Impoundment Control: Deferrals of Budget Authority for Military Construction

Published by the Government Accountability Office on 1990-06-28.

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

Comptroller General
of the United States
Wasbhgtnn, D.C. 2Ob48

June 28, 1990

To The President of the Senate and the
Speaker of the House of Representatives
This letter     reports    deferrals    of budget authority in
military    construction     programs that should have been, but
were not, reported       to the Congress by the President      pursuant
to the Impoundment Control           Act of 1974.
Section 1015(a) of       the Impoundment Control      Act, 2 U.S.C.
ยง 686(a),  requires      the Comptroller     General to report to the
Congress whenever       he finds that any officer      or employee of
the United States       has ordered,    permitted,   or approved a
reserve of budget       authority,   and the President     has failed to
transmit  a special      impoundment message with respect to such
The deferral      in question      occurs in programs financed             by the
Military    Construction      Appropriations       Act for the Department
of Defense, 1990, Pub. L. No. 101-148, 103 Stat.                    920 (19891,
and unobligated        funds carried      over from previous        years.l/
On January 24, 1990, Secretary             of Defense Richard Cheney
ordered a moratorium         on the award of new contracts             for
military    construction      and the exercise        of options      under
existing    contracts.       The moratorium       also applies      to
contracts     for architectural        and engineering      design services.
The directive       makes limited      exceptions     for projects       in which
the Department has a legal obligation                under treaty      or
statute    (such as for NATO infrastructure),              projects      required
for base closures         and realignments      pursuant    to Public Law
loo-525    (1984),     and projects      needed to meet urgent military
requirements,       upon approval      of the Deputy Secretary           of
Defense.      The military      construction      moratorium     was to remain

1/ Most of the fiscal          year 1990 military       construction
appropriations       are available    for obligation       for five fiscal
years until     September 30, 1994.       Two appropriations,           for the
North Atlantic       Treaty Organization     Infrastructure         and the
Home Owners Assistance         Fund, Defense, are available           for
obligation     until    expended.   Amounts appropriated          to the Base
Realignment     and Closure Account are available             for obligation
until    September 30, 1995.
in effect  until    April      30, 1990, to permit a review of
military  construction         projects  "in light   of coming changes
in the force structure          and disposition    of the U.S. Armed
On April      30, 1990, the Secretary          extended the moratorium
for an additional           45 days.     He also ordered the Deputy
Secretary       of Defense to determine         which of over 200 military
construction         projects   should be cancelled         and proposed for
rescission.          On June 14, 1990, Donald J. Atwood, Acting
Secretary       of Defense, extended the moratorium                through
November 15, 1990 on the same terms and conditions                        specified
in the April         30, 1990 order.        We understand      that on
June 20, 1990 the Secretary              proposed cancelling          $327 million
in military        construction      projects   identified       in response to
the April       30 directive.        Secretary    Cheney has proposed these
projects      for rescission       to the Office      of Management and
Budget (OMB), and OMB is currently                processing       a special
message proposing           the rescissions     to the Congress in
accordance        with the Impoundment Control            Act.     However,
neither     the Department or OMB have reported                or, to our
knowledge,        plan to report the remaining            funds affected        by
the moratorium          in a special     message under the Act.
Informally,     officials      at the Department have estimated                that
the services      were only able to obligate           roughly       $200-$300
million     of military     construction       funds before the moratorium
went into effect.          We are unable to ascertain            with precision
how much military         construction       budget authority        remains
affected     by the moratorium         order.     However,   it    is   estimated
that it applies         to 95 percent of unobligated            military
construction      funds.
Under the Impoundment          Control     Act,   a deferral      of budget
authority includes:
       "(A) withholding         or delaying   the obligation     or
       expenditure     of budget authority         (whether by
       establishing      reserves     or otherwise)     provided  for
       projects     or activities;      or
       "(B) any other type of Executive      action or
       inaction   which effectively  precludes     the
       obligation   or expenditure  of budget
       authority   . . . ."
2 U.S.C.    S 682(l).
Secretary    Cheney's order directing   the armed services  not to
obligate   funds for any new construction    projects  or exercise
options   for existing   ones for over 5 months, and the recent
2                                                                   GAO/OGC-90-5
order extending       the freeze for 3 additional     months, is an
action    which not only delays but also precludes          for the
duration     of the order the obligation     of budget authority        for
Department activities,        in this case the entire     military
construction      program.    Such an action   is reportable       as a
Accordingly;    in accordance with section     1015(a) of the
Impoundment Control      Act, we are apprising     the Congress of
the withholding     of budget authority    in military
construction    programs.

Comptroller  General
of the United States

3                                                            GAO/OGC-90-5