Background

DOD has undergone five BRAC rounds with the most recent occurring in  2005. Under the first four rounds in 1988, 1991, 1993, and 1995, DOD closed  97 major bases and had 55 major base realignments and hundreds of  minor closures and realignments. DOD has reported that under the prior  BRAC rounds it had reduced the size of its domestic infrastructure by  about 20 percent and had generated about $6.6 billion in net annual  recurring savings for those years following the completion of the 1995  round in 2001. As a result of the 2005 BRAC decisions, DOD was slated to  close an additional 25 major bases, complete 32 major realignments, and  complete 755 minor base closures and realignments. At the time the BRAC  decisions were finalized in November 2005, the BRAC Commission  projected that implementation of these decisions would generate over $4  billion in annual recurring net savings following the completion of  implementing those decisions in 2011. In accordance with BRAC statutory  authority, DOD must complete closure and realignment actions by  September 15, 2011—-6 years following the date the President transmits  his report on the BRAC recommendations to Congress. Environmental  cleanup and property transfer actions can exceed the 6-year time limit,  having no deadline for completion.
In addition to reducing unneeded infrastructure and generating savings,  DOD envisioned the 2005 BRAC round to be one that emphasized  transformation by aligning the infrastructure with the defense strategy and  fostered jointness by examining and implementing opportunities for  greater jointness across DOD. As such, there are a considerably higher  number of realignments to take place than in any of the four prior rounds,  which has resulted in far more individual BRAC actions, many of which  affect multiple bases. While the number of major closures and  realignments are somewhat similar to those of previous rounds (see table  1), the number of minor closures and realignments is significantly greater  than those in all previous rounds combined. Available data indicate that  despite the larger number of actions associated with the 2005 BRAC round  compared with previous rounds, the amount of property potentially  available for transfer is likely to be much less than in prior BRAC rounds.  Although the total amount of acres available for transfer resulting from the  2005 BRAC round is yet to be fully determined, the preliminary number of  potentially transferable acres for the 25 major bases is about 102,000  acres compared with a total of about 502,500 acres from the prior BRAC  rounds combined. The extent of additional transferable acreage arising  from the hundreds of minor base closures and realignments was not  available at the time of our review, but is likely to be limited given the  smaller size of many of those locations.
A critical component to the process of transferring unneeded property  arising from BRAC actions is the need to address the environmental  contamination that has occurred over time due to military operations  being conducted when the bases were active installations. Types of  environmental contaminants found at military installations include  solvents and corrosives; fuels; paint strippers and thinners; metals, such as  lead, cadmium, and chromium; and unique military substances, such as  nerve agents and unexploded ordnance. According to DOD officials, while  environmental cleanup of these contaminants has been an ongoing  process on active military bases, the cleanups often receive greater  attention once a base has been selected for closure. Environmental  cleanup is necessary for the transfer of unneeded contaminated property,  which becomes available as a result of base closures and realignments.  While addressing the environmental cleanup of contaminated property is a  requirement for property transfer to other users, the sometimes decades- long cleanup process is not bound by the 6-year limitation for  implementing required BRAC actions. As we have reported in the past,  addressing the cleanup of contaminated properties has been a key factor  related to delays in transferring unneeded BRAC property to other parties  for reuse. DOD officials told us that they expect environmental cleanup to  be less of an impediment during the 2005 round since the Department now  had a more mature cleanup program in place to address environmental  contamination on its bases.
In conducting assessments of potential contamination and to determine  the degree of cleanup required (on both active and closed bases), DOD  must comply with cleanup standards and processes under all applicable  environmental laws, regulations, and executive orders. The  Comprehensive Environmental Response, Compensation, and Liability Act  of 1980 (CERCLA), as amended, authorizes cleanup actions at federal  facilities where there is a release of hazardous substances or the threat of  such a release which can present a threat to public health and the  environment. To clean up potentially contaminated sites on both active  and closed bases, DOD generally follows the process that is required under  CERCLA, which generally includes the following phases and activities:  preliminary assessment, site investigation, remedial investigation and  feasibility study, remedial design and remedial action, and long-term  monitoring. (An explanation of these phases is provided in app. II.)
The Superfund Amendments and Reauthorization Act of 1986 (SARA)  added provisions to CERCLA specifically governing the cleanup of federal  facilities, including active military bases and those that are slated for  closure under BRAC and, among other things, required the Secretary of  Defense to carry out the Defense Environmental Restoration Program  (DERP). Following SARA’s enactment, DOD established DERP, which  now consists of two subprograms: (1) the Installation Restoration  Program, which addresses the cleanup of hazardous substances that are  primarily controlled under CERCLA and were released into the  environment prior to October 17, 1986; and (2) the Military Munitions  Response Program, which addresses the cleanup of munitions including  UXO and the contaminants and metals related to munitions that were  released into the environment prior to September 30, 2002. Cleanups of  hazardous substances released after 1986 and munitions released after  2002 are not eligible for DERP funds. These cleanups are generally  referred to as non-DERP or “compliance” cleanups and often include  activities that are regulated by the Resource Conservation and Recovery  Act. These cleanups involve the closure and cleanup of operations  associated with landfills, training ranges, and underground storage tanks  and are generally funded under base operations and maintenance accounts  for active bases. Once the property is determined to be unneeded and  transferable to other users under BRAC, the cleanups are funded under  the BRAC account.
While SARA had originally required the government to warrant that all  necessary cleanup actions had been taken before transferring property to  nonfederal ownership, the act was amended in 1996 to expedite transfers  of contaminated property. Now such property, under some  circumstances, can be transferred to nonfederal users before all remedial  action has been taken. However, certain conditions must exist before the  department can exercise this early transfer authority, such as the property  must be suitable for the intended reuse and the governor of the state must  concur with the transfer.
In addition to investigations into potential hazards, DOD is required to  follow National Environmental Policy Act requirements and consult with  local redevelopment authorities during the process of property disposal  and during the process of relocating functions from one installation to  another. Although the decision to close or realign installations is not  subject to the National Environmental Policy Act, DOD is required to  follow the act’s requirements during the process of property disposal and  during the process of relocating functions from one installation to another.  The National Environmental Policy Act requires federal agencies,  including DOD, to consult with and obtain the comments of other federal  agencies that have jurisdiction by law or special expertise with respect to  any environmental impact involved with the action.
DOD’s March 2006 Base Redevelopment and Realignment Manual  requires the military services to prepare an Environmental Condition of  Property Report for closing BRAC bases. The report is used to evaluate the  environmental condition of all transferable property based on already  available information on contamination. It can be used to identify “gaps” in  information regarding environmental conditions and where more study is  required. Environmental Condition of Property reports have replaced the  former baseline surveys that were required when SARA was enacted in  1986. According to Army officials, the Army plans to have a total of 183  Environmental Condition of Property reports completed for all of its 2005  major and minor base closures by January 31, 2007. With respect to Army  National Guard properties, the states will be responsible for their  Environmental Condition of Property reports except for the five bases  located on federal lands for which the Army will prepare the reports, if  required. According to Navy officials, the Navy has completed all reports  for lands affected by 2005 closures. Air Force officials reported that they  will have the reports completed for all their bases, which require one, by  April 2007.
DOD has had a long-standing policy of not considering environmental  cleanup costs in its BRAC decision making. Accordingly, the estimates  using the Cost of Base Realignment Actions model, which is used to  compare alternative actions during BRAC decision making, do not include  the cost of environmental cleanup for BRAC-affected bases. Historically,  we have agreed with DOD’s position that such costs are a liability to DOD  regardless of its base closure recommendations. While such costs are not  included in the Cost of Base Realignment Actions model, they are included  in developing BRAC implementation budgets and recorded as a BRAC  cost.

