oversight

Military Bases: Lessons Learned From Prior Base Closure Rounds

Published by the Government Accountability Office on 1997-07-25.

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

                   United States General Accounting Office

GAO                Report to the Congress




July 1997
                   MILITARY BASES
                   Lessons Learned From
                   Prior Base Closure
                   Rounds




GAO/NSIAD-97-151
      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Comptroller General
      of the United States

      B-274612

      July 25, 1997

      To the President of the Senate and the
      Speaker of the House of Representatives

      This report focuses on lessons learned from the base realignment and closure rounds held in
      1988, 1991, 1993, and 1995. We undertook this work so that a systematic assessment of
      experiences would be available should the Department of Defense (DOD) request and Congress
      authorize additional base closure rounds. In transmitting the results of the 1997 Defense
      Quadrennial Review to Congress on May 19, 1997, the Secretary of Defense stated his intent to
      ask Congress to authorize two additional base closure rounds.

      We are addressing this report to you in keeping with our practice of reporting to Congress on
      the recommendations and selection process employed by DOD in each of the three most recent
      base closure rounds, as initially required by the 1990 Defense Base Closure and Realignment
      Act (P.L. 101-510). We have identified lessons related to savings, costs, and economic impact
      and improvements needed in DOD’s process for identifying bases for realignment and closure.
      We have also included matters for congressional consideration if Congress contemplates
      legislation for future base closure rounds.

      We are sending copies of this report to the Chairmen and Ranking Minority Members, Senate
      Committee on Appropriations, Subcommittee on Defense; Senate Committee on Armed
      Services; House Committee on Appropriations, Subcommittee on National Security; House
      Committee on National Security; the Secretaries of Defense, the Army, the Navy, and the Air
      Force; and the Directors of the Defense Logistics Agency and the Defense Investigative Service.
      We will make copies available to others upon request.

      This report was prepared under the direction of David R. Warren, Director, Defense
      Management Issues, who may be reached on (202) 512-8412 if you or your staff have any
      questions. Major contributors to this report were Barry W. Holman, Marian H. Harvey, and
      Kay D. Kuhlman.




      James F. Hinchman
      Acting Comptroller General
      of the United States
Executive Summary


             Special legislative authorities were enacted in 1988 and 1990 to overcome
Purpose      impediments to base closures. These authorities provided the basis for
             four rounds of base realignments and closures (BRAC) between 1988 and
             1995. Despite anticipated completion of those rounds by 2001, the
             Department of Defense (DOD) continues to retain significant amounts of
             excess, costly infrastructure. Retaining this excess capacity drains
             resources needed for facilities maintenance and other priorities such as
             weapon systems modernization. Anticipating that DOD might request
             Congress to authorize additional BRAC rounds, GAO initiated this review to
             address (1) what lessons could be learned from prior rounds as they
             related to savings, costs, and economic impact; (2) what legislative actions
             would be needed if further BRAC rounds were to be authorized; and
             (3) what improvements, if any, would be needed in DOD’s process for
             identifying bases for realignment and closure.


             Closing unneeded defense facilities has historically been difficult because
Background   of public concern about the economic effects of closures on communities
             and the perceived lack of impartiality of the decision-making process. It
             was made even more difficult by legislation enacted in the 1970s that
             required DOD to notify Congress of proposed closures and to prepare
             economic, environmental, and strategic consequence reports. These
             requirements effectively precluded bases from being closed between 1977
             and 1988. However, legislation enacted in 1988 (P.L. 100-526) supported a
             special commission chartered by the Secretary of Defense to identify
             bases for realignment and closure and provided relief from certain
             statutory provisions that had hindered DOD’s past efforts. With this
             legislation, a BRAC round was completed in 1988. Congress later passed the
             Defense Base Closure and Realignment Act of 1990 (Title XXIX,
             P.L. 101-510), which created an independent commission and authorized
             three BRAC rounds in 1991, 1993, and 1995. The four rounds resulted in
             decisions to close 97 out of 495 major domestic installations and many
             smaller ones and to realign other facilities. The legislation authorizing
             these rounds expired at the end of 1995, and DOD’s authority to close or
             realign bases reverted to the 1970’s legislation under which DOD, in effect,
             was unable to close bases.

             Although the 1995 BRAC round produced decisions to close 27 major
             domestic bases, issues were raised about how some decisions were
             implemented. This was most evident as it related to the implementation of
             BRAC decisions at Air Force depots in Texas and California. As a result,
             there is considerable controversy today over those decisions.



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                   Executive Summary




                   Despite these recent BRAC rounds, DOD continues to maintain large
                   amounts of excess infrastructure, especially in its support functions, such
                   as maintenance depots, research and development laboratories, and test
                   and evaluation centers. Each service maintains its own facilities and
                   capabilities for performing many common support functions and, as a
                   result, DOD has overlapping, redundant, and underutilized infrastructure.
                   DOD has taken some steps to demolish unneeded buildings on various
                   operational and support bases; consolidate certain functions; privatize,
                   outsource, and reengineer certain workloads; and encourage
                   interservicing agreements—however, these are not expected to offset the
                   need for additional actions. At the same time, DOD officials recognize that
                   significant additional reductions in excess infrastructure requirements in
                   common support areas could come from consolidating workloads and
                   restructuring functions on a cross-service basis, something that has not
                   been accomplished to any great extent in prior BRAC rounds. GAO recently
                   added defense infrastructure to its list of high-risk federal programs
                   needing increased attention and planning to avoid waste and
                   mismanagement.1

                   The Secretary of Defense’s 1997 Quadrennial Defense Review, which
                   assessed defense strategy, programs, and policies, included the issue of
                   future base closures in the infrastructure portion of the review. In his
                   May 19, 1997, report to Congress on the results of this review, the
                   Secretary asked Congress to authorize domestic base closure rounds in
                   1999 and 2001. That recommendation was endorsed by the National
                   Defense Panel, the independent, congressionally mandated board that is
                   reviewing the work of the Quadrennial Defense Review and completing its
                   own review of defense issues. Earlier the Secretary announced that he had
                   established a Task Force on Defense Reform to go beyond the work of the
                   Quadrennial Defense Review; to examine ways to consolidate functions;
                   eliminate duplication of efforts; and recommend organizational reforms,
                   reductions in management overhead, and streamlined business practices.


                   Lessons have been learned from prior BRAC rounds that can be used to
Results in Brief   improve the BRAC process should future rounds be authorized. These
                   lessons relate to the amount of savings and up-front costs associated with
                   closing bases and the economic impact on communities confronted with
                   the loss of jobs. Data indicate that savings from base closures, though not
                   well-documented, are expected to be substantial. However, net savings
                   from BRAC were not generated as quickly as initially estimated because the

                   1
                    High Risk Series: Defense Infrastructure (GAO/HR-97-7, Feb. 1997).



                   Page 3                                                          GAO/NSIAD-97-151 Military Bases
Executive Summary




costs of closing bases and environmental cleanup were high and offset the
savings. Firm data on expected savings have been difficult to obtain
primarily because DOD accounting systems, like all accounting systems,
track expenses and disbursements, not savings. Furthermore, DOD
guidance does not require that the services’ BRAC savings estimates be
developed consistently, well-documented, or updated annually to reflect
changes that occur during implementation. Also, large revenues initially
expected to be generated from land sales have not occurred. Some cost
avoidances are not fully captured in DOD’s savings estimates because
defense budget plans do not reflect future costs such as long-term
recapitalization costs.2

While defense civilian job loss and other adverse effects on communities
are an inescapable byproduct of base closures, at least in the short term,
recent studies indicate that, in a number of communities, the local
economies appeared to be able to absorb the economic losses, though
some communities are faring better than others. However, in some cases,
it is too soon to tell what the ultimate economic impact will be. Several
federal programs appear to have helped cushion the impact of closing
bases on individuals and communities.

Given the historical difficulty of closing bases, new legislation is needed if
there are going to be future base closures. DOD has proposed that Congress
authorize two additional BRAC rounds. The expired 1990 BRAC legislation, as
amended, established a sound process for identifying bases for closure
and realignment, and it is widely viewed as a model for any future BRAC
legislation. Some individuals expressed concern over the role of politics in
the process. GAO recognizes that no public policy process, especially one
as open as BRAC, can be completely removed from the U.S. political system.
The process has several checks and balances to keep political influences
to a minimum, but the success of these provisions requires that all
participants of the process adhere to the rules and procedures. If future
BRAC rounds are authorized, decisions will need to be made regarding the
number of rounds, when they should be held, and how they will relate to
other legislation dealing with downsizing and restructuring DOD’s
laboratories and test and evaluation facilities.

The outcome of potential future BRAC rounds could be improved by
resolving, in advance, key organizational and policy issues, such as which
service or services will be responsible for which support functions and

2
 Cost avoidances are defined as avoidance of costs that have not been budgeted, whereas cost savings
are defined as cost reductions from an approved budget that result in program funds being recouped
or used elsewhere.



Page 4                                                         GAO/NSIAD-97-151 Military Bases
                            Executive Summary




                            whether some facilities will be managed jointly. The Office of the
                            Secretary of Defense will have to exercise strong leadership to overcome
                            the services’ long-standing parochialism and inability to agree on
                            significant cross-service consolidations in common support areas. The
                            Secretary’s Task Force on Defense Reform, as a follow-on effort to the
                            Quadrennial Defense Review, could help address some of these key
                            organizational and policy issues. If there are future BRAC rounds, a DOD
                            joint working group will also be needed to initiate improvements in DOD’s
                            BRAC processes and decision-making tools and ensure greater consistency
                            in the services’ processes. For example, further improvements can be
                            made to the model used by DOD to estimate the costs and savings of
                            closing and realigning facilities. Finally, if there are future BRAC rounds,
                            DOD needs to ensure full audit access to all parts of DOD’s BRAC process and
                            to use the current discount rate tied to the U.S. Treasury’s borrowing rate
                            to calculate the net present value of BRAC savings estimates.



Principal Findings

Important Lessons Learned   DOD’s experience with bases closed in prior rounds provides some lessons
About Savings, Closure      about the amount of savings and high up-front costs associated with base
Costs, and Economic         closures and the affect of closures on communities. Costs associated with
                            closing bases can be significant, and it may take several years before
Impact From Prior BRAC      savings offset these costs and annual recurring savings begin. DOD projects
Rounds                      that the cost of BRAC during the implementation period from 1990 to 2001
                            will reach $23 billion. Over time, DOD’s projections show that savings begin
                            to offset costs with annual net savings increasing yearly and reaching
                            $4.4 billion in fiscal year 2001. Once implementation costs have been fully
                            offset, including environmental restoration costs, DOD projects that the
                            recurring savings, or cost avoidance, will amount to $5.6 billion per year.
                            However, the exact amount of actual savings realized from BRAC actions is
                            uncertain because of the way in which initial cost estimates were
                            developed, subsequent changes in cost estimates, lack of updates to the
                            savings estimates, and inherent limitations in DOD’s accounting systems.

                            Confusion and uncertainty over savings expected from BRAC occurred in
                            part because initial costs and savings estimates, not of budget quality and
                            rigor, were developed by DOD components when initially considering bases
                            for closure or realignment. DOD’s policy was to exclude environmental
                            cleanup costs in initial BRAC decision-making because environmental




                            Page 5                                          GAO/NSIAD-97-151 Military Bases
Executive Summary




cleanup of bases was expected to occur, over time, whether a base closed
or not. GAO has agreed with DOD’s approach of excluding these costs from
its initial BRAC decisions. GAO has also agreed that environmental
restoration costs are a liability to DOD regardless of its base closure
decisions. After the BRAC decisions were finalized, DOD added
environmental cleanup costs, as it prepared new estimates of BRAC costs
and savings to formulate its budget requirements for implementing BRAC
decisions; such costs must be funded from the BRAC account. The
susequent inclusion of environmental cleanup costs increased the cost
estimates for BRAC actions relative to the estimates reported by the BRAC
Commission. The addition of environmental cleanup costs to the BRAC
budget estimates, as well as changes that occur in the estimates over time
and land sales revenues that were less than initially anticipated, has had
the effect of delaying the point in time in which savings would overtake
and offset the implementation costs.

In addition to these changes in the cost estimates, the services’ BRAC
savings estimates have been inconsistently developed and poorly
documented, and not consistently updated annually, although DOD is
required to report savings annually. A sound methodology for estimating
savings that includes updating the savings estimates when a significant
change occurs during implementation of a BRAC decision is important
because DOD relies on these savings for future defense programs. A
primary reason DOD has not tracked savings effectively is because DOD’s
accounting systems, like all accounting systems, are designed to track
expenses and disbursements, not savings or long-term cost avoidances.
Determining savings requires a separate analysis, which was usually done
when DOD components developed their budgets for implementing BRAC
decisions. The absence of efforts to update projected savings indicates the
need for additional guidance and emphasis from DOD on accumulating and
documenting updated savings data on a comprehensive and consistent
basis. Such efforts will also be important to tracking savings should
additional BRAC rounds be authorized.

At the same time, GAO recognizes that it may not always be practical to
fully capture some savings or costs avoided from base closures. For
example, defense budgets do not project long-term recapitalization costs
beyond planned military construction projects. The avoidance of these
recapitalization costs as a result of base closures could be significant, but
the amount is difficult to estimate with any degree of precision. As a
result, despite the need for greater emphasis on capturing and updating
savings, some level of imprecision is likely to continue.



Page 6                                           GAO/NSIAD-97-151 Military Bases
                           Executive Summary




                           Maximizing savings from BRAC is also difficult in that BRAC cost and savings
                           objectives compete with other policy and legislative requirements.
                           Requirements related to disposal and reuse of excess military facilities
                           limit opportunities for savings by reducing land sale revenues. On the
                           other hand, options exist for reducing the high costs associated with
                           environmental restoration; however, they require trade-offs among
                           cleanup costs, cleanup schedules, and base reuse goals.

                           DOD estimates that approximately 107,000 defense civilian jobs will have
                           been eliminated as a result of prior BRAC rounds—actions that will be
                           spread over approximately a 12-year period by the time all of the BRAC
                           actions have been implemented, not later than 2001. While this is a
                           significant number, several federal programs assist DOD employees and
                           communities in adjusting to base closures. For example, through the
                           priority placement program, more than 23,000 of DOD employees have
                           found jobs in other defense and government activities though some may
                           have had to relocate outside of their community to find comparable jobs.
                           Some employees who choose to stay in their communities may be unable
                           to match their previous income. Federal programs and grants available to
                           communities have helped to somewhat cushion the blow of base closures
                           and helped communities develop plans for base reuse and economic
                           revitalization. While the full economic impact of base closures on
                           communities will not be known for some time, early studies suggest that
                           the local economies of a number of communities appear able to absorb the
                           economic loss from base closures, though some communities are faring
                           better than others.


BRAC Legislation Will Be   The 1990 BRAC legislation, as amended, provided the framework for the
Needed If Future Rounds    BRAC processes that were used to successfully complete the three most

Are Held                   recent BRAC rounds. That legislation, which expired in 1995, is seen by
                           many officials as a model for the new legislation that would be needed for
                           any future BRAC rounds.3 Key elements of the BRAC legislation that DOD and
                           BRAC Commission officials said contributed to the success of prior rounds
                           included (1) the establishment of an independent commission and
                           nomination of commissioners by the President, in consultation with the
                           congressional leadership; (2) the development of clearly articulated,
                           published criteria for decision-making; (3) use of data certified as to its
                           accuracy; (4) the requirement that the President and Congress accept or
                           reject in their entirety the lists of closures adopted by the BRAC

                           3
                            In this review, GAO did not did not analyze the parts of the legislation that dealt with the
                           implementation of BRAC decisions, including property disposal and base reuse.



