Military Base Realignments and Closures
DOD Faces Challenges in Implementing Recommendations on Time and Is Not Consistently Updating Savings Estimates Gao ID: GAO-09-217 January 30, 2009The 2005 Base Realignment and Closure (BRAC) round is the biggest, most complex, and costliest BRAC round ever. In addition to base closures, many recommendations involve realignments, such as returning forces to the United States from bases overseas and creating joint bases. However, anticipated savings remained an important consideration in justifying the need for the 2005 BRAC round. The House report on the National Defense Authorization Act for Fiscal Year 2008 directed GAO to monitor BRAC implementation. Therefore, GAO assessed (1) challenges that might affect timely completion of recommendations, (2) any changes in DOD's reported cost and savings estimates since fiscal year 2008, and (3) the potential for estimates to continue to change. To address these objectives, GAO reviewed documentation and interviewed officials in the Office of the Secretary of Defense (OSD), the services' BRAC offices, and the Army Corps of Engineers; visited installations implementing some of the more costly realignments or closures; and analyzed BRAC budget data for fiscal years 2008 and 2009.
DOD has made progress in implementing the BRAC 2005 round but faces challenges in its ability to meet the September 15, 2011, statutory completion deadline. DOD expects almost half of the 800 defense locations implementing BRAC recommendations to complete their actions in 2011; however, about 230 of these almost 400 locations anticipate completion within the last 2 weeks of the deadline. Further, some of these locations involve some of the most costly and complex BRAC recommendations, which have already incurred some delays and thus have little leeway to meet the 2011 completion date if any further delays occur. Also, DOD must synchronize relocating about 123,000 personnel with an estimated $23 billion in facilities that are still being constructed or renovated, but some delays have left little time in DOD's plans to relocate these personnel by the deadline. Finally, delays in interdependent recommendations could have a cascading effect on other recommendations being completed on time. OSD recently issued guidance requiring the services and defense agencies to provide status briefings to improve oversight of issues affecting timely implementation of BRAC recommendations. However, this guidance did not establish a regular briefing schedule or require the services to provide information about possible mitigation measures for any BRAC recommendations at risk of not meeting the statutory deadline. DOD's fiscal year 2009 BRAC budget submission shows that DOD plans to spend more to implement recommendations and save slightly less compared to the 2008 BRAC budget. DOD's 2009 estimate of one-time costs to implement this BRAC round increased by $1.2 billion to about $32.4 billion. Net annual recurring savings estimates decreased by almost $13 million to about $4 billion. Also, GAO's calculations of net present value, which includes both expected cost and savings over a 20-year period ending in 2025 and takes into account the time value of money, show that implementing the 2005 BRAC recommendations is expected to save $13.7 billion. This compares to an estimated $15 billion in net present value savings based on last year's BRAC budget and the BRAC Commission's reported estimate of about $36 billion. Although DOD is about 3? years into the 6-year implementation period, the potential remains for BRAC cost estimates to continue to increase, but the potential for changes in savings estimates is unclear. Greater than expected inflation and increased market demands for construction materials could cause estimated construction costs to increase, although the extent of this increase is uncertain given today's economic market conditions. However, the potential for changes in savings estimates is unclear because BRAC headquarters officials at both the Army and the Air Force told us they do not plan to update their savings estimates regardless of factors that may cause those estimates to change, and OSD is not enforcing its own regulation requiring them to do so. Hence, congressional and defense decision makers could be left with an unrealistic sense of the savings this complex and costly BRAC round may actually produce, an issue that could be important in considering whether another round of BRAC may be warranted.
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-09-217, Military Base Realignments and Closures: DOD Faces Challenges in Implementing Recommendations on Time and Is Not Consistently Updating Savings Estimates
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
January 2009:
Military Base Realignments And Closures:
DOD Faces Challenges in Implementing Recommendations on Time and Is Not
Consistently Updating Savings Estimates:
Military Base Realignments and Closures:
GAO-09-217:
GAO Highlights:
Highlights of GAO-09-217, a report to congressional committees.
Why GAO Did This Study:
The 2005 Base Realignment and Closure (BRAC) round is the biggest, most
complex, and costliest BRAC round ever. In addition to base closures,
many recommendations involve realignments, such as returning forces to
the United States from bases overseas and creating joint bases.
However, anticipated savings remained an important consideration in
justifying the need for the 2005 BRAC round.
The House report on the National Defense Authorization Act for Fiscal
Year 2008 directed GAO to monitor BRAC implementation. Therefore, GAO
assessed (1) challenges that might affect timely completion of
recommendations, (2) any changes in DOD‘s reported cost and savings
estimates since fiscal year 2008, and (3) the potential for estimates
to continue to change. To address these objectives, GAO reviewed
documentation and interviewed officials in the Office of the Secretary
of Defense (OSD), the services‘ BRAC offices, and the Army Corps of
Engineers; visited installations implementing some of the more costly
realignments or closures; and analyzed BRAC budget data for fiscal
years 2008 and 2009.
What GAO Found:
DOD has made progress in implementing the BRAC 2005 round but faces
challenges in its ability to meet the September 15, 2011, statutory
completion deadline. DOD expects almost half of the 800 defense
locations implementing BRAC recommendations to complete their actions
in 2011; however, about 230 of these almost 400 locations anticipate
completion within the last 2 weeks of the deadline. Further, some of
these locations involve some of the most costly and complex BRAC
recommendations, which have already incurred some delays and thus have
little leeway to meet the 2011 completion date if any further delays
occur. Also, DOD must synchronize relocating about 123,000 personnel
with an estimated $23 billion in facilities that are still being
constructed or renovated, but some delays have left little time in
DOD‘s plans to relocate these personnel by the deadline. Finally,
delays in interdependent recommendations could have a cascading effect
on other recommendations being completed on time. OSD recently issued
guidance requiring the services and defense agencies to provide status
briefings to improve oversight of issues affecting timely
implementation of BRAC recommendations. However, this guidance did not
establish a regular briefing schedule or require the services to
provide information about possible mitigation measures for any BRAC
recommendations at risk of not meeting the statutory deadline.
DOD‘s fiscal year 2009 BRAC budget submission shows that DOD plans to
spend more to implement recommendations and save slightly less compared
to the 2008 BRAC budget. DOD‘s 2009 estimate of one-time costs to
implement this BRAC round increased by $1.2 billion to about $32.4
billion. Net annual recurring savings estimates decreased by almost $13
million to about $4 billion. Also, GAO‘s calculations of net present
value, which includes both expected cost and savings over a 20-year
period ending in 2025 and takes into account the time value of money,
show that implementing the 2005 BRAC recommendations is expected to
save $13.7 billion. This compares to an estimated $15 billion in net
present value savings based on last year‘s BRAC budget and the BRAC
Commission‘s reported estimate of about $36 billion.
Although DOD is about 3½ years into the 6-year implementation period,
the potential remains for BRAC cost estimates to continue to increase,
but the potential for changes in savings estimates is unclear. Greater
than expected inflation and increased market demands for construction
materials could cause estimated construction costs to increase,
although the extent of this increase is uncertain given today‘s
economic market conditions. However, the potential for changes in
savings estimates is unclear because BRAC headquarters officials at
both the Army and the Air Force told us they do not plan to update
their savings estimates regardless of factors that may cause those
estimates to change, and OSD is not enforcing its own regulation
requiring them to do so. Hence, congressional and defense decision
makers could be left with an unrealistic sense of the savings this
complex and costly BRAC round may actually produce, an issue that could
be important in considering whether another round of BRAC may be
warranted.
What GAO Recommends:
GAO recommends that OSD modify its recently issued guidance on BRAC
implementation status and require the services to update BRAC savings
estimates. DOD concurred with GAO‘s recommendations.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-09-217]. For more
information, contact Brian J. Lepore at (202) 512-4523 or
leporeb@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Challenges Increase the Risk That Some BRAC Recommendations Might Not
Be Completed by the Statutory Deadline:
BRAC Implementation Cost Estimates Are Higher and Savings Estimates Are
Lower Compared to Previous Fiscal Year:
Cost Estimates Could Continue to Rise, but the Potential for Savings
Estimates to Change Is Unclear:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: BRAC Recommendations DOD Expects to Cost the Most:
Appendix III: BRAC Recommendations DOD Expects to Save the Most
Annually:
Appendix IV: BRAC Recommendations DOD Expects to Save the Most Over a
20- year Period:
Appendix V: Comments from the Department of Defense:
Appendix VI: GAO Contact and Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: BRAC Recommendations with the Largest Increases in One-Time
Estimated Costs from Fiscal Year 2008 to Fiscal Year 2009:
Table 2: Comparison of BRAC Cost Categories from Fiscal Year 2008 to
Fiscal Year 2009:
Table 3: BRAC Recommendations DOD Expects to Cost the Most to Implement
(Fiscal Years 2006 through 2011):
Table 4: BRAC Recommendations DOD Expects to Save the Most Annually
After Implementation (Projected for Fiscal Year 2012):
Table 5: BRAC Recommendations DOD Expects to Save the Most Over a 20-
year Period (Fiscal Years 2006 through 2025):
Figure:
Figure 1: Small Percentage of BRAC Recommendations Generates Majority
of Estimated Savings:
Abbreviations:
BRAC: base realignment and closure:
DOD: Department of Defense:
OSD: Office of the Secretary of Defense:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
January 30, 2009:
Congressional Committees:
The 2005 Base Realignment and Closure (BRAC) round is the fifth such
round undertaken by DOD since 1988 and, by our assessment, is the
biggest, most complex, and costliest BRAC round ever. With this BRAC
round, the Department of Defense (DOD) plans to execute hundreds of
BRAC actions affecting over 800 defense locations, relocate over
123,000 personnel, and spend over $32 billion--an unprecedented amount,
given that DOD has spent almost $25 billion[Footnote 1] to implement
the four previous BRAC rounds combined when all relevant BRAC actions
have been completed. Unlike prior BRAC rounds, DOD is implementing the
BRAC 2005 round during a time of conflict and significant additional
defense appropriations through supplemental budgets to support
contingency operations. Compounding this challenge, DOD is also
implementing or planning to implement other extensive worldwide
transformation initiatives such as the permanent relocation of about
70,000 military personnel[Footnote 2] to the United States from Europe
and Korea; transformation of the Army's force structure from an
organization based on divisions to more rapidly deployable, combat
brigade-based units; an increase in the active-duty end strength of the
Army and the Marine Corps by 92,000 members;[Footnote 3] and the
potential redeployment of combat forces from Iraq to the United States,
all of which will place additional demands on DOD's domestic facility
infrastructure.
The Office of the Secretary of Defense (OSD) at the outset of BRAC 2005
indicated its intent to reshape DOD's installations and realign DOD
forces to meet defense needs for the next 20 years. Moreover, both DOD
and the BRAC Commission[Footnote 4] reported that their primary
consideration in making recommendations for the BRAC 2005 round was
military value.[Footnote 5] As such, many of the BRAC 2005
recommendations involve complex realignments, such as designating where
military forces returning to the United States from overseas bases
would be located; establishing joint military medical centers; creating
joint bases; and reconfiguring the defense supply, storage, and
distribution network. DOD is required to implement all BRAC 2005
recommendations by September 15, 2011.
However, anticipated savings resulting from implementing
recommendations remained an important consideration in justifying the
need for the 2005 BRAC round. In 2001 testimony before Congress, the
Secretary of Defense stated that another BRAC round would generate
recurring savings the department could use for other defense programs,
and that the BRAC Commission expected that the round would save about
$36 billion over a 20-year period ending in 2025.[Footnote 6]
Nonetheless, to realize savings from BRAC, DOD must first invest
billions of dollars in facility construction, renovation, and other up-
front expenses to implement the BRAC recommendations to produce the
projected savings that DOD could then redirect to other priorities.
Because of concerns about the progress DOD is making in implementing
the BRAC 2005 recommendations, the House Armed Services Committee
report accompanying the National Defense Authorization Act for Fiscal
Year 2008[Footnote 7] directed the Comptroller General to monitor the
implementation of recommendations for the 2005 round of closures and
realignments of military installations made pursuant to section 2914 of
the Defense Base Closure and Realignment Act of 1990.[Footnote 8] We
prepared this report to (1) assess the challenges DOD faces that might
affect the implementation of the BRAC recommendations by the statutory
completion deadline in 2011, (2) analyze how DOD's reported cost and
savings estimates have changed in the fiscal year 2009 BRAC budget
request compared to the fiscal year 2008 budget request, and (3)
evaluate the potential for BRAC cost and savings estimates to continue
to change as DOD proceeds with BRAC implementation.
