005.
Defense Infrastructure: Education and Training Joint Cross-Service
Group Data Integrity and Internal Control Processes for Base
Realignment and Closure 2005. D-2005-084. Arlington, Va.: June 10,
2005.
Defense Infrastructure: Industrial Joint Cross-Service Group Data
Integrity and Internal Control Processes for Base Realignment and
Closure 2005. D-2005-082. Arlington, Va.: June 9, 2005.
Infrastructure and Environment: Washington Headquarters Services Data
Call Submissions and Internal Control Processes for Base Realignment
and Closure 2005. D-2005-079. Arlington, Va.: June 8, 2005.
Defense Infrastructure: Supply and Storage Joint Cross-Service Group
Data Integrity and Internal Control Processes for Base Realignment and
Closure 2005. D-2005-081. Arlington, Va.: June 6, 2005.
Infrastructure and Environment: Defense Finance and Accounting Service
Data Call Submissions and Internal Control Processes for Base
Realignment and Closure 2005. D-2005-075. Arlington, Va.: May 27, 2005.
DOD Inspector General plans to issue reports on the Defense Logistics
Agency, the Headquarters and Support Activities Joint Cross-Service
Group, and the Medical Joint Cross-Service Group.
Department of the Army U.S. Army Audit Agency:
Reserve Component Process Action Team, The Army Basing Study 2005. A-
2005-0165-ALT. Alexandria, Va.: April 29, 2005.
The Army Basing Study 2005 Process. A-2005-0164-ALT. Alexandria, Va.:
April 22, 2005.
Validation of Army Responses for Joint Cross-Service Group Questions. A-
2005-0169-ALT. Alexandria, Va.: April 22, 2005.
Army Military Value Data, The Army Basing Study 2005. A-2005-0083-ALT.
Alexandria, Va.: December 21, 2004.
Army Capacity Data, The Army Basing Study 2005. A-2005-0056-ALT.
Alexandria, Va.: November 30, 2004.
Cost of Base Realignment Actions (COBRA) Model. A-2004-0544-IMT.
Alexandria, Va.: September 30, 2004.
Department of the Navy Naval Audit Service:
The Department of the Navy's Implementation of the FY 2005 Base
Realignment and Closure Process. N2005-0046. Washington, D.C.: June 10,
2005.
Risk Assessment of the Department of the Navy Base Realignment and
Closure 2005 Information Transfer System. N2005-0042. Washington, D.C.:
April 25, 2005.
Base Realignment and Closure Optimization Methodology. N2004-0058.
Washington, D.C.: June 16, 2004.
Department of the Air Force Air Force Audit Agency:
BRAC Cueing and Analysis Tools. F2005-0007-FB2000. Washington, D.C.:
June 22, 2005.
2005 Base Realignment and Closure-Installation Visualization Tool Data
Reliability. F2005-0004-FB4000. Washington, D.C.: June 16, 2005.
Base Realignment and Closure Data Collection System. F2004-0008-
FB40000. Washington, D.C.: September 27, 2004.
2005 Base Realignment and Closure: Installation Capacity Analysis
Questionnaire. F2004-0007-FB4000. Washington, D.C.: August 24, 2004.
2005 Base Realignment and Closure: Installations Inventory. F2004-0005-
FB4000. Washington, D.C.: April 12, 2004.
2005 Base Realignment and Closure: Air Force Internal Control Plan.
F2004-0001-FB4000. Washington, D.C.: December 29, 2003.
The Air Force Audit Agency plans to release 7 additional reports on the
Air Force and joint cross-service group data collection, the Air Force
analysis, and the use of various BRAC tools.
[End of section]
Appendix XVII: GAO Contact and Staff Acknowledgments:
GAO Contact:
Barry W. Holman (202) 512-5581:
Acknowledgments:
In addition to the individual named above, Mike Kennedy, Jim
Reifsnyder, Nelsie Alcoser, Shawn Arbogast, Raymond Bickert, Alissa
Czyz, Andrew Edelson, Glenn Knoepfle, Nancy Lively, Warren Lowman, Tom
Mahalek, David Mayfield, Richard Meeks, Hilary Murrish, Charles Perdue,
Robert Poetta, James Reynolds, Laura Talbott, and Cheryl Weissman made
key contributions to this report.
Other individuals also contributing to this report included, Tommy
Baril, Carl Barden, Angela Bourciquot, Steve Boyles, Delaney Branch,
Joel Christenson, Kenneth Cooper, Paul Gvoth, Larry Junek, Mark Little,
Philip Longee, Ricardo Marquez, Gary Phillips, Greg Pugnetti, Sharon
Reid, John Strong, Roger Tomlinson, and Kimberly Young.
(350443):
FOOTNOTES
[1] Definitions of closures and realignments and other BRAC-related
terms are included in app. II.
[2] DOD defines plant replacement value as the cost to replace an
existing facility with a facility of the same size at the same
location, using today's building standards.
[3] P.L. 107-107, Title XXX (Dec. 28, 2001).
[4] P.L. 101-510, Title XXIX (Nov. 5, 1990); 10 U.S.C. 2687, note.
[5] Once the recommendations become binding, DOD must initiate closure
or realignment actions no later than 2 years and complete these actions
within 6 years from the date the President transmits his report to
Congress. P.L. 101-510, section 2904.
[6] The seven joint cross-service groups were Education and Training;
Headquarters and Support Activities; Industrial; Intelligence; Medical;
Supply and Storage; and Technical.
[7] The reserve components consist of the Army National Guard of the
United States, the Army Reserve, the Naval Reserve, the Marine Corps
Reserve, the Air National Guard of the United States, the Air Force
Reserve, and the Coast Guard Reserve.
[8] In the context of BRAC, net present value is taking into account
the time value of money in calculating the value of future cost and
savings.
[9] During the BRAC process, data were certified by senior officials at
DOD installations. Each official certified that the information was
accurate and complete to the best of his or her knowledge and belief.
[10] P.L. 101-510, section 2912(a)(1)(A) required DOD to develop a 20-
year force structure plan as the basis for its BRAC analysis.
