Homeporting: Status of Continuing Construction and Development

Published by the Government Accountability Office on 1990-06-20.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

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t- :        United   States   General   Accounting   Office

GAO         Report to Congressional Requesters                            .;

June 1990
            Status of Continuing
            Construction md

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              REsTRlm--         Not to be rekased outside the
              General Accounting OB+lce uulees specifwally
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             United States
GAO          General Accounting  Office
             Washington, D.C. 20548

             National Security and
             International Affairs Division


             .June 20, 1990

             The Honorable Charles E. Bennett
             Chairman, Subcommittee on Seapower
               and Strategic and Critical Materials
             Committee on Armed Services
             House of Representatives

             The Honorable Patricia Schroeder
             Chairwoman, Subcommittee on Military
               Installations and Facilities
             Committee on Armed Services
             House of Representatives

             As a result of your strategic homeport hearing on April 24, 1990, and in
             response to subsequent discussions with your offices, we have continued
             reviewing the Navy’s strategic homeporting program. As requested by
             your staff, we followed up on your letter of May 1, 1990, to the Secre-
             tary of Defense urging that work on ongoing construction projects at all
             new homeports be stopped and your letter of May 15,1990, to the Secre-
             tary of the Navy recommending that construction of section 801 housing
             at Staten Island, New York, be halted. While our overall analysis is still
             ongoing, this interim report responds to your request for a status update
             of the new homeports’ development.

             Prior to your letters, the Secretary of Defense instituted a moratorium
Background   that halted new military construction throughout the Department of
             Defense. The moratorium has now been extended to November 15, 1990.
             As a result, some new construction planned for the strategic homeports
             has not started.

             Also, as part of a Navy infrastructure study the need for the strategic
             homeports is being considered, but the results of that study are not due
             before the fall of 1990. The Navy is also in the process of updating the
             net costs of not proceeding with the new homeports, which it currently
             estimates at $375 million. However, as we testified before the Subcom-
             mittees in April, these costs need to be weighed against the additional
             costs of making the new homeports fully capable and the Navy’s
             increased operating costs of having additional homeports.

              Page 1                                         GAO/NSIAD-90.231   Homeparting

Please contact me at (202) 275-6504 if you or your staff have questions
concerning the report. Other major contributors to this report are listed
in appendix IV.

Martin M Ferber
Director, Navy Issues

 Page 3                                          GAO/NSLADSO-231   Homeporting
                             Appendix I
                             status Update
                             (As of June 11,199o)

               percent complete). This package’s current contract value is $55.88 mil-
               lion, which includes $11.22 million in options awarded on March 23. The
               estimated work in place is $15 13 million, or 27 percent, of the current
               contract value. The expected contract completion date is February 18,
             l Military Construction Package II includes work for demolition, utilities,
               and site improvements. This package’s current contract value is $36.80
               million. The estimated work in place is $35.30 million, or 96 percent, of
               the contract value. The expected contract completion date is September
                8, 1990.
             0 The City of Everett is administering a contract for defense access roads
                funded with federal monies. Funds available for roads total $14.4 mil-
                lion. The estimated work in place is about 30 percent of the contract
                Funds available for land acquisition total $62.25 million of which $54.03

                has been expended.
                As of May 31, 1990, funds available totaled $191.01 million, obligations

                totaled $180.42 million, and expenditures totaled $117.17 million.
                Additional military construction projects (and associated costs) needed

                 for Initial Operating Capability was under study.
             . The date for Initial Operating Capability also was under study.

                              As of May 31, 1990, funds available for Ingleside totaled $92.67 million,
Gulf Coast           l

                              obligations totaled $60.95 million, and expenditures totaled $46.69
                     l        As of May 31, 1990, funds available for Pensacola totaled $41.80 mil-
                              lion, obligations totaled 527.58 million, and expenditures totaled $19.10
                     l        As of May 31, 1990, funds available for Pascagoula totaled $47.48 mil-
                              lion, obligations totaled $26.96 million, and expenditures totaled $6.87
                         l    As of May 31, 1990, funds available for Mobile totaled $37.31 million,
                              obligations totaled 525.94 million, and expenditures totaled $12.77
                         l    Construction was in various stages.

                              Page 6                                          GAO/NSIAJ+90.221   Homeportine
Appendix III

Potentially Applicable Laws

                            The laws affecting the disposition of particular government real prop-
                            erty may vary with the circumstances existing at the time of disposition.
                            If, however, all reversion and first purchase rights under the agree-
                            ments outlined in appendix II are extinguished, the laws with the most
                            relevance to a disposition appear to be the following.

