Military Base Realignments and Closures
Plan Needed to Monitor Challenges for Completing More Than 100 Armed Forces Reserve Centers Gao ID: GAO-07-1040 September 13, 2007The Army is implementing 44 base realignment and closure (BRAC) recommendations to construct 125 new Armed Forces Reserve Centers (AFRC) and close 387 existing reserve components facilities. The Department of Defense (DOD) expects the new AFRCs to increase recruiting and retention and create greater efficiencies by fostering jointness and consolidating functions. GAO (1) assessed the extent DOD's cost and savings estimates to implement the recommendations have changed from BRAC Commission projections and (2) determined the extent the Army has identified potential challenges that could affect BRAC implementation and has developed a plan to address these challenges. GAO analyzed DOD's publicly available BRAC budget data and interviewed officials at Army offices, including Reserve Command, National Guard Bureau, and the National Guard in five states. This report, prepared under the Comptroller General's authority to initiate evaluations, is one of a series related to the BRAC 2005 round.
Since the BRAC Commission issued its projections in 2005, DOD's cost estimates for implementing the reserve component recommendations have increased at the same time savings estimates have decreased. Implementation cost estimates increased from $2.9 billion to $3.2 billion--a 13 percent or $363 million increase in constant dollars--mostly due to higher military construction cost estimates. Annual recurring savings estimates decreased from $323 million to $288 million--an 11 percent decrease in constant dollars. However, GAO analysis suggests that these savings could be significantly less than currently estimated because over 90 percent of these savings are associated with eliminating positions currently held by military personnel without corresponding decreases in end strength in the force structure. GAO and the BRAC Commission have previously reported that military personnel eliminations are not a true source of savings because DOD does not expect to reduce end strength correspondingly but rather intends to reassign or shift these personnel to vacant positions in other areas. Although GAO agrees that transferring personnel to vacant positions may enhance capabilities and allows DOD to redirect freed-up resources to another area of need, GAO does not believe that such transfers produce a tangible dollar savings that DOD can apply to fund other defense priorities outside the military personnel accounts because these personnel will remain in the end strength--continuing to receive salaries and benefits. However, DOD's treatment of military personnel savings represents a long-standing difference of opinion between DOD and GAO. The Army has identified several potential challenges in implementing the 44 reserve component recommendations. These include completing many construction projects in a compressed time frame, realizing efficiencies based on limited testing of new military construction processes, potential increasing land and supporting infrastructure costs, and changing force structure and mission requirements that may affect facility capacity. The Army has started construction on 5 of the 125 AFRC projects, and the extent these challenges might occur remains uncertain until the Army receives and evaluates more AFRC construction proposals and more AFRCs are built. However, because the Army does not have a plan to routinely bring together the various key stakeholders involved in the construction of these facilities, including the state Army National Guard when appropriate, the extent the Army is able to monitor and quickly address potential challenges is unclear. Best practices suggest that involving stakeholders in planning can help create a clearer understanding among the stakeholders of competing demands, the limited resources available, and how those demands and resources require continuous balancing. Without a plan that brings together key stakeholders, it could be more difficult for the Army to monitor for implementation challenges and work through alternatives to mitigate them in a timely manner.
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-07-1040, Military Base Realignments and Closures: Plan Needed to Monitor Challenges for Completing More Than 100 Armed Forces Reserve Centers
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Report to Congressional Addressees:
United States Government Accountability Office:
GAO:
September 2007:
Military base realignments and closures:
Plan Needed to Monitor Challenges for Completing More Than 100 Armed
Forces Reserve Centers:
Military Base Realignments and Closures:
GAO-07-1040:
GAO Highlights:
Highlights of GAO-07-1040, a report to congressional addressees.
Why GAO Did This Study:
The Army is implementing 44 base realignment and closure (BRAC)
recommendations to construct 125 new Armed Forces Reserve Centers
(AFRC) and close 387 existing reserve components facilities. The
Department of Defense (DOD) expects the new AFRCs to increase
recruiting and retention and create greater efficiencies by fostering
jointness and consolidating functions. GAO (1) assessed the extent
DOD‘s cost and savings estimates to implement the recommendations have
changed from BRAC Commission projections and (2) determined the extent
the Army has identified potential challenges that could affect BRAC
implementation and has developed a plan to address these challenges.
GAO analyzed DOD‘s publicly available BRAC budget data and interviewed
officials at Army offices, including Reserve Command, National Guard
Bureau, and the National Guard in five states. This report, prepared
under the Comptroller General‘s authority to initiate evaluations, is
one of a series related to the BRAC 2005 round.
What GAO Found:
Since the BRAC Commission issued its projections in 2005, DOD‘s cost
estimates for implementing the reserve component recommendations have
increased at the same time savings estimates have decreased.
Implementation cost estimates increased from $2.9 billion to $3.2
billion”a 13 percent or $363 million increase in constant
dollars”mostly due to higher military construction cost estimates.
Annual recurring savings estimates decreased from $323 million to $288
million”an 11 percent decrease in constant dollars. However, GAO
analysis suggests that these savings could be significantly less than
currently estimated because over 90 percent of these savings are
associated with eliminating positions currently held by military
personnel without corresponding decreases in end strength in the force
structure. GAO and the BRAC Commission have previously reported that
military personnel eliminations are not a true source of savings
because DOD does not expect to reduce end strength correspondingly but
rather intends to reassign or shift these personnel to vacant positions
in other areas. Although GAO agrees that transferring personnel to
vacant positions may enhance capabilities and allows DOD to redirect
freed-up resources to another area of need, GAO does not believe that
such transfers produce a tangible dollar savings that DOD can apply to
fund other defense priorities outside the military personnel accounts
because these personnel will remain in the end strength”continuing to
receive salaries and benefits. However, DOD‘s treatment of military
personnel savings represents a long-standing difference of opinion
between DOD and GAO.
The Army has identified several potential challenges in implementing
the 44 reserve component recommendations. These include completing many
construction projects in a compressed time frame, realizing
efficiencies based on limited testing of new military construction
processes, potential increasing land and supporting infrastructure
costs, and changing force structure and mission requirements that may
affect facility capacity. The Army has started construction on 5 of the
125 AFRC projects, and the extent these challenges might occur remains
uncertain until the Army receives and evaluates more AFRC construction
proposals and more AFRCs are built. However, because the Army does not
have a plan to routinely bring together the various key stakeholders
involved in the construction of these facilities, including the state
Army National Guard when appropriate, the extent the Army is able to
monitor and quickly address potential challenges is unclear. Best
practices suggest that involving stakeholders in planning can help
create a clearer understanding among the stakeholders of competing
demands, the limited resources available, and how those demands and
resources require continuous balancing. Without a plan that brings
together key stakeholders, it could be more difficult for the Army to
monitor for implementation challenges and work through alternatives to
mitigate them in a timely manner.
What GAO Recommends:
GAO is recommending that the Secretary of Defense direct the Army to
develop a plan for bringing together various stakeholders to monitor
and address potential challenges. DOD partially concurred with GAO‘s
recommendation.
