Defense Management
Comprehensive Cost Information and Analysis of Alternatives Needed to Assess Military Posture in Asia Gao ID: GAO-11-316 May 25, 2011The Department of Defense (DOD) is currently conducting the largest transformation of military posture in the Pacific region since the end of World War II. Transforming posture in Korea, Japan, and Guam will affect tens of thousands of military personnel and their families and require the construction of hundreds of new facilities and more than 3,500 housing units. GAO was asked to examine: (1) initiatives in Korea, their cost implications, and the basis for "tour normalization;" (2) initiatives in Japan and Guam and their cost implications; and (3) the extent to which DOD estimates the total cost of posture and addresses affordability issues. GAO assessed DOD policies and procedures, interviewed relevant DOD and State Department officials, and analyzed cost data from the military services
DOD is transforming the facilities and infrastructure that support its posture in Asia without the benefit of comprehensive cost information or an analysis of alternatives that are essential to conducting affordability analysis. In South Korea, DOD is transforming its military posture through a series of four interrelated posture initiatives. GAO obtained DOD cost estimates that total $17.6 billion through 2020 for initiatives in South Korea, but DOD cost estimates are incomplete. One initiative, to extend the tour length of military service members and move thousands of dependents to South Korea--called "tour normalization"--could cost DOD $5 billion by 2020 and $22 billion or more through 2050, but this initiative was not supported by a business case analysis that would have considered alternative courses of action and their associated costs and benefits. As a result, DOD is unable to demonstrate that tour normalization is the most cost-effective approach to meeting its strategic objectives. This omission raises concerns about the investments being made in a $13 billion construction program at Camp Humphreys, where tour normalization is largely being implemented. DOD is also transforming its military posture in Japan, Okinawa, and Guam but has not estimated the total costs associated with these initiatives. Based on an October 2006 Government of Japan budget estimate study for realignment costs and limited cost information developed by DOD, GAO identified approximately $29.1 billion--primarily just construction costs--that is anticipated to be shared by the United States and Japan to implement these initiatives. DOD officials stated total cost estimates for its initiatives were not available because of the significant uncertainty surrounding initiativeimplementation schedules. The Senate Appropriations Committee recently directed DOD to provide annual status updates on posture initiatives in Korea, Japan, Guam, and the Northern Mariana Islands. If DOD is fully responsive to the Committee's reporting direction, these updates should provide needed visibility into initiative cost and funding requirements. DOD's posture planning guidance does not require the U.S. Pacific Command to include comprehensive cost data in its theater posture plan, and as a result, DOD lacks critical information that could be used by decision makers as they deliberate on posture requirements and affordability. GAO analysis shows that of the approximately $24.6 billion obligated by the military services to support installations in Asia from 2006 through 2010, approximately $18.7 billion (76 percent) was for operation and maintenance of these facilities. The services estimate that operation and maintenance costs would be about $2.9 billion per year through 2015. However, this estimate appears to be understated, and DOD's initiatives may significantly increase those costs. For example, DOD has yet to estimate costs associated with furnishing and equipping approximately 321 new buildings and 578 housing units in Okinawa. Without comprehensive and routine reporting of posture costs, DOD decision makers will not have the full fiscal context in which to develop posture plans and requirements, and congressional committees will lack a full understanding of the potential funding requirements associated with DOD budget requests. GAO recommends that DOD develop a business case analysis for its strategic objectives related to tour normalization in Korea, limit investments at Camp Humphreys until the business case is completed, and develop comprehensive cost estimates of posture in the Pacific. DOD generally agreed with GAO's recommendations, but it did not specify what corrective actions it would take or time frames for completion.
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: Brian J. Lepore Team: Government Accountability Office: Defense Capabilities and Management Phone: (202) 512-4523GAO-11-316, Defense Management: Comprehensive Cost Information and Analysis of Alternatives Needed to Assess Military Posture in Asia
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Report to the Subcommittee on Military Construction, Veterans Affairs,
and Related Agencies, Committee on Appropriations, U.S. Senate:
May 2011:
Defense Management:
Comprehensive Cost Information and Analysis of Alternatives Needed to
Assess Military Posture in Asia:
Defense Management:
GAO-11-316:
GAO Highlights:
Highlights of GAO-11-316, a report to the Subcommittee on Military
Construction, Veterans Affairs, and Related Agencies, Committee on
Appropriations, U.S. Senate
Why GAO Did This Study:
The Department of Defense (DOD) is currently conducting the largest
transformation of military posture in the Pacific region since the end
of World War II. Transforming posture in Korea, Japan, and Guam will
affect tens of thousands of military personnel and their families and
require the construction of hundreds of new facilities and more than
3,500 housing units. GAO was asked to examine: (1) initiatives in
Korea, their cost implications, and the basis for ’tour normalization;“
(2) initiatives in Japan and Guam and their cost implications; and (3)
the extent to which DOD estimates the total cost of posture and
addresses affordability issues. GAO assessed DOD policies and
procedures, interviewed relevant DOD and State Department officials,
and analyzed cost data from the military services.
What GAO Found:
DOD is transforming the facilities and infrastructure that support its
posture in Asia without the benefit of comprehensive cost information
or an analysis of alternatives that are essential to conducting
affordability analysis. In South Korea, DOD is transforming its
military posture through a series of four interrelated posture
initiatives. GAO obtained DOD cost estimates that total $17.6 billion
through 2020 for initiatives in South Korea, but DOD cost estimates are
incomplete. One initiative, to extend the tour length of military
service members and move thousands of dependents to South Korea”called ’
tour normalization“”could cost DOD $5 billion by 2020 and $22 billion
or more through 2050, but this initiative was not supported by a
business case analysis that would have considered alternative courses
of action and their associated costs and benefits. As a result, DOD is
unable to demonstrate that tour normalization is the most cost-
effective approach to meeting its strategic objectives. This omission
raises concerns about the investments being made in a $13 billion
construction program at Camp Humphreys, where tour normalization is
largely being implemented. DOD is also transforming its military
posture in Japan, Okinawa, and Guam but has not estimated the total
costs associated with these initiatives. Based on an October 2006
Government of Japan budget estimate study for realignment costs and
limited cost information developed by DOD, GAO identified approximately
$29.1 billion”primarily just construction costs”that is anticipated to
be shared by the United States and Japan to implement these
initiatives. DOD officials stated total cost estimates for its
initiatives were not available because of the significant uncertainty
surrounding initiative- implementation schedules. The Senate
Appropriations Committee recently directed DOD to provide annual status
updates on posture initiatives in Korea, Japan, Guam, and the Northern
Mariana Islands. If DOD is fully responsive to the Committee‘s
reporting direction, these updates should provide needed visibility
into initiative cost and funding requirements.
DOD‘s posture planning guidance does not require the U.S. Pacific
Command to include comprehensive cost data in its theater posture plan,
and as a result, DOD lacks critical information that could be used by
decision makers as they deliberate on posture requirements and
affordability. GAO analysis shows that of the approximately $24.6
billion obligated by the military services to support installations in
Asia from 2006 through 2010, approximately $18.7 billion (76 percent)
was for operation and maintenance of these facilities. The services
estimate that operation and maintenance costs would be about $2.9
billion per year through 2015. However, this estimate appears to be
understated, and DOD‘s initiatives may significantly increase those
costs. For example, DOD has yet to estimate costs associated with
furnishing and equipping approximately 321 new buildings and 578
housing units in Okinawa. Without comprehensive and routine reporting
of posture costs, DOD decision makers will not have the full fiscal
context in which to develop posture plans and requirements, and
congressional committees will lack a full understanding of the
potential funding requirements associated with DOD budget requests.
What GAO Recommends:
GAO recommends that DOD develop a business case analysis for its
strategic objectives related to tour normalization in Korea, limit
investments at Camp Humphreys until the business case is completed, and
develop comprehensive cost estimates of posture in the Pacific. DOD
generally agreed with GAO‘s recommendations, but it did not specify
what corrective actions it would take or time frames for completion.
View [http://www.gao.gov/products/GAO-11-316] or key components.
For more information, contact Brian J. Lepore at (202) 512-4523 or
leporeb@gao.gov.
[End of section]
United States Government Accountability Office:
GAO:
Contents:
Letter:
Background:
DOD Has Not Fully Estimated the Cost of Posture Initiatives in South
Korea or Provided an Analysis of Alternatives to Tour Normalization:
DOD Has Not Estimated the Cost of Posture Initiatives in Japan and
Guam:
DOD Lacks Comprehensive Cost Information Needed for Affordability
Analysis:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Committee Reporting Direction Contained in Senate Report
111-226 (S. Rep. No. 111-226, at 13-15 (2010)):
Appendix III: Additional PACOM Cost and Funding Data:
Appendix IV: Comments from the Department of Defense:
Appendix V: GAO Contact and Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: Summary of Estimated Costs of PACOM Posture Initiatives in
South Korea Identified as of January 2011 (Billions of Dollars):
Table 2: Summary of Estimated Costs of PACOM Posture Initiatives in
Japan and Guam Identified as of January 2011 (Billions of Dollars):
Figures:
Figure 1: Geographic Combatant Commands and Areas of Responsibility:
Figure 2: National and DOD Guidance, Strategies, and Plans Related to
Global Defense Posture:
Figure 3: South Korea Posture Transformation and Population Figures:
Figure 4: Planned Changes to DOD Population in South Korea 2009 through
2020:
Figure 5: Camp Humphreys Planned Expansion and Ongoing Land Reclamation
and Construction, as of April 2010:
Figure 6: Key Locations of Realignment Initiatives in Japan:
Figure 7: Relocation of U.S. Military Posture in Okinawa:
Figure 8: Camp Schwab, Okinawa, as of April 2010:
Figure 9: Locations of Key Posture Initiatives on Guam:
Figure 10: Service Obligations for DOD Installations in PACOM's Area of
Responsibility (Fiscal Years 2006-2010):
Figure 11: Japan Host-Nation Contributions Related to U.S. Military
Defense Posture in Japan (Fiscal Years 1978-2010):
Figure 12: Obligations by Appropriation Category Related to DOD
Facilities and Infrastructure: Fiscal Years 2006-2010 (Then-Year
Dollars), PACOM Area of Responsibility:
Abbreviations:
DOD: Department of Defense:
PACOM: Pacific Command:
USFJ: United States Forces Japan:
USFK: United States Forces Korea:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
May 25, 2011:
The Honorable Tim Johnson:
Chairman:
The Honorable Mark Kirk:
Ranking Member:
Subcommittee on Military Construction, Veterans Affairs, and Related
Agencies:
Committee on Appropriations:
United States Senate:
According to the 2010 Quadrennial Defense Review approximately 400,000
U.S. military personnel are forward-stationed or rotationally deployed
around the world on any given day--including those involved in
operations in Afghanistan and Iraq. In recent years, the Department of
Defense (DOD) has embarked on the largest transformation of U.S.
military posture in the Pacific region since the end of World War II.
As of March 2011, DOD posture initiatives planned for South Korea,
Japan, and Guam will affect tens of thousands of forward-deployed
military personnel and their dependents, and require the construction
of hundreds of new facilities and more than 3,500 housing units.
According to DOD estimates, the DOD population in South Korea may
increase from approximately 56,000 to as much as 84,000, and the DOD
population in Guam may increase from 15,000 to 39,000 by as early as
2020. The cost of these initiatives has yet to be fully estimated, but
billions of dollars in combined investments by host nations and the
U.S. government have already been identified as necessary to implement
these initiatives.
These posture transformation initiatives are being conducted in an era
of increasing budgetary pressures and competition for scarce resources.
In August 2010, the Secretary of Defense called on military leaders to
consider the affordability of programs in developing future plans, with
particular emphasis on reducing overhead costs. The Secretary of
Defense sought a $100-billion reduction in overhead costs over the next
5 years, froze the size of combatant commands, and required "zero-
based" reviews of their staffing and organizations.[Footnote 1] In
January 2011, the Secretary of Defense announced he had approved the
elimination of more than 100 general officer and flag officer positions
and the elimination or downgrading of nearly 200 civilian Senior
Executive Service or equivalent positions.
In addition, we have recently reported on the need to address the long-
term sustainability of the federal government's fiscal
policies.[Footnote 2] Since the end of the recent recession, the gross
domestic product has grown slowly and unemployment has remained at a
high level. While the economy is still recovering and in need of
careful attention, there is widespread agreement on the need to look
not only at the near term but also at steps that begin to change the
long-term fiscal path as soon as possible without slowing the recovery.
In our report on opportunities to reduce potential duplication in
government programs, save tax dollars, and enhance revenue, we observed
that having U.S. troops stationed overseas provides benefits, such as
deterring aggression against U.S. allies, but permanent stationing
comes with significant costs.[Footnote 3] We emphasized the need for
DOD to assess costs and benefits of overseas military presence options
before committing to costly personnel realignments and construction
plans.
The 2010 Quadrennial Defense Review highlights the importance of
periodically assessing and tailoring global defense posture in light of
continued globalization and enduring transnational threats. In the
Quadrennial Defense Review, DOD indicates that defense posture will
continuously adapt to the dynamic world environment and that ongoing
assessments of national interests, military requirements, and the
strategic environment should guide U.S. global defense-posture
planning. In addition, DOD identifies global posture as consisting of:
(1) forces (forward-stationed and rotationally deployed), capabilities,
and equipment; (2) overseas infrastructure and facilities; and (3)
international agreements with allies and key partners that may address
issues such as access, transit, and the framework under which U.S.
military personnel operate in a foreign country. This report focuses on
one of these three elements--DOD's network of overseas infrastructure
and facilities--which can vary widely in size and complexity from
location to location.
Given the cost of DOD's efforts to realign its global posture and the
criticality to national security of the U.S. force structure and
infrastructure abroad, you asked us to examine major global posture
realignment initiatives in Europe, Africa, and Asia. This report,
prepared prior to the earthquake and tsunami that struck Japan on March
11, 2011, addresses the cost and affordability of the department's
efforts to transform its defense posture in Asia. We examine: (1) the
magnitude of cost associated with the major global defense posture
initiatives ongoing and planned on the Korean peninsula and the process
by which the decision was made to move forward with the largest of
these initiatives--"tour normalization;" (2) the magnitude of cost
associated with the major global defense-posture initiatives ongoing
and planned in Japan and Guam; and (3) the extent to which DOD develops
comprehensive estimates of the cost of defense posture in Asia to
inform the decision-making process.
This report is one of a series of GAO reports on DOD's global defense-
posture initiatives. Since 2006, we have reported on issues related to
DOD's overall global-posture strategy and management practices, the
military buildup on Guam, the transformation of United States Army
posture in Europe, and the establishment of the United States Africa
Command.[Footnote 4] Those reports make a number of recommendations to
improve DOD's management of these efforts and the information about
them that DOD makes available to the executive branch and congressional
committees. Most recently, in February 2011, we reported on DOD
military posture in Europe, highlighting the need for additional cost
information and methods for evaluating posture alternatives in that
region.[Footnote 5] In many cases, DOD has agreed with our
recommendations and has taken actions to implement them.
For each of our objectives, we reviewed relevant policies and
procedures governing the management and supervision of global defense
posture, and collected information by interviewing and communicating
with officials in the Office of the Secretary of Defense, the Air
Force, the Army, the Navy, the Marine Corps, the Joint Staff, United
States Pacific Command (PACOM), and the State Department. We conducted
site visits at PACOM and its service components in Hawaii; United
States Forces Japan (USFJ), its service components, and the U.S.
