Defense Planning
DOD Needs to Review the Costs and Benefits of Basing Alternatives for Army Forces in Europe Gao ID: GAO-10-745R September 13, 2010Since the early 1990s, the Army has reduced its force presence in Europe by bringing troops and their families back to the United States and consolidating remaining forces and infrastructure at fewer locations. In 2004, the Department of Defense (DOD) announced an overseas basing strategy that called for further decreases of U.S. forces in Europe. As a result, the Army initiated actions to reduce personnel stationed in Europe by 30,000 personnel by fiscal year 2013 and reduce the number of Army brigade combat teams in Europe from four to two. Since 2004, the Army has consolidated operational forces close to the European training facility at Grafenwoehr, Germany and at Vicenza, Italy. The consolidation included significant investments to construct new or renovate facilities at remaining bases to improve the quality of life for soldiers and their families. To help offset the costs of these investments, the Army closed some bases in Germany and has planned additional closures. Amid the implementation of the Army's draw down in Europe, DOD announced in the February 2010 Quadrennial Defense Review that it would retain the four Army brigade combat teams in Europe, rather than return two to the United States as originally planned, pending the outcome of a review of the North Atlantic Treaty Organization strategic concept and ongoing U.S. defense posture reviews. The DOD announcement cast considerable uncertainty on the Army's future force structure in Europe. For instance, the Army will now retain installations to house the brigades for an indefinite period of time while decisions are made. Regardless of these decisions, the Army is planning future investments of almost $200 million in Europe to construct a new theater-level Army headquarters facility at Wiesbaden, Germany and the TRICARE Management Agency is planning a future investment of approximately $1.2 billion to replace aging medical facilities at Ramstein and Landstuhl, Germany with a new consolidated medical center adjacent to Ramstein Air Base in Kaiserslautern, Germany. In light of these significant investments and the uncertainty about the Army's future force structure in Europe, Congress asked us to assess (1) the cost implications of potentially keeping more Army forces in Europe than originally planned, and the extent to which the Army's plans align with an evolving European strategic concept and U.S. posture plans, and (2) whether the process used by the Army to determine facility requirements provides an adequate basis for its infrastructure plans.
Keeping more Army forces in Europe than originally planned would result in significant additional costs; however, it is unclear the extent to which DOD plans to weigh these costs against the benefits of having additional forces overseas, especially in light of an evolving European strategic concept and U.S. posture plans. In the near term, delays in decisions associated with two initiatives will impact the Army's costs in Europe. First, prior to the 2010 Quadrennial Defense Review, the Army had planned to return two of four brigade combat teams stationed in Europe to the United States in fiscal years 2012 and 2013, which would have saved millions annually in overseas stationing costs by allowing the closure of installations located at Bamberg and Schweinfurt, Germany. However, these plans are on hold pending an announcement of the North Atlantic Treaty Organization's strategic concept planned to be announced in November 2010, as well as ongoing U.S. assessments of the global defense posture, which have a less clear time frame for completion. The decision to retain these brigades in Europe will require the Army to seek funding of roughly $176 million annually to support the Bamberg and Schweinfurt communities beginning in fiscal year 2013, according to Army estimates. Second, U.S. Army Europe estimated that closing Heidelberg and moving its headquarters to Wiesbaden would save hundreds of millions of dollars annually beginning in 2013. However, because of uncertainty for the funding of construction in Wiesbaden, Heidelberg will remain open longer than originally planned and the previously estimated savings will be delayed by 2 years or more. As a result, the Army estimates it will need approximately $150 million annually to support continued operations. Both our review and an analysis performed by the Army found gaps in the support used to justify the decision to close Heidelberg and consolidate forces in Wiesbaden. Our work revealed that the original analyses were poorly documented, limited in scope, and based on questionable assumptions. Department of the Army officials also found the U.S. Army Europe's original analysis inadequate and performed another more detailed analysis in mid-2009 that affirmed the decision to consolidate but lowered the estimated savings. The Army estimates that, depending upon the assumptions used, it will potentially cost between $1 billion and $2 billion more from fiscal years 2012-2021 to keep the two brigades in Europe than it would cost to return them to the United States.1 DOD is reconsidering retaining the brigades in Europe in part because senior military officials in Europe have said that four brigade combat teams in Europe are needed to meet operational and mission requirements. According to DOD officials, the evaluation of U.S. forces in Europe will be primarily focused on whether four combat brigades will be retained in Europe. We are recommending that DOD require the Army to conduct a comprehensive analysis of alternatives for stationing forces in Europe that, at a minimum, should be done as expeditiously as possible upon the completion of the North Atlantic Treaty Organization's strategic concept announcement and consider the costs and benefits of a range of force structure and basing alternatives. Additionally, we are recommending that the Army develop a consistent process to determine specific facility requirements associated with the various basing options. In written comments on a draft of this correspondence, DOD stated that it concurred with our recommendations and have already initiated a strategy-based assessment of U.S. defense posture to be completed by the end of calendar year 2010 and that the Army intends to develop a central, on line classified site containing Army Stationing and Installation Plan population data that will reflect out-year stationing decisions that are classified due to host-nation sensitivity.