                           Page 7                                                              GAO/NSIAD-97-151 Military Bases
                        Executive Summary




                        Commission; and (5) the creation of tight time frames to force the process
                        to reach decisions in a timely manner. The legislation also required that
                        GAO assess DOD’s BRAC decision-making process and recommendations.
                        Additional audit coverage by the DOD Inspector General and service audit
                        agencies evolved over time and helped ensure that the data and analyses
                        associated with the decision-making process were accurate and complete.

                        Issues critical in any proposal for future BRAC rounds are the number of
                        rounds and when they should be held. The 1990 BRAC legislation authorized
                        three rounds at 2-year intervals in 1991, 1993, and 1995. Most DOD and
                        Commission officials GAO interviewed said it is likely that more than one
                        BRAC round will be needed to eliminate excess infrastructure. Some
                        thought each round should be authorized separately and DOD should make
                        every effort to close as many excess facilities as possible. Others noted the
                        advantages of multiple rounds, including continuity and expertise in DOD
                        and Commission staff, payment of closure costs over a longer period of
                        time, and possible force structure changes and technological advances
                        that suggest the need for continuing assessment of and revisions to the
                        infrastructure. Given the amount of advance work that goes into planning
                        for a BRAC round, up to 18 months advance lead time could be required to
                        make optimum preparations for another BRAC round.

                        Additionally, Congress would need to consider whether other legislation is
                        still required for downsizing and restructuring DOD’s laboratories and test
                        and evaluation facilities. Legislation enacted as part of the defense
                        authorization act in 1996 requires DOD to formulate a 5-year plan for
                        consolidating, restructuring, and revitalizing these facilities. That
                        legislation also charged DOD with identifying legislation needed to
                        implement the plan.


DOD’s BRAC Process      DOD and Commission officials stressed that strong, decisive leadership on
Should Be Improved If   the part of the Secretary of Defense will be key to the success of any
Future Rounds Are       future BRAC rounds. Although DOD completed four rounds, it did not reduce
                        as much infrastructure as it had originally planned. In particular, DOD
Authorized              missed opportunities to reduce infrastructure in the area of support
                        functions such as depots, medical facilities, training, and laboratories and
                        test facilities, where cross-service consolidations and interservicing were
                        possible.

                        The Office of the Secretary of Defense (OSD) emphasized the need for
                        cross servicing in the 1993 round, and even more so in 1995, when special



                        Page 8                                          GAO/NSIAD-97-151 Military Bases
                  Executive Summary




                  cross service teams were set up to work in parallel with the services’ BRAC
                  processes to identify cross-service alternatives. Parochial interests and
                  disagreements among the services over evaluation of their facilities were
                  barriers to achieving significant cross-service agreements in 1993 and
                  1995. Various officials suggested that intervention by the Secretary of
                  Defense would be needed to resolve these issues, foster increased cross
                  servicing, and reduce infrastructure in these areas in any future BRAC
                  rounds. The Secretary’s Task Force on Defense Reform, as a follow-on to
                  the Quadrennial Defense Review, as well as the National Defense Panel,
                  could help address some of these key organizational and policy issues.

                  DOD improved its decision-making processes in each of the BRAC rounds. It
                  strengthened its approach to data gathering and analysis and improved
                  computer models used for analyses. Now DOD has the opportunity to
                  further strengthen its processes before any future round. For example,
                  despite efforts to improve the model DOD used to estimate the costs of
                  closing and realigning facilities, several officials noted the need for further
                  improvements to ensure greater consistency and completeness in how the
                  services use the model. DOD can also strengthen the process to promote
                  greater consistency in how the services apply the decision criteria to
                  ensure a fair and open process. If there are future BRAC rounds, a DOD joint
                  working group will be needed to initiate improvements in DOD’s BRAC
                  processes and decision-making tools and ensure greater consistency
                  among the services’ processes. For example, the Air Force needs to
                  improve the clarity and visibility of its BRAC decision-making process. Also,
                  if there are future BRAC rounds, GAO believes that DOD and the BRAC
                  Commission should use the discount rate tied to the U.S. Treasury’s
                  borrowing rate to calculate the present worth of future savings, known as
                  the net present value. Finally, DOD would also need to ensure full audit
                  access to all parts of DOD’s BRAC process.


                  GAO  has already reported that DOD needs to develop an overall strategic
Recommendations   plan for accomplishing its fiscal and operational goals that, among other
                  things, considers the need and timing for future BRAC rounds.4 Because
                  substantial opportunities exist to achieve future savings through
                  cross-service consolidations in common support areas, GAO believes that it
                  is very important to resolve the policy issues that have limited
                  cross-service consolidations in the past. Accordingly, if Congress agrees
                  with DOD’s proposal and authorizes future BRAC rounds, GAO recommends
                  that the Secretary of Defense

                  4
                   High Risk Series: Defense Infrastructure(GAO/HR-97-7, Feb. 1997).



                  Page 9                                                         GAO/NSIAD-97-151 Military Bases
                      Executive Summary




                  •   work with the Task Force on Defense Reform and the National Defense
                      Panel to address, in advance of any future BRAC round, the important
                      organizational and policy issues in the various cross-service areas that
                      would facilitate the process of making further infrastructure reductions;
                  •   convene a DOD joint working group, as soon as practical, to develop policy
                      guidance, improve BRAC processes and decision-making tools, and ensure
                      greater consistency among the services’ processes;
                  •   use the current discount rate tied to the U.S. Treasury’s borrowing rate to
                      calculate the net present value of BRAC savings estimates; and
                  •   ensure full audit access to all parts of DOD’s BRAC process.

                      Whether or not Congress authorizes future BRAC rounds, DOD also needs to
                      improve its periodic updating and reporting of savings projected from
                      prior BRAC decisions. This information is needed to strengthen DOD’s
                      budgeting process and ensure that correct assumptions are being made
                      regarding expected reductions in base operating costs. Accordingly, GAO
                      recommends that the Secretary of Defense provide guidance to ensure that
                      its components have and follow a clear and consistent process for
                      updating savings estimates associated with prior BRAC decisions.


                      If Congress considers legislation for future BRAC round(s), it may wish to
Matters for           (1) model it on the 1990 BRAC legislation as a starting point, (2) pass such
Congressional         legislation early to allow the lead time needed for DOD and the Commission
Consideration         to organize their processes, and (3) consider the relationship between any
                      new BRAC authority and section 277 of the National Defense Authorization
                      Act for Fiscal Year 1996 pertaining to laboratories and test and evaluation
                      facilities.


                      In commenting on a draft of this report, DOD concurred with GAO’s
Agency Comments       conclusions and recommendations (see app. III for DOD’s comments).




                      Page 10                                         GAO/NSIAD-97-151 Military Bases
Page 11   GAO/NSIAD-97-151 Military Bases
Contents



Executive Summary                                                                                 2


Chapter 1                                                                                        14
                        Evolution of Efforts to Close Excess Military Bases                      14
Introduction            Results of Recent BRAC Rounds and the Quadrennial Defense                17
                          Review
                        Objectives, Scope, and Methodology                                       20

Chapter 2                                                                                        22
                        Savings From Prior BRAC Rounds Are Expected to Be                        22
Important Lessons         Substantial, Although Not Always Well-Documented
From Prior BRAC         Federal Programs and Local Economies Have Helped to Cushion              32
                          the Effects of Base Closures on Employees and Communities
Rounds Regarding        Conclusions                                                              34
Savings, Closure        Recommendation                                                           34
Costs, and Economic
Impact
Chapter 3                                                                                        36
                        1990 Legislation Provides an Effective Model for Future BRAC             36
Authorizing                Rounds
Legislation Needed If   Issues to Consider in Enacting Future BRAC Legislation                   37
                        Relationship of BRAC to Other Potential Legislation for                  40
Future BRAC Rounds         Restructuring Laboratories and Test Facilities
Are to Be Held          Conclusions                                                              41
                        Matters for Congressional Consideration                                  42

Chapter 4                                                                                        43
                        Success Will Depend on Resolution of Key Issues Before Future            43
Steps DOD Can Take        BRAC Rounds
to Enhance              Improvements Warranted in Other Aspects of DOD’s Process for             45
                          Identifying Bases for Closure
Decision-Making         Conclusions                                                              50
Should There Be         Recommendations                                                          51
Future BRAC Rounds
Appendixes              Appendix I: The Base Realignment and Closure Process                     52
                        Appendix II: Major Closure Decisions From Recent Base Closure            57
                          Rounds




                        Page 12                                      GAO/NSIAD-97-151 Military Bases
                       Contents




                       Appendix III: Comments From the Department of Defense                       59


Related GAO Products                                                                               62


Figures                Figure 2.1: Why BRAC Savings Are Difficult to Track and                     24
                         Estimates Change Over Time
                       Figure 2.2: Usual Procedures for Transferring Property                      29
                       Figure I.1: Activities and Time Line of the BRAC Process in 1995            53
                       Figure I.2: BRAC Criteria                                                   54




                       Abbreviations

                       AAA        Army Audit Agency
                       BRAC       base realignment and closure
                       CBO        Congressional Budget Office
                       CRS        Congressional Research Service
                       COBRA      Cost of Base Realignment Actions
                       DOD        Department of Defense
                       GAO        General Accounting Office
                       IG         Inspector General
                       OSD        Office of the Secretary of Defense
                       QDR        Quadrennial Defense Review
                       PRV        plant replacement value


                       Page 13                                         GAO/NSIAD-97-151 Military Bases
Chapter 1

Introduction


                             Historically, closing unneeded military bases has not been easy, in part,
                             because of the public’s concern about the effects of closures on
                             communities and their economies and questions about the impartiality of
                             the decision-making process. That perspective led to significant legal and
                             administrative barriers to base closures in the 1970s and 1980s. However,
                             special legislative authorities enacted in 1988 and 1990 provided the means
                             to deal with these concerns and overcome the barriers. Those
                             authorizations allowed four rounds of base realignment and closure (BRAC)
                             decision-making to occur in 1988, 1991, 1993, and 1995.


                             The Department of Defense (DOD) initiated actions during the 1960s and
Evolution of Efforts to      early 1970s to reduce its military basing infrastructure. The process for
Close Excess Military        identifying candidates for closure and realignment was almost completely
Bases                        developed by the Office of the Secretary of Defense (OSD), with little input
                             from the military departments or Congress. More than 60 major bases
                             were closed. However, the extent of these base closure actions, with the
                             cumulative economic impact and the lack of oversight of the
                             decision-making process, fostered concern about the fairness of the
                             process and set the stage for congressional resistance to future base
                             closures.


Legislative Impediments to   Congressional actions in the 1970s, such as denying funding for base
Base Closures in the 1970s   closures, made it increasingly difficult for DOD to unilaterally close and
and 1980s                    realign military bases. In 1977, Congress enacted legislation, reflected in
                             10 U.S.C. 2687, which essentially halted additional base closures. Under
                             section 2687, the closure of any military installation in the United States
                             with at least 300 authorized civilian positions or the realignment of any
                             installation involving a reduction of more than 1,000 civilian employees or
                             more than 50 percent of the installation’s authorized civilian workforce
                             could not take place until the Secretary of Defense had evaluated the
                             “fiscal, local economic, budgetary, environmental, strategic, and
                             operational consequences of such closure or realignment.” If the Secretary
                             found, as a result of these evaluations, that the individual base closure or
                             realignment should proceed, the Secretary had to notify Congress of the
                             proposed closure or realignment and wait 30 legislative days or
                             60 calendar days, whichever was longer, before proceeding. The
                             time-consuming processes associated with implementing these
                             requirements effectively stopped individual closure actions. As a
                             consequence, no major domestic military bases were closed between 1977
                             and 1988.



                             Page 14                                         GAO/NSIAD-97-151 Military Bases
                         Chapter 1
                         Introduction




Steps to Overcome        The suggestion to use an external commission to add independence and
Barriers and Develop a   credibility to the base closure process came in a 1983 report by the
Fair and Credible Base   President’s Private Sector Survey on Cost Control, known as the Grace
                         Commission. However, action to implement this recommendation did not
Closure Process          come until about 5 years later.

                         In May 1988, as the defense budget and force size were beginning to
                         decrease and future reductions were expected, the Secretary of Defense
                         chartered a commission to consider military bases for closure. That action
                         was later undergirded by special legislation enacted in October 1988
                         (P.L. 100-526) only for the 1988 BRAC round. It authorized a special
                         commission to identify proposed closures and realignments and provided
                         relief from certain statutory provisions that had hindered the base closure
                         process. The 1988 BRAC round produced decisions to close 16 major
                         domestic bases. Even so, concerns existed about the fairness and
                         impartiality of the process, in part, because the commission was appointed
                         by and reported directly to the Secretary; also, concerns were expressed
                         that the list of proposed closures unfairly targeted districts represented by
                         certain members of Congress.1

                         New efforts by the Secretary in January 1990 to initiate the closure of 35
                         additional bases and the realignment of 20 others—without special
                         enabling legislation—encountered difficulty and were not completed.
                         Problems included varying processes used by the services to derive their
                         proposed closures, OSD’s failure to provide specific guidance to the
                         military services and defense agencies on how to evaluate bases for
                         possible closure or realignment, and the difficulty in completing the
                         extensive studies required by 10 U.S.C. 2687. Concerned again that
                         political influence may have affected the Secretary’s January 1990
                         proposals, Congress passed the Defense Base Closure and Realignment
                         Act of 1990 (P.L. 101-510) halting any major closures, except those meeting
                         the new act’s requirements. That legislation authorized BRAC rounds in
                         1991, 1993, and 1995.2

                         The 1990 legislation created an independent Defense Base Closure and
                         Realignment Commission appointed by the President, in consultation with

                         1
                          At the request of the Chairmen and the Ranking Minority Members, House and Senate Committees on
                         Armed Services, we examined the Commission’s methodology, findings, and recommendations. We
                         made recommendations for improving management controls and methodology should there be future
                         base closure studies. See Military Bases: An Analysis of the Commission’s Realignment and Closure
                         Recommendations (GAO/NSIAD-90-42, Nov. 29, 1989).
                         2
                          With the expiration of the 1990 BRAC legislation on December 31, 1995, procedures and authority to
                         close or realign bases reverted to 10 U.S.C. 2687.



                         Page 15                                                         GAO/NSIAD-97-151 Military Bases
Chapter 1
Introduction




Congress, and outlined specific procedures, roles, and time lines for DOD,
the Commission, the President, and Congress to follow. That legislation
provided the foundation for a process whereby the Secretary of Defense
would make recommendations for closing and realigning military bases,
relying on (1) clearly articulated, published criteria used in selecting
candidate bases; (2) the review of his proposals by the Commission;
(3) acceptance or rejection of the Commission’s recommendations in their
entirety by the President; and (4) final acceptance or rejection of the
recommendations in their entirety by Congress. The legislation also
imposed clear milestone dates by which key players in the process, such
as the Secretary, the Commission, the President, and Congress, had to
complete their assigned roles.

While the time frames specified by the legislation for decision-making
during a BRAC round are compressed into a 6-month period, much greater
advance working time is required within DOD to provide policy guidance,
establish BRAC decision-making organizations within the services and
defense agencies (hereafter referred to as DOD components), and begin the
process of identifying candidate bases to be studied for potential closure
and realignment. Thus, the actual decision-making process can take
between 18 months and 2 years. As specified in the 1990 legislation, DOD
has up to 6 years to complete BRAC closures and realignments commencing
from the time the President transmits the Commission’s recommendations
to Congress. (See app. I for a summary of the BRAC decision-making
process, including key legislative requirements associated with the 1990
act.)

The 1990 legislation required us to provide the BRAC Commission and
Congress with a detailed analysis of the Secretary’s recommendations and
selection process. For the 1995 round, the 1990 legislation, as amended,
required that our report be completed within 45 days of the Secretary’s
making public his list of recommended closures and realignments.3 (At the
end of this report is a list of our reports completed in response to this
legislative provision, as well as our other recent reports dealing with the
BRAC process and the implementation of BRAC decisions.)