	Expected Environmental Cleanup Costs for the 2005 BRAC Round Are Not Yet Fully Known

Expected environmental cleanup costs for the 2005 BRAC round are not  yet fully known, but they are likely to increase from current estimates.  DOD’s available data indicate that at least $950 million will be needed to  complete the cleanups now underway for known hazards on the major and  minor bases scheduled for closure for the 2005 BRAC round. However, our  prior work has indicated that as closures are implemented, more intensive  environmental investigations occur and additional hazardous  contamination may be uncovered resulting in higher cleanup costs. Also,  the services’ estimates were based on cleanup standards that are  applicable for the current use of the property, but reuse plans developed  by communities sometimes lead to more stringent and thus more  expensive cleanups. In addition, DOD is in the early phases of identifying  and analyzing munitions hazards that may require additional cleanup at  both active and BRAC bases. Furthermore, the manner in which DOD is  required to report all these costs to Congress is fragmented. Of the four  reports DOD annually provides to Congress on environmental cleanup  costs and estimates for its bases, none gives the entire cost picture by  service or base.

		Cleanup Cost Estimates for BRAC 2005 Round Bases Are Not Fully Known and Likely to Increase

Although DOD data indicate that at least $950 million will be needed for  cleanup of the major and minor base closures resulting from the 2005  BRAC round, this figure reflects preliminary amounts that are likely to  increase as more information is collected during BRAC implementation on  the extent of cleanup required to safely reuse property in communities  where future land use decisions have yet to be made. DOD’s best available  data suggest that at least $590 million will be needed to complete the  cleanup of the 25 major base closures and about $360 million will be  needed for the minor closures. These amounts were developed from  information contained in the Defense Environmental Programs Fiscal  Year 2005 Annual Report to Congress, and they do not include all costs,  such as program management costs and non-DERP costs. In addition, the  2005 BRAC round includes the closure of more than 100 reserve centers,  the extent to which cleanups will be required and at what cost is largely  unknown. Only 2 of these centers reported cleanup estimates in the  Defense Environmental Programs Fiscal Year 2005 Annual Report to  Congress. Our experience with prior BRAC round bases has shown that  estimates tend to increase significantly once more detailed studies and  investigations are completed.
The following table provides DOD’s estimated cost to complete the  environmental cleanup beyond fiscal year 2006 for the 25 major DOD base  closures resulting from the 2005 BRAC round as reported in the Defense  Environmental Programs Fiscal Year 2005 Annual Report to Congress.  For certain bases, conflicting cost estimates appear between this report  and those reported in the 2005 Defense Base Closure and Realignment  Commission Report to the President. According to DOD officials, the  data provided to the BRAC Commission is now outdated and estimates  contained in the Defense Environmental Programs Fiscal Year 2005  Annual Report to Congress provide more current data.
Table 2 shows that DOD estimates it will spend at least $590 million to  clean up the 25 major bases recommended for closure in 2005. However,  we believe that this figure is low for several reasons. First, the amounts in  table 2 only include the cost estimate for DERP eligible cleanups—those  cleanups associated with contamination occurring prior to 1986 for  hazardous waste and prior to 2002 for munitions. The cost for non-DERP  cleanups and program management costs are not included. These  additional costs could add millions to the overall cost estimate. Second, no  cleanup cost estimates were available in the Defense Environmental  Programs Fiscal Year 2005 Annual Report to Congress for 5 of the 25  major base closures either because the cleanups were not eligible for  DERP funding, or because the bases had not been thoroughly assessed for  environmental damage. As the bases undergo more complete and in-depth  environmental assessments, a clearer picture of environmental cleanup  costs will likely emerge. Finally, these cost estimates will likely increase  due to more in-depth investigations that are expected to address all  environmental cleanup issues now that the bases have been scheduled for  a BRAC closure. For example, during our visit to the Mississippi Army  Ammunition Plant in June 2006, we noted that Army and contract officials  were preparing an environmental condition of property assessment to pull  together all known environmental issues. Army officials told us that the  ammunition plant had been closed and placed in standby status since 1990  and that no aggressive environmental cleanup had taken place. When the  plant was recommended for closure in 2005, the Army estimated that $8.4  million would be required to address environmental contamination caused  by 2 inactive range munitions sites. Since that time, according to Army  plant officials, as many as 46 more sites have been identified as having  environmental concerns which will require further investigation and  possible cleanup. Therefore, the total eventual cleanup costs are likely to  be much higher than the current estimate of $8.4 million.
DOD officials told us that the projected environmental cleanup cost  estimates are relatively lower for the 2005 BRAC bases than for those of  the prior rounds because the environmental conditions on the property of  today’s bases are much better than those closed in previous rounds. These  officials told us that this is primarily due to ongoing actions associated  with DOD’s Installation Restoration Program (cleanup program) and the  Military Munitions Response Program at active and BRAC bases. The  restoration program addresses hazardous substances, pollutants, and  other contaminants, and the munitions program addresses UXO and  discarded munitions. The officials stated that contaminated sites identified  under the installation restoration program are much farther along in the  cleanup process than sites identified under the munitions program,  primarily because the restoration program has been in existence since  1985 while the munitions program was only initiated in 2001. Our analysis  of DOD-provided cleanup-phase data for the identified contaminated  sites at 20 of the 25 major BRAC 2005 closures supports this assertion. For  example, DOD’s data show that, as of September 30, 2005, 89 percent of  the 571 installation restoration sites (508 sites) either had their cleanup  remedy in place or had the remedy complete, and 91 percent (521 sites)  had completed investigation studies. Comparatively, of the 50 identified  munitions sites at the 20 bases, only 8 percent (4 sites) reported cleanup  action complete and only 10 percent (5 sites) had completed investigation  studies. However, federal cleanup officials as well as military  environmental specialists told us that many of these sites may require  further investigation and cleanup—and greater cleanup costs—if, as  expected, the future control and use of the property shifts from the  military to the private sector. Furthermore, DOD officials stated that many  munitions sites were not required to be cleaned when they were  operational ranges on active bases, but will require cleanup now that the  bases have been closed. The Army estimates that the cost to address  active ranges on their 2005 BRAC properties ranges from $37 million to  $335 million and is not included in the $950 million estimate for cleanup of  2005 major and minor bases.