[11] Candidate recommendations refer to proposed recommendations that
were approved by either the military services or joint cross-service
groups and forwarded for review to DOD's Infrastructure Steering Group
and Infrastructure Executive Council.
[12] P.L. 107-107, Title XXX (Dec. 28, 2001).
[13] P.L. 101-510, Title XXIX (Nov. 5, 1990); 10 U.S.C. 2687 note.
[14] This contrasts with secretarial guidance issued in January 1994,
initiating the 1995 BRAC round, which established the goal of reducing
domestic base structure by a minimum of 15 percent of DOD-wide plant
replacement value. The Secretary of Defense indicated in a March 2004
report to Congress that DOD likely had about 24 percent excess facility
capacity going into the 2005 BRAC round.
[15] DOD broadly defines transformation as "a process that shapes the
changing nature of military competition and cooperation through new
combinations of concepts, capabilities, people and organizations that
exploit our nation's advantages and protect against asymmetric
vulnerabilities to sustain our strategic position, which helps underpin
peace and stability in the world." Examples of draft transformational
options included (1) consolidate management at installations with
shared boundaries and (2) establish regional cross-service and cross-
functional ranges that will support service, collective,
interoperability, and joint training, as well as test and evaluation of
weapon systems.
[16] P.L. 108-375, section 2832 (Oct. 28, 2004).
[17] In this report, we refer to the selection criteria by the
numbering method used by DOD instead of the specific statutory
provisions detailing these criteria as contained in P.L. 101-510,
section 2913.
[18] Payback period is defined as the number of years, beginning with
the date of completion of a closure or realignment, required for
cumulative estimated savings to exceed cumulative estimated costs
incurred in net present value terms as a result of implementing a BRAC
action.
[19] Besides the 50 states, this also includes the District of
Columbia; the Commonwealth of Puerto Rico; Guam; the Virgin Islands;
American Samoa; and any other commonwealth, territory, or possession of
the United States. P.L. 101-510, section 2910(7).
[20] The Commission on Review of Overseas Military Facility Structure
of the United States, also known as the Overseas Basing Commission. See
P.L. 108-132, section 128 (Nov. 22, 2003).
[21] Commission on Review of Overseas Military Facility Structure of
the United States (Washington, D.C.: May 9, 2005).
[22] We most recently reported that these costs were $23.3 billion
through fiscal year 2003 and they excluded an estimated $3.6 billion in
costs that are needed to complete environmental cleanup at BRAC bases
in future years. Also, they did not include about $1.9 billion in costs
incurred by other DOD and federal agencies to provide assistance to
communities and individuals impacted by BRAC as a result of prior BRAC
rounds.
[23] Sustainment refers to recurring maintenance and repair activities
necessary to keep facilities in good working order. Recapitalization
refers to major renovation or reconstruction activities (including
facility replacement) needed to keep facilities modern and efficient in
an environment of changing standards and missions. Base operating
support refers to a collection of day-to-day programs, activities, and
services, such as food services, grounds maintenance, and custodial
services, needed to keep the bases and installations in running order.
[24] These projections exclude environmental restoration costs, which
historically have not been included in BRAC costs and savings analyses
because restoration is a liability that exists regardless of whether a
base is closed, but are included in implementation budgets once BRAC
recommendations have become binding.
[25] GAO, Military Bases: Analysis of DOD's 1995 Process and
Recommendations for Closure and Realignment, GAO/NSIAD-95-133
(Washington, D.C.: Apr. 14, 1995).
[26] The sites are the Newport Chemical Depot, Indiana; Umatilla
Chemical Depot, Oregon; and Deseret Chemical Depot, Utah.
[27] Performance-based logistics is defined as the purchase of weapon
system sustainment as part of an integrated weapon system package based
on output measures, such as weapon system availability, rather than
input measures, such as parts and technical services.
[28] Performance-based agreements are defined as the negotiated
agreements between the major stakeholders that formally document the
performance and support expectations and resources to achieve the
desired outcome.
[29] These functions could include such areas as real property
management and maintenance, utilities, housing, emergency services,
environmental services, base security, reserve component support,
resource management, procurement, personal property management,
transportation, equipment maintenance, retail supply, base
communications, audio/visual services, personnel and professional
support, personnel services, food services, laundry services, education
services, personal and family services, recreation, military exchange
operations, airfield operations, garrison operations, internal review,
inspector general, and strategic planning.
[30] Each official who submitted data for BRAC analysis certified that
the information was accurate and complete to the best of his or her
knowledge and belief.
[31] Noted by the Secretary of Defense in his testimony before the BRAC
Commission on May 16, 2005.
[32] Homeland defense and surge considerations are in the military
value selection criteria 2 and 3, respectively, as reflected in P.L.
101-510, section 2913(b)(2)&(3).
[33] Modularity refers to the Army Modular Force Initiative whereby the
Army is transforming its force structure by increasing from 67 brigade
combat teams to 77 modular brigade combat teams (43 active Army and 34
Army National Guard) with the potential for 48 active Army modular
brigade combat teams.
[34] DOD's antiterrorism standards, effective no later than October
2009, apply to both new and existing DOD-inhabited buildings and
require, for example, minimum building standoff distances; structures
that will avoid progressive building collapse; reinforced exterior
walls; glazed windows, skylights, and doors; and properly secured
entrances. Unified Facilities Criteria, 4-010-01 (Oct. 8, 2003).
[35] P.L. 101-510, section 2913(e).
[36] GAO, Military Base Closures: Updated Status of Prior Base
Realignments and Closures, GAO-05-138 (Washington, D.C.: Jan. 13,
2005).
[37] Economic development conveyances are used to transfer unneeded
property to communities for uses that promote economic recovery and job
creation. The National Defense Authorization Act for Fiscal Year 2002
(P.L. 107-107, Title XXX, section 3006 (Dec. 28, 2001)) included a
provision stipulating that DOD seek to obtain fair market value for
BRAC-related transfers of property in the 2005 round. The effect this
provision will have on the generation of revenue for DOD is unknown at
this time.
[38] Some of the recommendations had multiple actions that affected
more than one economic area.
