Military Base Realignments and Closures
Cost Estimates Have Increased and Are Likely to Continue to Evolve Gao ID: GAO-08-159 December 11, 2007The 2005 Base Realignment and Closure (BRAC) round is the biggest, most complex, and costliest ever. DOD viewed this round as a unique opportunity to reshape its installations, realign forces to meet its needs for the next 20 years, and achieve savings. To realize savings, DOD must first invest billions of dollars in facility construction, renovation, and other up-front expenses to implement the BRAC recommendations. However, recent increases in estimated cost have become a concern to some members of Congress. Under the Comptroller General's authority to conduct evaluations on his own initiative, GAO (1) compared the BRAC Commission's cost and savings estimates to DOD's current estimates, (2) assessed potential for change in DOD's current estimates, and (3) identified broad implementation challenges. GAO compared the BRAC Commission's estimates, which were the closest estimates available associated with final BRAC recommendations, to DOD's current estimates. GAO also visited 25 installations and major commands, and interviewed DOD officials.
Since the BRAC Commission issued its cost and savings estimates in 2005, DOD plans to spend more and save less, and it will take longer than expected to recoup up-front costs. Compared to the BRAC Commission's estimates, DOD's cost estimates to implement BRAC recommendations increased from $21 billion to $31 billion (48 percent), and net annual recurring savings estimates decreased from $4.2 billion to $4 billion (5 percent). DOD's one-time cost estimates to implement over 30 of the 182 recommendations have increased more than $50 million each over the BRAC Commission's estimates, and DOD's cost estimates to complete 6 of these recommendations have increased by more than $500 million each. Moreover, GAO's analysis of DOD's current estimates shows that it will take until 2017 for DOD to recoup up-front costs to implement BRAC 2005--4 years longer than the BRAC Commission's estimates show. Similarly, the BRAC Commission estimated that BRAC 2005 implementation would save DOD about $36 billion over a 20-year period ending in 2025, whereas our analysis shows that BRAC implementation is now expected to save about 58 percent less, or about $15 billion. DOD's estimates to implement BRAC recommendations are likely to change further due to uncertainties surrounding implementation details and potential increases in military construction and environmental cleanup costs. Moreover, DOD may have overestimated annual recurring savings by about 46 percent or $1.85 billion. DOD's estimated annual recurring savings of about $4 billion includes $2.17 billion in eliminated overhead expenses, which will free up funds that DOD can then use for other priorities, but it also includes $1.85 billion in military personnel entitlements, such as salaries, for personnel DOD plans to transfer to other locations. While DOD disagrees, GAO does not believe transferring personnel produces tangible dollar savings since these personnel will continue to receive salaries and benefits. Because DOD's BRAC budget does not explain the difference between savings attributable to military personnel entitlements and savings that will make funds available for other uses, DOD is generating a false sense that all of its reported savings could be used to fund other defense priorities. DOD has made progress in planning for BRAC 2005 implementation, but several complex challenges to the implementation of those plans increase the risk that DOD might not meet the statutory September 2011 deadline. DOD faces a number of challenges to synchronize the realignment of over 123,000 personnel with the completion of over $21 billion in new construction or renovation projects by 2011. For example, the time frames for completing many BRAC recommendations are so closely sequenced and scheduled to be completed in 2011 that any significant changes in personnel movement schedules or construction delays could jeopardize DOD's ability to meet the statutory 2011 deadline. Additionally, BRAC 2005, unlike prior BRAC rounds, included more joint recommendations involving more than one military component, thus creating challenges in achieving unity of effort among the services and defense agencies.
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-08-159, Military Base Realignments and Closures: Cost Estimates Have Increased and Are Likely to Continue to Evolve
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Report to Congressional Adressees:
United States Government Accountability Office:
GAO:
December 2007:
Military Base Realignments And Closures:
Cost Estimates Have Increased and Are Likely to Continue to Evolve:
GAO-08-159:
GAO Highlights:
Highlights of GAO-08-159, a report to congressional addressees.
Why GAO Did This Study:
The 2005 Base Realignment and Closure (BRAC) round is the biggest, most
complex, and costliest ever. DOD viewed this round as a unique
opportunity to reshape its installations, realign forces to meet its
needs for the next 20 years, and achieve savings. To realize savings,
DOD must first invest billions of dollars in facility construction,
renovation, and other up-front expenses to implement the BRAC
recommendations. However, recent increases in estimated cost have
become a concern to some members of Congress.
Under the Comptroller General‘s authority to conduct evaluations on his
own initiative, GAO (1) compared the BRAC Commission‘s cost and savings
estimates to DOD‘s current estimates, (2) assessed potential for change
in DOD‘s current estimates, and (3) identified broad implementation
challenges. GAO compared the BRAC Commission‘s estimates, which were
the closest estimates available associated with final BRAC
recommendations, to DOD‘s current estimates. GAO also visited 25
installations and major commands, and interviewed DOD officials.
What GAO Found:
Since the BRAC Commission issued its cost and savings estimates in
2005, DOD plans to spend more and save less, and it will take longer
than expected to recoup up-front costs. Compared to the BRAC
Commission‘s estimates, DOD‘s cost estimates to implement BRAC
recommendations increased from $21 billion to $31 billion (48 percent),
and net annual recurring savings estimates decreased from $4.2 billion
to $4 billion (5 percent). DOD‘s one-time cost estimates to implement
over 30 of the 182 recommendations have increased more than $50 million
each over the BRAC Commission‘s estimates, and DOD‘s cost estimates to
complete 6 of these recommendations have increased by more than $500
million each. Moreover, GAO‘s analysis of DOD‘s current estimates shows
that it will take until 2017 for DOD to recoup up-front costs to
implement BRAC 2005”4 years longer than the BRAC Commission‘s estimates
show. Similarly, the BRAC Commission estimated that BRAC 2005
implementation would save DOD about $36 billion over a 20-year period
ending in 2025, whereas our analysis shows that BRAC implementation is
now expected to save about 58 percent less, or about $15 billion.
DOD‘s estimates to implement BRAC recommendations are likely to change
further due to uncertainties surrounding implementation details and
potential increases in military construction and environmental cleanup
costs. Moreover, DOD may have overestimated annual recurring savings by
about 46 percent or $1.85 billion. DOD‘s estimated annual recurring
savings of about $4 billion includes $2.17 billion in eliminated
overhead expenses, which will free up funds that DOD can then use for
other priorities, but it also includes $1.85 billion in military
personnel entitlements, such as salaries, for personnel DOD plans to
transfer to other locations. While DOD disagrees, GAO does not believe
transferring personnel produces tangible dollar savings since these
personnel will continue to receive salaries and benefits. Because DOD‘s
BRAC budget does not explain the difference between savings
attributable to military personnel entitlements and savings that will
make funds available for other uses, DOD is generating a false sense
that all of its reported savings could be used to fund other defense
priorities.
DOD has made progress in planning for BRAC 2005 implementation, but
several complex challenges to the implementation of those plans
increase the risk that DOD might not meet the statutory September 2011
deadline. DOD faces a number of challenges to synchronize the
realignment of over 123,000 personnel with the completion of over $21
billion in new construction or renovation projects by 2011. For
example, the time frames for completing many BRAC recommendations are
so closely sequenced and scheduled to be completed in 2011 that any
significant changes in personnel movement schedules or construction
delays could jeopardize DOD‘s ability to meet the statutory 2011
deadline. Additionally, BRAC 2005, unlike prior BRAC rounds, included
more joint recommendations involving more than one military component,
thus creating challenges in achieving unity of effort among the
services and defense agencies.
What GAO Recommends:
GAO recommends that DOD explain its estimated BRAC savings from
personnel reductions as compared to other savings to provide more
transparency to Congress. DOD concurred with our recommendation and
agreed to explain savings estimates in its BRAC budget material to
Congress.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.GAO-08-159]. For more information, contact Brian
Lepore at (202) 512-4523 or Leporeb@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
DOD Plans to Spend More and Save Less Than Originally Estimated and
Will Take Longer Than Expected to Recoup Up-Front Costs:
DOD‘s Estimates to Implement BRAC Recommendations Will Likely Continue
to Evolve, and Savings Estimates May be Overstated:
DOD Has Made Progress Implementing BRAC, but Several Challenges
Increase Risk That All Recommendations Might Not be Completed by the
Statutory Deadline:
Conclusion:
Recommendation for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: BRAC Recommendations with the Largest Increases in
Estimated Costs:
Appendix III: BRAC Recommendations with the Largest Decreases in
Estimated Net Annual Recurring Savings:
Appendix IV: BRAC Recommendations DOD Expects to Cost the Most:
Appendix V: BRAC Recommendations DOD Expects to Save the Most Annually:
Appendix VI: BRAC Recommendations DOD Expects to Save the Most Over a
20-Year Period:
Appendix VII: Comments from the Department of Defense:
Appendix VIII: GAO Contact and Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: Comparison of BRAC Cost and Savings Estimates:
Table 2: Army Installations Expecting Net Gains of at Least 5,000
Personnel for Fiscal Years 2006 through 2011 Due to BRAC, Overseas
Rebasing, Modularity, and Other Miscellaneous Restationing Actions (as
of March 2007):
Table 3: BRAC Recommendations That Increased by More Than $50 Million
in Estimated One-Time Costs (Fiscal Years 2006 through 2011):
Table 4: BRAC Recommendations That Have Decreased by More Than $25
Million in Estimated Net Annual Recurring Savings (Projected for Fiscal
Year 2012):
Table 5: BRAC Recommendations DOD Expects to Cost the Most to Implement
(Fiscal Years 2006 through 2011):
Table 6: BRAC Recommendations DOD Expects to Save the Most Annually
After Implementation (Projected for Fiscal Year 2012):
Table 7: BRAC Recommendations DOD Expects to Save the Most Over a 20-
Year Period (Fiscal Years 2006 through 2025):
Figures:
Figure 1: DOD‘s Selection Criteria for the BRAC 2005 Round:
Figure 2: DOD‘s Review Process of the BRAC 2005 Business Plans:
Figure 3: Comparison of Time to Recoup BRAC Costs Using BRAC Commission
and DOD‘s Data:
Figure 4: Sequencing of Personnel Movement for Several Interdependent
BRAC Recommendations:
Abbreviations:
BRAC: Base Realignment and Closure:
COBRA: Cost of Base Realignment Actions:
DOD: Department of Defense:
OSD: Office of the Secretary of Defense:
USACE: United States Army Corps of Engineers:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
December 11, 2007:
Congressional Addressees:
The Department of Defense (DOD) is currently implementing
recommendations resulting from the 2005 Base Realignment and Closure
(BRAC) round. BRAC 2005 is the fifth round undertaken by DOD since 1988
and, by our assessment, is the biggest, most complex, and costliest
BRAC round ever. With this BRAC round, DOD plans to execute over
800 BRAC actions, relocate over 123,000 personnel, and spend over
$31 billion”an unprecedented amount, given that DOD has spent about $24
billion to date to implement the four previous BRAC rounds combined.
DOD viewed the BRAC 2005 round as not only an opportunity to achieve
savings but also as a unique opportunity to reshape its installations
and realign its forces to meet its needs for the next 20 years. The
Secretary of Defense made clear at the outset that his primary goal for
the 2005 BRAC round was military transformation. As such, many of the
BRAC 2005 recommendations involve complex realignments such as
designating where forces returning to the United States from overseas
bases would be located; establishing joint medical centers; creating
joint bases; and reconfiguring the defense supply, storage, and
distribution network. However, anticipated savings resulting from BRAC
implementation remained an important consideration and was a factor in
justifying the need for the 2005 BRAC round[Footnote 1].
Unlike prior BRAC rounds, which were implemented during times of
declining defense budgets and where the focus was on eliminating excess
capacity and realizing cost savings, the 2005 BRAC round is being
implemented during a time of conflict when many military capabilities
are surging and DOD is also implementing or planning to implement other
extensive worldwide transformation initiatives. For example, at the
same time DOD is to implement the most recent round of BRAC, it is
relocating about 50,000 soldiers[Footnote 2] from primarily Europe and
Korea to the United States, transforming the Army‘s force structure
from an organization based on divisions to more rapidly deployable,
brigade-based units, and seeks to increase its active end strength by
92,000,[Footnote 3] all of which will affect DOD‘s facility
infrastructure. Consequently, when evaluating DOD‘s candidate BRAC
recommendations, the BRAC Commission[Footnote 4] focused not only on
costs and savings but also on DOD‘s future force structure, the ongoing
conflicts in Iraq and Afghanistan, and military transformation. In
addition, both DOD and the BRAC Commission reported that their primary
consideration in making recommendations for the 2005 round was military
value.[Footnote 5] To realize savings from BRAC, DOD must first invest
billions of dollars in facility construction, renovation, and other up-
front expenses to implement the BRAC recommendations. However, some
members of Congress have expressed concerns about DOD‘s increased up-
front cost estimates to implement the BRAC 2005 recommendations.
This report is one in a series of reports we have undertaken on BRAC
2005 implementation. These reports have identified complex challenges
to implementing recommendations from this BRAC round, including
retraining personnel to new missions, completing many construction
projects in a compressed time frame, and synchronizing personnel
movements with planned infrastructure improvements. We also reported
that Congress does not have full visibility over the total expected
cost of DOD‘s BRAC-related environmental cleanup efforts, several Air
National Guard recommendations are expected to result in annual costs
instead of annual savings, and DOD‘s cost estimates for implementing
recommendations related to the Army‘s reserve components have increased
while savings estimates have decreased. A listing of our related
products is at the end of this report.
As with most of our BRAC-related work, we initiated this review under
the authority of the Comptroller General to conduct evaluations on his
own initiative[Footnote 6] and are reporting the results of our
evaluation to you because of your oversight role of DOD‘s
infrastructure and the BRAC program. We are also reporting the results
of our work as a result of direction by the House Armed Services
Committee to report annually on DOD‘s implementation of BRAC
2005.[Footnote 7] Our objectives are to (1) compare cost and savings
estimates in the BRAC Commission‘s report to DOD‘s current cost and
savings estimates, (2) assess the potential for further change in DOD‘s
estimated costs and savings related to implementing BRAC 2005
recommendations, and (3) identify broad challenges that could affect
the implementation of these recommendations and DOD‘s ability to meet
the statutory 6-year completion period.[Footnote 8]
To address these objectives, we interviewed officials in the Office of
the Deputy Under Secretary of Defense for Installations and Environment
and associated BRAC implementation offices in the Army, Navy, and Air
Force. To analyze BRAC cost and savings estimates, we compared the
change in these estimates using mostly information in two publicly
available documents”the BRAC Commission‘s report to the President dated
September 2005 and DOD‘s latest BRAC budget submission to Congress
dated February 2007”because they provided the most authoritative
financial information publicly available. Also, we compared the BRAC
Commission‘s estimates, which were the closest estimates available
associated with final BRAC recommendations, to DOD‘s current budgeted
estimates. To analyze net annual recurring savings estimates, we used
OSD‘s savings data for fiscal year 2012”the fiscal year after DOD
expects to complete all BRAC recommendations”because it more fully
captured the expected savings and allowed us to replicate the same
methodology used by the BRAC Commission in its calculation of this
estimate. We generally reported costs and savings in current dollars
and not constant dollars except where noted. Given the unprecedented
number of BRAC 2005 closures and realignments, we focused our analysis
on broad issues affecting DOD‘s cost and savings estimates and
implementation challenges rather than on specific implementation issues
of individual recommendations. In addition, we visited 17 installations
and 8 major commands affected by some of the more costly BRAC
realignments or closures to obtain the perspective of officials
directly involved in BRAC implementation planning and execution.
Overall, we determined that the data to support our objectives were
sufficiently reliable for the purposes of making broad comparisons
between the BRAC Commission and DOD‘s cost and savings estimates and
identifying implementation challenges.
We conducted our work from November 2005, when the BRAC recommendations
became effective, through October 2007, so we could analyze data in
DOD‘s BRAC budget submission provided to Congress in February 2007. Our
work was conducted in accordance with generally accepted government
auditing standards. Further details on our scope and methodology are
described in appendix I.
Results in Brief:
Since the BRAC Commission issued its BRAC cost and savings projections
in 2005, DOD plans to spend more and save less to implement the BRAC
Commission‘s recommendations, and it will take the department longer
than expected to recoup up-front costs. DOD‘s cost estimates to
implement these recommendations have increased from $21 billion to $31
billion (48 percent) compared to the BRAC Commission‘s estimates, and
net annual savings estimates have decreased from $4.2 billion to $4
billion (5 percent) compared to the BRAC Commission‘s estimates.
[Footnote 9] Our analysis further shows that DOD‘s estimated one-time
costs to implement nearly 1/5 of the 2005 BRAC recommendations have
increased by more than $50 million each compared to the BRAC
Commission‘s estimates. Of these, the estimated costs to implement six
recommendations have increased by more than $500 million each.
Moreover, our analysis of DOD‘s current estimates shows that it will
take until 2017 for DOD to recoup its up-front costs to implement BRAC
recommendations”4 years longer than the BRAC Commission‘s estimate.
Similarly, the BRAC Commission estimated that BRAC 2005 would save DOD
about $36 billion over a 20-year period ending in 2025, whereas our
analysis shows BRAC implementation is now expected to save about $15
billion during this 20-year time period, a decrease of 58 percent,
because BRAC cost estimates have increased and savings estimates have
decreased. OSD BRAC officials told us that, although the 20-year
savings estimate is less than the BRAC Commission expected, the
department expects the implementation of this BRAC round to produce
capabilities that will enhance defense operations and management,
despite less than anticipated savings. In addition, both DOD and the
BRAC Commission used an estimation model, known as the Cost of Base
Realignment Actions (COBRA), to assess the costs and savings of
proposed BRAC recommendations during the decision-making process. The
COBRA model relied to a large extent on standard factors and averages
and was not intended to represent budget-quality estimates. As a
result, neither DOD‘s nor the BRAC Commission‘s cost and savings
estimates can be assumed to represent the actual completion costs that
Congress will need to fund through appropriations or fully reflect the
savings to be achieved after implementation.