BRACclosure and realignment decisions are binding and can only be
changed by subsequent legislative actions. During the 1993 and 1995
rounds, BRAC Commissions dealt with proposals from the Secretary to
change prior BRAC decisions. For example, in 1995, 27 of the 146

3
We further supported the work of the BRAC Commission by loaning some of our staff to the
Commission to assist in its own analyses.



Page 16                                                      GAO/NSIAD-97-151 Military Bases
                      Chapter 1
                      Introduction




                      recommendations DOD submitted to the BRAC Commission were changes to
                      prior Commissions’ decisions. Such changes may be required as DOD
                      proceeds with implementing BRAC decisions and finds that (1) aspects of
                      some decisions were based on inaccurate cost estimates and are,
                      therefore, cost prohibitive; (2) unforeseen events, such as organizational
                      restructuring, make implementation of the initial decisions impossible, or
                      (3) unforeseen circumstances or inaccurate analyses interfere with
                      mission requirements. Most changes to BRAC decisions were needed to
                      change the receiving site of a mission or an activity that was moving from
                      a base scheduled to be closed or realigned.


                      The four BRAC rounds completed between 1988 and 1995 produced
Results of Recent     decisions to close 97 out of DOD’s 495 major domestic military installations
BRAC Rounds and the   and numerous smaller installations and to realign many others.4 DOD
Quadrennial Defense   reported that by the end of fiscal year 1996, it had closed about 58 percent
                      of the 97 bases; DOD projects that over 80 percent will have been closed by
Review                the end of fiscal year 1997. DOD has until 2001 to complete the BRAC actions
                      authorized by the 1990 legislation. However, in many instances, DOD has
                      sought to expedite the schedule of planned closures in recent years to
                      hasten the point that it nets savings from the closures. DOD estimates that
                      when all of the recommendations have been implemented, it will have
                      closed about 20 percent of its major domestic bases and believes it has
                      positioned itself to achieve long-term reductions in the overall costs of
                      operating its bases. (See app. II for a list of military installations closed by
                      the four BRAC rounds that DOD designated as major military installations.)

                      Although the 1995 BRAC round produced decisions to close 27 major
                      domestic bases, issues were raised about how some decisions were
                      implemented. This was most evident as it related to the implementation of
                      BRAC decisions at Air Force depots in Texas and California. As a result of
                      this situation and other concerns, such as the amount of savings from base
                      closures, there is considerable controversy today over whether further
                      base closure actions should be authorized.

                      Notwithstanding the results of the four recent BRAC rounds, DOD officials
                      recognized, even while they were finishing the 1995 round, that they had


                      4
                       Military installations can be a base, camp, post, station, yard, center, or leased facility. As we reported
                      in 1995, the number of bases recommended for closure or realignment in a given BRAC round is often
                      difficult to tabulate precisely because closure decisions are not necessarily complete closures and
                      closures vary in size. The term “base closure” often conjures up the image of a larger facility being
                      closed than may actually be the case. The same is true with facilities designated by DOD as major
                      closures. This report relies on DOD’s characterization of which bases are to be considered major.



                      Page 17                                                             GAO/NSIAD-97-151 Military Bases
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Introduction




missed OSD’s goal in terms of reductions needed through base closures.
DOD calculated that the first three BRAC rounds reduced the plant
replacement value (PRV)5 of DOD’s domestic facilities by 15 percent. It
established a goal for the fourth round of reducing PRV by an additional
15 percent, for a total of 30 percent. When the Secretary announced his
recommendations for base closures and realignments in 1995, OSD
projected that if all of the Secretary’s recommendations were adopted, the
total PRV would be reduced by 21 percent, nearly a third less than OSD’s
goal.6 The Chairman of the Joint Chiefs of Staff testified before the BRAC
Commission in 1995 that excess basing capacity would remain after the
1995 round and cited the need for future base closure authority. DOD
officials recognize that significant reductions in excess infrastructure in
common support areas could come from consolidating workloads and
restructuring these functions on a cross-service basis, something that has
not been accomplished to any great extent in prior BRAC rounds.

Since the 1995 BRAC round, DOD and service officials have recognized that
they continue to maintain aging and excess infrastructure that they cannot
afford. As a result, the services are pursuing a number of initiatives to
reduce the costs of maintaining their infrastructure, including demolishing
aging and excess facilities that are no longer needed and that drain
resources that should be used to maintain and repair needed facilities,7
renewing efforts to outsource and privatize various operations,
consolidating and regionalizing some support operations, and placing
greater emphasis on interservicing and intraservicing support. In one
instance, Congress mandated that the Secretary develop a plan to
consolidate and restructure the services’ laboratories and test and
evaluation infrastructure by the year 2005.8 While demolition will help to
reduce excess facilities on some bases, the other initiatives underway or
planned by DOD could result in additional excess facilities.

Over the past 7 years, we have called attention to critical government
operations that are highly vulnerable to waste, fraud, abuse, and

5
 PRV is defined as the cost to replace current facilities using today’s construction costs and standards.
PRV is recognized as an imprecise measure, one that is calculated differently by each service.
However, it was a key measure used by OSD to establish its goals for base closures.
6
 The 1995 BRAC Commission did not approve all of the Secretary’s recommendations and it added
other bases to the closure list. Since that time, OSD has not recalculated the net reduction in PRV.
7
 The magnitude of this funding problem was highlighted in our recent report showing that during the
past 10 years, service funding devoted to real property maintenance of facilities had declined nearly
40 percent, while the square footage of space to be maintained worldwide had declined only about
10 percent. See Defense Infrastructure: Demolition of Unneeded Buildings Can Help Avoid Operating
Costs (GAO/NSIAD-97-125, May 13, 1997).
8
 See section 277 of the National Defense Authorization Act for Fiscal Year 1996 (P.L. 104-106).


Page 18                                                            GAO/NSIAD-97-151 Military Bases
                              Chapter 1
                              Introduction




                              mismanagement by designating them as high-risk areas. One area of focus
                              has been accountability and cost-effective management of defense
                              programs. Our February 1997 series of reports on high-risk areas included
                              defense infrastructure as a new high-risk area.9 Our defense infrastructure
                              report noted that DOD is spending funds to operate and maintain aging,
                              underutilized, and excess infrastructure and that setting forth a clear
                              framework for a reduced infrastructure is key to avoiding waste and
                              inefficiency. It further noted that the Secretaries of Defense, Army, Navy,
                              and Air Force need to give greater structure to their efforts to attain
                              infrastructure reductions by developing an overall strategic plan and using
                              a variety of means to achieve reductions. Those means could include
                              consolidations, privatization, outsourcing, reengineering, and
                              interservicing agreements. It further stipulated that DOD should consider
                              the need and timing for future BRAC rounds, as suggested by the 1995 BRAC
                              Commission and other groups.


Report of the 1997            The National Defense Authorization Act for Fiscal Year 1997
Quadrennial Defense           (P.L. 104-201) required that the Secretary of Defense, in consultation with
Review Calls for Additional   the Chairman of the Joint Chiefs of Staff, conduct a Quadrennial Defense
                              Review (QDR). This review was to be a comprehensive examination of the
BRAC Closures                 defense strategy, force structure, force modernization plans, budget plans,
                              infrastructure, and other elements of the defense program through the
                              year 2005. In his May 19, 1997, report to Congress outlining the results of
                              the review, the Secretary recommended that BRAC rounds be held in 1999
                              and 2001. That recommendation was endorsed by the National Defense
                              Panel, the independent, congressionally mandated, board that is reviewing
                              the work of the QDR and completing its own review of defense issues.

                              As the QDR was being finalized, the Secretary established a follow-on Task
                              Force on Defense Reform to go beyond the recommendations of the QDR
                              and develop a blueprint for further streamlining and reform of DOD’s
                              organization and procedures. By November 30, 1997, the Task Force is to
                              report to the Secretary with its recommendations for organizational
                              reforms, reductions in management overhead, and streamlined business
                              practices in DOD. It will focus on OSD, the defense agencies, DOD field
                              activities, and the military departments. One goal of the Task Force is to
                              eliminate unneeded organizations, functions, and personnel. The Task
                              Force is to work closely with the National Defense Panel.




                              9
                               High-Risk Series: Defense Infrastructure (GAO/HR-97-7, Feb. 1997).



                              Page 19                                                         GAO/NSIAD-97-151 Military Bases
                     Chapter 1
                     Introduction




                     Despite four rounds of base closures from 1988 to 1995, numerous
Objectives, Scope,   indicators show that the services continue to retain excess infrastructure.
and Methodology      Retaining this excess capacity drains resources needed for facilities
                     maintenance requirements and other important priorities such as weapon
                     systems modernization. Anticipating that DOD might request Congress to
                     authorize additional BRAC rounds, we initiated this review to determine
                     (1) what lessons could be learned from prior rounds as they relate to
                     savings, costs, and economic impact; (2) what legislative actions would be
                     needed if further BRAC rounds were to be authorized; and (3) what
                     improvements, if any, would be needed in DOD’s process for identifying
                     bases for closure and realignment.

                     We relied primarily on our prior work in discussing the lessons learned
                     from prior BRAC rounds as they relate to savings, costs, and economic
                     impact. However, to the extent possible, we updated information. To
                     obtain current information on BRAC costs and savings estimates, we used
                     DOD’s fiscal year 1998-99 biennial budget estimates for the BRAC accounts
                     as set forth in the justification data submitted to Congress in
                     February 1997. We also interviewed DOD Inspector General (IG) and Army
                     Audit Agency officials who were reviewing selected BRAC costs and savings
                     estimates to determine their validity.

                     To determine what legislative actions would be needed if further BRAC
                     rounds were to be authorized and what improvements, if any, would be
                     needed in DOD’s process for identifying bases for closure and realignment,
                     we interviewed DOD officials who participated in the 1995 round and, in
                     some cases, prior rounds. The officials were from OSD, the Departments of
                     the Army, Air Force, and Navy; Defense Investigative Service; and Defense
                     Logistics Agency. We also interviewed commissioners and selected staff
                     from the BRAC 1995 Commission, DOD IG and service audit agency officials,
                     and our staff who worked on the 1995 round. In addition, we reviewed
                     reports and documents from OSD, defense agencies, the military services,
                     the BRAC 1995 Commission, DOD IG, the service audit agencies, and others,
                     as well as our own, to identify key issues and lessons learned. After our
                     initial round of interviews and analyses of documents, we prepared a
                     consolidated list of main points related to our three objectives and
                     conducted selected follow-up interviews to determine consensus on key
                     points and modify reportable issues as warranted.

                     To obtain private sector views, we interviewed representatives from
                     Business Executives for National Security, the National Association of




                     Page 20                                        GAO/NSIAD-97-151 Military Bases
Chapter 1
Introduction




Installation Developers, and the International City and County
Management Association.

We focused primarily on parts of the 1990 BRAC legislation that governed
the process used to identify bases for closure and realignment. We did not
examine portions of the legislation and process dealing with
implementation of BRAC decisions.

We conducted our work between August 1996 and May 1997 in accordance
with generally accepted government auditing standards.




Page 21                                        GAO/NSIAD-97-151 Military Bases
Chapter 2

Important Lessons From Prior BRAC
Rounds Regarding Savings, Closure Costs,
and Economic Impact
                        Experiences from previous BRAC rounds provide some important lessons
                        should future BRAC rounds be considered. They point to the importance of
                        data pertaining to expected savings, the up-front costs of closures, and the
                        impact of job losses from base closings on local communities. Questions
                        about the amount of savings have been fueled by limitations in how DOD
                        develops and maintains current data on expected BRAC savings and the
                        high up-front costs of implementing the BRAC recommendations. How
                        individuals and communities would recover from base closures has been a
                        long-standing concern and was a primary reason base closures were
                        blocked in the past.

                        Available data suggest that savings from BRAC closures and realignments
                        are expected to be substantial. However, up-front costs have been higher
                        than initially estimated; thus, net savings have not been realized as quickly
                        as hoped. Also, because DOD has not adequately tracked changes in initial
                        savings estimates, questions have existed about the reliability of savings
                        projections. At the same time, DOD has opportunities to reduce or contain
                        closing costs. Also, recent experiences suggest that the economic impact
                        of base closures has been cushioned to some extent by federal programs
                        and assistance to affected individuals and communities. Early studies
                        suggest that, while some communities are affected economically more
                        than others, the effects in a number of instances have been relatively
                        limited.


                        We have consistently concluded that while changes in cost estimates had
Savings From Prior      occurred and tracking savings was difficult, significant net savings were
BRAC Rounds Are         still likely, but generally were going to take longer to achieve than initially
Expected to Be          estimated. DOD projects that, on an annual basis, savings from the recent
                        BRAC rounds began to exceed the cost of implementing the closures and
Substantial, Although   realignments in fiscal year 1996, with a net savings of $100 million that
Not Always              year and increasing incrementally each year thereafter to $4.4 billion in
                        2001. It projects that the cumulative total savings from BRAC actions from
Well-Documented         the past four BRAC rounds will begin to exceed the total cumulative costs in
                        fiscal year 1998. DOD projects that the total cumulative costs of
                        implementing BRAC actions will be $23 billion during the 1990 to 2001




                        Page 22                                           GAO/NSIAD-97-151 Military Bases
                          Chapter 2
                          Important Lessons From Prior BRAC
                          Rounds Regarding Savings, Closure Costs,
                          and Economic Impact




                          implementation period.1 However, DOD also expects to incur an additional
                          $3.3 billion in BRAC-related environmental restoration costs beyond 2001.2
                          DOD projects that once those costs have been fully offset, it will realize
                          annual recurring savings or cost avoidances of $5.6 billion from closures
                          and realignments. These savings are reflected in DOD’s budgets through
                          reduced funding levels to the base operating accounts. However, questions
                          have existed about the reliability of these savings projections because of
                          changes that occur over time and limitations in DOD’s efforts to track the
                          changes.

                          Up-front costs associated with closing bases can be significant and it may
                          take several years before savings offset these costs and annual recurring
                          savings begin.3 The costs of implementing BRAC recommendations have
                          been greater than DOD initially estimated because land sale revenues were
                          less than projected, particularly in the earlier rounds, and the costs of
                          environmental cleanup were added. As a result, the point at which
                          estimated savings began to offset the costs of closure was delayed, which
                          raised the question of whether savings were being realized from BRAC.
                          DOD’s current projection for annual recurring savings of $5.6 billion, once
                          implementation costs have been recouped, is $400 million less than the
                          $6 billion DOD initially projected after submitting its 1995
                          recommendations to the BRAC Commission.


Various Factors Account   Changes and uncertainties regarding BRAC implementation costs and
for Uncertainty in the    savings have been caused by a variety of factors, beginning with how the
Amount of Savings From    estimates were initially calculated and later updated or tracked. Figure 2.1
                          highlights a variety of factors that have made it difficult to fully identify
BRAC                      and track savings from closures or led to changing estimates of costs over
                          time which affected when savings would begin to offset the costs.


                          1
                           Implementation costs encompass (1) constructing new facilities at gaining bases to accommodate
                          organizations transferred from closing bases, (2) remedying environmental problems on closing bases,
                          and (3) moving personnel and equipment from closing to gaining bases. However, in calculating its
                          costs and savings, DOD does not include the cost of federal economic assistance provided to
                          communities affected by base closures. Our 1996 report on the first three BRAC rounds identified
                          about $780 million in such assistance. This cost, while significant in the short term, is a one-time cost
                          that will not impact recurring savings from BRAC in the long run. See Military Bases: Closure and
                          Realignment Savings Are Significant, but Not Easily Quantified (GAO/NSIAD-96-67, Apr. 8, 1996).
                          2
                           Even though Congress established a 6-year period for closing a base, there are no statutory deadlines
                          for the environmental cleanup process.
                          3
                           The 1988 and 1990 acts authorizing base closure rounds established closure accounts to fund one-time
                          costs to close or realign bases identified in the BRAC process. There are two accounts. BRAC I was
                          established to fund base closures in the 1988 round. BRAC II was established to fund base closures in
                          the 1991, 1993, and 1995 rounds. The revenues generated from land sales are required to be deposited
                          into this account to offset closure and realignment costs.