Embassy in Tokyo, Japan, and the U.S. Consulate on Okinawa; United
States Forces Korea (USFK), its service components, and the U.S.
Embassy in Seoul, South Korea. To identify the major global defense-
posture initiatives ongoing and planned and their associated costs, we
reviewed appropriate DOD strategies, plans and guidance including, but
not limited to, the Quadrennial Defense Review, Guidance for the
Employment of the Force, and Guidance for the Deployment of the Force;
we also reviewed PACOM's Theater Campaign Plan, Theater Posture Plan,
and relevant plans and strategies developed by PACOM's service
components. To identify the cost of posture initiatives in Korea and
Japan, we requested posture-initiative cost estimates from officials in
each military service headquarters, PACOM, USFK, and USFJ. For
initiatives in Japan, DOD officials provided information based on
budget estimates prepared by the Government of Japan, but provided only
limited estimates of costs to the United States. For initiatives in
Korea, DOD officials provided high-level cost estimates, which included
assumptions related to the use of host-nation support funding and host-
nation costs, which in some cases were constantly changing or not yet
approved. We discussed this cost information with officials in USFK,
USFJ, and the Office of the Secretary of Defense (Comptroller) and
determined that although the information was incomplete, it was
sufficiently reliable to provide an order of magnitude estimate of the
potential cost of each initiative, and therefore was adequate for the
purposes of our review, subject to the limitations discussed in this
report. To determine whether DOD captures and reports the total cost of
posture across the PACOM area of responsibility, we assessed the
information included in the 2009 and 2010 DOD Global Defense Posture
Reports to Congress, including the sections addressing posture costs,
the 2010 PACOM Theater Posture Plan, and President's Budget requests
for fiscal years 2010 and 2011. We then used a systematic data
collection approach to obtain cost data from the departments of the
Army, Air Force, and Navy, including the Marine Corps, and their PACOM
service component commands, on posture funding requirements and
obligations for fiscal years 2006 through 2015. To assess the
reliability of the cost data obtained through our systematic data
collection effort, we reviewed data system documentation and obtained
information on internal controls for those systems. We determined that
the cost data we received were reliable for the purposes of this
report.
We conducted this performance audit from November 2009 to April 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. Appendix I provides a more
detailed description of our scope and methodology.
Background:
DOD operates six geographic combatant commands, each with an assigned
area of responsibility (see fig. 1). Each geographic combatant
commander carries out a variety of missions and activities, including
humanitarian assistance and combat operations, and assigns functions to
subordinate commanders. Each command is supported by a service-
component command from each of the services. All of these component
commands play significant roles in preparing detailed posture plans and
providing the resources that the combatant commands need to execute
operations in support of their missions and goals.
Figure 1: Geographic Combatant Commands and Areas of Responsibility:
[Refer to PDF for image: world map of geographic combatant commands and
areas.]
U.S. Pacific Command;
U.S. Northern Command;
U.S. Southern Command;
U.S. Africa Command;
U.S. Central Command;
U.S. European Command.
Source: DOD; Map Resources (map).
[End of figure]
DOD's facilities are located in a variety of sites that vary widely in
size and complexity. Some sites are large complexes containing many
facilities to support military operations, housing, and other support
facilities, while others can be as small as a single radar site. To
develop common terminology for posture planning, DOD has identified
three types of installations that reflect the large-to-small scale of
DOD's enduring overseas posture--main-operating bases, forward-
operating sites, and cooperative security locations.
* Main-operating bases are overseas installations with relatively large
numbers of permanently stationed operating forces and robust
infrastructure, including family support facilities.
* Forward-operating sites are scaleable installations intended for
rotational use by operating forces in lieu of permanently stationed
forces that DOD would have to support. Because they are scaleable, they
may have a large capacity that can be adapted to provide support for
combat operations, and therefore DOD populations at these locations can
vary greatly, depending on how they are used at any given time.
* Cooperative security locations are overseas installations with little
or no permanent U.S. military presence, which are maintained with
periodic U.S. military, contractor, or host-nation support. DOD
populations at these locations can vary greatly, as they do at forward-
operating sites, depending on how they are being used at any given
time.
A hierarchy of national and defense guidance informs the development of
DOD's global posture. The National Security Strategy, issued by the
President at the beginning of each new Administration and annually
thereafter, describes and discusses the worldwide interests, goals, and
objectives of the United States that are vital to its national
security, among other topics. The Secretary of Defense provides
corresponding strategic direction in the National Defense Strategy.
Furthermore, the Chairman of the Joint Chiefs of Staff provides
guidance to the military through the National Military Strategy. The
department has developed new guidance for global defense posture in
numerous documents, principally the 2008 Guidance for Employment of the
Force and the 2008 Joint Strategic Capabilities Plan. The Guidance for
Employment of the Force consolidates and integrates planning guidance
related to operations and other military activities, while the Joint
Strategic Capabilities Plan implements the strategic policy direction
provided in the Guidance for Employment of the Force and tasks
combatant commanders to develop theater campaign, contingency, and
posture plans that are consistent with the Guidance for Employment of
the Force. The Theater Campaign Plan translates strategic objectives to
facilitate the development of operational and contingency plans, while
the Theater Posture Plan provides an overview of posture requirements
to support those plans and identifies major ongoing and new posture
initiatives, including current and planned military construction
requirements. Figure 2 illustrates the relationships among these
national and DOD strategic guidance documents.
Figure 2: National and DOD Guidance, Strategies, and Plans Related to
Global Defense Posture:
[Refer to PDF for image: illustration]
In order from high to low:
National Security Strategy (National strategies and guidance);
National Defense Strategy (National strategies and guidance);
National Military Strategy (National strategies and guidance);
Guidance for the Employment of the Force (National strategies and
guidance);
Joint Strategic Capabilities Plan (National strategies and guidance);
Theater Campaign Plans (Combatant command plans);
Theater Posture Plans (Combatant command plans).
Source: GAO analysis of National Strategies and Defense guidance.
[End of figure]
DOD Has Not Fully Estimated the Cost of Posture Initiatives in South
Korea or Provided an Analysis of Alternatives to Tour Normalization:
DOD is currently transforming its military posture in South Korea
through a series of four interrelated posture initiatives, but has not
estimated the total costs involved, or provided an analysis of
alternatives for one initiative--tour normalization--that was initiated
by the Commander, USFK that potentially could affect tens of thousands
of DOD personnel and dependents and increase costs by billions of
dollars. Although DOD has not fully estimated the total cost of its
posture initiatives, we obtained USFK and Army estimates for each
initiative, which were primarily focused on construction costs, which
indicate the magnitude of costs will be significant-- almost $18
billion in costs have been identified either to the Government of South
Korea or to DOD through fiscal year 2020 (see table 1). The largest of
these four initiatives and the primary long-term cost driver is tour
normalization--extending the tour length of military service members
and moving thousands of their dependents from the United States to
South Korea. According to USFK officials, the decision to move forward
with tour normalization was made to achieve certain USFK strategic
objectives, such as to provide military commanders greater flexibility
in how U.S. military forces assigned to South Korea are used and to
improve the quality of life for military service members and their
families. However, prior to making the decision to move forward with
the tour normalization initiative, DOD did not complete a business case
analysis that would evaluate the quantifiable and nonquantifiable
benefits, advantages, or disadvantages of competing alternatives in
order to identify the most cost-effective means to satisfy its
strategic objectives. As a result, DOD is embarking on an initiative
that involves moving thousands of U.S. civilians to South Korea and
constructing schools, medical facilities, and other infrastructure to
support them without fully understanding the costs involved or
considering potential alternatives that might more efficiently achieve
U.S. strategic objectives.
Table 1: Summary of Estimated Costs of PACOM Posture Initiatives in
South Korea Identified as of January 2011 (Billions of Dollars):
Posture initiative[A]: Yongsan Relocation Plan;
Estimated costs: United States[B]: $2.0[D];
Estimated costs: Korea: 6.3[D];
Estimated costs: Total[C]: $8.3.
Posture initiative[A]: Land Partnership Plan;
Estimated costs: United States[B]: 3.4[D];
Estimated costs: Korea: 0.6[D];
Estimated costs: Total[C]: 4.0.
Posture initiative[A]: 28,500 U.S. troops in Korea;
Estimated costs: United States[B]: 0.2[D];
Estimated costs: Korea: [Empty];
Estimated costs: Total[C]: 0.2.
Posture initiative[A]: Tour normalization;
Estimated costs: United States[B]: 5.1[E];
Estimated costs: Korea: [Empty];
Estimated costs: Total[C]: 5.1.
Posture initiative[A]: Total;
Estimated costs: United States[B]: $10.7;
Estimated costs: Korea: $6.9;
Estimated costs: Total[C]: $17.6.
Source: GAO analysis of USFK and Army cost data.
[A] Each initiative has a different starting date. The Yongsan
Relocation was agreed to in October 2004; Land Partnership Plan was
agreed to in March 2002; the 28,500 troop level agreement was announced
in 2008, and tour normalization was started in 2007. See narrative
below for additional details.
[B] Cost estimates prepared by USFK officials assumed the use of
Special Measures Agreement contributions to help defray costs of these
initiatives to the United States. According to USFK and State
Department officials, the United States and South Korea are currently
consulting on the extent to which Special Measures Agreement
contributions will be applied to these initiatives. Special Measures
Agreement contributions are funds provided or expenditures borne by
South Korea to help defray the cost of locating U.S. military personnel
in South Korea. Currently, those contributions are used for a variety
of purposes--for example, Special Measures Agreement contributions can
be used to reduce construction costs for new facilities and for
sustainment costs of current facilities.
[C] Because some components of the cost estimates were presented as
totals over some of the time periods and were not broken out by year,
we were not able to convert these costs into constant dollars.
[D] Costs estimated by USFK through 2016.
[E] Total costs estimated by USFK through 2020. USFK has estimated that
in addition to $5.1 billion through 2020, $1.5 billion is needed to
implement tour normalization at Kunsan Air Base after 2020, but Air
Force officials indicated this would only cover construction costs and
may be a low estimate. Also, the Army calculated an extended cost
estimate for tour normalization from 2021 to 2050, which indicates that
tour normalization could increase Army operation and support costs by
$15.7 billion or more during that time period.
[End of table]
Transforming United States Military Posture in South Korea:
Four major, interrelated initiatives that will affect posture are under
way in South Korea. Two of these initiatives--the Yongsan Relocation
Plan and the Land Partnership Plan--will consolidate U.S. military and
civilian personnel from Seoul and sites north of Seoul, to a site south
of Seoul. The third will establish and maintain United States military
troop strength at 28,500 soldiers, and the fourth--tour normalization-
-will provide for 36-month accompanied tours (personnel who bring their
families with them) for military personnel stationed in South Korea. In
total, USFK officials have estimated the total DOD population in South
Korea could increase from approximately 54,000 to 84,000 under these
initiatives (see fig. 3).[Footnote 6] DOD has not estimated the full
cost to implement these initiatives, but as of January 2011, DOD had
identified approximately $18 billion in costs from the start of the
initiative through fiscal year 2020 either to the Government of South
Korea or to DOD, as described below. According to USFK and State
Department officials, the United States and South Korea are currently
consulting on the extent to which Special Measures Agreement funding
will be applied to these initiatives.
Figure 3: South Korea Posture Transformation and Population Figures:
[Refer to PDF for image: map of South Korea posture transformation and
population figures. Some locations have no numerical value attached.]
Current Posture (2011)
Joint Training Facility;
Dongduchon: 9,189;
Uijonbu: 2,927;
Seoul: 16,573;
Osan: 9,002;
Humphreys: 7,043;
Mu Juk: No value;
Daegu: 5,926;
Busan: No value;
Chinhae: 465;
Kunsan: 2,886;
Kwangju: No value.
Major changes:
* Grow to 4,636 families;
* 74 bases/camps/sites;
* Total population: 54,010.
Future Posture (2020)
Joint Training Facility;
Seoul: 284;
Osan (Pyeongtaek Hub): 16,429;
Humphreys (Pyeongtaek Hub): 48,343;
Mu Juk: No value;
Daegu: 7,135;
Chinhae: 668;
Kunsan: 3,204;
Kwangju: No value.
Major changes:
* Grow to 12,025 families;
* 5 enduring enclaves (47 bases/camps/sites);
* Total population: 76,064;
* Potential to grow to 14,250 families and 84, 230 DOD personnel beyond
2020.
Source: United States Forces Korea; Map Resources (map).
[End of figure]
Yongsan Relocation Plan ($8.3 billion through fiscal year 2016).
According to USFK officials, this is an initiative agreed to between
the governments of the United States and South Korea in October 2004.
The agreement involves the relocation of U.S. Army Garrison Yongsan,
which contains the headquarters for U.S. 8th Army, USFK, Combined
Forces Command, and the United Nations Command. This initiative will
move most DOD personnel and their families--currently more than 17,000
people--from U.S. Army Garrison Yongsan, an installation located in the
heart of Seoul, to U.S. Army Garrison Humphreys (Camp Humphreys), so
that the land at Yongsan can be returned to South Korea. It is
anticipated that South Korea will fund much of the construction costs
for this initiative; USFK officials estimate that it will cost South
Korea about $6.3 billion and the United States about $2 billion in
construction costs through fiscal year 2016.
Land Partnership Plan ($4 billion through fiscal year 2016). This
realignment, agreed to between the governments of the United States and
South Korea in March 2002, will move U.S. troops who are currently
stationed north of Seoul farther south to Camp Humphreys, and the land
they vacate is intended to be returned to South Korea. This move will
involve about 7,000 to 8,000 servicemembers, primarily from the 2nd
Infantry Division. The total estimated construction costs for the Land
Partnership Plan are nearly $4 billion, about $3.4 billion of that to
be funded by the United States.
28,500 U.S. troops ($0.245 billion through fiscal year 2016). According
to the State Department, in 2008, the Presidents of the United States
and South Korea agreed that U.S. troop strength would reach and be
maintained at 28,500. USFK officials estimate that this initiative will
cost the United States about $245 million during the 5-year period of
fiscal years 2012 through 2016 ($140 million in military construction
and $105 million in operation and support costs).
Tour normalization ($5.1 billion through fiscal year 2020, and
approximately $22 billion or more through fiscal year 2050). Started in
2007 by a previous Commander at USFK, this initiative will provide 36-
month accompanied tours (personnel who bring their families with them),
and 24-month unaccompanied tours (personnel who do not bring their
families with them) to military personnel stationed in South Korea.
According to the 2010 Quadrennial Defense Review, DOD's long-term goal
is to phase out all unaccompanied tours in South Korea. According to
the USFK Program Objective Memorandum Fiscal Year 2012 - 2017
Commander's Narrative Assessment, if tour lengths in Korea are
normalized, U.S. forces stationed in Korea could become available to
support regional and global contingencies, support that, prior to
normalization, was prohibited by dwell-time[Footnote 7] requirements
and consideration for back-to-back non-accompanied deployments. Tour
normalization would reduce uncertainty for service members and their
families, and affirm the United States commitment to the U.S.-Korean
alliance and the region. It enables a more adaptive and flexible U.S.
and combined-force posture on the Korean peninsula to strengthen the
alliance's deterrent and defense capabilities and long-term capacity
for regional and global defense and security cooperation, according to
the Commander's Narrative Assessment.
