Defense Infrastructure
Continued Management Attention Is Needed to Support Installation Facilities and Operations Gao ID: GAO-08-502 April 24, 2008The Department of Defense (DOD) manages and operates about 577,000 structures worldwide, valued at about $712 billion. DOD has worked for several years to develop models that can reliably estimate the installation support funds needed to sustain these facilities, and plans to spend over $55 billion to support these facilities and operate its bases in fiscal year 2008. Because GAO has identified support infrastructure as a high-risk area that affects DOD's ability to devote funds to other more critical needs, GAO initiated this review under the Comptroller General's authority. This report discusses (1) the reliability of the annual funding estimates produced by the facilities sustainment model, (2) DOD's progress in meeting funding goals for facility sustainment and recapitalization, (3) the extent to which DOD has addressed deferred facility sustainment funding needs, and (4) the status of DOD's efforts to develop a new installation services model. To address these objectives, GAO reviewed the accuracy and support for the model's key inputs, analyzed pertinent documents, and visited eight judgmentally selected installations.
Although the facilities sustainment model, implemented in 2003, provides a consistent and reasonable framework for preparing estimates of DOD's annual facility sustainment funding requirements, accuracy and supportability issues with two of the model's key inputs have affected the reliability of the model's estimates. First, regarding the inventory quantity input, GAO found that the services had not complied with DOD regulations requiring verification of each real property inventory record. Without the verifications, DOD lacked assurance that the model used accurate inventory quantities, and GAO's analysis identified inaccuracies in some quantities used by the model. Second, regarding the sustainment cost factor input, GAO identified issues concerning some cost factors used by the model. For example, an independent study reported that only 13 of 45 cost factors evaluated were deemed to be reasonably accurate and adequately supported. Until DOD improves the accuracy of these two inputs, the model's estimates of facility sustainment funding requirements will not be as reliable as possible. The military services have not met all of DOD's goals for funding facility sustainment and recapitalization at levels to prevent deterioration and ensure that facilities are restored and modernized. Service officials stated that they generally did not meet the sustainment funding goals because resources were limited and programs such as force modernization often had higher funding priority. Although the services achieved more success in meeting DOD's goal to fund recapitalization, funding remains an issue with the Army, the Navy, and the Air Force reporting recapitalization backlogs of over $50 billion at the end of fiscal year 2007. DOD has not taken actions to estimate and address its deferred facility sustainment requirements. In fiscal years 2005 through 2007, the services did not fund over $3.5 billion of their estimated annual facility sustainment requirements. The services do not have consistent estimates of their deferred sustainment requirements or plans to deal with these needs because DOD has not provided adequate guidance to clearly define deferred sustainment requirements, or direct the services to measure, track, and address these needs. As a result, DOD's plans to address facility sustainment requirements do not include all deferred sustainment requirements, which could result in continued facility deterioration and increased future recapitalization costs. DOD's progress in developing a new model to estimate funding requirements for installation services, such as airfield and port operations, has been slow. Although DOD's goal is to establish common standards and metrics for installation services by the end of 2008, the services had agreed on common definitions and standards for only 2 of 29 areas by the end of 2007. DOD officials stated that reaching agreement has been difficult for several reasons, such as differences among the services in how tasks for installation services are performed and managed. Without a reliable model, DOD cannot provide the Congress with a clear basis for making funding decisions.
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-08-502, Defense Infrastructure: Continued Management Attention Is Needed to Support Installation Facilities and Operations
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
April 2008:
Defense Infrastructure:
Continued Management Attention Is Needed to Support Installation
Facilities and Operations:
Defense Infrastructure:
GAO-08-502:
GAO Highlights:
Highlights of GAO-08-502, a report to congressional committees.
Why GAO Did This Study:
The Department of Defense (DOD) manages and operates about 577,000
structures worldwide, valued at about $712 billion. DOD has worked for
several years to develop models that can reliably estimate the
installation support funds needed to sustain these facilities, and
plans to spend over $55 billion to support these facilities and operate
its bases in fiscal year 2008. Because GAO has identified support
infrastructure as a high-risk area that affects DOD‘s ability to devote
funds to other more critical needs, GAO initiated this review under the
Comptroller General‘s authority. This report discusses (1) the
reliability of the annual funding estimates produced by the facilities
sustainment model, (2) DOD‘s progress in meeting funding goals for
facility sustainment and recapitalization, (3) the extent to which DOD
has addressed deferred facility sustainment funding needs, and (4) the
status of DOD‘s efforts to develop a new installation services model.
To address these objectives, GAO reviewed the accuracy and support for
the model‘s key inputs, analyzed pertinent documents, and visited eight
judgmentally selected installations.
What GAO Found:
Although the facilities sustainment model, implemented in 2003,
provides a consistent and reasonable framework for preparing estimates
of DOD‘s annual facility sustainment funding requirements, accuracy and
supportability issues with two of the model‘s key inputs have affected
the reliability of the model‘s estimates. First, regarding the
inventory quantity input, GAO found that the services had not complied
with DOD regulations requiring verification of each real property
inventory record. Without the verifications, DOD lacked assurance that
the model used accurate inventory quantities, and GAO‘s analysis
identified inaccuracies in some quantities used by the model. Second,
regarding the sustainment cost factor input, GAO identified issues
concerning some cost factors used by the model. For example, an
independent study reported that only 13 of 45 cost factors evaluated
were deemed to be reasonably accurate and adequately supported. Until
DOD improves the accuracy of these two inputs, the model‘s estimates of
facility sustainment funding requirements will not be as reliable as
possible.
The military services have not met all of DOD‘s goals for funding
facility sustainment and recapitalization at levels to prevent
deterioration and ensure that facilities are restored and modernized.
Service officials stated that they generally did not meet the
sustainment funding goals because resources were limited and programs
such as force modernization often had higher funding priority. Although
the services achieved more success in meeting DOD‘s goal to fund
recapitalization, funding remains an issue with the Army, the Navy, and
the Air Force reporting recapitalization backlogs of over $50 billion
at the end of fiscal year 2007.
DOD has not taken actions to estimate and address its deferred facility
sustainment requirements. In fiscal years 2005 through 2007, the
services did not fund over $3.5 billion of their estimated annual
facility sustainment requirements. The services do not have consistent
estimates of their deferred sustainment requirements or plans to deal
with these needs because DOD has not provided adequate guidance to
clearly define deferred sustainment requirements, or direct the
services to measure, track, and address these needs. As a result, DOD‘s
plans to address facility sustainment requirements do not include all
deferred sustainment requirements, which could result in continued
facility deterioration and increased future recapitalization costs.
DOD‘s progress in developing a new model to estimate funding
requirements for installation services, such as airfield and port
operations, has been slow. Although DOD‘s goal is to establish common
standards and metrics for installation services by the end of 2008, the
services had agreed on common definitions and standards for only 2 of
29 areas by the end of 2007. DOD officials stated that reaching
agreement has been difficult for several reasons, such as differences
among the services in how tasks for installation services are performed
and managed. Without a reliable model, DOD cannot provide the Congress
with a clear basis for making funding decisions.
What GAO Recommends:
GAO recommends that DOD take several actions to increase the facilities
sustainment model‘s reliability, address deferred facility sustainment
funding requirements, and advance progress implementing the
installation services model. DOD generally agreed with the
recommendations.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-502]. For more
information, contact Brian J. Lepore at (202) 512-4523 or
leporeb@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Reliability of the Facilities Sustainment Model's Estimates Can Be
Improved:
Military Services Have Not Met All Funding Goals for Facility
Sustainment and Recapitalization:
DOD Has Not Taken Actions to Address Deferred Facility Sustainment
Requirements:
DOD's Progress in Developing an Installation Services Model Has Been
Slow:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Current Methods Used by the Military Services to Estimate
Installation Support Services Funding Requirements:
Appendix III: Comments from the Department of Defense:
Appendix IV: GAO Contact and Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: Selected Results from the Independent Validation and
Verification Study of DOD's Sustainment Cost Factors:
Table 2: Attainment of Sustainment Goals--Percentage of Requirement
Funded, Fiscal Years 2005 through 2008:
Table 3: DOD Facility Recapitalization Rates Expressed in Years:
Table 4: Unfunded Annual Facility Sustainment Requirements:
Figures:
Figure 1: DOD's Planned Fiscal Year 2008 Funding for Installation
Support:
Figure 2: Leaking Pipes and Cracked Walls at a Damaged Warehouse
Facility at Fort Sam Houston:
Figure 3: Deteriorated Barracks Building at Fort Sam Houston:
Figure 4: Standing Water on a Leaking Roof of a Weapons and Radar
Training Building at an Oceana Naval Air Station Annex:
Figure 5: Damaged Aircraft Hangar Doors at Oceana Naval Air Station:
Figure 6: Leaking Windows and Electrical Panels that Created a Safety
Hazard at a Deteriorated Aircraft Maintenance Hangar on Randolph Air
Force Base:
Figure 7: Cracking Aircraft Aprons at Randolph Air Force Base:
United States Government Accountability Office:
Washington, DC 20548:
April 24, 2008:
Congressional Committees:
Since 1997, we have identified the Department of Defense's (DOD)
management of its support infrastructure as a high-risk area because
infrastructure costs have affected the department's ability to devote
funds to other more critical programs and needs. DOD is one of the
world's largest organizations in terms of physical plant, managing and
operating about 577,000 buildings and structures at more than 5,300
sites worldwide with a total replacement value of about $712 billion.
In fiscal year 2008, DOD plans to spend more than $55 billion to
support these facilities and operate its bases. DOD refers to this
funding as installations support,[Footnote 1] which includes funds for
facilities sustainment, facilities recapitalization, installation
services, and facilities operation services.[Footnote 2] Accurate and
consistent estimates of funding requirements for these areas can enable
DOD to establish goals to optimally meet installation facility and
operations needs and make informed decisions to more efficiently
allocate resources at a time when our nation faces increased fiscal
constraints. By providing adequate funding for facilities support to
meet these goals, DOD can prevent facilities from becoming deteriorated
and outdated faster than expected, and ensure that installations can
provide the services needed to fully support military missions and
personnel at the levels desired.
DOD has worked for several years to develop models that can reliably
estimate the funds needed in several installation support funding areas
to effectively and efficiently support DOD's missions and personnel. To
date, DOD has developed and implemented only one installation support
funding model--the facilities sustainment model. This model has been
used by the military services since fiscal year 2003 to estimate the
annual sustainment funds the services need to budget to perform
maintenance and repair activities necessary to keep their buildings and
structures in good working order and maximize facility service life. To
help estimate other installation facility and operations funding needs,
DOD has used a metric for facility recapitalization,[Footnote 3] has
developed and will soon implement a model for facilities operation
services, and continues to work on a model for other installation
services, such as installation airfield and port operations, security,
and family support services.
Because of the challenges the department has faced in budgeting for the
significant funding required to support DOD installations and the
importance of adequate installation support to DOD's missions and the
quality of life for DOD personnel, we initiated this engagement under
the authority of the Comptroller General of the United States to
conduct evaluations on his own initiative.[Footnote 4] We are reporting
the results of our evaluation to you because of expressed interest
related to your committees' oversight responsibilities. This report
discusses (1) the reliability of the annual funding estimates produced
by the facilities sustainment model, (2) DOD's progress in meeting
funding goals for facility sustainment and recapitalization, (3) the
extent to which DOD has addressed deferred facility sustainment funding
needs, and (4) the status of DOD's efforts to develop a funding
requirements model for installation services.
To address these questions, we (1) reviewed the adequacy of the
documentation supporting the key inputs used by the facilities
sustainment model as well as the military services' compliance with
procedures designed to verify the accuracy of the inventory information
used by the model; (2) compared DOD's goals for facility funding with
accomplishments and discussed progress towards the goals with DOD and
military service officials;[Footnote 5] (3) discussed with DOD and
military service officials efforts to identify and address deferred
facility sustainment requirements, determined the amount of the annual
sustainment requirement that was not funded, and reviewed the deferred
facility maintenance amounts reported in the military services'
financial statements; and (4) documented the development history and
status of the installation services model and discussed with DOD
officials the remaining obstacles to the model's completion. We also
visited eight judgmentally selected military installations, selected to
represent several different geographic locations, to gain local-level
insight into compliance with inventory verification procedures, the
accuracy of real property inventory records, support funding issues,
and the condition of facilities. We conducted this performance audit
from May 2007 through April 2008, in accordance with generally accepted
government auditing standards. Those standards require that we plan and
perform the audit to obtain sufficient, appropriate evidence to provide
a reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives. A
detailed description of our scope and methodology is included in
appendix I of this report.
Results in Brief:
Although the facilities sustainment model provides a consistent and
reasonable framework for preparing estimates of DOD's annual facility
sustainment funding requirements, accuracy and supportability issues
with two of the model's key inputs--the inventory quantity and the
sustainment cost factor associated with each of DOD's 448 facility
categories--have affected the reliability of the model's estimates.
Regarding the inventory quantity input, we found that the military
services had not complied with DOD real property and financial
regulations that require verification of each real property inventory
record at least once every 5 years. For example, the Army and the Navy
had not verified the accuracy of about 39 percent and 59 percent,
respectively, of their real property inventory records during the 5
years ending with fiscal year 2007. Without the verifications, which
the services attributed to a lack of personnel, DOD lacked assurance
that the inventory quantities used by the model were accurate, and our
analysis identified inaccuracies in some inventory quantities
subsequently used by the model. During our visits to several
installations we also identified discrepancies between the inventory
quantities used by the model and the quantities indicated in the
supporting real property records. Regarding the sustainment cost factor
input, we identified issues concerning the accuracy and supportability
of some cost factors used by the model. For example, a contractor hired
by DOD to independently verify and validate the model's cost factors
reported in February 2006 that only 13 of 45 factors evaluated were
deemed to be reasonably accurate and adequately supported. We also
found that DOD did not maintain readily accessible information
documenting how each factor was calculated or explaining the reasons
that some factors changed from one year to the next, even when changes
were significant, such as more than 50 percent. Furthermore, a change
for fiscal year 2009 in DOD's method for calculating sustainment cost
factors that are not based on independent data sources can result in
reduced accuracy of those factors. Until DOD takes additional steps to
improve the accuracy of its inventory quantity and sustainment cost
factor inputs to the facilities sustainment model, the model's
estimates of annual facility sustainment funding requirements will not
be as reliable as possible, which could jeopardize DOD's ability to
adequately provide for and report on its facility sustainment needs.
The military services have not met all of DOD's goals for funding
facility sustainment and recapitalization at levels to prevent
deterioration and ensure that facilities are restored and modernized in
accordance with established benchmarks. Noting in 2004 that full
funding of sustainment requirements was the most economical approach
over a facility's life cycle, DOD established a goal for the military
services to fund sustainment at 95 percent of the requirement
determined by the facilities sustainment model beginning in fiscal year
2005, and at 100 percent of the requirement beginning in fiscal year
2008. However, DOD actually funded 79 percent, 91 percent, and 90
percent of its sustainment requirements in fiscal years 2005, 2006, and
2007, respectively, falling short of the goal in each year. In fiscal
year 2008, the Army, the Navy, the Air Force, and the Marine Corps
budgeted funds to meet 89 percent, 83 percent, 92 percent, and 89
percent of their sustainment requirements, respectively, and thus did
not budget to meet the fiscal year's 100 percent funding goal. Service
officials stated that they generally did not meet the sustainment
funding goals because resources were limited and some programs, such as
force modernization, often had a higher funding priority. Moreover,
some budgeted sustainment funds were used to pay for other needs, such
as unfunded facility restoration projects and bills for installation
services, which reduced funding that would have been used to sustain
facilities. At the eight installations we visited, facility sustainment
requirements were not fully funded every year during fiscal years 2005,
2006, and 2007, and some facilities had fallen into disrepair at most
of these installations. In the facility recapitalization area, the
military services achieved more success in meeting DOD's goal to fund
recapitalization annually at levels that would result in replacing
facilities every 67 years. For example, the Army, the Navy, and the Air
Force exceeded the 67-year goal in some years since fiscal year 2005.
