Military Base Realignments and Closures
Review of the Iowa and Milan Army Ammunition Plants Gao ID: GAO-11-488R April 1, 2011The 2005 Base Realignment and Closure (BRAC) Commission report recommended that the Army close Kansas and Lone Star Army Ammunition Plants and relocate certain munitions production-related functions from the Kansas and Lone Star Plants to Iowa and Milan (Tennessee) Army Ammunition Plants. As a result of the recommendations, the Army closed the Kansas and Lone Star Plants in 2009 and is in the process of relocating munitions production functions to the Iowa and Milan Plants. The 2005 BRAC recommendations must be completed by September 15, 2011. In addition, in February 2008, the U.S. Army Sustainment Command issued a request for proposals for operating and maintaining both the Iowa and Milan Plants. As part of the proposals, all offerors were to submit optimization plans for the optimum operation, maintenance, and utilization of the plants. In October 2008 the Army awarded a contract to American Ordnance for the operation and maintenance of the Iowa and Milan Plants at no direct cost to the government. Under the contract, American Ordnance will perform (among other things) security and maintenance for the facilities and will perform the actions identified in its Baseline Optimization Plan to optimize the facilities. In exchange for these services, American Ordnance is given the use of government equipment and facilities and will be able to use the facilities and equipment to manufacture ammunition, either for sale to the government or for commercial sale to other authorized parties. As part of its Baseline Optimization Plan, which is incorporated in the contract, American Ordnance intends to relocate certain munitions functions existing at the Milan Plant and consolidate them at the Iowa Plant. Due to the proprietary nature of American Ordnance's optimization plans, certain information has been omitted from this correspondence. This correspondence responds to an Explanatory Statement accompanying the Department of Defense Appropriations Act, 2010. That Statement directed GAO to conduct an audit on the amount and sources of the funds used in furtherance of the 2008 contract with American Ordnance to operate and transform the Iowa and Milan Army Ammunition Plants. In examining Iowa and Milan Ammunition Plants, our objectives were to determine the extent to which (1) the Army has implemented its plan for relocating munitions production-related functions to Iowa and Milan in accordance with the provisions of the 2005 BRAC Commission's recommendations, (2) the federal government is providing funding to implement either the Baseline or the Enhanced Optimization Plans included in the contract awarded to American Ordnance for operating and maintaining the Iowa and Milan Army Ammunition Plants, and (3) the plan to relocate functions between the plants, in accordance with the 2008 contract, has been implemented.
We found that the Army is implementing plans to relocate munitions production-related functions from Kansas and Lone Star Army Ammunition Plants to the Iowa and Milan Plants in accordance with the 2005 BRAC Commission's recommendations. According to senior Army officials, the Kansas and Lone Star Plants have been closed since 2009. In addition, certain munitions production-related functions have been moved to the Iowa and Milan Plants. Additional related actions, such as designing the layout for new production lines and installing equipment are in process at Iowa and Milan and according to documentation provided by Army plant officials all work is expected to be completed by the September 15, 2011 BRAC recommendation deadline. In regard to realigning production functions from Milan to Iowa as described in the 2008 contract, we found that activities to date have been funded by American Ordnance and that, in accordance with the no-cost provisions of the contract, Army contracting officials do not plan to provide funding to support the realignment. Furthermore, we found that the Army has not used and has no plans to use any BRAC funding to support American Ordnance's plans to shift munitions functions from Milan to Iowa. As to the extent that American Ordnance has begun to execute its plan for relocating functions to Iowa, we found that although new equipment is being installed at the Iowa Plant, American Ordnance will not be able to shift munitions production from Milan until required Environmental Assessments at the Iowa Plant and Milan are approved.