DOD has not finalized an implementation schedule for tour normalization
as DOD continues to evaluate alternative implementation schedules and
associated costs. As of September 2010, USFK officials estimated that
the total DOD population in South Korea was approximately 52,800,
including 11,600 dependents. One approach developed by USFK officials
for implementing tour normalization called for completing the
construction of facilities and movement of dependents to South Korea by
2020 except for the facilities and dependents associated with service
members at Kunsan Air Base (the Air Force has yet to decide if tour
normalization will be implemented at Kunsan Air Base). Under that
schedule, initial steps to implement tour normalization, such as
increasing the number of accompanied tours in South Korea, were
expected to be completed in fiscal year 2011, when USFK officials
estimated the total DOD population in South Korea would be about
54,000.[Footnote 8] Follow-on implementation steps would increase the
DOD population to about 60,000 by 2016, and 76,000 by 2020, according
to USFK estimates (see fig. 4). If DOD implements tour normalization at
Kunsan Air Base, USFK estimated that this would occur after 2020, and
the total DOD population on the South Korean peninsula could increase
to about 84,000.
Figure 4: Planned Changes to DOD Population in South Korea 2009 through
2020:
[Refer to PDF for image: shaded horizontal line graph]
Fiscal Year: 2010;
Servicemembers: 27,108;
Dependents: 11,561;
DOD civilians: 7,337;
DOD contractors: 5,180;
Retirees: 1,627.
Fiscal Year: 2011;
Servicemembers: 27,343;
Dependents: 12,280;
DOD civilians: 7,489;
DOD contractors: 5,267;
Retirees: 1,630.
Fiscal Year: 2012;
Servicemembers: 28,020;
Dependents: 13,640;
DOD civilians: 7,465;
DOD contractors: 5,201;
Retirees: 1,630.
Fiscal Year: 2013;
Servicemembers: 28,361;
Dependents: 13,639;
DOD civilians: 7,545;
DOD contractors: 5,238;
Retirees: 1,630.
Fiscal Year: 2014;
Servicemembers: 28,401;
Dependents: 13,634;
DOD civilians: 7,569;
DOD contractors: 5,238;
Retirees: 1,598.
Fiscal Year: 2015;
Servicemembers: 28,401;
Dependents: 14,554;
DOD civilians: 7,920;
DOD contractors: 5,366;
Retirees: 1,630.
Fiscal Year: 2016;
Servicemembers: 28,402;
Dependents: 15,053;
DOD civilians: 8,839;
DOD contractors: 5,778;
Retirees: 1,630.
Fiscal Year: 2017;
Servicemembers: 28,402;
Dependents: 19,004;
DOD civilians: 9,105;
DOD contractors: 5,778;
Retirees: 1,630.
Fiscal Year: 2018;
Servicemembers: 28,402;
Dependents: 23,075;
DOD civilians: 9,220;
DOD contractors: 5,778;
Retirees: 1,630.
Fiscal Year: 2019;
Servicemembers: 28,402;
Dependents: 27,471;
DOD civilians: 9,294;
DOD contractors: 5,778;
Retirees: 1,630.
Fiscal Year: 2020;
Servicemembers: 28,402;
DOD contractors: 30,959;
DOD civilians: 9,294;
DOD contractors: 5,778;
Retirees: 1,630.
Source: United States Forces Korea.
Note: This figure does not include implementing tour normalization at
Kunsan Air Base. If tour normalization is implemented at Kunsan Air
Base, USFK officials stated it would be after 2020, and increase the
total DOD population in South Korea to about 84,000.
[End of figure]
Because DOD is still analyzing alternative tour normalization
implementation schedules, the estimated costs have yet to be fully
defined and have been changing. USFK officials have estimated that
based on the 2020 implementation schedule, the cost to implement tour
normalization for all services (including military construction, family
housing, personnel,[Footnote 9] and operation and maintenance costs)
would be about $5.1 billion from fiscal year 2012 through fiscal year
2020, although these estimates are very preliminary and likely to
change. Additional costs estimated by USFK and the Army include:
* USFK estimated $1.5 billion would be needed to implement tour
normalization at Kunsan AFB after fiscal year 2020.[Footnote 10]
However, according to Air Force officials, this estimate only covers
construction costs; the total implementation costs could be much
higher.
* The Army calculated an extended cost estimate for tour normalization
from 2021 through 2050. That estimate shows that tour normalization
could increase Army operations and support costs by $15.7 billion or
more from 2021 through 2050 in areas such as increased personnel and
medical expenses.[Footnote 11]
On October 18, 2010, the Secretary of Defense announced in a memo to
the Secretaries of the Military Departments and similar officials from
other DOD organizations that he had directed USFK and the military
services to "proceed with full Tour Normalization for Korea, as
affordable, but not according to any specific timeline."[Footnote 12]
He also directed the Army to execute the Humphreys Housing Opportunity
Program for the construction of 1,400 units and to pursue Military
Construction funding for additional family housing.[Footnote 13]
However, the Secretary directed that no later than March 31, 2011,
USFK--along with PACOM, the military services, and other relevant DOD
organizations--was to provide the Secretary with a feasible and
affordable plan to continue the momentum toward full tour normalization
on the Korean peninsula. He directed the Cost Analysis and Program
Evaluation organization to evaluate the plan and cost estimates to
establish a "no less than funding level to be identified on an annual
basis. The Secretary stated he would continue to closely monitor
changes in timelines, requirements, and cost as he considered how to
most effectively implement the overall tour normalization plan.
Tour Normalization Is Not Supported by a Business Case Analysis:
Although detailed cost estimates are being prepared at the direction of
the Secretary of Defense as alternative implementation schedules are
considered, DOD has not developed a business case analysis that would
include an analysis of alternatives to support the decision to move
forward with tour normalization, and did not have one planned at the
time of our report. According to the GAO Cost Estimating and Assessment
Guide, a business case analysis is a comparative analysis that presents
facts and supporting details among competing alternatives.[Footnote 14]
A business case analysis considers not only all the life cycle costs of
competing alternatives, but also quantifiable and nonquantifiable
benefits. This analysis should be unbiased by considering all possible
alternatives and should not be developed solely for supporting a
predetermined solution. Moreover, a business case analysis should be
rigorous enough that independent auditors can review it and clearly
understand why a particular alternative was chosen. A business case
analysis seeks to find the best value solution by linking each
alternative to how it satisfies a strategic objective. Each alternative
should identify the:
* relative life-cycle costs and benefits;
* methods and rationale for quantifying the life-cycle costs and
benefits;
* effect and value of cost, schedule and performance tradeoffs;
* Sensitivity to changes in assumptions; and:
* risk factors.
On the basis of this information, the business case analysis then
recommends the best alternative. Our Cost Assessment Guide also states
that in addition to supporting an investment decision, the business
case analysis should be considered a living document and should be
updated often to reflect changes in scope, schedule, or budget. In this
way, a business case analysis is a valuable tool for validating
decisions to sustain or enhance the program.
DOD has focused on and produced tour normalization cost estimates and
continues to refine them, but has not addressed the other aspects of a
business case analysis--which, according to the GAO Cost Estimating and
Assessment Guide would include analyzing alternatives to tour
normalization and determining the associated costs, benefits,
advantages, and disadvantages of any viable alternative. For example,
USFK officials stated that tour normalization was driven by the USFK
Commander's strategic objectives to (1) obtain greater flexibility in
deploying U.S. forces assigned to South Korea and (2) improve military
families' quality of life by reducing the amount of time they were
separated by deployments. However, DOD has not clearly demonstrated the
extent to which tour normalization will actually achieve these
objectives or the total costs involved relative to other alternatives.
Specifically, a January 2006 joint statement of the United States and
South Korea affirms that South Korea, as an ally, fully understands the
rationale for the transformation of the U.S. global military strategy
and respects the necessity for strategic flexibility of the U.S. forces
in South Korea.[Footnote 15] U.S. Embassy officials in Seoul confirmed
that there are currently no legal impediments to prevent the United
States from deploying its forces, and under existing agreements, DOD
has flexibility in deploying its forces to other countries or regions
as necessary. However, USFK officials told us that in their view, the
Government of South Korea and the general public remained reluctant to
support such deployments after the United States deployed an Army
brigade to Iraq in 2004 that did not return to South Korea.[Footnote
16] Despite the agreement between the U.S. and South Korean presidents
to maintain the force presence at 28,500 troops, the USFK Commander
said that the decision to move forward with tour normalization and
bring more American military families to South Korea demonstrates the
United States' commitment to a long-term force presence in the country
and would alleviate concerns that any soldiers deployed from the
peninsula would not return.
In addition, as for achieving the goal of improving quality of life for
servicemembers, DOD has not produced specific analysis to show that
moving families to South Korea is an option that most servicemembers
and their families would consider an improvement to their quality of
life, especially if servicemembers deployed to South Korea would then
be subject to separation from their families if they are redeployed to
other regions. In those cases, servicemembers would be separated from
their immediate family members in South Korea when they are deployed,
and family members residing in South Korea would be separated from
their extended family network in the United States.
The financial risks of implementing tour normalization without a
business case analysis to support the decision are high, given the
magnitude of the resources that will be required and the impact on
military construction plans. For example, most of the military
dependents who would move to South Korea under this initiative would
move to Camp Humphreys. At the time of our visit to that location in
March 2010 the construction plan for Camp Humphreys included adding
2,328 acres to the camp, increasing the total size to 3,538 acres. The
plan also included constructing more than a thousand new structures,
including five new schools and an assortment of housing and other
support facilities at an estimated cost of approximately $13.1 billion.
This construction plan and the estimated cost combines construction of
new facilities and infrastructure to accommodate military service
members and dependents associated with the Yongsan Relocation Plan,
Land Partnership Plan, and initial construction associated with tour
normalization initiatives. At the time of our visit, significant land
reclamation was already under way to support the overall transformation
efforts, and new construction had started on facilities such as family
housing, recreational facilities and a family style water park. (see
fig. 5).
Figure 5: Camp Humphreys Planned Expansion and Ongoing Land Reclamation
and Construction, as of April 2010:
[Refer to PDF for image: map and photograph]
South Korea, Proposed Camp Humphreys:
Total:
* 3,538 acres (addition of 25 million square feet);
* Staffing: 17,036;
* Funding: $13.1 billion;
Existing Camp Humphreys: 1,210 acres.
Source: United States Forces Korea; Map Resources (map); GAO (photo).
[End of figure]
However, the plan for Camp Humphreys at the time of our visit did not
include building the necessary infrastructure to accommodate the
population expected to be added if tour normalization is fully
implemented.[Footnote 17] DOD officials stated that if tour
normalization were to be fully implemented, Camp Humphreys would
require seven additional schools--as well as an increase in other
infrastructure such as housing, commissaries, and postal facilities. We
were also told that the land area currently dedicated to new
construction would not accommodate these additional buildings, and
therefore existing building plans would have to be modified and
additional land might have to be acquired. The Army Corps of Engineers
official responsible for executing the building plan at Camp Humphreys
stated that accommodating the total tour normalization population would
call for a modified or new plan for the camp and that, with
construction already under way, it would be critical to modify the
plans as soon as possible, because costly modifications to building
plans could result from changing facility requirements after major
construction has begun. However, in our discussions with Office of the
Secretary of Defense officials from the Policy and Comptroller's
office, we were told that because the construction plan for Camp
Humphreys combines facility and infrastructure requirements for the
Yongsan Relocation, Land Partnership, and tour normalization
initiatives, they were unable to determine the extent to which tour
normalization has affected construction plans at Camp Humphreys.
Tour normalization will also have a major impact on posture costs and
pilot training capabilities at Osan Air Base, located a few miles away
from Camp Humphreys. For example, during our visit to Osan Air Base,
officials told us that one of the challenges they face in implementing
tour normalization is the limited amount of space available to
construct the required housing, parking, child development center,
commissary, six schools, and other quality-of-life facilities. At the
time of our visit to Osan Air Base, base officials provided an overview
of their plans to implement tour normalization, which required the
demolition of approximately 20 or more existing facilities and included
51 construction projects. (All but one of these projects were planned
to start in fiscal year 2012 or later.) Also, according to Air Force
officials, the Air Force's training capabilities in South Korea for its
F-16 pilots are inadequate; lengthening tours to 2 or 3 years would
exacerbate this training deficiency. Specifically, Air Force officials
stated that their pilots do not get enough training time on South
Korean training ranges because the pilots must share the ranges with
South Korean pilots. In addition, South Korean ranges do not offer all
of the training these pilots need. Currently, this reduced training
capacity is deemed acceptable by the Air Force because pilots are
reassigned after a 1-year tour and can update their training at their
next duty station. However, according to Air Force officials, if 3-year
tours are established for their pilots in South Korea, they may have to
send the pilots on training missions to Alaska--the closest site with
the required capabilities--for the training they need to maintain the
necessary qualification levels. The additional costs in terms of fuel
and other operating expenses for these training missions to Alaska
would be an added expense.
Without a business case analysis that identifies alternative courses of
action and their associated life cycle costs, potential benefits,
advantages, and disadvantages, DOD is embarking on an initiative that
involves moving thousands of U.S. civilians to South Korea and
constructing schools, medical facilities, and other infrastructure to
support them without fully understanding the costs involved or
considering potential alternatives that might more efficiently achieve
its strategic objectives. Furthermore, blending the construction
requirements for the Yongsan Relocation Plan, Land Partnership Plan,
and tour normalization has obscured the extent to which construction at
Camp Humphreys has been or could be affected by tour normalization
decisions. As previously discussed, the Secretary of Defense requested
a feasible and affordable plan to continue the momentum toward full
tour normalization on the Korean peninsula; this plan could help
determine the future of the initiative. However, according to USFK and
OSD officials, a business case analysis has not been included as part
of this decision process.
DOD Has Not Estimated the Cost of Posture Initiatives in Japan and
Guam:
DOD has embarked on a major realignment of U.S. military posture in
mainland Japan, Okinawa, and Guam, but has not developed comprehensive
cost estimates for these initiatives; as a result, DOD is unable to
ensure that all costs are fully accounted for or determine if resources
are adequate to support the program. In February 2005, the United
States Secretary of State and Secretary of Defense hosted Japan's
Minister for Foreign Affairs, and its Minister of State for Defense and
Director-General of the Defense Agency in a meeting of the United
States-Japan Security Consultative Committee. During that meeting, the
officials reached an understanding on common strategic objectives, and
underscored the need to continue examinations of the roles, missions,
and capabilities of Japan's Self-Defense Forces and the U.S. Armed
Forces in pursuing those objectives. They also decided to intensify
their consultations on realignment of U.S. force structure in
Japan.[Footnote 18] On October 29, 2005, the Security Consultative
Committee released a document titled U.S.-Japan Alliance:
Transformation and Realignment for the Future that, among other points,
approved recommendations for realignment of U.S. military forces in
Japan and related Japan Self Defense Forces, in light of their shared
commitment to maintain deterrence and capabilities while reducing
burdens on local communities, including those in Okinawa.[Footnote 19]
Both sides recognized the importance of enhancing Japanese and U.S.
public support for the security alliance. In May 2006, a United States-
-Japan Roadmap for Realignment Implementation was released that
provided details on the approved recommendations for realignment and
stated the construction and other costs for facility development in the
implementation of these initiatives will be borne by the Government of
Japan unless otherwise specified.[Footnote 20] The Roadmap also stated
the U.S. Government will bear the operational costs that arise from
implementation of these initiatives, and the two Governments will
finance their realignment-associated costs consistent with their
commitments to maintain deterrence and capabilities while reducing
burdens on local communities. The U.S. and Japanese governments signed
an agreement in February 2009 that implemented certain aspects of the
Roadmap related to the relocation of the III Marine Expeditionary Force
from Okinawa to Guam.[Footnote 21]
As of December 2009, DOD had approximately 45,000 servicemembers
stationed in Japan, with approximately 24,600 stationed in
Okinawa.[Footnote 22] In addition, DOD had almost 39,800 dependents who
accompanied these servicemembers---20,250 in mainland Japan and 19,521
in Okinawa. The planned end state of the announced realignment
initiatives will affect DOD posture in several areas of Japan,
including servicemembers, dependents, and/or military forces located in
Misawa, Yokota, Camp Zama, Yokusuka, Atsugi, Iwakuni, Kadena, and
Futenma (see fig. 6). For example, DOD's realignment initiatives, as
presented in the Roadmap, would include relocating a joint U.S./Japan
Air Defense Command headquarters to Yokota Air Base, relocating a
carrier air wing from Atsugi to Iwakuni, consolidating several Marine
Corps bases in Okinawa, and relocating Marine Corps units to Guam.