		DOD’s Environmental Cleanup Reports Do Not Provide a Complete Picture of Environmental Cleanup Cost Information

Congress does not have complete visibility over the expected total cost of  DOD’s cleanup efforts for the 2005 BRAC round or for the prior BRAC  rounds because of a variety of reports that individually are incomplete and  which collectively may present a confusing picture of costs. Although  DOD prepares multiple reports for Congress on various environmental  cleanup costs, none of them presents an overall total cost estimate per  base, nor is DOD required to present this information. DOD does not fully  explain the scope and limitations of the cost information presented.  Transparency and complete accountability in financial reporting and  budgetary backup documents are essential elements for providing  Congress with a more complete picture of the total cleanup costs so it can  make appropriate budgetary trade-off decisions to ensure the expeditious  cleanup and transfer of properties and ultimately realize savings for the  U.S. government. In order to provide a complete picture of the total  cleanup costs at BRAC bases, specific information must be extracted from  various reports, which we have done in order to present the total costs to  clean up properties resulting from prior BRAC round decisions.
Congress annually receives the following four required reports from DOD  that contain environmental cleanup costs and estimates for BRAC bases,  two of which also include costs for active bases.
Annual BRAC Budget Appropriations Request    Annual Government’s Consolidated Financial Statement Report    Annual Defense Environmental Programs Report    Annual Section “2907” Report A detailed description of the environmental cleanup costs and estimates  included in these reports is presented in appendix III.
Our review showed that none of these reports provides information in one  place on the total (spent plus estimated future environmental cleanup  costs) expected for all environmental cost categories (DERP, non-DERP,  and program management costs) by base. DOD officials told us that  Congress will often mistakenly assume that the cost data presented in the  Annual Defense Environmental Programs reports to Congress are the total  expected cost of the program. While these costs are typically the majority  of the overall total costs, the report excludes the cost of cleanups by base  that do not qualify for DERP funding. Although these non-DERP costs are  presented elsewhere in the report, they are only presented in aggregate  terms by service. From information contained in two of the reports, we  determined that the expected environmental costs for the first four BRAC  rounds will total $13.2 billion, as shown in table 3.
The $9.0 billion of funding made available for the four prior BRAC rounds  for all cost categories was obtained from DOD’s BRAC Budget  Appropriations Request for fiscal year 2005. The budget request did not  provide data on the total cost to complete the environmental cleanup at  the bases. The $3.8 billion cost from fiscal year 2006 through completion  for the DERP eligible cleanups (Installation Restoration Program and  Military Munitions Response Program) came from one section (Appendix  E, Restoration Budget Summary) in the Defense Environmental Programs  Fiscal Year 2005 Annual Report to Congress. On the basis of information  in this report, the time required to complete the cleanup for some bases  will take decades. For example, the estimated date to complete cleanup at  the former Mather Air Force Base, California, is reported as 2074, and the  estimated date to complete cleanup at the former Toole Army Depot, Utah,  is reported as 2032. The $0.4 billion estimated cost from fiscal year 2006  through completion for compliance (non-DERP) and program  management and planning was extracted from another section of the  Defense Environmental Programs Fiscal Year 2005 Annual Report to  Congress (specifically, Appendix J, Installation Restoration Program and  Military Munitions Response Program Status Tables) for each of the  services.
None of the environmental reports DOD submits to Congress provide  information in one place on the total costs and future cost estimates for  each of the environmental cost categories by service and by base. Further,  the environmental cleanup costs and estimates DOD reports to Congress  vary in their scope and limitations, but DOD does not fully explain their  differences. As a result, the cost of cleaning up BRAC property lacks  transparency and Congress does not have total visibility over this  multibillion dollar BRAC environmental cleanup effort.

	DOD Continues to Make Progress in Transferring Unneeded Properties, but Environmental Cleanup Continues to be a Key Impediment to Transfer of Remaining Properties

DOD continues to make progress in transferring unneeded BRAC property  since our last report on this subject. However, environmental cleanup of  contamination continues to be a key impediment to transferring the  remaining properties. Environmental cleanup issues are unique to each  site but usually result from a variety of interrelated factors such as  technological constraints, lengthy negotiations on regulatory compliance,  and the discovery of previously unknown and therefore unaddressed  environmental hazards.

		DOD Continues to Make Progress in Transferring Unneeded Properties

Since our last report on this subject in January 2005, DOD has made some  progress in transferring remaining unneeded property, having transferred  78 percent, (about 390,300 acres) of the 502,500 total unneeded acres  from prior BRAC rounds to federal and nonfederal entities—up from 72  percent (about 364,000 acres of the estimated 504,000 acres DOD reported  at the end of fiscal year 2004) from 2 years ago. This represents an  increase of about 26,300 acres from what we reported in January 2005. A  breakdown of the current status of unneeded BRAC property shows that  63 percent had been transferred to nonfederal entities, 15 percent had  been transferred to other federal agencies, 15 percent had been leased but  not transferred, and 7 percent was untransferred and is awaiting future  disposition (see fig. 1).
Nearly 22 percent (112,300 acres)  of the total acreage from prior BRAC  rounds—7 percent (35,700 acres) of untransferred property plus 15  percent (76,600 acres) of untransferred but leased property—has not been  transferred. In other words, over 68 percent (76,600 acres) of the  approximate 112,300 acres of untransferred property is being leased,  leaving only 32 percent (35,700 acres) that is not in reuse. Leased property,  while not transferred to the user, can afford the user and DOD some  benefits. Communities, for example, can choose leasing while awaiting  final environmental cleanup as an interim measure to promote property  reuse and job creation. DOD also benefits, in some cases, as the  communities assume responsibility for costs of protecting and maintaining  these leased properties. By adding leased acres to the number of  transferred acres, the amount of unneeded BRAC property in reuse rises  to 93 percent. However, while leasing can provide short-term reuse  benefits in terms of economic development opportunities, it may delay  DOD’s larger goal to expedite property transfers.

		Cleanup of Environmental Contamination Continues to Cause Property Transfer Delays Due to a Variety of Interrelated Factors

As we have reported in the past, environmental cleanup issues have and  continue to delay the services from rapidly transferring unneeded BRAC  property. As of September 30, 2006, about 81 percent of the approximate  112,300 acres remaining to be transferred from the prior BRAC rounds  (about 91,200 acres), which is located on 44 installations, have  environmental contamination issues. Environmental cleanup issues are  unique to each site but usually result from interrelated issues such as  technological constraints, cleanup negotiations, and previously unknown  environmental hazards, as described in the following examples.
Sometimes the available technology needed to detect and clean up  UXO is limited and not fully effective. For example, at the former Naval  Air Facility in Adak, Alaska, over 5,500 acres of UXO-contaminated  property have not been transferred because the technology for  economically cleaning up the UXO on this remote Aleutian island does  not currently exist. At the former Fort Ord Army Base in Marina,  California, about 11,800 acres contaminated with UXO still require  cleanup, and this effort is currently expected to take until 2021 due to  the labor-intensive nature of current cleanup technology (see fig. 2).  We were told by DOD officials that the detection of UXO is not only  labor intensive but difficult because the technology often used for this  purpose cannot easily distinguish between UXO and waste scrap  metals.
Prolonged negotiations between environmental regulators and DOD  about compliance with environmental regulations and laws can delay  property transfers. For example, at the former Fort Wingate, New  Mexico, which was closed by the 1988 BRAC Commission and has  about 8,800 acres of transferable property with environmental  impediments, it took years of active negotiation between the Army and  regulators to reach agreement for closure requirements permitted  under the Resource Conservation and Recovery Act. At the former  Fort Ord, California, open burning of the coastal chaparral is necessary  before discovery and removal of UXO and other munitions can begin.  However, according to Army officials, the number of acres that can be  burned annually must be negotiated with the state and is controlled by  California’s clean air standards.
Additional environmental contamination can be detected after a base is  recommended for closure. For example, the former McClellan Air  Force Base in Sacramento, California, was recommended for closure in  1995 and traces of plutonium were found during a routine cleanup in  September 2000, causing a cost increase of $21 million, and extending  the completion schedule beyond 2030.
Table 4 shows the most expensive “cost to complete” environmental  cleanups on prior BRAC round bases. The estimated costs to complete  cleanups at these 10 BRAC installations ($2.1 billion) account for more  than half (55 percent) of DOD’s $3.8 billion future BRAC environmental  restoration and munitions cleanup estimates for all unneeded properties  on bases from the previous BRAC rounds.