GAO-11-488R, Military Base Realignments and Closures: Review of the Iowa and Milan Army Ammunition Plants
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GAO-11-488R:
United States Government Accountability Office:
Washington, DC 20548:
April 1, 2011:
The Honorable Daniel K. Inouye:
Chairman:
The Honorable Thad Cochran:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
United States Senate:
The Honorable C.W. Bill Young:
Chairman:
The Honorable Norman D. Dicks:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives:
Subject: Military Base Realignments and Closures: Review of the Iowa
and Milan Army Ammunition Plants:
The 2005 Base Realignment and Closure (BRAC) Commission report
recommended that the Army close Kansas and Lone Star Army Ammunition
Plants and relocate certain munitions production-related functions
[Footnote 1] from the Kansas and Lone Star Plants to Iowa and Milan
(Tennessee) Army Ammunition Plants. As a result of the
recommendations, the Army closed the Kansas and Lone Star Plants in
2009 and is in the process of relocating munitions production
functions to the Iowa and Milan Plants. The 2005 BRAC recommendations
must be completed by September 15, 2011.
In addition, in February 2008, the U.S. Army Sustainment Command
issued a request for proposals for operating and maintaining both the
Iowa and Milan Plants. As part of the proposals, all offerors were to
submit optimization plans for the optimum operation, maintenance, and
utilization of the plants. In October 2008 the Army awarded a contract
to American Ordnance for the operation and maintenance of the Iowa and
Milan Plants at no direct cost to the government. Under the contract,
American Ordnance will perform (among other things) security and
maintenance for the facilities and will perform the actions identified
in its Baseline Optimization Plan to optimize the facilities.[Footnote
2] In exchange for these services, American Ordnance is given the use
of government equipment and facilities and will be able to use the
facilities and equipment to manufacture ammunition, either for sale to
the government[Footnote 3] or for commercial sale to other authorized
parties. As part of its Baseline Optimization Plan, which is
incorporated in the contract, American Ordnance intends to relocate
certain munitions functions existing at the Milan Plant and
consolidate them at the Iowa Plant. Due to the proprietary nature of
American Ordnance's optimization plans, certain information has been
omitted from this correspondence.
This correspondence responds to an Explanatory Statement[Footnote 4]
accompanying the Department of Defense Appropriations Act, 2010.
[Footnote 5] That Statement directed GAO to conduct an audit on the
amount and sources of the funds used in furtherance of the 2008
contract with American Ordnance to operate and transform the Iowa and
Milan Army Ammunition Plants. In examining Iowa and Milan Ammunition
Plants, our objectives were to determine the extent to which (1) the
Army has implemented its plan for relocating munitions production-
related functions to Iowa and Milan in accordance with the provisions
of the 2005 BRAC Commission's recommendations, (2) the federal
government is providing funding to implement either the Baseline or
the Enhanced Optimization Plans included in the contract awarded to
American Ordnance for operating and maintaining the Iowa and Milan
Army Ammunition Plants, and (3) the plan to relocate functions between
the plants, in accordance with the 2008 contract, has been implemented.
Scope and Methodology:
To conduct this work, we analyzed the status of implementing the BRAC
Commission's recommendations and compared the Commission's
recommendations for the plants with Army and contractor documentation.
We reviewed and analyzed the Army's plans and budget documents for
implementing the recommendations and interviewed BRAC officials at
various Department of the Army offices to determine the status of
implementation. We examined the Army's and American Ordnance's plans
for the plants and the terms of the contract awarded to American
Ordnance in 2008 to operate and maintain the plants. We reviewed
documents and conducted interviews with Army contracting officials to
determine whether the Army plans to fund portions of American
Ordnance's plan that relate to moving and consolidating production. To
determine the amounts and sources of the funds for the move, we
reviewed Department of Defense and Army financial documents and
documents related to American Ordnance's planned investments in the
plants. In addition, we conducted site visits and held meetings at the
Iowa and Milan Plants to ascertain the status of implementing the BRAC
Commission's recommendations and the contract awarded to American
Ordnance. Enclosure I contains briefing slides that provide additional
details regarding our scope and methodology and findings; see slides 9
through 11 for further details on our scope and methodology.
