Background

DOD operates six geographic combatant commands, each with an  assigned area of responsibility. Each geographic combatant command  carries out a variety of missions and activities, including humanitarian  assistance and combat operations, and assigns functions to subordinate  commanders. Each command is supported by a service component  command from each of the services, as well as a theater special operations  command. The Departments of the Army, Navy, and Air Force have key  roles in making decisions on where to locate their forces when they are  not otherwise employed or deployed by order of the Secretary of Defense  or assigned to a combatant command. In addition, the military  departments allocate budgetary resources to construct, maintain, and  repair buildings, structures, and utilities and to acquire the real property or  interests in real property necessary to carry out their responsibilities. All  of these entities play significant roles in preparing the detailed plans and  providing the resources that the combatant commands need to execute  operations in support of their missions and goals.
EUCOM’s area of responsibility covers all of Europe, large portions of  Asia, parts of the Middle East, and the Arctic and Atlantic Oceans. The  command is responsible for U.S. military relations with NATO and 51  countries. EUCOM also supports the activities of more than 100,000  military and civilian personnel across 10.7 million square miles of land and  13 million square miles of ocean (see fig. 1).
DOD’s facilities are located in a variety of sites that vary widely in size and  complexity; some sites are large complexes containing many facilities to  support military operations, housing, and other support facilities while  other sites can be as small as a single radar site. DOD also organizes  multiple sites under a single installation. For example, the Air Force base  in Kaiserslautern, Germany is comprised of 45 sites that vary in terms of  the number of personnel, number of buildings, and square footage. This  base includes large sites like Ramstein Air Base and smaller sites like the  Breitenbach radar site. To develop common terminology for posture  planning, DOD has identified three types of installations that reflect the  large-to-small scale of DOD’s enduring overseas posture-—main operating  bases, forward operating sites, and cooperative security locations.
Main operating bases are defined as overseas installations with relatively  large numbers of permanently stationed operating forces and robust  infrastructure that provide enduring family support facilities.
DOD defines forward operating sites as scaleable installations intended for  rotational use by operating forces, rather than supporting permanently  stationed forces. Because they are scaleable, they may have a large  capacity that can be adapted to provide support for combat operations,  and therefore, DOD populations at these locations can vary greatly,  depending on how they are used at any given time.
Cooperative security locations are overseas installations with little or no  permanent U.S. military presence, maintained with periodic service,  contractor, or host-nation support. As with forward operating sites, DOD  populations at these locations can vary greatly, depending on how they are  used at any given time.
The number of sites located in EUCOM’s area of responsibility has  decreased as the post-Cold War security environment has changed; in  1990, the Army alone had over 850 sites throughout Europe. In the past  decade, the total number of sites in EUCOM’s area of responsibility  continued to decline, falling to 350 for all services in 2009.
A hierarchy of national and defense guidance informs the development of  DOD’s global posture. The National Security Strategy, issued by the  President at the beginning of each new Administration and annually  thereafter, describes and discusses the worldwide interests, goals, and  objectives of the United States that are vital to its national security, among  other topics. The Secretary of Defense then provides corresponding  strategic direction through the National Defense Strategy. Furthermore,  the Chairman of the Joint Chiefs of Staff provides guidance to the military  through the National Military Strategy. On specific matters, such as global  defense posture, DOD has developed new guidance in numerous  documents, principally the 2008 Guidance for Employment of the Force  and the 2008 Joint Strategic Capabilities Plan. The Guidance for  Employment of the Force consolidates and integrates planning guidance  related to operations and other military activities, while the Joint Strategic  Capabilities Plan implements the strategic policy direction provided in the  Guidance for the Employment of the Force and tasks combatant  commanders with developing theater campaign, contingency, and posture  plans that are consistent with the Guidance for Employment of the Force.
The theater campaign plan translates strategic objectives to facilitate the  development of operational and contingency plans, while the theater  posture plan provides an overview of posture requirements to support  those plans and identifies major ongoing and new posture initiatives,  including current and planned military construction requirements. Figure 2  illustrates the relationships between these national and DOD strategic  guidance documents.

	DOD Guidance Does Not Require EUCOM to Estimate or Report the Total Cost of Posture

DOD guidance does not require EUCOM to include comprehensive  information on posture costs in its theater posture plan and, as a result,  DOD lacks critical information that could be used by decision makers and  congressional committees as they deliberate posture requirements and the  associated allocation of resources. DOD guidance requires that the theater  posture plans prepared by each combatant command provide information  on the inventory of installations in a combatant commander’s area of  responsibility and estimates of the funding required for military  construction projects in their theater posture plans, such as the $1.2 billion  in military construction funding projected to build a new hospital in  Landstuhl, Germany. However, this guidance does not specifically require,  and therefore EUCOM does not report the total cost to operate and  maintain DOD’s posture in Europe. Our analysis shows that operation and  maintenance costs are significant. Of the approximately $17.2 billion  obligated by the services to support DOD’s posture in Europe from 2006  through 2009, approximately $13 billion (78 percent) was for operation  and maintenance costs. The military services project that operation and  maintenance funding requirements will continue at about $3.2 billion  annually for fiscal years 2011-2015. However, DOD has several efforts  underway in areas such as planning for missile defense sites and  determining the number and composition of Army brigades in Europe that  could impact estimates of these future costs. DOD is drafting guidance to  require more comprehensive cost estimates for ongoing, current, or  planned initiatives and rough order of magnitude costs for newly proposed  posture initiatives. These proposed revisions, however, will not require  commanders to report operation and maintenance costs unrelated to  posture initiatives at existing installations in the theater posture plan. Our  prior work has demonstrated that comprehensive cost information— including accurate cost estimates—is a key component that enables  decision makers to make funding decisions, develop annual budget  requests, and to evaluate resource requirements at key decision points.  Until DOD requires the combatant commands to compile and report  comprehensive cost data DOD and Congress will have limited visibility  into the cost of posture in Europe, which may impact their ability to make  fully informed funding and affordability decisions.