[39] GAO, Military Base Closures: Updated Status of Prior Base
Realignments and Closures, GAO-05-138 (Washington, D.C.: Jan. 13,
2005); GAO, Military Base Closures: Progress in Completing Actions from
Prior Realignments and Closures, GAO-02-433 (Washington, D.C.: Apr. 5,
2002); and GAO, Military Bases: Status of Prior Base Realignment and
Closure Rounds, GAO/NSAID-99-36 (Washington, D.C.: Dec. 11, 1998).
[40] GAO, DOD Schools: Limitations in DOD-Sponsored Study on Transfer
Alternatives Underscore Need for Additional Assessment, GAO-05-469
(Washington, D.C.: Apr. 26, 2005).
[41] The medical group developed this candidate recommendation with the
knowledge of a specific provision of federal law (10 U.S.C. 2112a) that
could preclude closure of the university.
[42] See GAO, Budget Issues: Budgetary Implications of Selected GAO
Work for Fiscal Year 2001, GAO/OCG-00-8 (Washington, D.C.: Mar. 31,
2000); GAO, Budget Issues: Budgetary Implications of Selected GAO Work
for Fiscal Year 2000, GAO/OCG-99-26 (Washington, D.C.: Apr. 16, 1999);
and GAO, Military Physicians: DOD's Medical School and Scholarship
Program, GAO/HEHS-95-244 (Washington, D.C.: Sept. 29, 1995).
[43] The Grand Forks Air Force Base recommendation also includes the
realignment of McConnell Air Force Base, Kansas.
[44] The joint cross-service groups were Education and Training,
Headquarters and Support Activities, Industrial, Intelligence, Medical,
Supply and Storage, and Technical.
[45] See app. XVI for a list of relevant DOD Inspector General and
military service audit reports that were available at the time we
completed our review.
[46] BRAC legislation establishes specific thresholds that require
decisions regarding the closure or realignment of U.S. domestic
military installations to be made under the BRAC process. Accordingly,
decisions to close domestic U.S. military installations with
authorization for at least 300 civilian personnel or to realign
domestic U.S. military installations authorized at least 300 civilian
personnel that involve a reduction of more than 1,000 or 50 percent in
the number of civilian personnel authorized must undergo the BRAC
process. See P.L. 101-510, section 2909.
[47] The Integrated Global Presence and Basing Strategy (IGPBS) refers
to DOD's effort to evaluate the global posture of the armed forces,
which in part recommended the return of U.S. forces from Europe and
Korea. The Army's BRAC 2005 report indicates that had it been able to
include savings expected from closing overseas bases and restationing
overseas-based personnel to the United States, its recommendations
related to these actions would have achieved a net savings. However,
DOD determined, and we agree, that the inclusion of such savings based
on overseas base closures in BRAC is not appropriate, because the BRAC
process was established to consider only the closure or realignment
actions involving domestic U.S. military installations and not U.S.
military installations located in foreign countries.
[48] At OSD, the Infrastructure Steering Group (ISG) and the
Infrastructure Executive Council (IEC) provided overall coordination
and direction to the DOD-wide process.
[49] In a May 2003 report, we noted the challenges that the Army faces
in the funding of its reserve component facilities due to budget
coordination difficulties. See GAO, 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). According to Army officials, BRAC
provides them an opportunity to overcome these challenges.
[50] Modularity refers to the Army Modular Force Initiative whereby the
Army is transforming its force structure by increasing from 67 brigade
combat teams to 77 modular brigade combat teams (43 active Army and 34
Army National Guard) with the potential for 48 active Army modular
brigade combat teams.
[51] DOD defines transformation as "a process that shapes the changing
nature of military competition and cooperation through new combinations
of concepts, capabilities, people and organizations that exploit our
nation's advantages and protect against asymmetric vulnerabilities to
sustain our strategic position, which helps underpin peace and
stability in the world."
[52] The nine installations were Holston, Radford, and Lake City Army
Ammunition Plants; Watervliet Arsenal; Military Ocean Terminal Sunny
Point; Forts Myer and Detrick; and Tripler and Walter Reed Army Medical
Centers.
[53] These recommendations represent only those produced by the Army as
detailed in DOD's 2005 BRAC report. In addition, the various joint
cross-service groups produced various recommendations that affected
Army installations. Those recommended actions are detailed in the
appropriate appendices in this report.
[54] For purposes of BRAC 2005 actions, the United States is defined
under P.L. 101-510, section 2910(7) as the 50 states, District of
Columbia, the Virgin Islands, American Samoa, Commonwealth of Puerto
Rico, and any other commonwealth, territory, or possession of the
United States.
[55] In addition, some of these armed forces reserve centers are
expected to include some reserve activities from the other services.
[56] According to Army officials, the return of 15,000 soldiers was
directly incorporated into the Army's BRAC recommendations, including
the 1ST Armored Division headquarters and three heavy maneuver brigades
from Germany to Fort Bliss, the 1ST Infantry Division headquarters,
division support command, and aviation brigade to Fort Riley, and
military police, engineer, and logistical units to Fort Knox, Kentucky.
The Army also validated existing plans to restation about 10,000
soldiers to Schofield Barracks, Hawaii; Fort Lewis, Colorado; and Fort
Carson, Colorado. The remaining 22,000 soldiers will return to the
United States individually to be restationed as part of the Army's
force restructuring effort (called modularity).
[57] The Army's current modular force restructuring plan calls for the
creation of ten modular brigades within the United States by year 2006,
with the possibility of an additional five modular brigades beyond
then. As part of its BRAC analysis, the Army validated existing
stationing decisions for five of the ten new modular brigades and
incorporated the stationing of the remaining five modular brigades into
four of its BRAC recommendations.
[58] This commission, also known as the Overseas Basing Commission, was
established by Congress in 2003. See P.L. 108-132, section 128 (Nov.
22, 2003). It was created to evaluate, among other things, the current
and proposed overseas basing structure of the U.S. military forces. The
Commission's observations are included in the Report of the Commission
on Review of the Overseas Military Facility Structure of the United
States (Washington, D.C.: May 9, 2005).