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-1040].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Brian Lepore at (202) 512-
4523 or leporeb@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Cost Estimates Have Increased from BRAC Commission's Projections While
Savings Estimates Decreased:
Potential Challenges Exist to Implement Army's BRAC Recommendations
Affecting Its Reserve Components:
Conclusions:
Recommendation for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Department of Defense:
Appendix III: GAO Contact and Staff Acknowledgments:
Related GAO Products:
Table:
Table 1: Comparison of BRAC Cost and Savings Estimates:
Figures:
Figure 1: Armed Forces Reserve Center, Greenville, North Carolina:
Figure 2: Locations Where the Army Plans to Construct New Armed Forces
Reserve Centers by September 15, 2011:
Figure 3: Army's Rescheduling of AFRC Project Construction Starts
(Fiscal Years 2006 through 2011):
Abbreviations:
AFRC: Armed Forces Reserve Center:
BRAC: base realignment and closure:
DOD: Department of Defense:
OSD: Office of the Secretary of Defense:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
September 13, 2007:
Congressional Addressees:
On May 13, 2005, the Department of Defense (DOD) made public its
recommendations for base realignment and closure (BRAC) as part of an
effort to reduce excess infrastructure and costs, further
transformation, and foster jointness. After performing its own
analysis, the BRAC Commission[Footnote 1] forwarded the recommendations
to the President for approval. These recommendations were accepted in
their entirety by the President and Congress, and became effective on
November 9, 2005. The BRAC Commission directed 56 BRAC 2005
recommendations to the Army, of which 44 pertained to the reserve
components.[Footnote 2] These 44 recommendations represent more than
500 individual actions representing over 60 percent of the BRAC actions
for all the services and primarily direct the Army National Guard and
Army Reserve to construct 125 new Armed Forces Reserve Centers (AFRC)
and close 387 existing facilities. DOD expects the new AFRCs will
increase recruiting and retention and create greater efficiencies and
improved effectiveness by fostering jointness and consolidating
functions. Moreover, the Army reported to the BRAC Commission that
these new AFRCs will increase military value and improve the readiness
and ability of the reserve components to train and deploy in support of
current and future contingency operations. At the same time the Army is
to construct these AFRCs, it is also undertaking a massive worldwide
restationing initiative that involves the implementation of other
significant Army BRAC recommendations; the relocation of about 50,000
soldiers and their families from Germany and Korea to the United
States; the transformation of an Army force structure based on a
division organization to more rapidly deployable, brigade-based units;
and an increase in the Army's authorized end strength by 74,000 over
the next 5 years. By statute, DOD must complete the 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 commission's
recommendation.[Footnote 3] As a result, the ability to quickly
identify and mitigate challenges that could arise is imperative to the
Army's success in managing the construction of 125 AFRCs,
implementation of over 500 actions, and meeting the BRAC statutory 2011
deadline.
This report is one in a series of reports that detail the progress DOD
has made in implementing the base closures and realignments included in
the BRAC 2005 round. Because of the broad congressional interest in the
BRAC process, we performed our work under the Comptroller General's
authority to conduct evaluations under his own initiative.[Footnote 4]
In this report, we assessed the extent to which (1) BRAC cost and
savings estimates for the Army reserve component recommendations have
changed from BRAC Commission projections and (2) the Army has
identified potential challenges that could affect the implementation of
the recommendations and has developed a plan to address these
challenges. This report is addressed to you to facilitate your
oversight role for the Army's infrastructure and BRAC implementation
issues.
To accomplish these objectives, we assessed the changes to the cost and
savings estimates reported in the BRAC Commission report and the Army's
BRAC budget justification materials provided to Congress in support of
the President's fiscal year 2008 budget request. All cost and savings
estimates have been adjusted for inflation and are presented in fiscal
year 2005 constant dollars. In addition, we interviewed key officials
involved in implementing the recommendations to understand the
potential challenges the Army faces in completing the recommendations
by the end of the 6-year statutory completion period. We performed our
work at the Office of the Secretary of Defense's (OSD) BRAC Office,
Office of the Assistant Secretary of Defense for Reserve Affairs,
Office of the Assistant Secretary of the Army for Installations and
Environment, Army's Office of the Assistant Chief of Staff for
Installation Management, National Guard Bureau, Office of the Chief
Army Reserve, Army Reserve Command, and U.S. Army Corps of Engineers.
We also interviewed National Guard officials in five states and
officials in two Army Reserve regional readiness commands most affected
by the BRAC 2005 recommendations. We found DOD's data to be
sufficiently reliable for the purposes of this report and for making
broad estimated cost and savings comparisons. We conducted our work
from June 2006 through June 2007 in accordance with generally accepted
government auditing standards. Further details on our scope and
methodology can be found in appendix I.
Results in Brief:
DOD's cost estimates for implementing the Army reserve component
recommendations have increased compared with those projected by the
BRAC 2005 Commission while the savings estimates have decreased. Based
on data in DOD's fiscal year 2008 President's budget submission,
estimated costs to implement the recommendations have increased from
$2.9 billion to $3.2 billion in constant fiscal year 2005 dollars--a 13
percent or $363 million increase--mostly because of higher military
construction cost estimates. Furthermore, we calculated that the annual
recurring savings projected to accrue starting in 2012 decreased by 11
percent, to $288 million. Moreover, our analysis suggests that these
annual recurring savings could be significantly less than what is
projected in the fiscal year 2008 budget submission because more than
90 percent of these savings are associated with eliminating positions
currently held by military personnel without corresponding force
structure end-strength reductions. We have previously reported, and the
BRAC Commission agreed, that military personnel position eliminations
are not a true source of savings because DOD does not expect to reduce
end strength correspondingly but rather intends to reassign or shift
these personnel to vacant positions in other areas. DOD's assumption
behind the military personnel savings is that transferring military
personnel to vacant positions allows DOD to obtain new and additional
capabilities without having to request additional appropriations to
hire personnel for these positions. Although we agree that transferring
personnel to vacant positions may enhance capabilities and allows DOD
to redirect freed-up resources to another area of need, we do not
believe that such transfers produce a tangible dollar savings that DOD
can apply to fund other defense priorities outside the military
personnel accounts because these personnel will remain in the end
strength--continuing to receive salaries and benefits. In fact, the
Army plans to increase its reserve component's end-strength
authorization by about 9,000 military members over the next 5 years.
Not recognizing that these dollar savings cannot be readily applied
elsewhere could create a false sense of the savings available for use
in other areas outside the military personnel account, such as
modernization. However, DOD's treatment of military personnel savings
represents a long-standing difference of opinion between DOD and us.
The Army has identified several potential challenges that could affect
its ability to successfully construct all 125 AFRCs within the current
$3 billion estimate and by the 2011 statutory deadline;[Footnote 5]
however, it is unclear whether the Army will be able to successfully
address these challenges because the Army does not have a plan that
routinely brings together the various stakeholders, including the state
Army National Guard when appropriate, to help them monitor for
implementation challenges and to quickly take steps to mitigate those
challenges should they occur. Although the Army has started
construction on only 5 out of 125 AFRCs (3 Reserve-led and 2 Guard-led)
and none were completed at the time we completed the work for this
report, reserve component officials told us that the more significant
challenges that could affect BRAC implementation are the following:
* Completing construction of all AFRCs in compressed time frame: The
Army rescheduled the construction for many AFRC projects to start later
in the BRAC implementation period, thus increasing the number of
projects to be managed in a more compressed time frame. This compressed
construction time frame, in turn, reduces the time available to
mitigate unforeseen problems that may arise and increases the risk that
the AFRC projects and BRAC-recommended realignments may not be
completed by the 2011 statutory deadline.
* Realizing efficiencies from new military construction processes that
have undergone limited testing: The Army recently transformed its
military construction process in an effort to reduce costs and build
facilities faster. Because these new processes have undergone limited
testing, it remains uncertain whether these efficiencies will be
realized although the Army has already included these projected
efficiency savings in its BRAC budget estimates for fiscal years 2006
through 2011.
* Potential increasing land and supporting infrastructure costs: Cost
estimates for land and supporting infrastructure could be higher
because for many AFRCs earlier estimates were too low. Also, supporting
infrastructure, such as access roads and utilities, are lacking because
of the remoteness of some AFRC sites, which officials told us could
increase costs.