		EUCOM’s Posture Plan Does Not Report Operation and Maintenance Costs

The 2008 Joint Strategic Capabilities Plan requires that theater posture  plans prepared by each combatant command provide information on each  installation in a combatant commander’s area of responsibility, to include  identifying the service responsible for each installation, the number of  military personnel at the installation, and estimates of the funding required  for military construction projects. In accordance with these reporting  requirements, EUCOM’s 2009 and 2010 theater posture plans provided  personnel numbers, identified service responsibilities, and specified  posture initiatives on installations within EUCOM’s area of responsibility,  and estimated the funding required for proposed military construction  projects for the current year and projected military construction costs  over the next 5 years.
However, the Joint Strategic Capabilities Plan does not specifically require  the combatant commands to report estimates for other types of costs,  such as costs associated with the operation and maintenance of DOD  installations, in the theater posture plan. DOD’s operation and  maintenance funding provides for a large number of expenses. With  respect to DOD installations it provides for base operations support and  sustainment, restoration, and modernization of DOD’s buildings and  infrastructure. Base operations support funding can be used to pay for  expenses such as recurring maintenance and repair, utilities, and janitorial  expenses. Sustainment, restoration, and modernization funding is used to  provide resources for maintenance and repair activities necessary to keep  facilities in good working order. According to EUCOM officials, since  operation and maintenance costs are not required to be reported by the  Joint Strategic Capabilities Plan, EUCOM’s 2009 and 2010 theater posture  plans do not contain estimates for the funding required to operate and  maintain DOD’s installations or the approximately 310 other sites that  comprise the services’ posture in EUCOM’s area of responsibility.
To obtain a more comprehensive estimate of the cost of DOD’s posture in  Europe we gathered obligations data from the Army, Navy, and Air Force  related to military construction, family housing, and operation and  maintenance appropriations for installations in the EUCOM area of  responsibility and found that military construction and family housing  obligations accounted for about one-fifth of the services’ total obligations  against those appropriations from fiscal years 2006 through 2009. In total,  over the period, the military services obligated about $17.2 billion to build,  operate, and maintain installations in Europe, of which $3.8 billion (22  percent) was for military construction and $13.4 billion (78 percent) was  for operation and maintenance of these installations. Of this $13.4 billion  more than 50 percent was obligated for base operations support services  which include hiring security forces to protect Army bases and obtaining  utilities and janitorial services for installations (for a more detailed  breakdown of costs at installations in Europe see fig. 6 in app. II). On  average, the services reported they obligated approximately $4.3 billion  annually for installations in EUCOM’s area of responsibility (see fig. 3).

		Ongoing Efforts May Influence the Cost of DOD’s Posture in Europe

Our analysis of the data provided by the military services projects that  operation and maintenance funding requirements will continue at about  $3.2 billion annually for fiscal years 2011-2015. However, DOD has several  efforts underway—in areas such as reviewing posture requirements and  reducing overhead costs, planning for missile defense sites, and  determining the number and composition of Army brigades in Europe— that may affect the precision of these projections.
Reviewing Posture and Other Initiatives: DOD is reviewing its posture  worldwide and has begun a series of efficiency initiatives focused on  reducing overhead costs. These efforts include an examination of  headquarters like those in Europe. Specifically, the Secretary of Defense  has questioned why the Army, Navy, and Air Force service components in  EUCOM are commanded by four-star general or flag officers, which can  increase costs, given the support generally required for a 4-star command.  Also, the Army is continuing its efforts to consolidate its posture in  Europe, including an estimated $240 million requested for further  upgrades to its facilities in Wiesbaden, Germany. Depending on the results  of the DOD-wide global posture study and efficiency reviews, EUCOM and  the services may have to revise their posture plans.
Planning for European Ballistic Missile Defense: DOD has altered its  plan to build missile defense sites in Poland and the Czech Republic in  favor of a phased approach that relies on a combination of land- and sea- based defenses. DOD anticipates implementing this approach through  2020; however, DOD has not estimated the life-cycle cost of the phased  adaptive approach for Europe.
Keeping Army Brigades in Europe: In September 2010, we reported  that delays in decisions associated with the number and composition of  U.S. Army forces in Europe will impact posture costs. Prior to the 2010  Quadrennial Defense Review, the Army had planned to return two of four  brigade combat teams stationed in Europe to the United States in fiscal  years 2012 and 2013, which would have saved millions annually in  overseas stationing costs by allowing the closure of two installations in  Germany. However, these plans are on hold pending the results of ongoing  DOD assessments of defense posture. Army analysis has concluded that  the long-term incremental costs for keeping four brigades in Europe  (rather than two) will be between $1 billion and $2 billion for fiscal years  2012 through 2021 depending on the assumptions used.

		DOD Posture Planning Guidance Does Not Require EUCOM to Estimate and Report Total Posture Costs

To improve DOD’s reporting on global posture costs, we recommended, in  July 2009, that the Secretary of Defense direct the Under Secretary of  Defense (Comptroller) to develop a requirement and appropriate guidance  for constructing an estimate of total global defense posture costs that  reflects the basic characteristics of a credible cost estimate as defined in  GAO’s Cost Estimating and Assessment Guide. In response to our  recommendation DOD officials told us they are revising the Joint Strategic  Capabilities Plan to require additional cost information in future theater  posture plans. According to officials in the Office of the Under Secretary  of Defense (Comptroller) and Joint Staff, the revised guidance would  require the combatant commands to provide (1) current and projected full  posture project costs for the next 5 years for planned posture initiatives  (including construction, furniture, fixtures, equipment, and any operation  and maintenance costs) and (2) the rough order-of-magnitude cost  (including one-time and recurring costs, and cost to complete) for posture  change proposals. As of November 2010, the revisions to this guidance had  not been completed or approved within DOD.
Although these proposed revisions would provide more comprehensive  information on the cost to complete posture initiatives, they do not fully  address our recommendation to compile total costs because they will not  require the combatant commands to report, for each installation, the  operation and maintenance costs unrelated to posture initiatives in  conjunction with military construction costs by installation. These  operation and maintenance costs comprise much of the financial  obligations to support DOD’s overseas installations. By focusing this new  guidance only on posture initiatives, DOD is overlooking operation and  maintenance costs of installations and does not consider them when  making posture decisions. However, these costs have been substantial,  with DOD obligating about $3.4 billion annually in EUCOM's area of  responsibility, as shown in figure 3.