                          Page 23                                                           GAO/NSIAD-97-151 Military Bases
                                                Chapter 2
                                                Important Lessons From Prior BRAC
                                                Rounds Regarding Savings, Closure Costs,
                                                and Economic Impact




Figure 2.1: Why BRAC Savings Are Difficult to Track and Estimates Change Over Time




                                                          DOD accounting systems
                                                          are not designed to track
                                                          savings


             Over time, events may impact
             costs and savings that could not                                                                     Some costs are not fully
             have been known when                                                                                 captured initially (e.g.,
             estimates were developed                                                                             environmental costs)



                                                                  Why BRAC savings
                                                                  are difficult to track
                                                                  and the estimates
                                                                   change over time
               COBRA estimates are not
               comparable to BRAC                                                                                 Some savings cannot be fully
               budget estimates                                                                                   captured (e.g., long-term
                                                                                                                  recapitalization costs)




                                          DOD components do                            In the earlier rounds, less than
                                          not have an incentive                        anticipated land sale revenues
                                          to track savings                             and increasing environmental
                                          because budgets may                          cleanup costs changed the
                                          be reduced                                   estimates




                                                Source: Our analysis.




                                                DOD derived initial BRAC cost and savings estimates from the Cost of Base
                                                Realignment Actions (COBRA) model, which was used in each of the past
                                                four BRAC rounds to develop comparative costs of alternative actions. This
                                                model, while useful for initial BRAC decision-making, was not intended to




                                                Page 24                                                         GAO/NSIAD-97-151 Military Bases
Chapter 2
Important Lessons From Prior BRAC
Rounds Regarding Savings, Closure Costs,
and Economic Impact




produce budget quality data and was not used to develop the cost
estimates in the budgets for implementing BRAC decisions. Furthermore,
the model was not used by the Army and the Navy to develop the savings
estimates that were reported in DOD’s budget justifications for the BRAC
accounts. As we previously reported, the Air Force used the COBRA
estimates, with adjustments for inflation and recurring cost increases at
gaining bases, as the basis for developing its savings estimates.4

Differences between COBRA and budget quality data used in implementing
BRAC decisions include the following. COBRA estimates, particularly those
based on standard cost factors, are averages, which are refined for budget
purposes. Further, COBRA costs are expressed in constant-year dollars;5
budgets are expressed in then-year (inflated) dollars. Also, COBRA savings
estimates reflect the potential closing of a single location and may include
broader, DOD-wide costs and savings, recognizing the various DOD-wide
impacts of closing installations such as the costs and savings of multiple
tenants. BRAC budget estimates, however, are component specific, making
it difficult to precisely compare costs and savings between the two sets of
data for a given recommendation. Additionally, COBRA estimates do not
include the cost of environmental restoration, in keeping with DOD’s
long-standing policy of not considering such costs in its BRAC
decision-making, whereas BRAC budget estimates do.6 We have concurred
with DOD not considering these costs in developing its cost and savings
estimates as a basis for base closure recommendations. At the same time,
we agree with DOD’s position that environmental restoration costs are a
liability to it regardless of its base closure decisions; and we note, these
costs are substantial.

A fundamental limitation in DOD’s ability to identify and track savings from
BRAC closures and realignments is that DOD’s accounting systems, like all
accounting systems, are oriented to tracking expenses and disbursements,
not savings.7 Savings estimates are developed by the services at the time

4
 Military Bases: Closure and Realignment Savings Are Significant, but Not Easily Quantified
(GAO/NSIAD-96-67, Apr. 8, 1996).
5
 These represent the value of expenditures or costs expressed in terms of purchasing power of a single
base year. This excludes the effect of general inflation.
6
 This policy is based on the fact DOD is obligated to restore contaminated sites on military bases
regardless of whether they are closed. While such costs are not included in COBRA, they are included
in developing BRAC implementation budgets; such costs must be funded from the BRAC account.
7
 See Military Bases: Closure and Realignment Savings Are Significant, but Not Easily Quantified
(GAO/NSIAD-96-67, Apr. 8, 1996). We have also reported on fundamental problems with DOD’s ability
to accumulate reliable cost information. See High Risk Series: Defense Financial Management
(GAO/HR-97-3, Feb. 1997).



Page 25                                                         GAO/NSIAD-97-151 Military Bases
Chapter 2
Important Lessons From Prior BRAC
Rounds Regarding Savings, Closure Costs,
and Economic Impact




they are developing their initial BRAC implementation budgets and are
reported in DOD’s BRAC budget justifications. Because the accounting
systems do not track savings, updating these estimates requires a separate
data tracking system. The lack of updates is problematic because the
initial estimates are based on forecasted data that can change during
actual implementation, thereby increasing or decreasing the amount of
savings.

We previously found that most of the services and defense agencies did
not update their initial estimates of BRAC savings once initial implementing
budgets were developed. The BRAC 1990 legislation required that, for fiscal
year 1993 and thereafter, DOD submit annual budgets estimating the cost
and savings of each closure or realignment, as well as the period in which
savings were to be achieved. We believe the savings estimates should be
updated to the extent possible to more accurately reflect the expected
savings from BRAC actions in the budget submissions sent to Congress. The
lack of updates was recently confirmed by a draft Army Audit Agency
(AAA) report, which noted that the Army did not require its major
commands to update their savings estimates annually or when events
occurred that significantly affected the amount of savings.8 Based on an
initial review of BRAC costs and savings reported by the Air Force and the
Navy, DOD IG officials told us the same is true for the Air Force but the
Navy has a process for updating its savings estimates. A Navy official also
told us that the Navy’s savings estimates were reviewed annually and
revised during the budget review process. Other DOD officials said that
while cost data would be updated in preparing budget requests, original
savings estimates were not likely to be updated. DOD officials said that
savings estimates are not updated because DOD’s accounting systems do
not track savings.9 Some OSD and service officials said that DOD
components do not have an incentive to separately track savings for fear
that their budgets would be reduced as a result. Without this information,
Congress and DOD are uncertain about the net savings being achieved from
BRAC. This information is important for prior BRAC decisions and will also

8
 1995 Base Realignment and Closure Savings Estimates (AA 97-225, draft as of June 1997).
9
 The difficulties associated with estimating and updating savings from a major organizational
restructuring are not unique to DOD. Our recent examination of restructuring costs of defense
contractors revealed that restructuring savings were not recorded in contractors’ accounting records.
Therefore, neither the amount nor the nature of the savings could be determined by reviewing the
accounting records. We found that savings were therefore an estimate of a cost avoidance over
5 years. We also reported that the initial estimate of restructuring savings was simple in concept
because the critical assumption was made that everything else, except for the restructuring, was the
same after a business combination as before. Because things were never the same, it was difficult to
precisely identify actual savings several years after the initial estimate was prepared. See Defense
Restructuring Costs: Information Pertaining to Five Business Combinations (GAO/NSIAD-97-97, Apr. 1,
1997).



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Chapter 2
Important Lessons From Prior BRAC
Rounds Regarding Savings, Closure Costs,
and Economic Impact




be important should future BRAC rounds be authorized. DOD is depending
on BRAC savings for future defense programs—thus, the importance of
sound estimates of projected savings.

Our experience in examining BRAC implementation issues has also
identified fluctuations and variances in the cost estimates. We have
reported on some instances where elements of BRAC costs were overstated
and others that were understated. Our report on 1988 and 1991 closures
and realignments noted that the overall cost of military construction and
operations and maintenance associated with the BRAC accounts had
decreased.10 The same report also showed that DOD’s experience with
environmental restoration estimates showed that initial cost estimates can
increase significantly once detailed remediation studies and tests are
completed. We noted one instance, for example, where an initial cleanup
cost estimate increased from $11 million to over $114 million. DOD officials
said that estimates of environmental cleanup costs could increase from the
initial estimates as additional environmental studies are completed, more
work is identified, and cleanup time lines are accelerated. AAA is auditing
the environmental cleanup costs of closing Army bases.

DOD audit agencies have also reviewed various aspects of the cost and
savings from BRAC. The DOD IG has completed a series of audits comparing
most budget requests for BRAC military construction projects with the
COBRA estimates, which showed that the budget requests, on average, were
7.9 percent less than original estimates.11 We have reported that the Army,
over time, found that BRAC-related personnel costs were less than initially
forecast. More recently, AAA completed an audit of the costs and savings
estimates for 10 Army BRAC sites. Its draft report indicates that while AAA’s
cost estimates were much higher than COBRA’s, in large part due to
including environmental cleanup costs, they were less than those in the
Army’s implementation plans.12 It also validated that the closures would
result in substantial net savings. The DOD IG is examining the other
services’ past budgets to determine actual BRAC costs and savings.




10
 Military Bases: Revised Cost and Saving Estimates for 1988 and 1991 Closures and Realignments
(GAO/NSIAD-93-161, Mar. 31, 1993).
11
 Summary Report on the Audit of Defense Base Realignment and Closure Budget Data for FYs 1995
and 1996, Office of the Inspector General, U. S. Department of Defense, Report No. 96-093, April 3,
1996. We did not independently verify the accuracy of the data.
12
  1995 Base Realignment and Closure Savings Estimates (AA 97-225, draft as of June 1997).



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Some Significant Potential   Inherent limitations in DOD’s accounting systems, as well as the nature of
Savings Are Not Captured     the BRAC process, preclude capturing all potential savings or cost
in BRAC Savings Estimates    avoidances from BRAC actions.13 For example, DOD’s facilities are about
                             44 years old, on average, and must be replaced or revitalized at some
                             point. However, COBRA and BRAC budget estimates only captured short-term
                             recapitalization costs that were programmed in the services’ budgets. Also,
                             COBRA cost estimates for the repair and maintenance of facilities were
                             based on average expenditures. It is likely that these estimates
                             underestimated potential future costs, since DOD has significantly reduced
                             its spending for the repair and maintenance of its facilities for the past
                             10 years, which has led to concerns on the part of some defense officials
                             about growing backlogs in maintenance and repair. As we noted in our
                             report on facilities infrastructure and demolition, DOD’s funding for
                             maintenance and repair has declined about 40 percent over the last 10
                             years, which is far greater than the reduction in square footage of space to
                             be maintained. Thus, base closures can be viewed as representing the
                             avoidance of potentially significant costs that otherwise would be
                             associated with facilities’ revitalization at some point in the future.


BRAC Net Savings Have        Maximizing savings from base closures is limited by the policy and
Been Minimized by Policy     legislative requirements governing property disposal that reduce
and Legislative              opportunities for the selling of base property. One reason for the increase
                             in initial cost estimates from BRAC closures was DOD’s overly optimistic
Requirements Impacting       estimates of land sales revenues, especially in the earlier rounds.
Land Sales                   Originally, DOD expected to sell land from closed bases and apply the
                             revenues to offset BRAC closure costs. Significant revenues from land sales
                             were initially projected, but the number of acres sold and the amount of
                             proceeds were less than anticipated. For example, in 1990, DOD estimated
                             that the sale of property on military bases closed by BRAC 1988 could raise
                             about $2.4 billion in revenues. In fact, DOD only received about
                             $65.7 million in revenue from land sales on those bases between 1990 and
                             1995. The overestimated land sale revenues resulted partly because DOD
                             overestimated the value of the land and, more significantly, because it did
                             not take into account the effect of priorities set in law for disposal of
                             government property.

                             Once property is no longer required by a federal agency, the property is
                             offered to other federal agencies to satisfy their requirements. Property
                             that is not selected by federal agencies is declared surplus to the federal

                             13
                              Cost avoidances are defined as avoidance of costs that have not been budgeted, whereas cost savings
                             are defined as cost reductions from an approved budget that result in program funds being recouped
                             or used elsewhere.



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                                          government. At that point, the Federal Property and Administrative
                                          Services Act of 1949 authorizes disposal of the property through a variety
                                          of means, including public or negotiated sale and transfers to states and
                                          local governments for public benefit purposes. Additionally, a 1993
                                          amendment to the BRAC legislation, section 2903 of title XXIX of the
                                          National Defense Authorization Act for Fiscal Year 1994, states that under
                                          certain circumstances, surplus real property can be transferred to local
                                          redevelopment authorities under economic development conveyances for
                                          economic development and job creation purposes. This section was
                                          created to enable communities to act as master developers by obtaining
                                          property under more flexible finance and payment terms than previously
                                          existed. For example, a community can request property at less than fair
                                          market value if it can show the discount is needed for economic
                                          development.

                                          As shown in figure 2.2, local reuse authorities generally seek surplus
                                          property under one of the public benefit transfer or economic
                                          development authorities because these can be no-cost or no-initial cost
                                          acquisitions. If the property reuse does not meet the requirements for
                                          these conveyances, then the local reuse authorities can still pursue a
                                          negotiated sale without competing with other interested parties. Any
                                          surplus property that remains is available for sale to the general public.


Figure 2.2: Usual Procedures for Transferring Property

 Excess                                Surplus



      Other                Other                                   Economic           Negotiate sale
                                               Public
     defense              federal              benefit            development        to states or local        Public sale
     activities          agencies            transfers            conveyances          governments




                                          Source: Our analysis.




                                          The disposal of property by public benefit transfer, economic development
                                          conveyance, or noncompetitive negotiated sale can significantly reduce
                                          the amount of revenues to offset the cost of implementing BRAC decisions.



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                                 For example, the golf course at Myrtle Beach Air Force Base, South
                                 Carolina, was conveyed through a public benefit transfer to the city of
                                 Myrtle Beach. By doing so, the government relinquished the opportunity to
                                 sell the property for $3.5 million to a private developer who intended to
                                 use it as a public golf course.


Options Exist for Reducing       Environmental cleanup of closing bases creates a significant cost that
Environmental Costs, but         offsets the amount of savings that can be expected from base closures.
Require Trade-Offs Among         While we and others have reported the tendency for environmental
                                 cleanup costs to increase from the initial cost estimates as more detailed
Competing Objectives             environmental studies are completed, we have also noted that options for
                                 reducing these costs exist. Our 1996 report on the high costs of
                                 environmental cleanup noted several options for reducing cleanup costs at
                                 closing bases.14 However, we also noted that these options may adversely
                                 affect programmatic goals, thereby presenting decisionmakers with
                                 difficult choices in developing a cost-effective environmental cleanup
                                 program.15 The options include

                             •   deferring or extending certain cleanup actions,
                             •   modifying laws and regulations,
                             •   adopting more cost-effective cleanup technologies, and
                             •   sharing costs with the ultimate user of the property.

                                 Deferring or extending cleanup actions may delay property transfer and
                                 reuse, hurt the economic revitalization of communities affected by the
                                 closure process, and harm the environment and health. Modifying laws
                                 and regulations may increase environmental risk, thereby increasing
                                 public resistance and dissatisfaction. Adopting more cost-effective cleanup
                                 technologies may delay the program because new technologies under
                                 development may not be available for years and may not be more
                                 cost-effective than existing technologies. Sharing costs with the ultimate
                                 user could present problems because of unknown future liabilities and
                                 difficulty in establishing the value of the property.