	Opportunities Exist to Expedite Cleanup and Transfer of Unneeded BRAC Properties

Although opportunities exist to expedite the cleanup and transfer of  unneeded BRAC 2005 properties, as well as untransferred properties from  prior BRAC rounds, it is not clear to what extent each of these  opportunities are considered for BRAC properties nor what successes or  challenges were seen in their application since the services are not  required to report their strategies for addressing unclean and  untransferred properties to the Office of the Secretary of Defense (OSD).  Over the years, Congress has provided DOD with a wide range of property  transfer authorities to expedite the cleanup and transfer of unneeded  BRAC property, including public sales and the so-called “Early Transfer  Authority,” which allows property to be transferred before all necessary  cleanup actions have been completed. In prior BRAC rounds, there was  more extensive use made of some tools than others, and as we previously  reported, DOD could have given greater attention to early transfer  authority. Each of the military services has processes in place to monitor  their progress to clean and transfer BRAC properties. Also, DOD’s March  2006 Base Redevelopment and Realignment Manual, which provides  cleanup and disposal guidance for BRAC 2005 properties as well as  untransferred properties from prior BRAC rounds, encourages the services  to make wide use of all available property transfer tools. However, the  services are not required to report to OSD on the status of monitoring their  progress, their strategies for transferring BRAC properties, lessons  learned, or whether they are taking advantage of all available property  cleanup and transfer tools.

		Many Property Disposal Alternatives Exist

Congress has, over time, provided DOD with a wide range of property  transfer mechanisms and tools to expedite the cleanup and transfer of  unneeded BRAC property, including public sales, early transfer authority,  and privatization. The closure and realignment of individual installations  creates opportunities for those unneeded properties to be made available  to others for reuse. When an installation becomes a BRAC action, the  unneeded property is reported as excess. Federal property disposal laws  require DOD to first screen excess property for possible reuse by defense  and other federal agencies. If no federal agency needs the property, it is  declared surplus and is made available to nonfederal parties, including  state and local agencies, local redevelopment authorities, and the public,  using various transfer tools as shown in table 5.

		Use of the Wide Range of Tools Has Been Limited in the Past, but Has Greater Emphasis Now

Although prior DOD guidance to the military services promoted creativity  within applicable laws and regulations to successfully close and reuse  installations, DOD used some property transfer tools to a much greater  extent than others. In some cases, DOD’s deference to community plans  for economic development led it to use low or no-cost transfer tools more  often than property sales. As BRAC has evolved, there have been differing  emphases placed on the approaches used to transfer unneeded property.  For example, following the 1988 round, DOD emphasized revenue  generation through the sale of unneeded properties. Following the BRAC  rounds in the 1990s, however, DOD underscored economic development  through direct, no-cost transfers of property to the public sector. The  emphasis during the 2005 BRAC round appears to be headed towards a  renewed importance on achieving fair market value through various  transfer authorities and the consideration of all transfer tools available to  quickly transfer unneeded property to others for reuse.
The services have taken some steps to expand their use of the wide array  of transfer tools in recent years, most notably the Navy, which realized  over $850 million in revenues from the sale of unneeded BRAC properties  at two former Marine Corps air stations in California. Figure 3 illustrates  the alternatives used to transfer unneeded BRAC property from the prior  BRAC rounds to nonfederal entities as of September 30, 2006.
205,400 (65%) 13,300 (5%)
As shown in figure 3, low- and no-cost property conveyance mechanisms  accounted for 65 percent (205,400) of all acres transferred—public benefit,  conservation, and economic development conveyances were used in 17  percent, 19 percent, and 29 percent, respectively–whereas public and  negotiated sales accounted for 5 percent (13,300) of all acres transferred.  According to DOD officials, this trend reflected deference to local  community organizations and their preference for low- and no-cost  conveyances. Moreover, it also reflected the difficulty in using public and  negotiated sales at that time, because more time was often needed to  determine the nature and extent of environmental contamination and its  potential cleanup cost, to attract private property developers. However, as  more information is developed at these sites and as local economic  conditions change, a different approach to transferring property may now  be successful, an approach which would not have worked in the past. For  example, while an agreement was reached in 2000 on a no-cost economic  development conveyance at the former Alameda Naval Air Station,  California, the local redevelopment authority could not follow through on  the terms of this conveyance to create jobs because of a decline in the  local economy. Therefore, both the local redevelopment authority and the  Navy were reassessing other property transfer options, including public  sales, at the time of our review.

		Use of Early Transfer Authority May Facilitate Property Transfers

Another tool for facilitating property transfers is the so-called “early  transfer authority,” which is not actually a property transfer mechanism  but rather an amendment to SARA, allowing the services to transfer  property that has not been entirely cleaned under an authorized transfer  conveyance. Recognizing that environmental cleanup has often delayed  the transfer of BRAC property, Congress enacted the early transfer  authority provision in 1996 which allows, under certain conditions,  property to be transferred before all necessary cleanup actions have been  completed. The transfer agreement identifies who will complete the  cleanup and what funding the service will provide, if any. In addition, the  entity assuming cleanup responsibilities will often purchase environmental  insurance to insure itself against possible cost overruns. We previously  reported that this tool should receive greater DOD attention and DOD has  increased its use of this authority, transferring a total of about 23,700 acres  using this method as of July 2006.
There are typically two scenarios with which an early transfer is  requested. In the first scenario, the deed to the property is provided to the  new owner, such as a local redevelopment authority, and DOD continues  the cleanup. For the other scenario, the user takes the deed to the  property and as the new owner agrees to complete cleanup activities or to  control the implementation of an ongoing cleanup at the time of transfer.  Although this tool is officially called the “Transfer Authority in Connection  with Payment of Environmental Remediation Costs,” it is commonly  referred to as “privatization.” DOD’s March 2006 Base Redevelopment and  Realignment Manual states that if the fair market value of the property is  more than the cleanup cost, the purchaser must pay the military  departments the difference. However, if fair market value is less than the  cleanup costs, the military department may pay the purchaser the  difference. Because the purchaser will be responsible for completing the  cleanup, the services must confirm that the purchaser has the technical  expertise and financial capability to do so before considering this  approach. In terms of cost, DOD retains responsibility for funding the  environmental cleanup, regardless of whether it is performed by DOD or  the user.
A primary advantage of using the early transfer authority is that it makes  property available to the future user as soon as possible, thus allowing  environmental cleanup and redevelopment activities to proceed  concurrently. This can save time and costs and provide users with greater  control over both activities. Furthermore, it provides communities with  the means to quickly put property into productive use, create jobs, and  possibly create tax revenue. DOD reported that some reasons why the  services were not taking full advantage of this authority were due to a lack  of information on early transfer authority by communities, how to use it,  and how the process ensures the protection of public health, safety, and  the environment. In addition, DOD cites a lack of support from state and  local regulators as a reason for the previously limited use of this authority.  However, a local redevelopment authority can purchase environmental  insurance to transfer the risk of potential cost overruns from the property  owner to the contractor and the insurance provider. By shifting the risk,  contractors may be strongly motivated to complete the environmental  cleanups in a timely and cost-efficient manner. According to one local  redevelopment authority official, privatization of environmental cleanup  (one scenario for achieving an early transfer) is now seen as a way to  expedite the cleanup and transfer process significantly because DOD’s  approach can be too methodical, while the private sector can remediate  the hazards more economically and in less time.
As of July 2006, the number of completed early property transfers had  increased from 12 (about 8,200 acres) as of September 30, 2001, to 23  (about 23,700 acres). According to DOD officials, 8 early transfer authority  actions are currently pending (in the process of being transferred), and 5  are currently being considered for the future. Table 6 provides a list of  locations where early transfer authority has been completed, i.e., where a  deeded transfer has been completed, as of July 2006.