To address these objectives, we reviewed relevant documentation
including business plans, DOD presentations on BRAC implementation
status, and prior GAO reports, and interviewed officials in the Office
of the Deputy Under Secretary of Defense (Installations and
Environment) responsible for overseeing BRAC implementation and
associated BRAC implementation offices in the Army, the Navy, and the
Air Force. To assess the challenges DOD faces that might affect the
implementation of the BRAC recommendations by the statutory completion
deadline in 2011, we focused our work on recommendations that have
significant actions such as construction and movement of personnel
scheduled to occur near the statutory deadline. To analyze how DOD's
reported cost and savings estimates have changed in the fiscal year
2009 BRAC budget submission compared to the fiscal year 2008 budget
submission, we obtained budget data for both fiscal years and compared
dollar amount differences for cost and savings estimates for each BRAC
recommendation. To calculate the 20-year net savings estimates, we used
DOD's fiscal year 2009 BRAC budget data using the same methodology DOD
used to report its estimate to the BRAC Commission. Finally, to
evaluate the potential for BRAC cost and savings estimates to continue
to change as the department proceeds with BRAC implementation, we
interviewed officials from the Office of the Deputy Under Secretary of
Defense (Installations and Environment) responsible for overseeing BRAC
implementation and associated BRAC implementation offices for the
service departments to discuss plans and procedures for updating these
estimates. Further details on our scope and methodology can be found in
appendix I.
Overall, we determined that the data for this report were sufficiently
reliable for comparing cost and savings estimates and identifying broad
implementation challenges. We conducted this performance audit from
February 2008 to December 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.
Results in Brief:
Although DOD has made progress in implementing BRAC 2005, it faces
several challenges, all of which put some recommendations at risk of
not completing BRAC implementation by the statutory deadline of
September 15, 2011. For example, DOD expects almost 400 of the total of
about 800 locations to complete their BRAC recommendations in 2011,
which is within the last 9 months of the statutory deadline, and about
230 of these almost 400 locations are scheduled to complete their
recommendations in the last 2 weeks of the statutory completion period.
Further, some of these locations involve some of the most costly and
complex BRAC recommendations, which have already incurred setbacks and
thus have little leeway to meet the completion deadline if further
delays occur. Also, as part of BRAC implementation, DOD is planning to
synchronize the relocation of over 123,000 military and civilian
personnel with nearly $23 billion in new construction or renovation
projects, but some delays in starting construction projects have, in
turn, left little time in the planning schedules to complete those
relocations by the deadline. Finally, the interdependence of some BRAC
recommendations creates additional challenges to meeting the statutory
deadline, as a delay in completing one project could have a cascading
effect on other interconnected BRAC moves. In response to these
challenges, the Deputy Under Secretary of Defense (Installations and
Environment) issued a memo dated November 21, 2008, providing guidance
that required the military services and defense agencies to present OSD
with status briefings on BRAC implementation beginning in December
2008. The memo stated that these briefings will ensure that senior
leadership is apprised of significant issues impacting timely
implementation of BRAC recommendations. We believe this is a positive
step toward enhancing OSD's oversight of BRAC implementation. However,
because this guidance does not establish a regular briefing schedule or
require the services to provide information about possible mitigation
measures for any BRAC recommendations at risk of not meeting the
statutory deadline, OSD may not be able to fully assist the services to
complete their actions on time. We are making recommendations to
improve the timeliness and completeness of the information the
briefings will provide.
DOD's BRAC fiscal year 2009 budget submission, which covers fiscal year
2006 through fiscal year 2011, shows that DOD plans to spend more and
save slightly less compared to last year's BRAC budget submission to
implement BRAC recommendations. Specifically, DOD's 2009 estimated one-
time costs to implement this round of BRAC increased by $1.2 billion to
about $32.4 billion. Net annual recurring savings estimates decreased
by almost $13 million to about $4 billion, compared to DOD's estimates
in the fiscal year 2008 BRAC budget submission.[Footnote 9] In
addition, our calculations of the net present value, which includes
both estimated cost and savings over a 20-year period ending in 2025
based on DOD's fiscal year 2009 BRAC budget and takes into account the
time value of money, show that implementing the 2005 BRAC
recommendations has declined to $13.7 billion (in constant fiscal year
2005 dollars), compared to $15 billion that we previously reported
using DOD's fiscal year 2008 BRAC budget.[Footnote 10] The BRAC
Commission in 2005 reported that it estimated that DOD would save about
$36 billion over this same 20-year period after the department
implemented this round of BRAC.
Although DOD is now about 3½ years into the statutory 6-year BRAC
implementation period, the potential still remains for BRAC cost
estimates to continue to increase in future BRAC budgets, but the
potential for changes in savings estimates is unclear. Estimated costs
for military construction could increase because of greater than
expected inflation for building materials worldwide and increased
market demands for construction, particularly for Army BRAC projects,
which account for nearly 60 percent of the total BRAC construction cost
estimates. For example, prices for construction materials such as
steel, concrete, and copper rose by 18 percent to over 124 percent from
2005 to 2008. The increase in the price of fuel through July 2008 has
also contributed to increased construction costs, although fuel prices
had declined by the time of our report. In addition, U.S. Army Corps of
Engineers officials told us that the inflation rates they are required
to use in developing BRAC budget estimates underestimate actual
construction costs and that some construction bids from contractors are
coming in at higher amounts than budgeted. We believe that if
escalating pressures on the cost of commercial construction continue,
DOD may have difficulty completing so many construction projects within
current cost estimates by the statutory 2011 deadline, although recent
changes in market conditions could reverse pricing trends in DOD's
favor. At the same time, the potential for changes in BRAC savings
estimates is unclear because some services do not plan to update their
savings estimates regardless of factors that could cause those
estimates to change, and OSD is not enforcing its own regulation
requiring the services to do so. OSD officials told us that their focus
has been mainly on formulating cost estimates and planning BRAC
implementation. Nonetheless, DOD's financial management regulation for
BRAC appropriations states that BRAC saving estimates must be based on
the best projection of what savings will actually accrue from approved
realignments and closures and that prior year estimated savings shall
be updated to reflect actual savings.[Footnote 11] However, the
services are implementing this regulation inconsistently or not at all.
For example, officials responsible for implementing two recommendations
associated with substantial expected savings--establishing naval fleet
readiness centers at multiple installations and realigning defense
medical care and training--told us that they were updating their
savings estimates based on maturing implementation details. In
contrast, BRAC implementing officials for both Army and Air Force
headquarters told us that they plan to continue to report the same
savings estimates that they reported to Congress in February 2007,
despite any changes in implementation details or completion schedule
that could cause those estimates to change. Without consistently
updated BRAC savings estimates, DOD decision makers and Congress may be
left with an unrealistic sense of the savings this BRAC round may
actually produce. We are making a recommendation that BRAC savings
estimates are based on the best projection of what savings will accrue
from approved realignments and closures.
In comments on a draft of this report, DOD concurred with all of our
recommendations and noted that it has begun to implement them. DOD's
written comments are reprinted in appendix V.
Background:
DOD has undergone four BRAC rounds since 1988 and is currently
implementing its fifth round.[Footnote 12] In May 2005, the Secretary
of Defense made public more than 200 recommendations that DOD estimated
would generate net annual recurring savings of about $5.5 billion
beginning in fiscal year 2012. Ultimately, the BRAC Commission
forwarded a list of 182 recommendations for base closure or realignment
to the President for approval and estimated that BRAC could save DOD
annually about $4.2 billion after the recommendations had been
implemented. After the BRAC Commission forwarded to the President its
list of closure and realignment recommendations, the President was
required to review and prepare a report approving or disapproving the
BRAC Commission's recommendations by September 23, 2005. On September
15, 2005, the President approved, and the recommendations were
forwarded to Congress, which had 45 legislative days or until
adjournment of Congress to enact a joint resolution disapproving of the
recommendations on an all-or-none basis; otherwise, the recommendations
became effective. The BRAC Commission's recommendations were accepted
in their entirety by the President and not disapproved by Congress and
became effective November 9, 2005. The BRAC statute requires DOD to
complete recommendations for closing or realigning bases made in the
BRAC 2005 round within a 6-year time frame ending September 15, 2011, 6
years from the date the President submitted to Congress his approval of
the recommendations.
In making its 2005 realignment and closure proposals, DOD applied
legally mandated selection criteria that included military value as the
primary consideration, as well as expected costs and savings, economic
impact to local communities, community support infrastructure, and
environmental impact. Military value--which includes such
considerations as an installation's current and future mission
capabilities, condition, ability to accommodate future needs, and cost
of operations--was the primary criteria for making recommendations as
mandated by BRAC law and as reported by both DOD and the Commission.
Additionally, in establishing goals for the 2005 BRAC round, the
Secretary of Defense, in a November 15, 2002, memorandum initiating the
round, expressed his interest in (1) reducing excess infrastructure,
which diverts scarce resources from overall defense capability, and
producing savings; (2) transforming DOD by aligning the infrastructure
with the defense strategy; and (3) fostering jointness by examining and
implementing opportunities for greater jointness across DOD.
The 2005 round is unlike previous BRAC rounds because of OSD's emphasis
on transformation and jointness, rather than just reducing excess
infrastructure. For example, as part of the Army's efforts to transform
its forces, the Army included actions to relocate forces from Europe
and Korea to domestic installations, which were part of its larger
review of bases worldwide. The 2005 round also differs from previous
BRAC rounds in terms of the number of closure and realignment actions.
While the number of major closures and realignments is a little greater
than individual previous rounds, the number of minor closures and
realignments is significantly greater than those in all previous rounds
combined.[Footnote 13] DOD plans to execute over 800 closure and
realignment actions as part of the 2005 BRAC round, which is more than
double the number of actions completed in the prior four rounds
combined. The large increase in the number of minor closures and
realignments is primarily attributable to the more than 500 actions
involving the Army National Guard and Army Reserve, representing over
60 percent of the BRAC actions.
To implement BRAC recommendations, DOD typically must incur various up-
front investment costs during the 6-year implementation period in order
to achieve long-term savings associated with the recommended actions.
Such costs generally include, for example, one-time costs for actions
such as military construction and personnel and equipment movement, as
well as recurring costs for increased operation and maintenance of
facilities and information systems. While savings from this investment
may begin to accrue over the implementation period, additional savings
typically occur annually on a longer-term basis beyond the
implementation period ending in fiscal year 2011. One-time savings may
include, for example, reduced costs associated with inventory reduction
or elimination of planned military construction. Recurring savings may
include for example, reduced sustainment costs associated with
maintaining less warehouse space. Net annual recurring savings after
the implementation period are calculated by subtracting the annual
recurring costs from the annual recurring savings. Expected 20-year
savings, also referred to as 20-year net present value savings, takes
into account all one-time and recurring costs and savings incurred over
the fiscal year 2006 through 2025 time period.[Footnote 14]
For the BRAC 2005 round, the OSD BRAC Office--under the oversight of
the Under Secretary of Defense (Acquisition, Technology and Logistics)-
-has monitored the services' and defense agencies' implementation
progress, analyzed budget justifications for significant differences in
cost and savings estimates, and facilitated the resolution of any
challenges that may impair the successful implementation of the
recommendations within the 6-year completion period. To facilitate its
oversight role, OSD required the military departments and certain
defense agencies to submit a detailed business plan for each of their
recommendations. These business plans, which are to be updated every 6
months, include information such as a listing of all actions needed to
implement each recommendation, schedules for personnel movements
between installations, updated cost and savings estimates based on
better and updated information, and implementation completion time
frames.
Challenges Increase the Risk That Some BRAC Recommendations Might Not
Be Completed by the Statutory Deadline:
DOD has made progress in implementing the BRAC 2005 round but faces
challenges in its ability to meet the September 15, 2011, statutory
completion deadline. DOD is more than halfway through the
implementation period for BRAC 2005 and has made progress thus far.
However, DOD faces several challenges to completing BRAC actions at
some locations on time. First, DOD expects almost half of the 800
defense locations responsible for implementing BRAC to complete their
recommendations within months of the deadline, and about 230 of those
locations anticipate completion within the last 2 weeks of the
implementation period. Second, some of these locations, which involve
the most costly and complex recommendations, have already encountered
delays in their implementation schedules. Third, DOD must synchronize
relocating over an estimated 123,000 personnel with the construction or
renovation of facilities. Finally, delays in interdependent
recommendations could have a cascading effect on the timely completion
of related recommendations. OSD recently issued guidance requiring the
services and defense agencies to provide status briefings to improve
oversight of issues affecting timely implementation of BRAC
recommendations. However, this guidance did not establish a regular
briefing schedule as needed or require the services to provide
information about possible mitigation measures for any BRAC
recommendations at risk of not meeting the statutory deadline.