* Changing force structure and mission requirements for units slated to
occupy AFRCs: Future force structure and mission requirements could
change the composition and requirements of some units relocating into
new AFRCs. As a result, Army National Guard officials told us that some
new centers may not fully meet the personnel and equipment requirements
of certain types of newly-formed units, such as the fires brigades
being created by Army modularity.[Footnote 6]
It is unclear whether the Army will be able to successfully address
these challenges if they arise because the Army does not have a plan
that routinely brings together the various stakeholders, including the
state Army National Guard when appropriate, as a group to help them
monitor for potential challenges and develop plans to mitigate the
challenges should they occur. Effective development of such a plan for
BRAC implementation would better enable the Army to measure progress
toward its goals and identify strategies to meet goals that were not
met because of implementation challenges. Reserve component officials
further noted that this issue is important given that so many
stakeholders with varying viewpoints and perspectives on the potential
challenges are involved in the construction of the 125 AFRCs. Although
the construction of these reserve centers is guided by 44 separate
business plans that describe required actions, their timing, and
resources, both Army National Guard and Reserve Command officials told
us that these plans do not provide the information needed to quickly
develop plans to mitigate these challenges should they occur. In
addition, Army officials told us that should some of these challenges
occur, they might have to adapt by choosing one or more of the
following alternatives: (1) requesting more BRAC funds, (2) reducing
the scope of a construction project, (3) expanding the use of
alternative, less expensive construction materials, (4) requesting
additional funds from the regular military construction appropriations,
or (5) using funds as allowable from operation and maintenance
appropriations. Finally, National Guard officials said they could
exercise additional alternatives, such as using state funds, seeking
assistance from state congressional delegations, or allowing temporary
overcrowding of the AFRCs. However, the extent to which challenges will
occur and alternatives will be used remains uncertain until the Army
receives and evaluates more AFRC construction proposals and more
centers are built.
To better ensure that BRAC 2005 recommendations affecting the Army's
reserve components and interests of the states are effectively managed
and any potential adverse effects are quickly identified, we are making
a recommendation to the Secretary of Defense to direct the Secretary of
the Army to develop a plan for routinely bringing together the various
stakeholders as a group, to include the state Army National Guard when
appropriate, to monitor for and develop steps to mitigate
implementation challenges should they occur. Without a plan that
involves bringing together the stakeholders to help monitor for
challenges and work through alternatives, early identification of
challenges and development of steps to mitigate them in a timely manner
becomes more difficult. Best practices suggest that involving
stakeholders in planning can help create a clearer understanding among
the stakeholders of competing demands, the limited resources available,
and how those demands and resources require continuous balancing.
In commenting on a draft of this report, DOD partially concurred with
our recommendation. While stating that we appropriately highlighted
BRAC implementation challenges due to transformation, modularity,
mission changes, and construction factors affecting BRAC military
construction projects, to include changes to initial BRAC cost savings
projections and military construction time frames, DOD believes that we
overlooked the existence of various groups, forums, or plans that the
Army has in place to assist with BRAC execution and management.
Although we were aware of these groups, forums, and plans during the
course of our work, we nonetheless found that these venues were not
adequately meeting the needs of many reserve component and state-level
stakeholders. For example, during our review many Army National Guard
and Reserve officials still expressed confusion and frustration over
how to respond to certain challenges associated with the construction
of the 125 new AFRCs despite the existence of these various venues.
Moreover, these AFRCs are to be in 38 states and because local
circumstances may vary, it is unclear how planning groups that exclude
the states will be positioned to effectively mitigate the risks that
may be unique to a given location. Consequently, we still believe that
the Army would benefit from routinely bringing together the reserve
component and state-level stakeholders who are playing a vital role in
the planning of the actual design and construction of the AFRCs so that
challenges and issues can be effectively mitigated before the AFRCs are
built and subsequently require potential modification. As a result, we
continue to believe that our recommendation has merit. However, to
clarify our intent, we modified our recommendation to specifically
include state National Guard stakeholders when appropriate. DOD's
written comments are reprinted in appendix II. DOD also provided
technical comments, which we have incorporated into this report as
appropriate.
Background:
The BRAC Commission directed 56 BRAC 2005 recommendations to the Army,
of which 44 pertained to the reserve components. After the 44 reserve
component recommendations became effective on November 9, 2005, OSD
required the Army to submit a detailed business plan for each
recommendation that includes information such as a listing of all BRAC
actions, schedules for personnel movements between installations and
reserve centers, updated cost and savings estimates, and implementation
completion time frames. In total, the 44 recommendations affecting the
reserve components direct the construction of 125 new AFRCs. Of the 44
recommendations, 5 involve the realignment of the Army Reserve's
command and control structure within five regional areas. An AFRC is a
joint-use facility that accommodates units from two or more reserve
components. The primary function of an AFRC is to provide
administrative, training, and storage areas for the assigned military
units. As a joint-use facility, the interior of an AFRC consists of
space shared by all occupying components--such as assembly halls,
classrooms, conference rooms, physical fitness areas, and restrooms--as
well as space used exclusively by individual components, such as
offices, equipment storage, and weapons vaults. In addition, a vehicle
maintenance shop with work bays and maintenance administrative support
facilities is generally adjacent to the AFRC to allow units to store
and maintain their respective military vehicles and related equipment.
Figure 1 shows an example of an existing AFRC.
Figure 1: Armed Forces Reserve Center, Greenville, North Carolina:
[See PDF for image]
Source: Army Corps of Engineers.
[End of figure]
The implementation of these BRAC recommendations involves many key
stakeholders with differing levels of responsibilities.
* Army headquarters level has four main offices with BRAC
responsibilities.
- Assistant Secretary of the Army for Installations and Environment
establishes overall Army BRAC policy, direction, and oversight.
- Assistant Chief of Staff for Installation Management manages the
overall execution of Army BRAC actions. This office has two primary
divisions with BRAC responsibilities. First, the BRAC Division serves
as the program manager for Army base closures, realignments, and
disposals and manages the financial aspects of the BRAC program.
Second, the Army Reserve Division serves as the principal advisor for
the Army Reserve BRAC recommendations.
- Army Reserve Command oversees the Army Reserve's transformation and
integrates it with the BRAC program.
- National Guard Bureau serves as the central coordinator for the
individual states and for the Army National Guard BRAC recommendations.
* At the state and regional level, there are two other organizations
with BRAC responsibilities.
- Reserve regional readiness commands manage the facilities for the
Army Reserve units assigned in their respective region. In partnership
with the Army Reserve Division, these commands develop the requirements
and budget justification documents needed to construct the 76 Reserve-
led AFRCs.
- State National Guard Construction and Facilities Management Offices
are the principal administrators for the states' military real
property, facilities, military construction, and environmental
programs. In partnership with the National Guard Bureau, these state
offices develop the requirements and budget justification documents
needed to construct the 49 National Guard-led AFRCs.
* The Army Corps of Engineers is the Army's primary construction agent
and provides military construction execution oversight for Reserve-led
AFRCs. It also assists the Army Reserve Division in the development and
preparation of the requirements and budget justification documents
needed to construct the Reserve-led AFRCs.