DOD‘s estimated costs and savings to implement the recommendations from
the latest BRAC round are likely to change further due to uncertainties
surrounding certain implementation details for some recommendations,
potential increases in military construction costs, and likely
increases in the cost of environmental cleanup for some BRAC
properties. Moreover, we believe that DOD may have overstated its net
annual savings estimates by about 46 percent or $1.85 billion. DOD‘s
estimated net annual recurring savings of about $4 billion includes
$2.17 billion in eliminated overhead expenses, which will free up funds
that DOD can then use for other priorities. However, DOD‘s net annual
recurring savings estimate also includes $1.85 billion in military
personnel entitlements”such as salaries and housing allowances”for
personnel DOD plans to transfer to other locations rather than
eliminate. While DOD disagrees with us, we do not believe that
transferring military personnel produces tangible dollar savings
outside the military personnel accounts since these personnel will
continue to receive salaries and benefits. Because DOD‘s BRAC budget
submission to Congress does not explain the difference between net
annual recurring savings attributable to military personnel
entitlements and net annual recurring savings that will make funds
available for other uses, DOD is generating a false sense that all of
its reported savings could be used to fund other defense priorities.
DOD has made progress in planning for BRAC 2005 implementation, but
several complex challenges to the implementation of those plans
increase the risk that DOD might not meet the September 2011 statutory
deadline. By statute, DOD must complete the recommendations for closing
or realigning bases made in the BRAC 2005 round within 6 years from the
date the President submitted to Congress his approval of the BRAC
Commission‘s recommendations. Although DOD has completed several BRAC
actions already, the department faces a number of challenges related to
the synchronization and coordination involved in implementing some key
recommendations. For example, the realignment of over 123,000 military
and civilian personnel must be carefully synchronized with the
completion of over $21 billion in new construction or renovation
projects to support them. In addition, some recommendations are
dependent on the completion of other recommendations before facilities
can be renovated for new uses, and some DOD installations are affected
by more than six BRAC recommendations. Delays in completing some
interrelated actions could cause a domino effect that might jeopardize
DOD‘s ability to meet the statutory 2011 BRAC deadline. [Footnote 10]
In addition, our analysis shows that 43 percent of DOD‘s 240 business
plans for implementing BRAC recommendations involve formal coordination
between at least two military services or defense agencies. Such joint
recommendations involving more than one military component have created
challenges in achieving unity of effort.
This report contains a recommendation that DOD explain its annual
recurring savings attributable to military personnel entitlements in
its budget submission to Congress, thus providing more transparency
over these savings. In commenting on a draft of this report, the
department concurred with our recommendation and agreed to include an
explanation of the annual recurring savings in its BRAC budget
justification material that accompanies the annual President‘s budget.
Also, DOD noted that although net annual recurring savings have
decreased from $4.2 billion to $4 billion, these estimated savings
still represent a significant benefit that will result from the
implementation of BRAC recommendations. DOD‘s written comments are
reprinted in appendix VII. DOD also provided technical comments, which
we have incorporated into this report as appropriate.
Background:
DOD has undergone four BRAC rounds since 1988 and is currently
implementing its fifth round. [Footnote 11] For the most recent BRAC
round”referred to in this report as the BRAC 2005 round”DOD applied
legally mandated selection criteria that included four criteria related
to military value as well as other criteria regarding costs and
savings, economic impact to local communities, community support
infrastructure, and environmental impact, as shown in figure 1.
Figure 1: DOD‘s Selection Criteria for the BRAC 2005 Round:
[See PDF for image]
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.
Source: Pub. L. No. 101-510, § 2913.
[End of figure]
In applying these BRAC 2005 selection criteria, priority consideration
was given to military value. In fact, as required by BRAC legislation,
military value was the primary consideration for making BRAC
recommendations, as reported by both DOD and the BRAC Commission. DOD
also incorporated into its analytical process several key
considerations required by BRAC legislation, including the use of
certified data and basing its analysis on its 20-year force structure
plan. [Footnote 12] In commenting on DOD‘s BRAC process in July 2005,
we reported that DOD established and generally followed a logical and
reasoned process for formulating its list of BRAC recommendations.
[Footnote 13] Using this analytical process, the Office of the
Secretary of Defense (OSD) provided over 200 BRAC recommendations to
the BRAC Commission for an independent assessment in May 2005. The BRAC
Commission had the authority to change the Secretary‘s recommendations
if it determined that the Secretary deviated substantially from the
legally mandated selection criteria and DOD‘s force structure plan.
After assessing OSD‘s recommendations, the BRAC Commission stated that
it rejected 13 recommendations in their entirety and significantly
modified another 13. Ultimately, the BRAC Commission forwarded a list
of 182 recommendations for base closure or realignment to the President
for approval. The BRAC Commission‘s recommendations were accepted in
their entirety by the President and Congress and became effective
November 9, 2005. [Footnote 14] The BRAC legislation requires DOD to
complete recommendations for closing or realigning bases made in the
BRAC 2005 round within a 6-year time frame ending September 15, 2011, 6
years from the date the President submitted to Congress his approval of
the recommendations.
To provide a framework for promoting consistency in estimating the
costs and savings associated with various proposed BRAC
recommendations, DOD used an estimation model, known as the Cost of
Base Realignment Actions (COBRA). [Footnote 15] The COBRA model has
been used in the base closure process since 1988. It provided important
financial information to the selection process as decision makers
weighed the financial implications for various BRAC actions along with
military value and other selection criteria when arriving at final
decisions regarding the suitability of BRAC recommendations. [Footnote
16] In addition, the department designed the model to calculate
estimated costs and savings associated with actions that are necessary
to implement BRAC recommendations over the 6-year implementation period
and to calculate recurring costs or savings thereafter. As such, the
BRAC Commission continued to use DOD‘s COBRA model for making its cost
and savings estimates.
The COBRA model relies to a large extent on standard factors and
averages but is not intended to”and consequently does not”represent
budget-quality estimates. As a result, neither DOD‘s or the BRAC
Commission‘s COBRA-generated estimates can be assumed to represent the
actual completion costs that Congress will need to fund through
appropriations or fully reflect the savings to be achieved after
implementation. We have examined COBRA in the past and have found it to
be a generally reasonable estimator for comparing potential costs and
savings among candidate alternatives but have not considered it a tool
for use in budgeting. [Footnote 17] In the intervening years, COBRA has
been revised to address certain problems we and others have identified
after each round. As with any model, the quality of the output is
dependent on the quality of the input. For example, a DOD analyst could
assume a building could be renovated to accommodate receiving
personnel; however, when BRAC implementation began, site surveys showed
that the building could not be renovated, thus requiring new
construction that increased estimated costs.
The model provides a standard quantitative approach to comparing
estimated costs and savings across various proposed recommendations. In
this and previous BRAC rounds, DOD subsequently developed budget-
quality estimates once BRAC recommendations became effective. Thus, the
BRAC Commission‘s estimated implementation costs and savings were
useful for comparing candidate recommendations and DOD has subsequently
refined these estimates based on better information after conducting
site surveys.
BRAC legislation requires DOD to submit an annual schedule containing
revised BRAC cost and savings estimates for each closure and
realignment recommendation to Congress. To meet this legislative
requirement, DOD presents its schedule in its annual BRAC budget
submission to Congress. For BRAC 2005 recommendations, DOD‘s first
presentation of its cost and savings schedule was in its fiscal year
2007 budget submission to Congress in March 2006. However, the
department stated in its submission that it did not have enough time to
formulate a reasonable BRAC budget and that the fiscal year 2007 BRAC
budget submission contained significant funding shortfalls. DOD‘s
second presentation of its cost and savings schedule was its fiscal
year 2008 BRAC budget submission to Congress in February 2007.
For the BRAC 2005 round, the OSD BRAC Office”under the oversight of the
Under Secretary of Defense for Acquisition, Technology and
Logistics”has monitored the services‘ and defense agencies‘
implementation progress, analyzed budget justifications for significant
differences in cost and savings estimates, and facilitated the
resolution of any challenges that may impair the successful
implementation of the recommendations within the 6-year completion
period. To facilitate its oversight role, OSD required the military
departments and certain defense agencies to submit a detailed business
plan for each of their recommendations. These business plans include
information such as a listing of all actions needed to implement each
recommendation, schedules for personnel movements between
installations, updated cost and savings estimates based on better and
updated information, and implementation completion time frames.
[Footnote 18] OSD‘s general process for reviewing business plans is
shown in figure 2.
Figure 2: DOD‘s Review Process of the BRAC 2005 Business Plans:
[See PDF for image]
This figure is an illustration of DOD‘s Review Process of the BRAC 2005
Business Plans. The review process is as follows:
1) OSD directs military departments and defense agencies to develop
about 240 business plans as the foundation in BRAC implementation
planning. OSD reviews these plans twice per year to assess updated
information.
[Submit business plans and amended plans]
2) OSD BRAC Office[a] reviews business plans and amended business plans
for completeness and accuracy. Return business plan for revision, if
necessary (step 1).
[Submit business plans and amended plans]
3) Infrastructure Steering Group[b] reviews and approves plans. Return
business plan for revision, if necessary (step 1).
4) Business plans provide DOD the budgetary basis for BRAC funding
requests to Congress.
Source: GAO.
[a] OSD BRAC Office oversees the planning and execution of the BRAC
2005 program.
[b] The Secretary of Defense established the Infrastructure Steering
Group to oversee the BRAC 2005 process. The group is 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, the Deputy Under Secretary of Defense (Installations and
Environment), and the Military Department Assistant Secretaries for
Installations and Environment.
[End of figure]
OSD BRAC officials consider their business plans to be living documents
that will evolve over the course of the 6-year implementation period.
Additionally, OSD‘s General Counsel assesses whether the business plans
meet the intent of the BRAC Commission‘s recommendations.
DOD Plans to Spend More and Save Less Than Originally Estimated and
Will Take Longer Than Expected to Recoup Up-Front Costs:
Compared to the BRAC Commission‘s estimates, DOD plans to spend more
and save less to implement BRAC recommendations than the BRAC
Commission originally estimated, and it will take longer than expected
for DOD to recoup its up-front costs. Since the BRAC Commission issued
its cost and savings estimates in 2005, DOD‘s reported estimates of the
costs to implement about 180 BRAC recommendations have increased by $10
billion to about $31.2 billion while annual savings estimates have
decreased by about $200 million”$4.2 billion to $4 billion. Moreover,
our analysis of DOD‘s current estimates shows that it will take until
2017 for the department to recoup its up-front costs to implement BRAC
recommendations”4 years longer than the BRAC Commission‘s estimates
indicate this would happen. Similarly, whereas the BRAC Commission
estimated that the implementation of the BRAC 2005 recommendations
would save DOD about $36 billion over a 20-year period ending in 2025,
BRAC implementation is now expected to save about $15 billion, a
decrease of 58 percent.
DOD Plans to Spend More and Save Less Than Originally Estimated:
Since the BRAC Commission issued its cost and savings projections in
2005, cost estimates to implement the BRAC 2005 recommendations have
increased from $21 billion to $31 billion (48 percent) compared to the
BRAC Commission‘s reported estimates [Footnote 19] and net annual
recurring savings estimates have decreased from $4.2 billion to $4
billion (5 percent) compared to the BRAC Commission‘s reported
estimates as shown in table 1.
Table 1: Comparison of BRAC Cost and Savings Estimates (Dollars in
millions):
Category: One-time costs during implementation (fiscal years 2006
through 2011);
BRAC Commission‘s reported estimates[a]: $21,025;
DOD‘s estimates[b]: $31,160;
Difference, Amount: $10,135;
Difference, Percent: 48.
Category: Net annual recurring savings after implementation (fiscal
years 2012 through 2025);
BRAC Commission‘s reported estimates[a]: 4,225;
DOD‘s estimates[b]: 4,014;
Difference, Amount: (212);
Difference, Percent: (5).
Source: GAO analysis of BRAC Commission and DOD data.
Notes: Amounts may not total due to rounding.
[a] The BRAC Commission reported its estimates in constant fiscal year
2005 dollars (i.e., does not include projected inflation). Also, OSD
officials told us they disagreed with the BRAC Commission‘s reported
estimates for 18 recommendations and would increase one-time costs
during BRAC implementation by about $224 million and increase net
annual recurring savings after implementation by about $144 million to
the BRAC Commission‘s estimates shown in this table.
[b] DOD reported its BRAC estimates in the fiscal year 2008 BRAC budget
submission to Congress in current dollars (i.e., includes projected
inflation).
[End of table]
A comparison of the BRAC Commission‘s reported projections with DOD‘s
data shows that estimated implementation costs have increased by $10.1
billion or 48 percent and estimated net annual recurring savings have
decreased by $212 million or 5 percent. However, another way to compare
expected BRAC costs and saving is by omitting the effects of inflation.
We found that using the same constant dollar basis as used by the BRAC
Commission”meaning inflation is not considered”DOD‘s estimated one-time
costs to implement BRAC increased to about $28.6 billion or 36 percent
in constant dollars and estimated net annual recurring savings
decreased to about $3.4 billion or 20 percent in constant dollars
compared to the BRAC Commission‘s reported estimates.
We found that estimated military construction costs accounted for about
64 percent of the increase in expected BRAC one-time costs.
Specifically, the BRAC Commission estimated that to implement the BRAC
recommendations, military construction costs would be about $13
billion, whereas DOD‘s current estimates for military construction,
without inflation, were about $20 billion. We estimated that inflation
accounted for about 25 percent, or about $2.6 billion of the increase
in expected one-time costs. This mostly occurred because the BRAC
Commission presented its estimates using constant fiscal year 2005
dollars, which does not include the effects of projected inflation,
whereas DOD‘s budgeted estimates were presented in current (inflated)
dollars because budget requests take into consideration projected
inflation. Further, the BRAC Commission estimates did not include
projected environmental cleanup costs for BRAC-affected bases, which is
a consistent practice with past BRAC rounds because DOD is required to
perform needed environmental cleanup on its property whether a base is
closed, realigned, or remains open. Environmental cleanup added about 6
percent, or about $590 million in expected costs. Finally, other
projected expenses such as operation and maintenance accounted for
about 5 percent or about $500 million of the increase in expected
costs. Because the BRAC Commission‘s data do not include some specific
budget categories that are used in the DOD BRAC budget, we could not
make direct comparisons and precisely identify all estimated cost and
savings changes.
Estimated One-time Costs Have Increased:
Our analysis shows that estimated one-time costs to implement 33 BRAC
recommendations, representing nearly 1/5 of all the BRAC
recommendations for this round, increased by more than $50 million each
compared to the BRAC Commission‘s estimates. (See app. II for a listing
of these recommendations.) DOD‘s expected costs to implement 6 of these
recommendations increased by a total of about $4 billion. Specifically,
we found about:
* $970 million increase in the estimated costs of consolidating various
leased locations and closing other locations of the National Geospatial-
Intelligence Agency to Fort Belvoir, Virginia, largely because the
agency identified the need for additional supporting facilities, such
as a technology center and additional warehouse space, as well as
increased costs for information technology and furnishings to outfit
the new buildings. According to OSD‘s business plan, the COBRA analysis
of specific costs and the number of personnel to realign were
classified;
* $700 million increase in the estimated costs of realigning Walter
Reed Army Medical Center, D.C., and relocating medical care functions
to the National Naval Medical Center, Bethesda, Maryland, and Fort
Belvoir, Virginia, largely because planning officials identified the
need for additional space and supporting facilities at the receiving
installations that increased estimated military construction costs by
almost $440 million. Most of these estimated cost increases are
expected to occur at the National Naval Medical Center, Maryland,
because of increased requirements to renovate existing facilities, such
as the medical center. Additionally, several other facilities, such as
a parking structure and a larger than-initially-expected addition to
the medical center, increased the construction cost estimates as well;
* $680 million increase in the estimated costs of relocating the Army‘s
armor center and school from Fort Knox, Kentucky, to Fort Benning,
Georgia, to support the creation of a new maneuver school, largely
because the Army identified the need for about $400 million in
construction of several facility projects, such as training ranges,
instructional facilities, barracks, medical facilities, and a child
development center that were not in the initial estimates. Also, the
Army identified the need for about $280 million more in infrastructure
support, such as water, sewer, and gas lines, as well as roads to
support the new maneuver school at Fort Benning;
* $680 million increase in the estimated costs of closing Fort
Monmouth, New Jersey, largely because of increases in expected military
construction costs, such as $375 million at Aberdeen Proving Ground,
which is to receive many of the missions from the planned closure of
Fort Monmouth and for additional facilities, such as a communications
equipment building and an instructional auditorium. Also, the Army
identified the need for additional infrastructure improvements at
Aberdeen such as utilities, roads, and information technology upgrades.
The Army determined that its military construction estimates would
increase because the existing facilities at Aberdeen could not
accommodate an increase in size of Fort Monmouth‘s Command, Control,
Communications, Computers, Intelligence, Surveillance, and
Reconnaissance mission as originally estimated. Moreover, military
construction costs to relocate the U.S. Army Military Academy
Preparatory School from Fort Monmouth to West Point, New York,
increased about $175 million largely because the scope of the facility
construction increased from approximately 80,000 square feet to more
than 250,000 square feet and planning officials identified the need to
spend about $40 million to prepare the site for construction,
particularly for rock removal, given the terrain at West Point. Also,
DOD‘s cost estimates for environmental cleanup at Fort Monmouth have
increased by more than $60 million;
* $600 million increase in the estimated costs of co-locating
miscellaneous OSD, defense agency, and field activity-leased locations
to Fort Belvoir and Fort Lee, Virginia, largely due to increases in
military construction cost due to the identification of various
required facilities at the receiving installations not included in the
original estimate. For example, construction costs increased because it
was determined a structured parking garage costing about $160 million
would be needed to accommodate the increase in personnel with parking
needs compared to the original nearly $3 million estimate for a flat
surface parking lot. An additional estimated cost increase of nearly
$50 million is needed to cover the costs for a heating and cooling
plant and various safety and antiterrorism protection features.
Estimated costs also increased by more than $160 million to implement
this recommendation for increased information technology needs; and:
* $550 million increase in the estimated costs of establishing the San
Antonio Regional Medical Center and realigning enlisted medical
training to Fort Sam Houston, Texas, largely because planning officials
identified additional requirements to move medical inpatient care
functions from Wilford Hall Medical Center at Lackland Air Force Base,
Texas to Fort Sam Houston, including operating rooms and laboratory
facilities not included in the original estimate. Additionally,
requirements for more instructional and laboratory space increased to
accommodate an increase in the number of students expected to receive
medical training at Fort Sam Houston. Based on the services conducting
additional analysis and using other planning assumptions, the number of
students now expected to arrive at Fort Sam Houston for medical
enlisted training increased by more than 2,700 (44 percent)”from about
6,270 students to approximately 9,000 students.