DOD Has Made Progress in Implementing BRAC:
DOD is more than halfway through the implementation period for BRAC
2005 and has made steady progress thus far. In June 2008, DOD reported
to Congress that 59 of 800 affected locations have completed their BRAC
actions associated with that location as of December 1, 2007. While
much remains to be done, DOD is awarding construction contracts, and
DOD officials told us that fiscal years 2008 and 2009 should be the
years with the greatest number of construction contract awards. Also,
officials told us that high rates of obligation for BRAC military
construction funds in fiscal year 2008 indicate that the services and
defense agencies are generally meeting schedules for awarding
construction contracts.
This was the first BRAC round in which DOD required the services and
defense agencies that implement the recommendations to prepare business
plans for approval by the OSD BRAC Office. These business plans provide
information on actions and time frames as well as cost and savings to
help guide implementation. Services and defense agencies responsible
for implementing BRAC recommendations were required to obtain business
plan approval before beginning implementation. Business plans are
updated twice a year, represent the most current information available
on each recommendation, and serve as a tool for DOD to oversee the
implementation of this BRAC round but do not include analysis of the
likelihood of completing the recommendation on time.
DOD Faces Several Challenges to Completing BRAC Actions at Some
Locations on Time:
DOD faces several challenges in its ability to implement this round of
BRAC by the September 15, 2011, statutory completion deadline. By
statute, DOD must complete the recommendations for closing or
realigning bases made in the BRAC 2005 round within 6 years from the
date the President submitted to Congress his approval of the BRAC
Commission's recommendations. Although DOD has made implementation
progress in the last 3½ years since BRAC became effective, the
department still faces a number of challenges that could affect its
ability to complete all BRAC actions by the statutory deadline.
Many Defense Locations Are Expected to Complete BRAC within Months of
the Statutory Deadline:
As of June 2008, DOD reported to Congress[Footnote 15] that about half
out of 800 defense locations that are affected by BRAC recommendations
expect to complete their BRAC-related actions within the last 9 months
of the statutory deadline of September 15, 2011. Further, our analysis
of DOD's data shows that about 60 percent, or about 230, of these 400
locations expect to complete their BRAC actions in September 2011--the
last two weeks before the statutory deadline. OSD BRAC officials told
us some locations might have reported completion dates near the end of
the BRAC deadline to allow extra time, although such a practice could
represent potentially inaccurate completion estimates. Still, we
believe DOD's data provide an indicator of the number of locations that
have little room for delays in the BRAC completion schedule.
DOD Has Experienced Various Delays in the Implementation Schedule for
Some of the Most Costly and Complex BRAC Recommendations:
Some of the most costly and complex BRAC recommendations that DOD has
yet to fully implement have already incurred some setbacks in
implementation because of several reasons, including construction
problems, the requirement to study environmental impacts, and delays in
making decisions about site locations, awarding contracts and acquiring
land. According to our analysis, the recommendations discussed are
among the most costly, and represent about 30 percent of the total
estimated costs to implement this round of BRAC. Many of these
recommendations are also complex in that they involve movement of a
large number of personnel, large construction projects, and
synchronization with other recommendations. Some of the most costly
recommendations that have experienced delays are as follows:
* Close National Geospatial-Intelligence Agency leased locations and
realign others to Fort Belvoir, Virginia. DOD officials told us that
construction of the National Geospatial-Intelligence Agency's new $1.5
billion building at Fort Belvoir is currently on schedule. However,
there is minimal schedule margin, and as a result, any unmitigated
disruptions can jeopardize maintaining the complex construction
schedule required to move 8,500 personnel by the statutory deadline.
The estimated cost to implement this recommendation is $2.4 billion
according to DOD's fiscal year 2009 budget and the estimated completion
date is September 2011.
* Establish San Antonio Regional Medical Center and realign enlisted
medical training to Fort Sam Houston, Texas. As part of this
recommendation, DOD is realigning the inpatient medical function from
Lackland Air Force Base to Brooke Army Medical Center at Fort Sam
Houston. However, officials with the San Antonio Joint Program Office,
which was established to help implement the BRAC decisions affecting
San Antonio, told us that construction contract delays have left little
time in the implementation schedule to meet the statutory deadline. The
estimated cost to implement this recommendation is $1.7 billion,
according to DOD's fiscal year 2009 budget, and the estimated
completion date is September 2011.
* Realign Walter Reed Army Medical Center to Bethesda National Naval
Medical Center, Maryland. Tri-Care Management Activity officials told
us that although the implementation schedule for meeting the deadline
for this recommendation is on an accelerated track, it will still be
tight to meet the 2011 deadline. These officials told us it is taking
additional time to finalize the plans for building a world-class
medical center facility. According to DOD's fiscal year 2009 budget,
the estimated cost to implement this recommendation is $1.6 billion,
and the estimated completion date is September 2011.
* Realign Maneuver Training to Fort Benning, Georgia. Construction
delays to provide facilities associated with the realignment of the
Army's Armor School at Fort Knox, Kentucky, with the Infantry School at
Fort Benning, Georgia, to create the new Maneuver Training Center have
occurred because of concerns about environmental disturbances to the
habitat of the Red-Cockaded Woodpecker at Fort Benning. According to
Army officials, these delays have left little, if any, time in the
implementation schedules to absorb further delays. The estimated cost
to implement this recommendation is $1.5 billion, according to DOD's
fiscal year 2009 budget, and the estimated completion date is August
2011.
* Co-locate miscellaneous OSD, defense agency, and field activity
leased locations in the District of Columbia Metropolitan Area. Various
delays in the process to select a permanent site for co-locating about
6,400 personnel have slipped the time frame for starting the
implementation of this recommendation. The Army had originally planned
to relocate these agencies and activities to Fort Belvoir's Engineering
Proving Ground, but in August 2007, announced it was considering a
nearby location belonging to the U.S. General Services Administration
in Springfield, Virginia. Then, in October 2007, the Army announced it
was also considering other sites in Northern Virginia, finally deciding
on a site in Alexandria, Virginia in September 2008.[Footnote 16] These
delays, according to Army BRAC officials, have significantly compressed
the time available to build new facilities and move thousands of
personnel by the 2011 statutory deadline. The estimated cost to
implement this recommendation is $1.2 billion according to DOD's fiscal
year 2009 budget, and the estimated completion date is September 2011.
* Close Fort McPherson, Georgia. The relocation of Headquarters U.S.
Army Forces Command and Headquarters U.S. Army Reserve Command to Fort
Bragg, North Carolina, because of the closure of Fort McPherson, has
experienced delays. The construction contract for building a new
facility for the commands was delayed by 3½ months while requirements
for the building were being refined and may jeopardize the Army's
ability to meet the BRAC deadline. According to Forces Command
officials, there will be enough time to finish construction only if the
Army encounters no further significant complications during
construction. The construction contract was initially to be awarded in
May 2008 but was delayed until September 2008, and the schedule to
fully transfer Forces Command to Fort Bragg is very tight. The
estimated cost to implement this recommendation is $798 million,
according to DOD's fiscal year 2009 budget, and the estimated
completion date is September 2011.
* Realign Fort Bragg, North Carolina. Part of this recommendation
requires the relocation of the Army's 7th Special Forces Group to Eglin
Air Force Base, Florida. However, delays resulting from concerns about
the noise from the Joint Strike Fighter aircraft, which will also be
located at Eglin, through the implementation of another BRAC
recommendation, have contributed to uncertainties on where to relocate
the Special Forces Group at Eglin. As a result, obtaining the required
environmental impact studies has taken longer than originally
anticipated. As of December 2008, the Army had not started construction
of the needed facilities to relocate over 2,200 military personnel from
Fort Bragg to Eglin.[Footnote 17] Construction was originally planned
to start in October 2008. According to Special Operations officials at
Fort Bragg, the time frame to complete this move is extremely tight
because of these delays, and they expressed to us their doubts about
completing $200 million in construction on time in order to move all
military personnel by the deadline. The estimated cost to implement
this recommendation is $327 million, according to DOD's fiscal year
2009 budget, and the estimated completion date is September 2011.
In addition to the BRAC actions discussed, we also found other BRAC
actions that have experienced delays that could jeopardize DOD's
ability to meet the statutory 2011 BRAC deadline. Although the
individual recommendations are not among the most costly to implement,
collectively they illustrate further challenges DOD faces as follows:
* Realign Army reserve components and construct new Armed Forces
Reserve Centers. According to Army BRAC officials and our analysis,
time frames will be tight for completing some of the BRAC
recommendations involving building 125 new Armed Forces Reserve
Centers. According to Army officials, land still has not yet been
acquired for some of these reserve centers. Also, we have previously
reported that other BRAC funding priorities caused the Army to delay
the start of 20 armed forces reserve projects, compressing the amount
of time available to construct the facilities and respond to any
construction delays that might arise.[Footnote 18] The Army rescheduled
the start of these projects that it had initially planned to begin
construction in either fiscal year 2008 or 2009 to fiscal year 2010--
the second to the last year of the BRAC statutory completion period.
* Relocate medical command headquarters. Tri-Care Management Activity
officials responsible for implementing this BRAC recommendation told us
they have had delays in deciding on the actual site to relocate medical
command headquarters in the Washington, D.C., area. Factors for the
delay include higher than expected cost estimates to renovate a
possible site in Maryland and that the current occupants of this site
are not expected to vacate the property until 2011, which would be too
late to meet the BRAC completion deadline. Anticipating that leasing a
site might be the only viable alternative, these officials told us that
once a final decision on a site was made, they would be in a more
informed position to state whether enough time will be available to
move several thousand personnel into a leased site by the BRAC
deadline.
Synchronization of Personnel and Equipment Moves with Completion of
Construction Projects Is a Challenge:
DOD will face significant challenges in synchronizing the moves of all
personnel and equipment into their new locations. Specifically, DOD
must synchronize the relocation of over 123,000 personnel with the
construction of an estimated $23 billion in new or renovated
facilities. However, delays have left little time in the planning
schedule to relocate these personnel by the deadline. For example, the
already tight construction schedule for the new National Geospatial-
Intelligence Agency building at Fort Belvoir has created some risk for
integrating construction activities with the installation of
information systems and the relocation of 8,500 agency employees to the
new location, according to Fort Belvoir BRAC officials. Fort Belvoir
officials also described for us the very complex and detailed ongoing
planning for integrating the movement of the numerous organizations
affected by another BRAC recommendation that seeks to eliminate leased
locations for various Army organizations and consolidate them into two
buildings on Fort Belvoir. The officials are conducting a detailed
review of the requirements for each organization to ensure that there
is enough space for everyone and to develop a schedule to move these
organizations into the facility. Complicating the development of this
schedule is that many of these organizations work with highly
classified, sensitive information and cannot operate outside secured
space with controlled access.
Other DOD initiatives outside BRAC will complicate the synchronizing of
schedules for moving of people and equipment associated with BRAC. For
example, the Army plans to increase the size of its active-duty force
by about 65,000 over the next several years. In addition, the
repositioning of forces currently stationed in Europe and the Army's
ongoing reorganization to become a more modular, brigade-based force
have caused other movements and relocations that have to be integrated
with the BRAC implementation schedules. The military is also planning
on drawing down the level of troops in Iraq and returning some of these
forces to U.S. installations. The actions required to simultaneously
implement these initiatives with BRAC further complicate the
integration of moving schedules for people and equipment and raise the
level of risk for further schedule disruptions, which, in turn, raise
the risk of BRAC recommendations missing the statutory deadline.
Interdependence of Some Moves Creates Additional Challenges:
Some BRAC locations are unable to begin renovation of buildings slated
to house realigning organizations until current tenants of these
buildings vacate, a situation that has delayed the beginning of
implementation. For example, as we have previously reported, as part of
the BRAC recommendation to close Fort Monmouth, New Jersey, personnel
from the Army's Communications-Electronics Life Cycle Management
Command currently located at Fort Monmouth are relocating to Aberdeen
Proving Ground, Maryland. Army officials originally planned to renovate
facilities currently occupied by a training activity for some of these
employees. The training activity is scheduled to relocate to Fort Lee,
Virginia, through another BRAC action; however, Army officials said
that the new facilities for the training activity would not be complete
as originally planned, a setback that, in turn, would delay the
renovation of the Aberdeen facilities for the incoming employees. The
delays in construction at Fort Lee resulted in the Army having to plan
to build a new facility, rather than renovate an existing facility at
Aberdeen Proving Ground at an additional cost of $17 million, to avoid
the risk that the facility renovations could not completed in time for
the personnel to relocate into renovated facilities at
Aberdeen.[Footnote 19]
According to a Fort Belvoir official, two buildings at the installation
will be used to house various Army organizations that are currently in
leased space and will be relocating to Fort Belvoir as directed in a
BRAC recommendation. However, the Army Materiel Command is still using
the two buildings pending its relocation to Huntsville, Alabama, as
part of another BRAC recommendation. To further complicate the
situation, the Army Materiel Command is hiring employees for a new
organization, to be called Army Contracting Command, which will also be
housed in the two buildings eventually planned to house the Army
organizations that are currently in leased space. Until Army Materiel
Command and the newly hired employees of Army Contracting Command move
out of these buildings, Fort Belvoir officials cannot begin renovating
the building for its new tenants. However, construction delays in
Huntsville have caused the Army Materiel Command to delay its move to
the Huntsville area. Furthermore, Fort Belvoir officials told us that a
decision has not yet been made on the location for the newly formed
Army Contracting Command and that if both this new command as well as
the Army Materiel Command do not vacate the two buildings in question
by June 2011, it would be nearly impossible to meet the statutory
deadline. Again, this example demonstrates that delays in
interdependent recommendations could have a cascading effect on other
recommendations being completed on time.