Responsibility for managing the actual construction of the AFRCs is
divided between the two Army Reserve Components--Army National Guard
and the Army Reserve--with land ownership being a key determinant of
which component manages which AFRC project. For AFRCs built on federal
land, whether already owned or to be acquired by the federal
government, the Army Reserve is the lead component (76 centers out of
125). In these cases, the Army Reserve in partnership with the Army
Corps of Engineers identifies and purchases the land, if needed, and
the Corps manages the construction. In contrast, for AFRCs built on
state land, whether already owned or to be acquired by the state, each
state's respective Army National Guard is the lead component (49
centers out of 125). The National Guard became the lead for these 49
projects because it indicated to the Army that it either already owned
suitable land for the AFRC or was able to acquire it at no cost to the
federal government. For these National Guard-led AFRCs, each state's
Construction and Facilities Management Office, rather than the Army
Corps of Engineers, manages the contracting. Regardless of the reserve
component that manages the construction and where the AFRCs are built,
DOD provides 100 percent of the funding to construct the 125 AFRCs.
States are not required to share in AFRC construction cost. The
expected cost of the 125 AFRCs ranges from $1.5 million to up to $81
million. The Army started construction on 5 AFRCs in 2006 and expects
to start construction on 27 more in late fiscal year 2007 if funding
becomes available. Figure 2 shows the location of the 125 AFRCs
expected to be constructed because of BRAC recommendations.
Figure 2: Locations Where the Army Plans to Construct New Armed Forces
Reserve Centers by September 15, 2011:
[See PDF for image]
Source: BRAC Commission (data); MapInfo (map).
[End of figure]
Cost Estimates Have Increased from BRAC Commission's Projections While
Savings Estimates Decreased:
Data from the fiscal year 2008 President's budget submission show that
expected costs for implementing the BRAC Army reserve component
recommendations have increased and expected savings have decreased from
the BRAC Commission projections. We calculated that DOD's onetime costs
to implement the BRAC Army reserve component recommendations increased
$363 million or 13 percent, from $2.9 billion to $3.2 billion, during
the BRAC 6-year implementation period compared to the BRAC Commission's
estimates. After the BRAC implementation period, we calculated that DOD
will achieve a net annual savings of $288 million, 11 percent less than
the BRAC Commission's estimate of $323 million, as shown in table 1.
Table 1: Comparison of BRAC Cost and Savings Estimates:
Dollars in millions (constant fiscal year 2005 dollars).
Onetime costs during implementation through fiscal year 2011;
2005 BRAC Commission- reported estimates: $2,857;
DOD's fiscal year 2008 budget estimates: $3,220;
Difference: Amount: $363;
Difference: Percentage: 13.
Net annual recurring savings after the implementation period;
2005 BRAC Commission- reported estimates: 323;
DOD's fiscal year 2008 budget estimates: 288;
Difference: Amount: (35);
Difference: Percentage: (11).
Source: GAO's analysis.
[End of table]
Increases in projected military construction costs account for 97
percent of the increase in onetime costs during implementation.
Projected military construction costs mainly rose because of increased
requirements that resulted from the BRAC Commission's estimates either
underestimating the amount of construction needed or omitting certain
requirements, such as vehicle maintenance shops, that have now been
included. For example, the estimated military construction costs for
the recommendation to build 17 AFRCs in Texas increased from $313
million to $387 million, or 24 percent, mostly because the original
square footage estimates for many of the new AFRCs were underestimated
and lacked vehicle maintenance shops.
In addition, the savings projected to accrue from the BRAC 2005 reserve
component recommendations starting in fiscal year 2012 have decreased.
Although achieving savings is one of the rationales for undertaking a
BRAC round, DOD also cited other goals such as achieving reserve
component transformation and increasing recruiting and retention to
justify the need for the reserve component recommendations. Once
implementation is completed, DOD believes it will achieve a steady rate
of annual savings. The BRAC Commission estimated that the BRAC 2005
Army reserve component recommendations would result in an annual
recurring savings of $323 million. Based on data in DOD's fiscal year
2008 President's budget submission, annual recurring savings decreased
by 11 percent, to $288 million. However, 92 percent or $265 million of
the annual recurring savings are attributable to eliminating positions
currently held by military personnel, which both we and the BRAC
Commission do not consider savings because the Army reserve components
do not plan to reduce their military personnel end strength. If the
savings due to military personnel eliminations are removed, then annual
recurring savings would be reduced from $288 million to $23 million. We
have previously reported, and the BRAC Commission agreed, that military
personnel position eliminations are not a true source of savings
because DOD does not expect to reduce end strength correspondingly but
rather intends to reassign or shift these personnel to vacant positions
in other areas. DOD's assumption behind the military personnel savings
is that transferring military personnel to vacant positions allows DOD
to obtain new and additional capabilities without having to request
additional appropriations to hire personnel for these positions.
Although we agree that transferring personnel to vacant positions may
enhance capabilities and allows DOD to redirect freed-up resources to
another area of need, we do not believe that such transfers produce a
tangible dollar savings that DOD can apply to fund other defense
priorities outside the military personnel accounts because these
personnel will remain in the end strength--continuing to receive
salaries and benefits. In fact, the Army plans to increase its reserve
component's end-strength authorization by about 9,000 military members
over the next 6 years. Not recognizing that these dollar savings cannot
be readily applied elsewhere could create a false sense of the savings
available for use in other areas outside the military personnel
account, such as modernization. However, DOD's treatment of military
personnel savings represents a long-standing difference of opinion
between DOD and us.
Potential Challenges Exist to Implement Army's BRAC Recommendations
Affecting Its Reserve Components:
The Army identified several challenges that it may face when
implementing the BRAC 2005 reserve component recommendations to build
125 AFRCs. Although the Army has started construction on only 5 out of
125 AFRCs (3 Reserve-led and 2 Guard-led) and none were completed at
the time we completed the work for this report, reserve component
officials told us that the more significant challenges that could
affect BRAC implementation include completing many construction
projects in a compressed time frame, realizing efficiencies when using
new military construction processes, potential increasing land and
supporting infrastructure costs, and changing force structure and
mission requirements that affect facility capacity.
Completing Construction of All AFRCs in Compressed Time Frame:
Other BRAC funding priorities caused the Army recently to shift the
start of many of its AFRC projects to the later years of the time frame
ending with the BRAC statutory 2011 deadline. This approach compresses
the amount of time available to construct the facilities and respond to
any construction delays that might arise and consequently increases the
risk that the projects will not be completed in time to meet the BRAC
statutory completion deadline. As shown in figure 3, the Army
rescheduled the start of 20 projects that originally were slated to
begin construction in either fiscal year 2008 or 2009 to fiscal year
2010--the second to last year of the BRAC statutory completion period.
Figure 3: Army's Rescheduling of AFRC Project Construction Starts
(Fiscal Years 2006 through 2011):
[See PDF for image]
Source: GAO analysis of OSD and Army data.
Note: Data are from OSD-approved business plans and the fiscal year
2008 Army budget justification submission to Congress.
[End of figure]
According to Army officials, the Army's reasoning for shifting many
AFRCs to the later implementation years was to fund the more costly and
complex BRAC recommendations first, such as those that could affect
Army combat missions at locations like Fort Bliss, Texas, and Fort
Riley, Kansas, earlier in the implementation period than originally
planned. Also according to Army officials, the Army would assume less
risk as smaller projects theoretically can be completed within shorter
time frames compared to larger projects, which we believe is reasonable
given our understanding of the BRAC construction process.
Realizing Efficiencies from New Military Construction Processes That
Have Undergone Limited Testing:
Army officials also stated that the Army could be challenged in
realizing anticipated cost savings from the Army Corps of Engineers'
recent military construction transformation efforts. To reduce
construction costs and complete construction projects faster, the Corps
is currently transforming and streamlining its process for managing and
contracting military construction projects by allowing contractors
flexibility in using a wider variety of less expensive commercial
construction materials while still meeting all the applicable building
codes and functional and technical requirements. A major component of
the transformation initiative is the use of a standard request for
proposal that is less prescriptive. Based on these and other
transformation changes, the Corps expects that construction costs of
the primary facilities will be reduced by 15 percent. As such, the Army
has already incorporated a 15 percent reduction in its construction
estimates for all the AFRCs it is expected to build under BRAC.