We conducted this performance audit from July 2010 to March 2011 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:
We found that the Army is implementing plans to relocate munitions
production-related functions from Kansas and Lone Star Army Ammunition
Plants to the Iowa and Milan Plants in accordance with the 2005 BRAC
Commission's recommendations. According to senior Army officials, the
Kansas and Lone Star Plants have been closed since 2009. In addition,
certain munitions production-related functions have been moved to the
Iowa and Milan Plants. Additional related actions, such as designing
the layout for new production lines and installing equipment are in
process at Iowa and Milan and according to documentation provided by
Army plant officials all work is expected to be completed by the
September 15, 2011 BRAC recommendation deadline.
In regard to realigning production functions from Milan to Iowa as
described in the 2008 contract, we found that activities to date have
been funded by American Ordnance and that, in accordance with the no-
cost provisions of the contract, Army contracting officials do not
plan to provide funding to support the realignment. Furthermore, we
found that the Army has not used and has no plans to use any BRAC
funding to support American Ordnance's plans to shift munitions
functions from Milan to Iowa.
As to the extent that American Ordnance has begun to execute its plan
for relocating functions to Iowa, we found that although new equipment
is being installed at the Iowa Plant, American Ordnance will not be
able to shift munitions production from Milan until required
Environmental Assessments at the Iowa Plant and Milan are approved.
For additional information on the results of our work, see slides 1
through 20 of enclosure I.
Agency Comments and Our Evaluation:
In written comments on a draft of this correspondence, the Department
of Defense concurred with the summary and findings in objectives one
and two and provided technical comments to the summary and findings in
objective three. We incorporated DOD's technical comments in this
correspondence as appropriate. DOD's written comments are reprinted in
enclosure II.
We are sending copies of this correspondence to the appropriate
congressional committees. We are also sending copies to the Secretary
of Defense, Secretary of the Army, and Director, Office of Management
and Budget. This correspondence will also be available at no charge on
our Web site at [hyperlink, http://www.gao.gov]. Should you or your
staff have questions concerning this correspondence, please contact me
at (202) 512-4523 or leporeb@gao.gov. Contact points for our Offices
of Congressional Relations and Public Affairs may be found on the last
page of this correspondence. Key contributors to this correspondence
were Mark J. Wielgoszynski, Assistant Director; Tim Burke, Michael
Willems, Katherine Killebrew, Barbara Gannon, Charles Perdue, and Erik
Wilkins-McKee.
Signed by:
Brian J. Lepore:
Director:
Defense Capabilities and Management Team:
[End of section]
Enclosure I: Briefing Slides:
Military Base Realignments and Closures: Review of the Iowa and Milan
Army Ammunition Plants:
Briefing for Congressional Defense Subcommittees on Appropriations:
Contents:
* Introduction;
* Congressional Direction;
* Researchable Objectives;
* Scope and Methodology;
* Summary and Findings;
* Objective 1: Implementing BRAC at Iowa and Milan;
* Objective 2: Funding the Relocation of Functions From Milan to Iowa;
* Objective 3: Executing the Relocation Plan;
* Agency Comments and Our Evaluation;
* Related GAO Products.
Introduction:
The Army is in the process of relocating munitions production-related
functions to Iowa and Milan (Tennessee) Army Ammunition Plants as the
result of two recommendations of the 2005 Base Closure and Realignment
(BRAC)
Commission's report and in accordance with the provisions of the 2008
contract awarded to American Ordnance for operating and maintaining
these two plants.
* The 2005 BRAC Commission's recommended certain munitions production-
related functions to be moved to Iowa and Milan as the result of other
plant closures.
* Other production functions already existing in Milan are being
relocated to the Iowa Plant in accordance with the Army's 2008
contract with American Ordnance.
* Local and state officials in Tennessee are concerned whether the
relocations, outlined in the 2008 contract, violate the BRAC
Commission's recommendations and/or whether BRAC or other DOD funds
are being used by American Ordnance to execute the relocation of
functions outlined in the contract.