These and other initiatives are discussed in greater detail below.
Figure 6 also illustrates the approximate location of the epicenter of
the earthquake that struck off the east coast of Japan on March 11,
2011. The effect of this and the ensuing tsunami and nuclear reactor
incidents on DOD posture realignment initiatives is not yet known.
Figure 6: Key Locations of Realignment Initiatives in Japan:
[Refer to PDF for image: map illustration]
Misawa: Air Force;
Yokota: Air Force;
Zama: Army;
Yokosuka: Navy;
Atsugi: Navy;
Iwakuni: Marine Corps;
Kadena (Okinawa): Air Force;
Futenma (Okinawa): Marine Corps.
Source: DOD; Map Resources (map).
[End of figure]
Although DOD and the Government of Japan have embarked on these
initiatives, DOD has not estimated the total costs associated with
them. However, USFJ officials were able to provide us with details from
an October 2006 Government of Japan budget estimate study for
realignment costs covering Japan's fiscal years 2007 through 2014.
According to USFJ officials, the Government of Japan has not provided
any updates to these costs, so they are the best estimates of
Government of Japan costs available at this time.[Footnote 23] We also
obtained limited cost information associated with initiatives in Guam
and the Northern Mariana Islands that was developed by the Marine
Forces, Pacific Command. Taken together, the available cost information
we gathered indicates that posture initiative costs will be
significant--we identified approximately $29.1 billion--primarily
construction costs for these initiatives (see table 2). According to
USFJ and OSD officials, DOD is now in the process of developing cost
estimates for these initiatives. These costs may include, among other
items, the cost to outfit, furnish, and maintain buildings constructed
by Japan and to move personnel and equipment into consolidated
locations.
Table 2: Summary of Estimated Costs of PACOM Posture Initiatives in
Japan and Guam Identified as of January 2011 (Billions of Dollars):
Posture initiative: Japan: Carrier air wing, moving from Atsugi to
Iwakuni;
Estimated costs[E]: United States: Not yet estimated[A];
Estimated costs[E]: Japan: $1.4[B];
Estimated costs[E]: Total: $1.4.
Posture initiative: Japan: Camp Zama/ Sagama Depot;
Estimated costs[E]: United States: Not yet estimated[A];
Estimated costs[E]: Japan: 0.3[B];
Estimated costs[E]: Total: 0.3.
Posture initiative: Japan: Aviation training relocation;
Estimated costs[E]: United States: Not yet estimated[A]; Estimated
costs[E]: Japan: 0.3[B];
Estimated costs[E]: Total: 0.3.
Posture initiative: Japan: Yokota Air Base and Air Space;
Estimated costs[E]: United States: Not yet estimated[A];
Estimated costs[E]: Japan: No costs estimate provided;
Estimated costs[E]: Total: [Empty].
Posture initiative: Japan: Okinawa consolidation;
Estimated costs[E]: United States: Not yet estimated[A];
Estimated costs[E]: Japan: 4.2[B];
Estimated costs[E]: Total: 4.2.
Posture initiative: Japan: Futenma Replacement Facility;
Estimated costs[E]: United States: Not yet estimated[A];
Estimated costs[E]: Japan: 3.6[B];
Estimated costs[E]: Total: 3.6.
Posture initiative: Subtotal Japan;
Estimated costs[E]: United States: [Empty];
Estimated costs[E]: Japan: $9.8;
Estimated costs[E]: Total: $9.8.
Posture initiative: Guam: Roadmap agreement[C];
Estimated costs[E]: United States: 4.2;
Estimated costs[E]: Japan: 6.1;
Estimated costs[E]: Total: 10.3.
Posture initiative: Guam: Additional requirements;
Estimated costs[E]: United States: 7.1[D];
Estimated costs[E]: Japan: [Empty];
Estimated costs[E]: Total: 7.1.
Posture initiative: Subtotal Guam;
Estimated costs[E]: United States: $11.3;
Estimated costs[E]: Japan: $6.1;
Estimated costs[E]: Total: $17.4.
Posture initiative: Northern Mariana Islands Training Range;
Estimated costs[E]: United States: $1.9;
Estimated costs[E]: Japan: 0;
Estimated costs[E]: Total: $1.9.
Posture initiative: Total;
Estimated costs[E]: United States: $13.2;
Estimated costs[E]: Japan: $15.9;
Estimated costs[E]: Total: $29.1.
Source: GAO analysis of cost data provided by DOD officials.
[A] According to USFJ and OSD officials, DOD is in the process of
developing cost estimates for these initiatives. These costs may
include, among other items, the cost to outfit, furnish, and maintain
buildings constructed by Japan and to move personnel and equipment into
consolidated locations.
[B] USFJ information drawn from an October 2006 Government of Japan
budget-estimate study for realignment costs covering Japan's fiscal
years 2007 through 2014, using a conversion rate of $1 USD = ¥ 111.
[C] Anticipated funding in U.S. fiscal year 2008 dollars, as stipulated
in the United States-Japan Roadmap for Realignment Implementation, May
1, 2006.
[D] The Marine Corps has estimated these additional costs to complete
the relocation of Marines from Okinawa to Guam; however, they have not
been validated by the Department of Defense.
[E] Initiatives listed cover different time periods. Japan initiatives
were estimates of Japan Fiscal Years 2007 through 2014, Bi-lateral
agreement costs were 2006 through 2014, additional Guam requirements
were over an unspecified period of time, Northern Mariana Islands
Training Range costs were estimated from 2012 through an unspecified
end date. See below for more details.
[End of table]
Carrier air wing move from Atsugi to Iwakuni ($1.4 billion--Japan
budget estimate only). As outlined in the U.S.-Japan Roadmap for
Realignment Implementation (the Roadmap),[Footnote 24] Carrier Air Wing
5, a Navy air wing paired with the aircraft carrier USS George
Washington (currently stationed at Fleet Activities Yokosuka, Japan),
would move its headquarters and fixed wing flight operations from Naval
Air Facility Atsugi to Marine Corps Air Station Iwakuni. In 2006, Japan
estimated that it would spend approximately $1.4 billion to construct
new facilities under this initiative, but DOD has not estimated its own
costs. Under this initiative, the fixed-wing aircraft attached to
Carrier Air Wing 5 would move to Iwakuni, but according to Navy
officials, the rotary wing squadrons would stay at Atsugi. In addition,
Marine Corps rotary wing aircraft currently located at Iwakuni would
eventually relocate to Guam as part of the Marine Corps relocation from
Okinawa to Guam described below.
Camp Zama/ Sagama Depot ($0.3 billion--Japan budget estimate only). The
intent of this initiative is to improve command and control
capabilities between the U.S. Army and the Japanese Ground Self Defense
Force by transforming the Army's headquarters at Camp Zama,
establishing the headquarters of the Japanese Ground Self Defense Force
Central Readiness Force there, and giving Japanese helicopters access
to the Army's Kastner Army Airfield at Camp Zama. In addition, a battle
command training center and other support facilities are to be
constructed at Sagami General Depot. The United States would also
return portions of both Camp Zama and Sagami General Depot to Japan for
local redevelopment. According to USFJ officials, in 2006, Japan
estimated it would spend approximately $300 million to construct new
facilities under this initiative, but DOD has not estimated its own
costs.
Aviation Training Relocation ($0.3 billion--Japan budget estimate
only). In order to reduce the impact of noise on communities
surrounding U.S. air facilities at Kadena Air Base, Naval Air Facility
Misawa, and Marine Corps Air Station Iwakuni and to enhance bilateral
training with the Japanese, aviation training would be relocated to six
Japanese Air Self Defense Force facilities.[Footnote 25] Both the
United States and Japan would work toward expanding the use of Japanese
Air Self Defense Force facilities for bilateral training and exercises
in the future. In 2006, Japan estimated it would spend approximately
$300 million to construct new facilities for this initiative, but DOD
has not estimated its own costs.
Yokota Air Base and Air Space (No cost estimate provided). The Japan
Air Self Defense Force Air Defense Command and relevant units would
relocate to Yokota Air Base and a bilateral master plan would be
developed to accommodate facility and infrastructure requirements. A
bilateral, joint operations coordination center, established at Yokota
Air Base, would include a collocated air and missile defense
coordination function. Measures would be pursued to facilitate the
movement of civilian aircraft through the Yokota airspace while
satisfying military operational requirements.
Okinawa consolidation ($4.2 billion--Japan budget estimate only).
Following the relocation of Marines to the Futenma Replacement
Facility, the return of Marine Corps Air Station Futenma to the
Japanese, and the transfer of III Marine Expeditionary Forces personnel
to Guam, four additional U.S. facilities and part of a fifth facility
in southern Okinawa would be vacated (see fig. 7).[Footnote 26] The
Marines in these locations plan to move to four primary locations in
the northern, less crowded part of Okinawa. In 2006, Japan estimated it
would spend approximately $4.2 billion to construct projects under this
initiative, but DOD has not estimated its own costs.
Figure 7: Relocation of U.S. Military Posture in Okinawa:
[Refer to PDF for image: map]
This map illustrates the various military locations in Okinawa, Japan.
Source: DOD; Map Resources (map).
[End of figure]
Futenma Replacement Facility ($3.6 billion--Japan budget estimate
only). A new runway and surrounding infrastructure for the Marine Corps
are to be built at Camp Schwab to replace Marine Corps Air Station
Futenma; this new facility is known as the Futenma Replacement
Facility. DOD plans to relocate a Marine Aviation Group, Logistics
Squadron, and several helicopter squadrons to the Futenma Replacement
Facility once it is complete.[Footnote 27] Although plans for the new
air base have not been finalized, one option includes the construction
of two runways aligned in a V shape that would extend into the Oura and
Henoko Bays, while another option would require a single runway. Both
options would require significant reclamation of the sea to complete.
Figure 8 below shows some of the current facilities at Camp Schwab and
the estimated level of landfill that would be required to construct the
runway(s). The Marine Corps relocation to the Futenma Replacement
Facility at Camp Schwab is planned to occur when the facility is fully
operationally capable. In 2006, Japan estimated it would spend
approximately $3.6 billion for this initiative, but DOD has not
estimated what its costs will be.
Figure 8: Camp Schwab, Okinawa, as of April 2010:
[Refer to PDF for image: photograph]
This figure is a photograph of Camp Schwab, Okinawa Japan, one a
focused within the the other.
Line on the base bowling alley at Camp Schwab shows how high fill
material must rise to build the runway for the Futenma Replacement
Facility. GAO extended the line to show the impact of building the
runway on surrounding facilities and the nearby bay.
Source: GAO.
[End of figure]
Marine Corps Relocation from Okinawa to Guam ($17.4 billion--Japan
budget estimate and DOD estimated costs). As part of the military
posture realignment on Okinawa, about 8,600 Marines and their 9,000
dependents are to transfer from several locations in Okinawa to
Guam.[Footnote 28] It is expected that the 8,600 marines who relocate
to Guam will include the III Marine Expeditionary Force Command
Element, the 3rd Marine Division Headquarters and 3rd Marine Logistics
Group Headquarters, the 1st Marine Air Wing Headquarters, and the 12th
Marine Regiment Headquarters. The governments of Japan and the United
States have agreed to share the costs of transferring the Marines from
Okinawa to Guam, with the Government of Japan anticipated to provide
about $6.1 billion and the United States anticipated to provide an
additional $4.2 billion (in U.S. fiscal year 2008 dollars) for
construction of new facilities and infrastructure development on
Guam.[Footnote 29] In addition, the Marine Corps estimates that an
additional $7.1 billion may be required to complete the move to Guam--
-$4.7 billion for additional construction costs and $2.4 for costs
associated with utilities, labor, and procurement of military
equipment.[Footnote 30] However, these Marine Corps estimates have not
been validated by DOD.
This transfer of Marine Corps personnel and families is part of a
larger DOD effort to increase the military posture on Guam, including
Air Force initiatives to add intelligence, surveillance, and
reconnaissance capabilities; Navy initiatives related to new pier
construction and a new hospital; and an Army initiative related to
installation of an air and missile defense system. Figure 9 illustrates
the locations where these initiatives will be implemented on the
island. If implemented as planned, these initiatives will increase the
U.S. military presence on Guam from about 15,000 in 2009 to more than
39,000 by 2020, which will increase the current population of the
island by about 14 percent over those years.[Footnote 31] We have
issued a series of reports discussing various aspects of the military
buildup on Guam and the costs and challenges DOD will face in
accomplishing those initiatives, including obtaining adequate funding
and meeting operational needs, such as mobility support and training
capabilities.[Footnote 32] For example, we have reported DOD cost
estimates for the military buildup in Guam do not include the estimated
costs of all other defense organizations that will be needed to support
the additional military personnel and dependents who will relocate to
Guam.
Figure 9: Locations of Key Posture Initiatives on Guam:
[Refer to PDF for image: map of Guam]
Potential Air and Missile Defense System;
Marine Corps Main Cantonment (Marine Corps);
Naval Computer and Telecommunications Station Finegayan;
New Medical Clinic (Marine Corps);
Marine Corps South Finegayan Housing (Marine Corps);
New Naval Hospital (Navy);
Proposed Aircraft Carrier Capable Pier (Navy);
Waterfront Operations (Navy);
Apra Harbor Naval Complex (Navy);
New Medical Clinic (Navy);
Ordinance Annex;
Marine Corps Training Ranges (Marine Corps);
Andersen South (Air Force);
Intelligence, Surveillance, and Reconnaissance Capability (Air Force);
Andersen Air Force Base;
Marine Corps Aviation (Marine Corps);
Northwest Field Andersen Air Force Base (Air Force).
Source: DOD; Map Resources (map).
[End of figure]
Expanding training capabilities in the Northern Mariana Islands ($1.9
billion). According to Marine Corps officials, independent of the
progress made on the initiatives in Japan and Guam, the Marine Corps
will proceed with constructing new training areas in the Pacific. Some
training areas are expected to be constructed on Guam for the Marines.
However, the environmental impact statement (EIS) for the Marine Corps'
move to Guam found that Guam cannot accommodate all training for the
realigned Marine Corps forces. DOD has identified the nearby island of
Tinian (100 miles away) and other islands in the Northern Mariana
Islands as locations that could provide additional land for training.
Marine Corps officials estimate that building the training range in the
Northern Mariana Islands could cost approximately $1.9 billion or more.