Although preliminary results are encouraging for several active Army
construction projects, results based on a few AFRC projects remain
inconclusive. Specifically, the Corps initiated three Army Reserve-led
AFRC construction projects in 2006, which were awarded for amounts less
than the amount budgeted by the Army. However, it is uncertain whether
this cost reduction can be totally attributable to military
construction transformation, as the supporting infrastructure costs to
develop the sites for these projects were lower than what would
typically be expected for an AFRC. According to Corps officials, these
three pilot AFRC projects were located on Army installations with
access to roads and available utilities, whereas most Army AFRC
projects are expected to be located at remote or undeveloped sites that
could be more expensive to develop because they generally require more
road development and utility access. Moreover, it is uncertain whether
the National Guard will achieve any of the military construction
transformation savings because it does not generally use the Corps for
managing construction projects and the states are not obligated to
incorporate many of these transformational practices into the
construction of the 49 Guard-led AFRCs, even though the projects are
federally funded.
Further, Army Corps of Engineers officials told us that some of the
expected military construction transformation savings could decrease if
the cost of construction materials escalates or there is a shortage of
construction labor, especially in locations of high construction
volume. Corps officials told us that in the last several years, the
actual rate of construction inflation has exceeded the federal
government's inflation rate as determined by the Office of Management
and Budget, which DOD is required to use in budgeting for its
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 inflation rate has
diminished recently. We note, however, that this trend may not
necessarily continue into the future depending on the economics
surrounding the construction industry. However, if construction
inflation continues to exceed the rates used in the construction budget
process, Corps officials told us they will try to overcome the
inflation difference by negotiating with the building contractors for a
lower construction price, redirecting funds from other sources, or
reducing the scope of some construction projects.[Footnote 7] Given the
potential for underestimated future inflation rates, combined with the
fact that DOD is still early in the BRAC implementation process and the
Corps has only started construction on three reserve-led AFRC projects
(with the efficiencies gained from military construction transformation
for those three being inconclusive), the Army lacks assurance it will
be able to achieve the 15 percent reduction in military construction
costs for the AFRC projects until it receives bids from more projects.
Thus, it might have been premature of the Army to have already
incorporated these anticipated savings into its BRAC budget requests
before the Corps has more information with which to evaluate the
results.
Some Army officials also expressed concern that the Army Corps of
Engineers' military construction transformation could result in a
reduction in quality for the centers. Under military construction
transformation, the Corps is broadening the construction materials
standards for the AFRC projects it is managing. According to the Corps,
broadening the standards will allow contractors to pursue a wider
variety of alternate building systems in lieu of typical reserve
standards, which is expected to help keep costs down. Previously, the
Reserves generally required their AFRCs to be built using brick or
concrete block. Now contractors--while still meeting all applicable
building codes and technical requirements for the facility--may propose
less expensive alternatives, such as wood frame, prefabricated and
modular construction systems. For example, in two 2006 pilot projects
the typical reserve standard of concrete blocks covered with a brick
veneer was replaced with a less expensive metal frame covered with a
brick veneer. However, several state-level Army National Guard
officials and some Corps officials we met viewed this broadening of
standards as a reduction in quality and maintain that the savings
generated from using alternative construction materials may be offset
later by increased maintenance and repair costs. Corps officials told
us that they will be monitoring construction quality under these new
processes but the actual outcome remains uncertain until the Army
receives and evaluates more AFRC construction proposals and more
centers are built.
Potential Increasing Land and Supporting Infrastructure Costs:
Army Corps of Engineers officials indicated that cost estimates for
acquiring needed land and building supporting infrastructure could be
higher than estimated because earlier estimates were too low for many
Reserve-led projects[Footnote 8] and because supporting infrastructure,
such as access roads and utilities, is lacking because of the
remoteness of some AFRC sites. Although the BRAC Commission attempted
to estimate purchase prices for land while developing the
recommendations, cost projections for many AFRCs are expected to be
higher based on some recent site visits. For example, in Connecticut,
land has not been identified for a Reserve-led AFRC slated to start
construction in 2007 because according to Corps officials the average
cost of several proposed locations is $2 million--$1.1 million higher
than initially projected. This could be even more problematic in the
later years of BRAC's implementation period because as land
identification is delayed, inflation and market demands could further
increase land costs. According to our analysis, the Reserves have 18
projects slated to begin from 2008 to 2010 where land costs are
expected to exceed the amount estimated by the BRAC Commission.
However, the extent these costs could increase will depend on the
economics of the real estate market at the time of purchase. Moreover,
Corps officials told us that because some Reserve-led AFRCs are
expected to be at remote undeveloped sites, actual costs for supporting
infrastructure, such as access roads and electricity, water, and sewer
lines, could be higher than currently projected. Other Army officials,
on the other hand, stated to us that higher than expected land
acquisition and infrastructure support costs will not be a significant
issue because the Army can use funds from other BRAC projects if costs
for those other projects are lower than expected. For example, a
challenging site location at Fort Lewis caused an increase in the cost
estimate and as a result the Army recently initiated action to increase
the programmed amount by $4 million. Although the Army was able to
reallocate money for the Fort Lewis project, Corps of Engineers
officials told us that some future projects could incur significantly
higher supporting costs that the Army may be challenged in funding.
Changing Force Structure and Mission Requirements for Units Slated to
Occupy AFRCs:
Army officials noted that the Army's changing force structure and
mission requirements may affect the capacity of the AFRCs to meet the
personnel and equipment requirements of some units relocating into new
AFRCs. Army modularity is restructuring combat and combat support units
from a division organization to smaller, more rapidly deployable
brigade-size units. Reserve and National Guard officials told us that
they planned for Army modularity changes in determining facilities
requirements to the extent information was known, but some units were
reconfigured, disestablished, or newly activated after the BRAC
recommendations became effective, which complicates how the BRAC
recommendations will be applied to these units. Furthermore, some Army
National Guard officials told us that the new centers may not fully
meet the personnel and equipment requirements of certain types of
units. For example, Guard officials told us that personnel requirements
for the newly formed fires brigade were less defined when the BRAC
recommendations became effective and these requirements have doubled
since then (e.g., fires brigades have grown from 350 to 750 personnel).
As more force structure and mission change challenges emerge, Army BRAC
offices, the National Guard Bureau, the Army Audit Agency, and the
individual affected states are discussing BRAC implications. Although
they are uncertain about precise outcomes due to Army modularity, Guard
officials we interviewed did not see modularity as posing an
insurmountable implementation challenge at this time because they tried
to incorporate future modularity changes--to the extent the changes
were known--into AFRC requirements and because state governors have
flexibility to balance space requirements of their units with available
facilities in the states to station their Guard units. However, because
so few AFRCs have actually begun construction the extent to which
pending force structure and mission changes could be potential problems
remains uncertain.
The Army's Ability to Monitor and Quickly Address Potential Challenges
Is Unclear:
It is unclear whether the Army will be able to successfully address
potential implementation challenges affecting the completion of 125
AFRC projects because it does not have a plan that routinely brings
together the various stakeholders, including the state Army National
Guard when appropriate, to monitor and address these challenges.