BRAC implementing officials told us that information gained from site
visits, such as better information on the actual condition and
availability of certain facilities, was a key factor as to why the
department‘s estimates changed from the BRAC Commission‘s estimates.
For example, DOD‘s estimated cost increased over earlier projections as
a result of better data becoming available on the realignment of the
Army Forces Command headquarters due to the closure of Fort McPherson,
Georgia. These data showed the Command realigned to Fort Bragg and Pope
Air Force Base, North Carolina would be located in over 20 different
buildings. The Army decided, therefore, to preserve existing
operational efficiencies by keeping the entire Command intact in one
location, as it is now at Fort McPherson, by building a new facility at
Fort Bragg although this plan led to the increase in expected costs to
implement the recommendation.
Moreover, data for some recommendations changed as certain requirements
became better defined over time. For example, personnel requirements
related to the recommendation to activate a brigade combat team and its
associated headquarters unit at Fort Hood, Texas, and then relocate it
to Fort Carson, Colorado, became better defined after the BRAC
Commission made its estimates. During the BRAC decision-making process
in 2005, the Army planned its facility requirement on about 3,200
soldiers per brigade combat team but subsequently increased the
personnel requirement to 3,900 soldiers per brigade combat team as it
budgeted for needed facilities in formulating the fiscal year 2008 BRAC
budget submission. Likewise, the personnel requirement in providing
facilities for an associated headquarters unit increased from 300
soldiers in the initial analysis to 900, thus increasing the expected
costs. Thus, the number of personnel to be accommodated at Fort Carson
in order to implement this BRAC recommendation increased by 37 percent
from what was initially expected, which in turn increased the size of
the facilities necessary to house the additional soldiers expected to
arrive at Fort Carson, leading to an increase in expected cost to
implement this recommendation.
As in all previous BRAC rounds, the BRAC Commission used DOD‘s COBRA
model to generate its estimates. Both we and the BRAC Commission
acknowledged in our respective BRAC 2005 reports that the COBRA model,
while valuable as a comparative tool, does not provide estimates that
DOD is expected to use in formulating the BRAC budget and against which
Congress will appropriate funds. We have stated that COBRA does not
necessarily reflect with a high degree of precision the actual costs or
savings that are ultimately associated with BRAC implementation. We
have also stated that the services are expected to refine COBRA
estimates following the BRAC decision-making process to better reflect
expected costs and savings using site-specific information. While COBRA
estimates do not 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”and that the BRAC
Commission‘s COBRA-generated estimates are the only reasonable baseline
to use to identify BRAC cost and savings changes since the
recommendations became effective. [Footnote 20]
Savings Estimates Have Decreased:
Our analysis shows that estimated net annual recurring savings to
implement 13 BRAC recommendations decreased by more than $25 million
each compared to the BRAC Commission‘s estimates. (See app. III for a
listing of these recommendations.) The BRAC Commission estimated that
BRAC 2005 would result in net annual recurring savings of $4.2 billion
beginning in fiscal year 2012; however, we calculated that the net
annual recurring savings have decreased to $4 billion (5 percent).21
DOD attributed the decrease in its savings estimate primarily to
changes in initial assumptions or plans. We identified several BRAC
recommendations for which savings estimates decreased compared to the
BRAC Commission‘s estimates. Specifically, we found about:
* $90 million decrease in the estimated savings of closing various
leased locations of the National Geospatial-Intelligence Agency and
realigning other locations to Fort Belvoir, Virginia. Initially,
officials at the National Geospatial-Intelligence Agency and the OSD
BRAC Office explained that fewer personnel eliminations caused some of
the decrease in savings. Additionally, the day before we released this
draft for comment, an OSD BRAC Office official explained to us that
they under reported the estimated savings from expected lease
terminations in the fiscal year 2008 BRAC budget submission. However,
time did not permit us to analyze this information.
* $80 million decrease in the estimated savings of closing three
chemical demilitarization depots (Deseret Chemical Depot, Utah; Newport
Chemical Depot, Indiana; and Umatilla Chemical Depot, Oregon), largely
because the Army expects not to close these facilities within the BRAC
statutory implementation time frame because DOD must complete the
chemical demilitarization mission to comply with treaty obligations
before these facilities can close, which resulted in less expected
savings;
* $70 million decrease in the estimated savings of establishing joint
bases at multiple locations, largely because the Army did not include
its share of the expected savings due to unresolved issues concerning
joint base operations, whereas the other services included the COBRA-
generated savings in DOD‘s BRAC budget submission to Congress. OSD had
not approved the business plan for this recommendation; thus additional
information on expected savings was not available for us to review;
and:
* $50 million savings decrease in realigning the Defense Logistics
Agency‘s supply, storage, and distribution network, largely because of
the need to retain higher inventory levels than anticipated and less
personnel elimination.
DOD Will Take Longer to Recoup Up-Front Costs Than the BRAC Commission
Expected:
DOD‘s current estimates to implement the BRAC recommendations show that
it will take until 2017 for the department to recoup its up-front
costs”4 years longer than the BRAC Commission‘s estimates indicated it
would take for DOD‘s up-front investments to begin to pay back.
[Footnote 22] Historically, it has taken DOD about 6½ years to recoup
up-front costs for actions such as constructing new facilities,
providing civilian severance pay, or moving personnel and equipment as
a result of implementing BRAC recommendations. Our analysis of the BRAC
Commission‘s estimates shows that the time required to recoup such
costs would be 8 years, or in 2013. However, using DOD‘s current
estimates, our analysis shows that the time required to recoup costs
would be 12 years, or in 2017, as shown in figure 3.
Figure 3: Comparison of Time to Recoup BRAC Costs Using BRAC Commission
and DOD‘s Data (constant fiscal year 2005 dollars in billions):
[See PDF for image]
Six-year statutory implementation period is from 2006 through 2001.
Fiscal Year: 2006;
Cumulative net savings based on DOD current estimates: 0.1;
Cumulative one-time costs based on DOD current estimates: 1.5;
Cumulative net savings based on BRAC Commission estimates: 0.2;
Cumulative one-time costs based on BRAC Commission estimates: 3.5.
Fiscal Year: 2007;
Cumulative net savings based on DOD current estimates: 0.6;
Cumulative one-time costs based on DOD current estimates: 6.9;
Cumulative net savings based on BRAC Commission estimates: 1.1;
Cumulative one-time costs based on BRAC Commission estimates: 11.5.
Fiscal Year: 2008;
Cumulative net savings based on DOD current estimates: 1.6;
Cumulative one-time costs based on DOD current estimates: 14.5;
Cumulative net savings based on BRAC Commission estimates: 3.3;
Cumulative one-time costs based on BRAC Commission estimates: 16.8.
Fiscal Year: 2009;
Cumulative net savings based on DOD current estimates: 3.4;
Cumulative one-time costs based on DOD current estimates: 21.7;
Cumulative net savings based on BRAC Commission estimates: 7.0;
Cumulative one-time costs based on BRAC Commission estimates: 19.4.
Fiscal Year: 2010:
Cumulative net savings based on DOD current estimates: 6.0;
Cumulative one-time costs based on DOD current estimates: 26.7;
Cumulative net savings based on BRAC Commission estimates: 11.4;
Cumulative one-time costs based on BRAC Commission estimates: 20.8.
Fiscal Year: 2011;
Cumulative net savings based on DOD current estimates: 9.2;
Cumulative one-time costs based on DOD current estimates: 28.6;
Cumulative net savings based on BRAC Commission estimates: 15.5;
Cumulative one-time costs based on BRAC Commission estimates: 21.0.
Fiscal Year: 2012;
Cumulative net savings based on DOD current estimates: 12.6;
Cumulative one-time costs based on DOD current estimates: 28.6;
Cumulative net savings based on BRAC Commission estimates: 19.8;
Cumulative one-time costs based on BRAC Commission estimates: 21.0.
Fiscal Year: 2013:
Cumulative net savings based on DOD current estimates: 16.0;
Cumulative one-time costs based on DOD current estimates: 28.6;
Cumulative net savings based on BRAC Commission estimates: 24.0;
Cumulative one-time costs based on BRAC Commission estimates: 21.0.
Fiscal Year: 2014;
Cumulative net savings based on DOD current estimates: 19.3;
Cumulative one-time costs based on DOD current estimates: 28.6;
Cumulative net savings based on BRAC Commission estimates: 28.2;
Cumulative one-time costs based on BRAC Commission estimates: 21.0.
Fiscal Year: 2015;
Cumulative net savings based on DOD current estimates: 22.7;
Cumulative one-time costs based on DOD current estimates: 28.6;
Cumulative net savings based on BRAC Commission estimates: 32.4;
Cumulative one-time costs based on BRAC Commission estimates: 21.0.
Fiscal Year: 2016;
Cumulative net savings based on DOD current estimates: 26.1;
Cumulative one-time costs based on DOD current estimates: 28.6;
Cumulative net savings based on BRAC Commission estimates: 36.7;
Cumulative one-time costs based on BRAC Commission estimates: 21.0.
Fiscal Year: 2017;
Cumulative net savings based on DOD current estimates: 29.5;
Cumulative one-time costs based on DOD current estimates: 28.6;
Cumulative net savings based on BRAC Commission estimates: 40.9;
Cumulative one-time costs based on BRAC Commission estimates: 21.0.
Fiscal Year: 2018;
Cumulative net savings based on DOD current estimates: 32.8;
Cumulative one-time costs based on DOD current estimates: 28.6;
Cumulative net savings based on BRAC Commission estimates: 45.1;
Cumulative one-time costs based on BRAC Commission estimates: 21.0.
Fiscal Year: 2019;
Cumulative net savings based on DOD current estimates: 36.2;
Cumulative one-time costs based on DOD current estimates: 28.6;
Cumulative net savings based on BRAC Commission estimates: 49.4;
Cumulative one-time costs based on BRAC Commission estimates: 21.0.
Fiscal Year: 2020;
Cumulative net savings based on DOD current estimates: 39.6;
Cumulative one-time costs based on DOD current estimates: 28.6;
Cumulative net savings based on BRAC Commission estimates: 53.6;
Cumulative one-time costs based on BRAC Commission estimates: 21.0.
Fiscal Year: 2021;
Cumulative net savings based on DOD current estimates: 42.9;
Cumulative one-time costs based on DOD current estimates: 28.6;
Cumulative net savings based on BRAC Commission estimates: 57.8;
Cumulative one-time costs based on BRAC Commission estimates: 21.0.
Fiscal Year: 2022;
Cumulative net savings based on DOD current estimates: 46.3;
Cumulative one-time costs based on DOD current estimates: 28.6;
Cumulative net savings based on BRAC Commission estimates: 62.0;
Cumulative one-time costs based on BRAC Commission estimates: 21.0.
Fiscal Year: 2023;
Cumulative net savings based on DOD current estimates: 49.7;
Cumulative one-time costs based on DOD current estimates: 28.6;
Cumulative net savings based on BRAC Commission estimates: 66.3;
Cumulative one-time costs based on BRAC Commission estimates: 21.0.
Fiscal Year: 2024;
Cumulative net savings based on DOD current estimates: 53.0;
Cumulative one-time costs based on DOD current estimates: 28.6;
Cumulative net savings based on BRAC Commission estimates: 70.5;
Cumulative one-time costs based on BRAC Commission estimates: 21.0.
Fiscal Year: 2025;
Cumulative net savings based on DOD current estimates: 56.4;
Cumulative one-time costs based on DOD current estimates: 28.6;
Cumulative net savings based on BRAC Commission estimates: 74.7;
Cumulative one-time costs based on BRAC Commission estimates: 21.0.
DOD current estimates indicate cumulative savings will exceed
cumulative costs in fiscal year 2013.
BRAC Commission estimates indicate cumulative savings will exceed
cumulative costs in fiscal year 2017.
Source: GAO analysis of DOD and BRAC data.
[End of table]
Similarly, because DOD expects to spend more and save less compared to
the BRAC Commission‘s estimates, projected 20-year savings have
decreased by more than half. [Footnote 23] The BRAC Commission
estimated that the implementation of this BRAC round would save about
$36 billion over a 20-year period ending in 2025. However, based on our
analysis of DOD‘s current estimates, implementation of this BRAC round
will save about $15 billion, a decrease of $21 billion (58 percent), in
fiscal year 2005 constant dollars. OSD BRAC officials told us that,
although the 20-year savings estimate is less than the BRAC Commission
expected, the department expects the implementation of this BRAC round
to produce capabilities that will enhance defense operations and
management, despite less than anticipated savings.
Moreover, DOD expects a majority of the expected costs and savings to
be related to the implementation of a small percentage of the BRAC
recommendations. For example, we determined that DOD expects the
implementation of about 13 percent of the recommendations to incur 65
percent of the expected one-time costs (see app. IV); 15 percent of the
recommendations to generate 85 percent of the expected annual recurring
savings (see app. V); and 16 percent of the recommendations to generate
85 percent of the expected 20-year savings (see app. VI).
DOD‘s Estimates to Implement BRAC Recommendations Will Likely Continue
to Evolve, and Savings Estimates May be Overstated:
Based on our analysis, we believe DOD‘s cost and savings estimates to
implement the BRAC 2005 recommendations are likely to continue to
evolve in future BRAC budget submissions. First, DOD‘s estimates for
some key recommendations are uncertain because they are based on
implementation details that are still evolving, especially for some
complex recommendations such as establishing 12 new joint bases.
Second, military construction costs could increase due to various
economic factors and a possible readjustment of Army construction
costs. Third, environmental cleanup costs for BRAC implementation are
preliminary and are likely to increase. Furthermore, we believe that
DOD‘s annual recurring savings estimates may be overstated, largely
because 46 percent of this savings is due to questionable military
personnel savings.
Details for Several Key Recommendations Are Uncertain and Estimates Are
Likely to Change:
Many details involved in the implementation of several key BRAC
recommendations were uncertain when the department submitted its fiscal
year 2008 BRAC budget submission to Congress in February 2007; thus,
these estimates are likely to continue to change in succeeding BRAC
budget submissions. OSD officials told us that some estimates could
change as implementation planning progresses and that initial planning
for many recommendations was very difficult but they wanted to provide
Congress with the best budget data available at the time of the budget
submission. However, until DOD resolves implementation details
surrounding its BRAC recommendations, it will continue to have
difficulty in more precisely estimating costs and savings and the
resolution of these details could cause the department‘s cost and
savings estimates to change. For example:
* Realigning Walter Reed Army Medical Center, Washington, D.C. Multiple
groups reviewed current and future medical care for wounded soldiers,
and DOD officials told us that cost estimates in DOD‘s next BRAC budget
submission to Congress could change pending the outcomes of these
various review groups. OSD officials told us implementation costs will
likely increase from the reported $1.7 billion estimate if the time
frame to complete the recommendation is accelerated, as recommended by
OSD‘s independent panel to review current rehabilitative care at Walter
Reed. [Footnote 24]
* Co-locating miscellaneous OSD, defense agency, and field activity
leased locations to Fort Belvoir, Virginia. The Army had planned to
relocate these agencies and activities to Fort Belvoir‘s Engineering
Proving Ground, but in August 2007 the Army announced it is considering
a nearby location currently belonging to the U.S. General Services
Administration in Springfield, Virginia. Then, in October 2007, the
Army announced it is also considering another site in Northern Virginia
for relocating about 6,000 personnel. The reported cost estimate of
$1.2 billion to implement this recommendation is likely to change
depending on the Army‘s site location for relocating these OSD offices,
defense agencies, and defense field activities.
* Establishing Army Centers of Excellence at several locations. The
Army was not certain about the number of personnel it expected to
eliminate as a result of combining several Army schools and centers at
the time of the fiscal year 2008 BRAC budget submission to Congress.
[Footnote 25] Based on our analysis, once the Army resolves the
implementation details for these recommendations, the combined net
annual savings estimate of $332 million is likely to change in the next
BRAC budget submission.
* Realigning Fort Bragg, North Carolina. The decision as to where to
relocate on Eglin Air Force Base, Florida, the Army‘s 7th Special
Forces Group currently located at Fort Bragg remained uncertain as of
August 2007. According to officials at Eglin, the planned location of
the Special Forces Group could change because of various space and
noise issues associated with the installation‘s implementation of
another BRAC recommendation to establish a joint training site for the
Joint Strike Fighter aircraft, also at Eglin Air Force Base. DOD‘s
estimated $343 million in cost in its fiscal year 2008 BRAC budget
submission to Congress would change depending on the final site
location for the 7th Special Forces Group at Eglin.
* Establishing joint basing at multiple locations. The services have
yet to agree on many of the details involved with this recommendation
to create 12 joint bases. According to BRAC implementing officials and
recent testimony before Congress, it is still uncertain what the
organizational and personnel requirements will be for these joint
bases, thus making it difficult to provide a realistic estimate on the
costs or savings from implementing this recommendation. DOD is
currently estimating net savings of $116 million annually.
* Realigning medical enlisted training at Fort Sam Houston, Texas. Part
of this recommendation required the services to co-locate their medical
training to one location with the potential of transitioning to a joint
training effort. Fort Sam Houston officials told us that the expected
savings from this recommendation were anticipated based on a joint
training effort. However, BRAC implementing officials told us the
services had not yet agreed on the final joint curriculum when the
fiscal year 2008 BRAC budget submission was provided to Congress; thus
the number of instructors needed and several other details remained
uncertain. These officials told us that once these details become
final, the amount of expected net savings, which DOD estimated to be
about $91 million annually, could change for this recommendation.