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: John H. Pendleton Team: Government Accountability Office: Defense Capabilities and Management Phone: (404) 679-1816GAO-10-745R, Defense Planning: DOD Needs to Review the Costs and Benefits of Basing Alternatives for Army Forces in Europe
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GAO-10-745R:
United States Government Accountability Office:
Washington, DC 20548:
September 13, 2010:
The Honorable Daniel K. Inouye:
Chairman:
Committee on Appropriations:
United States Senate:
The Honorable Tim Johnson:
Chairman:
Subcommittee on Military Construction, Veterans Affairs, and Related
Agencies:
Committee on Appropriations:
United States Senate:
Subject: Defense Planning: DOD Needs to Review the Costs and Benefits
of Basing Alternatives for Army Forces in Europe:
Since the early 1990s, the Army has reduced its force presence in
Europe by bringing troops and their families back to the United States
and consolidating remaining forces and infrastructure at fewer
locations. In 2004, the Department of Defense (DOD) announced an
overseas basing strategy that called for further decreases of U.S.
forces in Europe. As a result, the Army initiated actions to reduce
personnel stationed in Europe by 30,000 personnel by fiscal year 2013
and reduce the number of Army brigade combat teams in Europe from four
to two. Since 2004, the Army has consolidated operational forces close
to the European training facility at Grafenwoehr, Germany and at
Vicenza, Italy. The consolidation included significant investments to
construct new or renovate facilities at remaining bases to improve the
quality of life for soldiers and their families. To help offset the
costs of these investments, the Army closed some bases in Germany and
has planned additional closures. Amid the implementation of the Army's
draw down in Europe, DOD announced in the February 2010 Quadrennial
Defense Review that it would retain the four Army brigade combat teams
in Europe, rather than return two to the United States as originally
planned, pending the outcome of a review of the North Atlantic Treaty
Organization strategic concept and ongoing U.S. defense posture
reviews. The DOD announcement cast considerable uncertainty on the
Army's future force structure in Europe. For instance, the Army will
now retain installations to house the brigades for an indefinite
period of time while decisions are made. Regardless of these
decisions, the Army is planning future investments of almost $200
million in Europe to construct a new theater-level Army headquarters
facility at Wiesbaden, Germany and the TRICARE Management Agency is
planning a future investment of approximately $1.2 billion to replace
aging medical facilities at Ramstein and Landstuhl, Germany with a new
consolidated medical center adjacent to Ramstein Air Base in
Kaiserslautern, Germany. In light of these significant investments and
the uncertainty about the Army's future force structure in Europe, you
asked us to assess (1) the cost implications of potentially keeping
more Army forces in Europe than originally planned, and the extent to
which the Army's plans align with an evolving European strategic
concept and U.S. posture plans, and (2) whether the process used by
the Army to determine facility requirements provides an adequate basis
for its infrastructure plans.
Scope and Methodology:
To assess the cost implications of potentially keeping more Army
forces in Europe than originally planned, and the extent to which the
Army's plans align with an evolving European strategic concept and
U.S. posture plans, we reviewed selected planning documents, such as
project justifications, pertaining to military construction and budget
documents for fiscal years 2004 through 2012. We also interviewed
officials at the Army Installation Management Command-Europe; the U.S.
Army Europe, and three garrisons in Germany (Heidelberg, Grafenwoehr,
and Wiesbaden) to discuss and obtain relevant documentation on the
status of completed, initiated, and planned renovations and military
construction at those locations. In addition, we reviewed Medical
Command and TRICARE Management Activity documentation and interviewed
command officials from both organizations concerning the costs to
replace or renovate the Landstuhl Regional Medical Center. We also
assessed the potential impact, in terms of plans and costs, of the
2010 Quadrennial Defense Review decision to retain four combat brigade
teams in Europe. This included assessing the projected costs of
keeping bases open that, according to U.S. Army Europe officials, had
been scheduled for return to the German government. We also assessed
the future cost ramifications of consolidating U.S. Army Europe and
7th Army's headquarters and movement of forces from Heidelberg to
Wiesbaden. Further, to assess the rationale and costs associated with
the Army's options for keeping forces in Europe or returning them to
the United States, we used as criteria relevant guidance from DOD, the
Office of the Joint Chiefs of Staff, and U.S. Army Europe on the types
of analyses to be performed and actions taken in considering changes
to overseas force structure. For transformation and consolidation
efforts yet to be completed, such as the consolidation of the
headquarters complex at Wiesbaden, Germany, we obtained the
documentation available to support the decision to consolidate and
compared the documentation to criteria to determine to what extent it
considered alternatives and captured potential cost savings. We met
with officials from the following organizations to gather further
information on U.S. Army Europe's analyses and justifications:
Headquarters, Department of the Army, Assistant Chief of Staff for
Installation Management; Headquarters, Army Installation Management
Command; Office of the Under Secretary Defense for Policy;
Headquarters, Department of the Army, Deputy Chief of Staff (G-3/5/7);
and the Office of the Joint Chiefs of Staff-Global Posture Issues Team.
To evaluate whether the Army's process for determining facility
requirements provides an adequate basis for its infrastructure plans
in Europe, we reviewed data from the Army's systems used to identify
facility requirements--the Real Property Planning and Analysis System,
the Army Stationing and Installation Plan, and the Army Criteria
Tracking System. For several European locations, we compared force
structure and population data in the Army Stationing and Installation
Plan to facility requirements for these locations in the Real Property
and Planning System. We also conducted a data reliability assessment
for both the Real Property Planning and Analysis System and Army
Stationing and Installation Plan. Further, we interviewed officials at
the U.S. Army Europe's Global Rebasing and Restructuring Division in
Heidelberg, Germany and Army officials at Grafenwoehr and Wiesbaden to
discuss and document to what extent their current and planned
facilities will meet force structure needs, as well as their
processes, including any informal methods, for determining facility
requirements. Although we did not independently validate the budget,
construction, stationing, and facility planning data provided by the
Army, we discussed with officials steps they have taken to ensure
reasonable accuracy of the data. As such, we determined the data to be
sufficiently reliable for the purposes of this correspondence. We
conducted this performance audit from February 2009 to July 2010 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.