IOU S.C 2662     Precludes the Secretary of a military department from entering into specified real property transactions
                 until the exprration of 30 days from the submission of a report on the transaction to specified
                 congressronal commrttees. The transactions covered include the lease, license, or transfer of real
                 property or the reporting of excess real property to a disposal agency.
IO U.S.C. 2687   Sets out procedures for base closures and realignments, includrng compliance wrth the National
          --__   Environmental Policy of 1969, as amended (42 U.S.C 4321 et seq.).
40 USC. 483      Pertarns to the utilrzatron of excess property.-.-__        I_-_
40 U.S.C. 484    Pertains to the disoosal of surplus oropertv.

                             All the above statutes are mentioned in the Defense Authorization
                             Amendments and Base Closure and Realignment Act (Public Law lOO-
                             526,lO USC. 2687 note) where they were waived or their authorities
                             delegated in order to facilitate the act’s purposes.

                             Page 7                                                        GAO/MZAD-S&231Homeporting

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    Post Office Box 6015
    Gaithersburg, Maryland     20877

    Telephone   202-275-6241

    The first five copies of each report   are free. Additional   copies are
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Appendix IV

Major Contributors to This Fkport

                        James Murphy, Assistant Director
National Security and   Brenda Farrell, Evaluator-in-Charge
International Affairs   Tana Davis, Evaluator
Washington, D.C.

                        Alan Goldberg, Senior Attorney
Office of General

 (394372)               Page 8                                GAO/NSIAB90-231   Homeporting
Appendix II

Homeporting Agreements

Location                                   Contract limitations on disposition
Staten Island, New York                    Upon timely notice by crty of New York, premises revert to the crty if (1) the Navy fails to
                                           utrkze the premises as a homeport within 8 years of its acquisition of the premises (unless
                                           extended by the parties) or (2) cessatron of use of the premises or any portion thereof for
                                           Navy homeportrng purposes
                                            (The city’s farlure to provrde a “reversion notice” within specified times extinguishes the
                                            city’s right to cause reversion to occur.)
Pascagoula, Missrssrppi                     Reversron of property automatically occurs if (1) construction of the homeport does not
                                            commence within 2 years of the conveyance of the property or (2) the Secretary of the Navy
                                            determines that the property IS no longer required for a homeport or related facilrties.
                                            (If the State of Missrssippr fails to pay for Navy Improvements wtthin 5 years from the date of
                                            reversion, then the property and improvements revert to the United States.)
Corpus Chnsti, Texas (Ingleside)            Land reverts to Corpus Christi Port Authority on January 1, 1992, if at such time (1) the Navy
                                            has not commenced construction of the homeport or (2) constructron has begun but the
                                            property IS no longer used for maritrme purposes by the Department of Defense.

                                            (Right of reversion to the Authority terminates and is extingurshed if the State of Texas or the
                                            Authonty falls to make certain capital contributrons or pay for the Increased value of the
                                            Improved property withrr a stated period of time.)
Mobrle, Alabama                             Land reverts to county and crty of Mobrle and State of Alabama on January 1, 1992, rf at
                                            such time (1) the Navy has failed to begin construction of the homeport or (2) constructron
                                            has begun but the property is no longer required for Department of Defense purposes

                                            (The rrght to revert termrnates and is extinguished upon the farlure of the city, county, or
                                            state to pay for the increased value of the improved property within a stated period of time L
Everett, Washington                         A Agreements for the past and anticipated future purchases of land between the Port of
                                            Everett and the Navy state that in the event the United States decides to sell or otherwise
                                            dispose of all or any part of the purchased property, the Port has the right to purchase the
                                            property for, dependtng upon crrcumstance, current fair market value or what the
                                            government paid for It plus interest.

                                            B All properties exchanged pursuant to an exchange agreement between the State of
                                            Washington and the Navy revert to the ownershrp status that existed prior to any transfers of
                                            ownershrp under the exchange agreement if the homeporting protect is not completed.

                                            C Property bought by the Navy from Western Gear Machinery Company appears to be
                                            retained by the Navy If homeporkng is not completed The agreement covering the purchase
                                            of this property contains no first right to purchase in Western’s favor should the Navy decide
                                            to drspose of the property

                                              D. A 1988 Aquatic Lands Lease for 30 years between the State of Washington Department
                                              of Natural Resources and the Navy does not provide for the failure to complete the
                                              homeport. Lease contains no rent amount, however
Pensacola, Flonda              ~   ~-   ---By     Memorandum of Agreement among the State of Florida, the city of Pensacola, and the
                                              Navy concernrng dredgrng, the Navy agreed to locate and construct a homeport at
                                              Pensacola, Flonda, by October 1, 1992. The Memorandum of Agreement does not address
                                              the farlure to complete the homeport but does condition completron on, among other
                                              matters, “the Navv’s receipt of appropriated funds from the United States Conaress.”