[59] GAO, Force Structure: Preliminary Observations on Army Plans to
Implement and Fund Modular Forces, GAO-05-443T (Washington, D.C.: Mar.
16, 2005).
[60] GAO, Military Training: Better Planning and Funding Priority
Needed to Improve Conditions of Military Training Ranges, GAO-05-534
(Washington, D.C.: June 10, 2005).
[61] At OSD, the Infrastructure Steering Group (ISG) and the
Infrastructure Executive Council (IEC) provided overall coordination
and direction to the DOD-wide process.
[62] The hangar module is defined as the hangar space, line space,
administrative space, and maintenance shop space required to house on
aircraft squadron. There are two types of hangar modules used: Type I,
which supports carrier-based fixed wing aircraft and helicopters, and
Type II, which supports larger aircraft.
[63] That concept is a single metric that considered berthing capacity
for all Navy surface ships normalized to the Cruiser class of ship.
They must have cold-iron, homeport capability and must meet shore power
quality and quantity requirements, water and sewage requirements, and
channel depth and height restrictions. For example, an aircraft carrier
equals four cruiser equivalents.
[64] The capacity analysis for surface/subsurface activities considered
all naval activities that reported cruiser-equivalent berthing
capability except for the Naval District of Washington, Naval Support
Activity New Orleans, and the Nuclear Power Training Unit, Charleston.
These activities were excluded because they have limited capability and
viability to homeport naval vessels.
[65] The analysis showed no excess capacity for munitions throughput
and showed excess capacity for storage.
[66] The Naval Audit Service visited 214 sites, covering 45 data calls,
and audited 8,338 questions.
[67] A model developed by the Center for Naval Analysis, which was used
in BRAC 1995 and updated for BRAC 2005. The model met operational
requirements and policy considerations by incorporating "rules" or
"constraints" for functions so that the model would not select an
operationally infeasible solution. For example, if the East Coast naval
bases had enough berthing capacity to handle all of the ships in the
force structure plan, the model could place all the ships at those
bases and suggest closure of all of the West Coast and Pacific bases,
which would be unacceptable. Therefore, the surface/subsurface
operations portion of the model included a constraint that at least 40
percent of the surface/subsurface ship be located on each coast.
[68] Costs associated with moving a carrier strike group to Pearl
Harbor, Hawaii, were projected to be from $2.6 to $3.1 billion. Cost
for moving it to Guam were projected to be from $4 billion to $6.6
billion.
[69] The other shipyards that perform depot level ship refueling,
modernization overhaul, and repair work are Norfolk, Pearl Harbor, and
Puget Sound.
[70] Legislation is currently pending in Congress that would not allow
the Navy to decommission the U.S.S. John F. Kennedy. See H.R. 1815,
109th Congress, section 127 (2005).
[71] A commodity is a generic grouping of the types of depot and
maintenance work associated with end items, weapons systems, or major
processes, for example, cranes and rigging, electronics, forge, nuclear
testing, or welding.
[72] At OSD, the Infrastructure Steering Group (ISG) and the
Infrastructure Executive Council (IEC) provided overall coordination
and direction to the DOD-wide process.
[73] Department of the United States Air Force, Expeditionary Air Force
Principles White Paper (Washington, D.C.: July 14, 2004).
[74] Air Force officials defined three types of surge, which increase
operations in response to a situation or event. For example, local
surge increases flying time; regional surge mobilizes and deploys
military forces; and strategic surge includes large-scale return of
forces from overseas or large scale mobility operations.
[75] Air Force BRAC installations fell into eight major commands: (1)
Air Mobility Command, (2) Air Combat Command, (3) Air Force Space
Command, (4) Air Force Materiel Command, (5) Air Force Special
Operations Command, (6) Air Education and Training Command, (7) Pacific
Air Force, and (8) Air Force Reserve Command. The Air National Guard
was included in the analysis, although it is not considered a major
command.
[76] The mission compatibility indexes list each of the 154
installations considered in the Air Force BRAC process, with its
respective scores for the overall mission; current and future mission;
condition of infrastructure; contingency, mobilization, and future
forces; and cost of operations and manpower.
[77] The Air Force Audit Agency performed audits on the following areas
for BRAC 2005: Air Force Internal Control Plan, Installations
Inventory, Installation Capacity Analysis Questionnaire, Base
Realignment and Closure Data Collection System, Air Force Data
Collection, Joint Cross-Service Group Data Collection, Joint Action
Scenario Team Data Collection, Installation Visualization Tool Data
Reliability, NOISEMAP Reliability, Air Force Analysis, Cost of Base
Realignment Actions, Cueing and Analysis Tools, and BRAC Facility
Analysis Capability.
[78] According to the Air Force's BRAC report, it recommends 72 BRAC
closures and realignments. However, it presented only 42 recommendation
narratives because various realignment actions were combined.
[79] The Air Force scenario teams in BRAC 2005 were the Combat Air
Forces, Mobility Air Forces, Space, and Integration.
[80] For example, Bangor Air Guard Station, Maine, is a receiver in the
realignment of Birmingham Air Guard Station, Alabama, although it has a
lower military value score for the tanker Mission Compatibility Index
than Birmingham Air Guard Station. However, the Bangor Air Guard
Station is used by the Air Force as a host base for the Northeast
Tanker Task Force in order to support transatlantic air operations.
[81] According to the Air Force's BRAC report, it recommends 72 BRAC
closures and realignments. However, the Air Force presented only 42
recommendation narratives because various realignment actions were
combined.
[82] The three recommendations that do not affect the reserve component
include the closure of Onizuka Air Force Station, California; the
realignment of Langley Air Force Base, Virginia; and the Air Force
logistics support centers recommendation.
[83] Joint cross-service groups and other service recommendations do,
however, allow for increased jointness with the Air Force. For example,
Eglin Air Force Base, Florida, will host Joint Strike Fighter pilot
training and will also host the Army's Seventh Special Forces Group in
conjunction with Education and Training Joint-Cross Service Group and
Army recommendations, creating substantial joint training
opportunities. Additionally, the Air Force enables Army closures and
realignments by turning over property ownership of Pope Air Force Base
to the Army, though an active/Air Reserve unit will permanently be
based at Fort Bragg, North Carolina, to assist with the aerial port and
tactical airlift capabilities needed by the Army's Airborne Corps.