		Services Monitor Progress, but DOD Does Not Require Them to Report Property Transfer Strategies and Progress

Although each of the military services has processes and procedures in  place to monitor environmental cleanup and property transfer progress,  DOD has not required the services to prepare and provide a BRAC  property cleanup and transfer strategy to OSD, which has overall  responsibility for overseeing the services’ implementation of  environmental cleanup on unneeded BRAC properties. Without such a  requirement, OSD cannot readily monitor and track the transfer tools the  services are using to expedite the cleanup and transfer of BRAC  properties. Further, there is less likelihood of the sharing of lessons  learned among the services, and communities could be denied full  economic benefits that may be possible through expedited reuse of the  property.
In March 2006 guidance, DOD encouraged the military services to use all  appropriate means to transfer unneeded property from the BRAC 2005  round and prior BRAC rounds, and to dispose of property at the “highest  and best use”. As the disposing agency, the military department has the  authority to select the methods of disposing of unneeded properties. The  guidance states that DOD recognizes that federal law provides it with an  array of legal authorities by which to transfer property, but also recognizes  that the variety of installation types and the unique circumstances of the  surrounding communities do not lend themselves to a single approach.
We found that each of the services monitors BRAC property cleanup and  disposal progress as part of their responsibility to dispose of unneeded  BRAC property. According to the Army, discussions within the Army  Conveyance Team can focus on progress and problems being  encountered with a current property disposal method at an installation.  The Army then attempts to resolve the problem with the local  redevelopment authority. In addition, the Army has developed a system to  track ongoing transfer conveyances for BRAC properties so it can identify  slippage and track progress. Approximately every 6 months Army  environmental personnel meet to discuss funding requirements and  property transfer issues. Within the Air Force Real Property Agency,  environmental program reviews are performed at least twice a year to  determine the extent of cleanup progress at Air Force BRAC installations.  In addition, the Air Force conducts bimonthly reviews to identify potential  problems and to confirm that the transfer schedule is being maintained.  We were told by a Navy official that each Program Management Office  regional director meets monthly with each of their BRAC teams to  discuss cleanup and property disposal progress at BRAC properties and, if  needed, any potential alternative approaches that could expedite cleanup  and disposal.
According to a key OSD official responsible for monitoring the services’  progress, the military services are not required to formally report their  strategy for cleaning up and transferring BRAC properties, including  sharing any challenges and successes they experienced in the use of  various property disposal tools or that they fully considered using all the  tools available to them. According to OSD and service officials in charge of  monitoring the services’ progress in the cleanup and transfer of unneeded  properties, the services currently provide OSD with only informal, ad hoc  progress reports. Furthermore, these officials believe that a more regular  and formal process for periodically reporting and sharing experiences with  various transfer tools would be helpful to both OSD (in tracking the use of  these tools) and to the services (in learning from others’ successes and  failures). One service official went on to state that more is actually learned  by the failures rather than the successes and those experiences should be  shared. We believe that sharing information, possibly via the Internet,  among and between the services, communities, and the private sector,  could facilitate the exchange of ideas and the sharing of lessons learned  which may in turn expedite the cleanup and transfer of BRAC properties.  Without such a requirement, OSD is hampered in tracking the services’ use  of these tools to assure Congress that they are taking full advantage of all  opportunities to expedite the cleanup and transfer of unneeded properties  so that communities can realize the full economic benefits of expeditious  property reuse.

	Conclusions

An incomplete picture of environmental cleanup costs at the beginning of  the implementation of BRAC 2005 relates to a piecemeal reporting of  environmental cleanup costs for bases when they are in an active status,  coupled with the fact that environmental cleanup information evolves over  time. DOD can ensure that Congress has the most complete information  available by providing more clarification and explanation as to what is  included and excluded in the environmental cleanup costs it presents to  Congress and include the total expected cost—both incurred costs as well  as the most current estimate of expected future costs—for the cleanup at  BRAC bases. Without this information, Congress cannot ensure that scarce  federal resources are used in the most efficient manner to address  environmental cleanup issues at unneeded DOD properties so that  productive new uses for these properties can be more quickly realized.
Numerous tools have been made available to DOD to help expedite the  transfer of unneeded BRAC property to other users. As DOD seeks to use  these tools for 2005 BRAC round bases, OSD could more effectively  conduct its oversight responsibilities by requiring the services to  periodically report on their progress to transfer properties and plans to  take full advantage of the tools available to them. In addition, each of the  services may find it useful to learn and benefit from the property transfer  experiences gained with these tools within and among the services. Delays  in transferring unneeded properties result in additional expense to DOD to  care for and maintain these properties while the affected community  receives no benefit—economic or otherwise—as it waits for the property  to be redeveloped for productive use.

	Recommendations for Executive Action

In order to provide more complete and transparent cost information for  the environmental cleanup of properties from all BRAC rounds, we  recommend that the Secretary of Defense direct the Under Secretary of  Defense (Acquisition, Technology, and Logistics) to report all costs (DERP  and non-DERP)—past and future—required to complete environmental  cleanup at each BRAC installation and to fully explain the scope and  limitations of all the environmental cleanup costs DOD reports to  Congress. We suggest including this information in the annual BRAC  budget justification documentation since it would accompany information  Congress considers when making resource allocation decisions.
In order to help ensure that the military services are taking full advantage  of all tools available to clean up and transfer unneeded BRAC properties  from the 2005 round, we recommend that the Secretary of Defense direct  the Under Secretary of Defense (Acquisition, Technology, and Logistics) to  require that the military services periodically report to OSD on the status  and proposed strategy for transferring these properties and include an  assessment of the usefulness of all tools at their disposal. We suggest  placing this information in an easily shared location, such as a Web site, so  that each service, and even the local communities and private sector, can  share and benefit from lessons learned.

	Agency Comments and Our Evaluation

In written comments on a draft of this report, DOD concurred with the  fundamental aspects of both of our recommendations to take actions to  improve its reporting of BRAC environmental cleanup costs to Congress  and to require the military services to periodically report to the Office of  the Secretary of Defense on the status and proposed strategy for  transferring unneeded BRAC properties. DOD’s comments are reprinted in  appendix IV and addressed as appropriate in the body of the report. DOD  further provided technical comments, which we also incorporated as  appropriate into this report.
In order to provide more complete and transparent cost information on  the entire cost of environmental cleanup, DOD concurred with our basic  recommendation to report all costs—past and future—required to  complete environmental cleanup at each BRAC installation and to fully  explain the scope and limitations of all the environmental cleanup costs  DOD reports to Congress. However, DOD’s comments reflect only a partial  concurrence because DOD did not agree with our suggestion to include  this information in the annual BRAC budget justification documentation.  DOD stated its belief that this would be counterproductive and that  Congress has prescribed the types of environmental information it wants  presented in the budget documentation, which DOD complies with. In  making our suggestion, it was not our intent that it be considered as part  of the recommendation. However, we continue to believe that the annual  BRAC budget justification documentation would be the most useful place  for this cost-reporting information, since this documentation is referred to  by Congress when deliberating BRAC environmental cleanup funding.  Nonetheless, if the Department can meet the intent of our  recommendation by submitting this information in another report, we  defer to the Department on how best to report this information to  Congress.
In order to help ensure that the military services are taking full advantage  of all tools available to clean up and transfer unneeded BRAC properties  from the 2005 round, DOD concurred with our recommendation to require  the military services to periodically report to the Office of the Secretary of  Defense on the status and proposed strategy for transferring BRAC  properties and include an assessment of the usefulness of all tools at their  disposal. Although DOD did not comment on our suggestion to accomplish  this through a shared Web site in order to maximize the lessons learned,  DOD officials embraced the idea as something easily doable in comments  made during our exit interview with the agency.
We are sending copies of this report to interested congressional  committees; the Secretaries of Defense, the Army, Navy, and Air Force;  and the Director, Office of Management and Budget. We will also make  copies available to others upon request. In addition, the report will be  available at no charge on GAO’s Web site on http://www.gao.gov.
Please contact me on (202) 512-4523, leporeb@gao.gov, or my Assistant  Director, Jim Reifsnyder, at (202) 512-4166, reifsnyderj@gao.gov, if you or  your staff has any questions concerning this report. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on the  last page of this report. GAO staff that made major contributions to this  report are listed in appendix VI.