Summary:
Keeping more Army forces in Europe than originally planned would
result in significant additional costs; however, it is unclear the
extent to which DOD plans to weigh these costs against the benefits of
having additional forces overseas, especially in light of an evolving
European strategic concept and U.S. posture plans. In the near term,
delays in decisions associated with two initiatives will impact the
Army's costs in Europe. First, prior to the 2010 Quadrennial Defense
Review, the Army had planned to return two of four brigade combat
teams stationed in Europe to the United States in fiscal years 2012
and 2013, which would have saved millions annually in overseas
stationing costs by allowing the closure of installations located at
Bamberg and Schweinfurt, Germany. However, these plans are on hold
pending an announcement of the North Atlantic Treaty Organization's
strategic concept planned to be announced in November 2010, as well as
ongoing U.S. assessments of the global defense posture, which have a
less clear time frame for completion. The decision to retain these
brigades in Europe will require the Army to seek funding of roughly
$176 million annually to support the Bamberg and Schweinfurt
communities beginning in fiscal year 2013, according to Army
estimates. Second, U.S. Army Europe estimated that closing Heidelberg
and moving its headquarters to Wiesbaden would save hundreds of
millions of dollars annually beginning in 2013. However, because of
uncertainty for the funding of construction in Wiesbaden, Heidelberg
will remain open longer than originally planned and the previously
estimated savings will be delayed by 2 years or more. As a result, the
Army estimates it will need approximately $150 million annually to
support continued operations. Both our review and an analysis
performed by the Army found gaps in the support used to justify the
decision to close Heidelberg and consolidate forces in Wiesbaden. Our
work revealed that the original analyses were poorly documented,
limited in scope, and based on questionable assumptions. Department of
the Army officials also found the U.S. Army Europe's original analysis
inadequate and performed another more detailed analysis in mid-2009
that affirmed the decision to consolidate but lowered the estimated
savings. In the longer term, if DOD decides not to return two of the
four Brigade Combat Teams in Europe to the United States the
incremental cost could be significant. The Army estimates that,
depending upon the assumptions used, it will potentially cost between
$1 billion and $2 billion more from fiscal years 2012-2021 to keep the
two brigades in Europe than it would cost to return them to the United
States.[Footnote 1] DOD is reconsidering retaining the brigades in
Europe in part because senior military officials in Europe have said
that four brigade combat teams in Europe are needed to meet
operational and mission requirements. According to DOD officials, the
evaluation of U.S. forces in Europe will be primarily focused on
whether four combat brigades will be retained in Europe. DOD and Army
guidance call for the department to consider alternatives as part of
the economic analyses conducted when contemplating construction or
real property acquisition, which are decisions that often arise in the
basing decision process, but we found that prior analyses have been
limited in scope, or based on assumptions that were questionable.
Without a comprehensive analysis, the Army may lack sufficient
information to determine the most cost effective approach to
maintaining a continued military presence in Europe that will align
with the evolving North Atlantic Treaty Organization strategic concept
and U.S. defense posture.
Once DOD determines its force structure and basing plans for a region,
it then needs to determine the types and quantities of facilities
necessary to provide operational and quality of life support to its
soldiers and families; however, we were unable to validate whether
completed or planned facilities in Europe would meet Army facility
planning criteria because U.S. Army Europe planners use inconsistent
processes to generate facility requirements. The Army in Europe does
not consistently use the official Army facility planning tools that
are designed to calculate, using population data and facility space
criteria, the facilities required to accommodate forces and ensure
that quality-of-life and other facility standards are met. Army
officials stated that its facility planning systems do not always
include current force structure and installation population data
because overseas basing decisions are sensitive and not reflected in
the systems before public announcements are made. The Army's systems
showed populations at some installations even after anticipated
closure dates, making the requirements generated by the systems
inaccurate. Army planners in Europe use unofficial, locally developed
systems to determine requirements, and we found that planners at
different installations were not using consistent methods to calculate
requirements for barracks and other facilities. The Army planners in
Europe told us that they are developing their own criteria for
determining the requirements that varies among the installations.
Because these alternative methods are not linked with the Army's
official system and its resident facility criteria and vary among the
installations, we were unable to determine if completed and planned
facilities will meet the Army's quality-of-life and other facility
planning criteria. Our inability to validate infrastructure
requirements reflects systemic issues that have been brought to the
Army's attention, but have not yet been resolved. For example, in a
June 2010 report addressing domestic facility requirements, we
reported that the Army's Real Property Planning and Analysis System
did not always produce reliable results for some types of facilities
because the systems have often relied on data that were not complete,
current, or accurate.[Footnote 2] Until the Army has a process to
calculate facility requirements based on current and accurate
information, the department cannot be assured that planned Army
facilities in Europe will meet quality-of-life and other facility
standards.
We are recommending that DOD require the Army to conduct a
comprehensive analysis of alternatives for stationing forces in Europe
that, at a minimum, should be done as expeditiously as possible upon
the completion of the North Atlantic Treaty Organization's strategic
concept announcement and consider the costs and benefits of a range of
force structure and basing alternatives. Additionally, we are
recommending that the Army develop a consistent process to determine
specific facility requirements associated with the various basing
options. In written comments on a draft of this correspondence, DOD
stated that it concurred with our recommendations and have already
initiated a strategy-based assessment of U.S. defense posture to be
completed by the end of calendar year 2010 and that the Army intends
to develop a central, on line classified site containing Army
Stationing and Installation Plan population data that will reflect out-
year stationing decisions that are classified due to host-nation
sensitivity.
Background:
Since 2004, as part of DOD's Integrated Global Presence and Basing
Strategy, the Army has drawn down its forces in Europe and
consolidated remaining forces and infrastructure at fewer locations.