                                 The Congressional Budget Office (CBO) has reported that DOD could reduce
                                 costs by delaying expensive remediation projects when contamination

                                 14
                                  Military Base Closures: Reducing High Costs of Environmental Cleanup Requires Difficult Choices
                                 (GAO/NSIAD-96-172, Sept. 5, 1996).
                                 15
                                   We have not taken a position on these options because of policy and legislative implications
                                 associated with them. Rather, we have presented them in the context of trade-offs they represent so
                                 that congressional and defense decisionmakers have the information for their consideration as they
                                 explore ways to reduce program costs while achieving environmental cleanup goals.



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poses no imminent threat and cost-effective technology is lacking.16 CBO
has also stated that in the long run, new cleanup technologies represented
the best hope of addressing environmental problems with available DOD
funds. A potential opportunity for reducing costs may be found in the
Department of Energy, which, in some cases, has successfully placed more
emphasis on remediation and less on planning by using “removal actions,”
which shortened or eliminated some of the planning steps normally
required before remediation could begin. For example, removal actions
have been used for treating groundwater and surface water, excavating
and disposing of contaminated soil, or leaving waste in place and covering
it with a protective barrier.

DOD implemented a Fast-Track Cleanup Program as part of the President’s
July 1993 base closure reinvestment plan to speed the recovery of
communities affected by the BRAC program. A key element of the cleanup
program is the cooperative relationship between state and federal
regulators and the installation restoration program manager—the BRAC
cleanup team. This team approach is intended to reduce the time to
establish and execute cleanup plans. The program also seeks better
integration of cleanup efforts with community-planned base reuse, and it
may also help to contain some environmental cleanup costs. DOD reports
that over the past 3 years, the program, with DOD and regulators working
together, has reduced 150 years of cleanup project work and avoided over
$150 million in costs.

Congress has provided some legislative relief to facilitate rapid reuse of
military property while the long process of environmental cleanup
proceeds. The National Defense Authorization Act for Fiscal Year 1996
included provisions to increase the feasibility of interim leases, allowing
leasing of some parcels to communities that require environmental
remediation. More recently, section 334 of the National Defense
Authorization Act for Fiscal Year 1997 contains a provision allowing DOD to
transfer parcels of land that are not fully cleaned up, if the state’s governor
agrees. DOD, in consultation with the Environmental Protection Agency, is
working on a policy to guide this early transfer authority process
uniformly. DOD is encouraging communities affected by BRAC actions to use
this new authority. DOD officials believe that this authority should provide
significant benefits for affected communities, but it is unclear how it will
affect environmental cleanup costs.




16
  Closing Military Bases: An Interim Assessment, CBO, December 1996.



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                         While defense civilian job loss and other adverse effects on communities
Federal Programs and     are an inescapable byproduct of base closures, at least in the short term,
Local Economies          recent studies indicate that, in a number of communities, the local
Have Helped to           economies appeared to be able to absorb the economic losses, though
                         some communities are faring better than others. Various programs and
Cushion the Effects of   benefits have been provided to assist employees and communities affected
Base Closures on         by base closures. While these programs may not have eliminated the pain
                         individuals and communities experience when confronted with the loss of
Employees and            employment and economic activity, there are a variety of indications that
Communities              these programs have helped to cushion the impact. However, in some
                         cases, it is too soon to tell what the ultimate impact will be.

                         To help communities to successfully transform closing bases into new
                         opportunities, federal agencies provided over $780 million in direct
                         financial assistance to areas affected by the 1988, 1991, and 1993 BRAC
                         rounds. This assistance was in numerous forms—planning assistance to
                         help communities determine how they could best develop the property,
                         training grants to provide the workforce with new skills, and grants to
                         improve the infrastructure on bases. DOD estimates that civilian reuse of
                         former bases has created over 30,000 new jobs. For example, state prison
                         facilities and small manufacturing companies will replace 900 defense
                         civilian jobs at Chase Naval Air Station, Beeville, Texas, with 1,500 new
                         jobs.

                         Several programs and benefits have also been available to assist DOD
                         employees in adjusting to base closures. For example, through the priority
                         placement program, many DOD employees found jobs in other defense and
                         government activities. In another program, homeowners’ assistance, DOD
                         has offered to buy workers’ homes if they cannot be sold or to provide
                         compensation for some property value losses. In addition, federal, state,
                         and local governments provide other types of assistance, such as
                         unemployment insurance payments and job training, to employees
                         affected by base closures.

                         DOD projections show that BRAC will have a very small impact on the total
                         U.S. workforce. DOD estimates that BRAC actions will result in the loss of
                         about 107,000 defense civilian jobs over approximately a 12-year period,
                         thus ameliorating the economic effects of the job losses in the short term.
                         While thousands of DOD civilian employees have or will be adversely
                         affected by BRAC actions, about 23,000 of these employees have already
                         found other employment through DOD’s priority placement program.
                         However, some of these placements may have required the employees to



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relocate to a job outside the community. Employees who looked for jobs
in their commuting area may have had to accept jobs with lower incomes.

Base closures also have an indirect impact on jobs in a local community
due to the decline of economic activity from the installation and defense
personnel who leave the community. In a 1996 RAND report on the effects
of military base closures on three local communities, RAND concluded
that “while some of the communities did indeed suffer, the effects were
not catastrophic (and) not nearly as severe as forecasted.”17 RAND’s
analysis showed that the burden of defense cutbacks such as base
closures tended to fall more on individuals and companies rather than on
the community. For example, a base with large civilian employment might
displace many workers, but the overall unemployment rate of the
community might remain relatively stable. According to the study, the
effects on the local community were especially cushioned when a base
was near or within a metropolitan area because the large economy
absorbs any job loss or economic impact. RAND found, like others, that
the impact on nonurban communities could be greater than on urban
communities. However, it demonstrated that economies of all types of
communities can also be affected by longer term patterns of population
and economic growth; the redirection of retirees’ retail and medical
expenditures from the base to the local community; and the withdrawal of
working spouses from the local labor market, freeing up jobs for local
citizens.

In a June 1996 report, the Congressional Research Service (CRS) analyzed
employment level data and found that 33 of 163 localities affected by BRAC
actions had unemployment rates of 5.9 percent or more in May 1995.18
However, a majority of the localities had unemployment rates that were
near to or well below the U.S. rate of 5.7 percent. Of the 33 localities, 22
were concentrated in three states: California (14 localities), Louisiana
(5 localities), and Texas (3 localities). CRS concluded from its analysis that
most communities affected by BRAC actions from any one of the BRAC
rounds “have a relatively low degree of economic vulnerability to job
losses that are estimated to result from these actions.” CRS also analyzed
the effect of the 1995 round on state employment rates and concluded that
the 1995 round would have little effect on the employment levels in the

17
 The Effects of Military Base Closures on Local Communities: A Short-Term Perspective, RAND
National Defense Research Institute, 1996. The report used a case study approach to examine the
impact on nearby communities of three base closures in California; George Air Force Base, Fort Ord,
and Castle Air Force Base. We did not independently test the validity of the study results.
18
 Military Base Closures Since 1988: Status and Employment Changes at the Community and State
Level, CRS, June 17, 1996. We did not independently test the accuracy of the data.



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                 22 affected states, with job losses amounting to 0.4 percent or less of total
                 state jobs.


                 The experience from the past BRAC rounds has raised concerns about the
Conclusions      amount of actual savings from base closures and the impact of closures on
                 communities. However, available data indicate that savings from BRAC
                 should be substantial. At the same time, precisely quantifying actual
                 savings is difficult for a variety of reasons, and questions remain about the
                 overall accuracy of DOD’s estimates. Since DOD’s accounting systems do not
                 track savings, updating the savings estimates requires some effort on the
                 part of DOD components. We have found that the savings estimates were
                 not always updated and that guidance for estimating and updating the
                 savings estimates has been insufficient. In some cases, certain cost
                 elements affecting the savings estimates have not been updated to reflect
                 significant changes that have occurred as implementation proceeds. Such
                 changes could increase or decrease the amount of expected savings and
                 need to be identified since DOD is relying on savings from BRAC to free up
                 funds for other defense areas. Improved guidance on estimating savings
                 could benefit current efforts to track savings from previous rounds and
                 will likely be important should there be future rounds. However, we also
                 found difficulties in estimating and fully capturing some savings from
                 BRAC, suggesting that despite the need for greater emphasis on capturing
                 and updating savings, some level of imprecision is likely to continue.

                 A significant up-front cost of base closures is environmental cleanup of
                 base property. Though DOD has taken several steps to facilitate progress in
                 cleaning up property on closing bases, more improvement is needed from
                 all participants in the cleanup process. DOD, Congress, regulators, and
                 communities will need to continue working together to find cost-effective
                 solutions to environmental restoration of closing bases, recognizing that
                 some trade-offs among cost, reuse, and time may be necessary.

                 Though the closing of a base can be a traumatic event to any community,
                 early studies and experience provide examples of communities that are
                 recovering from the economic impact and loss of jobs. The federal
                 government provides several forms of assistance to affected communities,
                 and bases are being successfully reused.


                 Whether or not Congress authorizes future BRAC rounds, DOD needs to
Recommendation   improve its periodic updating and reporting of savings projected from



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prior BRAC decisions. This information is needed to strengthen DOD’s
budgeting process and ensure that correct assumptions are being made
regarding expected reductions in base operating costs. Accordingly, we
recommend that the Secretary of Defense provide guidance to ensure that
its components have and follow a clear and consistent process for
updating savings estimates associated with prior BRAC decisions.




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Authorizing Legislation Needed If Future
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                            Special enabling legislation used in the three most recent BRAC rounds
                            expired at the end of 1995. Should the need to authorize one or more
                            additional rounds in the future arise, similar legislation would be needed.
                            Questions would likely be raised concerning the use of and changes to the
                            previous legislative authority, the number of rounds to be authorized, and
                            the timing for such rounds. It is unclear how legislation dealing with the
                            consolidation and restructuring of DOD’s laboratories and test facilities
                            would relate to any new BRAC legislation.


                            The Defense Base Closure and Realignment Act of 1990, as amended,
1990 Legislation            authorized the Secretary of Defense, with the approval of the President
Provides an Effective       and Congress, to close and realign military bases and dispose of excess
Model for Future            property as determined during the three most recent BRAC rounds. Many
                            individuals who participated in the BRAC process, including officials from
BRAC Rounds                 OSD, the services, and the 1995 Commission, widely agreed that the 1990
                            legislation, as amended, provided a sound framework for closing and
                            realigning bases. Some individuals expressed concern over the role of
                            politics in the process. We recognize that no public policy process,
                            especially one as open as BRAC, can be completely removed from the U.S.
                            political system. The process has several checks and balances to keep
                            political influences to a minimum, but the success of these provisions
                            requires that all participants of the process adhere to the rules and
                            procedures.

                            Key elements of the legislation that address historic concerns about the
                            fairness and objectivity of the base closing process include

                        •   selection criteria for identifying candidates for closure and realignment
                            that are made available for public comment;
                        •   an independent commission to review DOD’s proposed closures and
                            alignments and finalize a list of proposed closures and realignments to be
                            presented to the President and, subject to the President’s approval, to
                            Congress;
                        •   requirement for the BRAC Commission to hold public hearings;
                        •   data certified as to their accuracy;
                        •   imposition of specific time frames for completing specific portions of the
                            process;
                        •   requirement for the President and Congress to accept or reject the
                            Commission’s recommendations in their entirety; and
                        •   an external audit of the BRAC process.




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                        Although DOD and other officials agreed that the legislation should serve as
                        a model for additional rounds, some believed the time lines mandated by
                        the legislation were tight. The process began when the Secretary of
                        Defense made recommendations for base closure and realignments to the
                        BRAC Commission. The Commission proposed additions and deletions to
                        the Secretary’s recommendations and then submitted its analysis of the
                        Secretary’s recommendations along with its own recommendations to the
                        President, who transmitted the approved recommended list to Congress.
                        These milestone dates occurred within 6 months. The time lines for each
                        step of the process were tight to force the participants at each stage to
                        pass on their decisions to the next group of decisionmakers. Though some
                        officials told us that they could have used more time for analysis, most
                        agreed the time lines should be tight because they kept the process moving
                        and helped force decisions.



                        Consideration of new BRAC legislation would include determining how
Issues to Consider in   many rounds to authorize, when the future round(s) would be held, and
Enacting Future         how much lead time would be required to undertake a BRAC round.
BRAC Legislation
How Many Additional     We received various comments about the number of future BRAC rounds
Rounds Are Needed?      that might be needed. For example, the Defense Science Board’s 1996
                        summer study, published in November 1996, noted that there is still
                        considerable excess base capacity in DOD. It suggested three additional
                        rounds of base closures, one every other year. The May 1997 report of the
                        QDR recommended two additional BRAC rounds: one in 1999 and another in
                        2001.

                        Some individuals suggested that efforts should be made to accomplish
                        additional base closures with one additional BRAC round, but some
                        suggested that more than one might be needed because closing all of the
                        excess bases in one round might be cost prohibitive. In our 1995 report to
                        Congress and the BRAC Commission concerning the Secretary of Defense’s
                        recommendations for closures and realignments, we reported that the high
                        up-front cost of closures was a factor in some bases not being
                        recommended for closure in that round.1 The extent to which this would
                        be the case in future BRAC rounds could be dependent on the willingness of


                        1
                         Military Bases: Analysis of DOD’s 1995 Process and Recommendations for Closure and Realignment
                        (GAO/NSIAD-95-133, Apr. 14, 1995).



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DOD, and Congress, to make the up-front investment needed to close
unneeded military bases.2

Some officials suggested that current efforts within DOD and the services to
outsource, privatize, and consolidate certain functions and activities could
help reduce infrastructure requirements, indicating even more need for
base closures. To what extent and how quickly these efforts will identify
or produce additional excess capacity remain to be seen. Privatization and
outsourcing are expected to take place over the next several years, and the
results will likely not be fully known for inclusion in any additional base
closure action taken within the next few years.

One DOD official said that whether or not another BRAC round is held in the
near term, a BRAC effort might be needed within the next 10 to 15 years
based on developments in advanced weapon systems that could provide
the United States with much greater war-fighting capabilities and lead to
changes in DOD’s force and infrastructure requirements. Such
developments suggest that more than one BRAC round might be needed in
the future. Views varied whether more than one round should be
authorized at a time. One official said that if more than one BRAC round is
necessary, only one round should be authorized at a time because DOD
should be required to validate the need for a BRAC round each time and
maximize its results. Another official suggested that multiple rounds
should be authorized, if possible, because congressional willingness to
authorize additional rounds would decrease over time. This official noted
that subsequent rounds could be canceled if OSD leadership later
determined they were not needed. The National Defense Panel, in its
May 15, 1997, endorsement of the Secretary’s plan to request authority for
two additional BRAC rounds, also stipulated that permanent BRAC authority
would be most desirable to facilitate adjustments in the base structure as
needs and forces change.

Our own experience with the BRAC process and assessment of the situation
cause us to believe that if future BRAC rounds are considered, the
maximum number of closures should be accomplished in the fewest
rounds possible to minimize the (1) anxiety and turmoil associated with
the BRAC process and (2) potential investment costs at installations that
might be closed in the future. Such investments could occur as DOD
continues its efforts to revitalize its facilities, such as new housing
programs in which DOD is looking to leverage private sector resources.


2
 The up-front investments include the costs of environmental cleanup, relocation, and military
construction at the receiving sites. See chapter 2 for more information on BRAC closure costs.



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When Should Future           The 1995 BRAC Commission noted that in 1995 the Secretary of Defense
Rounds Be Held?              suggested the need for an additional round of closures and realignments in
                             3 to 4 years, after DOD had absorbed the effects of the closures and
                             realignments from the 1995 and earlier rounds. The Commission noted
                             that DOD would be implementing the closures and realignments of the 1995
                             and prior BRAC rounds through the end of this decade and possibly to 2001,
                             the end of the statutory period authorized for completing closures from
                             the 1995 round. Thus, it recommended that Congress authorize another
                             base closure commission similar to the prior commissions for 2001.
                             Others, including some congressional members, have stated that future
                             BRAC rounds should not be held until DOD has had time to implement
                             decisions of prior rounds. As already noted, the May 1997 QDR report
                             recommended BRAC rounds in 1999 and 2001.