Appendix I: Scope and Methodology

To address our first objective to examine potential cleanup costs  associated with the Base Realignment and Closure (BRAC) process, we  collected and analyzed relevant documentation generated by the Office of  the Secretary of Defense and the military departments, and we interviewed  key officials with knowledge of BRAC cost reports and estimates. We  collected and analyzed environmental cleanup cost estimates for the 25  major base closures and similar estimates for the minor closures and  realignments for the 2005 BRAC round, as well as costs for the prior BRAC  rounds. To gain a sense of the models used to estimate cleanup costs, we  viewed a demonstration of the Remedial Action Cost Engineering  Requirements System cost estimating tool used by the Army and the Air  Force, and the Normalized Data cost estimating tool used by the Navy. We  interviewed knowledgeable officials about BRAC environmental cleanup  costs from the Army Environmental Center, the Air Force Real Property  Agency, and the Navy’s Northeast BRAC Program Management Office. In  addition, we visited four BRAC 2005 locations—Fort Monroe, Hampton,  Virginia; Umatilla Chemical Depot, Hermiston, Oregon; Brunswick Naval  Air Station, Brunswick, Maine; and the Mississippi Army Ammunition  Plant, Picayune, Mississippi—to gain a better understanding of the  environmental cleanup requirements facing these installations and the  processes that base officials are following to estimate cleanup costs. We  also interviewed Office of the Secretary of Defense and the services’  officials to gain an understanding of how the estimates derived from the  services’ environmental cost estimating models are reported in various  Department of Defense (DOD) environmental reports to Congress. In so  doing, we analyzed the cost information contained in each report in order  to derive estimated cleanup costs for the prior BRAC rounds. We also  compared the cost estimates projected at the installation level with  estimates that were reported to Congress to verify that the data were  consistent. Although we found some discrepancies, we concluded that,  overall, the DOD data were sufficiently reliable for the purposes of this  report.
To address our second objective to examine DOD’s progress in  transferring unneeded properties from the four prior BRAC rounds, we  reviewed our prior BRAC reports and reports prepared by the  Congressional Research Service and DOD on this subject. Using property  transfer information on the four prior BRAC rounds provided by the Office  of the Secretary of Defense and the services, we updated the transfer  acreage data reported in our January 2005 report in order to determine the  extent of progress made in the transfer of unneeded property. We assessed  the reliability of the reported transferred property acreage by interviewing  knowledgeable officials and comparing acreage totals to GAO reports  from prior years. Although the acreage totals change as property is  transferred and more accurate land surveys are completed, we determined  that the data were sufficiently reliable to provide overall comparisons. We  interviewed officials from the Environmental Protection Agency’s Office of  Federal Facilities and consulted with them about their concerns regarding  environmental cleanup at prior BRAC round bases. We interviewed DOD  and military service officials responsible for environmental cleanup at  BRAC and active bases at both the headquarters and field level to clarify  reasons for property transfer delays, such as technology and regulations.  We visited the three BRAC bases from the four prior BRAC rounds with  the most expensive estimated cost to complete for cleanups—the former  McClellan Air Force Base, Sacramento, California; the former Fort Ord,  Marina, California; and the former Alameda Naval Air Station, Alameda,  California. During these visits, we spoke not only with military officials but  also with officials from local redevelopment authorities at these  installations, as well as officials from the California State Environmental  Protection Agency, to determine the major impediments to property  transfers. To supplement these discussions we collected data from the  services on the extent that environmental issues were impeding property  transfer.
To address our third objective to assess possible opportunities for DOD to  expedite the cleanup and transfer of unneeded BRAC properties, we  reviewed relevant laws, regulations, and policies governing the cleanup  and transfer of properties, and we also reviewed prior GAO and DOD  reports on this subject. We also reviewed DOD’s 2006 Base Redevelopment  and Realignment Manual for an assessment of tools available to the  services for expediting the cleanup and property transfer. We analyzed the  use of these tools to date at selected BRAC installations and compiled  overall statistics on the use of these authorities in the prior BRAC rounds.  We interviewed officials representing federal and state environmental  regulatory agencies for their perspective on DOD cleanup activities and  any opportunities for DOD to expedite the cleanup process while adhering  to legal cleanup standards. In addition, during our visits to the seven  installations mentioned earlier, we interviewed community officials for  their perspective on the speed and quality of environmental cleanups and  property transfers, and opportunities for speeding up the process. We  spoke with cognizant from the Office of the Secretary of Defense (OSD)  and service officials to ascertain their views as to the extent of oversight  of the services’ use of existing transfer tools and the sharing of lessons  learned from the property transfer process.
During the course of our review, we contacted the following offices with  responsibility for oversight, management, and implementation of the  environmental cleanup of military and specifically, BRAC bases:  Office of the Secretary of Defense    Office of the Deputy Under Secretary of Defense for Acquisition,  Technology and Logistics, Installations and Environment,   Washington, D.C.
Office of the Secretary of Defense (Comptroller), Washington, D.C.
Army Office of the Assistant Chief of Staff of Installation Management,  Base Realignment and Closure Division, Arlington, Virginia    Office of the Deputy Assistant Secretary of the Army, Environmental  Safety and Occupational Health, Washington, D.C.
Army Installation Management Agency, Arlington, Virginia    Army Materiel Command, Fort Belvoir, Virginia    Army Environmental Center, Aberdeen, Maryland    Army Corps of Engineers, Environmental Office for Formerly Used  Defense Sites, Washington, D.C.
Army National Guard, Arlington, Virginia    Navy BRAC Program Management Office Northeast, Philadelphia,    Navy BRAC Program Management Office, West, San Diego, California    Navy BRAC Environmental Office, Arlington, Virginia    Air Force Real Property Agency, Arlington, Virginia    Air Force Audit Agency, Washington, D.C.    Air National Guard, Arlington, Virginia    Air Force Office of the Civil Engineer, Environmental Division,   Arlington, Virginia    Federal Environmental Protection Agency, Federal Facilities Branch,    Association of State and Territorial Solid Waste Management Officials,  Washington, D.C.
State of California Environmental Protection Agency, Sacramento,    Fort Ord Reuse Authority, Marina, California    McClellan Local Reuse Authority, Sacramento, California    Alameda Reuse and Redevelopment Authority, Alameda, California    Umatilla Reuse Authority, Hermiston, Oregon    Brunswick Local Redevelopment Authority, Brunswick, Maine    Fort Monroe Reuse Authority, Hampton, Virginia We visited three bases closed during the prior BRAC rounds—chosen  because they represent each of the three services and also have the three  most expensive estimated costs to complete cleanups for sites currently  undergoing cleanup:    Fort Ord, Marina, California    McClellan Air Force Base, Sacramento, California    Alameda Naval Air Station, Alameda, California We also visited four bases scheduled for closure under the 2005 BRAC  round—chosen to represent a variety of missions as well as geographic  diversity:    Fort Monroe, Hampton, Virginia    Umatilla Chemical Depot, Hermiston, Oregon    Brunswick Naval Air Station, Brunswick, Maine    Mississippi Army Ammunition Plant, Picayune, Mississippi  We conducted our work from January 2006 through November 2006 in  accordance with generally accepted government auditing standards.