[84] Based on senior military judgment reflected in the Expeditionary
Air Force Principles White Paper, fighter squadrons will be optimally
sized to 24 aircraft per squadron, and 18 is the acceptable size per
squadron for stand-alone reserve installations. Sixteen is the optimum
size for C-130s (airlift aircraft) and KC-135s (tanker refueling
aircraft), and 12 is the acceptable size for stand-alone reserve
installations.
[85] GAO, Air Force Aircraft: Consolidating Fighter Squadrons Could
Reduce Costs, GAO/NSIAD-96-82 (Washington, D.C.: May 6, 1996).
[86] The three recommendations that do not affect the reserve component
include the closure of Onizuka Air Force Station, California; the
realignment of Langley Air Force Base, Virginia; and the Air Force
logistics support centers recommendation.
[87] The Department of the Air Force Analysis and Recommendations BRAC
2005, volume 5, part 1 of 2, page iii, lists 31 Air National Guard and
4 Air Reserve installations that were realigned. The Willow Grove Air
Reserve Station realignment action is located in the Department of the
Navy section of DOD's BRAC report.
[88] For example, the Pope Air Force Base recommendation, which
primarily affects active duty units, also includes the closure of
Pittsburgh Air Reserve Station, realignment of Yeager Air Guard Station
and Little Rock Air Force Base, thus affecting active, Air Reserve, and
Air National Guard personnel.
[89] The Air Force presented further information regarding the impact
of BRAC recommendations on manpower including full time and drill
personnel in the Air Force reserve component document titled, State-by-
State Installation View, May 13, 2005.
[90] The U.S. Coast Guard has eight helicopters at Otis Air National
Guard Base, Massachusetts.
[91] The Pope Air Force Base recommendation includes the closure of
Pittsburgh Air Reserve Station and the realignment of Yeager Air Guard
Station and Little Rock Air Force Base.
[92] The Grand Forks Air Force Base recommendation also includes the
realignment of McConnell Air Force Base.
[93] The Infrastructure Executive Council examined the strategic
presence of Grand Forks Air Force Base in the central United States
after all the service and Joint Cross-Service Group candidate
recommendations were evaluated as an aggregate.
[94] GAO, Military Bases, Analysis of DOD's 1995 Process and
Recommendations for Closure and Realignment, GAO/NSIAD-95-133
(Washington, D.C.: Apr. 14, 1995).
[95] At the Office of the Secretary of Defense, the ISG and the IEC
provided overall coordination and direction to the DOD-wide process.
[96] Since there was no standard definition, three of the subgroups
identified surge requirements on a judgmental basis as a percentage of
capacity raging from 10 to 25 percent. The professional development
education subgroup did not identify a surge requirement.
[97] Some of the transformation options included privatizing graduate-
level education, establishing centers of excellence for joint or
interservice education and training by combining or co-locating like
schools, establishing joint officer and enlisted specialized skill
training, and consolidating or co-locating at a single installation all
services' primary phase of pilot training that uses the same aircraft.
[98] At OSD, the Infrastructure Steering Group (ISG) and the
Infrastructure Executive Council (IEC) provided overall coordination
and direction to the DOD-wide process.
[99] These are installations having shared boundaries or that are
located in proximity to each other.
[100] The group used 200 gross square feet as the standard factor as a
compromise to account for the different standards used by each of the
military services and defense agencies.
[101] Department of Defense, Office of Inspector General Audit Report,
Headquarters and Support Activities Joint Cross-Service Group Data
Integrity and Internal Control Processes for Base Realignment and
Closure 2005, Report No. D2003-D000CG-0135.000 (Arlington, Va.:
forthcoming).
[102] The recommendations are to co-locate defense and military
adjudication activities at Fort Meade, Maryland, and to consolidate
Defense Commissary Agency offices at Fort Lee, Virginia.
[103] A DOD Inspector General representative told us that the group
rounded all personnel reductions to the next highest number, rather
than the normal practice of rounding up only when the calculated number
was .5 or higher.
[104] The group's recommendations transferred to the military
departments allowed the departments to recommend closure of Fort
Monroe, Virginia, Fort McPherson, Georgia, Naval Supply Activity New
Orleans, Louisiana, Marine Corps Support Center Kansas City, Missouri,
and Brooks City-Base, Texas.
[105] Approximately $270 million, of the projected net annual recurring
savings are from the elimination of military personnel and
approximately $267 million from the elimination of civilian employees.
[106] The National Capital Region includes Washington, D.C; the
Maryland counties of Montgomery and Prince George's; and the Virginia
counties of Fairfax, Loudoun, and Prince William and the City of
Alexandria, Virginia.
[107] Unified Facilities Criteria: DOD Minimum Antiterrorism Standards
for Buildings (UFC 4-010-01, 8 Oct. 2003).
[108] The other joint cross-service groups are also proposing to move
about 9,600 personnel to Fort Belvoir for a total of over 20,300
personnel.
[109] The functions include such activities as real property management
and maintenance, utilities, housing, emergency services, environmental
services, base security, reserve component support, resource
management, procurement, personal property management, transportation,
equipment maintenance, retail supply, base communications, audio/visual
services, personnel and professional support, personnel services, food
services, laundry services, education services, personal and family
services, recreation, military exchange operations, airfield
operations, garrison operations, internal review, inspector general,
and strategic planning.
[110] GAO, Defense Infrastructure: Issues Need to Be Addressed in
Managing and Funding Base Operations and Facilities Support, GAO-05-556
(Washington, D.C.: June 15, 2005).
[111] In late 2004, a Senior Joint Basing Group was created by DOD to
address installation management issues at joint bases.
[112] Scott Air Force Base is the current home of the U.S.
Transportation Command headquarters and the Air Force Air Mobility
Command, one of the combatant command's subordinate component commands.