                             That some view additional BRAC actions as a pressing need is seen in the
                             recommendation of the Defense Science Board’s 1996 summer study: it
                             suggested that three additional BRAC rounds be held—in 1997, 1999, and
                             2001. However, given the lengthy time frames required to initiate and
                             execute a BRAC round, as indicated in chapter 1 and appendix I, 1999 would
                             appear to be the earliest practical date for any future BRAC round. Several
                             officials suggested that any future BRAC round should not be held in an
                             election year because of political concerns that can arise during the BRAC
                             process. Based on our experience with the BRAC process, we agree. Given
                             that congressional or presidential elections will be held in 1998 and 2000,
                             those would be less desirable years in which to hold a BRAC round and
                             finalize BRAC decisions. Thus, 1999 or 2001 is the most practical date for
                             future BRAC rounds, although 1999 might be difficult from a planning
                             standpoint, particularly if the intent is to maximize reductions with just
                             one additional BRAC round.


How Soon Would               Given the history of previous BRAC rounds, at least 12 to 18 months
Authorizing Legislation Be   advance planning time, if not longer, would be needed to plan for a future
                             BRAC round. While the time frames specified by the legislation for
Needed?
                             decision-making during a BRAC round are compressed into a 6-month
                             period, much greater advance working time is required to provide policy
                             guidance, establish BRAC decision-making organizations within the services
                             and defense agencies (otherwise referred to as DOD components), and
                             begin the process of identifying candidate bases to be studied for potential
                             closure and realignment. Thus, the actual decision-making process can
                             take between 18 months and 2 years. (See app. I for a summary of the BRAC




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                        decision-making process, including key legislative requirements associated
                        with the 1990 act.)

                        For a BRAC round to be held in 1999, legislation should be enacted during
                        the 1997 legislative session. The need for early action on legislation before
                        a future BRAC round is underscored by the fact that, unlike recent BRAC
                        rounds, the termination of recent BRAC authority resulted in a complete
                        shut down of the BRAC Commission organization and termination of staff
                        who had been kept in place between recent BRAC rounds. Likewise, many
                        staff in DOD and the services who provided continuity from one BRAC round
                        to another have moved on to other work or retired. Therefore, it is
                        uncertain to what extent future BRAC rounds will benefit from the
                        experience and knowledge of many of the past BRAC participants.

                        The loss of institutional knowledge and experience in the BRAC process,
                        particularly within DOD and the services, could marginally add to the lead
                        time required to prepare for a future BRAC round. This situation, along with
                        the normal lead time required to initiate a BRAC program, will need to be
                        considered in authorizing any future BRAC round.


                        One related situation that might need to be addressed in the realm of new
Relationship of BRAC    BRAC legislation is the possible relationship between new BRAC authority
to Other Potential      and DOD’s plans for implementing section 277 of the National Defense
Legislation for         Authorization Act for Fiscal Year 1996. This section directed the Secretary
                        of Defense to develop a 5-year plan to consolidate, restructure, and
Restructuring           revitalize DOD’s laboratories and test and evaluation centers. The Secretary
Laboratories and Test   is to specify the actions needed to consolidate the laboratories and centers
                        into as few facilities as practical and possible, by October 1, 2005.
Facilities
                        DOD’s 1996 Vision 21 report to the President and Congress summarizes
                        reductions made in DOD laboratory and center infrastructure through the
                        BRAC processes and outlines how DOD will develop a detailed plan for the
                        laboratories and centers for the 21st century by July 1998.3 One option in
                        the report is to reduce the laboratory and test and evaluation
                        infrastructure each by at least 20 percent. It remains to be seen if this
                        option will result in the (1) consolidation of organizations and operations
                        on an intraservice or interservice basis and (2) elimination of enough
                        excess capacity so that additional facilities can be closed. A Vision 21
                        study team is developing a questionnaire to collect data for the analysis of

                        3
                        Report to the Congress: Vision 21, The Plan for 21st Century Laboratories and Test and Evaluation
                        Centers of the Department of Defense, April 30, 1996.



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              facilities that will be used as a basis for decision-making. However, given
              the limited success of similar studies in the past, including BRAC 1995, we
              question whether service officials, operating on their own, will be able to
              agree on large-scale consolidations, restructuring, and interservicing. This
              issue is further discussed in chapter 4.

              Section 277 also stipulated that in developing a plan for restructuring these
              facilities, DOD should identify any legislation needed to accomplish the
              effort. The May 1997 QDR report noted that DOD would seek authority for
              two additional BRAC rounds and for the restructuring of laboratories,
              research, development, and test facilities. It did not stipulate to what
              extent separate legislative provisions, apart from BRAC authority, might be
              sought for these facilities or to what extent they would be studied apart
              from the traditional BRAC process.4 It should be noted, however, some of
              these facilities are collocated with other mission functions on given
              installations. Also, given the large land areas associated with some test
              ranges, the potential for single or joint use of some of these facilities by
              combat forces and testing organizations could be considered, thereby
              providing expanded training capabilities and greater efficiencies in base
              operating costs; this, in turn, could result in a base closure elsewhere.
              Thus, even if a separate study process is used to examine consolidation
              and restructuring of laboratories, research, development, and test
              facilities, the BRAC process would appear to be the most appropriate
              process to consider closing or realigning bases on which these functions
              reside.


              Officials we contacted generally told us that the 1990 legislation provided
Conclusions   a sound framework for closing and realigning military bases. If future
              legislation is considered, DOD and Congress will need to address how many
              rounds to authorize and when to hold them. Various views have been
              expressed concerning the number and timing of BRAC rounds. Ideally, any
              future legislation should try to minimize the anxiety and turmoil
              associated with the BRAC process by maximizing results in the fewest
              number of rounds. These goals will have to be balanced by budget and
              planning realities, recognizing that closure rounds may also need to
              coincide with force structure changes and budget constraints. The timing
              of future rounds should reflect (1) the past practice of avoiding rounds
              during election years and (2) the lead time needed for DOD and the
              Commission to organize and educate a new group of people. Finally,

              4
               We are reviewing successful laboratory consolidations undertaken by the federal government, the
              private sector, and a foreign government agency that resulted in cost savings or more efficient
              operations, with a view toward identifying applications to the U.S. government.



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                future BRAC rounds might have to incorporate other initiatives such as the
                consolidation of laboratories and test and evaluation facilities mandated
                by section 277.


                If Congress considers legislation for future BRAC round(s), it may wish to
Matters for     (1) model it on the 1990 BRAC legislation as a starting point, (2) pass such
Congressional   legislation early to allow the lead time needed for DOD and the Commission
Consideration   to organize their processes, and (3) consider the relationship between new
                BRAC authority and section 277 of the National Defense Authorization Act
                for Fiscal Year 1996 pertaining to laboratories and test and evaluation
                facilities.




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Steps DOD Can Take to Enhance
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                       The 1990 BRAC legislation and the processes for executing that legislation
                       established a strong, workable process for BRAC decision-making. Even so,
                       DOD and its components improved their processes during each round to
                       overcome shortcomings. If Congress authorizes future BRAC rounds, DOD
                       and its components will have the opportunity to further improve their
                       processes. The greatest improvement, however, will require strong OSD
                       leadership to resolve important policy issues before any future BRAC
                       rounds.


                       In prior rounds, the Secretary of Defense’s list of bases recommended for
Success Will Depend    closure and realignment was little more than a collection of the lists the
on Resolution of Key   services submitted to him. Although large amounts of excess capacity
Issues Before Future   were identified DOD-wide, especially in the support functions, each service
                       resisted moving its work to the other services’ facilities. While the BRAC
BRAC Rounds            process dealt with basing decisions effectively, it did not provide an
                       effective forum for resolving cross-service policy issues. Officials said that
                       the success of any future BRAC round would depend on stronger leadership
                       by the Secretary of Defense to address key policy issues before the round
                       begins.

                       In the 1993 round, OSD directed the services to prepare integrated
                       proposals, with cross-service inputs, to streamline DOD depot maintenance
                       activities and increase efficiency.1 Each service was to identify its excess
                       maintenance capacity, and each was assigned lead responsibility for a
                       specific maintenance area. However, as noted in our report on the 1993
                       BRAC process, no BRAC recommendations resulted from these efforts.
                       According to several service officials at that time, the services had
                       difficulty overcoming their narrow view of their own depots; thus, a
                       general consensus could not be reached, especially on issues pertaining to
                       estimating costs. Also, the short time frame within which the services had
                       to complete their work impeded this cross-servicing effort.2

                       For the 1995 BRAC round, OSD again required the services to explore
                       opportunities for the cross-service use of common support assets in the

                       1
                        A Joint Chiefs of Staff Executive Working Group’s study of DOD maintenance depots concluded then
                       that the depots had between 25 and 50 percent excess capacity and that the service depots had
                       unnecessary duplication. Our recent work indicates that, based on maximum potential capacity
                       measurements, and considering funding and workload reductions that have occurred in recent years,
                       DOD is expected to still have excess depot capacity of about 50 percent in fiscal year 1999. (See
                       Defense Depot Maintenance: Uncertainties and Challenges DOD Faces in Restructuring Its Depot
                       Maintenance Program, GAO/T-NSIAD-97-111, Mar. 18, 1997).
                       2
                       Military Bases: Analysis of DOD’s Recommendations and Selection Process for Closures and
                       Realignments (GAO/NSIAD-93-173, Apr. 15, 1993).



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areas of (1) maintenance depots, (2) laboratories, (3) test and evaluation
facilities, (4) undergraduate pilot training, and (5) medical treatment
facilities. To facilitate this process, DOD established separate cross-service
working groups in each of these areas that complemented the BRAC review
organizations operating within each of the services. The groups were
supposed to propose alternatives for the services to consider. Although
these groups identified large amounts of excess capacity across DOD, few
facilities were closed, and the services’ final recommendations for
closures and realignments in these areas moved very little work from one
service’s facilities to another.

Officials indicated that, in retrospect, the cross-service groups had little
impact on service decisions in the 1995 round for several reasons. First,
key policy decisions that could drive decision-making had not been made
in advance. For example, executive agents for specific functions were not
designated nor were joint or lead-service responsibilities assigned.
Second, the groups provided their proposals late in the process, when the
services were completing analyses of their own installations. Finally, the
services continued to differ about how to assess and compare their
facilities.

An overarching concern of participants in the process was that OSD
provided insufficient leadership to bring about the services’ agreement to
share assets, consolidate workloads, or reduce excess capacity in common
support functions—decisions that the services, because of their individual,
parochial interests, could or would not make. Service officials said that if
further BRAC rounds occur, up-front decisions must be made about which
service(s) will be responsible for which functions. They said that service
parochialism remains such that the Secretary of Defense must make the
tough decisions, not the services. We believe the Secretary’s Task Force
on Defense Reform, in conjunction with the QDR and its National Defense
Panel, could help resolve some of the organizational and policy issues that
would contribute to the success of future rounds of base closures, should
Congress authorize them.

In his May 19, 1997, report to Congress on the QDR, the Secretary asked
Congress to authorize domestic base closure rounds in 1999 and 2001. On
May 15, 1997, the Secretary announced that he had established a high-level
Task Force on Defense Reform to go beyond the recommendations of the
QDR and develop a blueprint for further streamlining and reforming DOD’s
organizations and procedures. The Task Force is to report to the Secretary
by November 30, 1997, and is to recommend organizational reforms,



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                            BRAC Rounds




                            reductions in management overhead, and streamlined business practices.
                            It will focus on OSD, the defense agencies, DOD field activities, and the
                            military departments. One goal of the Task Force is to eliminate unneeded
                            organizations, functions, and personnel. The Task Force is to work closely
                            with the National Defense Panel, an independent, congressionally
                            mandated review board that will assess the Quadrennial Defense Review.

                            Opportunities for future cross-service cooperation and consolidation
                            include, and extend beyond, the five support functions considered in BRAC
                            1995. The following examples illustrate the types of actions that could
                            result in reduced excess capacity, minimized support costs, and the
                            success of future BRAC rounds, if made in advance of the round.

                        •   Decide what lead responsibilities will be assigned to each service in
                            cross-service areas, such as depot maintenance, training, and medical
                            facilities, and what operational responsibilities will be assigned to a joint
                            or OSD-led agency.
                        •   Determine to what extent (1) DOD medical infrastructure is needed to meet
                            war-fighting requirements and (2) capacity exceeding those requirements
                            will be retained for use by military dependents and retirees.
                        •   Determine what core support work needs to be done in house.
                        •   Determine to what extent OSD and the Joint Chiefs of Staff will emphasize
                            joint basing in the future as they increase joint training and operations.
                        •   Assess the potential for the increased sharing of bases on an interservice
                            or intraservice basis to maximize the use of available training ranges and
                            other facilities.
                        •   Determine, to the extent practical, whether (1) overseas basing is likely to
                            continue at the current level or be reduced and (2) contingent capacity for
                            basing in the United States needs to be retained.
                        •   Ensure that each service has fully assessed the potential for organizational
                            restructuring and realignments in light of recent force structure reductions
                            and changes.


                            As indicated in chapter 2, the officials we interviewed said the basic
Improvements                framework for BRAC rounds outlined in the 1990 legislation should not be
Warranted in Other          changed. They also said the eight criteria used for BRAC decision-making
Aspects of DOD’s            and the priority given to military value in selecting bases for closure and
                            realignment had served the process well and should be retained. A former
Process for                 BRAC commissioner noted that one of the key elements of the BRAC process
Identifying Bases for       has been its consistency over time. But several officials believed the way
                            in which some of the criteria were used in the decision-making process
Closure

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                        could be improved. For example, DOD could improve the COBRA model, the
                        questionnaires for collecting data from bases, and audit access.


Soundness of Criteria   The 1990 BRAC legislation required that the Secretary of Defense publish in
                        the Federal Register the selection criteria proposed by DOD in making
                        recommendations for closure and realignment and provide the
                        opportunity for public comment. The eight criteria adopted by DOD for the
                        1991 BRAC round were not changed in the two succeeding rounds. The first
                        four criteria provided DOD’s assessment of military value and were given
                        the greatest weight in the BRAC selection process.3 The remaining four
                        criteria dealt with return on investment (when accrued savings would
                        outweigh cost of closure), environmental and economic impacts, and the
                        ability of both existing and potential receiving communities’
                        infrastructures to support forces, missions, and personnel.


Suggestions for         While most officials we contacted said the eight BRAC criteria should be
Strengthening How the   retained, some identified ways to improve how DOD and its components
Criteria Are Used for   used the criteria for decision-making. They were particularly concerned
                        with the high costs of environmental restoration (criteria 8) and the
Making Decisions        exclusion of these costs from BRAC decision-making.4 Some noted that high
                        closing costs in general were an impediment to more closures in the 1995
                        round and said that those costs, as well as environmental restoration
                        costs, could be even more problematic in the future. Likewise, the 1995
                        report of the BRAC Commission recognized continuing concerns about the
                        exclusion of environmental restoration costs and recommended that the
                        policy be reviewed for any future base closures. On the other hand, several
                        officials we interviewed pointed out the difficulty of determining the full
                        cost of environmental restoration before completing detailed remediation
                        studies. There is no consensus on this issue. One official suggested DOD
                        include the estimated cost of accelerated or unique environmental
                        restoration costs, to the extent known during the decision-making stage of
                        the process, in its COBRA calculations.