Of that amount, Marine Corps Pacific officials identified $1 billion in
funding requirements from fiscal years 2012 through 2015 to cover costs
such as military construction, planning and development, environmental
compliance, and combat arms training ranges. The remaining cost for
full development of the training capabilities and capacity in the
Northern Mariana Islands was at least $900 million over an unspecified
period of time, according to the Marine Corps officials.
According to DOD officials, comprehensive cost estimates for posture
initiatives in Japan, including all costs that will be incurred by the
United States, have not been completed because there are many
uncertainties surrounding initiative implementation schedules.
According to Marine Corps officials and confirmed by USFJ officials,
when the Government of Japan is constructing any facility for the
United States, it does not outline specific timetables; therefore,
knowing when a Government of Japan-led construction project will begin
or end is difficult to determine and can affect DOD's ability to
estimate future costs. This is important because the United States-
Japan Roadmap for Realignment Implementation, dated May 1, 2006,
indicates that the Government of Japan will generally bear the
construction and other costs for facility development under these
initiatives, and the United States will bear the operational
costs.[Footnote 33] In January 2011, USFJ officials indicated that the
service component commands were in the process of developing some
initiative cost estimates, but their efforts were not complete and no
additional information was provided on the status of these efforts or
expected results.
In the United States Department of Defense Fiscal Year 2011 Budget
Request Overview, prepared by the Office of the Under Secretary of
Defense (Comptroller), DOD outlined the need to change how the
department buys its weapons and other important systems and
investments. According to DOD, one way to reform how the department
invests is to strengthen front-end scrutiny of costs and not rely on
overly optimistic or underestimated costs from the beginning of the
investment. In addition, according to the GAO Cost Estimating and
Assessment Guide, one method for capturing all cost elements that
pertain to a program from the initial concept through its operations,
support, and eventual end, is through a life-cycle cost estimate. A
life cycle cost estimate encompasses all past, present, and future
costs for every aspect of the program, regardless of funding source. A
life-cycle cost estimate usually becomes the program's budget baseline
because the estimate ensures that all costs are fully accounted for,
determines when a program is supposed to move from one phase to
another, and establishes if resources are adequate to support the
program.
Seeking more visibility into DOD posture initiative costs and funding
requirements, the Senate Appropriations Committee recently directed DOD
to provide comprehensive and routine updates on the status of posture-
restructuring initiatives in South Korea, Japan, Guam, and the Northern
Mariana Islands (see app. II).[Footnote 34] The updates should be
provided annually, beginning with the submission of the fiscal year
2012 budget request, until the restructuring initiatives are complete
or funding requirements to support them are satisfied. The updates
should address such things as schedule status, facilities requirements,
and total costs--including operations and maintenance. If fully
responsive to the committee's reporting direction, DOD status updates
should provide needed transparency and visibility into the near-and
long-term costs and funding requirements associated with the
transformation initiatives.
DOD Lacks Comprehensive Cost Information Needed for Affordability
Analysis:
As discussed in our recent report on military posture in Europe, DOD
guidance does not require combatant commanders to include comprehensive
information on posture costs in their theater posture plan, and as a
result, DOD lacks critical information that could be used by decision
makers and congressional committees as they deliberate new posture
requirements and the associated allocation of resources.[Footnote 35]
The 2008 Joint Strategic Capabilities Plan requires that each combatant
command provide, in its theater posture plan, information on the
inventory of installations in the combatant commander's area of
responsibility, to include estimates of the funding required for
proposed military construction projects. However, this guidance does
not specifically require--and therefore PACOM does not report--the
total cost to operate and maintain DOD's posture in Asia whether those
costs are associated with a posture initiative or not. Our analysis
shows that operation and maintenance costs are significant. Of the
approximately $24.6 billion obligated by the services to support DOD's
posture in Asia from fiscal years 2006 through 2010, approximately
$18.7 billion (76 percent) was for operation and maintenance
costs.[Footnote 36] The military services project that operation and
maintenance funding requirements will continue at about $2.9 billion
annually for fiscal years 2011-2015. However, as previously discussed,
DOD has major posture transformation initiatives underway in South
Korea, Japan, and Guam that could significantly impact estimates of
these future costs. For example, according to USFJ and Marine Corps
officials, although the Government of Japan has agreed to construct new
facilities as part of the realignment of U.S. military forces in Japan,
DOD is responsible for the costs to furnish, equip, and maintain those
facilities to make them usable, and for operation and support costs,
but DOD has not yet estimated those costs. According to USFJ officials,
in Okinawa alone, Japan would build approximately 321 new buildings and
573 housing units, all of which will need to be furnished and equipped
by DOD. Our prior work has demonstrated that comprehensive cost
information--including accurate cost estimates--is key to enabling
decision makers to make funding decisions, develop annual budget
requests, and evaluate resource requirements at key decision points.
DOD Does Not Routinely Capture and Report Total Posture Costs:
As we previously reported, the 2008 Joint Strategic Capabilities Plan
requires that theater posture plans prepared by each combatant command
provide information on each installation in a combatant commander's
area of responsibility, to include identifying the service responsible
for each installation, the number of military personnel at the
installation, and estimates of the funding required for military
construction projects.[Footnote 37],[Footnote 38] In accordance with
these reporting requirements, PACOM's 2010 theater posture plan
provides personnel numbers, service responsibilities, specified posture
initiatives, and associated military construction costs for
installations within PACOM's area of responsibility. However, the Joint
Strategic Capabilities Plan does not specifically require the combatant
commands to report estimates for other types of costs, such as costs
associated with the operation and maintenance of DOD installations, in
their theater posture plans. DOD's operation and maintenance funding
provides for a large number of expenses. For example, with respect to
DOD installations, operations and maintenance funding provides for base
operation support and sustainment, restoration, and modernization of
DOD's buildings and infrastructure, funding that--among other purposes-
-is to keep facilities and grounds in good working order.[Footnote 39]
Because the Joint Strategic Capabilities Plan does not require
operations and maintenance costs to be reported, they were not included
in PACOM's 2010 theater posture plan.
To obtain a more comprehensive estimate of the cost of defense posture
in the Pacific, we gathered, from each military service, obligations
data related to military construction, family housing, and operation
and maintenance appropriations for installations in the PACOM area of
responsibility. We found that military construction and family housing
obligations accounted for almost one-quarter of the services' total
obligations against those appropriations from fiscal years 2006 through
2010. In total, from 2006 through 2010, the military services obligated
about $24.6 billion to build, operate, and maintain installations in
Asia, of which about $5.9 billion (24 percent) was for military
construction and family housing, and $18.7 billion (76 percent) was for
operation and maintenance of these installations (for a more detailed
breakdown of costs at installations in Asia see app. III).[Footnote 40]
On average, the services reported they obligated almost $5 billion
annually for installations in PACOM's area of responsibility, with $3.7
billion obligated for operations and maintenance (see fig.
10).[Footnote 41]
Figure 10: Service Obligations for DOD Installations in PACOM's Area of
Responsibility (Fiscal Years 2006-2010):
[Refer to PDF for image: vertical bar graph]
Year: 2006;
Operation and maintenance: 1,268;
Military construction and family housing: 3,997.
Year: 2007;
Operation and maintenance: 1,288;
Military construction and family housing: 3,619.
Year: 2008;
Operation and maintenance: 1,350;
Military construction and family housing: 3,443.
Year: 2009;
Operation and maintenance: 1,116;
Military construction and family housing: 3,949.
Year: 2010;
Operation and maintenance: 904;
Military construction and family housing: 3,703.
Source: GAO analysis of DOD data.
[End of figure]
Ongoing Transformation Initiatives May Significantly Increase the Cost
of DOD's Posture in Asia:
Data provided by the military services projects that they will require
approximately $5.2 billion per year through 2015, of which $2.3 billion
(45 percent) will be for military construction and family housing and
$2.9 billion per year (55 percent) will be for installation operations
and maintenance costs. However, the operations and maintenance costs
may be significantly understated since the military services
historically obligated approximately $3.7 billion annually from 2006
through 2010 for installation operation and maintenance costs, as
discussed above, and the major transformation initiatives under way in
South Korea, Japan, and Guam may significantly increase costs over the
long term, potentially through 2015 and beyond, as illustrated by the
following examples.
Potential for Cost Growth in South Korea:
* To provide housing for thousands of dependents that DOD wants to move
to South Korea under tour normalization, DOD has established the
Humphreys Housing Opportunity Program, whereby, according to USFK
officials, private developers would build housing for DOD families and
then recover their investments through the rents that military families
pay using DOD overseas housing allowance funds. (Current estimates
indicate this monthly allowance would be about $4,200/month for service
members at Camp Humphreys.) Although using the Humphreys Housing
Opportunity Program has the potential to lower or even eliminate
construction-funding requirements, it would increase the Army housing-
allowance costs.
* One Army estimate indicates fully implementing tour normalization
could increase education and medical costs by almost $10 billion from
2012 through 2050.
* According to USFK and State Department officials, the United States
and Korea are currently consulting on the extent to which Special
Measures Agreement contributions (funds provided and expenditures borne
by the Government of South Korea to help defray the costs of the U.S.
military presence in South Korea) will be used to pay for some military
construction costs.[Footnote 42] Based on historical information and
the current Special Measures Agreement through 2013, South Korea has
provided or agreed to provide the United States on average 786 billion
per year from fiscal years 2007 through 2013, which is equivalent to
approximately $698 million U.S. dollars. [Footnote 43]While using these
contributions to pay for construction costs can lower DOD's
construction funding requirements, it also eliminates the opportunity
DOD has to apply those funds to reduce operation and maintenance costs
and related appropriations, thus increasing the required funding in
these appropriations.
Potential for Cost Growth in Japan:
* The Government of Japan has historically been a major financial
contributor, in the form of host-nation support funding, to help defray
DOD posture costs. However, after peaking in 1999 (¥276 billion),
funding from Japan has steadily declined. In 2010, the Government of
Japan provided ¥187 billion in host-nation support--the lowest total
since 1992.[Footnote 44] One element of host-nation support, the
Japanese Facilities Improvement Program--which, as of April 2010, has
provided over $22 billion worth of construction for U.S. military
facilities--has declined nearly 80 percent since 1993, as illustrated
in figure 11. According to an official in the Office of the Secretary
of Defense, in January 2011, the governments of Japan and the United
States agreed to maintain the 2010 levels of host-nation support for
the next 5 years. Any increases in DOD's operation and support costs
would therefore be borne by DOD.
Figure 11: Japan Host-Nation Contributions Related to U.S. Military
Defense Posture in Japan (Fiscal Years 1978-2010):
[Refer to PDF for image: combination vertical bar and line graph.
Values are represented in expenditures, in billions of yen.]
Fiscal Year: 1978;
Japanese Facilities Improvement Program: 0.0;
Japanese host nation support: 6.2.
Fiscal Year: 1979;
Japanese Facilities Improvement Program: 14.0;
Japanese host nation support: 28.
Fiscal Year: 1980;
Japanese Facilities Improvement Program: 22.7;
Japanese host nation support: 37.4.
Fiscal Year: 1981;
Japanese Facilities Improvement Program: 27.6;
Japanese host nation support: 43.5.
Fiscal Year: 1982;
Japanese Facilities Improvement Program: 35.2;
Japanese host nation support: 51.6.
Fiscal Year: 1983;
Japanese Facilities Improvement Program: 43.9;
Japanese host nation support: 60.8.
Fiscal Year: 1984;
Japanese Facilities Improvement Program: 51.3;
Japanese host nation support: 69.3.
Fiscal Year: 1985;
Japanese Facilities Improvement Program: 61.4;
Japanese host nation support: 80.7.
Fiscal Year: 1986;
Japanese Facilities Improvement Program: 62.7;
Japanese host nation support: 81.8.
Fiscal Year: 1987;
Japanese Facilities Improvement Program: 73.5;
Japanese host nation support: 109.6.
Fiscal Year: 1988;
Japanese Facilities Improvement Program: 79.2;
Japanese host nation support: 120.4.
Fiscal Year: 1989;
Japanese Facilities Improvement Program: 89.0;
Japanese host nation support: 142.3.
Fiscal Year: 1990;
Japanese Facilities Improvement Program: 100.1;
Japanese host nation support: 168.
Fiscal Year: 1991;
Japanese Facilities Improvement Program: 100.1;
Japanese host nation support: 177.5.
Fiscal Year: 1992;
Japanese Facilities Improvement Program: 99.7;
Japanese host nation support: 198.
Fiscal Year: 1993;
Japanese Facilities Improvement Program: 105.2;
Japanese host nation support: 228.6.
Fiscal Year: 1994;
Japanese Facilities Improvement Program: 102.2;
Japanese host nation support: 250.4.
Fiscal Year: 1995;
Japanese Facilities Improvement Program: 98.2;
Japanese host nation support: 271.4.
Fiscal Year: 1996;
Japanese Facilities Improvement Program: 97.3;
Japanese host nation support: 273.4.
Fiscal Year: 1997;
Japanese Facilities Improvement Program: 95.3;
Japanese host nation support: 273.8.
Fiscal Year: 1998;
Japanese Facilities Improvement Program: 73.7;
Japanese host nation support: 253.8.
Fiscal Year: 1999;
Japanese Facilities Improvement Program: 93.4;
Japanese host nation support: 275.7.
Fiscal Year: 2000;
Japanese Facilities Improvement Program: 96.1;
Japanese host nation support: 275.6.
Fiscal Year: 2001;
Japanese Facilities Improvement Program: 81.9;
Japanese host nation support: 257.2.
Fiscal Year: 2002;
Japanese Facilities Improvement Program: 75.3;
Japanese host nation support: 250.
Fiscal Year: 2003;
Japanese Facilities Improvement Program: 75.0;
Japanese host nation support: 246.
Fiscal Year: 2004;
Japanese Facilities Improvement Program: 74.9;
Japanese host nation support: 244.1.
Fiscal Year: 2005;
Japanese Facilities Improvement Program: 68.9;
Japanese host nation support: 237.8.
Fiscal Year: 2006;
Japanese Facilities Improvement Program: 63.8;
Japanese host nation support: 232.5.
Fiscal Year: 2007;
Japanese Facilities Improvement Program: 45.7;
Japanese host nation support: 217.3.
Fiscal Year: 2008;
Japanese Facilities Improvement Program: 36.2;
Japanese host nation support: 208.3.
Fiscal Year: 2009;
Japanese Facilities Improvement Program: 21.9;
Japanese host nation support: 20.6.
Fiscal Year: 2010;
Japanese Facilities Improvement Program: 20.6;
Japanese host nation support: 188.1.
Source: GAO analysis of DOD Data.
[End of figure]
* As previously discussed, DOD has not estimated the total costs to the
United States associated with the posture initiatives in Japan, which
could be significant. According to USFJ and Marine Corps officials,
although the Government of Japan has agreed to construct new facilities
as part of the realignment of U.S. military forces in Japan, DOD is
responsible for the costs to furnish and equip those facilities to make
them usable, and DOD has not yet estimated those costs. Due to the
number of buildings involved, these costs could be significant--USFJ
officials have estimated that Japan would build approximately 321 new
buildings and 573 housing units in Okinawa, all of which will need to
be furnished and equipped by the U.S. government.