OSD Recently Took Action to Obtain More Information on Issues That
Could Affect Meeting the Statutory Deadline:
As we concluded our fieldwork, the Deputy Under Secretary of Defense
(Installations and Environment) issued a memo dated November 21, 2008,
providing guidance that required the military services and defense
agencies to present periodic status briefings to OSD on implementation
progress "to ensure senior leadership is apprised of significant issues
impacting implementation of the BRAC recommendations" by the September
15, 2011, deadline. According to this guidance, at a minimum, the
briefings are to include information on projected and actual
construction contract award dates and construction completion dates, as
well as BRAC actions completed. The requirement to provide these
briefings is applicable only to those recommendations that are expected
to have a one-time cost of $100 million or greater. The first round of
such briefings was conducted in the first two weeks of December 2008.
We believe that OSD should be commended for taking this positive step
toward enhancing its oversight of BRAC implementation. However, OSD may
still not be in a position to fully assist the services in taking
mitigating measures, if warranted, to better ensure all BRAC actions
are completed by the statutory deadline because the guidance does not
establish a regular briefing schedule or require the services to
provide information about possible mitigation measures.
First, the guidance does not require the briefings to be conducted on a
firm schedule for the duration of the implementation period. Unlike
BRAC business plans that are to be updated every 6 months, after an
initial round of briefings to be conducted in December 2008, the
guidance requires only periodic updates to status briefing "as
necessary" and does not specify who determines when such updates are
deemed necessary. However, given the large number of locations that
expect to complete their BRAC actions within months or weeks of the
statutory deadline and the possibility of delays where little leeway
exists, OSD would benefit from early warning and consistent monitoring
of implementation challenges that could put completion schedules at
those locations at further risk.
Second, OSD's recent guidance does not require the services and defense
agencies to provide information about steps that could be taken to
mitigate the effects of the implementation challenges they identify. We
have advocated the use of a risk management approach to reduce, where
possible, the potential that an adverse event will occur, reducing
vulnerabilities as appropriate, and putting steps in place to reduce
the effects of any event that does occur.[Footnote 20] With information
about mitigation strategies that the services have developed or could
develop, OSD BRAC could be in a position to provide assistance and
coordination that could better enable the services and defense agencies
to stay on schedule.
BRAC Implementation Cost Estimates Are Higher and Savings Estimates Are
Lower Compared to Previous Fiscal Year:
DOD's BRAC fiscal year 2009 budget submission shows that DOD plans to
spend more and save less as compared to last year's BRAC budget
submission to implement the recommendations. DOD's 2009 estimated one-
time costs to implement this BRAC round increased by $1.2 billion. Net
annual recurring savings estimates decreased by almost $13 million. In
addition, our calculations show that expected savings over a 20-year
period ending in 2025 declined by $1.3 billion.
Estimated One-Time Costs Have Increased:
DOD's BRAC fiscal year 2009 budget submission shows that DOD plans to
spend more to implement its BRAC recommendations compared to last
year's BRAC budget. Specifically, DOD's cost estimates increased by
$1.2 billion in DOD's 2009 budget to a total estimated cost of $32.4
billion to implement this BRAC round. In September 2005, the BRAC
Commission originally estimated the costs to be about $21 billion. The
overall estimated cost increase of $1.2 billion is a cumulative cost
increase because some recommendations are expected to cost less while
others could cost more. Nonetheless, our analysis shows that $1.1
billion (93 percent) of the estimated $1.2 billion increase occurred in
six recommendations. For example, the recommendation to realign the
National Geospatial-Intelligence Agency to Fort Belvoir, Virginia, had
the largest increase in estimated costs--almost $350 million. Five
other recommendations make up the remaining majority of the estimated
cost increase: 1) close Fort McPherson, Georgia; 2) close Fort
Monmouth, New Jersey; 3) establish a regional medical center and
realign medical training to Fort Sam Houston, Texas; 4) consolidate
depot-level reparable procurement management; and 5) realign to
establish the Combat Service Support Center at Fort Lee, Virginia.
Table 1 shows the increase in cost estimates for these six
recommendations comparing fiscal year 2008 budgets to fiscal year 2009
budgets.
Table 1: BRAC Recommendations with the Largest Increases in One-Time
Estimated Costs from Fiscal Year 2008 to Fiscal Year 2009:
Dollars in millions.
Close National Geospatial-Intelligence Agency leased locations and
realign others at Fort Belvoir, Va;
Fiscal year 2008 cost estimate: $2,091;
Fiscal year 2009 cost estimate: $2,441;
Net cost increase: $350.
Close Fort McPherson, Ga;
Fiscal year 2008 cost estimate: 550;
Fiscal year 2009 cost estimate: 798;
Net cost increase: 248.
Close Fort Monmouth, N.J;
Fiscal year 2008 cost estimate: 1,458;
Fiscal year 2009 cost estimate: 1,595;
Net cost increase: 136.
Establish San Antonio Regional Medical Center and realign enlisted
medical training to Fort Sam Houston, Tex;
Fiscal year 2008 cost estimate: 1,591;
Fiscal year 2009 cost estimate: 1,724;
Net cost increase: 133.
Consolidate depot level reparable procurement management;
Fiscal year 2008 cost estimate: 264;
Fiscal year 2009 cost estimate: 392;
Net cost increase: 128.
Realign to establish Combat Service Support Center at Fort Lee, Va;
Fiscal year 2008 cost estimate: 1,145;
Fiscal year 2009 cost estimate: 1,270;
Net cost increase: 124.
Total one-time estimated costs from the BRAC recommendations listed
above;
Fiscal year 2008 cost estimate: $7,099;
Fiscal year 2009 cost estimate: $8,219;
Net cost increase: $1,120.
Total one-time estimated costs from all other BRAC recommendations;
Fiscal year 2008 cost estimate: $24,133;
Fiscal year 2009 cost estimate: $24,214;
Net cost increase: $81.
Total one-time estimated costs for all BRAC recommendations;
Fiscal year 2008 cost estimate: $31,232;
Fiscal year 2009 cost estimate: $32,433;
Net cost increase: $1,201.
Source: GAO analysis of DOD data.
Notes: Amounts are in current dollars (i.e., includes projected
inflation).
Totals may not add because of rounding.
[End of table]
In addition, various cost categories that make up each recommendation's
estimated costs have also experienced increases and decreases when
comparing DOD's fiscal year 2008 budget to the fiscal year 2009 budget.
These cost categories are one-time costs for items and activities such
as construction, environmental clean-up, and operation and maintenance.
Our analysis of DOD's budget data showed the largest estimated cost
increase occurred in the military construction cost category. For
example, estimated construction costs increased by nearly $1.5 billion;
however, this cost increase was offset by decreases in other cost
categories as shown in table 2.
Table 2: Comparison of BRAC Cost Categories from Fiscal Year 2008 to
Fiscal Year 2009:
Dollars in millions.
Military construction;
Fiscal year 2008 cost estimate: $21,281;
Fiscal year 2009 cost estimate: $22,765;
Cost estimate increase or (decrease) from fiscal year 2008 to 2009:
$1,484.
Operation and maintenance;
Fiscal year 2008 cost estimate: 6,649;
Fiscal year 2009 cost estimate: 7,134;
Cost estimate increase or (decrease) from fiscal year 2008 to 2009:
485.
Other[A];
Fiscal year 2008 cost estimate: 2,008;
Fiscal year 2009 cost estimate: 1,561;
Cost estimate increase or (decrease) from fiscal year 2008 to 2009:
(447).
Environmental;
Fiscal year 2008 cost estimate: 792;
Fiscal year 2009 cost estimate: 525;
Cost estimate increase or (decrease) from fiscal year 2008 to 2009:
(267).
Miscellaneous[B];
Fiscal year 2008 cost estimate: 503;
Fiscal year 2009 cost estimate: 449;
Cost estimate increase or (decrease) from fiscal year 2008 to 2009:
(54).
Total costs;
Fiscal year 2008 cost estimate: $31,233;
Fiscal year 2009 cost estimate: $32,434;
Cost estimate increase or (decrease) from fiscal year 2008 to 2009:
$1,201.
Source: GAO analysis of DOD provided data.
Note: Totals may not add because of rounding.
[A] The other cost category is composed of items such as information
technology items.
[B] Miscellaneous costs includes various items such as military
personnel permanent change of station, homeowners assistance program,
one-time costs funded outside the BRAC account, and other DOD-made
funding adjustments.
[End of table]
The overall total increase of $1.2 billion does not include about $416
million to accelerate and enhance the realignment and closure of Walter
Reed Army Medical Center in the District of Columbia and the movement
of its operations to the renovated Bethesda Naval Medical Center,
Maryland, and a new hospital at Fort Belvoir, Virginia. DOD received
these funds in its fiscal year 2008 supplemental request. OSD BRAC
officials told us that they intend to seek an additional $263 million
to complete the Walter Reed realignment, but these funds have not yet
been provided and are also not included in the overall total increase
of $1.2 billion. According to OSD BRAC officials, $416 million will be
reflected in the fiscal year 2010 President's Budget, as will the
additional $263 million if these funds are provided to BRAC before the
2010 budget is submitted to Congress sometime in early 2009.
In addition, our analysis of the 2005 BRAC round, based on DOD's fiscal
year 2009 budget estimates, indicates that relatively few
recommendations are responsible for a majority of the expected cost.
Specifically, we determined that the planned implementation of 30
recommendations (or about 16 percent of the total 182 recommendations)
is expected to account for about 72 percent of the expected one-time
costs. (See app. II for a listing of those BRAC recommendations DOD
expects to cost the most.)
Net Annual Recurring Savings Estimates Have Decreased:
While estimated implementation costs have risen, overall estimated net
annual recurring savings[Footnote 21] have decreased slightly by about
$13 million to about $4 billion based on DOD's approach to include
savings from military personnel who transferred or shifted from one
location to another but remained on the payroll.[Footnote 22] In
September 2005, the BRAC Commission originally estimated annual
recurring savings to be about $4.2 billion. This amount included the
savings associated with military personnel eliminations. Some
recommendation savings estimates have decreased while others have
increased, but the cumulative effect is an overall decrease in
estimated annual recurring savings. For example, the largest decrease
in net annual recurring savings was about $84 million for the
recommendation to establish joint bases, which decreased from about
$116 million in savings in the fiscal year 2008 budget submission to
$32 million in the fiscal year 2009 budget submission. Discussions with
agency officials involved with implementing this recommendation
indicate that the savings could decrease further in the future. In
contrast, the largest increase in net annual recurring savings was
about $58 million for the recommendation to establish the San Antonio
Regional Medical Center and realigning enlisted medical training to
Fort Sam Houston, Texas, which increased from about $91 million in
savings in the fiscal year 2008 budget submission to $149 million in
the fiscal year 2009 budget submission. OSD BRAC officials told us they
expect 2012 to be the first year to accrue the full amount of net
annual recurring savings because some recommendations are not expected
to be completed until around the September 15, 2011, deadline and
significant savings generally do not begin to accrue until
implementation is complete.
Twenty-Year Savings Have Decreased:
Given the cumulative increase in estimated one-time costs and decrease
in estimated net annual recurring savings, the estimated savings over a
20-year period ending in 2025, based on DOD's fiscal year 2009 budget
submission, has also decreased.[Footnote 23] Our calculations show that
the 20-year savings declined almost 9 percent by $1.3 billion to about
$13.7 billion, compared to $15 billion that we estimated based on the
fiscal year 2008 budget. In September 2005, the BRAC Commission
estimated that DOD would save about $36 billion over this 20-year
period--the current estimate is a reduction of about 62 percent from
the BRAC Commission's reported estimates. Further, we determined that
30 recommendations (about 16 percent of all 2005 BRAC recommendations)
account for about 85 percent of the expected savings over a 20-year
period. (See app. IV for a listing of those BRAC recommendations DOD
expects to save the most over a 20-year period.) The decrease in 20-
year savings is directly related to the growth in estimated one-time
cost and to the reduction in estimated annual recurring savings.