Appendix II: CERCLA Cleanup Requirements

The Comprehensive Environmental Response, Compensation, and  Liability Act of 1980 (CERCLA), as amended, authorizes cleanup actions  at federal facilities where there is a release of hazardous substances or  threat of such a release. CERCLA section 120(h) contains provisions that  establish requirements for the transfer or lease of federally owned  property based on storage, disposal, or known release of hazardous  substances. All contracts for transfer or lease must include notice of this  storage, disposal, or release. Except as noted below, CERCLA section  120(h)(3) requires that transfers of federal real property by deed must also  include: (a) a covenant by the United States that all remedial action  necessary to protect human health and the environment has been taken  prior to transfer, (b) a covenant by the United States to undertake any  further remedial action found to be necessary after transfer, and (c) a  clause granting access to the transferred property in case remedial action  or corrective action is found to be necessary after transfer.
To clean up potentially contaminated sites on both active and closed  bases, the Department of Defense (DOD) generally follows the process  that is required under CERCLA, which generally includes the following  phases and activities:    Preliminary Assessment—Available information is collected regarding  contamination, including a search of historical records, to confirm  whether a potential environmental contamination or military munitions  hazard could be present and to determine whether further action is  needed.
Site Investigation—This step usually involves a walk around the site by  an environmental engineer and may involve some limited soil and  water sampling including an analysis to determine the extent and  source(s) of the hazards.
Remedial Investigation/Feasibility Study—More rigorous statistical  sampling and analysis is conducted to determine the exact nature and  extent of contamination and whether cleanup action is needed and, if  so, select alternative cleanup approaches. This could include removal,  limiting public contact, determining no further action is warranted, or  cleaning of the hazardous media (soil, air, or water) on site.
Remedial Design/Remedial Action—This phase involves designing and  constructing the actual cleanup remedy, such as a pump and treat  system for underground water, or the removal of munitions.
Long-term Monitoring—At this phase, parties responsible for the  cleanup periodically review the remedy in place to ensure its continued  effectiveness, including checking for unexploded ordnance and  conducting public education.
While the Superfund Amendments and Reauthorization Act of 1986 had  originally required the government to warrant that all necessary cleanup  action had been taken before transferring property to nonfederal  ownership, the act was amended in 1996 to expedite transfers of  contaminated property. Now such property, under some circumstances,  can be transferred to nonfederal users before all remedial action has been  taken. However, certain conditions must exist before the department can  exercise this “early transfer authority.” For example, the property must be  suitable for transfer for the intended use; transfer of the property must not  delay any cleanup actions; and the governor of the state where the  property is located must approve the transfer. The advantage of an early  transfer is that property is made available under a transfer authority to the  future user as soon as possible to allow for concurrent environmental  cleanup and redevelopment. The law still requires that contaminated sites  must be cleaned up to ensure that past environmental hazards due to  former DOD activity on transferred BRAC property are not harmful to  human health or to the environment and that the property can support  new use; however, the early transfer authority does allow for the  concurrent cleanup and reuse of the property.

Appendix III: Environmental Cleanup Cost Information in Four Selected Reports to Congress

The Department of Defense (DOD) annually provides Congress with four  required reports that include information on environmental cleanup costs  and estimates at active and Base Realignment and Closure (BRAC)  installations. Each report is prepared for a different purpose, such as  budgetary, financial, or program oversight, resulting in various  presentations of estimated and actual cleanup costs. None of the reports,  however, provides the total environmental program costs and estimates  for each service and their bases. The types of environmental program  costs include restoration and munitions cleanup, compliance, and program  management and planning.
The four annual reports are the (1) Annual BRAC Budget Appropriations  Request, (2) Annual Defense Environmental Programs Report to Congress,  (3) Annual Government’s Consolidated Financial Statement Report, and  (4) Annual Section 2907 report. The following provides a description of  the reports’ mandates, when they are issued, and the information they  contain.
Annual BRAC Budget Appropriations Request: Section 206 of the  Defense Authorization Amendments and Base Closure and Realignment  Act, Public Law 100-526, specifies the type of information required in  DOD’s annual budget appropriation request for BRAC funding. DOD and  the services prepare separate budget justification books that provide  details for each BRAC round on funds made available for environmental  cleanup and the budget request estimate for the fiscal year that the request  is being made for. The environmental funded amounts and the estimate  include information on all environmental costs, including restoration and  munitions cleanup, compliance, and program management and planning.
The information in DOD’s fiscal year 2006 budget request indicates that  $9.0 billion had been made available for DERP (environmental restoration  and munitions) cleanup and non-DERP (compliance and program  management and planning) through fiscal year 2005 for the prior four  BRAC rounds. The fiscal year 2006 budget request estimate for the  environmental cleanup costs was about $378 million. DOD also presented  Congress with information on the 2005 BRAC closures and realignments,  which shows that DOD and the services plan to spend about $426 million  on the environmental cleanup cost categories between fiscal year 2006 and  2011. The estimated amounts were presented in current or inflated dollars.
Although the Annual BRAC Budget Appropriations Request report  includes all categories of costs, it does not include—nor is DOD required  to report—the total estimated cost to complete the environmental cleanup  (past and future costs) for the BRAC bases.
Annual Government’s Consolidated Financial Statement Report: As  required by the Chief Financial Officer Act of 1990 and the Government  Management Reform Act of 1994, DOD is required to report on its  estimated environmental liabilities in the federal government’s annual  fiscal year consolidated financial statements, and does so each year in its  performance and accountability report to Congress. The environmental  liability information for active and BRAC bases is contained in note 14 of  the financial statements for fiscal year 2005 and the information contains  separate line item amounts for the restoration and compliance categories.  The environmental program management and planning cost amounts were  included in the restoration amount and DOD uses the installations’ defense  environmental programs data to compile a large portion of its  environmental liabilities for financial statement reporting.
The November 15, 2005, report for fiscal year 2005 activity indicates that  the total BRAC restoration liability amount, or future cost to complete,  was $3.5 billion. The BRAC environmental liability for compliance and  program management and planning was reported as $206.5 million. The  data are not inflated and are stated in current dollars.
The government’s annual consolidated financial statement report presents  the most complete information on the environmental cost categories for  the cost to compete the cleanup. The information is reported in total for  DOD and summarized for each service. However, the report does not  provide information on how much has been made available for BRAC  environmental cleanup, and there is no detailed information presented for  individual bases.
Annual Defense Environmental Programs Report to Congress: As  required by section 2706 of Title 10, DOD annually submits this report to  Congress. The latest report, which covered fiscal year 2005, was issued to  Congress in March 2006. Different sections of the report discuss and  provide planning and funding costs and cost estimate information for the  various DOD environmental programs at active and BRAC bases. These  sections have information on active and BRAC bases’ restoration and  munitions cleanup expenditures for fiscal years 2004 and 2005 and the cost  to complete the environmental cleanup from 2006 to completion. The  report also presents information on non-DERP and program management  and planning costs and estimates for BRAC activities in the aggregate (but  not by base).
The information on the expected cost to complete the restoration and  munitions environmental cleanup at BRAC bases for the first four rounds  shows that DOD estimates this cost at about $3.8 billion from 2006 to  completion. From the section of the report that reconciles the services’  cost to complete with the reported environmental liability, we were able to  sum the services’ compliance and management and support costs and  determine that the total cost to complete from fiscal year 2006 for these  categories totaled about $0.4 billion. The dollar amounts for cost to  complete from 2006 through 2011 were inflated and the dollar amounts  from fiscal year 2012 to completion were in constant 2011 dollars.
While the defense environmental programs report provides ample  information on environmental cleanup costs and estimates, it does not  consolidate the information to obtain an overall or total environmental  cleanup cost amount for each service and base.
Annual Section 2907 Report: This report addresses reporting  requirements specified in section 2907 of Public Law 101-510, commonly  referred to as the BRAC Act, for all BRAC 2005 installations. Among other  things, the 2907 report includes details on the known environmental  remediation restoration and munitions cleanup issues at each base  affected by the 2005 BRAC recommendation. The information provides  details on the estimate to complete the cleanup at each identified site, and  plans and time lines to address the cleanup. According to DOD officials,  the first report issued for the 2005 BRAC was in March 2006 and the  estimates are based on the restoration and munitions cleanup data  contained in the defense environmental programs report.