As a result, according to Army officials these efforts have resulted
in significant recurring savings. As shown in figure 1, the Army's
plan called for reducing the number of permanent, or enduring, major
installations in Europe to six located in Germany at Wiesbaden,
Baumholder, Kaiserslautern, Grafenwoehr, Stuttgart, and Ansbach, and
one located in Italy at Vicenza. Figure 1 also shows installations
located in Germany at Schweinfurt and Bamberg that the Army originally
planned to close; however, the status of these installations is now
uncertain because of the February 2010 Quadrennial Defense Review
tentative decision to retain forces in Europe pending a global force
posture review.
Figure 1: Major Installations Supporting U.S. Army Forces in Europe:
[Refer to PDF for image: map depicting Major Installations Supporting
U.S. Army Forces in Europe]
Country: Germany;
Enduring bases:
Ansbach;
Baumholder;
Grafenwoehr/Vilseck/Hohenfels;
Kaiserslautern;
Stuttgart;
Wiesbaden;
Status deferred:
Bamberg;
Schweinfurt;
Country: Italy;
Enduring bases:
Vicenza.
Sources: U.S. Installation Management Command--Europe Region; Map
Resources (map).
[End of figure]
From fiscal years 2004 to 2009, the Army spent approximately $1.3
billion dollars to support its infrastructure transformation and
consolidation plans in Europe.[Footnote 3] The majority of this
investment was used to undertake two main efforts: (1) the
consolidation of operational forces close to Europe's training
facilities at Grafenwoehr, Germany and (2) the consolidation of the
U.S. Army Europe's Airborne Brigade Combat Team in Vicenza, Italy. In
and around Grafenwoehr, the Army spent about $473 million on
facilities. These included new or renovated operational complexes,
maintenance and operations centers, and barracks to support Army
brigade combat teams and other units. Other work at Grafenwoehr
included upgrading a medical and dental facility and constructing a
new post exchange and commissary, dining facility, physical fitness
center, as well as numerous other facilities to support unit
operations, the soldiers, and their families. Looking forward, the
Army is planning military construction to build barracks facilities at
Grafenwoehr to meet the current barracks standard, though this was not
part of the original transformation and consolidation plan.[Footnote
4] At Vicenza, Italy, the Army has spent about $424 million on
facilities to accommodate an expected increase in the forces stationed
in Italy. The Army's construction and renovation projects include
headquarters and maintenance buildings, barracks, child development
centers, and schools at various locations around Vicenza. The
remainder of the Army's investment, including Payment-in-Kind and
Sustainment, Restoration, and Modernization funds, were used to
support transformation and consolidation-related projects throughout
Germany, including at Ansbach, Heidelberg, and Kaiserslautern, among
others.
In addition to the Army's projects at Grafenwoehr and Vicenza, the
Army and TRICARE Management Activity have plans for two major
infrastructure projects to support forces in Europe at a cost of
almost $1.4 billion. These include construction of an Army
headquarters facility at Wiesbaden, Germany and construction of a
replacement regional medical center adjacent to Ramstein Air Base near
Kaiserslautern, Germany. Moving and consolidating several Army
headquarters from Heidelberg and other locations to Wiesbaden is the
last step in the U.S. Army Europe's transformation and consolidation
plan that began in 2004.[Footnote 5] According to U.S. Army Europe
officials, consolidating the headquarters would optimize command and
control, intelligence, and signal capabilities; provide a more
responsive organizational structure; offer better force protection
options than at the current location in Heidelberg; and provide access
to a nearby Army airfield. The Wiesbaden location would include a
theater-level command and control center, a consolidated intelligence
center, and a network warfare center at a cost of approximately $240
million. The first increment of $59.5 million was appropriated for
fiscal year 2009 to build the command and control center and the U.S.
Army Corps of Engineers began design work for the facility in the
first quarter of the fiscal year 2010. DOD's second project is to
replace the regional medical center located in Landstuhl and the
Medical Clinic at Ramstein Air Base in Germany with a new consolidated
medical center adjacent to Ramstein Air Base near Kaiserlautern,
Germany at a cost projected at $1.2 billion. According to DOD, this
project is being driven by the effort to recapitalize medical
facilities worldwide, and was not part of the effort to transform and
consolidate Army forces in Europe. The medical center is a major
hospital that provides primary care for more than 40,000 military
personnel and 245,000 beneficiaries in the European Command. The
facility also provides medical support for casualties that are air-
evacuated from Iraq and Afghanistan: wounded personnel are flown into
Ramstein Air Base and then taken by bus to Landstuhl Regional Medical
Center, approximately 20 minutes away. According to TRICARE Management
Activity officials, a 2002-2003 Army Medical Department study
recommended that DOD renovate and add to the existing hospital in
Landstuhl. However, in 2009, the Senate Appropriations Committee
directed DOD to complete a site assessment for this approach[Footnote
6] and the Office of the Deputy Under Secretary of Defense
(Installations and Environment) conducted a new analysis that included
consideration of alternative sites. One of the reasons officials
decided upon the new construction adjacent to Ramstein Air Base was
because it allows for easier access to the airfield where wounded
personnel arrive from combat zones.
Many defense organizations are involved in force structure and basing
decisions. According to Army, Joint Staff and DOD guidance, unit
commanders, U.S. Army Europe, and European Command are responsible for
providing analytical support and coordinating proposed basing actions.
[Footnote 7] For example, for stationing actions and unit moves,
commanders of units stationed in Europe will review the mission,
operational facilities, base support, available resources, potentially
including available funds, and political and environmental effects of
the proposed basing action. For force structure changes, Army
Headquarters or U.S. Army Europe obtains input and comments from
affected commands, including European Command, the functional
combatant commands and the component commands. Army Headquarters
transmits the resulting proposal to the Joint Staff and requests
approval by the Secretary of Defense. European Command conducts an
assessment of the implications of potential force structure changes,
to inform the Joint Staff and Office of the Secretary of Defense of
the relative values or benefits and costs or risks. The assessment
includes political-military, operational risk, force structure,
infrastructure, and resource implications of the proposed change, and
it should address alternatives considered, where applicable.