However, the adequacy of recapitalization funding remains an issue
because of underfunding in previous years. The Army, the Navy, and the
Air Force reported recapitalization backlogs of about $20.4 billion,
$27.6 billion, and $9.3 billion, respectively, at the end of fiscal
year 2007 and some of the installations we visited also reported
concerns over growing backlogs. As other important priorities, such as
force modernization, compete for funding, DOD has been challenged to
provide adequate resources for sustaining and recapitalizing its
facilities. As a result, some facilities have not been sustained at a
level to keep them in good working order and will likely experience
reduced service lives, which in turn will lead to more costly
recapitalization requirements in the future.
DOD has not taken actions to estimate and address the military's
deferred, or backlogged, facility sustainment requirements. Deferred
sustainment requirements might not exist if the annual sustainment
requirement were fully funded each year. However, as noted above, this
has not been the case and, in fiscal years 2005 through 2007, the
military services did not fund over $3.5 billion of their estimated
annual facility sustainment requirements. According to DOD, needed
sustainment work that is not performed will eventually result in
damaged facilities, shortened facility service lives, and increased
future costs for facility restoration. Yet, because DOD has not
provided guidance that clearly defines deferred sustainment
requirements, directs the services to consistently measure and track
deferred sustainment needs, or establishes a goal to address these
needs, the services do not have consistent estimates of their deferred
sustainment requirements or plans to deal with these needs. As a
result, DOD lacks a complete picture of its facility sustainment
funding needs and DOD's current plans and goals to address facility
sustainment requirements do not include all sustainment requirements,
which could further jeopardize DOD's ability to adequately provide for
its facility sustainment needs and result in continued facility
deterioration and increased future recapitalization costs. In addition,
the military services' financial reporting of deferred facility
maintenance information has been inconsistent with financial reporting
requirements intended to provide full disclosure of facility
conditions. Largely because of a lack of clear guidance, the services'
financial statements before fiscal year 2007 excluded required
information concerning deferred facility sustainment requirements and
included information that is not required concerning deferred facility
modernization requirements. Although DOD issued revised guidance in
September 2007 in part to address this issue, the guidance did not
provide sufficient details to ensure that future financial reporting of
deferred maintenance would be consistent with reporting requirements.
As a result, the military services' financial reporting of deferred
maintenance information may continue to be inconsistent with financial
reporting requirements.
DOD's progress in developing a model for estimating installation
services funding requirements has been slow because DOD has been unable
to overcome long-standing inconsistencies among the military services'
definitions of support service functions and other obstacles that
prevent such a model from being ready for use. In 2004, DOD's
installation strategic plan noted the need to develop an analytical
model based on common benchmarks to accurately forecast funding
requirements for installation services. Although interservice teams
have been studying installation support service areas since 2005 to
develop common definitions, performance standards, metrics, and cost
estimates, the military services had agreed on common definitions and
standards for only 2 of 29 service areas by the end of calendar year
2007. According to DOD officials, the difficulty in reaching agreement
has been caused by several factors, such as traditional differences
among the military services in how tasks and subtasks for installation
services are grouped, performed, managed, and funded; differences in
the value and emphasis placed on various support services, and
differences in support service needs based on installation location and
demographic characteristics. Although DOD's goal is to establish common
standards and metrics for installation services by the end of 2008, DOD
had not formally established a milestone for when the model will be
implemented for use in estimating the military's installation services
funding requirements. DOD officials stated that additional obstacles
must be overcome to meet the 2008 goal and complete development of a
reliable model. Key obstacles include overcoming differences among the
military services in service program management and funding methods and
identifying adequate information sources for estimating costs for the
various installation services. In view of these remaining obstacles and
prior progress, it is unclear whether the 2008 target will be met. In
the absence of a DOD-wide model, each military service has developed
methods to determine its installation services requirements and funding
needs subject to its own definition of the types and levels of services
it deems necessary. According to Army, Navy, and Air Force officials,
funding for installation services in some instances has been inadequate
and resulted in installations providing reduced services, which, in
turn, adversely affected the quality of life of DOD personnel. Until a
reliable model is implemented, DOD cannot know its installation
services funding requirements with confidence, set installation
services funding and performance benchmarks, measure the military
services' progress in providing installation services, or provide the
Congress with a clear, consistent basis for making related funding
decisions.
We are making several recommendations to increase the reliability of
the facilities sustainment model, address deferred facility sustainment
funding requirements, and advance progress towards implementing the
installation services model. Specifically, we are recommending that DOD
monitor and ensure compliance with guidance requiring verification of
real property inventory records, maintain documentation on the basis
for the sustainment cost factors used by the model, and revert to the
previously used method to calculate sustainment cost factors that are
not based on independent data sources. We also are recommending that
DOD provide guidance that clearly defines deferred facility sustainment
requirements, directs the services to consistently measure and track
deferred sustainment needs, establishes a goal to address these needs,
and ensures that the military services' financial reporting of deferred
facility maintenance is consistent with financial reporting
requirements. Further, we are recommending that DOD establish a
milestone for implementing the installation services model and provide
adequate senior-level oversight to ensure that the milestone is met.
In written comments on a draft of this report, DOD generally agreed
with our recommendations and stated that it had already initiated
several of the recommended actions. However, DOD's comments and stated
actions did not fully address some of our recommendations.
Specifically, in addition to the steps that DOD stated it has taken or
plans to take, we continue to believe that DOD needs to take further
steps to monitor and ensure compliance with inventory verification
guidance, provide a clear definition of deferred facility sustainment
requirements, direct the military services to consistently measure and
track deferred sustainment needs, ensure that the military services'
financial reporting and disclosure information regarding deferred
facility maintenance is consistent with financial reporting
requirements, and provide adequate senior-level oversight to ensure
that an installation services model is implemented as soon as possible.
DOD's comments are discussed in more detail at the end of this report
and are reproduced in full in appendix III.
Background:
Since 1997, we have identified management of DOD support infrastructure
as a high-risk area because infrastructure costs have affected the
department's ability to devote funds to other more critical programs
and needs. In a January 2007 update to our high-risk series, we noted
that DOD continued to face significant challenges in funding its
installation support and sustainment, restoration, and modernization of
its facilities, and questions persisted over the adequacy of funding
provided to these areas.[Footnote 6] Further, we noted that because of
these long-standing issues, DOD's management of support infrastructure
remains a high-risk area.
We have issued several reports in recent years highlighting the long-
term challenges DOD faces in managing its portfolio of facilities and
halting the degradation of facilities. For example, in February 2003,
we found that funds designated for facilities sustainment were held
back at the service headquarters, major command, and installation
levels to cover more pressing needs or emerging requirements, which
resulted in continued facility deterioration.[Footnote 7] In May 2003,
we reported that although funding for maintaining and constructing
reserve component facilities had increased by almost 50 percent during
1998 through 2003, the reserve components indicated the condition of
about 64 percent of their facilities was inadequate.[Footnote 8] In a
June 2005 report, we found that DOD did not have a common framework for
identifying base operating support functions and funding requirements
to ensure adequate delivery of services, particularly in a joint
environment.[Footnote 9] We also found that, because of a lack of a
common terminology across the services in defining base support
functions and the lack of a mature analytic process for developing
credible and consistent requirements, the services moved hundreds of
millions of operation and maintenance dollars designated for facilities
sustainment and other purposes to pay for base operations support.
While such funding movements are permissible, we found that they were
disruptive to the orderly provision of services and contributed to the
overall degradation of facilities. In another 2005 report, we found
that many of DOD's training ranges were in deteriorated condition and
lacked modernization, which adversely affected training activities and
jeopardized the safety of military personnel.[Footnote 10]
Funding of Installation Support:
The Office of the Deputy Under Secretary of Defense for Installations
and Environment has overall responsibility for DOD's facilities and
installations, which includes about 577,000 buildings and structures at
more than 5,300 sites worldwide with a total replacement value of about
$712 billion. During fiscal year 2008, DOD plans to spend around $55
billion to support its facilities and installations. DOD refers to this
funding as installation support, which includes five broad categories
of services, programs, and support activities--facilities, installation
services, family housing, environment, and base realignment and
closure. As shown in figure 1, the facilities category is composed of
five subcategories--sustainment, recapitalization, disposal, facilities
operation services, and new footprint, which includes facility
construction related to new or expanded missions.
Figure 1: DOD's Planned Fiscal Year 2008 Funding for Installation
Support:
This figure is a flowchart showing DOD's planned fiscal year 2008
funding for installation support.
[See PDF for image]
Source: DOD.
Note: The Congress appropriates funds according to the categories
listed under the appropriation heading, and DOD classifies funds for
installation support according to the categories in the chart. Numbers
in the chart may not total correctly due to rounding.
[End of figure]
Of these installation support categories, this report focuses on
facility sustainment, recapitalization, installation services, and
facilities operation services--the categories where DOD has or intends
to implement models to help estimate funding requirements.
* Sustainment, funded primarily with operation and maintenance
appropriations, includes the maintenance and repair activities
necessary to prevent deterioration, maintain safety, and keep
facilities in good working order over their service lives. Sustainment
includes regularly scheduled adjustments and inspections, preventive
maintenance tasks, and emergency response and service calls for minor
repairs. Sustainment also includes major repairs or replacement of
facility components that are expected to occur periodically throughout
a facility's life cycle, such as regular roof replacement; refinishing
wall surfaces; repairing and replacing electrical, heating, and cooling
systems; and replacing tile and carpets. According to DOD, needed
sustainment work that is not performed will eventually result in
damaged facilities, shortened facility service lives, and increased
future costs for facility restoration.
* Recapitalization, funded primarily with operation and maintenance and
military construction appropriations, provides for improving facilities
through restoration and modernization. Restoration includes repair and
replacement work needed to restore facilities degraded from several
causes, such as natural disaster, fire, accident, excessive age, or
inadequate sustainment. Modernization includes both renovation and
replacement of existing facilities to implement new or higher
standards, accommodate new functions, or replace building components
that typically last more than 50 years.
* Installation services, funded primarily with operation and
maintenance appropriations, includes the personnel, support equipment,
contracts, and associated costs to plan, manage, and deliver
installation services and functions. Installation services consists of
nine major program areas which include many diverse subfunctions, such
as installation airfield and port operations; security; transportation;
supply; communications; information management; personnel management;
food services; administrative, legal, and financial services;
unaccompanied personnel housing management; family and quality of life
programs; and environmental compliance.
* Facilities operation services, funded primarily with operation and
maintenance appropriations, includes 10 facility-related services--
fire and emergency services, utilities, pavement clearance, refuse
collection and disposal, real property leases, grounds maintenance,
pest control, custodial services, real property management and
engineering services, and engineering readiness. DOD previously
referred to facility operations as real property services and, together
with installation services, family housing, and environment, were
referred to as base operations support. In general, the military
services' budgets continue to refer to funding for installation
services and facility operation services as base operations support
funding.
DOD Intends to Use Models to Estimate Funding Requirements:
In order to more effectively and efficiently support DOD missions,
several years ago the Office of the Deputy Under Secretary of Defense
for Installations and Environment began to lead the military services
in developing more accurate methods to estimate installation support
funding requirements. According to DOD officials, in the past
installation support funding requirements were often artificially
derived, such as by basing funding needs on prior-year execution
levels. DOD lacked departmentwide standards for determining future
funding needs and did not have sufficient data to support informed
decision making. DOD's solution was to develop models that could
predict future requirements based on known inputs that were specific to
a facility category type, service, and location. The idea was to better
support funding decisions by developing models that used benchmarked
and validated inputs, estimated needs based on service levels
commensurate with industry standards, where applicable, and showed the
impact if funds were not provided. According to DOD officials, models
can improve consistency, increase credibility, establish an auditable
process, and provide a tool for setting funding goals and measuring
progress towards meeting those goals. The following is a summary status
of DOD's model development for installation support as of January 2008.
* The facilities sustainment model has been implemented and used by the
military services to estimate the annual facility sustainment funding
requirements since fiscal year 2003. The model estimates sustainment
requirements for each of DOD's 448 facility categories. DOD determined
the facility categories by grouping facilities with similar functions
and units of measure to provide for consistent analysis and planning
across the military.
* The facilities modernization model is under development and DOD plans
to begin using the model to estimate recapitalization funding
requirements in fiscal year 2010. According to DOD, the model will
estimate annual funding requirements and improve upon DOD's
recapitalization metric that has been used for several years to help
assess restoration and modernization funding needs. The
recapitalization metric uses as a measure the number of years it would
take for facilities to be replaced based on the annual funding provided
for restoration and modernization. DOD's current goal is for military
services to fund facility restoration and modernization in annual
amounts that would result in facilities being replaced every 67 years.
DOD established the 67-year benchmark after an assessment of DOD's real
property inventory in the late 1990s. According to DOD, the facilities
modernization model will determine funding needs based on DOD's real
property inventory and the expected service life for each facility
category, rather than using the 67-year average service life for all
facility categories.
* The facilities operation model has been under development since
fiscal year 2005 and DOD plans for all military services to use the
model to estimate the fiscal year 2010 facilities operation funding
requirements. According to DOD, the model will use commercial
benchmarks for similar services performed in the private sector. The
Air Force used a prototype of the model to help estimate the Air Force
fiscal year 2008 funding requirement for facilities operation.
* The installation services model has been under development since
2006, although work required to support the model, such as developing
DOD-wide common definitions for support services, began in fiscal year
2004. The model is intended to provide a consistent framework in which
the military services can develop annual funding requirements for
installation services. DOD's goal is to complete development of the
model in calendar year 2008. DOD has not set a date for the military
services to begin using the model to develop their installation
services funding requirements.
Reliability of the Facilities Sustainment Model's Estimates Can Be
Improved:
Although the facilities sustainment model provides a consistent and
reasonable framework for preparing estimates of DOD's annual facility
sustainment funding requirements, accuracy and supportability issues
with two of the model's key inputs--the inventory quantity and the
sustainment cost factor associated with each of DOD's 448 facility
categories--have affected the reliability of the model's estimates.
Regarding the inventory quantity input, we found that the military
services had not verified the accuracy of the facility inventory
records as required by DOD guidance, the model has used some inaccurate
inventory quantities, and discrepancies existed between some facility
inventory quantities used by the model and the quantities shown in
supporting installation inventory records. Regarding the sustainment
cost factor input, we identified issues concerning the accuracy and
supportability of some cost factors used by the model. Because of these
issues, the model's estimates of annual facility sustainment funding
requirements are not as reliable as possible.