		Comprehensive Cost Estimates Are Critical to Support Decisions on Funding and Affordability

Our prior work has demonstrated that comprehensive cost information is  a key component in enabling decision makers to set funding priorities,  develop annual budget requests, and evaluate resource requirements at  key decision points. We have developed a cost estimation process that,  when followed, should result in reliable and valid cost estimates that  management can use to make informed decisions. Furthermore, guidance  from the Office of Management and Budget has highlighted the importance  of developing accurate cost estimates for all agencies, including DOD.
DOD and EUCOM officials acknowledge that the provision of more  comprehensive cost data in the theater posture plans could be beneficial;  EUCOM officials told us that having more comprehensive cost information  would provide a better context for evaluating posture requirements.  However, EUCOM officials said that they would have to rely on the service  component commands to provide this information for inclusion in future  theater posture plans. Until DOD requires the combatant commands to  compile and report on comprehensive costs for established locations,  DOD and Congress will be limited in their ability to weigh the costs and  benefits of existing posture and posture initiatives and to make fully  informed decisions on funding DOD’s posture in Europe.

	EUCOM Lacks a Systematic Process to Evaluate Posture Alternatives and Routinely Incorporate Interagency Views in Posture Planning

EUCOM has developed an approach to compile posture requirements and  prepare annual theater posture plans, but does not have clearly defined  methods for evaluating posture alternatives or routinely incorporating the  views of interagency stakeholders. To support posture planning, EUCOM  assigned primary responsibility for developing its theater posture plan to  its Strategy Implementation Branch and established an Executive Council  and supporting Integration Team. The council and integration team  provide a forum for discussing posture issues that may cross service lines,  such as issues concerning sites that are used by multiple services but  supported by funding from a single service. In addition, EUCOM has  undertaken a series of actions to work with the service component  commands in developing its theater posture plan, such as holding a  posture planning conference. Although the approach EUCOM has taken to  determine posture requirements has fostered greater communication  between key stakeholders and improved its ability to resolve conflicting  views on posture issues, it has not been clearly defined and codified in  command guidance, and it does not specifically provide for the  comprehensive analysis of costs and benefits, because the combatant  commander has not been required to include such analysis in developing  the theater posture plan. In addition, the Interagency Partnering  Directorate, which was established by the EUCOM commander to improve  interagency coordination for the command, did not fully participate in  developing the 2010 posture plan, because its role in posture planning has  not been defined. As a result of these weaknesses in EUCOM’s posture  planning approach, the command is limited in its ability to consider and  evaluate the cost of posture in conjunction with the strategic benefits it  provides and may not be fully leveraging interagency perspectives as it  defines future posture requirements.

		EUCOM’s Approach to Compile Posture Requirements and Develop Its Posture Plan Is Not Formalized

In response to planning guidance established in the 2008 Guidance for  Employment of the Force, EUCOM assigned primary responsibility to its  Strategy Implementation Branch for developing the command’s theater  posture plan and for coordinating outreach to the service components. In  January 2009, the command also established the European Posture  Executive Council—which includes one-star flag officer representatives  from the command directorates, the service component commands, and  the services’ installation management organizations—to focus on posture  issues, including assessing strategy, prioritizing posture requirements, and  determining the feasibility of implementing planned posture. According to  EUCOM officials, the European Posture Executive Council has provided a  forum for coordinating input from the service component commands and  discussing and adjudicating posture issues that may cross service lines,  such as issues concerning sites that are used by multiple services but  supported by funding from a single service. To support the Executive  Council, EUCOM established the European Posture Integration Team, a  group of action officers that functions as a steering group for the council.
The EUCOM Deputy Commander has also requested that the Strategy  Implementation Branch develop a process to provide the component  commands with a long-term vision for sites and functional capabilities  needed to build partner capacity and other operational requirements for  the next 10-15 years. According to EUCOM officials, the Deputy  Commander wanted a method to provide the military services and the  service component commands with a foundation to develop specific  military construction programs and projects and to assist in the service  component’s long-term plans to gain efficiencies by consolidating existing  sites. The Strategy Implementation Branch identified the development of  the theater posture plan as the best vehicle through which EUCOM’s  vision for its posture could be communicated and coordinated with the  service component commands.
According to EUCOM officials, the development of the 2010 Theater  Posture Plan began with a February 2010 EUCOM Posture Conference,  which provided a forum for the EUCOM staff, the service components, and  DOD organizations outside of EUCOM (such as other combatant  commands, the Office of the Secretary of Defense, and the Joint Staff) to  discuss EUCOM posture and EUCOM’s role in supporting national and  regional strategic objectives. This conference was followed by a meeting  of the European Posture Integration Team, discussions with other DOD  organizations, and small group meetings among EUCOM staff. These  meetings culminated in a Long Term Theater Posture Strategy conference,  chaired by the EUCOM Deputy Commander, which included the EUCOM  staff and service component deputy commanders. This conference  included discussions of EUCOM’s posture planning assumptions—such as  the status of the defense budget—and posture planning tenets—such as  the need to develop posture plans in collaboration with other Geographic  Combatant Commands. Additional steps taken to refine the posture plan  included discussions with the Executive Council, and reviews by various  directorates within the command.
The resulting 2010 EUCOM theater posture plan presents a long-term  posture view which will facilitate near-term posture discussions amongst  the EUCOM staff and service components. Specifically, it details the force  structure and infrastructure capabilities and requirements EUCOM needs  to accomplish the programs, activities, and tasks as outlined within the  Theater, Regional, and Functional Campaign Plans; Contingency Plans;  and EUCOM Directorate, Component, and Special Operations Command  Europe supporting plans. Included in the plan are overarching posture  planning assumptions and tenets which are to be used as the basis for  discussions held by the EUCOM Posture Executive Council. The theater  posture plan also describes the current strategic context and conveys how  EUCOM posture is linked to and supports strategic objectives. The theater  posture plan informs the development of military service plans, the  budgeting process, and DOD’s internal global defense posture planning  efforts as well as external reports on DOD’s posture.
Although EUCOM and the service components have taken these positive  steps to identify posture requirements and develop the theater posture  plan, the process being used to develop the plan has been ad hoc, and  EUCOM officials stated they have not yet codified this process in  command guidance. In addition, the roles of the Executive Council and  Integration Team have not been clearly laid out in guidance. To provide  some clarity regarding the roles of the Executive Council and Integration  Team, the command is currently drafting an instruction that would assign  the European Posture Executive Council primary responsibility for  facilitating consensus on posture issues among EUCOM and the service  components. We were provided an early draft of this instruction, and  found it included criteria for selecting posture issues that should be  deliberated within the Executive Council and established a process for  service components to submit posture issues to the European Posture  Executive Council and the European Posture Integration Team.
While these are positive steps, the draft instruction did not provide  comprehensive guidance on the process or steps involved in developing  the theater posture plan. During the course of our work, EUCOM officials  acknowledged that more comprehensive guidance describing the planning  process, key steps involved, and roles and responsibilities of stakeholders  would be necessary to institutionalize and ensure consistency in annual  planning activities. They stated they were considering expanding the draft  guidance to address these issues. As of December 2010, however, the  instruction was still in draft and had not been approved.