Future Plans for Army Forces in Europe Are Uncertain, but Costs Are
Likely to Be Higher Than Earlier Army Estimates:
Keeping the four brigades in Europe will require the Army to seek
funds to keep installations open in the near term (fiscal years 2013
and 2014) and future decisions about force structure could result in
$1 billion to $2 billion in incremental costs in the long term if four
combat brigades, rather than two, are retained. The Army's force
structure in Europe is subject to the results of several pending
reviews including a comprehensive review of U.S. defense posture
worldwide. To date, however, DOD has not announced the details of the
scope and timing for the completion of this comprehensive review.
Retaining Forces in Europe Will Require the Army to Spend Additional
Funds, Lowering Anticipated Near-Term Savings:
Delays and changes in decisions will require the Army to seek hundreds
of millions of dollars more annually than planned to support
facilities in Europe that they originally intended to close. As part
of its plans to return two brigade combat teams stationed in Europe to
the United States in fiscal years 2012 and 2013, U.S. Army Europe
intended to close installations located at Bamberg and Schweinfurt,
Germany. However, the decision to retain these brigades in Europe
delays or eliminates these savings and, according to Installation
Management Command-Europe, will require the Army to seek funding of
roughly $176 million annually beginning in fiscal year 2013 to support
base operations at these two communities.
In addition, U.S. Army Europe planned hundreds of millions in savings
by closing Heidelberg and consolidating in Wiesbaden by 2013 and did
not program funding to operate this installation beyond 2012. However,
because of uncertainty for the funding of construction in Wiesbaden,
Heidelberg will remain open longer than originally planned and the
previously estimated savings will be delayed by 2 years or more. As a
result, the Army estimates it will need approximately $150 million
annually to support continued operations.[Footnote 8]
Both our review and the subsequent analyses performed by the Army
found gaps in the support used to justify the decision to close
Heidelberg and consolidate forces in Wiesbaden. The original analyses
were poorly documented, limited in scope, and based on questionable
assumptions. Army and DOD guidance describing economic analyses to
support military construction projects or decisions about the
acquisition of real property indicate that reasonable alternatives
should be considered when contemplating projects. For example, DOD
Instruction 7041.3 indicates that the analyses should address
alternatives that consider the availability of existing facilities and
estimated costs and benefits, among other factors.[Footnote
9]Similarly, Army Pamphlet 415-3 identifies the consideration and
evaluation of alternatives as sound economic principles underlying the
economic analyses to be performed in support of military construction
projects.[Footnote 10] When we asked to see the original analyses for
the 2005 decision, U.S. Army Europe officials provided us with an
information paper that had been prepared in response to our request
but did not produce documentation to support the original decision.
Little detail was available about the alternatives that had been
considered, or how quantitative criteria (like cost savings) and
qualitative criteria (like force protection and access to airfields)
were weighed in the decision. Army officials told us that alternatives
to Wiesbaden had been considered in discussions, and that these were
rejected in favor of Wiesbaden. In addition, although they noted that
estimated cost savings was one of the key reasons for the decision,
they also told us that the decision was primarily based on judgment.
Furthermore, according to DOD officials, the analysis was not rigorous
or documented. Department of the Army officials also deemed the
analysis inadequate to defend the operational and business needs for
the consolidation and as a result called for additional cost analysis
to be conducted by officials from the Assistant Chief of Staff-
Installation Management. A subsequent, more robust cost analysis
completed in 2009 reduced the estimated annual cost savings to less
than half of the original estimate, but affirmed the decision to
consolidate in Wiesbaden. DOD has updated its plans and has announced
that its current plan is to close the facilities in and around
Heidelberg by 2015, but has not yet obtained all the funding to build
the new headquarters complex in Wiesbaden.
Keeping More Forces in Europe Than Originally Planned Could Cost Up to
$2 Billion in the Long Term:
DOD has not yet made a final decision on the number of brigades that
will remain in Europe for the long term; however, the Army's Office of
the Deputy Chief of Staff for Programs (G8) estimates that the long-
term incremental costs for keeping the two brigades in Europe will be
between $1 billion and $2 billion for fiscal year 2012 through 2021.
The projected costs will vary depending on whether forces are sent
from the United States to Europe for training to maintain a constant
presence in Europe. Figure 2 compares the Army's annual estimated cost
for fiscal years 2012 through 2021 for keeping the two additional
brigades in Europe versus returning them to the United States,
assuming no rotational costs. As shown, in years 2012 and 2013 the
need to construct facilities in the United States to house the
returning brigades would cost more than retaining the brigades in
Europe at existing installations. However, Army analyses show that for
fiscal year 2014 through 2021 it will cost on average $360 million
more per year to retain the brigades in Europe.
Figure 2: Estimated Annual Total Costs for Basing Two Brigades in
Europe Compared to Returning Them to the United States for Fiscal
Years 2012-2021:
[Refer to PDF for image: multiple line graph]
Fiscal year: 2012;
Keeping brigades in Europe: $490 million;
Returning brigades to United States: $854 million.
Fiscal year: 2013;
Keeping brigades in Europe: $561 million;
Returning brigades to United States: $1.034 billion.
Fiscal year: 2014;
Keeping brigades in Europe: $570 million;
Returning brigades to United States: $291 million.
Fiscal year: 2015;
Keeping brigades in Europe: $653 million;
Returning brigades to United States: $324 million.
Fiscal year: 2016;
Keeping brigades in Europe: $698 million;
Returning brigades to United States: $317 million.