Although the Army has several venues in place to assist with BRAC
execution and management,[Footnote 9] in discussions with Army BRAC
headquarters officials they acknowledged to us that they could be more
proactive in outreaching and communicating with the stakeholders over
how to deal with and mitigate particular challenges associated with
constructing 125 AFRCs. Effective development of a plan to address
challenges associated with the BRAC implementation would enable the
Army to better communicate with stakeholders, measure progress toward
its goals, and identify strategies to meet goals that were not met
because of implementation challenges. Such planning is important to
ensure that an organization's activities support its goals and are
guided by good business principles, such as those embodied in the
Government Performance and Results Act of 1993.[Footnote 10] Although
the construction of the AFRCs is guided by 44 separate business plans
that describe required actions, their timing, and resources, Guard and
Reserve officials said that these plans do not provide the information
needed to monitor for potential challenges or the steps needed to
quickly mitigate them. Furthermore, we have previously reported that
involving stakeholders in planning efforts can help create a clearer
understanding among the stakeholders of the competing demands that
confront most agencies, the limited resources available to them, and
how those demands and resources require careful and continuous
balancing.[Footnote 11] Because the Army's reserve components
recommendations involve so many stakeholders, comprehensive and routine
stakeholder involvement is essential to the success of the Army's
implementation planning efforts. Additionally, a plan that involves key
stakeholders would be important because AFRCs will be truly joint
facilities--the Guard will be co-occupants of centers built by the
Reserves and the Reserves will be co-occupants of centers built by the
Guard--and because there are so many stakeholders involved in ensuring
that construction is completed on time.
In addition to the various Army headquarters offices that provide
overall BRAC direction and oversight, key stakeholders involved with
the Army's BRAC recommendations associated with Army reserve components
include the Reserves, which is represented by officials from the Army
Reserve Division of the Assistant Chief of Staff for Installation
Management; the Office of the Chief Army Reserve; and the various
regional readiness commands. Similarly, the Guard is represented by
officials from the National Guard Bureau and officials in each state's
respective Adjutant General and Construction and Facilities Management
Office. Moreover, the U.S. Army Corps of Engineers plays a vital role
in the construction of many AFRCs because it is the Army's primary
construction agent, responsible for construction management of the
Reserve-led AFRCs. In our discussions with officials, we found that
many times component and state-level stakeholders were confused and
frustrated regarding how to respond to potential challenges and had
varying viewpoints and perspectives on how these challenges should be
addressed if they occur. For example, some state National Guard
officials said that they are concerned about the potential for a
reduction in quality for many of the Reserve-led AFRCs because the
Corps' military construction transformation effort is allowing
alternative building materials to be used in lieu of the traditional
brick and mortar. Conversely, Reserve officials told us that they were
concerned about the extent to which the Guard might make what these
officials deemed unsatisfactory scope reductions in the Guard-led AFRCs
for such space as classrooms, assembly rooms, maintenance bays, and
parking lots. Because of varying viewpoints and perspectives on the
potential challenges and how they might be handled, opportunities for
these stakeholders to express and address their concerns is of
importance, particularily the resolution of potential issues before too
many AFRCs are built. Army officials told us that should some of these
challenges occur, they might have to adapt by choosing one or more of
the following alternatives, many with potentially adverse effects: (1)
request more BRAC funds, which would place additional demands on an
account with a set limit of funds and potentially undermine DOD's
ability to complete other BRAC recommendations unless OSD requests and
receives more funds from Congress; (2) reduce the scope of a
construction project to stay within the price limit, which could result
in an overcrowded facility or inadequate space for storing mission-
needed equipment and supplies; (3) work with the contractors to lower
the cost by using more alternative, less expensive construction
materials; (4) request additional funds from the regular military
construction appropriations; or (5) use funds as allowable from
operation and maintenance appropriations, which would leave other
maintenance and repair requirements unfunded.
Because it is early in the BRAC implementation process, the extent to
which challenges will occur and alternatives will be used remains
uncertain until the Army receives and evaluates more AFRC construction
proposals and more centers are built. However, there are indications
that some of the challenges identified by the Army are already
beginning to occur. For example, the Army Corps of Engineers is
currently debating what to do about two projects expected to start in
2007--Fort Detrick, Maryland, and Fort Lewis, Washington--where current
construction estimates exceed the amount budgeted. According to the
Corps, higher-than-expected supporting infrastructure costs and
estimate reductions based on anticipated military construction
transformation efficiencies contributed to the difference between the
current estimated cost to construct the AFRCs and what was actually
budgeted, and consequently the projects might run out of money. In
addition, several Corps officials expressed concern that many of the
2007 and the 2008 project proposals may exceed the cost estimate set
for the projects. If this happens, Corps officials told us that they
could work with the contractors to expand the use of alternative
construction materials or reduce the scope of a particular project to
stay within the price limit. However, if the Corps has to reduce the
scope, this increases the risk that the facility will be too small for
the number of personnel or their equipment. Likewise, Guard officials
told us that if they experience similar problems, they would consider
other alternatives such as using operation and maintenance appropriated
funds as allowed or requesting funds from the regular military
construction appropriation. Finally, Guard officials said that they
could use additional options if project proposals exceed cost
estimates, such as using state funds, seeking assistance from state
congressional delegations, allowing temporary overcrowding of the AFRC,
or leaving open readiness centers expected to close under BRAC. For
example, some Army Guard officials told us that if a newly built AFRC
is overcrowded and does not adequately support the unit's personnel and
equipment, they might retain certain existing armories or readiness
centers that were expected to close under BRAC, which could further
reduce BRAC savings and increase operation and maintenance costs should
the centers continue to support a federal mission.[Footnote 12]
Conclusions:
As the Army begins its $3 billion BRAC construction of 125 new AFRCs
around the nation, it will need to carefully manage many potential
challenges that could place the successful implementation of the
program at risk. We recognize that implementing these BRAC
recommendations while the Army simultaneously implements other BRAC
recommendations and ongoing, worldwide restationing and transformation
initiatives is an extremely difficult and daunting task. Although we
realize the Army has several venues in place to assist with BRAC
execution and management, the Army has not established a plan that
routinely brings together the various stakeholders, that includes the
state Army National Guard when appropriate, to help monitor and address
potential implementation challenges associated with completing the Army
reserve component BRAC recommendations. Developing such a plan would
better ensure clear communication and collaboration between key
stakeholders, which is especially important given that many
stakeholders have varying viewpoints and perspectives on these
potential challenges and the possible adverse effects. Development of
such a plan for BRAC implementation would also enable the Army to
better measure progress toward its goals and identify strategies to
meet goals that were not met because of implementation challenges.
Without a plan that brings together key stakeholders including the
state Army National Guard when appropriate, it will be more difficult
for the Army to monitor for implementation challenges and work through
alternatives to mitigate them in a timely manner.
Recommendation for Executive Action:
To better ensure that BRAC 2005 recommendations affecting the Army's
reserve components and interests of the states are effectively managed
and any potential adverse effects are quickly identified, we recommend
that the Secretary of Defense direct the Secretary of the Army to
develop a plan for routinely bringing together the various stakeholders
as a group, to include the state Army National Guard when appropriate,
to monitor for and develop steps to mitigate implementation challenges
should they occur. These steps should include ways to monitor and
mitigate the effects of potential challenges on BRAC completion time
frames, project cost and scope, construction quality, and capacity of
the facility to meet changing mission requirements.
Agency Comments and Our Evaluation:
In written comments on a draft of this report, DOD partially concurred
with our recommendation. DOD's comments are reprinted in appendix II
and addressed as appropriate in the body of the report. DOD further
provided technical comments, which we also incorporated into this
report as appropriate.