Facilities Sustainment Model Provides a Consistent and Reasonable
Framework for Preparing Funding Estimates:
The facilities sustainment model provides a consistent and reasonable
framework for estimating DOD's facility sustainment requirements,
providing that the information input to the model is accurate. DOD
officials stated that the model was designed to incorporate the basic
characteristics of effective cost estimates[Footnote 11] and was
independently validated prior to implementation. The model calculates
annual facility sustainment funding requirements for each of DOD's
facility categories by using an equation that considers four
quantifiable variables:
Sustainment requirement = (inventory quantity) times (sustainment cost
factor) times (geographic location adjustment factor) times (inflation
adjustment):
The inventory quantities used by the model come from the real property
inventory records maintained by military installations. Inventory
quantities are totaled for each facility category and reported to DOD
at the end of each fiscal year. Sustainment cost factors are estimates
of the average annual unit cost to sustain the average size facility in
each facility category--such as $2.53 per square foot for an aircraft
maintenance hangar. DOD determines the sustainment cost factor from a
variety of sources, such as private sector cost benchmarks for
buildings and building components, other government agency standard
cost estimates, and military-component-validated cost factors for
facilities with no commercial counterpart. Although DOD prefers these
sources to determine sustainment cost factors, DOD officials noted that
such sources are not available for some facility categories. In these
cases, DOD usually determines the cost factor based on costs from a
separate but similar facility category. The model also adjusts
sustainment costs to account for geographic location differences and
annual inflation. To do this, the model applies a location factor
developed by DOD to account for differences in labor, material, and
equipment costs depending on where installations are located, and
applies an inflation factor, determined by DOD, to account for cost
escalation. Finally, the model makes adjustments to remove those
facilities that are slated for closure or demolition in the near
future, add those facilities under construction, account for some data
differences among the military services, and categorize sustainment
costs under the appropriate DOD organization and appropriation type.
Facility Inventory Data Used in the Model Have Not Been Validated as
Required:
We found the model's estimates (output) were less reliable than
possible in part because the facility inventory data used as an input
by the model had not been validated as required. The model uses
facility inventory information from each military installation as a key
input in determining sustainment funding requirements, so the inventory
information must be accurate if the model's estimates are to be
accurate. To help ensure inventory accuracy, DOD guidance requires that
DOD components verify the accuracy of each real property inventory
record every 5 years.[Footnote 12] The instructions require that the
verifications be based on a physical inventory, which can verify that
the inventory records accurately describe all installation facilities
and accurately record each facility's size, or quantity, using the unit
of measure that DOD has prescribed for each facility category. The
verification of real property inventory records also helps ensure the
accuracy of facility-related information included in the military
services' annual financial statements.
Despite the guidance, we found that the military services had not
verified the accuracy of all facility inventory records within the past
5 years. According to service officials, the inventory verifications
had not been performed because personnel resources at military
installations were limited and the installations had higher priority
work for the personnel who were available. The level of compliance with
the verification requirements varied among the military services.
* Army information showed that the inventory records for over 90,000
Army facilities, about 39 percent of all Army facilities, had not been
verified within the 5-year period ending with fiscal year 2007.
Although some Army installations met the 5-year verification
requirement, most installations did not. At some installations, a
significant percentage of inventory records was not verified. For
example, at Forts Irwin, Bragg, Shafter, and Polk, 93 percent, 83
percent, 82 percent, and 75 percent, respectively, of the inventory
records had not been verified within the past 5 years.
* Navy information showed that Navy installations had not verified the
accuracy of about 59 percent of their real property inventory records
within the 5-year period ending with fiscal year 2007. More
specifically, the inventory records for about 49 percent of the Navy's
buildings, 58 percent of other Navy structures, and 80 percent of the
Navy's utility facilities had not been verified within the required
time frame.
* Although Air Force headquarters did not track compliance with the
real property inventory verification requirement, at our request the
Air Force queried its major commands about compliance levels. The Air
Education and Training Command reported that about 17 percent of its
inventory records had not been verified within the past 5 years. The
Air Combat Command, the Space Command, and Materiel Command reported
that about 10 percent, 3 percent, and 2 percent, respectively, of their
inventory records had not been verified within the past 5 years.
Reported information from the remaining commands did not state their
level of compliance but stated that the commands were verifying about
20 percent of their inventory records each year.
* Marine Corps headquarters also did not track compliance with the real
property inventory verification requirement. However, in May 2007, the
Naval Audit Service issued a report on the reliability of the real
property information included in the Marine Corps' financial
statements. The report stated that physical inventories of real
property were not being performed every 5 years as required and that
documentation supporting the performance of the physical inventories
did not exist, except for critical facilities.[Footnote 13]
During visits to eight installations, we found that while four
installations had verified their facility inventory records within the
past 5 years, the other four installations had not performed this
verification. For example, Randolph Air Force Base officials stated
that about 60 percent of the installation's real property inventory
records had not been validated by a physical inventory within the past
5 years because of limited personnel. The officials stated that
inventory validations were one of the last tasks to be performed
because other tasks were given higher priority. At Langley Air Force
Base, officials stated that about 50 percent of the installation's real
property inventory records had not been validated within the past 5
years, also because of limited personnel. From a list of the inventory
records that had been verified, we judgmentally selected and reviewed
the documentation supporting the verifications of 10 records. We found
discrepancies in 8 of the 10 records that raise questions about the
reliability of the verifications at Langley Air Force Base. For
example, the inventory verification documentation identified one
facility as a billboard when the real property record identified the
facility as a vehicle bridge, and the verification documentation
identified another facility as a youth center when the real property
record identified the facility as an Air Force clinic. In addition, the
inventory verification documentation in some cases included no
signature, date, or facility size, as required by installation
procedures.
Inaccurate Inventory Quantities Used by the Model:
We also question the reliability of the facilities sustainment model's
estimate (output), because we found several errors in the inventory
quantities used as input to the model. As shown in the following
examples, the inventory quantity errors caused inaccuracies in the
model's funding estimates.
* The inventory quantity used in the model to estimate sustainment
requirements for the military services' vehicle maintenance facilities
increased from 6,785 facilities in fiscal year 2006 to 14,760
facilities in fiscal year 2007, an increase of 118 percent. The
quantity then decreased to 6,599 facilities in fiscal year 2008. When
we asked for an explanation for the fluctuation, DOD officials stated
that the fluctuation was most likely caused by errors in five inventory
records at one installation. These records used the wrong unit of
measure in fiscal year 2007 to report inventory quantity. Specifically,
the installation reported the square footage of the facilities as the
inventory quantity instead of reporting the number of facilities. For
example, a vehicle maintenance facility with 3,325 square feet was
counted as 3,325 separate facilities. Because of this error, the
facilities sustainment model overstated the sustainment requirement for
vehicle maintenance facilities by about $12.0 million in fiscal year
2007.
* The inventory quantity used by the model to estimate sustainment
requirements for the Navy's hazardous waste storage or disposal
facilities increased from 399 facilities in fiscal year 2006 to 2,350
facilities in fiscal year 2007, an increase of 489 percent. The
quantity then decreased to 385 facilities in fiscal year 2008. When we
asked for an explanation for the fluctuation, Navy officials stated
that the fluctuation was caused by an error in reporting the inventory
quantity in fiscal year 2007. Because of this error, the facilities
sustainment model overstated the sustainment requirement for the Navy's
hazardous waste storage or disposal facilities by about $10.8 million
in fiscal year 2007.
* The inventory quantity used by the model to estimate sustainment
requirements for unsurfaced airfield pavement in the Army increased
from 762,553 square yards in fiscal year 2005 to 2,634,221 square yards
in fiscal year 2008, an increase of 245 percent. When we asked Army
officials to explain the basis for the increase, Army officials stated
that the Army had increased data emphasis and installations made great
efforts to accurately capture their entire inventories. Although the
dollar amount associated with this change in inventory is relatively
small, the Army's statement indicates that the Army's previously
reported inventory quantities for unsurfaced airfield pavement were not
accurate.
Discrepancies Existed between Quantities Used in the Model and
Supporting Inventory Records:
Our review also identified discrepancies between facility inventory
quantities used by the facilities sustainment model and quantities
shown in the supporting real property inventory records. We identified
such discrepancies at five of the eight installations we visited. In
many instances, the difference in the inventory quantities was
relatively small. Nevertheless, local officials could not explain the
differences, which cause the accuracy of the facility quantities used
by the model to be questionable. The following examples illustrate
discrepancies we identified during installation visits.
* At Fort Eustis, we selected 39 facilities and for each facility
compared the inventory quantity shown in the installation's real
property inventory record with the inventory quantity used in the
facilities sustainment model. In 36 of the 39 cases, the inventory
quantities did not match and local officials could not explain why. For
example, the Fort Eustis inventory record showed the size of a shore
erosion prevention facility to be 9,333 linear feet but the inventory
size used in the model was 30,839 linear feet, a difference of 230
percent. In another instance, the Fort Eustis inventory record showed
the size of a bulkhead facility to be 2,594 linear feet but the
inventory size used in the model was 1,394 linear feet, a difference of
86 percent. In neither case could Fort Eustis officials explain the
discrepancy between the quantities contained in the facility inventory
records and the quantities used by the model.
* At Randolph Air Force Base, we selected 39 facilities and for each
facility compared the inventory quantity shown in the installation's
real property inventory record with the inventory quantity used by the
facilities sustainment model. In 5 of the 39 cases, the inventory
quantities did not match and local officials could not explain why. For
example, the Randolph Air Force Base inventory record showed the size
of a heat source facility to be 5,918 million British thermal units,
but the inventory size used in the model was 27.15 million British
thermal units. The quantity used by the model was a default reset value
that the model used when the reported size for this facility type
exceeded 500 million British thermal units and the reporting
installation did not confirm that its reported facility size was
correct. Randolph Air Force Base officials did not resolve the
discrepancy during our visit.
* At Camp Lejeune, we found discrepancies in several of the inventory
records we checked. For example, the model estimated sustainment
requirements for seven aircraft runways at Camp Lejeune. When we asked
for the supporting facility inventory records in order to compare
inventory quantities in the records with the quantities used by the
model, Camp Lejeune officials stated that they could not locate the
inventory record for one of the runways. The model had used an
inventory size of 172,083 square yards for this runway and estimated
that its annual sustainment requirement was about $207,000. Camp
Lejeune officials did not resolve the discrepancy during our visit.
An Independent Study Found Concerns with the Model's Sustainment Cost
Factors:
An independent study that found concerns with the sustainment cost
factors used in the model contributed to our finding that the model's
estimates were less reliable than possible. As with inventory
quantities, the facility sustainment cost factors associated with each
of DOD's 448 facility categories are a key input to the facilities
sustainment model. The cost factors used by the model must be reliable
in order for the model's requirements estimates to be reliable. To
assess the quality of the factors, DOD hired a contractor in fiscal
year 2005 to perform an independent validation and verification study.
The contractor selected 45 cost factors, primarily from those factors
associated with facility categories with the highest sustainment
requirements, independently determined a value for each factor, and
compared these values with the cost factor values used by DOD. The
study, completed in February 2006, reported that only 13 of 45 factors
evaluated were deemed to be reasonably accurate and adequately
supported. The study concluded that 32 of DOD's cost factors were
either overvalued or undervalued and recommended that DOD adjust its
cost factor values in order to more accurately estimate sustainment
requirements. Table 1 illustrates selected results from the study.
Table 1: Selected Results from the Independent Validation and
Verification Study of DOD's Sustainment Cost Factors:
Facility category: Surfaced road;
Unit of measure: Square yard;
DOD's cost factor value[A]: $0.54;
Study's estimated cost factor value[A]: $1.77;
DOD's factor value less study's factor value: Amount: ($1.23);
DOD's factor value less study's factor value: Percentage: -228.
Facility category: Unsurfaced road;
Unit of measure: Square yard;
DOD's cost factor value[A]: 0.16;
Study's estimated cost factor value[A]: 0.53;
DOD's factor value less study's factor value: Amount: (0.37);
DOD's factor value less study's factor value: Percentage: -231.
Facility category: Operating fuel storage;
Unit of measure: Gallon;
DOD's cost factor value[A]: 0.08;
Study's estimated cost factor value[A]: 0.26;
DOD's factor value less study's factor value: Amount: (0.18);
DOD's factor value less study's factor value: Percentage: - 225.
Facility category: Sidewalk and walkway;
Unit of measure: Square yard;
DOD's cost factor value[A]: 0.86;
Study's estimated cost factor value[A]: 1.84;
DOD's factor value less study's factor value: Amount: (0.98);
DOD's factor value less study's factor value: Percentage: - 114.
Facility category: Vehicle bridge;
Unit of measure: Square yard;
DOD's cost factor value[A]: 76.42;
Study's estimated cost factor value[A]: 37.79;
DOD's factor value less study's factor value: Amount: 38.63;
DOD's factor value less study's factor value: Percentage: 51.
Facility category: Standby emergency power;
Unit of measure: Kilowatt;
DOD's cost factor value[A]: 17.17;
Study's estimated cost factor value[A]: 10.43;
DOD's factor value less study's factor value: Amount: 6.74;
DOD's factor value less study's factor value: Percentage: 39.
Facility category: Airfield pavement lighting;
Unit of measure: Linear foot;
DOD's cost factor value[A]: 3.30;
Study's estimated cost factor value[A]: 2.30;
DOD's factor value less study's factor value: Amount: 1.00;
DOD's factor value less study's factor value: Percentage: 30.
Facility category: General administration building;
Unit of measure: Square foot;
DOD's cost factor value[A]: 2.56;
Study's estimated cost factor value[A]: 3.21;
DOD's factor value less study's factor value: Amount: (0.65);
DOD's factor value less study's factor value: Percentage: -25.
Facility category: Fence and wall;
Unit of measure: Linear foot;
DOD's cost factor value[A]: 0.60;
Study's estimated cost factor value[A]: 0.73;
DOD's factor value less study's factor value: Amount: (0.13);
DOD's factor value less study's factor value: Percentage: -22.
Facility category: Potable water distribution line;
Unit of measure: Linear foot;
DOD's cost factor value[A]: 0.85;
Study's estimated cost factor value[A]: 0.67;
DOD's factor value less study's factor value: Amount: 0.18;
DOD's factor value less study's factor value: Percentage: 21.
Source: US COST, Facilities Sustainment Cost Factor Evaluation for the
Office of the Secretary of Defense (February 2006).
[A] Fiscal year 2005 dollars.
[End of table]
In response to the study's recommendations, DOD made changes to some
but not all of the factors recommended for adjustment. Specifically,
DOD cited the study as the basis for making changes to 16 cost factors
when factors were adjusted for use in estimating the fiscal year 2009
sustainment requirements. However, some of these changes were not
consistent with the study's recommendations. For example, the study
found that the factor for general administration buildings was 25
percent too low and recommended a change. Although DOD made a change
and attributed the study for the change, the revised cost factor was
still 16 percent below the study's recommended amount after adjusting
for inflation. The study also found that the factor for standby
emergency power facilities was 39 percent too high and recommended a
change. Although DOD made a change and attributed the study for the
change, the revised cost factor was still 40 percent higher than the
study's recommended amount after adjusting for inflation.
DOD did not document the reasons why some of the study's
recommendations were accepted and some were not, and in some cases
DOD's decisions appeared inconsistent. For example, the study
recommended increasing the cost factors for surfaced roads and
unsurfaced roads. DOD accepted the recommendation for unsurfaced roads,
which will result in adding over $90 million to the sustainment
requirement, but did not accept the recommendation for surfaced roads.
Because the reasons for these decisions were not documented, we asked
DOD officials to explain the basis for the decisions. The officials
stated that the recommendation for unsurfaced roads was accepted
because a DOD panel decided that the data used to support the study's
recommended cost factor value were superior to the data used to support
DOD's cost factor value. However, because the data used by the study
were readily available to DOD, it is unclear why the data were not
already used as the basis for DOD's cost factor. The officials stated
that the panel decided the opposite for surfaced roads--that the data
used to support DOD's cost factor were superior to the data supporting
the study's recommended cost factor. However, the basis for the panel
decision is somewhat unclear because DOD's cost factor was based on a
University of Kansas study and reasons were not stated to explain why
that study was considered a superior source.