		EUCOM Posture Planning Lacks Steps for Analyzing Alternatives

While EUCOM’s steps to date have improved its ability to obtain service  component command input to the theater posture plan and provided a  forum to consider posture issues, it has not yet developed a method to  routinely analyze the costs and benefits of posture alternatives at the  combatant command level as posture requirements are developed. As  discussed earlier, current DOD guidance on theater posture plans does not  require EUCOM to collect or report the total costs associated with DOD  installations in Europe. Furthermore, this guidance does not require the  combatant commands to analyze the costs of alternative courses of action  when developing the theater posture plan or provide guidance on the types  of cost analysis that should be completed. As for benefit analysis, the  EUCOM theater posture plan makes reference to benefits gained from  existing posture or those that may result from implementing proposed  posture requirements. However, these benefits are often based on  qualitative judgments on how requirements may assure allies, build  partner capacity, or support operations in neighboring commands. The  theater posture plan does not identify quantitatively comparable benefits  or ways to measure those benefits, such as logistical improvements or  shorter flying distances, nor does it apply operational metrics, such as  specific measures of EUCOM’s ability to move forces through the region.  Without comprehensive cost data and an objective way to measure  benefits EUCOM does not yet have the data needed to routinely analyze  the costs and benefits of posture alternatives.
Since EUCOM has not developed a method to routinely analyze the costs  and benefits of posture alternatives the Command may be missing  opportunities to gain efficiencies in DOD’s posture. For example, U.S.  Navy Europe officials told us they had identified excess capacity in some  of their current posture locations, and were considering alternative  courses of action to reduce posture costs. However, before they took steps  to reduce their posture to gain greater efficiencies, Navy officials wanted  to determine if other military services could use that excess Navy capacity  to meet another service’s posture requirements. Only through their  specific outreach efforts to other services were they able to identify a  potential Air Force requirement that could be satisfied with the Navy’s  location. These Navy officials commented that evaluations of posture at  the combatant command level could potentially lead to further  opportunities to gain greater efficiencies in posture investments made by  the military services.
Our work has shown that decision makers should complete comparative  analysis of competing options that considers not only the life-cycle costs  but also quantifiable and unquantifiable benefits. This evaluative  information helps them make decisions about the programs they  oversee—information that tells them whether, and in what important  ways, a program is working or not working, and why. In addition, DOD  and Army guidance related to economic analyses to support military  construction projects or the acquisition of real property indicates that  reasonable alternatives should be considered when contemplating such  new projects. For example, DOD Instruction 7041.3, which applies to  decisions about acquisition of real property, indicates that such analyses  should address alternatives that consider the availability of existing  facilities and the estimated costs and benefits of the alternatives, among  other factors.
Officials from EUCOM’s Strategy Implementation Branch stated that the  theater posture planning process is a new and emerging process driven by  recent changes to the Guidance for Employment of the Force and the Joint  Strategic Capabilities Plan. While they agreed with our assessment that  total posture costs should be part of any analysis of alternative courses of  action, they stated the EUCOM command staff would have to rely on the  service component commands to complete this type of analysis. EUCOM  officials stated that, unless the Joint Strategic Capabilities Plan were to  require this additional cost information, EUCOM would have difficulty  obtaining it from the military services.