As with annual recurring savings, the 20-year savings estimate of about
$13.7 billion includes the savings associated with the elimination of
military personnel. We have previously reported that military personnel
position eliminations are not a true source of savings since DOD
intends to reassign or shift personnel to other positions without
reducing military end strength associated with the corresponding BRAC
recommendation.[Footnote 24] DOD disagrees with our position.
In addition, our analysis shows the number of BRAC recommendations not
expected to achieve net savings over a 20 year period has continued to
increase since 2005. Specifically, based on the revised 20-year savings
estimates, 74 recommendations are not expected to result in a positive
net savings over 20 years, compared to 73 we identified in fiscal year
2008, and 30 estimated by the BRAC Commission in 2005. OSD BRAC
officials told us that, although the 20-year savings estimate is less
than was estimated in 2005 by the BRAC Commission, the department
expects the implementation of this BRAC round to produce capabilities
that will enhance defense operations and management, despite less than
anticipated savings.
Cost Estimates Could Continue to Rise, but the Potential for Savings
Estimates to Change Is Unclear:
Although DOD is almost 3½ years into the 6-year implementation period
for this round of BRAC, cost estimates could potentially continue to
increase, but the potential for changes in savings estimates is less
clear. Cost estimates could increase because of inflation and increased
demand for construction in some areas, although changing market
conditions that existed at the time of our report could reverse these
trends in DOD's favor. There is less visibility into potential changes
in savings estimates because some military services and defense
agencies are not periodically updating their BRAC savings estimates,
and OSD is not enforcing its regulation requiring them to do so.
Cost Estimates Could Continue to Rise:
BRAC 2005 implementation costs have the potential to continue to
increase because of sharp increases in the prices of fuel and in
construction materials such as steel, concrete and copper during most
of 2008. The one-time implementation cost estimates for BRAC 2005 rose
by about $1.2 billion from fiscal years 2008 to 2009 primarily because
of increases in the cost of military construction. The potential for
additional cost increases is particularly important to the Army, as it
is expected to incur the majority of the military construction costs
related to base closures and realignments. For example, our analysis of
DOD's fiscal year 2009 BRAC budget data shows that the Army's estimated
cost of about $13 billion for BRAC military construction accounted for
nearly 60 percent of the total BRAC military construction estimate of
about $22.8 billion. Moreover, the factors that drove the military
construction costs up in fiscal year 2007 continued to exert upward
pressure on prices through the end of fiscal year 2008. According to
the U.S. Army Corps of Engineers officials, the prices of steel,
concrete, and copper rose considerably from 2005 to 2008 because of
worldwide demand. Our analysis of producer price index data compiled by
the Bureau of Labor Statistics found that the price of steel rose by
about 40 percent over that period. The price of concrete rose by about
18 percent, while copper rose over 124 percent from 2005 to 2008. In
addition, fuel prices rose steadily from 2007 until August 2008, when
they started to drop.
Another factor that could drive up construction prices is the increased
demand for construction in some markets. Specifically, BRAC
implementing officials expressed concern that construction costs have
the potential to increase in areas already experiencing high commercial
construction demands such as the National Capital Region, Washington,
D.C., and San Antonio, Texas. Army Corps of Engineers officials told us
they are concerned about what effect construction demand might have on
bids given the sizable amount of construction to take place in a
limited amount of time to meet the BRAC statutory completion time
frame. Additionally, service officials at various installations
expressed concern about the potential for increases in construction
costs because of ongoing reconstruction because of damage caused by
natural disasters such as hurricanes and flooding, coupled with the
large volume of anticipated BRAC construction that could also affect
bids.
Further, we reported in December 2007[Footnote 25] that the inflation
rates prescribed by DOD and the Office of Management and Budget for
developing BRAC budget estimates had been lower than the actual rate of
construction inflation for the last several years; therefore, the use
of these rates could underestimate actual construction costs. To the
extent that the actual rate of inflation continues to exceed the
budgeted rate as implementation proceeds, and construction material
costs are higher than anticipated, U.S. Army Corps of Engineers
officials have said that they would either have to redirect funding
from other sources to provide for construction projects or resort to a
reduction in the scope of some construction projects.
Although the economy slowed down and fuel prices began to drop in mid-
to-late 2008, several bids for construction contracts that had been
advertised prior to these events have come in at levels higher than
programmed by the U.S. Army Corps of Engineers. For example, the
construction bids to build a general instruction complex associated
with the BRAC recommendation to create a Maneuver Center at Fort
Benning, Georgia, were $16 million over budgeted amounts. In another
case, the estimate for building a defense media center is currently $65
million, while the programmed amount is $44 million--a difference of
$21 million. Although bids have been above budgeted amounts for some
projects, the difference has been offset to some extent by other bids
that had come in under budgeted amounts for other projects.
Furthermore, as a result of the increasing construction prices, higher
than expected construction bids, and revisions to facility designs and
scope, the Army identified a potential BRAC cost increase of
approximately $2.6 billion, with military construction accounting for
about $1.4 billion and various operation and maintenance costs
accounting for the remaining $1.2 billion. In the summer of 2008, Army
officials told us that a high-level meeting was held with Army
leadership, known as the Stationing Senior Review Group, to discuss
ways to resolve the potential BRAC cost increases. Subsequently, the
Army's Office of the Assistant Chief of Staff for Installation
Management made clear in an August 2008 memorandum that further growth
in BRAC 2005 implementation must be avoided. BRAC officials told us
that the results of these discussions on potential cost increases would
be reflected in the fiscal year 2010 budget submission to Congress. DOD
expects the release of the fiscal year 2010 BRAC budget submission to
be after the issuance of this report; thus, we are unable to comment on
Army's recent actions to contain further cost growth related to it base
closures and realignments.
We believe that if the escalating pressures on the cost of construction
continue, DOD may have difficulty in completing planned construction
projects within currently estimated amounts in the BRAC accounts.
However, at the time we concluded our fieldwork in December 2008, the
U.S. economy had begun to experience a slowdown. Fuel prices, for
example, had dropped precipitously compared to where they had been
earlier in the year. The price of copper and concrete had also begun to
decline, but prices of these two commodities nonetheless remained above
2007 levels. A continued reduction in commodities prices and further
downturn in the U.S. economy could work in DOD's favor to reduce the
price of future construction contracts.
Potential for Savings Estimates to Change Is Unclear:
For the current BRAC round, the potential for savings estimates to
change is unclear because some military services are not updating their
savings estimates as required by DOD regulation.[Footnote 26] DOD's
Financial Management Regulation for BRAC appropriations has instructed
the services and defense agencies to update estimates in their annual
budget submissions since at least June 1998. Specifically, the
regulation requires that budget justification books include exhibits
reporting savings estimates for the BRAC 2005 round that are based on
the best projection of what savings will actually accrue from approved
realignments and closures. Further, the regulation states that prior
year estimated savings must be updated to reflect actual savings, when
available.
Our prior and current work shows that some of the military services
have not updated their savings estimates periodically, thereby
contributing to unrealistic BRAC net savings estimates. Specifically,
our analysis shows that some of the defense agencies and the Navy
updated savings estimates for some of their recommendations. For
example, on the one hand, officials responsible for implementing two
BRAC recommendations associated with substantial expected savings--
establishing naval fleet readiness centers at multiple installations
across the country and realigning medical care and training in San
Antonio, Texas--told us they updated their savings estimates in the
fiscal year 2009 BRAC budget based on maturing implementation plans. On
the other hand, BRAC implementing officials for the Army and the Air
Force told us they do not plan to update their savings estimates and
will continue to report the same savings estimates reported to Congress
in February 2007 despite any revisions in implementation details or
completion schedules that could cause savings estimates to change. Army
and Air Force officials told us that, since the savings reported to
Congress had already been "taken" from their budgets, there was no
incentive to update those estimates. Thus, Army and Air Force officials
told us that they do not plan to update savings estimates for the
remainder of BRAC implementation, despite the requirement in DOD's
Financial Management Regulation to do so. However, outdated savings
estimates undermine the ability of Congress to monitor savings, a key
indicator of success in BRAC implementation.
The issue of updating BRAC savings estimates is not new. We have
previously reported that the military services, despite DOD guidance
directing them to update savings estimates (for prior BRAC rounds) in
their annual budget submissions, had not periodically updated these
estimates, thereby contributing to imprecision and a lack of
transparency in overall BRAC estimated net savings figures.[Footnote
27] Service officials have acknowledged that updating savings has not
been a high priority and that instead, they have focused their
resources on developing cost estimates for the annual budget
submission. However, OSD BRAC and OSD Comptroller officials told us
that they believe savings estimates should be updated based on evolving
implementation plans.
In addition, our analysis of DOD's fiscal year 2009 budget estimates
for the 2005 BRAC round indicates that a majority of the expected
savings are related to the implementation of a small percentage of
recommendations. Specifically, we determined that the planned
implementation of 24 recommendations (about 13 percent of all 2005 BRAC
recommendations) accounts for about 80 percent, or nearly $3.2 billion,
of the estimated net annual recurring savings. (See fig. 1.) A list of
these recommendations can be found in appendix III.
Figure 1: Small Percentage of BRAC Recommendations Generates Majority
of Estimated Savings:
This figure is a series of pie graphs showing small percentage of BRAC
recommendations generates majority of estimated savings.
[Refer to PDF for image]
Source: GAO analysis based on DOD data.
[End of figure]
Since DOD promoted the latest round of BRAC partly on the premise that
it would save money, we believe that imprecise savings estimates could
diminish public trust in the BRAC process. Furthermore, without updated
BRAC savings estimates, as required in DOD's own Financial Management
Regulation, DOD decision makers and Congress may be left with an
unrealistic sense of the savings this complex and costly BRAC round may
actually produce, a situation that could be used to justify another
round of BRAC in the future.
Conclusions:
Given the exceptional size, complexity, and cost of the 2005 BRAC
round, the challenges to successfully implementing recommendations at
over 800 locations--while simultaneously undergoing extensive force
structure transformations--within the congressionally mandated 6-year
implementation period are similarly unprecedented. Complete and timely
information about the obstacles the services and defense agencies are
facing and any possible mitigation measures for those recommendations
that are at risk could enhance the management and oversight ability of
the OSD BRAC office. Although OSD has recently asked the services and
defense agencies to inform it of significant issues affecting
implementation of BRAC recommendations by the statutory deadline, its
November 2008 guidance does not specify a further schedule for
briefings. Given the tight time frames for completing some
recommendations and the complexity of the challenges some
recommendations face, OSD may not have enough advance warning to
effectively help the services and defense agencies overcome challenges
that could threaten their ability to complete some of the hundreds of
actions planned to take place within weeks of the congressionally
mandated BRAC deadline. Furthermore, if the services and defense
agencies provided OSD with information about possible measures that
could be taken to mitigate those challenges on a regular and known
schedule, OSD could more effectively reallocate resources, realign
priorities, and coordinate joint solutions as warranted.
Anticipated savings was an important consideration in justifying the
need for the 2005 BRAC round. Before DOD can realize substantial
savings from this large and complex BRAC round that it could redirect
to other priorities, the department must first invest billions of
dollars in facility construction, renovation, and other up-front
expenses. As the cost of implementing BRAC 2005 recommendations
increases, it is important for decision makers to maintain clear
visibility over the evolving potential for savings as a result of the
BRAC process. Updated savings estimates will add specificity to DOD's
assessment of how much money will become available for other purposes
and help avoid unnecessary appropriations from Congress. Moreover,
without more precise savings estimates through the end of the current
round's implementation period, Congress and DOD will lack an important
perspective about BRAC results that could inform decisions about any
future BRAC rounds. In addition, more precise estimates are important
to preserving public confidence in the BRAC program. Finally, the
periodic updating of savings estimates is a good financial management
practice that could strengthen DOD's budgeting process by helping to
ensure that the department relies on realistic assumptions in
formulating its budgets.
Recommendations for Executive Action:
To enhance OSD's role in overseeing the implementation of BRAC 2005
recommendations and managing challenges that could impact DOD's ability
to achieve full BRAC implementation by the statutory deadline, we
recommend that the Secretary of Defense direct the Under Secretary of
Defense (Acquisition, Technology and Logistics) to modify the recently
issued guidance on the status of BRAC implementation to:
* establish a briefing schedule with briefings as frequently as OSD
deems necessary to manage the risk that a particular recommendation may
not meet the statutory deadline, but as a minimum, at 6-month
intervals, through the rest of the BRAC 2005 implementation period, a
schedule that would enable DOD to continually assess and respond to the
challenges identified by the services and defense agencies that could
preclude recommendation completion by September 15, 2011, and:
* require the services and defense agencies to provide information on
possible mitigation measures to reduce the effects of those challenges.
To ensure that BRAC savings estimates are based on the best projection
of what savings will actually accrue from approved realignments and
closures, we recommend that the Secretary of Defense direct the Under
Secretary of Defense (Acquisition, Technology and Logistics); the Under
Secretary of Defense (Comptroller); and the military service
secretaries to take steps to improve compliance with DOD's regulation
requiring updated BRAC savings estimates.