Fiscal year: 2017;
Keeping brigades in Europe: $745 million;
Returning brigades to United States: $331 million.
Fiscal year: 2018;
Keeping brigades in Europe: $698 million;
Returning brigades to United States: $337 million.
Fiscal year: 2019;
Keeping brigades in Europe: $702 million;
Returning brigades to United States: $335 million.
Fiscal year: 2020;
Keeping brigades in Europe: $720 million;
Returning brigades to United States: $347 million.
Fiscal year: 2021;
Keeping brigades in Europe: $732 million;
Returning brigades to United States: $353 million.
Source: GAO presentation of Army data.
[End of figure]
Several factors make keeping the two additional brigades in Europe
more expensive than returning them to the United States. These include
the cost to provide schools and commissaries overseas, increased
personnel costs due to overseas allowances, and additional funds for
needed infrastructure projects to continue operations at Bamberg and
Schweinfurt. For example, the Army estimates that for fiscal years
2016 to 2021 it will need approximately $370 million to improve
facilities at Bamberg and Schweinfurt to meet quality of life
standards because improvements had not been planned for either of
these locations as they had previously been scheduled to be returned
to the German government.
Even with the potential significant long-term costs, senior military
officials in Europe have argued that the larger force structure is
necessary. In March 2010, the Commander of European Command stated in
written testimony that without four brigade combat teams and certain
headquarters capabilities European Command assumes risks in its
capability to conduct steady-state security cooperation, shaping, and
contingency missions and that deterrence and reassurance are at
increased risk.[Footnote 11] He also stated that the loss of certain
headquarters combined with significant force requirements in support
of Overseas Contingency Operations outside the European Command region
makes retaining four brigade combat teams critical to the United
States Army Europe's and European Command's mission.
DOD's Plans for Reviewing U.S. Global Defense Posture Are Unclear, but
Alternatives Under Consideration Are Limited:
The Army's force structure in Europe is subject to the results of a
pending review of the North Atlantic Treaty Organization's Strategic
Concept and an accompanying U.S. assessment of the U.S. European
defense posture network. The new North Atlantic Treaty Organization
strategic concept is scheduled to be unveiled at a November 2010
meeting in Lisbon, Portugal. The 2010 Quadrennial Defense Review
announced plans for a comprehensive review of U.S. defense posture
worldwide and the Secretary of Defense issued a memorandum in May 2010
identifying global posture as a critical issue to be scrutinized in
preparation for the fiscal year 2012 budget process. To date, DOD has
yet to announce the details of the scope and timing for the completion
of its comprehensive review of global posture.
DOD and Army guidance should prompt the department to consider
alternatives when contemplating basing decisions. In our past work, we
have found weaknesses in the department's process for adjusting
defense global posture and linking it with current strategy.[Footnote
12] And, even though DOD has stated that it plans to conduct a
comprehensive review of global posture, DOD and Army officials told us
their review of Army forces in Europe will focus on whether four
combat brigades will be retained in Europe. Additionally, until the
North Atlantic Treaty Organization new strategic concept is unveiled,
it is not known if DOD and the Army are making basing decisions that
will support the new strategy.
Inconsistent Processes to Develop Facility Requirements Hampers
Validation of Facility Needs:
Once DOD determines its force structure and basing plans for a
specific region, it then needs to determine the types and quantities
of facilities necessary to provide operational and quality of life
support to its soldiers and families; however, we were unable to
validate whether completed and planned facilities in Europe meet Army
facility planning criteria because U.S. Army Europe planners use
inconsistent processes to generate facility requirements. The Army in
Europe does not consistently use official Army facility planning tools
to calculate its requirements. The Army's official tools for
determining facility requirements do not use the most current and
accurate information for European locations, such as installation
population data and, in some cases, planners have used alternative or
workaround methods to develop facility requirements.
Army guidance directs garrison planning staff to use an Army-wide
system, known as the Real Property Planning and Analysis System, to
conduct facility requirements analyses which determine requirements
for the number, type, and size of facilities needed to accommodate
forces stationed at each installation. The planning and analysis
system uses installation population data from the Army Stationing and
Installation Plan and Army standardized facility criteria needed to
support the population and meet mission requirements and quality-of-
life standards. For example, the system uses installation population
data to determine the required number and size of headquarters and
administrative buildings, maintenance facilities, barracks, medical
and dental clinics, commissaries, and other support facilities needed
at each installation.
According to Army officials, the force structure and installation
population data used by the Real Property Planning and Analysis System
are not current and thus not accurate. Army officials stated that its
facility planning systems do not always include current force
structure and installation population data because overseas basing
decisions are sensitive and not reflected in the systems before public
announcements are made. For example, we found in the case of Vicenza
that the facility requirements in the planning and analysis system did
not track with anticipated increases in the installation population.
Specifically, the Army's force structure is expected to almost double
in Vicenza, Italy for fiscal years 2010 to 2014, yet the planning and
analysis system was not edited to reflect a corresponding increase in
facility requirements.
Because the stationing data do not always reflect current or planned
force structure decisions, U.S. Army Europe planners often use
alternative methods to determine facility requirements. However, such
methods use spreadsheets that are not linked to the planning and
analysis system or the criteria database. And, because the alternative
requirements determination methods are not linked with the official
planning system and its resident facility criteria and standards, it
is unknown if planned facilities will meet Army quality-of-life and
other facility standards contained in that system. We found that
planners were not using consistent methods to calculate facility
requirements. To illustrate, key U.S. Army Europe officials told us
that because accompaniment rates for troops in Europe are different
than in the United States, Army installation planners in Europe were
not using the Army's facility planning criterion for determining
barracks and family housing requirements; instead, they are using
their own subjective estimates that vary among the installations.