* Creating a Naval Integrated Weapons and Armaments Research,
Development and Acquisition, Test and Evaluation Center mostly at Naval
Air Weapons Station China Lake, California. Navy officials told us they
were uncertain how many personnel associated with a testing range
mission will realign as they plan for the implementation of this
recommendation. Moreover, the DOD Inspector General recently reported
that the Navy did not adequately document the number of personnel
expected to realign in this recommendation‘s proposed business plan,
citing that the number of personnel to move has ranged from about 1,660
to nearly 650. [Footnote 26] Until OSD resolves implementation details
surrounding this recommendation, it will continue to have difficulty in
more precisely estimating the associated costs and savings. DOD
estimated it will cost about $427 million to implement this
recommendation as presented in the fiscal year 2008 BRAC budget
submission and OSD estimated it will accrue a net recurring savings of
$68 million annually after 2011.
* Co-locating medical command headquarters. Various BRAC implementing
officials associated with planning the implementation for this
recommendation told us that depending on the still undecided final site
location and the number of personnel to relocate, the $50 million in
estimated costs to implement this recommendation could likely change.
These recommendations illustrate the evolving nature of implementation
planning and the likelihood that the associated cost and savings
estimates could likely change. They are not the only recommendations
which may experience changes in costs or savings; however, they are
some of the recommendations from which DOD expects to incur the most
costs and savings relative to other BRAC 2005 recommendations. Thus,
changes to cost and savings estimates related to these recommendations
will have a larger effect on the overall BRAC implementation estimates.
Military Construction Costs Could Increase:
Military construction costs could increase due to various economic
pressures and if the Army‘s new initiatives designed to reduce
construction costs do not achieve the planned results. DOD‘s current
cost estimates of $31 billion to implement the BRAC recommendations
involve about $21 billion in estimated costs for military construction
that could likely increase because of greater than expected inflation
and the market demand for new construction. Since the majority of
expected BRAC costs are for military construction, systemic increases
in the cost of construction could have a considerable effect on the
total cost to implement BRAC 2005. This change is important because
DOD‘s estimate of $21 billion in military construction is the single
largest cost item associated with implementing BRAC 2005
recommendations and is unprecedented given that DOD spent less than $7
billion for military construction in the four previous BRAC rounds
combined. In addition, we recognize that determining costs in
construction programs that span years of effort is difficult. As such,
DOD told us they will continue to monitor reasons for potential cost
growth for BRAC construction contracts.
Additionally, BRAC implementing officials expressed concern that
construction costs have the potential to increase in areas already
experiencing high commercial construction demands such as the National
Capital Region, Washington, D.C. and San Antonio, Texas. For example,
DOD estimated it could cost about $3.4 billion in construction to
implement several recommendations in the National Capital Region,
Washington, D.C. (the realignment of Walter Reed Medical Center, the
relocation of the National Geospatial-Intelligence Agency, and the
realignment to Fort Belvoir due to numerous terminations of DOD-leased
space in the Washington, D.C. area). Moreover, DOD estimated it could
cost about $1.3 billion in construction to implement the recommendation
to establish a new joint medical enlisted training center and relocate
Lackland Air Force Base‘s medical inpatient care to Fort Sam Houston,
San Antonio, Texas. U.S. Army Corps of Engineers (USACE) officials told
us they are concerned about what effect construction demand might have
on bid proposals given the sizable amount of construction to take place
in a limited amount of time to meet the BRAC statutory completion time
frame. Additionally, service officials at various installations
expressed concern about the potential for increases in construction
costs because of ongoing reconstruction due to damage caused by
Hurricane Katrina, coupled with the large volume of anticipated BRAC
construction that could also affect bid proposals.
Similar to the current commercial construction market in general,
military construction has been affected by rising costs for
construction labor and materials for the last several years. USACE
officials told us the actual rate of construction inflation for the
last several years has exceeded the federal government‘s inflation rate
used for budgetary purposes, which is required to be used in budgeting
for construction projects. While this difference was as high as 6.1
percentage points in 2004, the difference between the actual rate of
construction inflation and the government‘s budgetary inflation rate
has diminished recently. USACE officials told us that if the extent to
which the actual rate of inflation continues to exceed the budgeted
rate as implementation proceeds, and if construction material costs are
higher than anticipated, they would either have to redirect funding
from other sources to provide for construction projects or resort to a
reduction in the scope of some construction projects. However, this
trend may not necessarily continue into the future depending on the
economics surrounding the construction industry.
USACE is currently transforming and streamlining its process for
managing and contracting for military construction. USACE officials
told us that these transformation efforts could help in meeting Army‘s
expected large volume of military construction as well as costs
associated with BRAC and other force structure initiatives such as
overseas rebasing and Army modularity. USACE has developed a strategy
intended to reduce construction costs by 15 percent and reduce
construction time by 30 percent. Through its transformation strategy,
USACE intends to change how it executes construction projects by:
* standardizing facility designs and processes;
* expanding the use of premanufactured building where sections or
modules of a building are constructed and transported to a construction
site to be assembled;
* executing military construction as a continuous building program
rather than a collection of individual construction projects, and;
* emphasizing commercial rather that government building standards,
which would allow contractors greater flexibility to use a wider
variety of construction materials to meet construction requirements.
The Army has already incorporated a 15 percent reduction into its BRAC
construction estimates and has budgeted accordingly. Although USACE
officials expressed optimism that these cost savings will be realized,
and preliminary results are encouraging, these results are based on
recent, limited experience using this new process. Specifically, USACE
initiated five construction pilots in 2006, all of which were awarded
under its price limit. However, if the cost of construction materials
escalates or if there is a shortage of construction labor, especially
in locations of high construction volume such as Washington, D.C, and
San Antonio, Texas, USACE told us that some of the expected military
construction transformation savings could decrease. Given that the Army
is expected to incur almost 60 percent of the estimated BRAC
construction costs ($12 billion), the impact on overall BRAC costs if
the Army is unable to achieve its projected 15 percent savings could be
considerable, especially since USACE officials told us the majority of
the Army‘s BRAC-related construction projects incorporated the 15
percent reduction into their estimates.
Environmental Cleanup Costs Are Preliminary and Likely to Increase:
We reported in January 2007 that DOD‘s available data showed that at
least $950 million will be needed to complete environmental cleanups
underway for known hazards on the military bases scheduled for closure
as a result of the BRAC 2005 round. [Footnote 27] Our prior work has
shown that some closures result in more intensive environmental
investigations and the uncovering of additional hazardous
contaminations, thus resulting in higher cleanup costs than DOD
predicted and budgeted. For example, additional hazardous
contaminations were found at the former McClellan Air Force Base,
California, which was recommended for closure in 1995. The discovery of
traces of plutonium during a routine cleanup in 2000 caused cleanup
costs to increase by $21 million. However, as certain bases undergo
more complete and in-depth environmental assessments, a clearer picture
of environmental cleanup costs will likely emerge.
Annual Recurring Savings Estimates May be Overstated:
DOD‘s estimated annual recurring savings resulting from base closures
and realignments may be overstated by about 46 percent. Currently, DOD
calculates total estimated annual recurring savings of about $4
billion. This amount includes $2.17 billion in eliminated overhead
expenses such as the costs no longer needed to operate and maintain
closed or realigned bases and reductions in civilian salaries, which
will free up funds that DOD can then use for other defense priorities.
However, DOD‘s annual recurring savings estimate also includes $1.85
billion in military personnel entitlements”such as salaries and housing
allowances”for military personnel DOD plans to shift to other positions
but does not plan to eliminate. While DOD disagrees with us, we do not
believe that transferring personnel to other locations produces
tangible dollar savings outside the military personnel accounts that
DOD can use to fund other defense priorities since these personnel will
continue to receive salaries and benefits.
We recognize that DOD is trying to transform its infrastructure and the
Secretary of Defense‘s primary goal for the BRAC 2005 process was
military transformation. We also recognize DOD‘s position that military
personnel reductions allow the department to reapply these personnel to
support new capabilities and improve operational efficiencies.
Nonetheless, DOD‘s inclusion of military personnel entitlements in its
estimates of annual recurring savings could generate a false sense that
all of its reported savings would generate funds that DOD could apply
elsewhere. Because DOD‘s BRAC budget submission to Congress does not
explain the difference between recurring savings attributable to
military personnel entitlements and recurring savings that will make
funds available for other defense priorities, DOD‘s overall estimated
annual recurring savings appear almost twice as large as those which
will actually be realized. In addition, our analysis shows that the
current percentage of estimated annual recurring savings from military
personnel entitlements (46 percent) is considerably higher compared to
the last round of BRAC that took place in 1995, in which DOD derived
about 5 percent of BRAC annual recurring savings from military
personnel entitlements. During the previous four rounds of BRAC that
took place between 1988 and 1995, the military was downsizing in
personnel strength, yet the average percentage of annual recurring
savings DOD derived from military personnel entitlements was 26
percent.
We reported in July 2005 that military personnel position eliminations
are not a true source of savings since DOD intends to reassign or shift
personnel to other positions without reducing military end strength
associated with the corresponding BRAC recommendation. Moreover, the
BRAC Commission stated in its September 2005 report that DOD‘s
inclusion of savings from eliminating military personnel positions
distorts the actual savings attributable to BRAC recommendations. The
service officials we interviewed could not link actual military
personnel eliminations directly to implementing a BRAC recommendation,
as illustrated in the following:
* Army officials said its military end strength will not be reduced due
to any BRAC recommendations. In fact, the Army plans to increase its
active-duty end strength by 65,000 over the next several years.
* Navy officials said they anticipate reducing the Navy‘s end strength
by 26,000 active duty military personnel between fiscal years 2006 and
2011. However, they told us they have not linked any of these
anticipated reductions to BRAC recommendations.
* Air Force officials said they are in the process of reducing the
service‘s active-duty end strength by about 40,000. However, Air Force
officials said that they cannot link any reductions in military end
strength to implementing their BRAC recommendations and the personnel
drawdown is independent of BRAC.
DOD policy and Office of Management and Budget‘s guidance [Footnote 28]
require that an economic analysis be explicit about the underlying
assumptions used to estimate future costs and benefits, which we
believe includes estimating BRAC savings. If the savings we question
were omitted from DOD‘s savings estimates, net annual recurring savings
would decrease by about 46 percent. As a result, DOD‘s BRAC budget
submission does not provide enough information to allow Congress full
oversight of the savings that can be applied to other programs outside
of the military personnel account. Greater transparency over the
assumptions behind DOD‘s BRAC savings estimates would help to promote
independent analysis and review and facilitate congressional decision
making related to the multibillion-dollar BRAC implementation program.
In addition to taking issue with how DOD characterizes military
personnel savings, we also disagree with DOD claiming savings for
closing a base that is actually going to stay open. At the time of
DOD‘s fiscal year 2008 BRAC budget submission to Congress, DOD claimed
about $260 million in annual recurring savings for closing Cannon Air
Force Base, New Mexico, which is now going to remain open. Although DOD
recommended closing Cannon in May 2005 as a proposed recommendation,
the BRAC Commission modified the proposed closure, and stated in its
September 2005 report to the President that Cannon could remain open if
the Secretary of Defense identified a new mission for the base and
relocated the base‘s fighter wing elsewhere. [Footnote 29]
Subsequently, the Air Force announced in June 2006 that Cannon would
remain open and the 16th Special Operations Wing, currently located at
Hurlburt Field, Florida, would relocate to Cannon. Nevertheless, DOD
still claimed about $200 million in annual savings for military
personnel entitlements and about $60 million in annual savings for
categories such as base operation and maintenance in its fiscal year
2008 BRAC budget. Officials at the Air Force BRAC office told us that
they claimed these annual savings because they disestablished the
fighter wing at Cannon, although they said most of the military
personnel and aircraft associated with the disestablished fighter wing
were reassigned or relocated and will continue to operate. [Footnote
30]
Furthermore, we have taken issue with estimated savings for several Air
National Guard BRAC recommendations. As we reported in May 2007, the
implementation of several Air National Guard recommendations is
expected to result in annual recurring costs of $53 million rather than
the annual recurring savings of $26 million estimated by the BRAC
Commission”a $79 million per year difference that occurred primarily
due to language in the BRAC Commission‘s report that prevents the Air
National Guard from reducing its current end strength in some states.
[Footnote 31]
DOD Has Made Progress Implementing BRAC, but Several Challenges
Increase Risk That All Recommendations Might Not be Completed by the
Statutory Deadline:
DOD has made progress implementing BRAC 2005, but faces a number of
synchronization and coordination challenges related to implementing
many BRAC recommendations. These challenges increase DOD‘s risk of not
meeting the September 2011 statutory deadline. For example, personnel
movements involving tens of thousands of personnel must be synchronized
with the expenditure of billions of dollars to construct or renovate
facilities needed to support them by 2011. The time frames for
completing many BRAC recommendations are so closely sequenced and
scheduled to be completed in 2011 that any significant changes in
personnel movement schedules or construction delays could jeopardize
timely completion. Also, some recommendations are dependent on the
completion of others, and delays in completing some interrelated
actions might cause a domino effect that could jeopardize DOD‘s ability
to meet the statutory 2011 BRAC deadline. BRAC 2005, unlike prior BRAC
rounds, included more joint recommendations involving more than one
military component, thus creating challenges in achieving unity of
effort among the services and defense agencies.
DOD Has Made Progress Implementing BRAC:
DOD‘s implementation of BRAC 2005 has progressed since the
recommendations became effective in November 2005. For example, Navy
officials reported that they completed implementing 14 BRAC actions
[Footnote 32] involving the closure of Navy reserve centers and
recruiting districts. To dedicate resources and facilitate
communications to plan for the implementation of hundreds of BRAC
actions, the military services and affected defense agencies have their
own BRAC program management offices. Over the past 2 years, these
offices have begun the planning and design for the $21 billion military
construction program necessitated by the most recent BRAC round,
including initiating site surveys and environmental assessments needed
before military construction projects can begin.
OSD realized that the complexity of the BRAC 2005 round required it to
strategically manage and oversee the entire BRAC 2005 program. During
prior BRAC rounds, OSD‘s oversight of BRAC implementation was typically
limited to adjudicating disagreements among the services over
implementation issues, according to OSD BRAC officials. However, for
this BRAC round, the Principal Deputy Under Secretary of Defense for
Acquisition, Technology and Logistics stated in 2005 that the large
number of transformational recommendations, particularly
recommendations to promote joint facility operations, would present OSD
with significant implementation challenges. To meet these challenges,
the department initiated a process to develop business plans that laid
out the requisite actions, timing of those actions, and the costs and
savings associated with implementing each recommendation. Additionally,
OSD recognized that the development of business plans would serve as
the foundation for the complex program management necessary to
implement the BRAC 2005 recommendations. As such, the primary
implementation activity of the military services, and defense agencies
has been to develop about 240 business plans for OSD review and
approval. According to OSD, these business plans have been used as the
primary vehicle to delineate resource requirements and generate
military construction requirements.
As of October 2007, OSD has approved about 220 business plans. Some
business plans remain in draft and have not been approved for various
reasons. According to OSD, these business plans involve complex issues
associated with the services‘ lines of authority and sizable personnel
realignments that OSD BRAC officials told us they intend to resolve
soon. However, OSD has deferred the approval of about 15 business plans
pending the development of broader policies to facilitate the
implementation of the recommendations associated with joint basing and
chemical demilitarization. Finally, officials in OSD‘s BRAC Office told
us they plan to continue reviewing business plans as part of their
comprehensive, centrally managed oversight of the BRAC program.
Recognizing that business plans provide important implementation
details, in June 2007 OSD directed the services and defense agencies to
update these business plans twice a year in conjunction with OSD
program reviews.
Challenges in Synchronizing Many BRAC Actions Could Hinder DOD‘s
Ability to Complete Recommendations within the Statutory Time Frame:
The department faces a number of challenges related to synchronizing
the completion of many BRAC recommendations in order to meet the
statutory 2011 time frame. For example, personnel movements involving
tens of thousands of military and civilian personnel must be
synchronized with billions of dollars worth of construction or
renovation activities needed to ensure they have the necessary
facilities to support them. Also, the implementation of some
recommendations is dependent on the completion of other recommendations
before facilities can be renovated for new uses, and some DOD
installations are affected by more than six separate recommendations.
Delays in synchronizing and completing these interrelated actions could
cause a domino effect that might jeopardize DOD‘s ability to meet the
statutory 2011 BRAC deadline. Also, synchronizing the implementation of
several force structure initiatives could further complicate DOD‘s BRAC
implementation efforts.
DOD Must Synchronize Personnel Movements with Construction Time Frames:
Implementation challenges primarily stem from the complexity of
synchronizing the realignment of over 123,000 personnel with the
completion of over $21 billion in new construction or renovation
projects. According to DOD officials, construction schedules are often
the primary driver in setting BRAC implementation timelines due to the
amount of time needed to design and build new facilities or renovate
existing facilities. The time frames for completing many BRAC
recommendations are closely sequenced and scheduled to be completed in
2011 but any significant changes in personnel movement schedules or
construction delays could jeopardize DOD‘s ability to meet the
statutory 2011 BRAC deadline.
According to OSD‘s approved business plans and DOD officials, the
following are some BRAC recommendations that could experience
synchronization challenges:
* Realigning Army reserve components, constructing 125 new Armed Forces
Reserve Centers, and closing 387 existing reserve component facilities:
Army reserve component officials told us they are managing the
construction of new Armed Forces Reserve Centers in a compressed time
frame. The data in our recently issued report show that 26 percent of
the BRAC actions implementing these recommendations will begin in
fiscal year 2010, according to the approved business plans. [Footnote
33] This approach compresses the amount of time available to construct
the facilities and respond to any construction delays that might arise,
which increases the risk that the projects might not be completed in
time to meet the BRAC statutory completion deadline. On the other hand,
Army officials told us that they would assume less risk because many of
these projects are small and can be completed within shorter time
frames compared to larger projects. For example, the Army considered
starting construction on the Armed Forces Reserve Centers toward the
beginning of the implementation period and closing older reserve
facilities. Instead, more complex and costly recommendations became a
higher priority and reserve center actions were delayed.
* Co-locating miscellaneous OSD, defense agency, and field activity
leased locations at Fort Belvoir, Virginia: OSD officials told us that
these activities have scheduled the arrival of over 6,000 personnel by
September 1, 2011”2 weeks before the BRAC statutory deadline”to
implement over 30 discrete actions associated with this recommendation.