Introduction - BRAC 2005:
As a result of BRAC Commission recommendations, the Army has closed
Kansas and Lone Star Army Ammunition Plants and moved certain
munitions production-related functions to Iowa and Milan Army
Ammunition Plants.
The Iowa Plant gained 105- and 155-millimeter high explosive artillery
and missile warhead functions from the Kansas Army Ammunition Plant.
It also acquired detonators, relays, and delays functions from the
Lone Star Army Ammunition Plant.
The Milan Plant gained 155-millimeter Improved Conventional Munitions
artillery and 60-, 81-, and 120-millimeter mortar functions from the
Kansas Army Ammunition Plant. Milan also gained 105- and 155-
millimeter Improved Conventional Munitions artillery, Multiple Launch
Rocket System, hand grenade, and 60- and 81-millimeter mortar
functions from the Lone Star Army Ammunition Plant.
According to BRAC documentation neither Iowa nor Milan were projected
to gain any jobs as a result of these closures.
Introduction - 2008 American Ordnance Contract:
In February 2008, the U.S. Army Joint Munitions Command issued a
request for proposals for operating and maintaining both the Iowa and
Milan Plants. As part of their proposals, all offerors were to submit
"optimization plans" for the optimum operation, maintenance, and
utilization of the plants. American Ordnance submitted a proposal that
included two Optimization Plans: 1) a Baseline Plan consisting of
required actions funded by American Ordnance; and 2) an Enhanced Plan
consisting of optional projects subject to the availability of
government funding.
In October 2008, American Ordnance and the Army signed a contract with
an initial period of performance of 10 years[Footnote 6] for the
operation and maintenance of the Iowa and Milan Plants at no direct
cost to the government. Under the contract, American Ordnance will
perform (among other things) security and maintenance for the
facilities”costs that in the absence of the contract would have been
borne by the government. In addition, American Ordnance will perform
the actions identified in the Baseline Optimization Plan to optimize
the facilities as part of its own investment in the plants.
Introduction - 2008 American Ordnance Contract:
In exchange for these services, American Ordnance is given the use of
government equipment and facilities. American Ordnance will be able to
use the facilities and equipment to manufacture ammunition, either for
sale to the government or for commercial sale to other authorized
parties.
According to American Ordnance's baseline optimization plan, which is
incorporated by reference in the awarded contract, it will relocate
munitions and subassemblies currently produced at the Milan Plant,
such as 40-millimeter grenades, M-112 Demolition Block, Mine Clearing
Linear Charge, Spider, and 60-and 81-millimeter mortars to the Iowa
Plant.
Congressional Direction:
Section 8124 of the Department of Defense Appropriations Act, 2010
[Footnote 7] indicated that an explanatory statement printed in the
Congressional Record would have the same effect as a joint explanatory
statement of a committee of conference. That explanatory statement,
among other things, directed GAO to conduct an audit on the amount and
sources of funds used in furtherance of the American Ordnance contract
to operate and transform the Iowa and the Milan Army Ammunition Plants.
Researchable Objectives:
* To what extent has the Army implemented its plan for relocating
munitions production-related functions to Iowa and Milan Army
Ammunition Plants in accordance with the provisions of the 2005 Base
Closure and Realignment Commission's recommendations?
* To what extent is the federal government providing funding to
implement either the Baseline or the Enhanced Optimization Plans
included in the contract awarded to American Ordnance for operating
and maintaining the Iowa and Milan Army Ammunition Plants?
* To what extent has the plan to relocate functions between the Iowa
and Milan plants in accordance with the 2008 contract been implemented?
Scope and Methodology: Objective 1 - Implementing BRAC at Iowa and
Milan:
To conduct this work, we:
* analyzed the status of implementing the BRAC Commission's
recommendations and compared the Commission's recommendations for the
plants with Army and contractor documentation.
* reviewed the 2005 BRAC Commission report to document recommendations
related to both the Iowa and Milan Plants.
* reviewed and analyzed the Army's plans and budget documents for
implementing the recommendations.