                        3
                         Only the Air Force included the fifth criteria, return on investment (including cost of closure), in its
                        initial analysis of its bases and did not establish a distinct military value for its bases. This and other
                        factors noted in our 1995 report contributed to a lack of clarity in the Air Force’s BRAC
                        decision-making process.
                        4
                         Environmental restoration cost is a separate issue from environmental impact, which is included in
                        the eight BRAC criteria. The environmental impact criterion required that the components consider
                        the impact of BRAC actions on such environmental issues as threatened or endangered species,
                        wetlands, flood plains, water supplies, and air quality, it did not deal with the issue of the cost of
                        environmental restoration.



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Despite significant DOD efforts to improve the COBRA model during previous
BRAC rounds, several officials pointed out shortcomings during the 1995
round.5 The 1995 BRAC Commission’s report noted that even after four
rounds, the services still differed about how to use the COBRA model to
estimate savings and costs in areas like personnel, moving costs, and
locality pay. Since the model was used to make comparisons between
bases, greater consistency in its application was an issue to BRAC
Commission personnel and others who examined BRAC issues on a
cross-service basis. Some officials suggested that if there are future
rounds, DOD and the services should begin working in advance to enhance
the completeness and consistency of COBRA cost factors and analyses
within and among DOD’s components, to the extent practical. Some
recognized that given the nature and time frames of the BRAC
decision-making process, it was not likely that the COBRA model, or any
other model, would provide budget quality data before closure decisions
are finalized.

Another cost-related issue of some concern involved DOD’s and the 1995
BRAC Commission’s use of a discount rate to calculate the present worth of
future savings, known as the net present value. The 1995 BRAC Commission
expressed concern with DOD’s use of a yearly revised discount rate,
preferring a standardized rate that could be used to compare projected net
savings in each round. In 1991, DOD used a 10-percent discount rate; in
1993, a 7-percent rate; and in 1995, a 2.75-percent rate. The lower the
discount rate, the greater the net present value of savings.6 Our April 1995
report on DOD’s BRAC 1995 round noted that DOD had used a discount rate
tied to the U.S. Treasury’s borrowing rate—an approach that we and
others considered appropriate for analyzing programs in which a given
objective is to be achieved at the lowest cost. At that time, most
preliminary BRAC 1995 COBRA analyses were done by DOD components, and
the discount rate was 2.75 percent for 20-year programs. That rate was
revised by the Office of Management and Budget to 4.85 percent about a
month before the Secretary announced the bases recommended for
closure and realignment. However, DOD did not change its COBRA analyses
to use the revised discount rate, nor did the BRAC Commission use the
revised rate in its subsequent analyses. If in any future rounds DOD plans to

5
See Military Bases: Analysis of DOD’s 1995 Process and Recommendations for Closure and
Realignment (GAO/NSIAD-95-133, Apr. 14, 1995) for a summary of efforts to improve the COBRA
model prior to the 1995 round.
6
 Our 1995 report on DOD’s recommendations for base closures noted that the 20-year net present
value on projected savings from the Secretary’s proposals was nearly $22 billion using a 2.75-percent
discount rate; conversely, the savings would be approximately $17 billion using a 4.85-percent discount
rate.



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                     use a discount rate, we believe that the U.S. Treasury’s borrowing rate is
                     an appropriate one to use, but its use should be tied to the currently
                     approved rate. The value of using a real-world discount rate that reflects
                     the current cost to the government of borrowing could be lost if discount
                     rates were artificially set simply for the purpose of equal comparisons
                     among BRAC rounds.

                     Some individuals suggested that DOD and its components, in comparing
                     commercial and industrial-type facilities, should emphasize the cost of
                     doing business. In examining the history of BRAC, we found that this issue
                     had been raised in discussions within DOD in earlier BRAC rounds. DOD
                     believed that the cost of doing business may be more important for
                     industrial-type activities than for operational bases but that decisions to
                     close or realign industrial activities must be based on an activity’s ability
                     to contribute to defense missions and readiness capabilities. In the 1995
                     round, DOD considered issuing policy guidance emphasizing that the cost
                     of doing business is an important part of military value for industrial
                     activities and that it should be examined under the fourth criteria, which is
                     “cost and manpower implications.”


Data Gathering and   A number of officials commented on the lengthy data requests that bases
Analysis             had to respond to in conjunction with DOD components’ assessments of
                     their bases. While some saw this as a growing burden and questioned to
                     what extent all of the data were actually used in decision-making, others
                     saw benefits in having the extensive data to fully assess individual bases.
                     Some also saw a benefit in having consistent data requests and analyses
                     from one round to the next. No clear consensus for any change seemed to
                     emerge other than that prior BRAC rounds had eliminated all but the best
                     bases and that distinguishing between individual bases could become
                     increasingly difficult in future rounds. The implications were that a few
                     characteristics could be key to distinguishing between some bases in the
                     future and should be kept in mind by the components in developing their
                     data calls.

                     Several officials we interviewed also noted that in BRAC 1995 some bases
                     had to respond to data requests from a cross-service group as well as to
                     data requests from their service headquarters. This was an extra burden
                     and could be avoided if cross-service reviews were completed before the
                     services’ BRAC processes began.




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Audit Coverage   The 1990 BRAC legislation required that we provide the BRAC Commission
                 and Congress a detailed analysis of the Secretary of Defense’s
                 recommendations and selection process. The service audit agencies and,
                 in BRAC 1995, the DOD IG were also extensively involved in auditing the
                 process to better ensure the accuracy of data used in decision-making and
                 enhance the overall integrity of the process. In most instances, service
                 audit agencies and the DOD IG made assessments of special cost or
                 analytical models used in decision-making and verified data entries and
                 output pertaining to these models. They referred errors to the components
                 on a real-time basis to ensure needed corrections were made. In most
                 cases, we provided broader monitoring of the process and reviewed and
                 assessed the results of the audit agencies’ work. In selected instances, we
                 observed the work of the audit agencies in making their assessments.
                 Originally, our report was to be completed within 30 days of the date of
                 the Secretary of Defense’s making public the list of bases recommended
                 for closure and realignment; the legislation as amended, gave us 45 days to
                 complete our report on the 1995 BRAC round.

                 The tight time frames under which we operated required that we have
                 access to the BRAC decision-making processes as they were unfolding
                 within DOD and the services, rather than after the Secretary had submitted
                 his recommendations to the Commission. Accordingly, we monitored the
                 process for nearly a year before the Secretary submitted his proposals to
                 the 1995 Commission and made a more detailed analysis once the list was
                 finalized. We also coordinated with the service audit agencies and the DOD
                 IG, which audited the individual components’ data gathering and analysis
                 processes. Our broader, DOD-wide focus allowed us to compare and
                 contrast processes the components used and to identify potential problem
                 areas while the processes were still underway and resolution was most
                 needed.

                 DOD and its components granted us varying degrees of access to their
                 processes. For example, the Defense Logistics Agency, which encountered
                 problems in the 1993 round, invited us to monitor all phases of its
                 decision-making process in 1995, including executive-level sessions at
                 which BRAC issues were discussed and decisions made. This greatly
                 facilitated our ability to monitor the process as it was unfolding and
                 provided us with opportunities to address issues and potential problem
                 areas during the process. Somewhat less, but reasonable, levels of access
                 were granted by other DOD components, except for the Air Force. The Air
                 Force granted very limited direct access to its process until after the
                 Secretary of Defense announced his recommendations on



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              February 28, 1995. This limited our ability to fully assess the Air Force’s
              process.7 If we are to play a monitoring role in any future BRAC round, this
              issue needs to be addressed.


              If there are future BRAC rounds, as requested by the Secretary of Defense
Conclusions   on May 19, 1997, DOD can improve its process for deciding which bases to
              recommend for closure and realignment. Most importantly, DOD must
              resolve certain policy issues in advance to ensure the success of a future
              BRAC round. In particular, the services must share assets, consolidate
              workloads, and reduce excess capacity in common support functions;
              up-front decisions must be made about which service(s) will be
              responsible for which functions; and the services must fully assess the
              potential for organizational restructuring in view of recent force structure
              reductions. Resolution of these and other issues requires strong, decisive
              leadership by the Secretary of Defense. We believe the Secretary’s Task
              Force on Defense Reform, in conjunction with the Quadrennial Defense
              Review and its National Defense Panel, could help the Secretary deal with
              these issues.

              Other improvements to DOD’s BRAC decision-making processes are also
              desirable, should legislation be enacted authorizing one or more future
              BRAC rounds. Several steps could be taken to more fully and consistently
              capture costs and savings associated with BRAC options being considered.
              These include clear and timely policy guidance and early joint-service
              efforts to improve the COBRA model and any other BRAC decision-making
              tools and to ensure more consistency among the services in applying these
              tools and the BRAC criteria. In particular, the Air Force needs to improve
              the clarity and visibility of its BRAC decision-making process.

              Given DOD’s obligation to clean up bases whether they are closed or not
              and the difficulty of determining the cost of environmental restoration
              before completing detailed remediation studies, we continue to believe
              that this is not a cost of closure and should not be included as a factor in
              deciding which bases to close. However, to the extent there are marginal
              costs associated with expedited cleanup resulting from BRAC closures, DOD
              may want to examine the feasibility of including these costs in its costs
              and savings analyses. If there are future BRAC rounds, we believe DOD and
              the BRAC Commission should use the discount rate tied to the U.S.

              7
               Several officials noted that the transparency of BRAC decision-making was less clear in the Air Force
              than in the other DOD components. This and other factors raised many questions about the openness
              and objectivity of the Air Force’s process and heightened concerns about politicization of the BRAC
              process in 1995.



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                      Treasury’s borrowing rate to calculate the present worth of future savings,
                      known as the net present value. Finally, if we are to play a monitoring role
                      in any future BRAC round, we must have full access to all parts of DOD’s
                      BRAC processes.



                      If Congress authorizes future BRAC rounds, we recommend that the
Recommendations       Secretary of Defense

                  •   work with the Task Force on Defense Reform and the National Defense
                      Panel to address, in advance of any future BRAC round, the important
                      organizational and policy issues in the various cross-service areas
                      discussed in this chapter to facilitate the process of making further
                      infrastructure reductions;
                  •   convene a DOD joint working group, as soon as practical, to develop policy
                      guidance, improve BRAC processes and decision-making tools, and ensure
                      greater consistency among the services’ processes;
                  •   use the current discount rate tied to the U.S. Treasury’s borrowing rate to
                      calculate the net present value of BRAC savings estimates; and
                  •   ensure full audit access to all parts of DOD’s BRAC process.




                      Page 51                                         GAO/NSIAD-97-151 Military Bases
Appendix I

The Base Realignment and Closure Process


              The Department of Defense’s (DOD) recent base realignment and closure
              (BRAC) rounds in 1991, 1993, and 1995 have typically taken at least 1-1/2
              years from the time DOD initiated the process until the time expired in
              which Congress approved the recommendations. Under this process,
              services and defense agencies, acting on DOD guidance, evaluate their
              bases, identify candidates for closure and submit their recommendations
              to the Secretary of Defense who, after reviewing the recommendations,
              submits a consolidated list of recommendations to the BRAC Commission.
              The Commission reviews the Secretary’s list and may add bases for
              closure consideration or delete bases from the Secretary’s
              recommendations. After completing its analysis and holding public
              hearings related to the proposed closures, the Commission adopts a list of
              proposed closures that are forwarded to the President who may either
              accept the recommendations in their entirety or reject the
              recommendations, in whole or in part, and provide the Commission and
              Congress the reasons for that disapproval. If the President disapproves
              any of the recommendations, then the Commission shall transmit a revised
              list of recommendations to the President. Assuming presidential
              acceptance of the list, as occurred in prior rounds, the list is forwarded to
              Congress, which likewise must reject the list in its entirety or it becomes
              final. Figure I.1 refers to the 1995 round to illustrate the key steps in the
              process and time lines.




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                                                    The Base Realignment and Closure Process




Figure I.1: Activities and Time Line of the BRAC Process in 1995




                                                                                       January 7, 1994
                                                                                       Secretary of Defense issues policy guidance to
                                                                                       begin DOD's process for identifying
                                                                                       candidates for base closure and realignment.

    Key steps taken by DOD components
          Develop policy guidance.
          Establish base closure review organizations
          within DOD components.
          Categorize activities.
          Collect data to identify excess capacity and
          establish military values at individual locations.
          Identify and analyze realignment and closure alternatives.
          Perform analyses to gauge potential costs and savings
          from realignment and closure alternatives.
          Determine economic, community, and environmental
           impacts.
          Recommend to the Secretary of Defense candidates
          for realignment and closure.                                                 March 1, 1995
                                                                                       Secretary of Defense reports his recommendations
    Key steps taken by the Commission                                                  for realignment and closures to the Commission
          Analyze the Secretary of Defense's recommendations.
          Hold hearings.                                                               April 15, 1995
          Conduct fact-finding site visits to installations.                           GAO reports to Congress and the Commission on
          Hold regional hearings in communities.                                       its analysis of the Secretary's recommendations
                                                                                       and selection process.




                                                                                       July 1, 1995
                                                                                       The Commission reports to the President on its
                                                                                       recommendations for realignments and closures.
                                                                                       July 15, 1995
                                                                                       The President transmits to the Commission and
                                                                                       Congress a report containing his approval or
                                                                                       disapproval of the recommendations.
                                                                                               August 15, 1995
                                                                                               Should the President disapprove any of the
                                                                                               recommendations, the Commission must
                                                                                               transmit a revised list to the President.
                                                                                       September 1995
                                                                                       Congress has 45 days in which to enact a joint resolution
                                                                                       should it desire to disapprove the entire package of
                                                                                       realignment and closure recommendations. If the time
                                                                                       expires without action, then the decisions become law.




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                                The Base Realignment and Closure Process




                                Many aspects of the recent BRAC processes were mandated by the 1990
                                BRAC legislation, as amended. The mandates


                            •   Authorized an independent commission of eight members appointed by
                                the President, by and with the advise and consent of the Senate. The
                                nomination of individuals is in consultation with the Speaker and the
                                Minority Leader of the House of Representatives and the Majority and
                                Minority leaders of the Senate.
                            •   Specified time lines for decisions by the Secretary of Defense, the
                                President, the BRAC Commission, and Congress.
                            •   Authorized the BRAC Commission to add and/or delete bases to/from the
                                Secretary’s list of proposed closures and realignments.
                            •   Required the Commission to hold public hearings.
                            •   Required the Secretary to publish in the Federal Register the selection
                                criteria proposed by DOD in making recommendations for closure and
                                realignment and provide the opportunity for public comment. Figure I.2
                                shows the criteria adopted by DOD and used in each round.


Figure I.2: BRAC Criteria

                                      Military Value (receives priority consideration)
                                      1. The current and future mission requirements and the impact on
                                      operational readiness of DOD's Total Force.
                                      2. The availability and condition of land, facilities, and associated air space
                                           at both the existing and potential receiving locations.
                                      3. The ability to accommodate contingency, mobilization, and future total
                                           force requirements at both the existing and potential receiving locations.
                                      4. The cost and manpower implications.

                                      Return on Investment
                                      5. The extent and timing of potential cost and savings, including the number
                                          of years, beginning with the date of completion of the closure or
                                          realignment, for the savings to exceed the costs.

                                      Community impacts
                                      6. The economic impact on communities.
                                      7. The ability of both the existing and potential receiving communities'
                                          infrastructure to support forces, missions, and personnel.
                                      8. The environmental impact.




                                Source: DOD.