DOD partially concurred with our recommendation that the Secretary of
Defense direct the Secretary of the Army to develop a plan for
routinely bringing together the various stakeholders as a group to
monitor for and develop steps to mitigate implementation challenges
should they occur to better ensure that BRAC recommendations affecting
the Army's reserve components are effectively managed and any potential
adverse effects are quickly identified and mitigated. While stating
that we appropriately highlighted BRAC implementation challenges due to
transformation, modularity, mission changes, and construction factors
affecting BRAC military construction projects, to include changes to
initial BRAC cost savings projections and military construction time
frames, DOD believes that we overlooked the various groups, forums, or
plans that the Army has in place to assist with BRAC execution and
management. Although we were aware of these various venues and we
changed our report to acknowledge them, we nonetheless found that these
venues were not adequately meeting the needs of the various state Army
National Guard and Reserve officials who share in the responsibility
for the design and construction of the AFRCs. Throughout our work we
found that many of these officials were still confused and frustrated
regarding how to respond to potential challenges associated with the
construction of the 125 new AFRCs despite the existence of the Army's
various venues. Moreover, because the AFRCs are to be in 38 states and
because local circumstances may vary, it is unclear how executive-level
planning groups or other forums that exclude the states will be
positioned to effectively mitigate the risk that may be unique to a
given location. Although DOD stated in its comments that the Army
already has a plan in place to bring the various stakeholders together,
Army BRAC headquarters officials acknowledged that they could be more
proactive in outreaching and communicating with the stakeholders on how
to deal with and mitigate particular challenges associated with
constructing 125 AFRCs. Moreover, because of varying viewpoints on how
potential challenges should be addressed, opportunities for these
stakeholders to meet and express their concerns is of importance,
especially so that any potential issues can be resolved before too many
AFRCs are built and the Army can meet the BRAC statutory 2011 deadline.
Consequently, we continue to believe that the Army would benefit from
routinely bringing together the reserve component and state-level
stakeholders who are playing a vital role in the actual design and
construction of the AFRCs so that challenges and issues can be
effectively mitigated before they rise to the Army's executive
headquarters level. Additionally, best practices suggest that involving
stakeholders in planning can help create a clearer understanding among
the stakeholders of competing demands, the limited resources available,
and how those demands and resources require continuous balancing.
In addition to the existing groups, forums, or plans, DOD also stated
that the Army BRAC office will begin quarterly BRAC program reviews
with the Assistant Secretary of the Army for Installations and
Environment, which will further provide a forum for discussing and
vetting issues affecting the BRAC program. Although we commend the Army
for initiating these reviews, it remains unclear the extent to which
the reserve components and state National Guard offices will be
routinely involved until these reviews take place and it is this
involvement that forms the basis of our recommendation. In addition,
DOD stated that OSD-approved business plans are in place and updated
biannually as needed. As we stated in the report, although the
construction of the AFRCs is guided by 44 separate business plans that
describe required actions, their timing, and resources, Army National
Guard and Reserve officials said that these plans do not provide
adequate information needed to monitor for potential challenges or the
steps needed to quickly mitigate them.
For the reasons stated above, we continue to believe that our
recommendation has merit. To clarify the intent, however, we modified
our recommendation to specifically include state National Guard
stakeholders when appropriate, because it is unclear how existing
executive-level planning groups that may not include the states will be
positioned to effectively mitigate the risk that may be unique to a
given state.
DOD also noted in its comments that it continues to disagree with us
regarding the treatment of military personnel savings. DOD considers
military personnel reductions attributable to a BRAC recommendation as
savings that are just as real as savings generated through end-strength
reductions. As we stated in the report, the issue of military personnel
savings represents a long-standing difference of opinion between DOD
and us. Although we agree that transferring personnel to vacant
positions may enhance capabilities and allows DOD to redirect freed-up
resources to another area of need, we do not believe that such
transfers produce a tangible dollar savings that DOD can apply to fund
other defense priorities outside the military personnel accounts
because these personnel will remain in the end strength and will
continue to receive salaries and benefits. Not recognizing that these
dollar savings cannot be readily applied elsewhere could create a false
sense of the savings available for use in other areas outside the
military personnel account, such as modernization.
We are sending copies of this report to interested congressional
committees; the Secretary of Defense; the Under Secretary of Defense
for Acquisition, Technology, and Logistics; the Secretary of the Army;
the Chief of the National Guard Bureau; 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 have any questions concerning this report, please
contact me at (202) 512-4523 or leporeb@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made major contributions to
this report are listed in appendix III.
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 Ike Skelton:
Chairman:
The Honorable Duncan L. Hunter:
Ranking Member:
Committee on Armed Services:
House of Representatives:
The Honorable John P. Murtha:
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 performed our work at various Office of the Secretary of Defense
(OSD) and Army base realignment and closure (BRAC) offices involved in
the implementation of the Army reserve component recommendations and at
various states affected by the recommendations.
To determine changes in estimated cost and savings, we used data in the
Army's BRAC budget justification materials provided to Congress in
support of the President's fiscal year 2008 budget request and compared
them to the estimates in the 2005 BRAC Commission report, both publicly
available data. All cost and savings estimates have been adjusted for
inflation and are presented in fiscal year 2005 constant dollars
because the BRAC Commission reported its estimates in 2005 constant
dollars. BRAC Commission estimates are based on the Department of
Defense's (DOD) quantitative model, known as the Cost of Base
Realignment Actions. DOD has used this cost model in each of the
previous BRAC rounds and, over time, has improved upon its design to
provide better estimating capability, although the model is not
intended to produce budget quality estimates. We did not validate the
Army's military construction requirements because the Army Audit Agency
was in the process of validating these requirements at the time of our
review. To assess the reliability of DOD's BRAC cost and savings
estimates, we talked with officials at the OSD BRAC Office about their
data quality control procedures and reviewed relevant documentation. We
determined the Army's budget justification data to be sufficiently
reliable for the purposes of this report and for making broad cost and
savings comparisons. We also analyzed data from OSD-approved business
plans for each recommendation to determine reasons for changes in cost
and savings estimates.
To identify what Army officials said were the more significant
potential challenges that could affect the implementation of the BRAC
2005 reserve component recommendations, we interviewed numerous
stakeholders to the process. These stakeholders included officials in
the OSD BRAC Office, Office of the Assistant Secretary of Defense for
Reserve Affairs, Office of the Assistant Secretary of the Army for
Installations and Environment, Army's Office of the Assistant Chief of
Staff for Installation Management, National Guard Bureau, Army Reserve
Command, Office of the Chief Army Reserve, and U.S. Army Corps of
Engineers Headquarters and Louisville District offices. We also
interviewed National Guard officials in five states and officials in
two Army Reserve regional readiness commands most affected by the 2005
BRAC recommendations. Specifically, we visited state National Guard
officials in Alabama, Arkansas, Kentucky, Oklahoma, and Texas. With the
exception of Kentucky, we selected these states because they either had
a large number of Armed Forces Reserve Centers (AFRC) slated for
construction, had a National Guard headquarters located near a reserve
regional readiness command, or both. We selected Kentucky because its
National Guard headquarters is located near the U.S. Army Corps of
Engineers' Louisville District, which is managing the BRAC construction
of the Reserve-led AFRCs. In the states we visited, we spoke with the
chief construction and facilities management officers. In two states,
we met with the adjutants general. Additionally, we met with officials
in two reserve regional readiness commands--one in Alabama and one in
Arkansas. During these meetings, we interviewed key officials involved
in implementing the recommendations to understand the potential
challenges the Army faces in completing the recommendations by the end
of the 6-year statutory BRAC completion period and summarized their
views. We conducted our work from June 2006 through July 2007 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: Comments from the Department of Defense:
Office Of The Under Secretary Of Defense:
3000 Defense Pentagon:
Washington, Dc 20301-3000:
Acquisition, Technology And Logistics:
August, 23, 2007
Mr. Brian J. Lepore:
Director, Defense Capabilities and Management:
U.S. Government Accountability Office:
441 G Street, N.W.
Washington, DC 20548-0001
Dear Mr. Lepore,
This is the Department of Defense (DOD) response to the GAO draft
report, GAO-07-1040, "Military Base Closures And Realignments: Plan
Needed to Monitor Challenges for Completing More than One Hundred Armed
Forces Reserve Centers," dated July 26, 2007 (GAO Code 350874).