* interviewed BRAC officials from the office of the Army Chief of
Staff for Installation Management, Army Materiel Command, and Joint
Munitions Command to determine the status of BRAC implementation at
the plants.
* conducted site visits and held meetings at the Iowa and Milan Plants
to physically ascertain the status of implementing the BRAC
Commission's recommendations.
Scope and Methodology: Objective 2 - Funding the Relocation of Functions
from Milan to Iowa:
* Our work included reviewing estimates from DOD and Army budgets for
Fiscal Year 2008”-the year the contract with American Ordnance was
awarded”-through Fiscal Year 2011.
* To determine the amounts and sources of funding for implementing the
contract, we reviewed the Request for Proposals issued by the U.S.
Army's Joint Munitions Command, American Ordnance's proposal in
response to that request, the awarded contract, and the Baseline and
Enhanced Optimization Plans incorporated by reference in the contract.
* To determine whether government funds are being used for the
relocation of functions from Milan to Iowa, we reviewed DOD and Army
year-to-year financial documents, BRAC budget documents, plant
operational budgets, and documentation for ongoing and planned
projects at both plants. We also interviewed officials at the Office
of the Assistant Chief of Staff for Installation Management, Army
Materiel Command, Joint Munitions Command, Army officials at the Iowa
and Milan Plants, and representatives from American Ordnance.
Scope and Methodology: Objective 3 - Executing the Relocation Plan:
* Our work included a review and analysis of documents from 2008 to
present identifying Army and American Ordnance completed and planned
actions to implement the relocation of functions from Milan to Iowa.
* To determine the extent of implementation of the plan outlined in
the contract, we reviewed the contract and analyzed briefings and
evidence from site visits to both Iowa and Milan and conducted
interviews with Army and American Ordnance plant officials to identify
actions taken and planned.
* We conducted this performance audit from July 2010 to March 2011 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 the
evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
Summary and Findings:
Objective 1: Implementing BRAC at Iowa and Milan:
According to senior Army officials, the Kansas and Lone Star Army
Ammunition Plants have been closed in accordance with the 2005 BRAC
Commission recommendations. Army documents also show that, in
accordance with the BRAC Commission recommendations, certain munitions
production-related functions have been moved to the Iowa and Milan
Ammunition Plants. Additional related actions are in process at Iowa
and Milan and Army plant officials expect them to be completed by the
September 15, 2011 BRAC recommendation deadline.
Objective 2: Funding the Relocation of Functions From Milan to Iowa:
In October 2008, American Ordnance signed a no-cost to the government
contract with the Army to operate and maintain both the Iowa and Milan
Army Ammunition Plants. The contract included a baseline optimization
plan to, among other things, relocate munitions and subassemblies
currently produced at the Milan Plant to Iowa. In regard to funding
the relocation, we found that in accordance with the provisions of the
contract, relocation activities to date have been funded solely by
American Ordnance. Additionally, we found no evidence that the Army
plans to provide funding, BRAC or otherwise, to support American
Ordnance's ongoing relocation plans at the Iowa and Milan Plants.
Objective 3: Executing the Relocation Plan:
Prior to relocating functions from Milan to Iowa in accordance with
the provisions of the 2008 contract, American Ordnance needs to
prepare environmental paperwork to support the Army's environmental
considerations under the National Environmental Policy Act (NEPA),
including Environmental Assessments at both locations. We found that
although American Ordnance has begun executing its plan for the Iowa
Plant it will not be able to shift production until required NEPA
paperwork at the Iowa Plant is completed and approved.
Objective 1 - BRAC Implementation: Army is Implementing Plans to
Relocate Ammunition Functions to Iowa and Milan Army Ammunition Plants
in Accordance With BRAC:
According to senior Army officials, actions to close Kansas and Lone
Star Ammunition Plants and move certain munitions functions in
accordance with the BRAC Commission's recommendations were completed
in July and September 2009, respectively.