In addition, recent developments could affect the timing of this
realignment to Fort Belvoir because, at the time of our review, the
Army was revising its implementation planning to accommodate the
possibility of using nearby land owned by the U.S. General Services
Administration or another location in Northern Virginia, which will
require additional studies to determine environmental impacts and
transportation requirements at the new location, according to Fort
Belvoir officials. If the process of identifying alternative site
locations results in delaying the movement of miscellaneous OSD
offices, defense agencies, and field offices, this could jeopardize
meeting the statutory deadline.
* Realigning the National Geospatial-Intelligence Agency to Fort
Belvoir, Virginia: The fiscal year 2008 BRAC budget submission shows
that construction is expected to be completed by June 2011, which
allows 3 months before the statutory deadline to move its missions. To
mitigate mission impact and the risk of not completing these moves if
construction is delayed, the agency plans to begin moving its personnel
in phases starting in April 2010.
* Realigning Walter Reed Army Medical Center, Washington, D.C., to the
National Naval Medical Center, Maryland, and Fort Belvoir, Virginia:
Completion is scheduled by September 2011 according to the business
plan. The medical joint cross-service group that developed this
recommendation in 2005 stated that delays in constructing and occupying
the buildings could risk the timely completion of this recommendation
and concluded that aggressive actions would be needed to meet the 6-
year deadline. Army and OSD officials testified before Congress in
January 2007 that the time frame was ’very tight“ for completing this
recommendation. [Footnote 34] Also, in response to various concerns
about the quality of care for warfighters at Walter Reed, an official
with the Army‘s Surgeon‘s General Office told us in September 2007 that
certain parts of the recommendation supporting the construction of
intensive medical care facilities are expected to be completed sooner
than originally planned, while the move to the National Naval Medical
Center, Maryland, and Fort Belvoir, Virginia is still scheduled to be
completed by September 2011. DOD‘s standard construction schedules for
medical facilities indicate new hospitals, or additions and renovations
to an existing hospital, generally take longer to complete compared to
other facilities.
Some Recommendations Are Dependent on the Completion of Others:
In some cases, DOD‘s synchronization challenges are exacerbated when
the completion of one recommendation is dependent on the completion of
another. For example, the BRAC recommendation to close Fort Monmouth,
New Jersey, involves relocating personnel from the Army‘s
Communications-Electronics Life Cycle Management Command currently
located at Monmouth to Aberdeen Proving Ground, Maryland. The new
facilities at Aberdeen are expected to be renovated by February 2011.
However, DOD cannot begin those renovations until the training activity
currently occupying the Aberdeen facilities relocates to Fort Lee,
Virginia, an action associated with the implementation of another BRAC
recommendation. Consequently, the training activity cannot vacate the
Aberdeen space until a new facility is built for them at Fort Lee
sometime in 2009. This interdependence is shown in figure 4.
Figure 4: Sequencing of Personnel Movement for Several Interdependent
BRAC Recommendations:
[See PDF for image]
This figure is a time line depicting the sequencing of personnel
movement for several interdependent BRAC recommendations. The following
data is depicted:
Fort Lee Construction: Fiscal years 2007-2009;
Fort Lee cannot realign 800 personnel from Aberdeen Proving Ground
until Fort Lee constructs new facilities for them. Construction is
expected to be completed in 2009.
Possible delay: 2009-?
Aberdeen Proving Ground Renovation: Fiscal years 2009-2011;
Aberdeen cannot begin renovation until 800 personnel move to Fort Lee.
Renovation is expected to be completed and facilities to be ready by
February 2011.
Possible delay: 2011-?
Fort Monmouth Relocation: Fiscal year 2011;
The relocation cannot be completed until the renovation at Aberdeen is
done. Forth Monmouth is expected to close by September 2011.
Possible delay: 2011-?
Possible delay:
Possible delay means completion dates could slip. For Fort Monmouth
possible delays in construction or renovation at Fort Lee or Aberdeen
could cause slippage of completion dates, thus increasing the risk of
not closing Forth Monmouth within the statutory timeline.
Source: GAO.
[End of figure]
Likewise, such interdependence could undermine the Navy‘s ability to
complete within the statutory deadline the recommendation to
consolidate various Navy-leased locations onto government-owned
property. The business plan that describes the actions and time frames
for moving various Navy-leased locations onto government-owned property
stated that it will begin renovating space for the move to Arlington,
Virginia, in September 2008. However, the current occupant of the
space”a component of the Defense Information Systems Agency”is not
scheduled to vacate the space the Navy is to move into until June 2011
because the Defense Information Systems Agency component needs to wait
until it can move into newly constructed space at Fort Meade,
Maryland”an action associated with another BRAC recommendation.
Although both DOD components are working on a solution, the business
plans for these two recommendations stated several options in order to
meet the 2011 BRAC deadline, such as having the Navy occupy ’portable
facilities,“ build a new facility, or explore other workarounds to meet
the statutory time frame.
Some Installations Affected by Multiple Recommendations:
Another factor that could threaten the timely completion of some of the
BRAC recommendations is the number of DOD installations that are
affected by more than one recommendation. Based on BRAC Commission
data, 27 installations are affected by six or more BRAC recommendations
that include installations such as Fort Belvoir, Virginia; Fort Sam
Houston, Texas; Lackland Air Force Base, Texas; Wright-Patterson Air
Force Base, Ohio; Naval Station Norfolk, Virginia; Aberdeen Proving
Ground, Maryland; and Redstone Arsenal, Alabama. In addition to their
routine duties for facility management, installation officials are
responsible for synchronizing and coordinating the movements of
personnel with the availability of facilities. The following are
examples of installations affected by multiple recommendations: Some
Installations Affected by Multiple Recommendations:
* Fort Belvoir, Virginia: Officials responsible for implementing the
BRAC actions associated with 14 separate recommendations told us that
they need to synchronize the availability of various facilities to
accommodate the increase of nearly 24,000 personnel expected to arrive,
primarily as a result of BRAC recommendations resulting in the closure
or realignment of numerous DOD agencies and activities. These officials
said that they have concerns about meeting the overall time frame
because their plans do not allow for any delays in construction
projects or funding. Fort Belvoir officials told us they are
encountering challenges when planning the synchronization of the large
volume of construction and personnel movement throughout the
implementation period. For example, the Army initially planned to site
the implementation of 2 recommendations (realigning the National
Geospatial-Intelligence Agency and co-locating miscellaneous OSD,
defense agency, and field activity leased locations) at Fort Belvoir
that would have an unfavorable impact on the surrounding community due
to increased traffic congestion. Though Fort Belvoir in October 2007
announced new plans to obtain property near Fort Belvoir that might
lessen traffic congestion for the move of miscellaneous OSD, defense
agency, and field activity leased locations, Fort Belvoir officials
told us that these plans could raise new implementation challenges to
meet the statutory deadline because of additional time needed for
environmental impact studies, planning and design of new construction,
and demolition of existing structures at the new proposed site.
* Fort Sam Houston, Texas: Installation officials at Fort Sam Houston
told us that they have to synchronize numerous actions involving eight
separate BRAC recommendations and have concerns about coordinating the
availability of facilities”either to be constructed or renovated”with
the planned net increase of over 10,000 personnel. Furthermore,
officials told us the lack of guidance on how installation officials
will establish a joint base with nearby Lackland and Randolph Air Force
Bases, Texas, in accordance with the BRAC recommendation on joint
basing exacerbates the uncertainty in planning for the implementation
of these recommendations.
Force Structure Initiatives Further Complicate DOD‘s BRAC
Implementation Efforts:
Two Army force restructuring initiatives”modularity and overseas
rebasing strategy”could exacerbate the Army‘s BRAC synchronization
challenges. The Army considers modularity to be the most extensive
reorganization of its force since World War II, in which it
restructures itself from a division-based force to a more agile and
responsive modular brigade-based force. According to Army estimates,
this initiative will require a significant investment through fiscal
year 2011. DOD‘s Global Defense Posture Realignment Plan, also known as
overseas rebasing, will result in a global realignment of U.S. forces
and installations, including the planned transfer to American territory
of up to 70,000 defense personnel and about 100,000 family members and
civilian employees currently living overseas. As a result of mostly
these force structure initiatives and BRAC, the Army plans to relocate
over 150,000 soldiers and civilian personnel by fiscal year 2012,
representing over 20 percent of the Army‘s total projected active-duty
and civilian personnel end strength. To illustrate, Army installations
that expect personnel increases of greater than 5,000 over the next 5
years, as of March 2007, are shown in table 2.
Table 2: Army Installations Expecting Net Gains of at Least 5,000
Personnel for Fiscal Years 2006 through 2011 Due to BRAC, Overseas
Rebasing, Modularity, and Other Miscellaneous Restationing Actions (as
of March 2007):
Installation: Fort Belvoir, VA;
FY 2006 beginning population: 21,437;
Estimated FY 2011 population: 45,332;
Estimated net gain in population: 23,895;
Percentage of population increase: 111;
Estimated Army military construction (dollars in thousands): $277,700.
Installation: Fort Bliss, TX;
FY 2006 beginning population: 20,130;
Estimated FY 2011 population: 38,063;
Estimated net gain in population: 17,933;
Percentage of population increase: 89;
Estimated Army military construction (dollars in thousands): 2,076,280.
Installation: Fort Bragg, NC;
FY 2006 beginning population: 57,352;
Estimated FY 2011 population: 69,136;
Estimated net gain in population: 11,784;
Percentage of population increase: 21;
Estimated Army military construction (dollars in thousands): 1,421,011.
Installation: Fort Lewis, WA;
FY 2006 beginning population: 36,147;
Estimated FY 2011 population: 47,110;
Estimated net gain in population: 10,963;
Percentage of population increase: 30;
Estimated Army military construction (dollars in thousands): 1,191,249.
Installation: Fort Sam Houston, TX;
FY 2006 beginning population: 24,819;
Estimated FY 2011 population: 34,980;
Estimated net gain in population: 10,161
Percentage of population increase: 41;
Estimated Army military construction (dollars in thousands): 179,540.
Installation: Fort Benning, GA;
FY 2006 beginning population: 40,592;
Estimated FY 2011 population: 50,487;
Estimated net gain in population: 9,895;
Percentage of population increase: 24;
Estimated Army military construction (dollars in thousands): 1,423,461.
Installation: Fort Riley, KS;
FY 2006 beginning population: 15,188;
Estimated FY 2011 population: 24,608;
Estimated net gain in population: 9,420;
Percentage of population increase: 62;
Estimated Army military construction (dollars in thousands): 905,570.
Installation: Fort Lee, VA;
FY 2006 beginning population: 13,495;
Estimated FY 2011 population: 20,645;
Estimated net gain in population: 7,150;
Percentage of population increase: 53;
Estimated Army military construction (dollars in thousands): 965,500.
Installation: Fort Meade, MD;
FY 2006 beginning population: 35,504;
Estimated FY 2011 population: 41,915;
Estimated net gain in population: 6,411;
Percentage of population increase: 18;
Estimated Army military construction (dollars in thousands): 104,900.
Installation: Fort Carson, CO;
FY 2006 beginning population: 24,066;
Estimated FY 2011 population: 29,756;
Estimated net gain in population: 5,690;
Percentage of population increase: 24;
Estimated Army military construction (dollars in thousands): 958,129.
Source: GAO analysis of Army headquarters-level data.
Notes: Personnel growth consists of Army military (active and reserve),
military students and trainees, civilians, non-Army military and
civilians, and mission contractors. Figures do not include family
members and nonmission-related contractors and expected increases that
may occur as a result of plans to increase the Army‘s active end
strength by 65,000 personnel.
[End of table]
As shown in table 2, some installations are expecting substantial
growth; Forts Belvoir, Bliss, Riley, and Lee each anticipate net
personnel gains of more than 50 percent. For example, the Army plans to
relocate at Fort Bliss, Texas, about 18,000 personnel as part of BRAC,
the transformation of Army modular brigade units, and DOD‘s overseas
rebasing efforts. The Army is planning 54 new construction projects
over the 6-year BRAC implementation period to accommodate the increase
in base population at Fort Bliss. Also, some of the installations
listed in table 2 may experience more growth in the next several years
depending on whether the Army‘s active end strength is increased by
65,000 soldiers.
Coordination Among Multiple Services and Agencies Presents Additional
Challenges:
BRAC 2005, unlike prior BRAC rounds, included more joint
recommendations involving more than one military component, thus
creating challenges in achieving unity of effort among the services and
defense agencies. According to our analysis, 43 percent of the 240 OSD-
required business plans involved formal coordination between at least
two services or agencies. Service officials said that gaining consensus
among military services and defense agencies has been challenging in
the areas of personnel and facility requirements, implementation
schedules, and funding responsibilities. For example, officials told us
it was a challenge due to the joint nature in planning for the
implementation of the recommendation to realign Fort Bragg, North
Carolina, by relocating Army‘s 7th Special Forces Group to Eglin Air
Force Base, Florida. Service officials told us it took time for the
Army and Air Force to coordinate how to share base operations costs
given these two services have different standards for calculating these
costs. Similarly, regarding the recommendation to establish the Joint
Strike Fighter initial joint training site at Eglin Air Force Base,
Florida, it took time for the Navy, Marine Corps, and Air Force to
agree on cost-sharing arrangements and a joint training curriculum
designed to achieve savings from consolidated training on the aircraft.
Likewise, other complex joint cross-service recommendations could be
slowed by a similar need to coordinate and negotiate agreements. The
following are some BRAC recommendations with unresolved coordination
challenges.
* Create joint bases involving multiple defense installations: The 26
defense installations involved with creating 12 new joint bases
required DOD to define the governance structure over how these joint
bases should be organized, the associated chain of command authority,
and the operational concepts for managing these joint bases. [Footnote
35] According to service officials, some of their most challenging
issues to resolve include 1) transferring real property and budget
authority to the lead service, 2) determining standard levels of base
operating support and which base functions to transfer to the lead
service, 3) deciding whether civilian personnel on a joint base will
become employees of the lead service, 4) agreeing on common terminology
and standards, and 5) funding contributions from each service. These
challenges to establishing joint bases have been problematic since each
service has its own concept of how installations should be managed and
organized. In particular, during recent congressional testimony, the
Air Force expressed views on joint basing concepts contrary to those of
OSD and the other services. [Footnote 36] To overcome these challenges,
OSD formed a special working group to resolve these issues and OSD
officials told us they would approve the joint basing business plan
when more of the planning details have been resolved.
* Realign supply, storage, and distribution management at multiple
locations: There are several potential issues between the Defense
Logistics Agency and the military services that may affect the planned
implementation of the recommendation. While baseline agreements have
been reached between the Defense Logistics Agency and the services on
the transfer of supply-related personnel positions and related
inventories to the Defense Logistics Agency, some important aspects of
the implementation plans are incomplete and still need to be resolved.
For example, performance-based agreements that will establish
responsibilities, metrics to measure performance, costs, and business
rules between the Defense Logistics Agency and the services have yet to
be negotiated and agreed upon. Additionally, the funding and decision-
making process for future maintenance, upgrades, usage, and integration
of information technology systems transferring to Defense Logistics
Agency has not been agreed to. Lastly, due to the way the Defense
Logistics Agency plans to implement the recommendation by staging the
personnel transfers over time by each military service, it plans to
apply lessons learned to resolve issues as implementation proceeds. We
also reviewed a separate BRAC action, which is part of this
recommendation, in more detail and issued our report in October 2007.
[Footnote 37]
* Co-locate medical command headquarters: The affected agencies have
had challenges in reaching agreement on where to co-locate these
medical commands. Specifically, the Air Force and OSD Health Affairs
have disagreed with the business manager on associated cost and
implementation time frames. As such, OSD has not yet approved the
business plan for this recommendation. As a result of these
coordination challenges, the planning process has lengthened beyond
that which DOD officials initially expected, which could result in
delayed implementation of certain recommendations. The need for gaining
consensus about planning and implementation details among the services
and defense agencies could continue throughout the BRAC implementation
period. At the same time, DOD believes the review process helps to
ensure that BRAC actions meet the intent of the law, are accurate, and
effectively coordinated. However, if gaining consensus among these
entities continues to be a challenge or if new organizations
established under BRAC continue to lack fully developed operational
concepts and organizational structures, it may become increasingly
difficult to implement these recommendations before the statutory 2011
deadline.
Conclusion:
DOD recognizes that its BRAC recommendations and its implementation are
of high public interest. As such, it is paramount that DOD communicates
openly about the expected savings that could result from the
implementation of BRAC actions. As long as DOD continues to assert that
nearly half of its estimated $4 billion in annual recurring BRAC
savings come from military personnel reassignments, which will not free
up funds for other defense priorities, DOD could create a false sense
that BRAC 2005 will result in a much higher dollar savings than will
actually be realized to readily fund other priorities. Without
explaining the difference between annual recurring savings attributable
to military personnel reassignments and annual recurring savings that
will make funds available for other defense priorities, DOD could
lessen the credibility of the BRAC program and decrease the public‘s
trust in the BRAC process. Greater transparency over the source of
expected BRAC savings could help to preserve public confidence in the
integrity of the BRAC program.
Recommendation for Executive Action:
To provide more transparency over DOD‘s estimated annual recurring
savings from BRAC implementation, we recommend that the Secretary of
Defense direct the Under Secretary of Defense for Acquisition,
Technology and Logistics, in consultation with the Office of the Under
Secretary of Defense (Comptroller), to explain, in DOD‘s BRAC budget
submission to Congress, the difference between annual recurring savings
attributable to military personnel entitlements and annual recurring
savings that will readily result in funds available for other defense
priorities.
Agency Comments and Our Evaluation:
In written comments on a draft of this report, DOD concurred with our
recommendation and agreed to include an explanation of the annual
recurring savings in its BRAC budget justification material that
accompanies the annual President‘s budget. DOD also noted in its
comments to us that military personnel reductions attributable to a
BRAC recommendation as savings are as real as savings generated through
end strength reductions. DOD also stated that while it may not reduce
overall end strength, its reductions in military personnel for each
recommendation at a specific location are real and these personnel
reductions allow the department to reapply these military personnel to
support new capabilities and improve operational efficiencies. While we
recognize these benefits from reapplying freed up military personnel to
other locations due to implementing BRAC recommendations, we do
question that nearly half of DOD‘s annual recurring savings estimate of
$4 billion includes military personnel entitlements”such as salaries
and housing allowances”for military personnel DOD plans to shift to
other positions but does not plan to eliminate thus requiring DOD to
continue paying the salaries and benefits. While DOD disagrees with us,
we do not believe that shifting or transferring personnel to other
locations produces tangible dollar savings outside the military
personnel accounts that DOD can use to fund other defense priorities
since these personnel will continue to receive salaries and benefits.