The Department partially concurs with the GAO's recommendation in the
draft report concerning development of a plan for routinely bringing
together the various stakeholders as a group. The Army currently has
several venues in which it participates in the execution of the Base
Realignment and Closure (BRAC) program with all of the stakeholders and
is proactive in monitoring changing mission requirements and adjusting,
as needed, project cost, scope and construction resources to meet BRAC
timelines.
It is also important to note that the Department continues to disagree
with GAO regarding the treatment of military personnel savings in the
draft report. The Department considers military personnel reductions
attributable to a BRAC recommendation as savings that are just 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.
The Department's comments regarding the specific recommendations in the
report are outlined in the enclosure. The Department appreciates the
work performed by the GAO in this regard and appreciates the
opportunity to comment on the draft report.
Sincerely,
Signed by:
Philip W. Grone:
Deputy Under Secretary of Defense:
(Installations and Environment):
Enclosure:
As stated:
GAO Draft Report – Dated July 26, 2007 GAO Code 350874/GAO-07-1040
"Military Base Closures And Realignments: Plan Needed to Monitor
Challenges for Completing More than One Hundred Armed Forces Reserve
Centers"
Department Of Defense Comments To The Recommendation:
Recommendation 1: The GAO recommends that the Secretary of Defense
direct the Secretary of the Army to develop a plan for routinely
bringing together the various stakeholders as a group to monitor and
develop steps to mitigate those challenges should they occur. Those
steps should include ways to monitor and mitigate the effects of
potential challenges on the base realignment and closure completion
timeframes, project cost and scope, construction quality, and capacity
of the facility to meet changing mission requirements.
DOD Response: DoD partially concurs with comment. Although Army was not
directed to develop a plan for managing potential adverse effects, the
following mechanisms and forums exist to mitigate challenges and
impacts to BRAC program execution. The Army Vice Chief of Staff (VCSA)
chairs the Stationing Senior Review Group (SSRG) meetings at which
programmatic issues are raised, discussed, and resolved. The
Installation Management Board of Directors monitor performance measures
for programs and operations to ensure compliance with the plan. At the
installation level the Deputy Garrison Commander for Transformation is
identified as the BRAC program coordinator and provides project
feedback to the Senior Mission Commander and the various installation
stakeholders on a routine basis. The Army BRAC office will begin
Quarterly BRAC program reviews with the Assistant Secretary of the Army
for Installations and Environment, inclusive of the stakeholders, which
further provides a forum for discussing and vetting issues impacting
the BRAC program. In addition, OSD- approved Business Plans are in
place and updated biannually, as needed. Army already has a plan in
place to bring the various stakeholders together and has made
significant strides in monitoring and mitigating risks that would
hamper completing mandated BRAC actions by September 15, 2011.
Additionally, the Army has venues where stakeholders meet for BRAC
project reviews and conferences. BRAC construction priorities are
coordinated through the National Guard Bureau Army Installations (ARI)
Office, Office of the Assistant Chief of Staff for Installation
Management (OACSIM) Army Reserve Installations Division (ARID) and U.S.
Army Reserve Command (USARC) Transformation Integration Office (TIO)
based on mission impact, land acquisition, environmental issues and
level of funding per fiscal year. BRAC projects are also validated
through independent U.S. Army Audit Agency (USAAA) audits and Program
Managers are in place to manage BRAC execution by regions. GAO has
appropriately highlighted challenges due to transformation, modularity,
mission changes, and construction factors impacting BRAC military
construction projects, to include changes to initial BRAC cost savings
projections and military construction timelines. GAO's draft report
does not accurately reflect the steps currently in place, nor does it
address the steps scheduled to further assist with BRAC execution and
management.
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
Brian J. Lepore, (202) 512-4523 or leporeb@gao.gov:
Acknowledgments:
In addition to the contact named above, Barry Holman, Director
(retired); Laura Talbott, Assistant Director; Shawn Arbogast; Rachel
Beers; Grace Coleman; Jennifer Edwards; Julie Matta; and Charles Perdue
made key contributions to this report.
[End of section]
Related GAO Products:
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: Observations Related to the
2005 Round. GAO-07-1203R. Washington, D.C.: September 6, 2007.
Military Base Closures: Projected Savings from Fleet Readiness Centers
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.
Footnotes:
[1] 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 present its findings and conclusions on the
Secretary's recommendations, along with its own recommendations, to the
President.
[2] The Army National Guard, Army Reserve, Air Force Reserve, Air
National Guard, Navy Reserve, Marine Corps Reserve, and Coast Guard
Reserve constitute the DOD reserve components. The reserve component
recommendations addressed in this report only involve the Army. The
other reserve components are addressed in separate recommendations.
[3] Pub. L. No. 101-510, § 2904, as amended (1990).
[4] 31 U.S.C. § 717.
[5] Per the Commission's recommendations, the Army is not required to
construct certain AFRCs if the Army is unable to acquire land suitable
for construction of the facilities.
[6] Army modularity, which has been referred to as the largest Army
reorganization in 50 years, encompasses the Army's total force and
directly affects the Army's combat units and its related support and
command and control. The foundation of Army modularity is the creation
of brigade combat teams that will have a common organizational design
and will increase the pool of available units for deployment. Many
units of the Army National Guard and the Army Reserve are being
reorganized because of Army modularity into organizations such as fires
brigades, which combine the functions of division artillery, general
support field artillery, and corps artillery into one organization.
[7] The House Armed Services Committee has directed the Secretary of
Defense to submit an analysis of the construction cost inflation
differences by February 1, 2008. H.R. Rep. No. 110-146, at 520 (2007)
(Conf. Rep.)
[8] Per the Commission's recommendations, the Army is not required to
construct certain AFRCs if the Army is unable to acquire land suitable
for construction of the facilities.
[9] These include the Stationing Senior Review Group chaired by the
Army Vice Chief of Staff, the Installation Management Board of
Directors, and at the installation level, the Deputy Garrison Commander
for Transformation, who provides project feedback to various
installation stakeholders on a routine basis. In addition, the Army
plans to begin quarterly BRAC program reviews with the Assistant
Secretary of the Army for Installations and Environment to further
provide a forum for discussing issues associated with the BRAC program.
Moreover, the Army stated that it has venues where stakeholders meet
for BRAC project reviews and conferences.
[10] Pub. L. No. 103-62 (1993).
[11] GAO, Executive Guide: Effectively Implementing the Government
Performance and Results Act, GAO/GGD-96-118 (Washington, D.C.: June
1996).
[12] In developing its BRAC recommendations for the reserve components
the Army allowed the states to voluntarily participate in the process.
The Department of the Army worked very closely with the state adjutants
general throughout the BRAC 2005 process, and understands that the
state governors will close 211 Army National Guard facilities with the
intent of relocating their tenant units into the 125 new AFRCs.
According to some state guard officials, because many of the Army
National Guard facilities slated to close under BRAC are owned by the
states, a state has the option to keep these facilities open if the
state determines that the new AFRC will not sufficiently meet the
requirements of the units slated to occupy it.
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