		EUCOM Has Not Defined Steps for Obtaining Input from Interagency Stakeholders

Although the EUCOM Commander has identified building partner capacity  as his top priority—activities that generally require close coordination  with other U.S. government agencies—the command has not clearly  defined specific steps to obtain input from interagency stakeholders as  posture plans are developed. The 2010 Quadrennial Defense Review  suggests that building partner capacity with efforts to improve the  collective capabilities and performance of DOD and its partners will be a  key mission area to support the objective of rebalancing the force. In  March 2010, the EUCOM commander, in written testimony provided to the  House and the Senate Armed Services Committees, indicated that building  partnership and partner capacity is the command’s highest priority. DOD  recognizes that building partner capacities and developing global defense  posture require close collaboration with allies and partners abroad and  with key counterparts at home, principally the civilian departments  responsible for diplomacy and development. In addition, our prior work  demonstrates that leading organizations involve stakeholders as they  develop plans and requirements. The inclusion of stakeholders early and  often can test and provide critical feedback on the validity of the  assumptions made during a planning process.
To enhance EUCOM’s ability to coordinate with other government  agencies, the EUCOM commander established the Interagency Partnering  Directorate in October 2009. As of November 2010, the directorate was  comprised of approximately 30 staff—6 of whom were representatives  from the Departments of State, Energy, and Treasury; Immigration and  Customs Enforcement; Customs and Border Protection; and the Drug  Enforcement Agency. According to the Deputy Director, discussions are  underway to add representatives from the Department of Justice and the  U.S. Agency for International Development.
Despite the priority given to building partner capacity, and the recognized  need to closely collaborate with non-DOD agencies and organizations to  plan for and conduct those missions, the Interagency Partnering  Directorate was not integral in the development of the 2010 EUCOM  Theater Posture Plan. According to a senior directorate official, the  directorate was not fully involved in the development of the theater  posture plan because the organization was relatively new, and they are  still trying to determine how this directorate can best plug into the various  planning and other functions within the command.
Similarly, a Strategy Implementation Branch official involved in the  development of the theater posture plans commented that although  EUCOM has been successful in bringing in interagency officials to the  command, and has included the Interagency Partnering Directorate on the  Executive Council, it has not defined how the interagency representatives  can best participate in ongoing posture planning activities. According to  that Strategy Implementation Branch official, EUCOM has not defined how  it will routinely coordinate with the interagency community or how the  interagency representatives can best support ongoing posture planning  efforts. As a result, EUCOM officials involved in posture planning may not  have full visibility into the activities of non-DOD agencies and  organizations that could utilize DOD infrastructure and the interagency  community may not be fully aware of the opportunities to leverage  existing DOD facilities.
Without guidance from the EUCOM Commander that clarifies the roles  and responsibilities of the Interagency Partnering Directorate related to  posture planning, and establishes a process through which interagency  perspectives can be routinely obtained as posture plans are developed,  EUCOM is limited in its ability to leverage DOD’s interagency partners’  expertise when developing its posture plans and may miss opportunities to  fully leverage its posture investments to support a whole-of-government  approach to missions and activities for building partner capacities.

	Conclusions

The nation’s long-term fiscal challenges have led DOD to examine the cost  of its operations, including costs associated with its overseas network of  infrastructure and facilities. DOD and EUCOM officials are taking positive  steps to improve their posture planning efforts, but actions to date do not  fully address posture cost and interagency issues. DOD is in the process of  revising its Joint Strategic Capabilities Plan, but the draft revisions do not  require combatant commanders to include comprehensive information on  the cost to maintain existing locations, or to address the need for  analyzing the cost and benefits of posture alternatives. Without further  revisions to the Joint Strategic Capabilities Plan to address this lack of  focus on the total cost of posture and analysis of alternatives, DOD’s  posture planning process and reports will continue to lack complete  information on the financial commitments and funding liabilities  associated with DOD’s posture, and potential opportunities to obtain  greater cost efficiencies may not be identified. In addition, since EUCOM  is taking steps to address posture matters and is developing guidance for  identifying and resolving posture issues within the command, it has an  opportunity to use this guidance to clearly define and codify a process for  how the theater posture plan is to be drafted, to establish approaches to  collect and analyze comprehensive cost information and address  affordability issues, and to regularly obtain the perspectives of relevant  agencies throughout the posture planning process. Without such guidance,  EUCOM will remain limited in its ability to analyze posture alternatives  and collaborate with interagency partners when developing its posture  requirements. Such guidance would allow EUCOM to develop a more  informed understanding of the potential impacts of posture requirements  and to set priorities among competing investments before asking the  department to expend resources or Congress to appropriate needed funds.

	Recommendations for Executive Action

To provide for more comprehensive information on the cost of posture  and analysis of posture alternatives as future theater posture plans are  developed, we recommend that the Secretary of Defense direct the  Chairman, Joint Chiefs of Staff, to revise the Joint Strategic Capabilities  Plan to  require the theater posture plan to include the cost of operating and  maintaining existing installations and estimate the costs associated with  initiatives that would alter future posture and    provide guidance on how the combatant commands should analyze the  costs and benefits of alternative courses of action when considering  proposed changes to posture.
To ensure that EUCOM clearly defines a process for developing its theater  posture plan, including compiling posture costs, considering affordability,  and regularly obtaining the perspectives of relevant agencies throughout  the posture planning process, we recommend that the Secretary of  Defense, through the Chairman of the Joint Chiefs of Staff, direct the  EUCOM Commander to take the following three actions:    Define the roles and responsibilities of the European Posture Executive  Council and Integration Team in the posture planning process and  development of the theater posture plan.
Develop a process through which interagency perspectives can be  obtained throughout the posture planning process and the development of  the theater posture plan.  Issue guidance to codify the EUCOM posture planning process once the  above steps have been taken.