Agency Comments and Our Evaluation:
In written comments on a draft of our report, DOD concurred with all
three of our recommendations. DOD noted that BRAC business managers
have and will continue to provide briefings on the status of
implementation actions associated with recommendations exceeding $100
million, and that these briefings provide a forum for BRAC business
managers to explain their actions to mitigate challenges. In addition,
DOD agreed that updating savings estimates on a regular basis is
essential. The department stated that it is emphasizing savings updates
during its briefings and in all future business plan approval
documentation. DOD's written comments are reprinted in appendix V. DOD
also provided technical comments, which we have incorporated into this
report as appropriate.
We are sending copies of this report to interested congressional
committees; the Secretary of Defense; the secretaries of the Army,
Navy, and Air Force; Commandant of the Marine Corps; and the Director,
Office of Management and Budget. In addition, the report will be
available at no charge on GAO's Web site at [hyperlink,
http://www.gao.gov].
If you or your staff have any questions concerning this report, please
contact me on (202) 512-4523 or by e-mail at leporeb@gao.gov. Contact
points for our Offices of Congressional Relations and Public Affairs
are on the last page of this report. GAO staff who made major
contributions to this report are listed in appendix VI.
Signed by:
Brian J. Lepore, Director:
Defense Capabilities and Management:
List of Congressional Committees:
The Honorable Carl Levin:
Chairman:
The Honorable John McCain:
Ranking Member:
Committee on Armed Services:
United States Senate:
The Honorable Joseph Lieberman:
Chairman:
The Honorable Susan Collins:
Ranking Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Daniel K. Inouye:
Chairman:
The Honorable Thad Cochran:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
United States Senate:
The Honorable Tim Johnson:
Chairman:
The Honorable Kay Bailey Hutchison:
Ranking Member:
Subcommittee on Military Construction, Veterans Affairs, and Related
Agencies:
Committee on Appropriations:
United States Senate:
The Honorable Ike Skelton:
Chairman:
The Honorable John M. McHugh:
Ranking Member:
Committee on Armed Services:
House of Representatives:
The Honorable John P. Murtha, Jr.:
Chairman:
The Honorable C.W. Bill Young:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives:
The Honorable Chet Edwards:
Chairman:
The Honorable 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:
We reviewed the Defense Base Closure and Realignment Commission's 182
recommendations to realign and close military bases as presented in its
September 2005 report to the President. We reviewed relevant
documentation and interviewed officials in the Office of the Deputy
Under Secretary of Defense (Installations and Environment) responsible
for overseeing BRAC implementation and associated BRAC implementation
offices in the Army, the Navy, and the Air Force. Given the
unprecedented number of BRAC 2005 closures and realignments, we
generally focused our analysis on those recommendations that DOD either
expects to cost the most or save the most.
To assess the challenges DOD faces that might affect the implementation
of the BRAC recommendations by the statutory completion deadline of
September 15, 2011, we reviewed relevant documentation including BRAC
business plans, DOD presentations on BRAC implementation status, and
prior GAO reports. We also interviewed officials in the Office of the
Deputy Under Secretary of Defense (Installations and Environment) and
associated BRAC offices, commands, and defense agencies that were
implementing some of the complex or most costly BRAC realignments or
closures to obtain the perspective of officials directly involved in
BRAC implementation planning and execution. We also selected some of
these installations or commands because they were responsible for
implementing recommendations with a significant number of actions such
as the completion of construction and movement of personnel expected to
occur near the statutory deadline. At these locations, we discussed the
specific challenges associated with implementing BRAC recommendations.
In addition, we used DOD's annual report to Congress to identify
estimated completion dates.[Footnote 28] Finally, we reviewed OSD's
November 21, 2008, memo to the services and defense agencies
responsible for implementing BRAC recommendations and assessed OSD's
requirements for briefings on the status of BRAC implementation.
To assess changes in DOD's reported cost and saving estimates since the
fiscal year 2008 budget submission, we compared the fiscal year 2009
BRAC budget submission to the fiscal year 2008 budget submission. We
used DOD's BRAC budget submissions because these documents are the most
authoritative information that is publicly available for comparing BRAC
cost and savings estimates and because these submissions are the basis
on which DOD seeks appropriations from the Congress. We then calculated
dollar-amount differences for cost estimates and noted those
recommendations that have increased the most in expected costs. To
assess changes in DOD's estimate of net annual recurring savings, we
used OSD's data provided to us for estimated savings in fiscal year
2012--the year after OSD expects all recommendations to be completed--
because this data more fully captured these savings. We used OSD's data
for fiscal year 2008 and fiscal year 2009 to make comparisons. In
addition, to determine expected 20-year savings--also known as the 20-
year net present value--we used the same formulas and assumptions as
DOD and the BRAC Commission used to calculate these savings.[Footnote
29] Specifically, we used DOD's BRAC fiscal year 2009 budget data for
expected costs and savings to implement each recommendation for fiscal
years 2006 through 2011. We also used data that the OSD BRAC office
provided us for expected net annual recurring savings after the
completion of each recommendation for fiscal years 2012 to 2025. We
then converted these data to fiscal year constant 2005 dollars using
DOD price indexes to distinguish real changes from changes because of
inflation. We used fiscal year 2005 dollars to calculate 20-year
savings because the BRAC Commission also used fiscal year 2005 dollars
for this calculation. Applying the same formulas and assumptions as
used by the BRAC Commission, we used a 2.8 percent discount rate to
calculate the accumulated net present value of expected 20-year
savings.
To assess the reliability of DOD's BRAC cost and savings data, we
tested computer-generated data for errors, reviewed relevant
documentation, and discussed data quality control procedures with OSD
BRAC officials. We determined that the data were sufficiently reliable
for the purposes of making cost and savings comparisons for BRAC
recommendations. We generally reported these estimated cost and savings
in current dollars and not constant dollars except where noted.
Finally, to evaluate the potential for BRAC cost and savings estimates
to continue to change as the department proceeds with BRAC
implementation, we interviewed officials from the Office of the Deputy
Under Secretary of Defense (Installations and Environment), who are
responsible for overseeing the implementation of BRAC recommendations
and from associated BRAC implementation offices in the Army, Navy, and
Air Force to discuss plans and procedures for updating these estimates.
We also discussed plans and procedures for updating estimates with the
Office of the Under Secretary of Defense (Comptroller). In addition, we
discussed BRAC construction cost estimates with the U.S. Army Corps of
Engineers because of its major role in planning and executing military
construction projects. Further, we discussed cost and savings
assumptions with officials from the military services responsible for
implementing certain recommendations to better understand the potential
for changes to cost and savings estimates.
To obtain the perspective of installation and command officials
directly involved in BRAC implementation planning and execution, we
visited 12 installations, commands, or defense agencies affected by
BRAC. We selected these installations and commands because they were
among the closures or realignments that DOD projected to have
significant costs or savings and to obtain a command-level perspective
about BRAC implementation. Installations, commands, and defense
agencies we visited are:
* Army Forces Command, Fort McPherson, Georgia;
* Army Special Operations Command, Fort Bragg, North Carolina;
* Army Installation Management Command regions at Fort McPherson,
Georgia; Fort Monroe, Virginia; and Fort Sam Houston, Texas;
* Army Training and Doctrine Command, Fort Monroe, Virginia;
* Garrison, Fort Belvoir, Virginia;
* Garrison, Fort Bliss, Texas;
* Garrison, Fort Sam Houston, Texas;
* Air Force's Air Education and Training Command, Randolph Air Force
Base, Texas;
* Tri-Care Management Activity, Falls Church, Virginia;
* National Geospatial-Intelligence Agency, Fort Belvoir, Virginia;
* Naval Air Systems Command, Arlington, Virginia; and:
* U.S. Army Corps of Engineers, Washington, D.C.
Overall, we determined that the data for this report were sufficiently
reliable for comparing cost and savings estimates and identifying broad
implementation challenges. We conducted this performance audit from
February 2008 to December 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: BRAC Recommendations DOD Expects to Cost the Most:
Appendix II lists BRAC recommendations that the DOD expects to cost the
most to implement based on its fiscal year 2009 budget submission to
Congress. DOD expects 30 recommendations (16 percent of the 182
recommendations) to generate about 72 percent of the one-time costs to
implement BRAC recommendations during fiscal years 2006 through
September 15, 2011, as shown in table 3.
Table 3: BRAC Recommendations DOD Expects to Cost the Most to Implement
(Fiscal Years 2006 through 2011):
Current year dollars in millions.
Realign Operational Army (Integrated Global Presence and Basing
Strategy);
One-time cost estimates: $3,029.
Close National Geospatial-Intelligence Agency leased locations and
realign others at Fort Belvoir, Va;
One-time cost estimates: 2,441.
Establish San Antonio Regional Medical Center and realign enlisted
medical training to Fort Sam Houston, Tex;
One-time cost estimates: 1,724.
Realign Walter Reed Army Medical Center to Bethesda National Naval
Medical Center, MD and to Fort Belvoir, Va;
One-time cost estimates: 1,640[A].
Close Fort Monmouth, N.J;
One-time cost estimates: 1,595.
Realign Maneuver Training to Fort Benning, Ga;
One-time cost estimates: 1,509.
Realign to establish Combat Service Support Center at Fort Lee, Va;
One-time cost estimates: 1,270.
Co-locate miscellaneous OSD, defense agency, and field activity leased
locations;
One-time cost estimates: 1,194.
Close Fort McPherson, Ga;
One-time cost estimates: 798.
Realign Fort Hood, Tex;
One-time cost estimates: 670.
Close Brooks City-Base, Tex;
One-time cost estimates: 582.
Consolidate Defense Information Systems Agency at Fort Meade, Md;
One- time cost estimates: 578.
Realign supply, storage, and distribution management;
One-time cost estimates: 541.
Reserve Component Transformation, Tex;
One-time cost estimates: 486.
Co-locate military department investigation agencies with DOD
Counterintelligence and Security Agency at Marine Corps Base Quantico,
Va;
One-time cost estimates: 459.
Relocate Army headquarters and field operating activities;
One-time cost estimates: 444.
Realign to create a Naval Integrated Weapons and Armaments Research,
Development, and Acquisition, Test and Evaluation Center mostly at
Naval Air Weapons Station China Lake, Calif;
One-time cost estimates: 421.
Consolidate depot level reparable procurement management;
One-time cost estimates: 392.
Co-locate missile and space defense agencies at Redstone Arsenal, Ala;
One-time cost estimates: 352.
Consolidate/co-locate active and reserve personnel and recruiting
centers for Army and Air Force;
One-time cost estimates: 344.
Realign Fort Bragg, N.C;
One-time cost estimates: 327.
Close Naval Air Station Brunswick, Maine;
One-time cost estimates: 300.
Close Naval Air Station Willow Grove, Pa., and realign Cambria Regional
Airport, Johnstown, Pa;
One-time cost estimates: 295.
Realign to relocate Air Defense Artillery Center and School at Fort
Sill, Okla;
One-time cost estimates: 294.
Consolidate Defense Finance and Accounting Service;
One-time cost estimates: 290.
Close Fort Monroe, Va;
One-time cost estimates: 286.
Reserve Component Transformation, Okla;
One-time cost estimates: 254.
Consolidate correctional facilities into joint regional correctional
facilities;
One-time cost estimates: 251.
Realign defense research service-led laboratories at multiple
locations;
One-time cost estimates: 244.
Realign Naval Support Activity New Orleans, La;
One-time cost estimates: 238.
Total one-time estimated costs from the recommendations listed above;
One-time cost estimates: $23,246.
Total one-time estimated costs from all recommendations;
One-time cost estimates: $32,433.
Percentage of one-time costs from recommendations listed above of all
recommendations;
One-time cost estimates: 72%.
Source: GAO analysis based on DOD data.
Note: Totals may not add because of rounding.
[A] This amount does not include an additional $416 million already
received and an anticipated $263 million not yet received to accelerate
and enhance the realignment of Walter Reed Army Medical Center to
Bethesda National Naval Medical Center, Maryland, and to Fort Belvoir,
Virginia.
[End of table]
[End of section]
Appendix III: BRAC Recommendations DOD Expects to Save the Most
Annually:
Appendix III lists individual BRAC recommendations that DOD expects to
save the most annually after it has implemented the recommendations
based on its fiscal year 2009 budget submission. DOD expects 24
recommendations (13 percent of the 182 recommendations) to generate
more than 80 percent of the net annual recurring savings as shown in
table 4.
Table 4: BRAC Recommendations DOD Expects to Save the Most Annually
after Implementation (Projected for Fiscal Year 2012):
Current year dollars in millions.