* While it is difficult to determine at this time what, if any, impact
the March 11, 2011, earthquake, tsunami, and associated nuclear reactor
incident will have on current agreements and initiative construction
plans, DOD officials have said that there is potential for increases in
the cost of materials and labor in Asia. They said that it could be
similar to the impact that was experienced in the United States after
Hurricane Katrina. As we reported, at that time, service officials at
various installations expressed concern about the potential for
increases in construction costs because of ongoing reconstruction due
to damage caused by Hurricane Katrina, coupled with the large volume of
anticipated Base Realignment and Closure construction.[Footnote 45]
Potential for Cost Growth in Guam:
* In the introduction to the 2009 Agreement, the United States and
Japan have reaffirmed their intention to spend just over $10 billion
together to provide facilities and infrastructure on Guam to
accommodate the Marine Corps relocation by 2014.[Footnote 46] However,
as previously discussed, Marine Corps officials estimate it will cost
an additional $4.7 billion for military construction and $2.4 billion
for operation and maintenance, procurement, and collateral equipment to
complete the relocation. These Marine Corps cost estimates have not
been reviewed or validated within DOD and are therefore subject to
change.
* If implemented as planned, military posture initiatives will increase
the U.S. military presence on Guam from about 15,000 in 2009 to more
than 39,000 by 2020, a presence that will increase the current island
population by about 14 percent over those years.[Footnote 47] Operation
and maintenance costs will increase as the DOD population grows.
Comprehensive Cost Information Is Needed for Affordability Analysis:
According to the GAO Cost Estimating and Assessment Guide,
affordability is the degree to which a program's funding requirements
fit within the agency's overall portfolio plan. Making a determination
about whether a program is affordable depends a great deal on the
quality of its cost estimate. Our prior work has demonstrated that
comprehensive cost information is a key component in enabling decision
makers to set funding priorities, develop annual budget requests, and
evaluate resource requirements at key decision points. We have
developed a cost estimation process that, when followed, should result
in reliable and valid cost estimates that management can use to make
informed decisions about whether a program is affordable within the
portfolio plan.[Footnote 48] Furthermore, guidance from the Office of
Management and Budget has highlighted the importance of developing
accurate cost estimates for all agencies, including DOD.[Footnote 49]
In addition, our Cost Estimating and Assessment Guide highlights the
importance of considering the collective resources needed by all
programs designed to support an agency's goals. The benefit of
considering the collective program requirements gives decision makers a
high level analysis of their portfolio and the resources they will need
in the future. Whether these funds will be available will determine
what programs remain in the agency's portfolio. Because programs must
compete against one another for limited funds, it is considered a best
practice to perform this affordability assessment at the agency level,
not program by program. In the case of PACOM-posture costs,
affordability analysis therefore requires an accurate cost estimate of
the total cost to sustain existing posture--such as the cost to sustain
existing DOD infrastructure and facilities in Hawaii and other
locations currently in place in the Pacific--to serve as a foundation
for deliberating the cost and affordability of new posture initiatives.
While approaches may vary, an affordability assessment should address
requirements at least through the programming period and, preferably,
several years beyond.
To improve DOD's reporting on global posture costs, we recommended, in
February 2011, that the Secretary of Defense direct the Chairman, Joint
Chiefs of Staff, revise the Joint Strategic Capabilities Plan to
require that theater posture plans include the cost of operating and
maintaining existing installations and estimate the costs associated
with initiatives that would alter future posture.[Footnote 50] DOD
agreed with this recommendation and recognized that the costs
associated with operating and maintaining overseas facilities are an
important consideration in the posture decision-making process, but
DOD's proposed corrective actions did not fully address the intent of
our recommendation. Specifically, the department did not state that it
would further modify the Joint Strategic Capabilities Plan to require
that the theater posture plans include the cost of operating and
maintaining existing installations outside of costs associated with
posture initiatives. DOD stated that there are limits to combatant
commands' abilities to include operation and maintenance information in
theater posture plans, as those costs are inherently a service
function. DOD stated that, when operation and maintenance costs are
known, combatant commanders should include them in their theater
posture plans. When these costs are unknown--but required for oversight
and decision making--the department would require the services to
provide appropriate cost detail.
DOD's proposed corrective actions would therefore not require the
combatant commanders to routinely collect and consider operations and
maintenance costs at existing installations (costs that recently have
been about $3.7 billion annually in the Pacific) unrelated to posture
initiatives as theater posture plans are developed. Furthermore, the
department's proposed action to include operations and maintenance
costs in the theater posture plans only when they are known and to
require the services to provide additional data only when it is needed
for decision making could result in DOD decision makers receiving
fragmented posture cost information on an ad-hoc basis. Without a
comprehensive estimate of the total cost of posture--including existing
facilities and infrastructure that will not be affected by any new
posture initiatives--and routine reporting of those costs, DOD decision
makers and congressional committees will not have the full fiscal
context they need to develop and consider DOD's funding requests for
future posture initiatives. Absent further modification to the Joint
Strategic Capabilities Plan to require the theater posture plans to
include the cost of operating and maintaining existing installations,
DOD decision makers are left with the option to require the Services to
provide this data.
Conclusions:
DOD posture in Asia provides important operational capabilities and
demonstrates a strong commitment to our allies--critical aspects of our
national defense. However, in an era of significant budgetary pressures
and competition for resources, comprehensive cost information and
alternative courses of action must be routinely considered as posture
requirements are developed. To ensure the most cost effective approach
is pursued, major initiatives, such as tour normalization in South
Korea, require not only comprehensive cost estimates but a thorough
examination of the potential benefits, advantages, disadvantages, and
affordability of viable alternatives before a course of action is
selected. However, despite not having an approved business case that
supports the decision to move forward with tour normalization and the
presence of outstanding questions about the cost and schedule to
implement the initiative, DOD is constructing facilities and
infrastructure at Camp Humphreys in a manner that combines requirements
for multiple initiatives, an approach that makes it difficult to
identify what funds or construction activities are at risk if a more
cost-effective alternative to tour normalization is identified.
Furthermore, across the Pacific region, DOD has embarked on complex
initiatives to transform U.S. military posture, and these initiatives
involve major construction programs and the movement of tens of
thousands of DOD civilian and military personnel, and dependents--at an
undetermined total cost to the United States and host nations. Although
we have identified potential costs that range as high as $46.7 billion
through 2020, and $63.9 billion through 2050, these estimates are
volatile and not comprehensive. Furthermore, congressional committees
have been presented with individual posture decisions and funding
requests that are associated with specific construction programs or
initiatives, but those requests lack comprehensive cost estimates and
the financial context that such estimates would provide--including long-
term costs to complete and annual operation and maintenance costs.
Without that context, DOD is presenting Congress with near-term funding
requests that will result in significant long-term financial
requirements whose extent is unknown.
Recommendations for Executive Action:
To provide DOD and Congress with comprehensive posture cost information
that can be used to fully evaluate investment requirements and the
affordability of posture initiatives, we recommend that the Secretary
of Defense take the following seven actions:
* Identify and direct appropriate organizations within the Department
of Defense to complete a business case analysis for the strategic
objectives that have to this point driven the decision to implement
tour normalization in South Korea. This business case analysis should
clearly articulate the strategic objectives, identify and evaluate
alternative courses of action to achieve those objectives, and
recommend the best alternative. For each alternative course of action
considered, the business case analysis should address, at a minimum:
- relative life-cycle costs and benefits;
- methods and rationale for quantifying the life-cycle costs and
benefits;
- effect and value of cost and schedule trade-offs;
- sensitivity to changes in assumptions;
- potential advantages and disadvantages associated with the
alternative; and:
- risk factors.
- Set specific time frames for the completion of the business case
analysis, the Secretary of Defense's review, and the approval of the
selected alternative.
- Through the Chairman of the Joint Chiefs of Staff, direct the
Commander, United States Forces Korea, to provide a detailed accounting
of the funds currently being applied and requested to construct new
facilities at Camp Humphreys, identify construction projects that will
be affected---directly or indirectly--by a decision to fully implement
tour normalization, and provide that information to the Office of the
Secretary of Defense with sufficient time to limit investments
associated with tour normalization as recommended below.
- Identify and limit investments and other financial risks associated
with construction programs at Camp Humphreys--funded either by direct
appropriations or through alternative financing methods such as the
Humphreys Housing Opportunity Program--that are affected by decisions
related to tour normalization until a business case analysis for the
strategic objectives that have to this point driven the decision to
implement tour normalization in South Korea, is reviewed and the most
cost-effective approach is approved by the Secretary of Defense.
- Direct the Secretaries of the military departments to take the
following three actions with respect to annual cost estimates:
- Develop annual cost estimates for DOD posture in the U.S. Pacific
Command area of responsibility that provide a comprehensive assessment
of posture costs, including costs associated with operating and
maintaining existing posture as well as costs associated with posture
initiatives, in accordance with guidance developed by the Under
Secretary of Defense (Comptroller).
- Provide these cost estimates to the Combatant Commander in a time
frame to support development of the annual theater posture plan.
- Provide these cost estimates to the Offices of the Under Secretary of
Defense (Comptroller) and the Under Secretary of Defense (Policy) to
support DOD-wide posture deliberations, affordability analyses, and
reporting to Congress.
Agency Comments and Our Evaluation:
In written comments on a draft of this report, DOD fully agreed with
six of our recommendations, partially agreed with one recommendation,
and stated it would work with DOD components to implement the
recommendations. However, DOD did not indicate the specific steps or
time frames in which corrective actions would be taken. Specifics
regarding DOD's corrective actions and time frames for completion are
important to facilitate Congressional oversight, and can provide
reasonable assurance that DOD will take all appropriate measures to
mitigate financial risks and better define future requirements.
DOD agreed with our three recommendations to complete a business case
analysis for the strategic objectives that have, to this point, driven
the decision to implement tour normalization in South Korea; set
specific time frames for the completion of the business case analysis;
and account for the funds currently being applied and requested to
construct new facilities at Camp Humphreys. In its response, DOD
acknowledged that while USFK has completed numerous analyses concerning
tour normalization, DOD agrees that there is value in conducting a
business case analysis that assesses alternatives to strategic
objectives. However, DOD provided no specifics on the steps or time
frames it would follow to implement these corrective actions.
DOD also agreed with our recommendations to develop annual cost
estimates for DOD posture in the U.S. Pacific Command area of
responsibility; provide these cost estimates to the Combatant Commander
in a time frame to support development of the annual theater posture
plan; and to provide these cost estimates to the Offices of the Under
Secretary of Defense (Comptroller) and the Under Secretary of Defense
(Policy) to support DOD-wide posture deliberations, affordability
analyses and reporting to Congress. However, DOD provided no specifics
on the steps or time frames it would follow to implement these
corrective actions.
DOD partially agreed with our recommendation to identify and limit
investments and other financial risks associated with construction
programs at Camp Humphreys--funded either by direct appropriations or
through alternative financing methods such as the Humphreys Housing
Opportunity Program--that are affected by decisions related to tour
normalization until a business case analysis for the strategic
objectives is reviewed, and the most cost-effective approach is
approved by the Secretary of Defense. DOD stated it will identify and
consider limiting the investments and other financial risks, while
examining the implications (diplomatic, fiscal) of such decisions.
While we agree it is prudent to examine the implications of decisions
to limit investments and financial risks, DOD provided no specifics on
the steps or time frames it would follow to implement this corrective
action. Without specific implementation time frames for a business case
analysis that are synchronized with planned investment decisions, DOD
may not be in a position to effectively limit actions and investments
to expand housing at Camp Humphreys planned for this fiscal year if the
business case analysis proves those investments to be inappropriate.
We also provided the Department of State with a draft of this report
for official comment, but it declined to comment since the report
contains no recommendations for the State Department. DOD and State
provided technical comments separately that were incorporated into the
report as appropriate. DOD's written comments are reprinted in appendix
IV.
We are sending copies of this report to appropriate congressional
committees, the Secretary of Defense, and appropriate DOD
organizations. 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 has any questions about this report, please
contact me at (202) 512-4523 or leporeb@gao.gov. Contact points for our
Offices of Congressional Affairs and Public Affairs may be found on the
last page of this report. GAO staff who made major contributions to
this report are listed in appendix V.
Signed by:
Brian J. Lepore:
Director Defense Capabilities and Management:
[End of section]
Appendix I: Scope and Methodology:
To determine the magnitude of cost associated with the major global
defense posture initiatives ongoing and planned on the Korean peninsula
and the process by which the decision was made to move forward with the
largest of these initiatives---tour normalization--we interviewed and
collected data from officials in the Office of the Under Secretary of
Defense (Policy), the Under Secretary of Defense (Comptroller), the
Deputy Under Secretary of Defense (Installations and Environment), and
the Joint Staff; the Department of the Army, and the Department of the
Air Force; PACOM and the Army, Navy, Marine Corps, and Air Force
component commands; and United States Forces Korea and its Army and Air
Force service components. We conducted interviews and collected data
from officials at the U.S. Army Garrison Yongsan, U.S. Army Garrison
Humphreys, and Osan Air Base. We also met with U.S. officials at the
U.S. Embassy in Seoul, South Korea. We collected planning and cost
information at military service headquarters, PACOM, United States
Forces Korea, and United States Forces Korea's Army and Air Force
service components. For initiatives in Korea, USFK officials provided
high-level cost estimates, which included assumptions related to the
use of host-nation support funding and host-nation costs, which in some
cases were constantly changing or not yet approved. Army headquarters
officials provided us with detailed estimates of tour normalization
costs extended to 2050, and stated those estimates were the official
position of the Department of the Army on tour normalization costs. We
compiled this initiative information, including available cost
information and assumptions related to host-nation funding, in order to
identify the magnitude of DOD's initiatives and their potential costs.
We converted host-nation funding to U.S. dollars using exchange rates
published in the 2011 Economic Report of the President. We discussed
the cost information we received with officials in USFK and Office of
the Secretary of Defense (Comptroller) and determined that although the
information was incomplete, it was sufficiently reliable to provide an
order-of-magnitude estimate of the potential cost of each initiative
and therefore was adequate for the purposes of our review, subject to
the limitations discussed in this report. Once we consolidated
initiative description and cost information, we provided our summaries
back to the cognizant DOD offices to ensure we had appropriately
interpreted the data they provided. To determine whether tour
normalization was supported by a business case analysis, we interviewed
and collected data from the Office of the Under Secretary of Defense
(Policy), the Department of the Army, and United States Forces Korea
officials. Additionally, we collected and analyzed documentation,
including the current and previous versions of the Quadrennial Defense
Review, OSD policy documents related to tour normalization, and
strategic documentation referencing the decision to move forward with
tour normalization. We then compared DOD's approach to criteria
established in the GAO Cost Estimating and Assessment Guide.