[113] At the Office of the Secretary of Defense, the ISG and the IEC
provided overall coordination and direction to the DOD-wide process.
[114] A commodity is a generic grouping of the types of depot and
maintenance work associated with end items, weapons systems, or major
processes, such as engines, combat vehicles, and calibration.
[115] The term interservicing is used here to refer to the
consolidation of common workloads of more than one service under a
single military service.
[116] GAO, Army Depot Maintenance: Privatization without Further
Downsizing Increases Costly Excess Capacity, GAO/NSIAD-96-201
(Washington, D.C: Sept. 18, 1996).
[117] The shore based aviation consolidated allowance list inventory is
a consolidated list of components, repair parts, and consumable items
and depot and field level repairable items required to support planned
operational and maintenance missions at designated naval and Marine
Corps air stations.
[118] The Navy working capital fund is a revolving fund that relies on
sales revenue rather than direct appropriations to finance its
operations. Activities under the fund are supposed to generate
sufficient revenues to recover expenses incurred in their operations
and are expected to operate on a break-even basis over time.
[119] Under 10 U.S.C. 2466, not more than 50 percent of annual depot
maintenance funding provided to the military departments and defense
agencies can be used for work accomplished by private-sector
contractors. Section 2466 also requires annual reporting to the
congress on the distribution of depot maintenance funding between the
public and private sectors.
[120] GAO, Depot Maintenance: Key Financial Issues for Consolidations
at Pearl Harbor and Elsewhere Are Still Unresolved, GAO-01-19
(Washington, D.C: Jan. 22, 2001).
[121] Pueblo Chemical Depot was removed from the BRAC closure list two
weeks before the recommendations were released. During the BRAC
process, we expressed our concerns that Pueblo would not be able to
successfully demilitarize its stockpiles within the statutory BRAC
timeframe because a plant has yet to be built.
[122] GAO, Chemical Weapons: Destruction Schedule Delays and Cost
Growth Continue to Challenge Program Management, GAO-04-634T
(Washington, D.C.: Apr. 1, 2004), GAO, Nonproliferation: Delays in
Implementing the Chemical Weapons Convention Raise Concerns About
Proliferation, GAO-04-361 (Washington, D.C.: Mar. 31, 2004), and GAO,
Chemical Weapons: Sustained Leadership, Along with Key Strategic
Management Tools, Is Needed to Guide DOD's Destruction Program, GAO-03-
1031 (Washington, D.C.: Sept. 5, 2003).
[123] GAO, Military Bases: Cost to Maintain Inactive Ammunition Plants
and Closed Bases Could be Reduced, GAO/NSIAD-97-56 (Washington, D.C.:
Feb. 20, 1997).
[124] At the Office of the Secretary of Defense, the Infrastructure
Steering Group (ISG) and the Infrastructure Executive Council (IEC)
provided overall coordination and direction to the DOD-wide process.
[125] Initially, the group developed a space allowance of 100 square
foot for detailees and contractors. However, the group subsequently
found out that detailees and contractors consisted of all levels of
personnel, including high ranking liaisons, managers, and analysts. As
a result, the group raised the space allowance 150 square foot per
person, which they believe more accurately reflects the intelligence
community average for government, military and civilian personnel.
[126] The headquarters group has several recommendations that propose
to move activities to Fort Belvoir.
[127] At OSD, the Infrastructure Steering Group (ISG) and the IEC
provided overall coordination and direction to the DOD-wide process.
[128] Medical care under TRICARE is provided by DOD personnel in
military treatment facilities or through civilian providers in civilian
facilities. During the 1990s, DOD restructured its health care system
into TRICARE to improve beneficiaries' access to health care while
maintaining quality and controlling costs.
[129] The DOD health care system included about 163,000 medical
personnel worldwide in fiscal year 2004, some of whom are active duty
military personnel assigned to deployable units that may rotate back to
military treatment facilities.
[130] Catchment areas are geographic areas determined by the Assistant
Secretary of Defense for Health Affairs that are defined by five-digit
zip codes, usually within an approximate 40-mile radius of military
treatment facilities with inpatient care.
[131] The National Defense Authorization Act of Fiscal Year 2004 (P.L.
108-136, Section 726 [Nov. 24, 2003]) required the Secretary of Defense
to consult with the working group in developing recommendations in the
2005 BRAC round. The working group is expected to provide a plan to the
Secretary of Defense in order to provide health care services to
persons who are entitled to and are receiving health care and whose
accessibility to it will be affected by 2005 BRAC actions.
[132] The medical group used a DOD-approved optimization model
developed by the Navy. Depending on the assumptions used in the model
and level of capacity reduction, the model provided a set of potential
closure or realignment alternatives for further consideration by
decision makers.
[133] Multiservice markets exist where two or more service military
treatment facilities are co-located geographically with shared
beneficiary populations. The medical group concluded that a substantial
portion of total inpatient excess capacity was in multiservice markets.
[134] One of the medical group's recommendations includes
disestablishing the inpatient mission at 9 military treatment
facilities. A VA hospital was located near inpatient facilities at
Andrews Air Force Base, Maryland; Fort Eustis, Virginia; Fort Knox,
Kentucky; Keesler Air Force Base, Mississippi; MacDill Air Force Base,
Florida; Naval Station Great Lakes, Illinois; and Scott Air Force Base,
Illinois.
[135] The medical group developed this candidate recommendation with
the knowledge of a specific provision of federal law (10 U.S.C. 2112a)
that could preclude closure of the university.
[136] GAO, Budget Issues: Budgetary Implications of Selected GAO Work
for Fiscal Year 2001, GAO/OCG-00-8 (Washington, D.C.: Mar. 31, 2000);
GAO, Budget Issues: Budgetary Implications of Selected GAO Work for
Fiscal Year 2000, GAO/OCG-99-26 (Washington, D.C.: Apr. 16, 1999); and
GAO, Military Physicians: DOD's Medical School and Scholarship Program,
GAO/HEHS-95-244 (Washington, D.C.: Sept. 29, 1995).
[137] Performance-based logistics is defined as the purchase of weapon
system sustainment as part of an affordable integrated weapon system
package based on output measures, such as weapon system availability,
rather than input measures, such as parts and technical services.