Planners explained that it was a challenge to develop these rates
because the documents available to them that provided details on
installation population were not always up to date and did not
accurately reflect future Army force structure decisions. This lack of
consistency in the methods used by planners in Europe and not knowing
to what extent the planners are using current information to determine
facility requirements precluded us from validating whether completed
or planned facilities in Europe would satisfy its infrastructure needs.
Our inability to validate infrastructure requirements reflects
systemic issues that have been brought to the Army's attention, but
have not yet been resolved. A 2006 Army Audit Agency report on
military construction requirements in Europe noted that Army systems
for planning construction projects often contained conflicting or
inaccurate information and planners sometimes generated incorrect
requirements when they used the systems.[Footnote 13] Although the
Army Audit Agency found that planned military construction projects
were adequate to support U.S. Army Europe's installation plans, it
also identified concerns with the accuracy of the information used to
determine facility requirements in Europe. The report noted that
project planners often did not maintain adequate documentation
supporting how they determined requirements and, as a result, often
had to recreate the information to support their analysis. In
addition, in a June 2010 report that examined facility requirements
for Army installations in the United States, we found that the Army's
Real Property Planning and Analysis System did not always produce
reliable results for some types of facilities because the system has
often relied on data that are not complete, current, or accurate.
[Footnote 14] For instance, we found that the facility design criteria
had not been updated to reflect current standard designs for 47 of the
58 facility types in the system. As a result of our findings, to
improve the accuracy and completeness of the Army's Real Property
Planning and Analysis System as a tool for generating facility
requirements, we recommended that the Secretary of Defense direct the
Secretary of the Army to develop and implement guidance that requires
the Army Criteria Tracking System which feeds standardized facility
criteria into the Army's Real Property Planning and Analysis System to
be updated to reflect changes to facility designs as they are made.
DOD concurred with our recommendation and stated that the Army has
already taken action to enhance the accuracy of its planning systems
to better respond to changing requirements.
Conclusions:
With over $1.3 billion invested since 2004, another $1.4 billion in
infrastructure investments planned for the Wiesbaden consolidation and
the recapitalization of medical facilities, and the potential to
increase costs by up to $2 billion over the next 10 years if all four
Army brigades are kept in Europe, the financial stakes are high for
DOD as it considers its future posture. Existing guidance should
prompt the department to consider analyses of alternatives when
contemplating basing options; however, previous Army analyses have not
been well documented, and the plans being pursued are based on a
previous strategy developed in 2004 and may not be aligned with a new
strategic concept that has yet to be determined. In addition, the
Army's approach to managing its facilities thus far has resulted in
uncertainty concerning whether completed and planned facilities will
meet infrastructure needs. Until facility requirements reflect quality-
of-life and other standardized facilities criteria, there is
inadequate assurance that the Army's facilities in Europe will fully
meet the needs of soldiers and their families. Without a comprehensive
review the Army may lack sufficient information to determine the most
cost effective approach to maintaining a continued presence in Europe.
Recommendations for Executive Action:
To take advantage of the pause before final decisions on the Army's
European force structure are made and determine the best course of
action for its European posture, we recommend that the Secretary of
Defense direct the Secretary of the Army to take the following two
actions:
1. Conduct a comprehensive analysis of alternatives for stationing
forces in Europe. At a minimum, the review should be done as
expeditiously as possible upon the completion of the North Atlantic
Treaty Organization's strategic concept announcement and consider the
costs and benefits of a range of force structure and basing
alternatives.
2. Develop a consistent process to determine specific facility
requirements associated with the various options.
Agency Comments and Our Evaluation:
In written comments on a draft of this correspondence, DOD stated that
it concurred with our recommendations and certain actions have already
been initiated. In response to our first recommendation, DOD stated
that it is currently conducting a strategy-based assessment of U.S.
defense posture, including a broad review of the European theater and
analysis of the total ground force requirement in Europe. DOD
anticipates that its assessment should be complete by the end of
calendar year 2010. In response to our second recommendation, the Army
intends to develop a central, on line classified site containing Army
Stationing and Installation Plan population data that will reflect out-
year stationing decision that are classified due to host-nation
sensitivity. DOD's comments are reprinted in their entirety in
enclosure I. DOD also provided a number of technical and clarifying
comments, which we have incorporated where appropriate.
We are sending copies of this report to other congressional committees
and interested parties. We are also sending copies to the Secretaries
of Defense and the Army. In addition, this report will be available at
no charge on our Web site at [hyperlink, http://www.gao.gov]. If you
or your staff have any questions about this report, please contact me
at (404) 679-1816 or pendletonj@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made key contributions to
this report are listed in enclosure II.
Signed by:
John Pendleton, Director:
Defense Capabilities and Management:
[End of section]
Enclosure I: Comments from the Department of Defense:
Office Of The Under Secretary Of Defense:
Acquisition, Technology And Logistics:
3000 Defense Pentagon:
Washington, DC 20301-3000:
August 19, 2010:
Mr. John Pendleton:
Director, Defense Capabilities and Management:
U.S. Government Accountability Office:
441 G Street, N.W.
Washington, DC 20548:
Dear Mr. Pendleton:
This is the Department of Defense (DoD) response to the GAO draft
report, GAO-10-745R, "Defense Infrastructure: DoD Needs to Review the
Costs and Benefits of Basing Alternatives for Army Forces in Europe,"
dated July 12, 2010 (GAO Code 351325). Specific comments are enclosed.