	Agency Comments and Our Evaluation

In written comments on a draft of this report, DOD generally agreed with  all of our recommendations. DOD’s response appeared to acknowledge  that understanding the full cost of posture is an important consideration as  DOD deliberates decisions on current and future posture requirements,  and the actions it has taken or plans to take should provide a greater  understanding of DOD posture costs. However, we believe some  additional steps are warranted to fully address our recommendations.  Technical comments were provided separately and incorporated as  appropriate. The department’s written comments are reprinted in  appendix III.
DOD agreed with our recommendation that the Joint Strategic Capabilities  Plan be revised to require the combatant commanders to include the cost  of operating and maintaining existing installations and estimate the costs  of its initiatives in future theater posture plans, but its proposed actions  are not fully responsive to our recommendation. In its response, the  department stated that it recognizes that the costs associated with  operating and maintaining overseas facilities are an important  consideration in the decision-making process, and that the current draft  2011 Joint Strategic Capabilities Plan requires that theater posture plans  include operation and maintenance costs for current and planned posture  initiatives. The department also indicated that the combatant command  should include in the theater posture plan operation and maintenance  costs when they are known. In instances where operation and  maintenance costs are not known but required for oversight and decision  making, DOD stated that it will require the military services to provide the  needed data. While the proposed actions would be positive steps, the  department’s plan to include operation and maintenance costs when they  are known—or require additional data only when needed for decision  making—could result in fragmented cost information. Therefore, we  continue to believe that DOD should revise the Joint Strategic Capabilities  Plan to require posture plans to include the cost of operating and  maintaining existing installations, even when those costs are unrelated to  a specific posture initiative.
In response to our recommendation that the Joint Strategic Capabilities  Plan be revised to provide guidance on how the combatant commands  should analyze the costs and benefits of alternative courses of action when  considering proposed changes to posture, DOD agreed, stating that the  department uses four cost/benefit criteria in evaluating posture change  proposals and that these four criteria should be used by the combatant  commanders in analyzing alternative courses of action. Identifying the  criteria that should be used in analyzing alternative courses of action is  important, but the absence of detailed guidance within the Joint Strategic  Capabilities Plan itself on how those criteria should be applied by the  combatant commanders could lead to inconsistent application of the  criteria, making it difficult for decision makers to evaluate alternatives.   Therefore, we believe that DOD needs to take the additional step to revise  the Joint Strategic Capabilities Plan to provide guidance on how the  combatant commands should apply the criteria to analyze the costs and  benefits of alternative courses of action.
Regarding our recommendation that the EUCOM Commander define the  roles and responsibilities of the European Posture Executive Council and  European Posture Integration Team in the posture planning process and  development of the theater posture plan, DOD agreed, stating that  EUCOM’s Theater Posture Plan defines the roles and responsibilities of  the Posture Executive Council and Posture Integration Team, and  provided additional specifics, which were consistent with the information  contained in our report. In addition, in response to our fifth  recommendation, DOD agreed to incorporate those roles and  responsibilities in command guidance.  Therefore, if fully implemented, we  believe DOD’s actions should meet the intent of our recommendation.
DOD agreed with our recommendation that the Secretary of Defense,  through the Chairman of the Joint Chiefs of Staff, direct the EUCOM  Commander to develop a process to obtain interagency perspectives  throughout the posture planning process and development of the theater  posture plan. DOD stated that such a process currently exists and is  documented in EUCOM’s Theater Posture Plan, which states that the  EUCOM Posture Executive Council coordinates with interagency partners  through the Interagency Partnering Directorate and the EUCOM Civilian  Deputy to the Commander. As discussed in this report, we acknowledge  the EUCOM initiative to establish the Interagency Partnering Directorate,  and modified the report to clarify that the EUCOM Posture Executive  Council includes the Interagency Partnering Directorate. However, as we  also point out in the report, this coordination approach was not fully  effective in the development of the 2010 Theater Posture Plan, directorate  officials were still trying to determine how best to participate in various  planning activities, and a EUCOM Strategy Implementation Branch official  believed the command has not defined how the interagency  representatives can best support ongoing posture planning efforts and  routinely coordinate with the interagency community. Therefore, we  believe that EUCOM needs to take the additional steps to establish a  process through which interagency perspectives can be routinely obtained  throughout the posture planning process, and institutionalize that  approach in the posture planning guidance that as of December 2010 was  still in draft form.
DOD also agreed with our recommendation that the Secretary of Defense,  through the Chairman of the Joint Chiefs of Staff, direct the EUCOM  Commander to issue guidance to codify the EUCOM posture planning  process. In its comments, DOD noted that the EUCOM Theater Posture  Plan and draft command directive provide roles, responsibilities, and  guidance for posture development while also identifying EUCOM-specific  procedures that enable EUCOM to complete a variety of tasks. As we  reported, we reviewed EUCOM’s 2010 Theater Posture Plan as well as an  early draft of EUCOM’s Directive 56-24 and found that they included  criteria for selecting posture issues that should be deliberated within the  executive council and established a process for service components to  submit posture issues to the executive council and the integration team.  However, neither document provided comprehensive guidance on the  process or steps involved in developing the theater posture plan and  EUCOM’s posture requirements or a process through which interagency  perspectives can be routinely obtained. Consequently, we believe that  EUCOM needs to take the additional steps to finalize this guidance and  modify its contents so that it addresses these weaknesses.
As we agreed with your office, unless you publicly announce the contents  of this report earlier, we plan no further distribution of it until 19 days  from the date of this letter. In addition, this report will be available at no  charge on our Web site at http://www.gao.gov.
If you or your staff has any questions about this report, please contact me  at (404) 679-1816 or pendletonj@gao.gov. Contact points for our Offices of  Congressional Affairs may be found on the last page of this report. GAO  staff who made major contributions to this report are listed in appendix  IV.