[138] At OSD, the ISG and the IEC provided overall coordination and
direction to the DOD-wide process.
[139] DOD maintains supply within a two-tiered system typically
referred to as the wholesale and retail levels. Wholesale generally
includes activities that procure, hold, and manage materiel not
specific to individual operating units, and is also referred to as
"above installation activities." Retail refers to activities that
support organizational level needs for supplies and materiel and is
also referred to as "installation and below activities."
[140] Limited retail-level data were collected with the cooperation of
the Industrial Joint Cross-Service Group to support one recommendation
that contained some service retail supply consolidations with DLA
wholesale supply activities.
[141] The group defined excess capacity as the difference between
current capacity and current usage. Under increased surge conditions,
excess capacity will be reduced.
[142] Depot level reparables are supply items that are designed to be
repaired at the depot level.
[143] The Defense Supply Center Columbus Ohio, manages the maritime and
land supply chain. The Defense Supply Center Richmond Virginia, manages
the aviation supply chain, and the Defense Supply Center Philadelphia
Pennsylvania, manages the troop support supply chain.
[144] Consumable items are either not repairable or not economically
repairable.
[145] Performance-based agreements are the negotiated agreements
between the major stakeholders that formally document the performance
and support expectations and resources to achieve the desired outcome.
[146] Follower organizations exist only because there is a larger
organization that they serve at their locations.
[147] A-76 is competitive sourcing where the federal government
determines whether functions described as "commercial in nature" are
best provided by the private sector, by government personnel, or by
another agency through a fee-for-service agreement.
[148] These additional closures are Fort Monmouth, New Jersey, which is
included in the Army section of DOD's report; Naval Support Activity
Corona, California, which is included in the Navy section; and Brooks
City-Base, Texas, which is included in the Medical Joint Cross-Service
Group section.
[149] At OSD, the Infrastructure Steering Group (ISG) and the
Infrastructure Executive Council (IEC) provided overall coordination
and direction to the DOD-wide process.
[150] Test ranges were in the technical group's domain; open-air ranges
were analyzed by the Education and Training Joint Cross-Service Group
with input from the technical group.
[151] The 13 technical capability areas are based on the Defense
Technology Area Plan 2003, which lists 12 areas; however the technical
group separated ground vehicles and sea vehicles into two technical
capability areas for subgroup review and analysis.
[152] Multifunctional refers to combining activities across the three
functions of research, development and acquisition, and test and
evaluation. Multidisciplinary refers to combining activities across 1
or more of the 13 technical capability areas.
[153] The group defined a technical facility category as a collection
of people and physical infrastructure that performs a technical
function (or functions) in a specific technical capability area at a
specific location.
[154] The group also provided a recommendation to relocate Naval
Support Activity Corona to March Air Reserve Base. According to
technical group officials, when the closure of Naval Support Activity
Corona is included in the data, both their original recommendation and
alternative had shorter payback periods and higher 20-year net present
value savings than the Navy's final recommendation.
[155] The group found that the Navy's 1995 BRAC recommendations
projected that the Navy would eliminate 4,000 technical positions.
Comparable information was not available for the Air Force and Army;
however, the group assumed that the Air Force and Army eliminated the
same number of personnel, for an approximate 12 percent reduction of
the technical workforce through BRAC 1995. The group rounded this up to
15 percent for a standard assumption for military and civilian
personnel reductions. Based on our analysis of the 1995 BRAC
recommendations, it is unlikely that the Air Force and Army reduced
their technical workforces by 4,000 positions because neither had BRAC
recommendations that closed significant technical facilities.
[156] We identified an additional $12.8 million savings for eliminating
contractors for the recommendation to co-locate extramural research
program managers that was included as a one-time savings but should
have been an annual recurring savings. The total annual recurring
savings for eliminating contractors would increase to $66.7 million if
this error is corrected.
[157] The recommendations are the co-location of extramural research
program managers, consolidation of ground vehicle development and
acquisition, and co-location of the Defense research service-led
laboratories.
[158] The eight locations are the Air Force Research Laboratory, Mesa
City, Arizona; United States Marine Corps Direct Reporting Program
Manager Advanced Amphibious Assault facilities, Virginia; Office of
Naval Research, Virginia; Air Force Office of Scientific Research
facility, Virginia; Army Research Office, North Carolina; Army Research
Office, Virginia; Defense Advanced Research Project Agency facility,
Virginia; and Defense Threat Reduction Agency, Fort Belvoir, Virginia,
which is currently in leased space in Virginia.
[159] The projected savings were determined using the Headquarters and
Support Activities Joint Cross-Service Group's methodology of a savings
of $37.29 per square foot of space being vacated within the Washington,
D.C. area. The group assumed that 160 square feet would be vacated for
each person moved or eliminated.
[160] The technical group did not take a one-time savings for the
Defense Threat Reduction Agency because, according to an agency
official, the agency is scheduled to move to Fort Belvoir in January
2006.
[161] See app. VII for further discussion of antiterrorism and force
protection standards.
[162] As previously mentioned, the technical group originally provided
other options for the Navy's recommendation to close Naval Support
Activity Corona, which were disapproved by the ISG.
[163] When the impact of other joint cross-service group and service
recommendations is included, this increases to 683 direct jobs lost and
an 11.6 percent reduction in direct and indirect jobs in Martin County.
[164] A Navy official said that most Navy activities asked to exclude
large numbers of personnel from consideration in recommendations and
the technical group was consistent in disregarding these exclusions.
[165] Federally funded research and development centers are nonprofit
entities sponsored and funded by the government that typically assist
government agencies with scientific research and analysis, systems
development, and systems acquisition. The Aerospace Corporation is the
federally funded research and development center that works with the
Space and Missile Systems Center at Los Angeles Air Force Base.
[166] The Air Force considered three options for closing Los Angeles
Air Force Base. One option used a city-base construct, which had a 2-
year payback and a $99.0 million 20-year net present value savings.
Another allowed for office space for the contractors with the federally
funded research and development center and had a 9-year payback and a
$228.3 million 20-year net present value savings.