Sincerely,
Signed by:
Dorothy Robyn:
Deputy Under Secretary of Defense:
(Installations and Environment):
Enclosure: As stated:
[End of letter]
GAO Draft Report ” Dated July 12, 2010:
GAO Code 351325/GA0-10-745R:
"Defense Infrastructure: DoD Needs to Review the Costs and Benefits of
Basing Alternatives for Army Forces in Europe"
Department Of Defense Comments To The Recommendations:
Recommendation 1: The GAO recommends that the Secretary of Defense
direct the Secretary of the Army to conduct a comprehensive analysis
of alternatives for stationing forces in Europe. At a minimum, the
review should be done as expeditiously as possible upon the completion
of the North Atlantic Treaty Organization's strategic concept
announcement and consider the costs and benefits of a range of force
structure and basing alternatives.
DOD Response: DoD concurs. The 2010 Quadrennial Defense Review (QDR)
stated the intent to retain four brigade combat teams and a Corps
headquarters in Europe pending a review of the NATO Strategic Concept
and an accompanying U.S. assessment of our European defense posture
network. DoD is currently conducting a strategy-based assessment of
U.S. defense posture, including a broad review of the European theater
and analysis of the total ground force requirement in Europe (in
addition to other key posture issues). Evaluation of options will
consider a broad range of criteria to include political-military
factors, operations, force structure/force management, and cost. The
assessment should be complete by the end of calendar year 2010.
Recommendation 2: The GAO recommends that the Secretary of Defense
direct the Secretary of the Army to develop a consistent process to
determine specific facility requirements associated with the various
options.
DOD Response: DoD concurs. The Army will develop a central on-line
classified site containing Army Stationing and Installation Plan
(ASIP) population data that will reflect out-year overseas stationing
decisions that are classified due to host-nation sensitivity. This
information will update the Real Property Planning and Analysis System
(RPLANS), and allow the Office of the Assistant Chief of Staff for
Installation Management to accurately represent and justify out-year
overseas facility requirements.
[End of section]
Enclosure II: GAO Contact and Staff Acknowledgments:
GAO Contact:
John Pendleton, (404) 679-1816 or pendletonj@gao.gov:
Staff Acknowledgments:
In addition to the individual named above, Laura Durland (Assistant
Director), Tim Burke, Ron La Due Lake , Kelly Rubin, Brian Chung,
Robin Nye, Michael Shaughnessy, and Mae Jones made key contributions
to this report.
[End of section]
Footnotes:
[1] These estimates vary depending upon assumptions such as whether
the Army includes costs to deploy forces from the United States to
Europe for training to maintain a constant presence in Europe.
[2] GAO, Defense Infrastructure: Army Needs to Improve Its Facility
Planning Systems to Better Support Installations Experiencing
Significant Growth, [hyperlink,
http://www.gao.gov/products/GAO-10-602] (Washington, D.C.: June 24,
2010).
[3] The $1.3 billion consists of funding from five funding sources:
(1) Military Construction-the largest amount, comprised of $957
million; (2) Army Family Housing; (3) Sustainment, Restoration, and
Modernization; (4) Operations and Maintenance; and (5) Payment-in-
Kind. Payment-in-Kind is compensation received from a host nation in
the form of construction, repair, and base support projects instead of
residual value cash payment. (Residual Value is the negotiated
monetary or non monetary compensation DOD receives from host nations
for DOD-funded facilities or other capital improvements returned to
the host nation under a realignment action.)
[4] Beginning in fiscal year 2005 the Army changed its barracks
criteria for enlisted soldiers. The new criteria places two junior
soldiers (grades E-1 to E-4) in a suite composed of two private living
and/or sleeping rooms, with walk-in closets, connected by a shared
bathroom, and service area with sink, counter, refrigerator, and
either a stove or cook top and a microwave oven. Junior non-
commissioned officers (grades E-5 and E-6) occupy the entire suite,
providing them a living room, a bedroom, and a separate bathroom.
[5] In addition to closing Heidelberg, U.S. Army Europe also initiated
plans to close communities located in both Darmstadt and Mannheim,
Germany and the associated savings for closing these installations was
included in U.S. Army's Europe's calculated savings for the Wiesbaden
consolidation.
[6] S. Rep. No. 111-40, at 20-21 (2009). The Committee noted that
Ramstein Air Force Base could potentially accommodate the new
hospital, and directed the DOD to conduct a cost versus benefit
analysis of locating the replacement hospital at Landstuhl or Ramstein.
[7] Relevant regulations include U.S. Army Europe Regulation 220-5,
Peacetime Stationing (Sept. 4, 2002); Chairman of the Joint Chiefs of
Staff Instruction 2300.03C, Realignment of Overseas Sites (Dec. 26,
2007); Chairman of the Joint Chiefs of Staff Instruction 2300.02F,
Coordination of Overseas Force Structure Changes and Host-Nation
Notification (Sept. 30, 2009); and Department of Defense Instruction
4165.69, Realignment of DoD Sites Overseas (Apr. 6, 2005).
[8] This amount includes estimates provided by Installation Management
Command-Europe for family housing, base operations support, and
sustainment, restoration, modernization.
[9] Department of Defense Instruction 7041.3, Economic Analysis for
Decisionmaking (Nov. 7, 1995).
[10] Army Pamphlet 415-3, Economic Analysis: Description and Methods
(Aug. 10, 1992).
[11] See Statement of Admiral James G. Stavridis, Commander, United
States European Command, before the Senate Committee on Armed Services
(Mar. 9, 2010).
[12] GAO, Force Structure: Actions Needed to Improve DOD's Ability to
Manage, Assess, and Report on Global Defense Posture Initiatives,
[hyperlink, http://www.gao.gov/products/GAO-09-706R] (Washington,
D.C.: July 2, 2009).
[13] U.S. Army Audit Agency, Military Construction Requirements in
Europe, Audit Report: A-2006-0077-ALE (Wiesbaden, Germany: March 17,
2006).
[14] [hyperlink, http://www.gao.gov/products/GAO-10-602].
[End of section]
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