Appendix IV: Comments from the Department of Defense

Appendix V: Key Prior GAO Reports on DOD Environmental Cleanup

Environmental Liabilities: Long-Term Planning Hampered by Control  Weaknesses and Uncertainties in the Federal Government’s Estimates.  GAO-06-427. Washington, D.C.: March 31, 2006.
Military Bases: Analysis of DOD’s 2005 Selection Process and  Recommendations for Base Closures and Realignments. GAO-05-785.  Washington, D.C.: July 1, 2005.
Military Base Closures: Observations on Prior and Current BRAC  Rounds. GAO-05-614. Washington, D.C.: May 3, 2005.
Military Base Closures: Updated Status of Prior Base Realignments and  Closures. GAO-05-138. Washington, D.C.: January 13, 2005.
DOD Operational Ranges: More Reliable Cleanup Cost Estimates and a  Proactive Approach to Identifying Contamination Are Needed. GAO-04- 601. Washington, D.C.: May 28, 2004.
Military Munitions: DOD Needs to Develop a Comprehensive Approach  for Cleaning Up Contaminated Sites. GAO-04-147. Washington, D.C.:  December 19, 2003.
Environmental Compliance: Better DOD Guidance Needed to Ensure  That the Most Important Activities Are Funded. GAO-03-639. Washington,  D.C.: June 17, 2003.
Environmental Contamination: DOD Has Taken Steps to Improve  Cleanup Coordination at Former Defense Sites but Clearer Guidance Is  Needed to Ensure Consistency. GAO-03-146. Washington, D.C.: March 28,  2003.
Military Base Closures: Progress Completing Actions from Prior  Realignments and Closures. GAO-02-433. Washington, D.C.: April 5, 2002.
Military Bases: Status of Prior Base Realignment and Closure Rounds.  GAO/NSIAD-99-36. Washington, D.C.: December 11, 1998.
Military Base Closures: Reducing High Costs of Environmental Cleanup  Requires Difficult Choices. GAO/NSIAD-96-172. Washington, D.C.:  September 5, 1996.

Appendix VI: GAO Contacts and Staff Acknowledgments

	Acknowledgments

In addition to the individuals named above, Barry Holman, Karen Kemper,  Andy Marek, Bob Poetta, and Angie Zeidan made significant contributions  to this report.
Other individuals also contributing to this report include Susan Ditto, Ron  La Due Lake, Steve Lipscomb, Ken Patton, Charles Perdue, and Ed  Zadjura.

Summary:
Why GAO Did This Study

The cleanup of environmental contamination on unneeded property resulting from prior defense base realignment and closure (BRAC) rounds has been a key impediment to the transfer of these properties and could be an issue in the transfer and reuse of unneeded property resulting from the 2005 BRAC round. GAO's analysis of available data indicates that, when completed, the cleanup for the four prior BRAC rounds is expected to cost about $13.2 billion and additional costs will be needed for BRAC 2005 property. These costs reduce BRAC savings, especially in the short term. Because of broad congressional interest in BRAC, GAO prepared this report under the Comptroller General's authority to conduct evaluations on his own initiative. GAO's objectives were to examine costs to clean up 2005 BRAC properties, progress in transferring prior BRAC rounds properties to other users, and opportunities to expedite cleanups and transfers. To address these issues, GAO analyzed cleanup cost estimates, interviewed environmental officials and visited seven bases.

What GAO Found

While expected environmental cleanup costs for unneeded property arising from the 2005 BRAC round are not yet fully known, Department of Defense (DOD) data indicate that about $950 million will be needed to clean up these bases, adding to the estimated $13.2 billion total cleanup cost for the prior rounds. Although DOD's cleanup program has matured compared to prior BRAC rounds, there are still many unknowns and the cleanup estimate for the 2005 round should be considered preliminary. In fact, environmental cleanup costs are likely to increase as more intensive environmental investigations are undertaken, additional hazardous conditions are discovered, and future reuse plans are finalized. Furthermore, Congress does not have full visibility over the total cost of DOD's BRAC cleanup efforts because none of the four reports DOD prepares on various aspects of environmental cleanup present all types of costs--past and future--to complete cleanup at each base. Compiling a complete picture of all costs requires extracting information from multiple reports, as GAO has done to estimate the total cleanup cost for the four prior BRAC rounds. More complete and transparent cost information would assist Congress in conducting its oversight responsibilities for this multibillion dollar effort. While GAO's analysis shows that DOD continues to make progress in transferring over 502,500 acres of unneeded property from the four prior BRAC rounds--78 percent of the acres have now been transferred compared to 72 percent 2 years ago--over 112,300 acres remain untransferred. Comparatively, a total of about 102,000 acres are potentially transferable as a result of the 2005 BRAC round. Impediments to transfer continue to be related primarily to a variety of interrelated environmental cleanup issues, including limited technology to address unexploded ordnance and prolonged negotiations on compliance with environmental regulations. Opportunities exist to expedite the cleanup and transfer of unneeded 2005 BRAC properties compared with other BRAC rounds. Congress provided DOD with a wide range of property transfer authorities for prior BRAC rounds. In the past DOD did not use some tools as much as others out of deference to community land reuse plans. For example, low- and no-cost transfer tools accounted for 65 percent of all acres transferred, whereas public and negotiated sales accounted for 5 percent. DOD's March 2006 guidance now encourages the services to make full use of all tools for transferring properties resulting from both the 2005 and prior-year BRAC rounds. The services have processes in place to monitor their progress to clean up and transfer BRAC properties, but they are not required to report periodically to the Office of the Secretary of Defense on their successes and challenges in using various transfer authorities. Collectively, such lessons learned could help others expedite the cleanup and transfer of unneeded properties by maximizing the use of all available tools, thereby accelerating the economic benefits of property reuse to communities while also saving the ongoing caretaker costs being incurred by DOD for unneeded properties.