[167] P.L. 101-510, section 2913 (c)(1) requires DOD to consider the
extent and timing of potential costs and savings, including the number
of years until savings exceed costs, in its BRAC selection process.
[168] BRAC legislation provides for a 6-year implementation period
following the approval of recommended BRAC actions. Thus the final year
for implementation of a closure or realignment action for the 2005 BRAC
round is 2011. P.L. 101-510, section 2904 (a)(5).
[169] For BRAC 2005, costs and savings are in fiscal year 2005 constant
dollars.
[170] In the context of BRAC, net present value is taking into account
the time value of money in calculating the value of future cost and
savings. For fiscal year 2005, DOD used a 2.8 percent discount rate to
calculate net present value.
[171] GAO, Military Base Closures: Better Planning Needed for Future
Reserve Enclaves, GAO-03-723 (Washington, D.C.: June 27, 2003). An
enclave is a section of a military installation that remains intact
after the installation is closed or realigned, and that will continue
with its current role and functions, subject to specific modifications.
[172] GAO, Military Bases: Lessons Learned from Prior Base Closure
Rounds, GAO/NSIAD-97-151 (Washington, D.C.: July 25, 1997).
[173] U.S. Army Audit Agency, Cost of Base Realignment Actions (COBRA)
Model, Audit Report A-2004-0544-IMT (Alexandria, Va.: Sept. 30, 2004).
[174] This policy is based on the fact DOD is obligated to restore
contaminated sites on military bases regardless of whether they are
closed. We agree with DOD's position that such costs are a liability to
DOD regardless of its base closure recommendations. While such costs
are not included in COBRA, they are included in developing BRAC
implementation budgets.
[175] GAO, Military Base Closures: Updated Status of Prior Base
Realignments and Closures, GAO-05-138 (Washington, D.C.: Jan. 13,
2005).
[176] GAO, Military Base Closures: Updated Status of Prior Base
Realignments and Closures, GAO-05-138 (Washington, D.C.: Jan. 13,
2005); GAO, Military Base Closures: Progress in Completing Actions from
Prior Realignments and Closures, GAO-02-433 (Washington, D.C.: Apr. 5,
2002); and GAO, Military Bases: Status of Prior Base Realignment and
Closures Rounds, GAO/NSAID-99-36 (Washington, D.C.: Dec. 11, 1998).
[177] GAO, Military Base Closures: Updated Status of Prior Base
Realignments and Closures, GAO-05-138 (Washington, D.C.: Jan. 13,
2005).
[178] An independent review panel of four members, three Ph.D.
economists and one policy analyst, who were all experienced in
conducting local economic impact studies and who were not otherwise
associated with the BRAC 2005 process was formed to review the
methodology and to determine if it conformed to accepted economic
practices.
[179] Based on the primary counties in which bases were located, the
Federal Information Processing Standards (FIPS) codes were determined.
A mapping of the county FIPS codes to Statistical Areas as determined
by OMB was done to establish the economic area.
[180] Metropolitan Statistical Area (MSA) is a core based statistical
area associated with at least one urbanized area that has a population
of at least 50,000. A core based statistical area is a statistical
geographic entity consisting of the county or counties associated with
at least one core (urbanized area or urban cluster) of at least 10,000
population, plus adjacent counties having a high degree of social and
economic integration with the core as measured through commuting ties
with the counties containing the core. The MSA comprises the central
county or counties containing the core, plus adjacent outlaying
counties having a high degree of social and economic integration with
the central country as measured through commuting. While a MSA has at
least 50,000 people, a Micropolitan Statistical Area has at least one
urban cluster that has a population of at least 10,000 but less than
50,000. The Micropolitan Statistical Area comprises the central county
or counties containing the core, plus adjacent outlaying counties
having a high degree of social and economic integration with the
central county as measured through commuting.
[181] A Metropolitan Division is used to refer to a county or group of
counties within a MSA that has a population core of at least 2.5
million people.
[182] Contractor mission support employees perform one or more of the
military missions on the base, and whose work tasks are virtually
identical to government civil servants or military personnel. Examples
include intelligence analysts; technicians; aircraft, ship, vehicle, or
weapon system maintenance staff; and information technology
specialists.
[183] MIG are the developers of the IMPLAN economic impact modeling
system. The firm provides tools, data, and support to perform in-depth
examinations of state, county, or multi-county regions. Over 1,000
public and private institutions use its tools. MIG does not have data
for Puerto Rico or Guam. Based on recommendations of the Independent
Review Panel of the BRAC economic impact methodology, MIG experts, and
the Chief Economist of the Guam Department of Labor, multipliers for
Key West-Marathon Florida Micropolitan Statistical Area (Monroe County,
Florida) were assigned to the San Juan-Caguas-Guaynabo, Puerto Rico
Metropolitan Statistical Area. Multipliers for the Honolulu, Hawaii MSA
were assigned to the Guam economic area.
[184] MOSes are specific military occupations performed by military
personnel. Examples of some of the many MOSes within the military
include administrative clerk, rifleman, logistics specialist,
machinist, and ammunition technician. To aid in the crosswalk from
MOSes to industry sectors (represented by codes from the North American
Industrial Classification (NAICS)), the MOSes were mapped to the
Standard Occupational Classification, which were in turned mapped into
the NAICS codes.
[185] Most of these new economic areas appeared to have populations
smaller than the average of the existing populations. Generally, it is
expected that the larger the population for an area, the larger the
multipliers, and vice-versa. An area with a larger population would be
expected to have more of its expenditures remaining in the area and
have fewer of its expenditures leak out to other areas. As a result,
the multipliers of areas with larger populations would be expected to
be larger than average and vice-versa. Thus, these economic areas would
be expected to have multipliers smaller than the average. Using the
average multipliers would tend to overestimate the indirect/induced job
impact on these economic areas.
[186] The methodology for the 1995 BRAC process, which was similar to
the methodology used for the 2005 BRAC process, was also reviewed by an
independent panel comprised of 6 members.
[187] Some of the recommendations had multiple actions that affected
more than one economic area.
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