                                Page 54                                                   GAO/NSIAD-97-151 Military Bases
    Appendix I
    The Base Realignment and Closure Process




•   Stipulated that decisions to close defense facilities with authorization for
    at least 300 civilians must be made under the BRAC process. Decisions to
    realign defense facilities authorized at least 300 civilian that involve a
    reduction of more than 1,000 civilians, or 50 percent or more of the
    civilians authorized, also had to undergo the BRAC process. DOD
    components retained the option of including facilities/activities that fell
    below the threshold.
•   Required all bases to be compared equally against DOD’s selection criteria
    and the current force structure plan.
•   Required that information used in the BRAC decision-making process be
    certified; that is, that the information was accurate and complete to the
    best of the originator’s knowledge and belief. This requirement was added
    for the 1993 round and was designed to overcome concerns about the
    consistency and reliability of data used in the process;
•   Stipulated that if the President accepted the BRAC Commission’s
    recommendations in their entirety, then the recommendations were to be
    sent to Congress for its consideration. If the President disapproved the
    recommendations, in whole or in part, then the President shall transmit to
    the Commission and Congress the reasons for disapproval, and the
    Commission shall be asked to send the President a revised list of
    recommendations.
•   Stipulated that Congress had to accept the Commission’s
    recommendations in their entirety. If Congress rejected the
    recommendations through a joint resolution, then the Secretary could not
    carry out any closure or realignment recommended by the Commission.
•   Stipulated that specific BRAC appropriation accounts be created to ensure
    sufficient funding is provided for implementing the closure and
    realignment decisions.
•   Required us to submit a detailed analysis of the Secretary’s
    recommendations and selection process to Congress and the Commission.

    In addition to the key elements that were required by the 1990 BRAC
    legislation, DOD, in implementing the BRAC process, adopted the following
    procedures.

•   The services and defense agencies used the same analytical tools for
    assessing the (1) cost and savings associated with BRAC actions and
    (2) potential economic impact on communities affected by those actions.




    Page 55                                         GAO/NSIAD-97-151 Military Bases
    Appendix I
    The Base Realignment and Closure Process




•   The services and defense agencies developed and implemented internal
    control plans that identified how they intended to conduct their BRAC
    process, ensure accurate data collection and analyses, and document
    decisions.
•   Service audit agencies and the DOD Inspector General (IG) audited the
    process to better ensure the accuracy of data used in decision-making and
    enhance the overall integrity of the process.
•   The Joint Chiefs of Staff reviewed the list of closures and realignments
    proposed by the services and defense agencies to assess impact on
    national security.

    The major difference between the 1995 round and the previous rounds was
    DOD’s 1995 requirement that the services and defense agencies explore
    opportunities for the cross-service use of common support assets. The
    Office of the Secretary of Defense (OSD) organized cross-service review
    groups to propose alternatives for the components to consider in the
    following five functional areas: (1) maintenance depots, (2) laboratories,
    (3) test and evaluation facilities, (4) undergraduate pilot training, and
    (5) medical treatment facilities.




    Page 56                                       GAO/NSIAD-97-151 Military Bases
Appendix II

Major Closure Decisions From Recent Base
Closure Rounds


   Army                               Navy                                       Air Force                           Defense Logistics Agency
   1988
  Presidio of San Francisco, Calif.   Philadelphia Naval Hospital, Pa.           Chanute Air Force Base, Ill.
  Fort Sheridan, Ill.                 Naval Station Galveston, Tex.              Mather Air Force Base, Calif.
  Jefferson Proving Ground, Ind.      Naval Station Lake Charles, La.            Pease Air Force Base, N.H.
  Lexington Army Depot, Ky.           Naval Station Brooklyn, N.Y.               George Air Force Base, Calif.
  Army Material Tech Lab, Mass.                                                  Norton Air Force Base, Calif.
  Fort Douglas, Utah
  Cameron Station, Va.


   1991
  Fort Benjamin Harrison, Ind.        Hunters Point Annex, Calif.                Bergstrom Air Force Base, Tex.
  Fort Devens, Mass.                  Tustin Marine Corps Air Station, Calif.    Carswell Air Force Base, Tex.
  Ford Ord, Calif.                    Chase Field Naval Air Station, Tex.        Eaker Air Force Base, Ark.
  Sacramento Army Depot, Calif.       Moffett Naval Air Station, Calif.          England Air Force Base, La.
                                      Naval Station Long Beach, Calif.           Grissom Air Force Base, Ind.
                                      Naval Station, Philadelphia, Pa.           Loring Air Force Base, Maine
                                      Philadelphia Naval Shipyard, Pa.           Lowry Air Force Base, Colo.
                                      Naval Station Puget Sound, Wash.           Myrtle Beach Air Force Base, S.C.
                                      Naval Electronic Systems                   Richards-Gebaur Air Reserve
                                        Engineering Center, San Diego,             Station, Mo.
                                        Calif.                                   Rickenbacker Air Guard Base, Ohio
                                                                                 Williams Air Force Base, Ariz.
                                                                                 Wurtsmith Air Force Base, Mich.
                                                                                 Castle Air Force Base, Calif.


   1993

   Vint Hill Farms, Va.               Marine Corps Air Station El Toro, Calif.   Homestead Air Force Base, Fla.      Defense Personnel Support Center,
                                      Naval Hospital Oakland, Calif.             Plattsburgh Air Force Base, N.Y.     Pa.
                                      Naval Air Station, Cecil Field, Fla.       O’Hare International Airport Air
                                      Naval Air Station Agana, Guam                Reserve Station, Ill.
                                      Naval Electronics Systems                  Gentile Air Force Station, Ohio
                                       Engineering Center, St. Inigoes, Md.      K.I. Sawyer Air Force Base, Mich.
                                      Naval Station Charleston, S.C.             Newark Air Force Base, Ohio
                                      Naval Station Mobile, Ala.
                                      Naval Air Station Alameda, Calif.
                                      Naval Station Treasure Island, Calif.
                                      Naval Aviation Depot Pensacola, Fla.
                                      Naval Air Station Barbers Point, Hawaii
                                      Naval Station Staten Island, N.Y.
                                      Naval Air Station Dallas, Tex.
                                      Mare Island Naval Shipyard, Calif.
                                      Naval Aviation Depot Alameda, Calif.
                                      Naval Training Center, San Diego,
                                       Calif.
                                      Naval Training Center Orlando, Fla.
                                      Naval Air Station Glenview, Ill.
                                      Charleston Naval Shipyard, S.C.
                                      Naval Aviation Depot Norfolk, Va.




                                                  Page 57                                                            GAO/NSIAD-97-151 Military Bases
                                                    Appendix II
                                                    Major Closure Decisions From Recent Base
                                                    Closure Rounds




Army                                    Navy                                     Air Force                                 Defense Logistics Agency
 1995

Fort McClellan, Ala.                    Naval Air Facility, Adak, Alaska         McClellan Air Force Base, Calif.          Defense Distribution Depot Memphis,
Fort Chaffee, Ark.                      Naval Shipyard, Long Beach, Calif.       Ontario International Airport Air Guard    Tenn.
Oakland Army Base, Calif.               Fleet Industrial Supply Center,            Station, Calif.                         Defense Distribution Depot Ogden,
Fitzsimmons Army Medical Center,          Oakland, Calif.                        Roslyn Air Guard Station, N.Y.             Utah
  Colo.                                 Ship Repair Facility, Guam               Bergstrom Air Reserve Base, Tex.
Savanna Army Depot Activity, Ill.       Naval Air Warfare Center, Aircraft       Reese Air Force Base, Tex.
Fort Holabird, Md.                        Division, Indianapolis, Ind.
Fort Richie, Md.                        Naval Surface Warfare Center, Crane
Bayonne Military Ocean Terminal, N.J.     Division Detachment, Louisville, Ky.
Seneca Army Depot, N.Y.                 Naval Surface Warfare Center,
Fort Indiantown Gap, Pa.                  Dahlgren Division Detachment,
Fort Pickett, Va.                         White Oak, Md.
                                        Naval Air Station, South Weymouth,
                                          Mass.
                                        Naval Air Warfare Center, Aircraft
                                          Division, Warminster, Pa.


                                                    Source: DOD.

                                                    Note: Military installations can be a base, camp, post, station, yard, center, or leased facility. As
                                                    we reported in 1995, the number of bases recommended for closure or realignment in a given
                                                    BRAC round is often difficult to tabulate precisely because closure decisions are not necessarily
                                                    complete closures and closures vary in size. The term “base closure” often conjures up the image
                                                    of a larger facility being closed than may actually be the case. The same is true with facilities
                                                    designated by DOD as major closures. This report relies on DOD’s characterization of which
                                                    bases are to be considered major and which are closures versus realignments. For example, the
                                                    BRAC 1995 decision regarding Kelly Air Force Base, Texas is characterized as a major base
                                                    realignment, not a closure. Therefore, it is not listed on this table.




                                                    Page 58                                                                GAO/NSIAD-97-151 Military Bases
Appendix III

Comments From the Department of Defense




               Page 59        GAO/NSIAD-97-151 Military Bases
Appendix III
Comments From the Department of Defense




Page 60                                   GAO/NSIAD-97-151 Military Bases
                   Appendix III
                   Comments From the Department of Defense




Now on pp. 9-10.




Now on p. 10.




Now on p. 10.




Now on p. 10.




Now on p. 10.




                   Page 61                                   GAO/NSIAD-97-151 Military Bases
Related GAO Products


                      Military Bases: Analysis of DOD’s 1995 Process and Recommendations for
BRAC                  Closure and Realignment (GAO/NSIAD-95-133, Apr. 14, 1995).
Decision-Making
Process               Military Bases: Analysis of DOD’s Recommendations and Selection Process
                      for Closures and Realignments (GAO/NSIAD-93-173, Apr. 15, 1993).

                      Military Bases: Observations on the Analyses Supporting Proposed
                      Closures and Realignments (GAO/NSIAD-91-224, May 15, 1991).

                      Military Bases: An Analysis of the Commission’s Realignment and Closure
                      Recommendations (GAO/NSIAD-90-42, Nov. 29, 1989).


                      Military Bases: Cost to Maintain Inactive Ammunition Plants and Closed
BRAC                  Bases Could be Reduced (GAO/NSIAD-97-56, Feb. 20, 1997).
Implementation:
Costs, Savings, and   Navy Nuclear Power School (GAO/NSIAD-97-21R, Nov. 22, 1996).

Reuse                 Military Bases: Update on the Status of Bases Closed in 1988, 1991, and
                      1993 (GAO/NSIAD-96-149, Aug. 6, 1996).

                      Military Bases: Potential Reductions to the Fiscal Year 1997 Base Closure
                      Budget (GAO/NSIAD-96-158, July 15, 1996).

                      Military Bases: Closure and Realignment Savings Are Significant, but Not
                      Easily Quantified (GAO/NSIAD-96-67, Apr. 8, 1996).

                      Military Bases: Case Studies on Selected Bases Closed in 1988 and 1991
                      (GAO/NSIAD-95-139, Aug. 15, 1995).

                      Military Bases: Reuse Plans for Selected Bases Closed in 1988 and 1991
                      (GAO/NSIAD-95-3, Nov. 1, 1994).

                      Military Bases: Revised Cost and Saving Estimates for 1988 and 1991
                      Closures and Realignments (GAO/NSIAD-93-161, Mar. 31, 1993).

                      Military Bases: Transfer of Pease Air Force Base Slowed by Environmental
                      Concerns (GAO/NSIAD-93-111FS, Feb. 3, 1993).


                      Military Base Closures: Reducing High Costs of Environmental Cleanup
Environmental         Requires Difficult Choices (GAO/NSIAD-96-172, Sept. 5, 1996).
Restoration

                      Page 62                                        GAO/NSIAD-97-151 Military Bases
               Related GAO Products




               Environmental Protection: Status of Defense Initiatives for Cleanup,
               Compliance, and Technology (GAO/NSIAD-96-155, Aug. 2, 1996).

               Federal Facilities: Consistent Relative Risk Evaluations Needed for
               Prioritizing Cleanups (GAO/RCED-96-150, June 7, 1996).

               Nuclear Waste: Greater Use of Removal Actions Could Cut Time and Cost
               for Cleanups (GAO/RCED-96-124, May 23, 1996).

               Military Bases: Environmental Impact at Closing Installations
               (GAO/NSIAD-95-70, Feb. 23, 1995).

               Environment: DOD’s New Environmental Security Strategy Faces Barriers
               (GAO/NSIAD-94-142, Sept. 30, 1994).


               Base Operations: Challenges Confronting DOD as It Renews Emphasis on
BRAC Related   Outsourcing (GAO/NSIAD-97-86, Mar.11, 1997).

               Defense Infrastructure: Demolition of Unneeded Buildings Can Help Avoid
               Operating Costs (GAO/NSIAD-97-125, May 13, 1997).

               Defense Outsourcing: Challenges Facing DOD As It Attempts to Save
               Billions in Infrastructure Costs (GAO/T-NSIAD-97-110, Mar. 12, 1997).

               Military Bases: Cost to Maintain Inactive Ammunition Plants and Closed
               Bases Could be Reduced (GAO/NSIAD-97-56, Feb. 20, 1997).

               Defense Infrastructure (GAO/HR-97-7, Feb. 1997).

               Future Years Defense Program: Lower Inflation Outlook Was Most
               Significant Change From 1996 to 1997 Program (GAO/NSIAD-97-36, Dec. 12,
               1996).

               Defense Acquisition Infrastructure: Changes in RDT&E Laboratories and
               Centers (GAO/NSIAD-96-221BR, Sept. 13, 1996).

               Air Force Aircraft: Consolidating Fighter Squadrons Could Reduce Costs
               (GAO/NSIAD-96-82, May 6, 1996).

               Army Aviation Testing: Need to Reassess Consolidation Plan
               (GAO/NSIAD-96-87, Mar. 15 1996).



               Page 63                                            GAO/NSIAD-97-151 Military Bases
                    Related GAO Products




                    DOD Training: Opportunities Exist to Reduce the Training Infrastructure
                    (GAO/NSIAD-96-93, Mar. 29, 1996).

                    DOD Infrastructure: DOD’s Planned Finance and Accounting Structure Is Not
                    Well Justified (GAO/NSIAD-95-127, Sept. 18, 1995).


                    Defense Depot Maintenance: Uncertainties and Challenges DOD faces in
Depot Maintenance   Restructuring Its Depot Maintenance Program (GAO/T-NSIAD-97-111, Mar. 18,
                    1997).

                    Air Force Depot Maintenance: Privatization-in-Place Plans Are Costly
                    While Excess Capacity Exists (GAO/NSIAD-97-13, Dec. 31, 1996).

                    Navy Depot Maintenance: Cost and Savings Issues Related to
                    Privatizing-in-Place at the Louisville, Kentucky Depot (GAO/NSIAD-96-202,
                    Sept. 18, 1996).

                    Army Depot Maintenance: Privatization Without Further Downsizing
                    Increases Costly Excess Capacity (GAO/NSIAD-96-201, Sept. 18, 1996).

                    Defense Depot Maintenance: DOD’s Policy Report Leaves Future Role of
                    Depot System Uncertain (GAO/NSIAD-96-165, May 21, 1996).

                    Defense Depot Maintenance: More Comprehensive and Consistent
                    Workload Data Needed for Decisionmakers (GAO/NSIAD-96-166, May 21, 1996).

                    Defense Depot Maintenance: Privatization and the Debate Over the
                    Public-Private Mix (GAO/T-NSIAD-96-148, Apr. 17, 1996).

                    Depot Maintenance: Opportunities to Privatize Repair of Military Engines
                    (GAO/NSIAD-96-33, Mar. 5, 1996).

                    Closing Maintenance Depots: Savings, Workload, and Redistribution
                    Issues (GAO/NSIAD-96-29, Mar. 4, 1996).

                    Aerospace Guidance and Metrology Center: Cost Growth and Other
                    Factors Affect Closure and Privatization (GAO/NSIAD-95-60, Dec. 9, 1994).




(709209)            Page 64                                          GAO/NSIAD-97-151 Military Bases
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