It is important to note that the verification and validation study
evaluated 45 (about 10 percent) of DOD's 448 sustainment cost factors
and identified concerns with 32 (about 71 percent) of the factors
evaluated. Of these 32 factors, DOD made changes to 16 factors and
attributed the changes to the study. On the basis of these percentages,
it appears likely that if further study and analysis were performed on
the remaining 395 cost factors not subjected to an independent review,
additional reliability concerns would be identified and DOD would be in
a position to make adjustments to additional factors.
Support for Some Sustainment Cost Factors Is Unclear:
We identified issues concerning the supportability of some cost factors
used by the facilities sustainment model. DOD officials stated that, as
resources permit, several cost factors are refined each year in an
effort to continually improve the accuracy of the model. However, DOD
has not provided a clear audit trail with readily accessible
information documenting the support or basis for each factor's value,
such as the details on the calculations used and explanations for
changes in factors from year to year. Without this documentation, the
support for many factors is unclear, as illustrated below.
* From fiscal year 2008 to 2009, DOD decreased the sustainment cost
factor for potable water storage facilities and pedestrian bridges by
90 percent and 88 percent, respectively. Because documentation did not
explain the reason for these changes, we asked DOD officials for an
explanation. The officials stated that the changes were made to correct
a math error that had been made in the calculation of the previously
used cost factor values. Such errors might be more easily detected if
calculation details were provided in the documentation supporting the
cost factors.
* From fiscal year 2008 to 2009, DOD increased the sustainment cost
factor for airfield pavement lighting by 90 percent. The February 2006
verification and validation study had found this factor, before the
increase, to be high. Because documentation did not explain the reason
for the increase, we asked DOD officials for an explanation. The
officials stated that the increase resulted from a change in the basis
for the cost factor. The revised cost factor was based on a detailed
cost analysis of a standard design using vendor quotes. Still,
documentation showing the calculations and the number of vendors
contacted to ensure competitive pricing would help support this cost
factor change.
* From fiscal year 2008 to 2009, DOD increased the sustainment cost
factor for fences and walls by 92 percent. Because documentation did
not explain the reason for the increase, we asked DOD officials for an
explanation. The officials stated that the change resulted from a
change in the planned design life for fences and walls from 50 to 26
years. The February 2006 verification and validation study had
recommended that this factor be increased by 22 percent but did not
recommend a change in service life. Documentation showing the detailed
reasons for the change and the calculations used would help support
this cost factor change.
* From fiscal year 2008 to 2009, DOD decreased the sustainment cost
factor for sidewalks and walkways from $1.82 per square yard to $0. The
change reduced DOD's sustainment requirements by about $98 million.
Because documentation did not explain the reason for the decrease, we
asked DOD officials for an explanation. The officials stated that the
decrease resulted from a change in the planned design life for
sidewalks and walkways from 50 to 28 years, which resulted in
eliminating sustainment costs but increasing recapitalization costs. We
asked facility maintenance personnel at four of the installations we
visited whether they agreed with the change in the cost factor. In each
case, the officials stated that they disagreed because sidewalks and
walkways do have sustainment costs. Documentation showing the detailed
reasons for the change and the calculations used would help support
this cost factor change.
The support for some sustainment cost factors was also unclear because
of the method DOD used to determine the values for the factors.
Specifically, DOD attempts to use independent data sources as the basis
for determining sustainment cost factors. However, according to DOD
officials, independent data sources are not available for some facility
categories. To develop a sustainment cost factor for one of these
facility categories, DOD normally performs a ratio analysis based
primarily on costs from a similar facility category where costs are
based on independent sources.[Footnote 14] For example, the sustainment
cost factor for satellite communications buildings is based on a ratio
of costs from communications buildings, where the sustainment cost
factor is based on independent data sources.
However, we found that the cost factors for some facility categories
were based on costs from seemingly dissimilar facility categories. In
such cases, the support for the factors was unclear because
documentation did not explain the relationship between the facility
categories. For example, the sustainment cost factor for petroleum
pipelines, which are measured in miles, and the sustainment cost factor
for aircraft fueling facilities, which are measured in gallons per
minute, were both based on a ratio of costs from automobile service
facilities, which are measured in square feet. DOD officials stated
that sustainment costs for automobile service facilities include
hydrant and fuel truck station records, periodic maintenance
inspections, and replacement of worn parts, which are similar to costs
associated with petroleum pipelines and aircraft fueling facilities.
However, because automobile service facilities also include costs for
items not clearly associated with petroleum pipelines and aircraft
fueling facilities, such as linoleum flooring, painted walls, water
heaters, and heating and air conditioning systems, the connection
between these facility categories remains unclear.
DOD's Fiscal Year 2009 Calculation Method Can Reduce the Accuracy of
Sustainment Cost Factors Not Based on Independent Data Sources:
Each year since the facilities sustainment model was implemented in
2003, DOD has adjusted the sustainment cost factors for estimated
inflation. However, for fiscal year 2009, DOD changed the calculation
method used to make the inflation adjustment and the change can result
in reduced accuracy for those sustainment cost factors that are not
based on independent data sources but rather are based on ratio
analyses. As discussed above, when independent data sources are not
available to estimate a sustainment cost factor for a facility
category, DOD normally estimates the unknown cost factor by performing
a ratio analysis based on costs from a similar facility category where
the costs are based on independent sources. DOD's premise is that
because there is a similar relationship between the sustainment and
replacement cost factors for the two facility categories, a ratio
analysis can be used to estimate the unknown sustainment cost
factor.[Footnote 15] DOD uses ratio analyses to estimate the
sustainment cost factors for approximately one-third of DOD's facility
categories.
DOD officials stated that because several years had passed since the
facilities sustainment model was implemented and the actual inflation
rates for each of those years was known, DOD decided that it could
improve the accuracy of the factors if they were recomputed using the
actual prior year inflation rates. Thus, in developing the cost factors
to be used in estimating DOD's fiscal year 2009 facility sustainment
funding requirements, DOD recomputed all cost factors using actual
prior year inflation rates.
The recomputation should result in increased accuracy for those
sustainment cost factors that are based on independent data sources.
However, depending on the method used to make the inflation adjustment
for those cost factors that are based on ratio analyses, the
recomputation can also result in decreased accuracy for those factors.
To illustrate, for cost factors based on ratio analyses, DOD previously
made inflation adjustments by first applying the estimated annual
inflation rate to the individual sustainment and replacement cost
factors and then using a ratio analysis to calculate the unknown
sustainment cost factor. DOD did not use this method for fiscal year
2009. Instead, DOD used the value of the sustainment cost factor that
was determined in the first year that a ratio analysis was used and
then applied actual prior year inflation to recompute the cost factor's
value for fiscal year 2009. DOD's new method would be appropriate and
result in accurate estimates under two circumstances--if the similar
relationship between the two facility categories used in the ratio
analyses existed only in the first year that the ratio analysis was
used, or if the relationship between the known sustainment and
replacement cost factors used in the ratio analysis remained the same
from the original year to the current year. However, according to DOD
officials and our review of supporting documentation, neither
circumstance is applicable. More specifically, DOD officials stated
that the similar relationship between the facility categories continues
from year to year and our review found that the relationship between
the known sustainment and replacement cost factors often do not stay
the same because the individual costs can change at different rates
from year to year.
For example, the cost factor for retaining structure facilities is not
based on independent data sources but rather on a ratio analysis of
costs from fence and wall facilities. To adjust the retaining structure
facilities' cost factor for fiscal year 2009, DOD applied actual
inflation rates to the factor's value in 2005, the year that the factor
was first determined using a ratio analysis. The result was a
sustainment cost factor of $11.57 per linear foot. However, if DOD had
used its previously used method and calculated the cost factor using a
ratio analysis after the individual costs used in the analysis had been
adjusted for actual inflation, the sustainment cost factor would have
been $21.99 per linear foot, or 90 percent more. Using the previously
used calculation method would have increased the accuracy of the cost
factor because costs would continue to be based on a current year ratio
analysis and actual prior year inflation would still be considered
because the individual costs used in the ratio analysis would have been
adjusted for actual prior year inflation. Based on DOD's inventory of
retaining structure facilities, the difference resulted in the
facilities sustainment model estimating about $13 million less for
sustaining these facilities in fiscal year 2009.
As another example, the cost factor for petroleum pump station
facilities is not based on independent data sources but rather on a
ratio analysis of costs for automobile service facilities. To adjust
the petroleum pump station facilities' cost factor for fiscal year
2009, DOD applied actual inflation rates to the factor's value in 2006,
the year that the factor was first determined using a ratio analysis.
The result was a sustainment cost factor of $20.85 per square foot.
However, if DOD had calculated the cost factor using the previously
used method, the sustainment cost factor would have been $18.56 per
square foot, or 11 percent less. Based on DOD's inventory of petroleum
pump station facilities, the difference resulted in the model
estimating about $2.4 million more for sustaining these facilities in
fiscal year 2009.
In commenting on the calculation method used for fiscal year 2009 and
the resulting impact on those factors based on ratio analyses, DOD
officials stated that the intent was to reduce the number of variables
and unknowns in developing the cost factors and inflating the original
calculation appeared to be the least complicated method. Although the
method used by DOD for fiscal year 2009 may provide for some
consistency, the method does not appear to be any less complicated than
the previously used method, does not appear to reduce any variables or
unknown quantities, and can result in reduced accuracy for those cost
factors that are determined by a ratio analysis.
Military Services Have Not Met All Funding Goals for Facility
Sustainment and Recapitalization:
The military services have not met all of DOD's goals for funding
facility sustainment and recapitalization at levels to prevent
deterioration and ensure that facilities are restored and modernized in
accordance with established benchmarks. Full funding of sustainment
requirements is the most cost-effective approach to managing facilities
because it provides the most performance over the longest period for
the least investment. However, the military services collectively have
not met DOD's facility sustainment funding goals each year since goals
were established in fiscal year 2005, and some facilities had fallen
into disrepair at most installations we visited. As a result, some
facilities have deteriorated and will likely experience reduced service
lives, which, in turn, will lead to more costly recapitalization
requirements in the future. Although the military services achieved
more success in meeting DOD's recapitalization goals--largely because
of factors outside the normal facility recapitalization funding
process--service officials noted concern over the shortage of
restoration and modernization funds and a growing backlog of
restoration and modernization requirements.
Full Funding of Sustainment Requirements Is Cost Effective:
According to DOD, full funding of sustainment requirements is the most
cost effective approach to managing facilities because it provides the
most performance over the longest period for the least investment.
However, as other important priorities, such as force modernization,
have competed for funding, DOD has been challenged to provide adequate
resources for sustaining and recapitalizing its facilities. In April
2007 testimony, DOD noted that full funding of facilities sustainment
had been and continued to be the foundation of the department's long-
term facilities strategy and goals in order to optimize DOD's facility
investment and ensure facility readiness.[Footnote 16] When full
sustainment funding is not provided, service officials noted that
facility deterioration accelerates, facility service lives shorten,
mission capabilities and quality of life decrease, and expected future
costs increase. In view of these positions and recognizing that funding
of sustainment requirements had been a challenge because of competing
budget priorities, DOD's 2004 installations strategic plan established
a goal for the military services to fund sustainment at 95 percent of
the requirement determined by the facilities sustainment model
beginning in fiscal year 2005, and at 100 percent of the requirement
beginning in fiscal year 2008. Because the facilities sustainment model
provides a consistent and reasonable framework for estimating
sustainment requirements, use of the model for setting funding goals
appears reasonable, even though the reliability of the model's
estimates can be improved.
Military Services Have Not Met Sustainment Goals:
Collectively, the military services did not meet DOD's sustainment
funding goal in fiscal years 2005 through 2007 and they did not budget
funds to meet the goal in fiscal year 2008. As shown in table 2, during
fiscal years 2005 through 2007, only the Marine Corps met or exceeded
the goal by funding over 100 percent of the Marine Corps' annual
sustainment requirement in fiscal years 2006 and 2007, thus reducing
some of the Marine Corps' backlog of deferred sustainment needs.
Table 2: Attainment of Sustainment Goals--Percentage of Requirement
Funded, Fiscal Years 2005 through 2008:
Component: Army;
Fiscal year 2005: Goal: 95;
Fiscal year 2005: Actual: 64;
Fiscal year 2006: Goal: 95;
Fiscal year 2006: Actual: 88;
Fiscal year 2007: Goal: 95;
Fiscal year 2007: Actual: 73;
Fiscal year 2008: Goal: 100;
Fiscal year 2008: Budgeted: 89.
Component: Navy;
Fiscal year 2005: Goal: 95;
Fiscal year 2005: Actual: 90;
Fiscal year 2006: Goal: 95;
Fiscal year 2006: Actual: 79;
Fiscal year 2007: Goal: 95;
Fiscal year 2007: Actual: 92;
Fiscal year 2008: Goal: 100;
Fiscal year 2008: Budgeted: 83.
Component: Air Force;
Fiscal year 2005: Goal: 95;
Fiscal year 2005: Actual: 78;
Fiscal year 2006: Goal: 95;
Fiscal year 2006: Actual: 84;
Fiscal year 2007: Goal: 95;
Fiscal year 2007: Actual: 88;
Fiscal year 2008: Goal: 100;
Fiscal year 2008: Budgeted: 90.
Component: Marine Corps;
Fiscal year 2005: Goal: 95;
Fiscal year 2005: Actual: 94;
Fiscal year 2006: Goal: 95;
Fiscal year 2006: Actual: 126;
Fiscal year 2007: Goal: 95;
Fiscal year 2007: Actual: 113;
Fiscal year 2008: Goal: 100;
Fiscal year 2008: Budgeted: 89.
Component: DOD-wide[A];
Fiscal year 2005: Goal: 95;
Fiscal year 2005: Actual: 79;
Fiscal year 2006: Goal: 95;
Fiscal year 2006: Actual: 91;
Fiscal year 2007: Goal: 95;
Fiscal year 2007: Actual: 90;
Fiscal year 2008: Goal: 100;
Fiscal year 2008: Budgeted: 88.
Source: DOD.
[A] Also includes data from the Tricare Management Activity and the DOD
Education Activity.
[End of table]
Service officials stated that they generally did not meet the
sustainment funding goals because resources were limited and some
programs, such as force modernization, often had higher funding
priority. In addition, in some cases funds budgeted for sustainment
needs were used to pay for other needs, such as unfunded facility
restoration projects or unfunded bills for installation services. When
sustainment funds are used to pay for other needs, the result is that
even more facility sustainment requirements are unmet, which could lead
to additional restoration and modernization requirements in the future.
The following is a summary of the comments on this issue from the
military services.
* Army officials stated that the Army achieved a lower facility
sustainment rate than budgeted in some years because facility
sustainment funds were used to make up for funding shortages in
installation services by covering some must-pay bills. In fiscal year
2005, the officials stated about $600 million of budgeted sustainment
funds were used to pay for installation support services. The officials
also noted that, because sustainment requirements have not been fully
funded, using sustainment funds for other purposes amplifies the impact
on facilities by causing additional deterioration.