                                            Page 6                                                         GAO/NSIABSO-231     Homeporting
Status Update
(As of June 11,199O)

                   91 percent of the contracts’ value was complete.
Staten Island   l

                . June 25, 1990, is the scheduled date for the official dedication ceremony
                   for New York Naval Station. June 21-25 is Fleet Week and five Navy
                   ships will berth at Stapleton during that period.
                l  The Shore Intermediate Maintenance Facility (SIMA) will be ready for
                   occupancy acceptance from the contractor on June 151990. This means
                   it will be “substantially completed.” The SIMA will be operational June
                   21, 1990. About 13 military personnel are assigned to the SIW. This
                   figure is now expected to increase to about 35 by January 1,199l. The
                   manning will be adjusted to maintain the number of ships homeported at
                   Stapleton. The total personnel requirement for a fully equipped and uti-
                   lized SIMA at Stapleton is 350.
                   The bachelors enlisted quarters/mess hall will be ready for occupancy

                    acceptance the last week in June.
                   The 400 military construction housing units will be completed by June

                    15. About 131 Normandy families are now assigned housing units at
                    Fort Wadsworth and are in the process of transferring there while cur-
                    rently eight USS Normandy families are actually living there. Eight per-
                    sonnel assigned to the SIMA and 16 personnel assigned to the
                    construction battalion unit are also currently in quarters at Fort
                 . As of June 11, 1990, the developer for the section 801 build to lease
                    housing had not received the necessary financing to proceed,
                    Utilities/site improvements (i.e. hot water, heat, electrical installation)

                    will be complete in August.
                    August 1, 1990, is the official effective date for the Normandy to be

                    homeported at Staten Island.
                 . The Commanding Officer of the Brooklyn Naval Station is in the process
                    of transferring personnel from Brooklyn to Staten Island. About 60 civil-
                    ians assigned to Public Works and about five military personnel
                    assigned to Housing have relocated (both groups were previously
                    located in the old commissary building). On June 26, new furniture will
                    begin to arrive at Staten Island. Furniture from Brooklyn Naval Station
                    will be moved in July.
                    As of May 31, 1990, funds available for Staten Island totaled $193.30

                    million, obligations totaled $162.40 million, and expenditures totaled
                    $136.16 million.

                            As of May 30, 1990, two military construction contracts totaling $92.68
Everett                 l

                            million had been let.
                        l   Military Construction Package I includes work for dredging (94 percent
                            complete), a carrier pier (18 percent complete), and the south wharf (28

                            Page 4                                         GAO/NSIAD90231   Homeporting

                      Our review indicates that the Navy has not taken any action to stop
Results in Brief      ongoing construction as a result of your letters. Work under contracts
                      already awarded has continued unabated and the Navy is going ahead
                      with plans to dedicate the New York Naval Station on June 25, 1990. In
                      fact, some families of military personnel assigned to the USS Normandy
                      (the first ship scheduled to be homeported at Staten Island), the inter-
                      mediate maintenance activity, and the construction battalion unit are
                      already living at Staten Island or are in the process of transferring
                      there. All these actions pertain to the strategic homeport. In addition,
                      there are other actions and personnel transfers associated with the clo-
                      sure of the Brooklyn Naval Station. Appendix I summarizes preliminary
                      information we gathered on the status of construction and other activity
                      at all of the new homeports.

                      Your offices also asked us to determine the legal status of any limita-
Limitations on Land   tions on the disposal of land if the new homeports are terminated.
                      We found that most of the written agreements pertaining to home-
                      porting involve land that was obtained from state or local governmental
                      instrumentalities and that reverts to the prior owner if (1) construction
                      of the homeport does not begin within a specified time or (2) the Navy
                      ceases to use the homeport. Appendix II summarizes the legal limita-
                      tions for each new homeport and appendix III addresses potentially
                      applicable laws.

                      As requested, we did not obtain official written agency comments on
                      this report. However, we did discuss the matters presented in this report
                      with Department of Defense and Navy officials and included their views
                      where appropriate.

                       As agreed with your offices, unless you publicly announce its contents
                       earlier, we plan no further distribution of this report until 7 days from
                       the date of this letter. At that time, we will send copies to the Chairmen,
                       Senate and House Committees on Armed Services and Appropriations,
                       the Secretaries of Defense and the Navy, and other interested parties.

                       Page 2                                           GAO/NSIAlMO-231   Homeporting