Realign to establish fleet readiness centers;
Net annual recurring savings[A]: $304.
Consolidate Defense Finance and Accounting Service;
Net annual recurring savings[A]: 283.
Realign Cannon Air Force Base, N.M.[B];
Net annual recurring savings[A]: 260.
Realign Pope Air Force Base, N.C;
Net annual recurring savings[A]: 213.
Realign Walter Reed Army Medical Center to Bethesda National Naval
Medical Center, Md. and to Fort Belvoir, Va;
Net annual recurring savings[A]: 172.
Consolidate/co-locate active and reserve personnel and recruiting
centers for Army and Air Force;
Net annual recurring savings[A]: 170.
Consolidate depot level reparable procurement management consolidation;
Net annual recurring savings[A]: 156.
Close Fort Monmouth, N.J;
Net annual recurring savings[A]: 154.
Realign supply, storage, and distribution management;
Net annual recurring savings[A]: 152.
Establish San Antonio Regional Medical Center and realign enlisted
medical training to Fort Sam Houston, Tex;
Net annual recurring savings[A]: 149.
Realign to establish Combat Service Support Center at Fort Lee, Va;
Net annual recurring savings[A]: 148.
Realign Maneuver Training to Fort Benning, Ga;
Net annual recurring savings[A]: 133.
Close Naval Air Station Brunswick, Maine;
Net annual recurring savings[A]: 99.
Consolidate Transportation Command components at Scott Air Force Base,
Ill;
Net annual recurring savings[A]: 97.
Close Fort McPherson, Ga;
Net annual recurring savings[A]: 94.
Close Brooks City-Base, Tex;
Net annual recurring savings[A]: 92.
Realign by converting medical inpatient services to clinics at various
installations;
Net annual recurring savings[A]: 91.
Co-locate miscellaneous OSD, defense agencies, and field activity
leases at Fort Belvoir, Va;
Net annual recurring savings[A]: 72.
Close Naval Station Ingleside, Tex. and realign Naval Air Station
Corpus Christi, Tex;
Net annual recurring savings[A]: 69.
Realign to create a Naval Integrated Weapons and Armaments Research,
Development, and Acquisition, Test and Evaluation Center mostly at
Naval Air Weapons Station China Lake, Calif;
Net annual recurring savings[A]: 68.
Relocate medical command headquarters;
Net annual recurring savings[A]: 67.
Close Fort Monroe, Va;
Net annual recurring savings[A]: 65.
Close National Geospatial-Intelligence Agency leased locations and
realign others at Fort Belvoir, Va;
Net annual recurring savings[A]: 57.
Consolidate Defense Information Systems Agency at Fort Meade, Md;
Net annual recurring savings[A]: 52.
Total net annual recurring savings from the recommendations listed
above;
Net annual recurring savings[A]: $3,216.
Total net annual recurring savings from all recommendations;
Net annual recurring savings[A]: $4,001.
Percentage of net annual recurring savings from recommendations listed
above of all recommendations;
Net annual recurring savings[A]: 80%.
Source: GAO analysis based on DOD data.
Note: Totals may not add because of rounding.
[A] Data provided by DOD for fiscal year 2012 expected savings.
[B] In May 2005, DOD proposed closing Cannon AFB, New Mexico. In
September 2005, the BRAC Commission stated that Cannon could remain
open if DOD identified a new mission for the base. Subsequently, the
Air Force announced in June 2006 that Cannon will remain open because
it plans to activate a new mission at the base. The Air Force BRAC
Office said it claimed these savings because the decision to reallocate
Air Force resources and mission to Cannon was made after the BRAC
recommendation was approved and was therefore, a non-BRAC programmatic
decision.
[End of table]
[End of section]
Appendix IV: BRAC Recommendations DOD Expects to Save the Most over a
20-year Period:
Appendix IV lists individual BRAC recommendations that DOD expects to
save the most over a 20-year period. DOD expects 30 recommendations (16
percent) to generate more than 85 percent of the 20-year savings as
shown in table 5.
Table 5: BRAC Recommendations DOD Expects to Save the Most Over a 20-
year Period (Fiscal Years 2006 through 2025):
Constant fiscal year 2005 dollars in millions.
Realign to establish fleet readiness centers;
20-year net present value[A]: $3,371.
Realign Cannon Air Force Base, N.M.[B];
20-year net present value[A]: 2,838.
Consolidate Defense Finance and Accounting Service;
20-year net present value[A]: 2,766.
Realign Pope Air Force Base, N.C;
20-year net present value[A]: 2,379.
Consolidate/co-locate active and reserve personnel and recruiting
centers for Army and Air Force;
20-year net present value[A]: 1,463.
Consolidate depot level reparable procurement management;
20-year net present value[A]: 1,350.
Realign supply, storage, and distribution management;
20-year net present value[A]: 1,175.
Consolidate Transportation Command components at Scott Air Force Base,
Ill;
20-year net present value[A]: 941.
Realign by converting medical inpatient services to clinics at various
installations;
20-year net present value[A]: 850.
Close Naval Air Station Brunswick, Maine;
20-year net present value[A]: 717.
Relocate medical command headquarters;
20-year net present value[A]: 671.
Close Naval Station Ingleside, Tex. and realign Naval Air Station
Corpus Christi, Tex;
20-year net present value[A]: 490.
Close Naval Station Pascagoula, Miss;
20-year net present value[A]: 463.
Close Brooks City-Base, Tex;
20-year net present value[A]: 427.
Close Naval Air Station Atlanta, Ga;
20-year net present value[A]: 364.
Realign to establish Combat Service Support Center at Fort Lee, Va;
20-year net present value[A]: 348.
Close Fort Monroe, Va;
20-year net present value[A]: 318.
Realign to consolidate maritime command, control, communications,
computers, intelligence, surveillance, and reconnaissance, research,
development, and acquisition, test and evaluation functions at multiple
locations;
20-year net present value[A]: 296.
Realign to create a Naval Integrated Weapons and Armaments Research,
Development, and Acquisition, Test and Evaluation Center mostly at
Naval Air Weapons Station China Lake, Calif;
20-year net present value[A]: 290.
Close Fort Gillem, Ga;
20-year net present value[A]: 288.
Realign Walter Reed Army Medical Center to Bethesda National Naval
Medical Center, Md., and to Fort Belvoir, Va;
20-year net present value[A]: 287.
Co-locate miscellaneous Army leased locations;
20-year net present value[A]: 277.
Establish joint bases at multiple locations;
20-year net present value[A]: 273.
Close Fort Monmouth, N.J;
20-year net present value[A]: 269.
Realign Army Reserve Command and Control - Northeast;
20-year net present value[A]: 262.
Realign Mountain Home Air Force Base, Idaho;
20-year net present value[A]: 259.
Close Fort McPherson, Ga;
20-year net present value[A]: 257.
Realign commodity management privatization;
20-year net present value[A]: 248.
Realign defense research service-led laboratories at multiple
locations;
20-year net present value[A]: 235.
Close U.S. Army Garrison Michigan at Selfridge;
20-year net present value[A]: 215.
Total savings from the recommendations listed above;
20-year net present value[A]: $24,388.
Total savings from only recommendations that accrue a net savings after
20 years;
20-year net present value[A]: $28,640.
Percentage of savings from recommendations listed above of all
recommendations that accrue a net savings after 20 years;
20-year net present value[A]: 85%.
Source: GAO analysis based on DOD data.
Note: Totals may not add because of rounding.
[A] Net present value: A financial calculation that takes the time
value of money into account by determining the present value of the up-
front initial investment minus future net savings over a specific
period of time. In the context of BRAC, net present value is the total
one-time costs minus the total net savings that DOD expects to incur
from fiscal year 2006 through fiscal year 2025 to project 20-year
savings at a 2.8 percent discount rate.
[B] In May 2005, DOD proposed closing Cannon AFB, New Mexico. In
September 2005, the BRAC Commission stated that Cannon could remain
open if DOD identified a new mission for the base. Subsequently, the
Air Force announced in June 2006 that Cannon will remain open because
it plans to activate a new mission at the base. The Air Force BRAC
Office said it claimed these savings because the decision to reallocate
Air Force resources and mission to Cannon was made after the BRAC
recommendation was approved and was therefore, a non-BRAC programmatic
decision.
[End of table]
[End of section]
Appendix V: Comments from the Department of Defense:
Office Of The Under Secretary Of Defense:
3000 Defense Pentagon:
Washington, DC 20301-3000:
Acquisition Technology And Logistics:
January 14, 2009:
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, "Military Base Realignments And Closures: DoD Faces Challenges
in Implementing Recommendations on Time and is Not Consistently
Updating Savings Estimates," dated December 18, 2008 (GAO Code
351170)/GAO-09-217).
The Department appreciates the opportunity to comment on this draft
report and concurs with the GAO's recommendations concerning program
execution update briefings to the OSD staff by the business plan
managers and the updating of savings estimates. Detailed comments on
the report recommendations are enclosed.
Even though the BRAC 2005 round is costing more and savings less than
originally estimated in 2005, implementation of these recommendations
are expected to enhance defense operations and management as the
Department reshapes and realigns forces to meet future national
security needs. The report accurately characterizes the Department's
viewpoint that this BRAC round is transforming DoD by aligning the
infrastructure with the defense strategy, fostering jointness across
the Department, and reducing excess infrastructure and producing
savings. The Department appreciates the fact that this report
acknowledges that the Department has made steady progress thus far in
implementing these recommendations.
The Department recognizes the unique challenges associated with
implementing the more complex recommendations and the synchronization
efforts required to manage the interdependencies among many
recommendations. To apprise senior leadership of problems requiring
intervention as early as possible, the Department institutionalized an
implementation execution update briefing program in November, which
this report acknowledges as a positive step in oversight. These update
briefings, representing 86 percent of the investment value of all
recommendations, provided an excellent forum for business plan managers
to explain their actions underway to mitigate the impacts of problem
issues. The business managers have and will continue to brief the
status of implementation actions associated with recommendations which
exceed $100M on a continuing basis through statutory completion of all
recommendations (September 15, 2011). The business managers are also
required to brief other plans for which they have concerns.
The Department considers the updating of savings estimates on a regular
basis to be essential. While sufficient guidance already exists in the
financial management regulation, additional emphasis on this effort is
being provided during all program execution update discussions and in
all future business plan update approval documentation.
We continue to appreciate audit work performed by the GAO.
Sincerely,
Signed by:
Wayne Arny
Deputy Under Secretary of Defense:
(Installations and Environment):
Enclosure:
As stated:
GAO Draft Report – Dated December 18, 2008 GAO Code 351170/GAO-09-217:
"Military Base Realignments And Closures: DoD Faces Challenges in
Implementing Recommendations on Time and is Not Consistently Updating
Savings Estimates"
Department Of Defense Comments To The Recommendations:
Recommendation 1: The GAO recommends that the Secretary of Defense
direct the Under Secretary of Defense for Acquisition, Technology and
Logistics modify its recently issued guidance on the status of the base
realignment and closure (BRAC) implementation to establish a briefing
schedule with briefings as frequently as the Office of the Secretary of
Defense deems necessary to manage the risk that a particular
recommendation may not meet the statutory deadline, but as a minimum,
at six-month intervals, through the rest of the BRAC 2005
implementation period, which would enable DoD to continually assess and
respond to the challenges identified by the Services and Defense
Agencies that could preclude recommendation completion by September 15,
2011.
DOD Response: Concur. The implementation execution update briefing
program the Department institutionalized in November 2008 provided an
excellent forum for business plan managers to explain their actions
underway to mitigate the impacts of problem issues. The business
managers will regularly brief the status of implementation actions
associated with recommendations which exceed $100M on a continuing
basis through statutory completion of all recommendations (September
15, 2011). The business managers are also required to brief other plans
for which they have concerns. These briefings are occurring more
frequently than the six-month intervals recommended in this report.
Recommendation 2: The GAO recommends that the Secretary of Defense
direct the Under Secretary of Defense for Acquisition, Technology and
Logistics to require the Services and Defense Agencies to provide
information on possible mitigation measures to reduce the effects of
those challenges.
DOD Response: Concur. The implementation execution update briefing
program the Department institutionalized in November 2008 provided an
excellent forum for business plan managers to explain their actions
underway to mitigate the impacts of problem issues. Mitigation efforts
are being provided during all briefings and these efforts are planned
for further discussion within the next 60 days. The business managers
will brief the status of implementation actions associated with
recommendations which exceed $100M on a continuing basis through
statutory completion of all recommendations (September 15, 2011). The
business managers are also required to brief other plans for which they
have concerns.
Recommendation 3: The GAO recommends that the Secretary of Defense
direct the Under Secretary of Defense for Acquisition, Technology and
Logistics, the Under Secretary of Defense (Comptroller), and the
Service secretaries to take steps to improve compliance with DoD's
regulation requiring updated base realignment and closure savings
estimates.