* Navy officials also stated that budgeted sustainment funds were used
to pay for other critical unfunded needs. The officials stated that
about $200 million in budgeted sustainment funds were used each year to
pay for critical restoration and modernization projects. In addition,
Navy officials told us that about $195 million and $184 million of
budgeted sustainment funds in fiscal years 2005 and 2006, respectively,
were used to pay for installation support services. Navy officials also
stated that although other critical needs were met with the sustainment
funds, the result was the deferment of a significant amount of needed
sustainment work.
* Air Force officials noted that in some instances installations have
used sustainment funds to pay for unfunded restoration and
modernization projects in order to repair damaged facilities or prevent
catastrophic facility failures so that missions were met. The officials
stated that in fiscal year 2005 and also in fiscal year 2006, about
$250 million of budgeted sustainment funds were used each year to pay
for facility restoration projects. Although the result was less funding
for needed sustainment work, the officials stated that the funds were
still used on facility needs rather than on other needs, such as
installation services.
* Marine Corps officials stated that nearly all budgeted sustainment,
restoration, and modernization funds have been used as intended.
Underfunding of Sustainment Requirements Has Resulted in Some
Deteriorated Facilities:
Although many facilities are in good condition, service officials
stated that underfunding of sustainment requirements over many years
has resulted in some deteriorated facilities. Deteriorated facilities
will likely experience reduced service lives, which, in turn, will lead
to more costly recapitalization requirements in the future. Army
officials noted that when sustainment funding is inadequate, planned
projects are delayed, which sometimes causes further deterioration,
such as damage to interior walls and floors from leaking roofs. Navy
and Air Force officials also stated that inadequate facility
sustainment funding has resulted in deteriorated facilities, reduced
mission capabilities, and lower quality of life for installation
personnel. Navy officials stated that in some instances installation
aircraft runways have been closed because sustainment funds were not
available to perform needed repairs.
At the eight installations we visited, facility sustainment
requirements were not fully funded every year during fiscal years 2005,
2006, and 2007. At some, but not all, of the installations, local
officials stated that sustainment funding had not been available to
accomplish all needed work and, as a result, many installation
facilities were in a deteriorated condition. For example, officials at
Fort Sam Houston stated that the foundation of a warehouse facility had
shifted, which caused cracks in the walls, warped door frames, and
leaking pipes (see fig. 2). Repairs had not been completed because
adequate sustainment funds were unavailable. Fort Sam Houston officials
also noted that several barracks buildings, which were still in use,
had deteriorated because of inadequate funding. For example, porch
surfaces were crumbling, paint was peeling, and windows needed repair
(see fig. 3).
Figure 2: Leaking Pipes and Cracked Walls at a Damaged Warehouse
Facility at Fort Sam Houston:
This figure is a photograph of leaking pipes and cracked walls at a
damaged warehouse facility at Fort Sam Houston.
[See PDF for image]
Source: GAO.
[End of figure]
Figure 3: Deteriorated Barracks Building at Fort Sam Houston:
This figure is a photograph of deteriorated barracks building at Fort
Sam Houston.
[See PDF for image]
Source: GAO.
[End of figure]
Officials at Oceana Naval Air Station stated that many facility roof
structures at the installation had exceeded their service lives and
some were leaking, causing damage to interior building components. The
officials noted that the roof of a weapons and radar training building
at an Oceana Naval Air Station annex had standing water and leaked,
which caused problems inside the building (see fig. 4). Local officials
stated that the roof repair would cost about $2.3 million and had been
deferred because of inadequate sustainment funding. Oceana officials
also stated that needed repairs to several aircraft hangar doors at the
installation had been deferred due to inadequate sustainment funding
(see fig. 5). Because hangar door motors did not work, employees used a
tow tractor to open and close the doors, which resulted in additional
damage to the doors. The officials also stated that an employee had
been injured by a hangar door because the door's safety device did not
work.
Figure 4: Standing Water on a Leaking Roof of a Weapons and Radar
Training Building at an Oceana Naval Air Station Annex:
This figure is a photograph of standing water on a leaking roof of a
weapons and radar training building at an Oceana Naval Air Station
Annex.
[See PDF for image]
Source: GAO.
[End of figure]
Figure 5: Damaged Aircraft Hangar Doors at Oceana Naval Air Station:
This figure is a combination of two photographs showing damaged
aircraft doors at Oceana Naval Air Station.
[See PDF for image]
Source: GAO.
[End of figure]
At Randolph Air Force Base, officials stated that although an aircraft
maintenance hangar needed substantial window repairs or replacement to
prevent safety violations, funds were not available to accomplish the
work. The officials noted that the facility's window frames were
corroded, which allowed rain water to enter the building. The windows
were located directly above electrical panels and water ran over the
panels when it rained, creating a safety hazard (see fig. 6). On
occasion, water in the building had caused aircraft maintenance
operations to temporarily shut down. The officials told us that the
facility had already received one safety violation and another one
could permanently shut down the facility. Randolph Air Force Base
officials also stated that some aircraft runways and aprons had
deteriorated due to inadequate sustainment funding. The officials said
the concrete on some runways and aprons was old and prone to cracking,
which could cause concrete pieces to break off, creating a foreign
object hazard to aircraft engines (see fig. 7). The officials explained
that some holes had been patched as a temporary fix, but that the
patches tended to crack and pop out. The officials stated that projects
costing about $56 million were needed to complete all needed runway and
apron repairs.
Figure 6: Leaking Windows and Electrical Panels that Created a Safety
Hazard at a Deteriorated Aircraft Maintenance Hangar on Randolph Air
Force Base:
This figure is a combination of two photographs, one of leaking windows
and the other of electrical panels, both of which created a safety
hazard at a deteriorated aircraft maintenance hangar on Randolph Air
Force Base.
[See PDF for image]
Source: GAO.
[End of figure]
Figure 7: Cracking Aircraft Aprons at Randolph Air Force Base:
This figure is a photograph of two cracking aircraft aprons at Randolph
Air Force Base.
[See PDF for image]
Source: GAO.
[End of figure]
Military Services Achieved More Success in Attaining Recapitalization
Goals:
In comparison to facility sustainment goals, the military services have
achieved more success in attaining DOD recapitalization goals. Although
DOD has not used a standardized model to determine facilities
recapitalization funding requirements, for several years the department
has used a metric that measures the number of years that would be
required to replace the facility inventory on the basis of the annual
funding provided for restoration and modernization. According to
February 2006 testimony, DOD's recapitalization rate in fiscal year
2001 was 192 years, a rate that DOD considered inadequate in view of
DOD's current goal of 67 years and similar private sector industries,
which replace their facilities every 50 years, on average.[Footnote 17]
Since fiscal year 2001, DOD's recapitalization rate has improved and,
as shown in table 3, the military services have met or bettered the 67
year benchmark in many instances. For example, the Army bettered the
goal in fiscal years 2005, 2006, and 2007, the Navy bettered the goal
in fiscal years 2006 and 2007, and the Air Force bettered the goal in
fiscal year 2005.
Table 3: DOD Facility Recapitalization Rates Expressed in Years:
Component: Army;
Fiscal year 2005: 62;
Fiscal year 2006: 61;
Fiscal year 2007: 42;
Fiscal year 2008[A]: 72.
Component: Navy;
Fiscal year 2005: 77;
Fiscal year 2006: 48;
Fiscal year 2007: 62;
Fiscal year 2008[A]: 66.
Component: Air Force;
Fiscal year 2005: 66;
Fiscal year 2006: 69;
Fiscal year 2007: 71;
Fiscal year 2008[A]: 97.
Component: Marine Corps;
Fiscal year 2005: 72;
Fiscal year 2006: 97;
Fiscal year 2007: 119;
Fiscal year 2008[A]: 83.
Component: DOD-wide[B];
Fiscal year 2005: 67;
Fiscal year 2006: 60;
Fiscal year 2007: 59;
Fiscal year 2008[A]: 74.
Source: DOD.
Note: To exceed DOD's 67-year recapitalization rate goal, the number of
years must be less than 67.
[A] Budgeted.
[B] Also includes data from the Defense Logistics Agency, the Tricare
Management Activity, and the DOD Education Activity.
[End of table]
According to DOD officials, one reason for greater success in meeting
recapitalization goals is that additional restoration and modernization
funds were provided from programs outside of the normal funding
process. For example, the officials stated that many installations have
received additional recapitalization funding as the result of decisions
related to the implementation of base realignment and closure
recommendations, the global basing strategy, and the Army's
restructuring initiative.
Although the military services met recapitalization goals in some
years, the adequacy of restoration and modernization funding remains an
issue, particularly in view of existing backlogs of needed restoration
and modernization work. Army officials stated that Army restoration and
modernization needs were not fully funded in fiscal years 2005 and
2006, and at the end of fiscal year 2007 the Army reported a backlog of
restoration and modernization needs of about $20.4 billion. Navy
officials stated that the Navy's restoration and modernization backlog
grew from about $13.3 billion in fiscal year 2005 to about $27.6
billion at the end of fiscal year 2007, an increase of 108 percent. Air
Force officials stated that restoration and modernization requirements
had not been adequately funded and that the Air Force had a restoration
and modernization backlog of about $9.3 billion at the end of fiscal
year 2007. Marine Corps officials stated that the Marine Corps had a
restoration and modernization backlog of about $1 billion at the end of
fiscal year 2007. Without adequate restoration and modernization
funding, facilities cannot be restored, improved, or modernized in
accordance with military needs and expectations.
Officials at some of the installations we visited also stated that
inadequate funding for restoration and modernization needs was a
concern. For example, officials at Fort Sam Houston stated that the
installation's backlog of restoration and modernization requirements
grew from about $341 million in fiscal year 2005 to about $456 million
in fiscal year 2007, an increase of about $115 million (34 percent). At
Langley Air Force Base, officials stated that the installation's
backlog of restoration and modernization requirements grew from about
$24 million in fiscal year 2005 to about $46 million in fiscal year
2007, an increase of about $22 million (92 percent).
DOD Has Not Taken Actions to Address Deferred Facility Sustainment
Requirements:
DOD has not taken actions to estimate and address the military's
deferred facility sustainment requirements. Deferred facility
sustainment requirements--specifically unfunded facility sustainment
needs that carry over from one year to the next--can eventually result
in damaged facilities, shortened facility service lives, and increased
future costs for facility restoration. However, because DOD has not
provided guidance that clearly defines deferred sustainment
requirements, directs the services to consistently measure and track
deferred sustainment needs, or establishes a goal to address these
needs, the military services do not have consistent estimates of their
deferred sustainment requirements or plans to deal with these needs. As
a result, DOD lacks a complete picture of its facility sustainment
funding needs and DOD's current plans and goals to address facility
sustainment requirements do not include all sustainment requirements.
In addition, without consistent estimates, the military services'
annual financial statements have not included the cumulative amount of
deferred facility sustainment requirements as required by Federal
Financial Accounting Standards in order to provide full disclosure of
facility conditions.
DOD Has Not Provided Adequate Guidance on Deferred Sustainment
Requirements:
The military services do not have consistent estimates of their
deferred sustainment requirements or plans to deal with these needs
because DOD has not provided adequate guidance on deferred sustainment
requirements. Although DOD guidance provides a clear definition of work
classified as facility sustainment and DOD's facilities sustainment
model provides a framework for estimating and addressing annual
facility sustainment funding requirements, DOD has not provided a clear
definition of work that should be classified as deferred facility
sustainment or issued guidance for estimating and addressing deferred
sustainment funding requirements. According to DOD officials, deferred
sustainment has not been emphasized because the goal has been for the
military services to fully fund their annual sustainment requirements.
If the annual sustainment requirements were fully funded each year,
then facilities could be optimally maintained and needed sustainment
work would not be deferred, so deferred sustainment requirements would
not exist. However, this has not been the case. As shown in table 4,
the military services did not fund over $3.5 billion of their annual
sustainment requirements in fiscal years 2005 through 2007. According
to DOD, needed sustainment work that is not performed--specifically
unfunded facility sustainment needs that carry over from one year to
the next--will eventually result in damaged facilities, shortened
facility service lives, and increased future costs for facility
restoration.
Table 4: Unfunded Annual Facility Sustainment Requirements:
(Dollars in millions).
Component: Army;
Fiscal year 2005: $918;
Fiscal year 2006: $574;
Fiscal year 2007: $735;
3-year total: $2,228.
Component: Navy;
Fiscal year 2005: 34;
Fiscal year 2006: 61;
Fiscal year 2007: 121;
3-year total: 216.
Component: Air Force;
Fiscal year 2005: 375;
Fiscal year 2006: 418;
Fiscal year 2007: 214;
3-year total: 1,007.
Component: Marine Corps;
Fiscal year 2005: 70;
Fiscal year 2006: 47;
Fiscal year 2007: (15)[A];
3-year total: 102.
Total;
Fiscal year 2005: $1,398;
Fiscal year 2006: $1,100;
Fiscal year 2007: $1,056;
3-year total: $3,553.
Source: DOD.
Note: The amounts shown reflect the difference between each service's
annual facility sustainment requirements, as determined by the
facilities sustainment model, and the amount each service spent on
facility sustainment. The actual unfunded facility sustainment
requirements could differ from the estimates due to concerns with the
model's inputs that we discussed earlier in this report. Numbers in the
table may not total correctly due to rounding.
[A] The Marine Corps funded more than its annual sustainment
requirement in fiscal year 2007.
[End of table]
Services Do Not Have Consistent Estimates of Deferred Sustainment Needs
and Preparing These Estimates Can Be Difficult:
Without guidance that places emphasis on deferred facility sustainment
needs, the military services and the installations we visited did not
have consistent estimates of their deferred sustainment needs, and DOD
officials noted that preparing these estimates is difficult for several
reasons. Although each service knew the amount of its annual
sustainment requirements that was not funded, they did not know the
amounts of their deferred sustainment requirements and each service
expressed a different view of the issue. For example, Army officials
stated that although the Army does not have information documenting its
cumulative deferred sustainment requirements, deferred sustainment
needs were being addressed with the Army's current funding of its
annual sustainment, restoration, and modernization programs. However,
the Army did not fund over $735 million of its annual sustainment
requirements in fiscal year 2007 and budgeted funds to pay for only 89
percent of the Army's fiscal year 2008 sustainment requirements.
Meanwhile, Navy officials stated that it did not need to estimate
deferred sustainment needs because sustainment work that is deferred
becomes a restoration and modernization requirement. However, according
to DOD definitions, deferred sustainment does not become a restoration
requirement until it results in damaging a facility, and it could take
several years before deferred sustainment work actually damages a
facility to the point that it must undergo restoration. In contrast,
officials from the Air Force stated that deferred sustainment
requirements should be estimated and added to the annual sustainment
requirements in order to see the total sustainment funding requirement,
even though the cost to fund the total requirement would be too high to
be fully funded considering other Air Force budget priorities. Finally,
Marine Corps officials stated that, based on periodic facility
inspections, it has an estimate of total facility needs that includes
all deferred sustainment, restoration, and modernization requirements.
However, this estimate does not distinguish the deferred sustainment
requirement from the restoration and modernization requirement, which
means that the Marine Corps does not know its actual deferred
sustainment requirement. The Marine Corps also stated that funding over
100 percent of the annual sustainment requirement, as it did in fiscal
year 2007, would be required to reduce the size of the deferred
sustainment requirement.
At some of the installations we visited, officials noted that deferred
sustainment requirements needed to be adequately estimated and
addressed if facilities are to be sustained at an optimum level. For
example, officials at Langley Air Force Base stated that because the
facilities sustainment model only estimated the annual sustainment
requirement and did not address deferred sustainment, deferred facility
sustainment needs at many installations would not be met even if the
installations were funded at the amounts estimated by the model. The
officials also stated that deferred sustainment requirements needed to
be specifically recognized and a plan developed to address these
requirements. At Camp Lejeune, officials noted that the facilities
sustainment model was based on facility life-cycle costs and the
model's annual funding estimates were based on the assumption that
facilities were fully sustained in the past and were in good condition.