DOD did acknowledge however, that these savings may not be available to
fund other defense priorities because they have already been spent to
fund military personnel priorities. It is also worth noting that DOD
commented that although its net annual recurring savings estimates have
decreased from $4.2 billion to $4 billion, these savings still
represent a significant benefit that will result from the
implementation of BRAC recommendations. DOD‘s written comments are
reprinted in appendix VII. DOD also provided technical comments, which
we have incorporated into this report as appropriate.
We are sending copies of this report to interested congressional
committees; the Secretaries of Defense; the Secretaries of the Army,
Navy, and Air Force; Commandant of the Marine Corps; and the Director,
Office of Management and Budget. We will also make copies available to
others upon request. In addition, the report will be available at no
charge on GAO‘s Web site at [hyperlink, http://www.gao.gov].
If you or your staff has any questions concerning this report, please
contact me on (202) 512-4523 or by e-mail at leporeb@gao.gov. Contact
points for our Offices of Congressional Relations and Public Affairs
are on the last page of this report. GAO staff that made major
contributions to this report are listed in appendix VIII.
Signed by:
Brian J. Lepore:
Director Defense Capabilities and Management:
List of Congressional Addressees:
The Honorable Carl Levin:
Chairman:
The Honorable John McCain:
Ranking Member:
Committee on Armed Services:
United States Senate:
The Honorable Daniel K. Inouye:
Chairman:
The Honorable Ted Stevens:
Ranking Member:
Subcommittee on Defense Committee on Appropriations:
United States Senate:
The Honorable Tim Johnson:
Chairman:
The Honorable Kay Bailey Hutchison:
Ranking Member:
Subcommittee on Military Construction, Veterans Affairs, and Related
Agencies:
Committee on Appropriations:
United States Senate:
The Honorable Susan Collins:
Ranking Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Ike Skelton:
Chairman:
The Honorable Duncan L. Hunter:
Ranking Member:
Committee on Armed Services:
House of Representatives:
The Honorable John P. Murtha, Jr.:
Chairman:
The Honorable C.W. Bill Young:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives:
The Honorable Chet Edwards:
Chairman:
The Honorable Roger F. Wicker:
Ranking Member:
Subcommittee on Military Construction, Veterans Affairs, and Related
Agencies:
Committee on Appropriations:
House of Representatives:
The Honorable Tom Davis:
Ranking Member:
Committee on Oversight and Government Reform:
House of Representatives:
[End of section]
Appendix I: Scope and Methodology:
We reviewed the Defense Base Closure and Realignment Commission‘s 182
recommendations to realign and close military bases, but mostly focused
our work on the recommendations that changed the most in expected costs
and savings compared to the Commission‘s estimates. Recognizing that
the Department of Defense (DOD) was in the process of initial planning
for base realignment and closure (BRAC) implementation, and the
associated financial data were changed frequently during our review, we
compared BRAC cost and savings estimates primarily using two key
publicly available documents”the 2005 BRAC Commission report to the
President released in September 2005 and DOD‘s latest BRAC budget
submission provided to Congress in February 2007. We used data from the
BRAC Commission report to the President because the estimates contained
in this report were the closest estimates available associated with the
final and approved BRAC recommendations. We used DOD‘s most recent BRAC
budget submission because it was the most authoritative information
publicly available for making broad comparisons of BRAC cost and
savings estimates. Specifically, we compared the change in cost
estimates as well as the estimates for net annual recurring savings
that DOD expects to incur after BRAC implementation and noted those
recommendations that have increased the most in expected costs and
decreased the most in expected savings. In addition, we used the BRAC
Commission‘s data generated from DOD‘s estimation model, known as the
Cost of Base Realignment Actions, to determine changes in expected one-
time costs, to include military construction cost estimates and
inflation. We generally reported costs and savings in current dollars
and not constant dollars except where noted.
To calculate DOD‘s estimate of net annual recurring savings, we used
OSD‘s data provided to us for estimated savings in fiscal year 2012”the
year after OSD expects all recommendations to be completed”because
these data more fully captured these savings and allowed us to
replicate the same methodology used by the BRAC Commission in its
calculation of this estimate. We used OSD‘s fiscal year 2012 data and
subtracted the estimates for annual recurring costs from the estimates
for annual recurring savings, which is the same method both DOD and we
have used for prior BRAC rounds. To determine expected 20-year
savings”also known as the 20-year net present value”we used the same
formulas and assumptions as DOD and the BRAC Commission used to
calculate these savings. [Footnote 38] Specifically, we used DOD‘s BRAC
fiscal year 2008 budget data for expected costs and savings to
implement each recommendation for fiscal years 2006 through 2011. We
also used data that the BRAC Office in the Office of the Deputy Under
Secretary of Defense for Installations and Environment provided us for
expected net annual recurring savings after the completion of each
recommendation for fiscal years 2012 to 2025. We then converted these
data to fiscal year constant 2005 dollars using DOD price indexes to
distinguish real changes from changes due to inflation. We used fiscal
year 2005 dollars to calculate 20-year savings because the BRAC
Commission also used fiscal year 2005 dollars for this calculation.
[Footnote 39] Finally, we calculated how many years it would take for
expected BRAC savings to recoup the expected initial investment costs
to implement the recommendations, comparing the fiscal years, or break-
even points, when cumulative net savings would exceed cumulative one-
time costs. We did this to be consistent with the way DOD had reported
their break-even points for past BRAC rounds, which is a methodology we
also replicated in our prior reports on BRAC implementation.
To assess the reliability of DOD‘s BRAC cost and savings data, we
tested computer-generated data for errors, reviewed relevant
documentation, and discussed data quality control procedures with
officials at the Office of the Secretary of Defense (OSD) BRAC Office.
We determined that the data were sufficiently reliable for the purposes
of making broad comparisons between DOD‘s reported cost and savings
estimates and the BRAC Commission‘s reported estimates.
To determine why DOD‘s estimates changed compared to the BRAC
Commission‘s estimates, we reviewed over 200 OSD-approved business
plans that outlined actions, time frames, and financial estimates for
implementing each BRAC recommendation. We also obtained and analyzed
information from the U.S. Army Corps of Engineers about its recent
initiative to transform how it manages military construction projects
and how these new initiatives are expected to reduce military
construction costs during BRAC implementation. We did not validate the
services‘ or defense agencies‘ BRAC military construction requirements
because DOD‘s Office of the Inspector General, the Army Audit Agency,
the Naval Audit Service, and the Air Force Audit Agency were reviewing
BRAC military construction projects at the time of this report. Their
work in this area is expected to continue over the next several years.
However, we met with staff of these audit services periodically over
the course of our review.
Further, we met periodically with officials at the OSD BRAC office and
corresponding BRAC implementation offices in the Army, Navy, and Air
Force to determine why DOD‘s estimates changed compared to the BRAC
Commission‘s estimates. We also met with these officials to discuss
their roles and responsibilities as they began BRAC implementation
planning and to obtain their perspectives on any implementation
challenges that they encountered. Given the unprecedented number of
BRAC 2005 closures and realignments, we focused our analysis on broad
issues affecting DOD‘s cost and savings estimates and implementation
challenges rather than on specific implementation issues of individual
recommendations.
To obtain the perspective of installation and command officials
directly involved in BRAC implementation planning and execution, we
visited 17 bases and 8 major commands affected by BRAC. We selected
these bases and commands because they were among the closures or
realignments that DOD projected to have significant costs or savings,
or because we wanted to obtain more information about particular
implementation issues. Installations we visited include:
* Aberdeen Proving Ground, Maryland;
* Brooks City-Base, Texas;
* Eglin Air Force Base, Florida;
* Fort Belvoir, Virginia;
* Fort Benning, Georgia;
* Fort Bliss, Texas;
* Fort Dix, New Jersey;
* Fort McPherson, Georgia;
* Fort Monmouth, New Jersey;
* Fort Monroe, Virginia;
* Fort Sam Houston, Texas;
* Lackland Air Force Base, Texas;
* McGuire Air Force Base, New Jersey;
* National Naval Medical Center, Maryland;
* Randolph Air Force Base, Texas;
* Rock Island Army Arsenal, Illinois; and:
* Walter Reed Army Medical Center, District of Columbia.
In addition, we met with officials from eight commands to obtain a
command-level perspective about BRAC implementation and because these
commands were involved in coordinating the business plans or were
responsible for key decisions in implementation planning. Commands
visited include the Air Force‘s Air Education and Training Command;
Army Communications–Electronics Life Cycle Management Command; Army
Forces Command; Army Information Systems Engineering Command; Army
Medical Command; Army Training and Doctrine Command; Naval
Installations Command; and the U.S. Army Corps of Engineers. As we
obtained information concerning implementation challenges during
interviews, we assessed the reliability of that information by asking
similar questions from officials at different military services at the
installation and headquarters levels.
We conducted our work from November 2005, when the BRAC recommendations
became effective, through October 2007 so we could analyze data in
DOD‘s BRAC budget submission provided to Congress in February 2007. Our
work was done in accordance with generally accepted government auditing
standards.
[End of section]
Appendix II: BRAC Recommendations with the Largest Increases in
Estimated Costs:
Appendix II lists specific base realignment and closure (BRAC)
recommendations that have increased the most in estimated one-time
costs compared to the BRAC Commission estimates reported in September
2005. Table 3 shows that the Department of Defense‘s (DOD) one-time
implementation cost estimates have increased by more than $50 million
each for 33 recommendations compared to BRAC Commission estimates.
Table 3: BRAC Recommendations That Increased by More Than $50 Million
in Estimated One-Time Costs, Fiscal Years 2006 through 2011 (Dollars in
millions):
Recommendation: Close National Geospatial-Intelligence Agency leased
locations and realign others to Fort Belvoir, VA;
BRAC 2005 Commission reported estimates[a]: $1,117.30;
DOD‘s fiscal year 2008 budget estimates[b]: $2,090.97;
Difference, Amount: $973.67;
Difference, Percent: 87.
Recommendation: Realign Walter Reed Army Medical Center to Bethesda
National Naval Medical Center, MD and to Fort Belvoir, VA;
BRAC 2005 Commission reported estimates[a]: 988.76;
DOD‘s fiscal year 2008 budget estimates[b]: 1,688.38;
Difference, Amount: 699.62;
Difference, Percent: 71.
Recommendation: Realign Maneuver Training to Fort Benning, GA;
BRAC 2005 Commission reported estimates[a]: 773.10;
DOD‘s fiscal year 2008 budget estimates[b]: 1,454.65;
Difference, Amount: 681.55;
Difference, Percent: 88.
Recommendation: Close Fort Monmouth, NJ;
BRAC 2005 Commission reported estimates[a]: 780.43;
DOD‘s fiscal year 2008 budget estimates[b]: 1,458.11;
Difference, Amount: 677.68;
Difference, Percent: 87.
Recommendation: Co-locate miscellaneous OSD, defense agency, and field
activity leased locations;
BRAC 2005 Commission reported estimates[a]: 601.75;
DOD‘s fiscal year 2008 budget estimates[b]: 1,200.00;
Difference, Amount: 598.25;
Difference, Percent: 99.
Recommendation: Establish San Antonio Regional Medical Center and
realign enlisted medical training to Fort Sam Houston, TX;
BRAC 2005 Commission reported estimates[a]: 1,040.90.
DOD‘s fiscal year 2008 budget estimates[b]: 1,591.02;
Difference, Amount: 550.12;
Difference, Percent: 53.
Recommendation: Realign to establish Combat Service Support Center at
Fort Lee, VA;
BRAC 2005 Commission reported estimates[a]: 754.00;
DOD‘s fiscal year 2008 budget estimates[b]: 1,145.40;
Difference, Amount: 391.40;
Difference, Percent: 52.
Recommendation: Realign supply, storage, and distribution management;
BRAC 2005 Commission reported estimates[a]: 192.70;
DOD‘s fiscal year 2008 budget estimates[b]: 577.32;
Difference, Amount: 384.62;
Difference, Percent: 200.
Recommendation: Consolidate Defense Information Systems Agency at Fort
Meade, MD;
BRAC 2005 Commission reported estimates[a]: 219.98;
DOD‘s fiscal year 2008 budget estimates[b]: 572.83;
Difference, Amount: 352.85;
Difference, Percent: 160.
Recommendation: Close Fort McPherson, GA;
BRAC 2005 Commission reported estimates[a]: 214.54;
DOD‘s fiscal year 2008 budget estimates[b]: 550.07;
Difference, Amount: 335.53;
Difference, Percent: 156.
Recommendation: Close Brooks City-Base, TX;
BRAC 2005 Commission reported estimates[a]: 325.30;
DOD‘s fiscal year 2008 budget estimates[b]: 592.30;
Difference, Amount: 267.00;
Difference, Percent: 82.
Recommendation: Consolidate/co-locate active and reserve personnel and
recruiting centers for Army and Air Force;
BRAC 2005 Commission reported estimates[a]: 128.73;
DOD‘s fiscal year 2008 budget estimates[b]: 370.02;
Difference, Amount: 241.29;
Difference, Percent: 187.
Recommendation: Co-locate military department investigation agencies
with DOD Counterintelligence and Security Agency to Marine Corps Base
Quantico, VA;
BRAC 2005 Commission reported estimates[a]: 171.99;
DOD‘s fiscal year 2008 budget estimates[b]: 388.14;
Difference, Amount: 216.15;
Difference, Percent: 126.
Recommendation: Close Fort Monroe, VA;
BRAC 2005 Commission reported estimates[a]: 72.40;
DOD‘s fiscal year 2008 budget estimates[b]: 288.06;
Difference, Amount: 215.66.
Difference, Percent: 298.
Recommendation: Co-locate missile and space defense agencies to
Redstone Arsenal, AL;
BRAC 2005 Commission reported estimates[a]: 178.20;
DOD‘s fiscal year 2008 budget estimates[b]: 373.53;
Difference, Amount: 195.33;
Difference, Percent: 110.
Recommendation: Close Naval Support Activity New Orleans, LA;
BRAC 2005 Commission reported estimates[a]: 46.15;
DOD‘s fiscal year 2008 budget estimates[b]: 232.73;
Difference, Amount: 186.58;
Difference, Percent: 404.
Recommendation: Realign Fort Hood, TX;
BRAC 2005 Commission reported estimates[a]: 435.80;
DOD‘s fiscal year 2008 budget estimates[b]: 621.75;
Difference, Amount: 185.95;
Difference, Percent: 43.
Recommendation: Realign to create joint centers for chemical,
biological, and medical research, development, and acquisition;
BRAC 2005 Commission reported estimates[a]: 55.23;
DOD‘s fiscal year 2008 budget estimates[b]: 233.92;
Difference, Amount: 178.69;
Difference, Percent: 324.
Recommendation: Close Lone Star Army Ammunition Plant, TX;
BRAC 2005 Commission reported estimates[a]: 29.00;
DOD‘s fiscal year 2008 budget estimates[b]: 173.43;
Difference, Amount: 144.43;
Difference, Percent: 498.
Recommendation: Consolidate depot level reparable procurement
management consolidation;
BRAC 2005 Commission reported estimates[a]: 124.90;
DOD‘s fiscal year 2008 budget estimates[b]: 263.89;
Difference, Amount: 138.99;
Difference, Percent: 111.
Recommendation: Reserve Component Transformation, TX;
BRAC 2005 Commission reported estimates[a]: 375.60;
DOD‘s fiscal year 2008 budget estimates[b]: 500.79;
Difference, Amount: 125.19;
Difference, Percent: 33.
Recommendation: Co-locate miscellaneous Air Force leased locations and
National Guard Headquarters leased locations;
BRAC 2005 Commission reported estimates[a]: 90.50;
DOD‘s fiscal year 2008 budget estimates[b]: 212.47;
Difference, Amount: 121.97;
Difference, Percent: 135.
Recommendation: Realign to relocate undergraduate pilot and navigator
training;
BRAC 2005 Commission reported estimates[a]: 71.70;
DOD‘s fiscal year 2008 budget estimates[b]: 193.19;
Difference, Amount: 121.49;
Difference, Percent: 169.
Recommendation: Relocate Army headquarters and field operating
activities:
BRAC 2005 Commission reported estimates[a]: 199.90;
DOD‘s fiscal year 2008 budget estimates[b]: 320.85;
Difference, Amount: 120.95;
Difference, Percent: 61.
Recommendation: Close Fort Gillem, GA;
BRAC 2005 Commission reported estimates[a]: 56.80;
DOD‘s fiscal year 2008 budget estimates[b]: 150.43;
Difference, Amount: 93.63;
Difference, Percent: 165.
Recommendation: Relocate miscellaneous Department of the Navy leased
locations;
BRAC 2005 Commission reported estimates[a]: 61.75;
DOD‘s fiscal year 2008 budget estimates[b]: 155.07;
Difference, Amount: 93.32;
Difference, Percent: 151.
Recommendation: Realign to create a Naval Integrated Weapons and
Armaments Research, Development, and Acquisition, Test and Evaluation
Center mostly at Naval Air Weapons Station China Lake, CA;
BRAC 2005 Commission reported estimates[a]: 343.33;
DOD‘s fiscal year 2008 budget estimates[b]: 426.95;
Difference, Amount: 83.62;
Difference, Percent: 24.
Recommendation: Realign to relocate Air Defense Artillery Center and
School to Fort Sill, OK;
BRAC 2005 Commission reported estimates[a]: 247.00;
DOD‘s fiscal year 2008 budget estimates[b]: 326.16;
Difference, Amount: 79.16;
Difference, Percent: 32.
Recommendation: Reserve Component Transformation, OK;
BRAC 2005 Commission reported estimates[a]: 168.70;
DOD‘s fiscal year 2008 budget estimates[b]: 238.89;
Difference, Amount: 70.19;
Difference, Percent: 42.
Recommendation: Consolidate Transportation Command components at Scott
Air Force Base, IL;
BRAC 2005 Commission reported estimates[a]: 101.88;
DOD‘s fiscal year 2008 budget estimates[b]: 171.60;
Difference, Amount: 69.72;
Difference, Percent: 68.