Appendix I: Scope and Methodology

To determine the extent to which U.S. European Command (EUCOM)  estimates and reports the total cost of the Department of Defense’s (DOD)  installations in its theater posture plan, we collected information by  interviewing and communicating with officials in the Office of the Under  Secretary of Defense for Policy, the Under Secretary of Defense  (Comptroller), the Deputy Under Secretary of Defense (Installations and  Environment), and the Joint Staff; Department of the Army, Department of  the Navy, and Department of the Air Force; EUCOM; and the Army, Navy,  and Air Force component commands and installation management entities  for the Army and Navy service components within EUCOM. Additionally,  we reviewed documentation including the 2009 and 2010 DOD Global  Defense Posture Reports to Congress including the sections addressing  posture costs, sections of the 2008 EUCOM Theater Campaign Plan;  sections of the 2009 and 2010 EUCOM Theater Posture Plans; and  departmental guidance and directives on command functions, campaign  planning, overseas force structure changes, and global defense posture  management. We also reviewed budget documentation including the  military construction appropriations component of the President’s Budget  request for fiscal years 2006-2011. Furthermore, we issued three separate  data requests asking for obligations and requirements data on military  construction appropriations and operation and maintenance  appropriations for fiscal years 2006-2015. We submitted the first data  request to each of three military services (Army, Navy, and Air Force) and  the second and third data requests to three service component commands  in EUCOM’s area of responsibility asking them to review and validate the  data received through prior data requests. The first and second data  requests were transmitted prior to the release of the Fiscal Year 2011  President’s Budget request and the third was transmitted following the  release of the Fiscal Year 2011 budget. When we received these data, we  aggregated and assessed them. To assess the reliability of received cost  data, we reviewed data system documentation and obtained written  responses to questions regarding the internal controls on the systems. We  determined that the cost data we received were sufficiently reliable for the  purposes of this report. To ensure the accuracy of our analysis, we used  Statistical Analysis Software (SAS) when analyzing the data and had the  programming code used to complete those analyses verified for logic and  accuracy by an independent reviewer. Furthermore, we reviewed previous  GAO reporting on overseas basing, military construction, the uses of cost  information when making decisions about programs, and guidance on cost  estimating and the basic characteristics of credible cost estimates.
To determine the extent to which EUCOM has clearly defined methods for  evaluating posture alternatives and including the views of interagency  stakeholders, we reviewed departmental guidance and directives on  command functions, campaign planning, overseas force structure changes,  and global defense posture management. Additionally, we reviewed the  2008 EUCOM Theater Campaign Plan; the 2009 and 2010 EUCOM Theater  Posture Plans; and the section of the 2010 Quadrennial Defense Review  Report that addresses global defense posture matters. We also reviewed  management practices established by the GAO Cost Estimating and  Assessment Guide and DOD and military service guidance to inform our  audit. Furthermore, we collected information by interviewing officials in  the Office of the Under Secretary of Defense for Policy, the Under  Secretary of Defense (Comptroller), the Deputy Under Secretary of  Defense (Installations and Environment), and the Joint Staff; Department  of the Army, Department of the Navy, and Department of the Air Force;  EUCOM; the Army, Navy, and Air Force component commands and  installation management entities for the Army and Navy service  components within EUCOM; and Department of State. We reviewed DOD  and service guidance on completing economic analyses and analyses of  alternatives, and DOD guidance on collaborating with other government  agencies. We also reviewed previous GAO reporting related to  performance measurement and evaluation and challenges to interagency  collaboration.
We conducted this performance audit from October 2009 through  December 2010 in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.

Appendix II: Total Cost of DOD’s Installations in EUCOM’s Area of Responsibility

To obtain a more comprehensive estimate of the cost of the Department of  Defense’s (DOD) posture in Europe, we requested information from the  Army, Navy, and Air Force on military construction, family housing, and  operation and maintenance appropriations for installations under their  responsibility. The three service components responded with obligation  figures for the three appropriation categories for the period fiscal year  2006 through fiscal year 2009. Additionally, the three service components  provided estimated requirements for the three appropriation categories for  the period fiscal year 2011 through fiscal year 2015. There are limitations  associated with our data call including (1) the omission of supplementary  funding provided to support ongoing operations; (2) the omission of costs  reimbursed by tenant organizations, such as the Defense Logistics Agency,  at installations in EUCOM’s area of responsibility; (3) the omission of  personnel costs for troops stationed at installations in EUCOM’s area of  responsibility; and (4) the omission of costs stemming from the presence  of U.S. Africa Command. However, we discussed these limitations with  officials in the Office of the Under Secretary of Defense for Policy, the  Office of the Under Secretary of Defense (Comptroller), and the Office of  the Under Secretary of Defense (Installations and Environment) and  EUCOM officials and determined that the cost data we received were  sufficiently reliable for the purposes of this report.
Our analysis of obligations data indicates the Army constituted 52.2  percent of all obligations for the period fiscal year 2006 through fiscal year  2009, the largest proportion of the three service components. However, the  Army has been faced with a significant challenge to meet the facility needs  associated with several recent initiatives, such as the transformation of the  Army’s force structure, the permanent relocation of thousands of overseas  military personnel back to the United States, the implementation of base  realignment and closure actions, and the planned increase in the Army’s  active-duty end strength. Taken together, the Army estimated that these  initiatives would result in a threefold increase in the Army’s military  construction program for fiscal years 2006 through 2009. The Air Force   The Air Force  and Navy comprised 38.1 percent and 9.8 percent of obligations,  and Navy comprised 38.1 percent and 9.8 percent of obligations,  respectively. (See fig. 4.)  respectively. (See fig. 4.)
Furthermore, our analysis shows that Army operation and maintenance  obligations for the same period totaled $6.5 billion, or 48.1 percent, of the  approximately $13.4 billion in total operation and maintenance  obligations. The Air Force and Navy comprised 42.3 percent and 9.6  percent of obligations, respectively. (See fig. 5.)

Appendix III: Comments from the Department of Defense

Appendix IV: GAO Contact and Staff Acknowledgments

	Staff Acknowledgments

In addition to the contact named above, Robert L. Repasky, Assistant  Director; Brian Hackney; Joanne Landesman; Ying Long; Greg Marchand;  Charles Perdue; Terry Richardson; Ophelia Robinson; Michael  Shaughnessy; Amie Steele; Alex Winograd; and Ricardo Marquez made key  contributions to this report.