However, the officials stated that this is not the case at many
installations because years of inadequate funding had resulted in a
backlog of deferred sustainment requirements. Fort Sam Houston
officials stated that although a backlog of deferred sustainment needs
existed, it was difficult to quantify the size of the backlog because
the installation lacked the personnel required to fully inspect all
installation facilities and catalogue all of the needed sustainment
work and projects. Similarly, Randolph Air Force Base officials stated
that all deferred sustainment needs at the installation had not been
identified partly because there was little confidence that the work
would be funded even if the effort were expended to document the
requirement.
Although Federal Real Property Council guidance requires federal
activities to know the repair needs of their facilities,[Footnote 18]
DOD officials indicated that for several reasons, determining deferred
facility sustainment needs is not an easy task. First, DOD officials
noted that all unfunded annual sustainment requirements do not become
deferred requirements. To illustrate, if a facility has an annual
inspection requirement and the inspection is not performed, the
inspection cost would not become a deferred sustainment requirement
because two annual inspections would not be required in the following
year and the facilities sustainment model would include the annual
inspection cost in the subsequent year's funding estimate. However, if
a facility were scheduled for a roof replacement and roof was not
replaced, the cost of the replacement would become a deferred
requirement because it would still be needed and the cost would not be
included in the subsequent year's funding estimate.
Second, DOD officials also noted that the facilities sustainment model
estimates the average annual sustainment funding requirements for each
facility category but does not identify the actual sustainment work
that each installation facility needs. The officials noted that a model
might be developed that could provide reliable estimates of deferred
sustainment requirements. However, according to the officials, actual
facility sustainment needs can only be determined through facility
inspections in which actual conditions are determined, needed repair
and maintenance work is documented, and costs to complete this work are
estimated. A comparison of an installation's actual facility
sustainment needs with the installation's annual sustainment funding
would provide an estimate of the installation's deferred sustainment
requirement. Of the military services, only the Marine Corps
systematically inspected its facilities and documented needed repairs
and improvements so that actual deferred facility needs were known.
However, because the documentation did not distinguish facility
sustainment needs from restoration and modernization needs, the Marine
Corps did not know its actual deferred sustainment funding
requirements. The Army used a facility inspection method that provided
an estimate of facility funding needs based on facility condition
assessments. However, the method did not document each facility's
actual needed sustainment, restoration, and modernization projects. The
Navy stopped performing facility condition inspections after fiscal
year 2005 because of the high cost of the inspections. Although the
Navy plans to implement a model beginning in fiscal year 2008 designed
to estimate facility conditions and funding needs, the model will not
document each facility's actual needed sustainment, restoration, and
modernization projects. Air Force officials stated that its facilities
are inspected as funds permit and facility deficiencies, work requests,
and projects are documented. However, the officials stated that the
list of needed work was not considered all inclusive and did not
categorize needed work as sustainment, restoration, or modernization.
Third, as noted previously, estimating deferred sustainment
requirements can be further complicated by DOD's definition of facility
restoration and the associated decisions on when deferred sustainment
requirements become restoration requirements. Specifically, DOD defines
restoration as including repair and replacement work to restore
facilities damaged by inadequate sustainment, excessive age, disaster,
accident, or other causes. Marine Corps officials noted that it can be
difficult to determine when deferred sustainment work actually damages
a facility and thus should be reclassified from a sustainment funding
requirement to a restoration funding requirement.
Lack of Clear Guidance Impedes Reliable Financial Reporting of Deferred
Sustainment Costs:
The military services' financial reporting of deferred facility
maintenance information is not consistent with federal financial
reporting requirements due to a lack of clear DOD reporting guidance.
We found that prior to fiscal year 2007, the services' financial
statements excluded required information concerning deferred facility
sustainment requirements and included information concerning deferred
facility modernization requirements. Including deferred facility
modernization requirements is not consistent with federal financial
reporting requirements because these requirements pertain to activities
intended to expand or upgrade facility capacity. Although DOD issued
revised guidance in September 2007 in part to address these issues, the
guidance did not provide sufficient details to ensure that future
financial reporting of deferred maintenance would be consistent with
reporting requirements. Unreliable deferred maintenance information,
could further jeopardize DOD's ability to adequately provide for its
facility sustainment needs and result in continued facility
deterioration and increased future recapitalization costs.
Federal financial accounting standards require that federal entities
that own property, plant, and equipment include information in their
financial statements disclosures related to the condition and the
estimated deferred maintenance costs of these assets.[Footnote 19] The
accounting standards define maintenance as the act of keeping fixed
assets in acceptable condition, including preventive maintenance,
normal repairs, replacement of parts and structural components, and
other activities needed to preserve the asset so that it continues to
provide acceptable services and achieves its expected life. The
distinction between maintenance and deferred maintenance is that
deferred maintenance is maintenance that was not performed when it
should have been or was scheduled to be and which, therefore, was put
off or delayed for a future period. By definition, both maintenance and
deferred maintenance exclude activities aimed at expanding the capacity
of an asset or otherwise upgrading it to serve needs different from, or
significantly greater than, those originally intended. In other words,
expenditures to modernize or upgrade property, plant, and equipment
should not be reported as maintenance costs.
According to DOD officials, prior to fiscal year 2007, the military
services' financial statement reports included disclosures pertaining
to only to the annual amount of their sustainment requirements, as
determined by the facilities sustainment model, which was not funded.
In addition, the military services' financial statement disclosures for
deferred maintenance also included information on the cumulative
deferred restoration and modernization requirements as a component of
the reported deferred maintenance amounts. Reporting deferred
modernization requirement amounts is not consistent with reporting
standards because modernization includes facility work to implement new
or higher facility standards, accommodate new functions, or replace
building components that have exceeded their useful life, typically
about 50 years. However, DOD guidance did not clearly instruct the
military services to exclude deferred modernization requirement amounts
from the amounts they reported for deferred maintenance. Thus, the
reporting of deferred modernization requirements as part of deferred
facility maintenance in the financial statements results in misleading
deferred maintenance disclosures and is not consistent with what is
called for by federal accounting standards.
DOD officials further stated that while in the process of updating DOD
financial regulations in 2007, DOD recognized that the financial
statements should include the cumulative, not just the annual, deferred
sustainment amounts. To address this issue beginning with the fiscal
year 2007 financial statements, an official in the Office of the
Secretary of Defense (Comptroller) stated that the military services
were directed to begin reporting deferred maintenance amounts that
include cumulative deferred sustainment requirements. However, because
the military services did not have estimates of their deferred
sustainment requirements, DOD officials stated that the military
services were directed to estimate their total deferred maintenance
needs based on each service's facility quality ratings. Facility
quality ratings, prepared for each real property inventory asset,
reflect each facility's condition at a specific point in time and the
estimated cost to correct existing deficiencies to bring the facility
to a fully serviceable operating condition.
Although DOD decided to use the facility quality ratings for estimating
and reporting deferred maintenance, DOD's guidance for determining the
quality ratings specifically excluded consideration of sustainment
requirements and specifically included all restoration and
modernization requirements, except for construction of new facility
capacity.[Footnote 20] To address this issue, DOD issued new guidance
on September 5, 2007.[Footnote 21] The new guidance directed the
military services to begin including sustainment requirements in the
facility quality ratings and to exclude restoration and modernization
requirements that were related to facility conversion and construction
of new facility capacity. However, the guidance did not provide details
to the military services on how to do implement these changes and
permitted each service to decide on a method, as long as the service
validated the accuracy of the method used.
Although the military services attempted to implement the new guidance
in reporting deferred maintenance information in their fiscal year 2007
financial statements, the reported information was still inconsistent
and incomplete. First, because the new guidance did not provide details
on how to implement the changes, each service used its own methods.
Yet, according to a May 2006 report commissioned by DOD to provide an
independent verification and validation of the services' facility
quality ratings, the services used inconsistent methods to determine
facility conditions, which resulted in inconsistent estimates of needed
maintenance costs.[Footnote 22] Second, with the new guidance being
issued on September 5, 2007, the military services had little time to
make any adjustments to their facility quality ratings prior to
preparation of their fiscal year 2007 financial statements, which were
due in November 2007. According to Navy officials, Navy facility
quality ratings had not been updated since 2005 because the Navy
stopped performing facility inspections. Third, when reporting deferred
facility maintenance amounts in its fiscal year 2007 financial
statement, the Air Force included a note stating that the use of
facility quality ratings as a basis for calculating deferred
maintenance did not seem prudent because the quality of the information
used to determine the ratings was questionable. Without guidance
providing for consistent methods for measuring deferred sustainment
requirements and determining which portion of the deferred restoration
and modernization requirements to include in the financial statements,
the military services' financial reporting of deferred maintenance
information may continue to be inconsistent with financial reporting
requirements, which could further jeopardize DOD's ability to
adequately provide for its facility sustainment needs and result in
continued facility deterioration and increased future recapitalization
costs.
DOD's Progress in Developing an Installation Services Model Has Been
Slow:
DOD's progress in developing a model for estimating installation
services funding requirements has been slow because DOD has been unable
to overcome long-standing inconsistencies among the military services'
definitions of support service functions and other obstacles that
prevent such a model from being ready for use. In an effort to ensure
consistent delivery of adequate installation services among DOD
components and provide the Congress with a clearer basis for making
funding decisions, DOD began in 2004 to develop an analytically sound
model for determining installation services funding requirements.
However, progress has been slow and it is unclear whether DOD's target
for completing this work will be met. Without a DOD-wide model, the
military services have used various methods to estimate their support
services requirements subject to their own definition of the types and
levels of services deemed necessary. On the basis of these estimates,
Army, Navy, and Air Force officials have raised concerns about the
adequacy of support services funding from fiscal years 2005 through
2007, stating that this funding was less than the amounts needed to
provide services at the levels desired and resulted in some
installations providing reduced services, which caused the quality of
life of DOD personnel in some instances to be negatively affected.
Efforts to Develop an Installation Services Model Began in 2004:
DOD's efforts to develop a model for estimating installation services
funding requirements began in 2004, when the Office of the Deputy Under
Secretary of Defense for Installations and Environment designated the
improvement of installation services management as a priority.
According to officials from this office, DOD's and the military
services' ability to forecast installation services requirements and
funding needs had been hindered by the lack of a common terminology
across the military services and the lack of common definitions had
caused differing expectations for service support when multiple
military services were collocated on a single installation.[Footnote
23] The 2004 Defense Installations Strategic Plan articulated the need
to define common standards and performance metrics for managing
installation support and established goals to implement DOD-wide
support service standards and to develop an analytical model based on
common benchmarks to accurately forecast installation services funding
requirements. The plan noted that installation services included a
large collection of diverse functions and that work towards a model
would first focus on services related to real property--work that
subsequently resulted in DOD's facilities operation model--and then on
all other installation services--work now directed at developing the
installation services model.
Also in 2004, in an effort to promote joint installation management,
DOD established a working group to develop policy and create a
strategic framework for delivery of installation services. The
framework was to include the establishment of common definitions,
tiered performance standards, and performance measures to assist in
managing support services resources and help ensure the common delivery
of applicable support services across all military installations. To
support this effort, service standards teams, composed of members from
each military service, were formed and charged with developing common
output-level standards, which include common definitions, performance
standards, metrics, and unit cost estimates for each installation
support service. The common output-level standards would also provide a
key component needed to develop an installation services model.
Service standards teams were formed to develop common definitions and
standards for 29 different support services. The initial goal was for
the teams to complete their work by February 2006. According to DOD
officials, from the beginning the teams had difficulty completing their
work and obtaining agreement from all military services on the common
definitions and standards. By December 2007, the military services had
accepted the common definitions and service standards for only 2 of the
29 support services addressed by the service standards teams, and the
target date for completing the work had slipped to March 2008. DOD's
2007 Defense Installation Strategic Plan set a goal to establish common
standards and metrics for installation services and complete the model
by the end of 2008.
Several Factors Have Hampered Progress in Developing an Installation
Services Model:
According to DOD officials, several factors have hampered progress
towards completing the common output-level standards and developing the
installation services model. For example, each military service has its
own long-standing policies and practices on how tasks and subtasks for
each installation service are grouped, performed, managed, and funded.
Also, differences in the military services' policies, practices, and
traditions have resulted in service differences in (1) the value of and
emphasis placed on the various support services, (2) views on whether
service programs should be managed and funded centrally or not, and (3)
support service requirements based on installation location and
demographic characteristics. For example, remote installations might
provide some services that are normally provided by local communities
in more populated areas, and installations with a high percentage of
young, single personnel might provide some services not provided at
installations with different demographics.
As one example of an installation support service that is managed
differently among the military services, DOD cited differences in the
management of chaplain services. According to DOD officials, the Navy,
in accordance with its policy, donates all funds collected during on-
base religious services to charities. The other military services, in
accordance with their policies, use funds collected during on-base
religious services to directly support the chaplain program, such as
paying for program expenses. Thus, in order to reach a common
definition and service standard for the chaplain program, this
difference among the military services must be resolved.
Office of the Deputy Under Secretary of Defense for Installations and
Environment officials, who were overseeing the development of the
model, stated that resolving the differences in support service
definitions and service standards remains a key obstacle to completing
an installation services model that can reliably estimate the funds
required to provide services at appropriate levels across all
installations. The officials also noted that other obstacles exist and
must be overcome before a model is completed. For example, because each
of the installation services is unique, a separate model will be
required for each service. Thus, the installation services model will
be a collection of many separately developed, service-specific models.
According to the officials, a few service standards teams believe the
services they studied will be difficult to model. Further, it may also
be difficult to identify adequate information sources for estimating
the standard costs for some installation services, such as for mission-
based services, including airfield and port operations, and regulatory
services, including environmental services. The problem is that
historical metrics and costs for some services are not readily
available within DOD, and private sector data sources may not be
suitable for services that are performed differently by the private
sector and DOD. Given these obstacles and the slow pace of prior
progress in developing the common definitions and standards, it is
unclear whether the 2008 target in DOD's plan will be met. In addition,
the plan did not establish a milestone for when the model will be
implemented for use in estimating the military's installation services
funding requirements. Until DOD formally establishes a milestone for
when the installation services model will be implemented and provides
adequate senior-level oversight to ensure that the milestone is met,
DOD may not have the necessary impetus to resolve these obstacles so
that development of the model can be completed.
Adequacy of Installation Services Funding Has Been a Concern:
The adequacy of funding for installation services has been a concern
for the military services. Without a DOD-wide model, each military
service has developed methods to estimate its installation services
requirements and funding needs subject to its own definition of the
types and levels of services it deems necessary. Appendix II provides a
brief description of the methods used by each military service to
estimate installation services funding requirements. On the basis of
these estimates and other information, Army, Navy, and Air Force
officials stated that installation services funding for fiscal years
2005 through 2007 was less than the amounts needed to provide services
at the levels desired. For example, according to Army officials,
installation services and facility operations services--collectively
classified as base operations support in the Army's budget--were funded
at about 80 percent, 82 percent, and 87 percent of requirements in
fiscal years 2005, 2006, and 2007, respectively. Of the military
services, only the Marine Corps stated that its installation services
and facility operations services were adequately funded during these
fiscal years.