Additional actions related to the recommendations, such as designing
the layout for new lines and installing equipment at the Iowa and
Milan Plants, are in process and are expected to be complete by the
September 15, 2011, BRAC deadline, according to Army plant officials.
Figure 1 shows the status at Iowa and Milan for relocating the
functions in accordance with BRAC.
According to Army financial documents, DOD's cost to implement BRAC
recommendations at Iowa will be $17.9 million and at Milan $16.7
million.
Figure 1: Completion Dates for Relocating BRAC Functions:
[Refer to PDF for image: illustrated table[
Iowa Army Ammunition Plant:
Mines: August 2011;
105 and 155MM High Explosive: May 2011;
Detonators/relays/delays: September 2011;
Missile warheads: Completed.
Milan Army Ammunition Plant:
105 and 155MM Improved Conventional Munition: July 2011;
Multiple launch rocket system: July 2011;
60, 81 and 120MM mortars: September 2011;
M67 hand grenades: Completed.
Source: GAO Analysis.
[End of figure]
Objective 2 - Funding the Relocation of Functions from Milan to Iowa:
American Ordnance Signed a 10-Year No-Cost Contract With the Army to
Operate and Maintain the Iowa and Milan Army Ammunition Plants:
American Ordnance's 2008 contract to operate and maintain both Milan
and Iowa Army Ammunition Plants included two optimization plans: a
baseline optimization plan describing required actions funded by
American Ordnance, and an enhanced optimization plan that included
optional actions that could be undertaken if additional government
funding were provided.
* Actions described in the Baseline Optimization Plan are to be
performed at no direct cost to the government. All costs associated
with the execution of this plan are included in American Ordnance's
estimated corporate investment and any financial risk due to delays in
achieving the projected schedule for relocation resides with American
Ordnance.
* The second plan, known as the Enhanced Optimization Plan, consists
of optional projects that American Ordnance would like to initiate if
the Army elects to provide funding.
- Agreement to fund projects listed in the Enhanced Optimization Plan
could, according to estimates, cost between $45 and $55 million.
- To date, according to Army contact officials there are no plans to
fund any of the projects listed in the Enhanced Optimization Plan.
Objective 3 - Executing the Relocation Plan: American Ordnance is
executing its plan for relocating functions, but environmental review
is pending:
American Ordnance drafted a proposed Environmental Assessment at Milan
in June 2010. The assessment was released for public comment and
forwarded to Joint Munitions Command/Army Materiel Command for review.
Final processing by the Army is still pending.
A similar Environmental Assessment to determine whether an Environmental
Impact Statement is needed must be completed and approved by the Army
for the Iowa Plant prior to the relocation of production functions
from Milan to Iowa.
American Ordnance has begun installing production equipment at the
Iowa Plant. Contractually, the entire cost of relocating this function
to Iowa is the responsibility of American Ordnance. However,
production in Iowa cannot begin until the required environmental
reviews have been completed and approved.
Agency Comments and Our Evaluation:
In written comments on a draft of this correspondence, the Department
of Defense concurred with the summary and findings in objectives one
and two and provided technical comments to the summary and findings in
objective three. We incorporated DOD's technical comments in this
correspondence as appropriate. DOD's written comments are reprinted in
enclosure II.
Related GAO Products:
Military Base Realignments and Closures: DOD is Taking Steps to Mitigate
Challenges but Is Not Fully Reporting Some Additional Costs. GAO-10-
725R. Washington, D.C.: July 21, 2010.
Defense Infrastructure: Army Needs to Improve Its Facility Planning
Systems to Better Support Installations Experiencing Significant
Growth. GA0-10-602. Washington, D.C.: June 24, 2010.
Military Base Realignments and Closures: Estimated Costs Have
Increased While Savings Estimates Have Decreased Since Fiscal Year
2009. GAO-10-98R. Washington, D.C.: November 13, 2009.
Military Base Realignments and Closures: DOD Needs to Update Savings
Estimates and Continue to Address Challenges in Consolidating Supply-
Related Functions at Depot Maintenance Locations. GAO-09-703.