To determine the magnitude of cost associated with the major global
defense posture initiatives ongoing and planned in Japan, Guam, and the
Northern Mariana Islands, we interviewed and collected data from
officials in the Office of the Under Secretary of Defense (Policy), the
Office of the Under Secretary of Defense (Comptroller), the Office of
the Deputy Under Secretary of Defense (Installations and Environment),
and the Joint Staff; the Department of the Army, the Department of the
Navy, and the Department of the Air Force; PACOM and the Army, Navy,
Marine Corps, and Air Force component commands; United States Forces
Japan and its military service components, including Marine Corps Bases
Japan; and the Joint Guam Program Office. We conducted interviews and
collected data from officials at Yokota Air Base, Camp Zama, and Fleet
Activities Yokosuka, and on Okinawa at Camps Schwab, Butler, and
Courtney, and Marine Corps Air Station Futenma. We also met with U.S.
officials at the U.S. Embassy in Tokyo, Japan, and the U.S. Consulate
in Naha, Okinawa. At all appropriate offices included in our review,
including Office of the Secretary of Defense, PACOM and its service
component commands, USFJ and its component commands and at specific
military facilities visited, we requested comprehensive DOD cost
estimates for each posture initiative and were told that comprehensive
cost estimates for each initiative did not exist. As a result, we
collected planning, any cost information that was available, and
initiative status information. For initiatives in Japan, DOD officials
provided information based on budget estimates prepared by the
Government of Japan, but provided only limited estimates of costs to
the United States. We discussed this cost information with officials at
USFJ and the Office of the Secretary of Defense (Comptroller) and
determined that although the information was incomplete, it was
sufficiently reliable to provide an order-of-magnitude estimate of the
potential cost of each initiative, and therefore was adequate for the
purposes of our review, subject to the limitations discussed in this
report. We compiled the data, including cost information, from all
locations in order to assemble a full description of the initiatives
and any identified cost. We analyzed and compared the cost information
received with criteria established in the GAO Cost Estimating and
Assessment Guide. Additionally, to provide us with more comprehensive
information on the military buildup on Guam, we interviewed and
collected data from the Joint Guam Program Office and used information
developed through other related GAO work.
To determine the extent to which DOD develops comprehensive estimates
of the total cost of defense posture in Asia to inform the decision-
making process, we interviewed and collected data from officials in the
Office of the Under Secretary of Defense (Policy), the Under Secretary
of Defense (Comptroller), the Deputy Under Secretary of Defense
(Installations and Environment), and the Joint Staff; the Department of
the Army, the Department of the Navy, and the Department of the Air
Force; PACOM and its Army, Navy, Marine Corps, and Air Force component
commands; United States Forces Japan and its military service
components; United States Forces Korea and its Army and Air Force
service components; and the Joint Guam Program Office. We also reviewed
the 2009 and 2010 DOD Global Defense Posture Reports to Congress,
including the sections addressing posture costs, and sections of the
2010 PACOM Theater Posture Plans. We also reviewed budget
documentation, including the military construction appropriations
component of the President's Budget request for fiscal years 2010 and
2011. Furthermore, we issued data requests asking for actual
obligations and projected requirements data on military construction,
family housing, and operations and maintenance appropriations related
to installations as part of DOD's defense posture in Asia for fiscal
years 2006 through 2015. We obtained data from the Departments of the
Army, Navy, and Air Force and their PACOM service component commands,
including the Marine Corps. After we received the data and consolidated
them by military service, we sent this information back to the services
that had provided them to ensure we had appropriately interpreted the
data they had provided. After receiving validated data from all of the
services, we aggregated and analyzed it. To assess the reliability of
the cost data received during this data call, we reviewed data system
documentation and obtained written responses to questions regarding the
internal controls on the systems. To ensure the accuracy of our
analysis, we used Statistical Analysis Software (SAS) when analyzing
the data and had the programming code used to complete those analyses
verified for logic and accuracy by an independent reviewer.
Furthermore, we reviewed previous GAO reporting on overseas basing,
military construction, the uses of cost information when making
decisions about programs, and guidance on cost estimating and the basic
characteristics of credible cost estimates.
Given the various steps discussed above to assess the quality of the
cost data, cost estimates, and other data used, we determined the data
were sufficiently reliable for purposes of this report.
We conducted this performance audit from November 2009 through April
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.
[End of section]
Appendix II: Committee Reporting Direction Contained in Senate Report
111-226 (S. Rep. No. 111-226, at 13-15 (2010)):
In order to provide Congress with comprehensive and routine information
on the status of these major DOD posture initiatives in a manner that
can be used to provide the appropriate context for budget deliberations
and oversight, the Committee directs the Department to provide detailed
annual updates on the status of posture restructuring initiatives in
Korea, Japan, Guam, and the initiative that will address training
capabilities and capacity in the Pacific region as an appendix to the
annual DOD Global Posture Report.
These initiative status updates should be provided annually, beginning
with the submission of the fiscal year 2012 budget request, until the
restructuring initiatives are complete and/or funding requirements to
support them are satisfied. The initiative status updates should
address the following areas:
* Initiative Description--an overall description of each initiative,
the major components of the initiative, the relationships between each
component and the overall successful completion of the initiative, a
program baseline that provides an estimated total cost of the
initiative, expected completion date, and the basis for pursuing the
initiative that is clearly linked to specific DOD strategic goals and
objectives defined by the Secretary of Defense, Military Departments,
Combatant Commander, or Service Component Commands.
* DOD organization responsible for managing and executing the
initiative.
* Schedule Status--a comparison of the current estimated timeframe to
complete the overall initiative and major components of the initiative
with original baseline estimates and the currently approved schedule.
An explanation of changes in the estimated completion date or changes
in the approved schedule should be provided.
* Facilities Requirements--a comparison of the baseline and current
projected number of facilities required to provide appropriate work
space, housing, and support services to the population DOD anticipates
it will be supporting, including facilities, family housing,
commissaries/post exchanges, schools, child care, clinics and
hospitals, and any other facility that will be needed to support the
military, civilian employee, local national employees, contractor, and
retiree population.
* Cost and Funding Status:
* Cost Summary--a comparison of the baseline, approved program, and
current estimated costs by appropriation; expressed in base year and
then-year dollars, addressing all costs associated with establishing,
modifying, and sustaining DOD's posture under this initiative,
including costs such as the housing allowance provided to military
service members and families that are then paid to external
organizations for housing.
* Funding Summary--a listing of the funding profile, by appropriation,
for the initiative, based on the current year President's Budget
detailing prior years, current year, future years defense program, and
costs to complete; expressed in then-year dollars. All funding
requirements associated with the initiative should be addressed,
including, but not limited to military construction, operations and
support, and personnel appropriations:
* Initiative Estimate Assumptions--the key assumptions that drive
initiative cost and schedule estimates, including:
* Population, including the number of military, civilian, non-DOD
personnel, command sponsored families and dependants, non-command
sponsored families and dependants, and military retirees affected by
the initiative.
* Housing, including the use of public/private partnerships to provide
necessary facilities, percentage of personnel and dependents expected
to reside in base housing and off the base or installation,
availability of host-nation land for construction of facilities, and
the anticipated host-nation funded and/or provided housing
construction.
* Cost Estimating, including modeling used to predict costs, inflation
estimates used for then-year dollar projections, and contracting
strategy.
* Financial, including the funding that will be available and provided
by military services and other DOD agencies affected by the initiative
to cover their respective costs, including the expected overseas base
housing allowance that will be provided to military families.
* Medical, including extent to which each military base or installation
will have stand-alone medical treatment facilities, will share medical
treatment facilities or capacity, the services provided (medical,
dental, vision), dates new facilities will be available for use, ratio
of primary care providers to population, and any other element that
drives the number of medical treatment facilities and associated
infrastructure or personnel required to support the population.
* Education, including the estimated number of children per family,
student distribution by grade level, tuition assistance that will be
required/provided, assumptions used to develop related Department of
Defense Education Activity [DODEA] cost factors, and any other element
that drives the number of schools and associated infrastructure or
personnel required to support the population.
* Support Services, including capacities of commissaries, exchanges,
USO, Red Cross or other support services or organizations, necessary
modifications to their existing facilities, and sources of funding
necessary to pay for any needed improvements or new construction.
* Local Community Support, including the extent to which local
business, housing, medical treatment, education, and other support
services will be available and necessary to support the expected DOD
population.
* Host-Nation Agreements, including any specific agreements with host
nations or legal issues that establish or drive specific timeframes for
completion of the initiative or major components of the initiatives.
[End of section]
S. Rep. No. 111-226, at 13-15 (2010).
[End of section]
Appendix III: Additional PACOM Cost and Funding Data:
Figure 12: Obligations by Appropriation Category Related to DOD
Facilities and Infrastructure: Fiscal Years 2006-2010 (Then-Year
Dollars), PACOM Area of Responsibility:
[Refer to PDF for image: tabular data]
Service: Air Force;
Appropriation: Military construction;
2006: 193,093,947;
2007: 229,488,267;
2008: 124,791,877;
2009: 144,571,902;
2010: 91,833,683;
Total: 783,779,676.
Service: Air Force;
Appropriation: Family housing;
2006: 145,446,251;
2007: 155,291,465;
2008: 145,378,007;
2009: 138,083,185;
2010: 115,912,420;
Total: 700,111,328.
Service: Air Force;
Appropriation: Operations and maintenance;
2006: 2,089,371,770;
2007: 1,712,180,826;
2008: 1,337,538,829;
2009: 1,527,902,866;
2010: 1,188,754,179;
Total: 7,855,748,470.
Service: Air Force;
Appropriation: Total;
2006: 2,427,911,968;
2007: 2,096,960,558;
2008: 1,607,708,713;
2009: 1,810,557,953;
2010: 1,396,500,282;
Total: 9,339,639,474.
Service: Army;
Appropriation: Military construction;
2006: 399,084,688;
2007: 404,816,440;
2008: 382,916,312;
2009: 228,837,701;
2010: 254,713,287;
Total: 1,670,368,428.
Service: Army;
Appropriation: Family housing;
2006: 138,459,889;
2007: 129,700,976;
2008: 107,267,438;
2009: 106,880,599;
2010: 78,864,842;
Total: 561,173,744.
Service: Army;
Appropriation: Operations and maintenance;
2006: 945,767,563;
2007: 938,007,393;
2008: 1,036,868,296;
2009: 1,119,613,020;
2010: 1,084,952,878;
Total: 5,125,209,150.
Service: Army;
Appropriation: Total;
2006: 1,483,312,140;
2007: 1,472,524,809;
2008: 1,527,052,046;
2009: 1,455,331,320;
2010: 1,418,531,007;
Total: 7,356,751,322.
Service: Navy;
Appropriation: Military construction;
2006: 65,389,883;
2007: 152,592,843;
2008: 370,358,517;
2009: 293,256,375;
2010: 72,269,230;
Total: 953,866,848.
Service: Navy;
Appropriation: Family housing;
2006: 221,089,276;
2007: 188,773,004;
2008: 170,798,725;
2009: 158,873,003;
2010: 155,809,407;
Total: 895,343,415.
Service: Navy;
Appropriation: Operations and maintenance;
2006: 659,437,364;
2007: 652,559,851;
2008: 714,723,989;
2009: 864,527,302;
2010: 1,021,578,554;
Total: 3,912,827,060.
Service: Navy;
Appropriation: Total;
2006: 945,916,523;
2007: 993,925,698;
2008: 1,255,881,231;
2009: 1,316,656,680;
2010: 1,249,657,191;
Total: 5,762,037,323.
Service: Marine Corps;
Appropriation: Military construction;
2006: 6,865,000;
2007: 2,689,616;
2008: 27,663,578;
2009: 25,872,286;
2010: 115,377,635;
Total: 178,468,115.
Service: Marine Corps;
Appropriation: Family housing;
2006: 98,434,926;
2007: 24,474,357;
2008: 20,524,120;
2009: 19,136,813;
2010: 19,871,778;
Total: 182,441,994.
Service: Marine Corps;
Appropriation: Operations and maintenance;
2006: 302,030,829;
2007: 315,878,594;
2008: 353,896,975;
2009: 437,027,171;
2010: 407,816,335;
Total: 1,816,649,904.
Service: Marine Corps;
Appropriation: Total;
2006: 407,330,755;
2007: 343,042,567;
2008: 402,084,673;
2009: 482,036,270;
2010: 543,065,748;
Total: 2,177,560,013.
Grand Total;
2006: 5,264,471,386;
2007: 4,906,453,632;
2008: 4,792,726,663;
2009: 5,064,582,223;
2010: 4,607,754,228;
Total: 24,635,988,132.
Source: GAO analysis of DOD data.
[End of section]
Appendix IV: Comments from the Department of Defense:
Under Secretary Of Defense:
2000 Defense Pentagon:
Washington, DC 20301-2000:
May 13, 2001:
Mr. Brian J. Lepore:
Director, Defense Capabilities and Management:
U.S. Government Accountability Office:
441 G Street, NW:
Washington DC 20548:
Dear Mr. Lepore:
This is the Department of Defense's (DOD) response to the Government
Accountability Office's (GAO) draft report, "Comprehensive Cost
Information and Analysis of Alternatives Needed to Assess Military
Posture in Asia" ” GAO Code 351410/GA0-11-316.
The Department concurs with six of GAO's recommendations and partially
concurs with one. Clarification and further information are included
for each recommendation on the accompanying pages.
We will work with DOD components to implement these recommendations and
look forward to further dialogue with GAO on costing posture
initiatives.
Sincerely,
Signed by:
Michele A. Flournoy:
Gao Draft Report Dated April 8, 2011:
GAO-11-316 (GAO CODE 351410):
"Defense Management: Comprehensive Cost Information And Analysis Of
Alternatives Needed To Assess Military Posture In Asia":
Department Of Defense Comments To The Gao Recommendations:
Recommendation 1: The GAO recommends that the Secretary of Defense
identify and direct appropriate organizations within the Department of
Defense to complete a business case analysis for the strategic
objectives that have to this point driven the decision to implement
tour normalization in South Korea. This business case analysis should
clearly articulate the strategic objectives, identify and evaluate
alternative courses of action to achieve these objectives, and
recommend the best alternative. For each alternative course of action
considered, the business case analysis should address, at a minimum:
* relative life-cycle costs and benefits;
* methods and rationale for quantifying the life-cycle costs and
benefits;
* effect and value of cost and schedule tradeoffs;
* sensitivity to changes in assumptions;
* potential advantages and disadvantages associated with the
alternative; and
* risk factors. (See page 47/GAO Draft Report.)
DOD Response: Concur. While USFK has conducted numerous analyses
concerning Tour Normalization and continues to assess and evaluate
different courses of action, the Department of Defense agrees that
there is value in conducting a business case analysis that assesses
alternatives to strategic objectives.
Recommendation 2: The GAO recommends that the Secretary of Defense set
specific timeframes for the completion of the business case analysis.
Secretary of Defense review, and approval of the selected alternative.
(See page 48/GAO Draft Report.)
DOD Response: Concur.
Recommendation 3: The GAO recommends that the Secretary of Defense,
through the Combatant Commander, Pacific Command, direct the Commander,
United States Forces Korea to provide a detailed accounting of the
funds currently being applied and requested to construct new facilities
at Camp Humphreys, identify construction projects that will be affected-
directly or indirectly-by a decision to fully implement tour
normalization, and provide that information to the Office of the
Secretary of Defense with sufficient time to limit investments
associated with tour normalization as recommended below. (See page
48/GAO Draft Report.)
DOD Response: Concur.
Recommendation 4: The GAO recommends that the Secretary of Defense
identify and limit investments and other financial risks associated
with construction programs at Camp Humphreys- funded either by direct
appropriations or through alternative financing methods such as the
Humphreys Housing Opportunity Program-that are affected by decisions
related to tour normalization until a business case analysis for the
strategic objectives that have to this point driven the decision to
implement tour normalization in South Korea is reviewed and the most
cost-effective approach is approved by the Secretary of Defense. (See
page 48/GAO Draft Report.)
DOD Response: Partially concur. DOD will identify and consider limiting
the investments and other financial risks, while examining the
implications (diplomatic, fiscal) of such decisions.