Although it was beyond the scope of our review to assess the impacts
that resulted from less than full funding of installation services, we
did ask the military services for their views. Army officials stated
that, because of inadequate funding levels, installation services were
reduced and provided at lower than optimum levels at some
installations, which reduced the support provided to military
personnel. Navy officials stated that effects of inadequate funding
included (1) reduced operating hours at some installation entrance
gates, which slowed base access; (2) reduced law enforcement patrols,
pier security, and surveillance detection, which increased security
risks; (3) cutbacks in facility cleaning contracts, which caused mold
and mildew growth, which could potentially create health issues; (4)
closure of some installation swimming pools and automobile hobby shops,
which affected personnel quality of life; and (5) scaled back special
events, which reduced the connection between some bases and the local
communities. Air Force officials stated that inadequate installation
services funding resulted in reduced in-house and contractual support
for day-to-day operations at some installations in areas such as
installation security, transportation, and supply. In addition, the
quality of life for service members was affected at some installations
by the closure of dining and fitness facilities and decreased library
hours and other contractual services supporting base personnel.
Officials at some of the installations we visited also commented that
because of inadequate funding, some installation services and facility
operations services were reduced causing negative effects on the
quality of life of installation personnel. At Fort Eustis, for example,
officials estimated that custodial services were funded at about 25
percent of the amount needed to meet normal requirements. The officials
stated that custodial services no longer provided for cleaning carpets
or windows and only provided for cleaning restrooms once a week. At
Langley Air Force Base, officials stated that, although essential
services were being provided, funding shortages had caused the
installation to reduce custodial and ground maintenance services and
close one dining facility.
Conclusions:
Although the facilities sustainment model provides a consistent and
reasonable framework for preparing estimates of DOD's annual facility
sustainment funding requirements, accuracy and supportability issues
with two of the model's key inputs--the inventory quantity and the
sustainment cost factor associated with each of DOD's 448 facility
categories--have affected the reliability of the model's estimates. In
particular, the military services had not complied with DOD guidance
that requires verification of real property inventory records and
consequently the inventory records contained inaccuracies and
discrepancies, information documenting the basis for each sustainment
cost factor was not readily available, and the fiscal year 2009 method
for calculating sustainment cost factors that are not based on
independent data sources can reduce the accuracy of these factors.
Until DOD takes additional steps to improve the accuracy and
supportability of its inventory quantity and sustainment cost factor
inputs to the facilities sustainment model, the model's estimates of
annual facility sustainment funding requirements will not be as
reliable as possible, which could jeopardize DOD's ability to
adequately provide for its facility sustainment needs.
Furthermore, because the military services do not have consistent
estimates of their deferred facility sustainment requirements, DOD
lacks a complete picture of its facility sustainment funding needs.
Thus, current plans and goals to address sustainment needs do not
include all sustainment requirements, which could further jeopardize
DOD's ability to adequately sustain its facilities and result in
continued facility deterioration and increased future restoration
costs. In addition, largely because of lack of clear guidance, the
military services' financial reporting of deferred facility maintenance
information has been inconsistent with financial reporting requirements
intended to provide full disclosure of facility conditions. Until DOD
provides guidance that clearly defines deferred sustainment
requirements, directs the services to consistently measure and track
deferred sustainment needs, establishes a goal to address these needs,
and ensures that the military services' financial reporting of deferred
facility maintenance is consistent with financial reporting
requirements, the services will not have consistent estimates of their
total facility sustainment requirements, will be unable to develop
plans to address these needs, and may continue to report deferred
maintenance information that is inconsistent with financial reporting
requirements.
DOD has yet to overcome long-standing inconsistencies among the
military services' definitions of support service functions, as well as
other obstacles, to complete a model for estimating installation
services funding requirements. Until a reliable model is implemented,
DOD cannot know its installation services funding requirements with
confidence, set installation services funding and performance
benchmarks, measure the military services' progress in providing
installation services, or provide the Congress with a clear, consistent
basis for making related funding decisions. DOD has a goal to establish
common standards and metrics for installation services by the end of
2008. However, until DOD formally establishes a milestone for when the
installation services model will be implemented and provides adequate
senior-level oversight to ensure that the milestone is met, DOD may not
have the necessary impetus to complete the model as quickly as
possible.
Recommendations for Executive Action:
To improve the support provided for DOD's facilities and installation
services, we recommend that the Secretary of Defense direct the Deputy
Under Secretary of Defense (Installations and Environment) to take the
following five actions in order to increase the reliability of the
facilities sustainment model, address deferred facility sustainment
funding requirements, and advance progress towards implementing the
installation services model:
* Monitor and ensure compliance with guidance requiring verification of
real property inventory records.
* Maintain documentation regarding the basis for the sustainment cost
factors used by the model to include the calculations used to determine
each factor as well as the reasons for any changes from year to year.
* Revert to the previously used ratio analysis method to calculate the
values of those sustainment cost factors that are not based on
independent data sources.
* Issue guidance to the military services that (1) provides a clear
definition of deferred facility sustainment requirements and explains
when deferred facility sustainment becomes a facility restoration
requirement, (2) directs the military services to consistently measure
and track deferred sustainment needs, (3) establishes a goal to address
deferred facility sustainment needs, and (4) ensures that the military
services' financial reporting and disclosure information regarding
deferred facility maintenance is consistent with financial reporting
requirements.
* Establish a milestone for implementing the installation services
model for use in estimating DOD's installation services funding
requirements and provide adequate senior-level oversight to ensure that
the milestone is met.
Agency Comments and Our Evaluation:
In written comments on a draft of this report, DOD concurred with four
recommendations, partially concurred with one recommendation, and
stated that it had already initiated several of the recommended
actions. However, DOD's comments and stated actions did not fully
address some of our recommendations. While DOD's actions represent
positive first steps, we believe that DOD needs to take additional
steps to fully address the issues discussed in this report.
Specifically, in addition to the steps that DOD stated it has taken or
plans to take, we continue to believe that DOD needs to take further
steps to monitor and ensure compliance with inventory verification
guidance, provide a clear definition of deferred facility sustainment
requirements, direct the military services to consistently measure and
track deferred sustainment needs, ensure that the military services'
financial reporting and disclosure information regarding deferred
facility maintenance is consistent with financial reporting
requirements, and provide adequate senior-level oversight to ensure
that an installation services model is implemented as soon as possible.
DOD concurred with our recommendation to monitor and ensure compliance
with guidance requiring verification of real property inventory
records. DOD stated that it added a data element to its real property
inventory records that will record the most recent date that each
facility was inspected. DOD stated that this data, which it expects
will be available by fiscal year 2009, will provide a means of
identifying the verification dates and taking action to update them as
required. However, as noted in this report, data are already available
showing facility inspection dates and the data show that the military
services have not complied with verification requirements. Our
recommendation is that DOD ensure compliance with the guidance in order
to help ensure inventory accuracy and it is not clear that DOD's action
of adding a data element to its inventory records will improve
compliance. We continue to believe that additional steps are needed to
monitor and ensure compliance with guidance requiring verification of
real property inventory records.
DOD concurred with our recommendation that it maintain documentation
regarding the basis for the sustainment cost factors used by the model
to include the calculations used to determine each factor as well as
the reasons for any changes from year to year. DOD stated that it has
maintained documentation for sustainment cost factors since the
inception of the facilities sustainment model. However, as noted in
this report and as we discussed with DOD officials during our review,
the documentation did not always show the basis for the sustainment
cost factors, the calculations used to determine each factor, or the
reasons for any changes from year to year and that is the basis for our
recommendation. DOD also stated that it has revised its documentation
standards to improve the level of detail and accessibility. If fully
implemented, DOD's action should result in an improved audit trail
documenting the basis for each factor's value.
DOD concurred with our recommendation that it revert to the previously
used ratio analysis method to calculate the values of those sustainment
cost factors that are not based on independent data sources. DOD stated
that it will adopt the GAO-preferred method to inflate the small number
of sustainment cost factors generated by ratios beginning in fiscal
year 2009. As noted in this report, the "GAO-preferred" method is the
method that can result in greater accuracy of the sustainment cost
factor values. Also, regarding the "small" number of sustainment cost
factors generated by ratios, as noted in this report, DOD has used a
ratio analysis to estimate the sustainment cost factors for
approximately one-third of DOD's 448 facility categories.
DOD concurred with our recommendation related to deferred facility
sustainment requirements stating that it had issued guidance in
September 2007 that revised the definition of facility quality ratings
to represent deferred sustainment and restoration, revised its
methodology for estimating deferred maintenance in its financial
reports by using the facility quality ratings, and planned to develop
program guidance with the fiscal year 2011 budget process to establish
goals to address deferred sustainment requirements. As noted in this
report, we were aware of the September 2007 guidance. However, we made
our recommendation because our review found that the guidance did not
provide a clear definition of deferred facility sustainment
requirements, details to the military services on how to implement the
revised quality rating guidance, or sufficient details to ensure that
future financial reporting of deferred maintenance would be consistent
with reporting requirements. We continue to believe that additional
guidance is needed to provide a clear definition of deferred facility
sustainment requirements, direct the military services to consistently
measure and track deferred sustainment needs, and ensure that the
military services' financial reporting and disclosure information
regarding deferred facility maintenance is consistent with financial
reporting requirements.
DOD partially concurred with our recommendation to establish a
milestone for implementing the installation services model for use in
estimating DOD's installation services funding requirements and provide
adequate senior-level oversight to ensure that the milestone is met.
DOD stated that it had established a milestone to implement an
installation services model in support of the fiscal year 2012 budget
and had made initial progress toward that goal. However, DOD stated
that the development process had revealed several obstacles that may
require it to reevaluate the goal for at least some installation
service functions. Although we believe that DOD's action to establish
an implementation goal is a step in the right direction, we also
recommended and continue to believe that adequate senior-level
oversight is needed to ensure that an installation services model is
implemented as soon as possible. DOD's comments did not explain to what
extent it plans to do this.
DOD's comments are reproduced in full in appendix III.
We are sending copies of this report to the Secretaries of Defense, the
Army, the Navy, and the Air Force; the Commandant of the Marine Corps;
and the Director, Office of Management and Budget. We will provide
copies of this report to others upon request. In addition, the report
will be available at no charge on the GAO Web site at [hyperlink,
http://www.gao.gov].
If you or your staff have any questions on the information discussed in
this report, please contact me on (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 key contributions to this report are listed in appendix IV.
Signed by:
Brian J. Lepore:
Director Defense Capabilities and Management:
List of Committees:
The Honorable Carl Levin:
Chairman:
The Honorable John McCain:
Ranking Member:
Committee on Armed Services:
Unites States Senate:
The Honorable Daniel K. Inouye:
Chairman:
The Honorable Ted Stevens:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
Unites 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:
Unites 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 Zach Wamp:
Ranking Member:
Subcommittee on Military Construction, Veterans' Affairs, and Related
Agencies:
Committee on Appropriations:
House of Representatives:
[End of section]
Appendix I: Scope and Methodology:
To determine the reliability of the annual funding estimates produced
by the facilities sustainment model, we reviewed the documentation
supporting the model's analytic framework--including the model's
inputs, calculations, and assumptions--to determine whether the model
provides a consistent and reasonable framework for estimating
sustainment funding requirements. In addition, we assessed the accuracy
and supportability of the model's key inputs--the inventory quantity
and the sustainment cost factor. Regarding inventory quantity, we
reviewed DOD regulations that require periodic verification of the
accuracy of real property inventory information, determined the extent
to which the military services had complied with these regulations, and
discussed with service officials the reasons for noncompliance. During
visits to eight military installations,[Footnote 24] we compared the
inventory information contained in selected installation real property
records with the inventory information used by the model and asked
local officials to explain discrepancies. We judgmentally selected the
records to include a variety of facility categories. At the
installations visited, we also determined compliance with the required
procedures for verifying real property inventory accuracy and, at one
installation, we reviewed the records that documented the compliance.
In addition, we analyzed the inventory quantities used by the model for
each facility category during fiscal years 2005 through 2008 to
identify large fluctuations from one year to the next and asked DOD and
service headquarters officials to explain some of the fluctuations. In
cases where the fluctuations were caused by an error, we determined the
resulting impact on the model's sustainment cost estimate by
recomputing sustainment costs based on the correct inventory quantity.
Although we assessed the accuracy of selected real property inventory
information, which is discussed in this report, we did not assess the
overall reliability of DOD's real property inventory records. Regarding
sustainment cost factors, we discussed the development of the factors
with DOD officials, reviewed the findings of a study designed to
provide an independent verification and validation of the sustainment
cost factors used by the model, and documented DOD's response to the
study's recommendations. In addition, we reviewed the documentation
supporting the factors for each facility category to determine whether
the documentation provided a clear basis for each factor's value.
Further, we analyzed the impact of a revised method used by DOD to
adjust factors for use in fiscal year 2009 by comparing the values of
selected factors adjusted under the revised and the previously used
methods.
To determine DOD's progress in meeting funding goals for facility
sustainment and recapitalization, we reviewed DOD's installation
strategic plans to identify DOD's goals for facility sustainment and
recapitalization. We also reviewed DOD information showing the amounts
budgeted for facility sustainment, restoration, and modernization for
fiscal years 2005 through 2008 and the amounts spent for fiscal years
2005 through 2007 and compared these amounts to the corresponding
goals.[Footnote 25] The amounts budgeted and spent represented DOD
official financial information and we did not independently verify the
amounts. In addition, we reviewed prior DOD testimony on installation
support funding goals and we discussed the goals and DOD's progress in
meeting the goals with DOD and service headquarters officials. To the
extent that goals were not met, we asked DOD and service officials to
explain why and describe the associated consequences on installation
facilities. We also reviewed the restoration and modernization backlog
amounts reported by the military services. At each of the installations
visited, we asked local officials to describe the impacts when
sustainment and recapitalization funding goals were not met. Further,
we observed and took photographs of installation facilities that were
in a deteriorated condition because of a shortage of sustainment funds.
To determine the extent to which DOD has addressed deferred facility
sustainment funding needs, we compared the military services' annual
sustainment funding requirements with the amounts actually funded to
determine the annual unfunded sustainment requirements for fiscal years
2005 through 2007. We discussed the issue with DOD and military service
officials and reviewed DOD guidance and definitions related to facility
maintenance. We also reviewed prior DOD testimony on installation
support and DOD's installation strategic plans for information on
deferred sustainment requirements. We asked officials in each military
service whether any difficulties or obstacles existed in developing
estimates of deferred sustainment needs, whether the service had
estimated its deferred sustainment funding requirements, and whether
the service had plans or goals to address deferred sustainment
requirements. In addition, we reviewed federal financial accounting
requirements pertaining to the reporting of deferred property
maintenance and compared these requirements to the information reported
in the military services' financial statements. Further, we reviewed
the military services' efforts to respond to September 2007 DOD
guidance that was intended to improve the military services' reporting
of deferred maintenance amounts.
To determine the status of DOD's efforts to develop a funding
requirements model for installation services, we obtained and reviewed
documentation on the history of the model's development and interviewed
DOD officials concerning past progress on the model, the model's status
at the end of calendar year 2007, and future plans for completing and
implementing the model. We also documented the timeline of DOD's
efforts since DOD decided to develop the model and compared various
developmental milestones with actual progress. Further, we discussed
with DOD officials the factors that have affected progress in
developing the model and asked the officials to identify any remaining
obstacles that must be overcome before the model could be completed and
used to estimate DOD's installation services funding requirements. In
the absence of a DOD-wide model, we also interviewed officials from
each of the military services and reviewed related information to
document the methods used by each military service to determine
installation services funding needs. Further, we asked service
headquarters officials and officials at the installations we visited to
explain the consequences when installation services funding was less
than required.