Recommendation: Realign defense research service-led laboratories at
multiple locations;
BRAC 2005 Commission reported estimates[a]: 136.05;
DOD‘s fiscal year 2008 budget estimates[b]: 203.39;
Difference, Amount: 67.34;
Difference, Percent: 49.
Recommendation: Reserve Component Transformation, NY;
BRAC 2005 Commission reported estimates[a]: 103.80;
DOD‘s fiscal year 2008 budget estimates[b]: 162.65;
Difference, Amount: 58.85;
Difference, Percent: 57.
Recommendation: Close Naval Air Station Brunswick, ME;
BRAC 2005 Commission reported estimates[a]: 193.12;
DOD‘s fiscal year 2008 budget estimates[b]: 245.97;
Difference, Amount: 52.85;
Difference, Percent: 27.
Source: GAO analysis of BRAC Commission and DOD data.
[a] In constant fiscal year 2005 dollars.
[b] In current dollars.
[End of table]
[End of section]
Appendix III: BRAC Recommendations with the Largest Decreases in
Estimated Net Annual Recurring Savings:
Appendix III lists specific base realignment and closure (BRAC)
recommendations that have decreased the most in estimated net annual
recurring savings compared to the BRAC Commission estimates. Table 4
shows that the Department of Defense‘s (DOD) net annual recurring
savings estimates have decreased by more than $25 million each for 13
recommendations compared to BRAC Commission estimates.
Table 4: BRAC Recommendations That Have Decreased by More Than $25
Million in Estimated Net Annual Recurring Savings, Projected for Fiscal
Year 2012 (Dollars in millions):
Recommendation: Close National Geospatial-Intelligence Agency leased
locations and realign others at Fort Belvoir, VA;
BRAC 2005 Commission reported estimates[a]: $127.70;
DOD‘s fiscal year 2008 budget estimates[b]: $35.48;
Difference, Amount: ($92.23);
Difference, Percent: 72.
Recommendation: Establish joint bases at multiple locations;
BRAC 2005 Commission reported estimates[a]: 183.76;
DOD‘s fiscal year 2008 budget estimates[b]: 116.39;
Difference, Amount: (67.37);
Difference, Percent: 37.
Recommendation: Realign Fort Hood, TX[c];
BRAC 2005 Commission reported estimates[a]: (45.27);
DOD‘s fiscal year 2008 budget estimates[b]: (105.78);
Difference, Amount: (60.51);
Difference, Percent: 134.
Recommendation: Realign supply, storage, and distribution management;
BRAC 2005 Commission reported estimates[a]: 203.21;
DOD‘s fiscal year 2008 budget estimates[b]: 157.58;
Difference, Amount: (45.63);
Difference, Percent: 22.
Recommendation: Realign Grand Forks Air Force Base, ND;
BRAC 2005 Commission reported estimates[a]: 66.69;
DOD‘s fiscal year 2008 budget estimates[b]: 25.06;
Difference, Amount: (41.63);
Difference, Percent: 62.
Recommendation: Close Deseret Chemical Depot, UT;
BRAC 2005 Commission reported estimates[a]: 37.95;
DOD‘s fiscal year 2008 budget estimates[b]: 0;
Difference, Amount: (37.95);
Difference, Percent: 100.
Recommendation: Establish San Antonio Regional Medical Center and
realign enlisted medical training to Fort Sam Houston, TX;
BRAC 2005 Commission reported estimates[a]: 129.04;
DOD‘s fiscal year 2008 budget estimates[b]: 91.22;
Difference, Amount: (37.82);
Difference, Percent: 29.
Recommendation: Close Naval Air Station Willow Grove, PA and realign
Cambria Regional Airport, Johnstown, PA;
BRAC 2005 Commission reported estimates[a]: 73.90;
DOD‘s fiscal year 2008 budget estimates[b]: 36.32;
Difference, Amount: (37.58);
Difference, Percent: 51.
Recommendation: Realign to establish Joint Strike Fighter initial joint
training site at Eglin Air Force Base, FL[c];
BRAC 2005 Commission reported estimates[a]: (3.33);
DOD‘s fiscal year 2008 budget estimates[b]: (40.69);
Difference, Amount: (37.36);
Difference, Percent: 1122.
Recommendation: Close Umatilla Chemical Depot, OR;
BRAC 2005 Commission reported estimates[a]: 34.69;
DOD‘s fiscal year 2008 budget estimates[b]: 0;
Difference, Amount: (34.69);
Difference, Percent: 100.
Recommendation: Realign Otis Air National Guard Base, MA, and Lambert-
St. Louis International Airport Air Guard Station, MO[c];
BRAC 2005 Commission reported estimates[a]: 27.88;
DOD‘s fiscal year 2008 budget estimates[b]: (6.21);
Difference, Amount: (34.09);
Difference, Percent: 122.
Recommendation: Realign Operational Army (Integrated Global Presence
and Basing Strategy)[c];
BRAC 2005 Commission reported estimates[a]: (294.68);
DOD‘s fiscal year 2008 budget estimates[b]: (324.78);
Difference, Amount: (30.10);
Difference, Percent: 10.
Recommendation: Co-locate miscellaneous Air Force leased locations and
National Guard Headquarters leased locations;
BRAC 2005 Commission reported estimates[a]: 30.84;
DOD‘s fiscal year 2008 budget estimates[b]: 1.08;
Difference, Amount: (29.76);
Difference, Percent: 97.
Source: GAO analysis of BRAC Commission and DOD data.
[a] In constant fiscal year 2005 dollars.
[b] Data provided by DOD for fiscal year 2012 expected savings.
[c] Both the BRAC Commission and subsequently DOD estimated that this
recommendation would incur a net annual recurring cost (denoted by the
parenthesis) after the BRAC implementation period rather than a net
annual recurring savings. We used the parenthesis to denote an increase
in net annual recurring cost. We included this recommendation because
DOD‘s current estimate shows net annual recurring cost has increased by
more than $25 million.
[End of table]
[End of section]
Appendix IV: BRAC Recommendations DOD Expects to Cost the Most:
Appendix IV lists individual base realignment and closure (BRAC)
recommendations that the Department of Defense (DOD) expects to cost
the most to implement. DOD expects 24 recommendations (13 percent) to
generate 65 percent of the one-time costs to implement BRAC
recommendations during fiscal years 2006 through September 15, 2011, as
shown in table 5.
Table 5: BRAC Recommendations DOD Expects to Cost the Most to
Implement, Fiscal Years 2006 through 2011 (Dollars in millions):
Recommendation: Realign Operational Army (Integrated Global Presence
and Basing Strategy);
One-time costs: $2,918.
Recommendation: Close National Geospatial-Intelligence Agency leased
locations and realign others to Fort Belvoir, VA;
One-time costs: 2,091.
Recommendation: Realign Walter Reed Army Medical Center to Bethesda
National Naval Medical Center, MD and to Fort Belvoir, VA;
One-time costs: 1,688.
Recommendation: Establish San Antonio Regional Medical Center and
realign medical enlisted training to Fort Sam Houston, TX;
One-time costs: 1,591.
Recommendation: Close Fort Monmouth, NJ 1,458Realign Maneuver Training
to Fort Benning, GA;
One-time costs: 1,455.
Recommendation: Co-locate miscellaneous OSD, defense agency, and field
activity leased locations;
One-time costs: 1,200.
Recommendation: Realign to establish Combat Service Support Center at
Fort Lee, VA;
One-time costs: 1,145.
Recommendation: Realign Fort Hood, TX;
One-time costs: 622.
Recommendation: Close Brooks City-Base, TX;
One-time costs: 592.
Recommendation: Realign supply, storage, and distribution management;
One-time costs: 577.
Recommendation: Consolidate Defense Information Systems Agency to Fort
Meade, MD;
One-time costs: 573.
Recommendation: Close Fort McPherson, GA;
One-time costs: 550.
Recommendation:
Army reserve component transformation, TX;
One-time costs: 501.
Recommendation: Realign to create a Naval Integrated Weapons and
Armaments Research, Development, and Acquisition, Test and Evaluation
Center mostly at Naval Air Weapons Station China Lake, CA;
One-time costs: 427.
Recommendation: Co-locate military department investigation agencies
with DOD Counterintelligence and Security Agency to Marine Corps Base
Quantico, VA;
One-time costs: 388.
Recommendation: Co-locate missile and space defense agencies to
Redstone Arsenal, AL;
One-time costs: 374.
Recommendation: Consolidate/co-locate active and reserve personnel and
recruiting centers for Army and Air Force;
One-time costs: 370.
Recommendation: Realign Fort Bragg, NC;
One-time costs: 343.
Recommendation: Realign to relocate Air Defense Artillery Center and
School to Fort Sill, OK;
One-time costs: 326.
Recommendation: Relocate Army headquarters and field operating
activities;
One-time costs: 321.
Recommendation: Close Fort Monroe, VA;
One-time costs: 288.
Recommendation: Consolidate Defense Finance and Accounting Service;
One-time costs: 280.
Recommendation: Close Naval Air Station Willow Grove, PA and realign
Cambria Regional Airport, Johnstown, PA;
One-time costs: 266.
Total one-time estimated costs from the recommendations listed above:
$20,344.
Total one-time estimated costs from all recommendations: $31,160.
Percentage of one-time costs from recommendations listed above of all
recommendations: 65%.
Source: GAO analysis based on DOD data.
Note: Totals may not add because of rounding.
[End of table]
[End of section]
Appendix V: BRAC Recommendations DOD Expects to Save the Most Annually:
Appendix V lists individual base realignment and closure (BRAC)
recommendations that the Department of Defense (DOD) expects to save
the most annually after it has implemented the recommendations. DOD
expects 28 recommendations (15 percent) to generate 85 percent of the
net annual recurring savings as shown in table 6.
Table 6: BRAC Recommendations DOD Expects to Save the Most Annually
After Implementation, Projected for Fiscal Year 2012 (Fiscal year 2012
dollars in millions):
Recommendation: Realign to establish fleet readiness centers;
Net annual recurring savings[a]: $304.
Recommendation: Consolidate Defense Finance and Accounting Service;
Net annual recurring savings[a]: 284.
Recommendation: Realign Cannon Air Force Base, NM[b];
Net annual recurring savings[a]: 260.
Recommendation: Realign Pope Air Force Base, NC;
Net annual recurring savings[a]: 212.
Recommendation: Realign Walter Reed Army Medical Center to Bethesda
National Naval Medical Center, MD and to Fort Belvoir, VA;
Net annual recurring savings[a]: 172.
Recommendation: Consolidate/co-locate active and reserve personnel and
recruiting centers for Army and Air Force;
Net annual recurring savings[a]: 170.
Recommendation: Realign supply, storage, and distribution management;
Net annual recurring savings[a]: 158.
Recommendation: Close Fort Monmouth, NJ;
Net annual recurring savings[a]: 154.
Recommendation: Consolidate depot level reparable procurement
management consolidation;
Net annual recurring savings[a]: 150.
Recommendation: Realign to establish Combat Service Support Center at
Fort Lee, VA;
Net annual recurring savings[a]: 148.
Recommendation: Realign Maneuver Training to Fort Benning, GA;
Net annual recurring savings[a]: 133.
Recommendation: Establish joint bases at multiple locations;
Net annual recurring savings[a]: 116.
Recommendation: Close Naval Air Station Brunswick, ME;
Net annual recurring savings[a]: 115.
Recommendation: Realign by converting medical inpatient services to
clinics at various installations;
Net annual recurring savings[a]: 106.
Recommendation: Consolidate Transportation Command components at Scott
Air Force Base, IL;
Net annual recurring savings[a]: 97.
Recommendation: Close Fort McPherson, GA;
Net annual recurring savings[a]: 94.
Recommendation: Close Brooks City-Base, TX;
Net annual recurring savings[a]: 92.
Recommendation: Establish San Antonio Regional Medical Center and
realign enlisted medical training to Fort Sam Houston, TX;
Net annual recurring savings[a]: 91.
Recommendation: Co-locate miscellaneous OSD, defense agencies, and
field activity leases at Fort Belvoir, VA;
Net annual recurring savings[a]: 72.
Recommendation: Close Naval Station Ingleside, TX and realign Naval Air
Station Corpus Christi, TX;
Net annual recurring savings[a]: 69.
Recommendation: Realign to create a Naval Integrated Weapons and
Armaments Research, Development, and Acquisition, Test and Evaluation
Center mostly at Naval Air Weapons Station China Lake, CA;
Net annual recurring savings[a]: 68.
Recommendation: Close Fort Monroe, VA;
Net annual recurring savings[a]: 65.
Recommendation: Consolidate Defense Information Systems Agency at Fort
Meade, MD;
Net annual recurring savings[a]: 52.
Recommendation: Relocate medical command headquarters;
Net annual recurring savings[a]: 51.
Recommendation: Realign to relocate Air Defense Artillery Center and
School to Fort Sill, OK;
Net annual recurring savings[a]: 50.
Recommendation: Co-locate missile and space defense agencies to
Redstone Arsenal, AL;
Net annual recurring savings[a]: 45.
Recommendation: Realign defense research service-led laboratories at
multiple locations;
Net annual recurring savings[a]: 43.
Recommendation: Close Naval Air Station Atlanta, GA;
Net annual recurring savings[a]: 42.
Total net annual recurring savings from the recommendations listed
above: $3,413.
Total net annual recurring savings from all recommendations: $4,014.
Percentage of net annual recurring savings from recommendations listed
above of all recommendations: 85%.
Source: GAO analysis based on DOD data.
Note: Totals may not add because of rounding.
[a] Data provided by DOD for fiscal year 2012 expected savings.
[b] In May 2005, DOD proposed closing Cannon Air Force Base, New
Mexico. In September 2005, the BRAC Commission stated that Cannon could
remain open if DOD identified a new mission for the base. Subsequently,
the Air Force announced in June 2006 that Cannon will remain open
because they plan to activate a new mission at the installation.
[End of table]
[End of section]
Appendix VI: BRAC Recommendations DOD Expects to Save the Most Over a
20-Year Period:
Appendix VI lists individual base realignment and closure (BRAC)
recommendations that the Department of Defense (DOD) expects to save
the most over a 20-year period. DOD expects the implementation of 29
recommendations (16 percent) to generate 85 percent of the 20-year
savings as shown in table 7.
Table 7: BRAC Recommendations DOD Expects to Save the Most Over a 20-
Year Period, Fiscal Years 2006 through 2025 (Constant fiscal year 2005
dollars in millions):
Recommendation: Realign to establish fleet readiness centers;
20-year net present value[a]: $3,361.
Recommendation: Realign Cannon Air Force Base, NM[b];
20-year net present value[a]: 2,837.
Recommendation: Consolidate Defense Finance and Accounting Service;
20-year net present value[a]: 2,800.
Recommendation: Realign Pope Air Force Base, NC;
20-year net present value[a]: 2,382.
Recommendation: Consolidate/co-locate active and reserve personnel and
recruiting centers for Army and Air Force;
20-year net present value[a]: 1,436.
Recommendation: Consolidate depot level reparable procurement
management;
20-year net present value[a]: 1,367.
Recommendation: Realign supply, storage, and distribution management;
20-year net present value[a]: 1,251.
Recommendation: Establish joint bases at multiple locations;
20-year net present value[a]: 1,032.
Recommendation: Realign by converting medical inpatient services to
clinics at various installations;
20-year net present value[a]: 1,015.
Recommendation: Consolidate Transportation Command components at Scott
Air Force Base, IL;
20-year net present value[a]: 930.
Recommendation: Close Naval Air Station Brunswick, ME;
20-year net present value[a]: 950.
Recommendation: Close Naval Station Ingleside, TX and realign Naval Air
Station Corpus Christi, TX;
20-year net present value[a]: 488.
Recommendation: Relocate medical command headquarters;
20-year net present value[a]: 482.
Recommendation: Realign to establish Combat Service Support Center at
Fort Lee, VA;
20-year net present value[a]: 457.
Recommendation: Realign commodity management privatization;
20-year net present value[a]: 454.
Recommendation: Close Fort McPherson, GA;
20-year net present value[a]: 452.
Recommendation: Close Naval Station Pascagoula, MS;
20-year net present value[a]: 446.
Recommendation: Close Brooks City-Base, TX;
20-year net present value[a]: 417.
Recommendation: Close Fort Monmouth, NJ;
20-year net present value[a]: 381.
Recommendation: Close Naval Air Station Atlanta, GA;
20-year net present value[a]: 372.
Recommendation: Close Fort Monroe, VA;
20-year net present value[a]: 330.
Recommendation: Co-locate miscellaneous Army leased locations;
20-year net present value[a]: 319.
Recommendation: Realign to create a Naval Integrated Weapons and
Armaments Research, Development, and Acquisition, Test and Evaluation
Center mostly at Naval Air Weapons Station China Lake, CA;
20-year net present value[a]: 285.
Recommendation: Realign to consolidate maritime command, control,
communications, computers, intelligence, surveillance, and
reconnaissance, research, development, and acquisition, test and
evaluation functions at multiple locations;
20-year net present value[a]: 272.
Recommendation: Realign defense research service-led laboratories at
multiple locations;
20-year net present value[a]: 268.
Recommendation: Realign Army Reserve Command and Control - Northeast;
20-year net present value[a]: 260.
Recommendation: Realign Mountain Home Air Force Base, ID;
20-year net present value[a]: 254.
Recommendation: Realign Walter Reed Army Medical Center to Bethesda
National Naval Medical Center, MD and to Fort Belvoir, VA;
20-year net present value[a]: 2251.
Recommendation: Close Fort Gillem, GA;
20-year net present value[a]: 249.
Total savings from the recommendations listed above: $25,756.
Total savings from only recommendations that accrue a net savings after
20 years: $30,358.
Percentage of savings from recommendations listed above of all
recommendations that accrue a net savings after 20 years: 85%.
Source: GAO analysis based on DOD data.
Notes: Totals may not add because of rounding.
[a] Net present value: A financial calculation that takes the time
value of money into account by determining the present value of the up-
front initial investment minus future net savings over a specified
period of time. In the context of BRAC, net present value is the total
one-time costs minus the total net savings that DOD expects to incur
from fiscal year 2006 through fiscal year 2025 to project 20-year
savings at 2.8 percent discount rate.