Washington, D.C.: July 9, 2009.
Military Base Realignments and Closures: DOD Faces Challenges in
Implementing Recommendations on Time and Is Not Consistently Updating
Savings Estimates. GA0-09-217. Washington, D.C.: January 30, 2009.
Military Base Realignments and Closures: Higher Costs and Lower Savings
Projected for Implementing Two Key Supply-Related BRAC Recommendations.
GAO-08-315. Washington, D.C.: March 5, 2008.
Military Base Realignments and Closures: Estimated Costs Have
Increased and Estimated Savings Have Decreased. 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. GA0-08-159. Washington, D.C.:
December 11, 2007.
Military Base Realignments and Closures: Transfer of Supply, Storage,
and Distribution Functions from Military Services to Defense Logistics
Agency. GAO-08-121R. Washington, D.C.: October 26, 2007.
[End of section]
Enclosure II: Comments from the Department of Defense:
Department Of The Army:
Office Of The Assistant Secretary of The Army:
Acquisition, Logistics And Technology:
103 Army Pentagon
Washington, DC 20310-01133:
Mr. Brian J. Lepore:
Director, Defense Capabilities and Management:
U.S. Government Accountability Office:
441 G Street, NW:
Washington. D.C. 20548:
Dear Mr. Lepore:
This is the Department of Defense (DoD) response to the Government
Accountability Office (GAO) draft report, GAO-11-349R, "Military Base
Realignment and Closures" review of the Iowa and Milan Army Ammunition
Plants, February 24, 2011 (GAO Code 351496).
Responses to the technical information in the report are enclosed.
Enclosure 1 is the DoD comment to the GAO technical information.
Enclosure 2 is a letter from the U.S. Fish and Wildlife Service
supporting the comments. The DoD concurs with the summary and findings
in objectives one and two and has technical comments with the summary
and findings in objective three. Specifically, the GAO Report states
that the Army has concluded that an Environmental Impact Statement
(EIS) is required for the movement of production functions to the Iowa
Army Ammunition Plant (IAAAP). In fact, the Army is currently in the
process of conducting an Environmental Analysis and has not yet drawn
a conclusion as to whether an EIS will be required for the movement of
production to the IAAAP.
Due to the proprietary nature of the information contained in the
report, the DoD requests the GAO add the following marking to the
report: "For Official Use Only. This document contains information
exempt from disclosure under the Freedom of Information Act. The
Freedom of Information Act, Title 5 United States Code Section
552, Exemption 4, applies as marked (see 5400.7-R)."
Thank you for the opportunity to respond to your comments.
Sincerely,
Signed by:
Malcolm R. O'Neill
Assistant Secretary of the Army (Acquisition, Logistics and
Technology):
Enclosures:
[End of section]
Footnotes:
[1] The 2005 Base Closure and Realignment and Commission recommended
the movement of certain functions, such as production, storage, and
demilitarization. This correspondence only addresses the production
functions that were directed to be relocated to the Iowa and Milan
Plants.
[2] A second optimization plan, known as the Enhanced Optimization
Plan, is also part of the contract and consists of optional projects
that the government could elect to initiate by providing additional
funding.
[3] In a separate contract awarded in conjunction with the facility
contract, the Army agreed to purchase certain kinds of ammunition from
American Ordnance over a five-year period.
[4] Section 8124 of the Department of Defense Appropriations Act,
2010, indicated that the explanatory statement regarding that Act
printed in the House of Representatives section of the Congressional
Record on or about December 16, 2010, would have the same effect with
respect to the allocation of funds and implementation of that Act as
if it were a joint explanatory statement of a committee of conference.
Pub. L. No. 111-118, § 8124 (2009).
[5] Pub. L. No. 111-118.
[6] The contract was for a five year base period of performance with
one five year option exercised at the time of contract award and with
the possibility of three 5-year award terms that could extend the
contract term to a total of 25 years.
[7] Pub. L. No. 111-118 (2009).
[End of section]
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