We conducted this performance audit from May 2007 through April 2008,
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
[End of section]
Appendix II: Current Methods Used by the Military Services to Estimate
Installation Support Services Funding Requirements:
The Army determines its installation services funding requirements
primarily through the Army's base operations support requirements
model. This model uses Army-defined service standards and a costing
methodology that estimates costs for 95 different installation services
across Army installations based on cost pacing measures and data unique
to each support service. Examples of cost pacing measures include
population served, facility square footage, and number of transactions
required. According to the Army, the model's process results in
estimated funding requirements for what each support service should
cost based on a predefined level of support. The Army adjusts the
model's funding estimate to include costs for some services that are
not modeled and determines the amount of funding actually budgeted
based upon the availability of resources and Army priorities. Beginning
with its fiscal year 2010 budget, the Army plans to use the facilities
operation model to estimate support services funding requirements for
the facility-related services included in that model.[Footnote 26]
The Navy determines its installation services funding requirements
primarily from the Navy's base operating support model. This model
estimates the funding required for 18 Navy service support functions,
which represent about 67 percent of all Navy support services costs.
Funding estimates for 9 other service support functions are not modeled
but are determined primarily from prior-year costs for the required
level of support. For each of the 18 modeled service support functions,
the model estimates funding requirements for four separate standard
levels of service by multiplying a unit factor, such as square feet of
a building, by a unit cost factor for each of the four levels of
service that could be provided. According to the Navy, the unit costs
used by the model are established in several ways, including Navy
historical costs and commercial estimating manuals and data sources.
Each year senior Navy leadership decides which of the four levels of
service will be provided for each service support function at naval
installations. On the basis of these decisions and information from the
model, the Navy determines its installation services funding
requirement. Beginning with its fiscal year 2010 budget, the Navy plans
to use the facilities operation model to estimate support services
funding requirements for the facility-related services included in that
model.
The Air Force used a prototype of the facilities operation model to
estimate its fiscal year 2008 funding requirements for the 10 facility-
related support services included in that model. Even though the model
was not yet at full operational capability, the Air Force decided that
the model provided a more realistic estimate of facility-related
service funding requirements than the Air Force's previously used
method, which was based on historical costs. The Air Force plans to
continue to use this model. To estimate its funding requirements for
several other installation services that are not included in the model,
including security forces, airfield operations, installation
administration, food services, and lodging, the Air Force uses a cost
projection formula. The formula primarily uses the number of personnel
assigned to each installation and the value of the installation's
facilities as key inputs to determining its funding requirements
estimates. The Air Force does not use a model or formula for some
installation services, such as environmental conservation and
compliance, pollution prevention, unaccompanied personnel housing,
child development centers, and base communications and multimedia
activities. According to Air Force officials, the Air Force leadership
makes final decisions on the annual installation services budget based
on Air Force priorities and budget constraints.
The Marine Corps currently does not use a comprehensive model to
estimate funding requirements for installation services except for
utility costs. For utilities, Marine Corps officials stated that
funding requirements are based on a model that organizes and aggregates
available consumption and cost data by utility type and predicts future
costs to support budgeting and programming needs. For all other
installation support service areas, the Marine Corps estimates funding
requirements primarily by direct review of historical program execution
and future needs. During its budget development process, the Marine
Corps makes final decisions on funding levels based on needs,
resources, and priorities. Beginning with its fiscal year 2010 budget,
the Marine Corps plans to use the facilities operation model to
estimate support services funding requirements for the facility-related
services included in that model.
[End of section]
Appendix III: Comments from the Department of Defense:
Office Of The Under Secretary Of Defense:
3000 Defense Pentagon:
Washington, Dc 20301-3000:
Acquisition Technology And Logistics:
April 18, 2008:
Mr. Brian Lepore:
Director, Defense Capabilities and Management:
U.S. Government Accountability Office:
441 G Street, N.W.:
Washington, DC 20548:
Dear Mr. Lepore:
This is the Department of Defense (DoD) response to the GAO draft
report, GAO-08-502, `Defense Infrastructure: Continued Management
Attention Is Needed to Support Installation Facilities and Operations,'
dated March 3, 2008 (GAO Code 351029). The Department had already
initiated several of the recommended actions and appreciates GAO's
support for further improving DoD's facilities budget models. Specific
comments are enclosed.
Sincerely,
Signed by:
Alex A. Buhler:
for:
Wayne Amy:
Deputy Under Secretary of Defense (Installations and Environment):
Enclosure:
As stated:
GAO Draft Report - Dated March 3, 2008 GAO Code 351029/GAO-08-502
"Defense Infrastructure: Continued Management Attention Is Needed to
Support Installation Facilities and Operations"
Department Of Defense Comments To The Recommendations:
Recommendation 1: The GAO recommends that the Secretary of Defense
direct the Deputy Under Secretary of Defense (Installations and
Environment) to monitor and ensure compliance with guidance requiring
verification of real property inventory records.
DOD Response: Concur. DoD has added a new data element to its Real
Property Inventory Requirements (RPIR) document to address this issue
as part of the department's overall effort to transform business
processes and improve the quality of real property inventory data. The
new data element, "Asset Review Date," provides visibility of the most
recent inspection date for each asset. This data element will provide a
direct means of identifying verification dates in the inventory and
taking action to update them as required. DoD initiated this data
element in FY 2007 and expects to fully populate the date for all
records by FY 2009.
Recommendation 2: The GAO recommends that the Secretary of Defense
direct the Deputy Under Secretary of Defense (Installations and
Environment) to maintain documentation regarding the basis for the
sustainment cost factors used by the model to include the calculations
used to determine each factor as well as the reasons for any changes
from year to year.
DOD Response: Concur. DoD has maintained documentation for sustainment
cost factors since the inception of the facilities sustainment model,
and has revised the standards to improve the level of detail and
accessibility for the FY 2008 cost factor documentation, now in
progress.
Recommendation 3: The GAO recommends that the Secretary of Defense
direct the Deputy Under Secretary of Defense (Installations and
Environment) to revert to the previously used ratio analysis method to
calculate the values of those sustainment cost factors that are not
based on independent data sources.
DOD Response: Concur. DoD will adopt the GAO-preferred method to
inflate the small number of sustainment cost factors generated by
ratios beginning in FY 2009.
Recommendation 4: The GAO recommends that the Secretary of Defense
direct the Deputy Under Secretary of Defense (Installations and
Environment) to issue guidance to the Services that (1) provides a
clear definition of deferred facility sustainment requirements and
explains when deferred facility sustainment becomes a facility
restoration requirement, (2) directs the Services to consistently
measure and track deferred sustainment needs, (3) establishes a goal to
address deferred facility sustainment needs, and (4) ensures that the
Services' financial reporting and disclosure information regarding
deferred facility maintenance is consistent with financial reporting
requirements.
DOD Response: Concur. DoD issued guidance in September 2007 that
revised the definition of facility quality ratings (Q-ratings) to
represent deferred sustainment and restoration. Military Services are
required to establish Q-ratings and report them in their real property
inventories for each asset. Effective with the end-of-FY 2007 financial
report on deferred maintenance, DoD revised its methodology for
estimating real property deferred maintenance to incorporate the
revised Q-ratings, and expects this change to be fully implemented with
the next annual report on deferred maintenance. DoD agrees that
establishing goals to address deferred sustainment requirements would
be useful and plans to develop program guidance with the FY 2011 budget
process.
Recommendation 5: The GAO recommends that the Secretary of Defense
direct the Deputy Under Secretary of Defense (Installations and
Environment) to establish a milestone for implementing the installation
services model for use in estimating DoD's installation services
funding requirements and provide adequate senior level oversight to
ensure that the milestone is met.
DOD Response: Partially concur. DoD has established a milestone to
implement an installation services model in support of the FY 2012
budget and has made initial progress toward that goal. However, the
development process has revealed several obstacles that may require DoD
to re-evaluate this goal for at least some installation service
functions. As a result, DoD may adjust its milestone.
[End of section]
Appendix IV: 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, Mark Little, Assistant
Director; Bonita Anderson; Harry Knobler; Mary Jo Lacasse; Josh
Margraf; and Gary Phillips made significant contributions to this
report.
[End of section]
Related GAO Products:
Cost Assessment Guide: Best Practices for Estimating and Managing
Program Costs. Exposure Draft. GAO-07-1134SP. Washington, D.C.: July
2007.
High-Risk Series: An Update. GAO-07-310. Washington, D.C.: January
2007.
Defense Infrastructure: Issues Need to Be Addressed in Managing and
Funding Base Operations and Facilities Support. GAO-05-556. Washington,
D.C.: June 15, 2005.
Military Training: Better Planning and Funding Priority Needed to
Improve Conditions of Military Training Ranges. GAO-05-534. Washington,
D.C.: June 10, 2005.
Defense Infrastructure: Changes in Funding Priorities and Management
Processes Needed to Improve Condition and Reduce Costs of Guard and
Reserve Facilities. GAO-03-516. Washington, D.C.: May 15, 2003.
Defense Infrastructure: Changes in Funding Priorities and Strategic
Planning Needed to Improve the Condition of Military Facilities. GAO-
03-274. Washington, D.C.: February 19, 2003.
[End of section]
Footnotes:
[1] Installation support includes five categories of services and
support activities through which DOD manages and funds the life-cycle
of its installations--facilities, installation services, family
housing, environment, and base realignment and closure.
[2] Facility sustainment provides for the maintenance and repair needed
to keep facilities in good working order over their service lives. This
includes major repairs or replacement of facility components, such as
roof replacements. Facility recapitalization consists of restoration
(repair and replacement work) and modernization (alteration of existing
facilities). Installation services consist of many diverse program
areas, such as installation airfield and port operations, security,
legal and financial services, and family and quality of life programs.
Facilities operation services include facility-related services, such
as utilities, leases, and custodial services, and grounds maintenance.
In their budgets, the military components generally continue to refer
to funding for installation services and facilities operation services
as base operations support funding.
[3] DOD's recapitalization metric uses as a measure the number of years
that will elapse before facilities will be replaced based on the annual
funding provided for restoration and modernization. DOD's current goal
is for military components to fund facility restoration and
modernization in annual amounts that would result in facilities being
replaced every 67 years. DOD is developing a new facilities
modernization model intended to improve upon the existing
recapitalization metric and directly estimate annual funding
requirements for facility recapitalization by considering the expected
service life for each facility category.
[4] 31 U.S.C. 717 (b) (1).
[5] In addition to data from the military services, some of the data
related to facility funding goals in this report include data from the
Defense Logistics Agency, the Tricare Management Activity, and the DOD
Education Activity. However, we did not include these components in our
review.
[6] GAO, High-Risk Series: An Update, GAO-07-310 (Washington, D.C.:
January 2007).
[7] GAO, Defense Infrastructure: Changes in Funding Priorities and
Strategic Planning Needed to Improve the Condition of Military
Facilities, GAO-03-274 (Washington, D.C.: Feb. 19, 2003).
[8] GAO, Defense Infrastructure: Changes in Funding Priorities and
Management Processes Needed to Improve Condition and Reduce Costs of
Guard and Reserve Facilities, GAO-03-516 (Washington, D.C.: May 15,
2003).
[9] GAO, Defense Infrastructure: Issues Need to Be Addressed in
Managing and Funding Base Operations and Facilities Support, GAO-05-556
(Washington, D.C.: June 15, 2005).
[10] GAO, Military Training: Better Planning and Funding Priority
Needed to Improve Conditions of Military Training Ranges, GAO-05-534
(Washington, D.C.: June 10, 2005).
[11] See GAO, Cost Assessment Guide: Best Practices for Estimating and
Managing Program Costs, Exposure Draft, GAO-07-1134SP (Washington,
D.C.: July 2007).
[12] See DOD Instruction No. 4165.14, Real Property Inventory and
Forecasting (Mar. 31, 2006) and DOD Financial Management Regulation
7000.14-R, vol. 4, ch. 6, Property, Plant, and Equipment (July 2006).
[13] Naval Audit Service, Independent Attestation Report--Agreed-Upon
Procedures Attestation Engagement of Marine Corps Real Property
Financial Statement Information, N2007-0031 (May 7, 2007).
[14] The premise is that there is a similar relationship between the
sustainment and replacement cost factors for two facility categories.
The replacement cost factor is DOD's estimate of the average unit cost
to replace a facility in a given facility category based on the
category's prescribed unit of measure. Thus, when the sustainment and
replacement cost factors for the first facility category are known and
the replacement cost factor of the second facility category is known, a
ratio analysis can be used to estimate the unknown sustainment cost
factor of the second facility category by multiplying the ratio of the
cost factors from the first facility category by the replacement cost
factor of the second facility category.
[15] See note 14.
[16] Statement of Mr. Philip W. Grone, Deputy Under Secretary of
Defense (Installations and Environment), before the Subcommittee on
Readiness and Management Support, Senate Armed Services Committee (Apr.
10, 2007).
[17] Statement of Mr. Philip W. Grone, Deputy Under Secretary of
Defense (Installations and Environment), before the Military Quality of
Life and Veterans Affairs Subcommittee, House Appropriations Committee
(Feb. 15, 2006).
[18] Federal Real Property Council, 2007 Guidance for Real Property
Inventory Reporting (June 8, 2007).
[19] Statement of Federal Financial Accounting Standards No. 6,
Accounting for Property, Plant, and Equipment (June 1996) and Statement
of Federal Financial Accounting Standards No. 14, Amendments to
Deferred Maintenance Reporting (April 1999).
[20] See Department of Defense Instruction No. 4165.14, Real Property
Inventory and Forecasting (Washington, D.C.: Mar. 31, 2006).
[21] See Under Secretary of Defense (Acquisition, Technology and
Logistics) Memorandum, Facility Quality Rating Guidance (Washington,
D.C.: Sept. 5, 2007).
[22] Black & Veatch, DOD Facility Quality IVV Report - Independent
Verification and Validation of Condition Reporting for Defense
Facilities (May 16, 2006).
[23] See GAO-05-556.
[24] To gain insight at the installation level into the accuracy of
real property inventory records, compliance with inventory verification
procedures, support funding issues, and the condition of facilities, we
visited the following eight installations: Fort Eustis, Virginia; Fort
Sam Houston, Texas; Naval Air Station Oceana, Virginia; Naval Station
Mayport, Florida; Langley Air Force Base, Virginia; Randolph Air Force
Base, Texas; Marine Corps Base Quantico, Virginia; and Marine Corps
Base Camp Lejeune, North Carolina. We judgmentally selected these
installations because they represented two installations from each of
the military services and were located in several different geographic
locations. We recognize that information obtained from these
installations, as well as the facility conditions observed, may or may
not be representative of other military installations.
[25] In addition to data from the military services, some of the data
related to facility funding goals in this report include data from the
Defense Logistics Agency, the Tricare Management Activity, and the DOD
Education Activity. However, we did not include these components in our
review.
[26] Since fiscal year 2005, DOD has been developing a model to
estimate funding requirements for 10 facility-related services--fire
and emergency services, utilities, pavement clearance, refuse
collection and disposal, real property leases, grounds maintenance,
pest control, custodial services, real property management and
engineering services, and engineering readiness. According to DOD, the
model will use commercial benchmarks for similar services performed in
the private sector. DOD plans for all military components to use the
model to estimate the fiscal year 2010 facilities operation funding
requirements.
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