DOD Response: Concur. The Department considers the updating of savings
estimates on a regular basis to be essential. While sufficient guidance
already exists in the financial management regulation, additional
emphasis on this effort is being provided during all program execution
update discussions and in all future business plan update approval
documentation.
[End of section]
Appendix VI: GAO Contact and Staff Acknowledgments:
GAO Contact:
Brian J. Lepore, (202) 512-4523 or leporeb@gao.gov:
Acknowledgments:
In addition to the individual named above, Laura Talbott, Assistant
Director; Vijay Barnabas; John Beauchamp; Susan Ditto; Gregory
Marchand; Richard Meeks; and Charles Perdue made key contributions to
this report.
[End of section]
Related GAO Products:
Military Base Realignments and Closures: Army Is Developing Plans to
Transfer Functions from Fort Monmouth, New Jersey, to Aberdeen Proving
Ground, Maryland, but Challenges Remain. [hyperlink,
http://www.gao.gov/products/GAO-08-1010R]. Washington, D.C.: August 13,
2008.
Defense Infrastructure: High-Level Leadership Needed to Help
Communities Address Challenges Caused by DOD-Related Growth.
[hyperlink, http://www.gao.gov/products/GAO-08-665]. Washington, D.C.:
June 17, 2008.
Defense Infrastructure: DOD Funding for Infrastructure and Road
Improvements Surrounding Growth Installations. [hyperlink,
http://www.gao.gov/products/GAO-08-602R]. Washington, D.C.: April 1,
2008.
Defense Infrastructure: Army and Marine Corps Grow the Force
Construction Projects Generally Support the Initiative. [hyperlink,
http://www.gao.gov/products/GAO-08-375]. Washington, D.C.: March 6,
2008.
Military Base Realignments and Closures: Higher Costs and Lower Savings
Projected for Implementing Two Key Supply-Related BRAC Recommendations.
[hyperlink, http://www.gao.gov/products/GAO-08-315]. Washington, D.C.:
March 5, 2008.
Defense Infrastructure: Realignment of Air Force Special Operations
Command Units to Cannon Air Force Base, New Mexico. [hyperlink,
http://www.gao.gov/products/GAO-08-244R]. Washington, D.C.: January 18,
2008.
Military Base Realignments and Closures: Estimated Costs Have Increased
and Estimated Savings Have Decreased. [hyperlink,
http://www.gao.gov/products/GAO-08-341T]. Washington, D.C.: December
12, 2007.
Military Base Realignments and Closures: Cost Estimates Have Increased
and Are Likely to Continue to Evolve. [hyperlink,
http://www.gao.gov/products/GAO-08-159]. Washington, D.C.: December 11,
2007.
Military Base Realignments and Closures: Impact of Terminating,
Relocating, or Outsourcing the Services of the Armed Forces Institute
of Pathology. [hyperlink, http://www.gao.gov/products/GAO-08-20].
Washington, D.C.: November 9, 2007.
Military Base Realignments and Closures: Transfer of Supply, Storage,
and Distribution Functions from Military Services to Defense Logistics
Agency. [hyperlink, http://www.gao.gov/products/GAO-08-121R].
Washington, D.C.: October 26, 2007.
Defense Infrastructure: Challenges Increase Risks for Providing Timely
Infrastructure Support for Army Installations Expecting Substantial
Personnel Growth. [hyperlink, http://www.gao.gov/products/GAO-07-1007].
Washington, D.C.: September 13, 2007.
Military Base Realignments and Closures: Plan Needed to Monitor
Challenges for Completing More Than 100 Armed Forces Reserve Centers.
[hyperlink, http://www.gao.gov/products/GAO-07-1040]. Washington, D.C.:
September 13, 2007.
Military Base Realignments and Closures: Observations Related to the
2005 Round. [hyperlink, http://www.gao.gov/products/GAO-07-1203R].
Washington, D.C.: September 6, 2007.
Military Base Closures: Projected Savings from Fleet Readiness Centers
Are Likely Overstated and Actions Needed to Track Actual Savings and
Overcome Certain Challenges. [hyperlink,
http://www.gao.gov/products/GAO-07-304]. Washington, D.C.: June 29,
2007.
Military Base Closures: Management Strategy Needed to Mitigate
Challenges and Improve Communication to Help Ensure Timely
Implementation of Air National Guard Recommendations. [hyperlink,
http://www.gao.gov/products/GAO-07-641]. Washington, D.C.: May 16,
2007.
Military Base Closures: Opportunities Exist to Improve Environmental
Cleanup Cost Reporting and to Expedite Transfer of Unneeded Property.
[hyperlink, http://www.gao.gov/products/GAO-07-166]. Washington, D.C.:
January 30, 2007.
Military Bases: Observations on DOD's 2005 Base Realignment and Closure
Selection Process and Recommendations. [hyperlink,
http://www.gao.gov/products/GAO-05-905]. Washington, D.C.: July 18,
2005.
Military Bases: Analysis of DOD's 2005 Selection Process and
Recommendations for Base Closures and Realignments. [hyperlink,
http://www.gao.gov/products/GAO-05-785]. Washington, D.C.: July 1,
2005.
[End of section]
Footnotes:
[1] This dollar amount is based on DOD's fiscal year 2009 budget
submission to Congress to pay for continuing implementation of
recommendations from prior BRAC rounds (BRAC 1988, 1991, 1993, and
1995). This amount does not include other BRAC associated costs such as
costs to complete environmental cleanup at BRAC bases in future years
and costs incurred by other DOD and federal agencies to provide
assistance to communities and individuals impacted by BRAC. DOD's
budget submission is reported in current dollars (i.e., includes
projected inflation).
[2] The relocation of about 15,000 U.S. military personnel from various
overseas locations to the United States is included in the BRAC 2005
recommendations. DOD plans to relocate the remaining military personnel
in realignment actions not related to BRAC.
[3] The Army is planning to increase its active-duty end strength by
65,000, and the Marine Corps is planning to increase its active-duty
end strength by 27,000 over the next several years.
[4] BRAC legislation (Pub. L. No. 101-510, Title XXIX (1990), as
amended by Pub. L. No. 107-107, Title XXX (2001)) provided for an
independent commission to review the Secretary of Defense's realignment
and closure recommendations and the commission had the authority to
change these recommendations if it determined that the Secretary
deviated substantially from the legally mandated selection criteria.
The Defense Base Closure and Realignment Commission (referred to in
this report as the BRAC Commission) presented its list of final
recommendations to the President of the United States, who approved
them in their entirety. The President subsequently forwarded these BRAC
recommendations to Congress, and they became effective on November 9,
2005.
[5] Military value refers to one or more BRAC selection criteria, which
includes such considerations as an installation's current and future
mission capabilities, condition, ability to accommodate future needs,
and cost of operations. Military value was a priority consideration in
prior BRAC rounds, along with costs and savings, economic impact on
communities, and other concerns. DOD adopted similar criteria,
establishing military value as a priority consideration for the 2005
BRAC round and cost and savings as a secondary consideration, which
Congress subsequently enacted into law in the Ronald Reagan National
Defense Authorization Act for Fiscal Year 2005, Pub. L. No. 108-375, §
2832 (2004) (amending Pub. L. No. 101-510, § 2913 (1990)).
[6] The BRAC Commission reported its estimate in constant fiscal year
2005 dollars (i.e., excludes projected inflation).
[7] Pub. L. No. 110-181 (2008).
[8] H.R. Rep. No. 110-146, at 514 (May 11, 2007).
[9] As we have previously reported, we believe DOD's net annual
recurring savings estimates may be overstated because they include
savings from eliminating military personnel positions without
corresponding decreases in end-strength. DOD disagrees with our
position. The $4 billion estimate is calculated using DOD's method,
which we nonetheless believe overstates savings. However, we included
these estimates for consistency.
[10] The 20-year savings estimates, also known as the 20-year net
present value, are in constant fiscal year 2005 dollars (i.e., excludes
projected inflation), to be consistent with the BRAC Commission's
methodology and reporting of this estimate.
[11] DOD Financial Management Regulation, 7000.14R, vol. 2B, ch. 7,
Base Realignment and Closure Appropriations, paragraph 070303E (Sept.
2008).
[12] The first round in 1988 was authorized by the Defense
Authorization Amendments and Base Closure and Realignment Act, Pub. L.
No. 100-526, Title II (1988) (as amended). Subsequently, additional
BRAC rounds were completed in 1991, 1993, and 1995 as authorized by the
Defense Base Closure and Realignment Act of 1990, Pub. L. No. 101-510,
Title XXIX (1990) (as amended). The latest round--BRAC 2005--was
authorized by the National Defense Authorization Act for Fiscal Year
2002, Pub. L. No. 107-107, Title XXX (2001).
[13] DOD defines major closures as installations recommended for
closure with plant replacement value exceeding $100 million and major
realignments as installations losing more than 400 military and
civilian personnel. Minor closures and realignments are those closures
and realignments that do not meet the definitions above.
[14] In the context of BRAC, net present value savings take into
account the time value of money in calculating the value of future
costs and savings. For fiscal year 2005, DOD used a 2.8 percent
discount rate to calculate net present value. To be consistent, we used
the same rate in our calculations.
[15] DOD, Report on 2005 Defense Base Closure and Realignment
Implementation, Volume I, (June 2008).
[16] DOD was directed to expand its consideration of other possible
sites in the National Defense Authorization Act for Fiscal Year 2008.
[17] The BRAC recommendation called for moving 1,352 personnel to
Eglin, but the Army has added approximately 900 personnel to this move
as a non-BRAC action.
[18] GAO, Military Base Realignments and Closures: Plan Needed to
Monitor Challenges for Completing More than 100 Armed Forces Reserve
Centers, [hyperlink, http://www.gao.gov/products/GAO-07-1040]
(Washington, D.C.: Sept. 13, 2007).
[19] GAO, Military Base Realignments and Closures: Army Is Developing
Plans to Transfer Functions from Fort Monmouth, New Jersey, to Aberdeen
Proving Ground, Maryland, but Challenges Remain, [hyperlink,
http://www.gao.gov/products/GAO-08-1010R] (Washington, D.C.: Aug. 13,
2008).
[20] GAO, Hurricane Katrina: GAO's Preliminary Observations Regarding
Preparedness, Response, and Recover, [hyperlink,
http://www.gao.gov/products/GAO-06-442T] (Washington, D.C.: Mar. 8,
2006) and GAO, Defense Management: Additional Actions Needed to Enhance
DOD's Risk-Based Approach for Making Resource Decisions, [hyperlink,
http://www.gao.gov/products/GAO-06-13] (Washington, D.C.: Nov. 15,
2005).
[21] Net annual recurring savings comparisons are based on OSD
projections for fiscal year 2012 and beyond.
[22] As we have previously reported, we and the BRAC Commission believe
that DOD's net annual recurring savings estimates may be overstated
because they include savings from eliminating military personnel
positions without corresponding decreases in end-strength. DOD
disagrees with our position. Savings for eliminating military personnel
positions as defined by DOD's approach account for about $1.85 billion-
-46 percent of total current estimated recurring savings of $4 billion.
[23] Twenty-year savings, also known as 20-year net present value in
the BRAC Commission's report, is a financial calculation that accounted
for the time value of money by determining the present value of future
savings minus up-front investment costs over a specific period of time.
Determining net present value is important because it illustrates both
the up-front investment costs and long-term savings in a single amount.
In the context of BRAC implementation, net present value is calculated
for a 20-year period from 2006 through 2025.
[24] We included the savings from military personnel eliminations in
our report for ease of comparison.
[25] GAO, Military Base Realignments and Closures: Cost Estimates Have
Increased and Are Likely to Continue to Evolve, [hyperlink,
http://www.gao.gov/products/GAO-08-159] (Washington, D.C.: Dec.11,
2007).
[26] DOD Financial Management Regulation, 7000.14R, vol. 2B, ch. 7,
Base Realignment and Closure Appropriations, para. 070303E (Sept.
2008).
[27] GAO, Military Base Closures: Updated Status of Prior Base
Realignments and Closures, [hyperlink, http://www.gao.gov/products/GAO-
05-138] (Washington, D.C.: Jan. 13, 2005).
[28] DOD, Report on 2005 Defense Base Closure and Realignment
Implementation, Volume I, (June 2008).
[29] DOD reported 20-year savings estimates for each base closure and
realignment recommendation in its report to the BRAC Commission.
Subsequently, the BRAC Commission also reported 20-year savings
estimates for each BRAC recommendation in its report to the President.
OSD BRAC officials told us that DOD does not include 20-year savings
estimates in its BRAC budgets to Congress because this information is
not required. Consequently, we calculated 20-year savings for
comparison purposes in a manner consistent with the BRAC Commission's
calculation of these savings.
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