Recommendation 5: The GAO recommends that the Secretary of Defense
direct the Secretaries of the Military Departments take the following
action with respect to annual cost estimates; develop annual cost
estimates for DOD posture in the U.S. Pacific Command area of
responsibility that provide a comprehensive assessment of posture
costs, including costs associated with operating and maintaining
existing posture as well as costs associated with posture initiatives,
in accordance with guidance developed by the Under Secretary of Defense
(Comptroller). (See page 48/GAO Draft Report.)
DOD Response: Concur.
Recommendation 6: The GAO recommends that the Secretary of Defense
direct the Secretaries of the Military Departments take the following
action with respect to annual cost estimates; provide these cost
estimates to the Combatant Commander in a timeframe to support
development of the annual theater posture plan. (See page 48/GAO Draft
Report.)
DOD Response: Concur.
Recommendation 7: The GAO recommends that the Secretary of Defense
direct the Secretaries of the Military Departments take the following
action with respect to annual cost estimates; provide these cost
estimates to the Offices of the Under Secretary of Defense
(Comptroller) and the Under Secretary of Defense (Policy) to support
DOD-wide posture deliberations, affordability analyses and reporting to
Congress. (See page 48/GAO Draft Report.)
DOD Response: Concur.
[End of section]
Appendix V: GAO Contact and Staff Acknowledgments:
GAO Contact:
Brian Lepore, (202) 512-4523 or leporeb@gao.gov:
Acknowledgments:
In addition to the contact named above, Robert L. Repasky, Assistant
Director; Jeff Hubbard; Joanne Landesman; Ying Long; Greg Marchand;
Richard Meeks; Charles Perdue; Lisa Reijula; Terry Richardson; Michael
Shaughnessey; and Amie Steele made key contributions to this report.
[End of section]
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Defense Infrastructure: Guam Needs Timely Information from DOD to Meet
Challenges in Planning and Financing Off-Base Projects and Programs to
Support a Larger Military Presence. [hyperlink,
http://www.gao.gov/products/GAO-10-90R]. Washington, D.C.: November 13,
2009.
Defense Infrastructure: DOD Needs to Provide Updated Labor Requirements
to Help Guam Adequately Develop Its Labor Force for the Military
Buildup. [hyperlink, http://www.gao.gov/products/GAO-10-72].
Washington, D.C.: October 14, 2009.
Ballistic Missile Defense: Actions Needed to Improve Planning and
Information on Construction and Support Costs for Proposed European
Sites. [hyperlink, http://www.gao.gov/products/GAO-09-771]. Washington,
D.C.: August 6, 2009.
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]. July 2, 2009.
Defense Infrastructure: Planning Challenges Could Increase Risks for
DOD in Providing Utility Services When Needed to Support the Military
Buildup on Guam. [hyperlink, http://www.gao.gov/products/GAO-09-653].
Washington, D.C.: June 30, 2009.
Defense Management: Actions Needed to Address Stakeholder Concerns,
Improve Interagency Collaboration, and Determine Full Costs Associated
with the U.S. Africa Command. [hyperlink,
http://www.gao.gov/products/GAO-09-181]. Washington, D.C.: February 20,
2009.
Defense Infrastructure: Opportunity to Improve the Timeliness of Future
Overseas Planning Reports and Factors Affecting the Master Planning
Effort for the Military Buildup on Guam. [hyperlink,
http://www.gao.gov/products/GAO-08-1005]. Washington, D.C.: September
17, 2008.
Force Structure: Preliminary Observations on the Progress and
Challenges Associated with Establishing the U.S. Africa Command.
[hyperlink, http://www.gao.gov/products/GAO-08-947T]. Washington, D.C.:
July 15, 2008.
Defense Infrastructure: Planning Efforts for the Proposed Military
Buildup on Guam Are in Their Initial Stages, with Many Challenges Yet
to Be Addressed. [hyperlink, http://www.gao.gov/products/GAO-08-722T].
Washington, D.C.: May 1, 2008.
Defense Infrastructure: Overseas Master Plans Are Improving, but DOD
Needs to Provide Congress Additional Information about the Military
Buildup on Guam. [hyperlink, http://www.gao.gov/products/GAO-07-1015].
Washington, D.C.: September 12, 2007.
Military Operations: Actions Needed to Improve DOD's Stability
Operations Approach and Enhance Interagency Planning. [hyperlink,
http://www.gao.gov/products/GAO-07-549]. Washington, D.C.: May 31,
2007.
Defense Management: Comprehensive Strategy and Annual Reporting Are
Needed to Measure Progress and Costs of DOD's Global Posture
Restructuring. [hyperlink, http://www.gao.gov/products/GAO-06-852].
Washington, D.C.: September 13, 2006.
[End of section]
Footnotes:
[1] A "zero-based" review is a review conducted without consideration
of funding requirements, availability of personnel, and organizational
limitations.
[2] GAO, The Federal Government's Long-Term Fiscal Outlook: Fall 2010
Update, [hyperlink, http://www.gao.gov/products/GAO-11-201SP]
(Washington, D.C.: Nov. 15, 2010). Additional information on the
federal fiscal outlook, federal debt, and the outlook for the state and
local government sector is available at: [hyperlink, http:
www.gao.gov/special.pubs/longterm/].
[3] GAO, Opportunities to Reduce Potential Duplication in Government
Programs, Save Tax Dollars, and Enhance Revenue, [hyperlink,
http://www.gao.gov/products/GAO-11-318SP] (Washington, D.C.: March
2011).
[4] See related GAO products at the end of this report.
[5] Total DOD population estimates prepared by USFK included military
personnel, dependents, civilian employees, contractors, and retirees.
According to USFK officials, retirees were included in the estimate
because they are provided access to DOD support services, such as
commissaries and medical care, and therefore those facilities were
sized to accommodate them.
[6] DOD defines dwell time as the period of time between the release
from involuntary active duty and the reporting date for a subsequent
tour of active duty pursuant to 10 U.S.C. § 12302. Such time includes
any voluntary active duty performed between two periods of involuntary
active duty pursuant to 10 U.S.C. § 12302.
[7] USFK planned to increase the number of accompanied tours from 1805
positions as of September, 2008 to 4636 positions by December, 2010
during the initial phase of implementing tour normalization.
[8] Military Personnel costs included overseas-housing allowance,
assignment incentive pay, cost-of-living allowance, family-separation
allowance, and permanent change of station costs.
[9] As previously discussed, if tour normalization is fully implemented
in Kunsan, USFK has estimated that the total DOD population in South
Korea could increase to approximately 84,000.
[10] The Army estimate does not include any other military service
cost, especially Air Force costs, for tour normalization between 2020
and 2050 nor does it include the additional cost associated with the
other U.S. posture initiatives in South Korea between 2016 and 2050.
[11] In the memo, the Secretary of Defense did not define the level of
tour normalization resource requirements that would be affordable.
[12] According to USFK officials, the Humphreys Housing Opportunity
Program would use private developers to construct military-housing
facilities at Camp Humphreys that in turn would be rented by military
service members using DOD overseas housing allowance funds--estimated
at $4,200 per month.
[13] GAO, Cost Estimating and Assessment Guide: Best Practices for
Developing and Managing Capital Program Costs, [hyperlink,
http://www.gao.gov/products/GAO-09-3SP] (Washington, D.C.: March 2009).
[14] Text of the Joint United States-Republic of Korea Statement on the
Launch of the Strategic Consultation for Allied Partnership (Jan. 19,
2006).
[15] According to the State Department, in April 2008 the Presidents of
the United States and South Korea agreed to maintain the United States
force level on the peninsula at 28,500.
[16] In March 2011, OSD officials stated that the master plan for Camp
Humphreys is currently being modified to reflect full implementation of
tour normalization.
[17] See Joint Statement, U.S.-Japan Security Consultative Committee
(Washington, D.C.: Feb. 19, 2005).
[18] See United States-Japan Security Consultative Committee Document,
U.S.-Japan Alliance: Transformation and Realignment for the Future
(Oct. 29, 2005).
[19] See United States-Japan Security Consultative Committee Document,
U.S.-Japan Roadmap for Realignment Implementation, (May 1, 2006) The
U.S.-Japan Security Consultative Committee has discussed the Roadmap in
subsequent Joint Statements made in May 2007 and May 2010.
[20] Agreement Concerning the Implementation of the Relocation of III
Marine Expeditionary Force Personnel and Their Dependents from Okinawa
to Guam, U.S.-Japan, Feb. 17, 2009, Temp. State Dep't No. 09-89.
[21] Servicemember population totals include Navy Ashore and Afloat,
Marines Ashore and Rotational, Army, Air Force, and Coast Guard.
[22] We requested total cost estimates for each initiative from DOD
officials at all levels in the department, including the Office of the
Secretary of Defense, PACOM, USFJ, and their respective service
component commands. See appendix I for more details on our scope and
methodology.
[23] United States-Japan Security Consultative Committee Document,
United States-Japan Roadmap for Realignment Implementation, May 1,
2006.
[24] Japanese Air Self Defense Force bases where aviation training
would be relocated are Chitose, Misawa, Hyakuri, Komatsu, Tsuiki, and
Nyutabaru.
[25] The facilities that would be fully returned to Japan are Marine
Corps Air Station Futenma, Camp Kinser, Naha Port, Kuwae Tank Farm, and
Camp Lester. Camp Foster would be partially returned.
[26] Marine Corps plans indicate that heavy (CH-53), medium (CH-46),
and light (AH-1) helicopter assets may relocate to Camp Schwab, among
other assets.
[27] Although the Roadmap and the Agreement concerning the Guam
relocation refer to approximately 8,000 personnel, the Record of
Decision for the Guam and Commonwealth of Northern Mariana Islands
relocation refers to approximately 8,600 Marines. See Department of the
Army and Department of the Navy, Record of Decision for the Guam and
CNMI Relocation (Sept. 2010).
[28] The Roadmap provides a framework for the funding amounts, which
were subsequently reaffirmed in the introduction to the U.S.-Japan
Agreement concerning the relocation to Guam. Agreement Concerning the
Implementation of the Relocation of III Marine Expeditionary Force
Personnel and Their Dependents from Okinawa to Guam, U.S.-Japan, Feb.
17, 2009, Temp. State Dep't No. 09-89.
[29] In Japan the Marine Corps has portions of its labor and utilities
costs paid by the Japanese Government. According to Marine Corps
officials, on Guam these costs will need to be paid from the Marine
Corps' budget.
[30] GAO, Defense Infrastructure: Guam Needs Timely Information from
DOD to Meet Challenges in Planning and Financing Off-Base Projects and
Programs to Support a Larger Military Presence, [hyperlink,
http://www.gao.gov/products/GAO-10-90R] (Washington D.C., Nov. 13,
2009).
[31] See our list of related products at the end of this report for
additional information.
[32] United States-Japan Security Consultative Committee Document:
United States-Japan Roadmap for Realignment Implementation (May 1,
2006).
[33] See S. Rep. No. 111-226, at 13-15 (2010). The direction appeared
in a committee report accompanying a proposed bill for appropriations
for military construction, the Department of Veterans Affairs, and
related agencies for the fiscal year ending September 30, 2011 (S.
3615). Specifically, the committee directed DOD to provide detailed
annual updates on the status of posture-restructuring initiatives in
Korea, Japan, Guam, and the initiative that will address training
capabilities and capacity in the Pacific region as an appendix to the
annual DOD Global Posture Report.
[34] GAO, Defense Management: Additional Cost Information and
Stakeholder Input Needed to Assess Military Posture in Europe,
[[hyperlink, http://www.gao.gov/products/GAO-11-131 (Washington, D.C.:
February 2011).
[35] The estimated $24.6 billion obligated by the services to build,
operate, and maintain military installations in Asia does not include
funds obligated by tenant organizations at those locations that can
contribute significant funding to operate and maintain infrastructure.
See app. I for more details on our scope and methodology to collect and
analyze posture costs.
[36] [hyperlink, http://www.gao.gov/products/GAO-11-131].
[37] The Joint Strategic Capabilities Plan defined an installation as
any one of three types of locations: main operating base, forward
operating site, or cooperative security location.
[38] As discussed later in this report, the Government of Japan does
provide some host-nation support funding to help defray DOD labor,
utilities and facility improvement costs for facilities in Japan.
[39] This data does not include (1) supplementary funding provided to
support ongoing operations, (2) costs reimbursed by tenant
organizations at installations in PACOM's area of responsibility, and
(3) personnel costs for troops stationed at installations in PACOM's
area of responsibility. See appendix III for more details on PACOM
posture obligations and estimated requirements.
[40] See appendix I for details on our cost-estimate methodology.
[41] According to USFK officials, the Republic of Korea provided 790.4
billion of host-nation support in 2010, which would equal about $663.3
million.
[42] Conversion to U.S. dollars is calculated using the annual exchange
rates from 2007 through 2010, and the 2010 exchange rate for the period
2011 though 2013. The Special Measures Agreement signed in January 2009
indicates that the 2009 contribution is 760 billion, with subsequent
yearly contributions for 2010-2013 determined by increasing the
contribution of the previous year by an inflation rate. See Agreement
Concerning Special Measures, U.S.-S. Korea, art. II, Jan. 15, 2009,
Temp. State Dep't No. 09-63.
[43] ¥188 billion equals about $1.3 billion, based on a 87.78 foreign
exchange rate.
[44] 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.: December
2007).
[45] See Agreement Concerning the Implementation of the Relocation of
III Marine Expeditionary Force Personnel and Their Dependants from
Okinawa to Guam, U.S.-Japan, Feb. 17, 2009, Temp. State Dep't No. 09-
89.
[46] This DOD population increase includes all DOD initiatives planned
for the military buildup on Guam, not just the transfer of Marine Corps
forces from Okinawa. For more information on the Guam initiatives, see
GAO, Defense Infrastructure: Guam Needs Timely Information from DOD to
Meet Challenges in Planning and Financing Off-Base Projects and
Programs to Support a Larger Military Presence [hyperlink,
http://www.gao.gov/products/GAO-10-90R (Washington, D.C.: November
2009).
[47] In March 2009, GAO published its Cost Estimating and Assessment
Guide that identifies best practices for developing and managing
capital program costs. Agencies can follow the 12-step process which
addresses best practices, including defining the program's purpose,
developing the estimating plan, defining the program's characteristics,
determining the estimating approach, identifying ground rules and
assumptions, obtaining data, developing the point estimate, conducting
sensitivity analysis, performing a risk or uncertainty analysis,
documenting the estimate, presenting it to management for approval, and
updating it to reflect actual costs and changes. Following these steps
ensures that realistic cost estimates are developed and presented to
management, enabling them to make informed decisions about whether the
program is affordable within the portfolio plan. GAO, Cost Estimating
and Assessment Guide: Best Practices for Developing and Managing
Capital Program Costs, [hyperlink, http://www.gao.gov/products/GAO-09-
3SP] (Washington, D.C.: March 2009).
[48] See Office of Management and Budget, Capital Programming Guide,
Version 2.0, Supplement to OMB Circular A-11, Part 7 (Washington, D.C.:
June 2006).
[49] GAO, Defense Management: Additional Cost Information and
Stakeholder Input Needed to Assess Military Posture in Europe,
[hyperlink, http://www.gao.gov/products/GAO-11-131] (Washington, D.C.:
February, 2011).
[50] GAO, Defense Management: Additional Cost Information and
Stakeholder Input Needed to Assess Military Posture in Europe,
[hyperlink, http://www.gao.gov/products/GAO-11-131] (Washington, D.C.:
February 2011).
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