[b] In May 2005, DOD proposed closing Cannon Air Force Base, New
Mexico. In September 2005, the BRAC Commission stated that Cannon could
remain open if DOD identified a new mission for the base. Subsequently,
the Air Force announced in June 2006 that Cannon will remain open
because they plan to activate a new mission at the installation.
[End of table]
[End of section]
Appendix VII: Comments from the Department of Defense:
Office Of The Under Secretary Of Defense:
Acquisition, Technology And Logistics:
3000 Defense Pentagon:
Washington, Dc 20301-3000:
December 3, 2007:
Mr. Brian J. Lepore:
Director, Defense Capabilities and Management:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548-0001:
Dear Mr. Lepore:
This is the Department of Defense (DoD) response to the GAO draft
report, "Military Base Realignments And Closures: Cost Estimates Have
Increased and Are Likely to Continue to Evolve," dated November 5, 2007
(GAO Code 350840/GAO-08-159).
The Department appreciates the opportunity to comment on this draft
report and concurs with the GAO's one recommendation concerning
insertion of an explanation of the annual recurring savings in the
Department's Base Realignment and Closure (BRAC) 2005 budget
justification material executive summary, as indicated in the enclosed.
The report accurately characterizes the Department's viewpoint that,
even though the BRAC 2005 round is costing more and saving less than
originally estimated in 2005, implementation of these recommendations
are expected to enhance defense capabilities as the Department reshapes
and realigns forces to meet future national security needs.
Regarding the increase in one-time costs between the original Cost of
Base Realignment Actions (COBRA) FY05 constant dollar estimates and the
estimates reflected in the FY 2008 President's Budget, the Department
agrees that the majority of that increase is associated with funding
Military Construction (MilCon) projects. With approximately 70 percent
of the BRAC 2005 FY08 President's Budget allocated to facilitize new
capabilities, it is understandable that most of the increase would be
associated with MilCon.
The reasons for such increases, beyond inflation, include management
decisions to pursue new construction versus use of renovated space, use
of site specific survey assessments, and to accommodate changes in unit
sizes, functions or responsibilities by increasing facilities, changing
configurations or building additional facilities. In other cases,
business decisions were made to enhance quality of life and training
infrastructure at installations receiving missions beyond those
initially estimated by COBRA.
Specifically, the Army added approximately $2 billion to improve
training ranges, consolidate reserve centers, for child care and other
quality of life facilities and in support of medical facilities.
The Department concurs with the GAO assessment that the original COBRA
model estimates, while valuable as a comparative tool, do not provide
estimates that the Department is expected to use in formulating the
BRAC budget against which Congress will appropriate funds.
Specifically, the Department's experience is such that the combination
of actual on-site surveys and better definition of requirements
contributed to MilCon cost increases as the more detailed
implementation planning process progressed.
Regarding the treatment of annual recurring savings, the Department
considers military personnel reductions attributable to a BRAC
recommendation as savings that are as real as savings generated through
end-strength reductions. While the Department may not reduce overall
end-strength, the reductions in military personnel for each
recommendation at a specific location are real. As is the case of
monetary savings, personnel reductions allow the Department to re-apply
these military personnel to support new capabilities and to improve
operational efficiencies. In this context, savings from military
personnel reductions are real savings. However, the Department
acknowledges that these savings may not be available to fund other
Defense priorities because they have already been spent to fund
military personnel priorities.
Finally, in spite of the fact that net annual recurring savings (ARS)
have decreased from $4.2 billion to $4.0 billion, as indicated in the
report, the Department emphasizes that the ARS still represents a
significant benefit that will result from successful implementation of
these recommendations.
The Department's comments regarding the specific recommendation in the
report are outlined in the enclosure. We appreciate the work performed
by the GAO.
Sincerely,
Signed by:
Phillip W. Grone:
Deputy Under Secretary of Defense:
(Installations and Environment):
Enclosure: As stated:
GAO Draft Report – Dated November 5, 2007:
GAO Code 350840/GAO-08-159:
"Military Base Realignments And Closures: Cost Estimates Have Increased
and Are Likely to Continue to Evolve"
Department Of Defense Comments To The Recommendation:
Recommendation: The GAO recommends that the Secretary of Defense direct
the Under Secretary of Defense for Acquisition, Technology and
Logistics, in consultation with the Office of the Under Secretary of
Defense (Comptroller), to explain, in DoD's budget submission to
Congress, the difference between annual recurring savings attributable
to military personnel entitlements and annual recurring savings that
will readily result in funds available for other defense priorities.
DOD Response: DoD concurs with this recommendation. The Department will
include an explanation of the annual recurring savings in its BRAC 2005
budget justification material executive summary that accompanies the
annual President's Budget. As explained in the Department's main
response to this draft report, personnel reductions allow the
Department to re-apply these military personnel to support new
capabilities and to improve operational efficiencies. In this context,
savings from military personnel reductions are real savings. However,
the Department acknowledges that these savings may not be available to
fund other Defense priorities because they have already been spent to
fund military personnel priorities.
[End of section]
Appendix VIII: GAO Contact and Staff Acknowledgments:
GAO Contact:
Brian J. Lepore, (202) 512-4523 or leporeb@gao.gov:
Acknowledgments:
In addition to the individual named above, Barry Holman, Director
(retired); Laura Talbott, Assistant Director; Leigh Caraher; Grace
Coleman; Susan Ditto; Thomas Mahalek; Julia Matta; Charles Perdue;
Benjamin Thompson; and Tristan T. To made key contributions to this
report.
Related GAO Products:
Military Base Realignments and Closures: Impact of Terminating,
Relocating, or Outsourcing the Services of the Armed Forces Institute
of Pathology. GAO-08-20. Washington, D.C.: November 9, 2007.
Military Base Realignments and Closures: Transfer of Supply, Storage,
and Distribution Functions from Military Services to Defense Logistics
Agency. GAO-08-121R. Washington, D.C.: October 26, 2007.
Defense Infrastructure: Challenges Increase Risks for Providing Timely
Infrastructure Support for Army Installations Expecting Substantial
Personnel Growth. GAO-07-1007. Washington, D.C.: September 13, 2007.
Military Base Realignments and Closures: Plan Needed to Monitor
Challenges for Completing More than 100 Armed Forces Reserve Centers.
GAO-07-1040. Washington, D.C.: September 13, 2007.
Military Base Realignments and Closures: Observations Related to the
2005 Round. GAO-07-1203R. Washington, D.C.: September 6, 2007.
Military Base Closures: Projected Savings from Fleet Readiness Centers
Are Likely Overstated and Actions Needed to Track Actual Savings and
Overcome Certain Challenges. GAO-07-304. Washington, D.C.: June 29,
2007.
Military Base Closures: Management Strategy Needed to Mitigate
Challenges and Improve Communication to Help Ensure Timely
Implementation of Air National Guard Recommendations. GAO-07-641.
Washington, D.C.: May 16, 2007.
Military Base Closures: Opportunities Exist to Improve Environmental
Cleanup Cost Reporting and to Expedite Transfer of Unneeded Property.
GAO-07-166. Washington, D.C.: January 30, 2007.
Military Bases: Observations on DOD‘s 2005 Base Realignment and Closure
Selection Process and Recommendations. GAO-05-905. Washington, D.C.:
July 18, 2005.
Military Bases: Analysis of DOD‘s 2005 Selection Process and
Recommendations for Base Closures and Realignments. GAO-05-785.
Washington, D.C.: July 1, 2005.
Military Base Closures: Observations on Prior and Current BRAC Rounds.
GAO-05-614. Washington, D.C.: May 3, 2005.
Military Base Closures: Updated Status of Prior Base Realignments and
Closures. 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. GAO-04-760. Washington, D.C.: May
17, 2004.
Military Base Closures: Observations on Preparations for the Upcoming
Base Realignment and Closure Round. GAO-04-558T. Washington, D.C.:
March 25, 2004.
[End of section]
Footnotes:
[1] In a 2001 testimony before Congress, the Secretary of Defense
stated that another BRAC round would generate recurring savings the
department could use for other higher-priority defense programs.
[2] About 15,000 of these soldiers are included in the 123,000
personnel mentioned above. Army plans to relocate the remaining
soldiers in realignment actions not related to BRAC.
[3] The Army plans to seek an increase in its active-duty end strength
by 65,000, and the Marine Corps plan to seek an increase in its active-
duty end strength by 27,000 over the next several years.
[4] BRAC legislation (Pub. L. No. 101-510, Title XXIX, as amended by
Pub. L. No. 107-107, Title XXX) provided for an independent commission
to review the Secretary of Defense‘s realignment and closure
recommendations and the commission had the authority to change these
recommendations if it determined that the Secretary deviated
substantially from the legally mandated selection criteria. The Defense
Base Closure and Realignment Commission (referred to in this report as
the BRAC Commission) presented its list of final recommendations to the
President of the United States, who approved them in their entirety.
The President subsequently forwarded these BRAC recommendations to
Congress, and they became effective on November 9, 2005.
[5] Military value refers to one or more of the first four BRAC
selection criteria (see fig. 1), which includes such considerations as
an installation‘s current and future mission capabilities, condition,
ability to accommodate future needs, and cost of operations. Whereas in
prior rounds, military value was a priority consideration, along with
costs and savings, economic impact to local communities, and other
concerns, the National Defense Authorization Act for Fiscal Year 2002
directed DOD to consider military value above all other criteria in the
BRAC 2005 round. Pub. L. No. 107-107, § 3002 (2001).
[6] 31 U.S.C. § 717.
[7] H.R. Rep. No. 110-146, at 514 (2007).
[8] Pub. L. No. 101-510, § 2904(a)(5), as amended, provides that the
Secretary shall complete all such closures and realignments no later
than the end of the 6-year period beginning on the date on which the
President transmits the report pursuant to section 2903(e) containing
the recommendations for such closures or realignments.
[9] The BRAC Commission reported its estimates in constant fiscal year
2005 dollars (i.e., excludes projected inflation), while DOD reported
BRAC estimates in the fiscal year 2008 BRAC budget submission to
Congress in current dollars (i.e., includes projected inflation).
[10] Pub. L. No. 101-510, § 2904, as amended (1990).
[11] The first round in 1988 was completed under the Defense
Authorization Amendments and Base Closure and Realignment Act (Pub. L.
No. 100-526, Title II, as amended (1988)). Subsequently, additional
BRAC rounds were completed in 1991, 1993, and 1995 as authorized in the
Defense Base Closure and Realignment Act of 1990 (Pub .L. No.101-510,
Title XXIX, as amended (1990)). The latest round”BRAC 2005”was
authorized in the National Defense Authorization Act for Fiscal Year
2002 (Pub. L. No. 107-107, Title XXX, (2001)).
[12] Specified DOD personnel are required 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. Pub. L. No. 101-510, § 2903(c)(5). The force
structure plan is the numbers, size, and composition of the units that
comprise U.S. forces, for example, divisions, air wings, aircraft,
tanks, and so forth. Pub. L. No. 101-510, § 2912(a)(1)(A).
[13] GAO, Military Bases: Analysis of DOD‘s 2005 Selection Process and
Recommendations for Base Closures and Realignments, GAO-05-785
(Washington, D.C.: July 1, 2005).
[14] The President was required to approve or disapprove the BRAC
Commission‘s recommendations in their entirety by September 23, 2005.
After they were approved, the recommendations were forwarded to
Congress, which had 45 days or until adjournment of Congress to
disapprove the recommendations on an all-or-none basis; otherwise, the
recommendations became effective.
[15] The COBRA model provided for several key outputs such as (1)
estimated one-time costs for such factors as military construction,
personnel severance, or moving costs over the implementation period;
(2) estimated savings for such factors as personnel reductions or
eliminations, or reduced operations and maintenance costs; (3) savings
that are expected to occur annually after the implementation period;
(4) the payback period for estimating when total savings will exceed
total costs; and (5) the 20-year savings, also known as net present
value, of implementing BRAC actions.
[16] Pub. L. No. 101-510, § 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.
[17] GAO, Military Bases: Analysis of DOD‘s 2005 Selection Process and
Recommendations for Base Closures and Realignments, GAO-05-785
(Washington, D.C.: July 1, 2005) and Military Bases: Analysis of DOD‘s
1995 Process and Recommendations for Closure and Realignment, GAO/NSIAD-
95-133 (Washington, D.C.: Apr. 14, 1995).
[18] OSD assigned one of the military services or a defense agency to
take the lead in developing business plans for each recommendation or a
distinct part of a recommendation. For recommendations affecting
multiple services or defense agencies, the military service or defense
agency with facility management authority at the gaining site usually
prepared the business plan.
[19] The BRAC Commission forwarded 182 BRAC recommendations to the
President who approved them in their entirety. Our analysis shows DOD
requested funds to implement 175 recommendations because 7
recommendations do not involve implementation costs for various
reasons.
[20] In DOD‘s initial BRAC fiscal year 2007 budget submission to
Congress in March 2006, the department stated that it did not have
enough time to formulate a reasonable BRAC budget and that the budget
submission contained significant funding shortfalls. Based on our
analysis of DOD‘s initial BRAC budget submission, we agreed and
believed it would have been inappropriate for us to use the data in our
analysis.
[21] Estimates for net annual recurring savings are based on DOD‘s
annual recurring costs and savings expected in 2012, the year after DOD
expects to complete BRAC implementation. OSD BRAC officials told us
they expect 2012 to be the first year to accrue the full amount of net
annual recurring savings because some recommendations are not expected
to be completed until late 2011. Based on data OSD provided us, DOD
expects to generate about $400 million more in annual recurring savings
using its 2012 data, which we have included in our analysis, compared
to the data provided in the department‘s fiscal year 2008 BRAC budget
submission to Congress.
[22] Payback period is a metric used by DOD and the BRAC Commission in
evaluating individual BRAC recommendations and represents the time
required to recoup up-front investment costs to implement BRAC
recommendations. Thus, payback or the break-even point is when
cumulative savings exceed cumulative costs.
[23] Twenty-year savings, also known as 20-year net present value in
the BRAC Commission‘s report, is a financial calculation that accounted
for the time value of money by determining the present value of future
savings minus up-front investment costs over a specified period of
time. Determining net present value is important because it illustrates
both the up-front investment costs and long-term savings in a single
amount. In the context of BRAC implementation, net present value is
calculated for a 20-year period from 2006 through 2025.
[24] Report by the Independent Review Group on Rehabilitative Care and
Administrative Processes at Walter Reed Army Medical Center and the
National Naval Medical Center, April 2007.
[25] Combining several existing schools and centers is associated with
three BRAC recommendations. These Army recommendations are (1) realign
the Armor School at Fort Knox, Kentucky, with the Infantry School at
Fort Benning, Georgia, to create the new Maneuver Training Center; (2)
realign various combat service support functions from various
installations to Fort Lee, Virginia, to establish a combined Combat
Service Support Center; and (3) realign the Air Defense Artillery
School from Fort Bliss, Texas, to Fort Sill, Oklahoma, to form the new
Net Fires Center.
[26] DOD Inspector General, Navy‘s Proposed Business Plan for Base
Realignment and Closure 2005 Recommendation 184, D-2007-127 (Arlington,
Va.: Sept. 25, 2007).
[27] GAO, Military Base Closures: Opportunities Exist to Improve
Environmental Cleanup Cost Reporting and Expedite Transfer of Unneeded
Property, GAO-07-166 (Washington, D.C.: Jan. 30, 2007).
[28] DOD Instruction 7041.3, Economic Analysis for Decisionmaking (Nov.
7, 1995) and Office of Management and Budget, Circular No. A-94,
Guidelines and Discount Rates for Benefit-Cost Analysis of Federal
Programs (Oct. 29, 1992).
[29] Although the BRAC Commission language refers to Cannon Air Force
Base as a realignment, this is in reference to establishing an enclave
at Cannon that could remain open until December 31, 2009, during which
time the Secretary of Defense could seek other newly identified
missions for possible assignment to Cannon.
[30] In commenting on a draft of this report, the Air Force BRAC Office
said they claimed these savings because the decision to reallocate Air
Force resources and mission to Cannon was made after the BRAC
recommendation was approved and was therefore, a non-BRAC programmatic
decision.
[31] GAO, Military Base Closures: Management Strategy Needed to
Mitigate Challenges and Improve Communication to Help Ensure Timely
Implementation of Air National Guard Recommendations, GAO-07-641
(Washington, D.C.: May 16, 2007).
[32] In the context of BRAC, actions are activities necessary to
implement final and approved recommendations of the BRAC Commission to
close or realign military installations.
[33] GAO, Military Base Realignments and Closures: Plan Needed to
Monitor Challenges for Completing More than 100 Armed Forces Reserve
Centers, GAO-07-1040 (Washington, D.C.: Sept. 13, 2007).
[34] House Appropriations Subcommittee on Defense hearing on Military
Medical Readiness and Related Issues, January 19, 2007.
[35] To establish joint bases, DOD plans to transfer various
installation management functions from bases that are contiguous or in
close proximity to each other to a designated lead military service.
For example, OSD plans to transform three bases”McGuire Air Force Base,
Fort Dix, and Naval Air Engineering Station Lakehurst–New Jersey”into
one joint base with the Air Force providing installation services.
[36] Testimony before the House Appropriations Subcommittee on Military
Construction and Veterans Affairs in March 2007.
[37] GAO, Military Base Realignments and Closures: Transfer of Supply,
Storage, and Distribution Functions from Military Services to Defense
Logistics Agency, GAO-08-121R (Washington, D.C.: Oct. 26, 2007).
[38] DOD reported 20-year savings estimates for each base closure and
realignment recommendation in its report to the BRAC Commission.
Subsequently, the BRAC Commission also reported 20-year savings
estimates for each BRAC recommendation in its report to the President.
OSD BRAC officials told us that DOD does not include 20-year savings
estimates in its BRAC budgets to Congress because this information is
not required. Consequently, we calculated 20-year savings for
comparison purposes in a manner consistent with the BRAC Commission‘s
calculation of these savings.
[39] Applying the same formulas and assumptions as used by the BRAC
Commission, we used a 2.8 percent discount rate to calculate the
accumulated net present value of expected 20-year savings.
[End of section]
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