Related GAO Products

Defense Management: Improved Planning, Training, and Interagency  Collaboration Could Strengthen DOD’s Efforts in Africa. GAO-10-794.  Washington, D.C.: July 28, 2010.
Defense Management: U.S Southern Command Demonstrates  Interagency Collaboration, but Its Haiti Disaster Response Revealed  Challenges Conducting a Large Military Operation. GAO-10-801.  Washington, D.C.: July 28, 2010.
Defense Planning: DOD Needs to Review the Costs and Benefits of  Basing Alternatives for Army Forces in Europe. GAO-10-745R.  Washington, D.C.: September 13, 2010.
National Security: Interagency Collaboration Practices and Challenges  at DOD’s Southern and Africa Commands. GAO-10-962T. Washington,  D.C.: July 28, 2010.
Defense Infrastructure: Planning Challenges Could Increase Risks for  DOD in Providing Utility Services When Needed to Support the Military  Buildup on Guam. GAO-09-653. Washington, D.C.: June 30, 2009.
Force Structure: Actions Needed to Improve DOD’s Ability to Manage,  Assess, and Report on Global Defense Posture Initiatives. GAO-09-706R,  July 2, 2009.
Military Operations: Actions Needed to Improve DOD’s Stability  Operations Approach and Enhance Interagency Planning. GAO-07-549.  Washington, D.C.: May 31, 2007.
Defense Management: Comprehensive Strategy and Annual Reporting  Are Needed to Measure Progress and Costs of DOD’s Global Posture  Restructuring. GAO-06-852. Washington, D.C.: September 13, 2006.
Defense Infrastructure: Guam Needs Timely Information from DOD to  Meet Challenges in Planning and Financing Off-Base Projects and  Programs to Support a Larger Military Presence. GAO-10-90R.  Washington, D.C.: November 13, 2009.
Defense Infrastructure: DOD Needs to Provide Updated Labor  Requirements to Help Guam Adequately Develop Its Labor Force for the  Military Buildup. GAO-10-72. Washington, D.C.: October 14, 2009.
Ballistic Missile Defense: Actions Needed to Improve Planning and  Information on Construction and Support Costs for Proposed European  Sites. GAO-09-771. Washington, D.C.: August 6, 2009.
Defense Management: Actions Needed to Address Stakeholder Concerns,  Improve Interagency Collaboration, and Determine Full Costs  Associated with the U.S. Africa Command. GAO-09-181. Washington,  D.C.: February 20, 2009.
Defense Infrastructure: Opportunity to Improve the Timeliness of Future  Overseas Planning Reports and Factors Affecting the Master Planning  Effort for the Military Buildup on Guam. GAO-08-1005. Washington, D.C.:  September 17, 2008.
Force Structure: Preliminary Observations on the Progress and  Challenges Associated with Establishing the U.S. Africa Command.  GAO-08-947T. Washington, D.C.: July 15, 2008.
Defense Infrastructure: Planning Efforts for the Proposed Military  Buildup on Guam Are in Their Initial Stages, with Many Challenges Yet  to Be Addressed.GAO-08-722T. Washington, D.C.: May 1, 2008.
Defense Infrastructure: Overseas Master Plans Are Improving, but DOD  Needs to Provide Congress Additional Information about the Military  Buildup on Guam. GAO-07-1015. Washington, D.C.: September 12, 2007.

Summary:
Why GAO Did This Study

In 2004, the Department of Defense (DOD) announced sweeping changes to restructure U.S. military presence overseas and reduce military posture in Europe. In August, 2010, the Secretary of Defense called for a review of DOD operations and activities to identify opportunities to decrease costs in order to free funds to support other DOD priorities. The Senate Appropriations Subcommittee on Military Construction and Veterans' Affairs asked GAO to determine the extent to which the European Command (EUCOM) (1) estimates and reports the total cost of DOD's installations in Europe and (2) has defined methods for evaluating posture alternatives and including the views of interagency stakeholders in its posture planning process. To address these objectives, GAO assessed DOD plans and guidance, reviewed planning efforts in EUCOM, and collected obligations data from the military services for the military construction, family housing, and operation and maintenance appropriations.

What GAO Found

DOD posture planning guidance does not require EUCOM to include comprehensive cost data in its theater posture plan and, as a result, DOD lacks critical information that could be used by decision makers as they deliberate posture requirements. DOD guidance requires that theater posture plans provide specific information on, and estimate the military construction costs for, installations in a combatant commander's area of responsibility. However, this guidance does not require EUCOM to report the total cost to operate and maintain installations in Europe. GAO analysis shows that of the approximately $17.2 billion obligated by the services to support installations in Europe from 2006 through 2009, approximately $13 billion (78 percent) was for operation and maintenance costs. Several factors--such as the possibility of keeping four Army brigades in Europe instead of two--could impact future costs. DOD is drafting guidance to require more comprehensive cost estimates for posture initiatives; however, these revisions will not require commanders to report costs, unrelated to posture initiatives, for DOD installations. GAO's prior work has demonstrated that comprehensive cost information is critical to support decisions on funding and affordability. Until DOD requires the combatant commands to compile and report comprehensive cost data in their posture plans, DOD and Congress will be limited in their abilities to make fully informed decisions regarding DOD's posture in Europe. EUCOM has developed an approach to compile posture requirements, but it does not have clearly defined methods for evaluating posture alternatives or routinely incorporating the views of interagency stakeholders. EUCOM has taken several steps to assign responsibilities for developing its posture plan and established an Executive Council to deliberate posture issues and work with the service component commands, but the process of developing a theater posture plan is relatively new and is not yet clearly defined and codified in command guidance. While EUCOM's steps to date have improved its ability to communicate with stakeholders and resolve conflicting views on posture issues, it has not been clearly defined and codified in command guidance. Furthermore, it does not provide for the analysis of costs and benefits, because the combatant commander has not been required to include such analysis in developing the theater posture plan. In addition, the Interagency Partnering Directorate--which was established by the EUCOM commander to improve interagency coordination within the command--has been included in the Executive Council, but EUCOM has not defined how interagency representatives can regularly participate in ongoing posture planning activities. As a result of these weaknesses in EUCOM's posture planning approach, the command is limited in its ability to consider and evaluate the cost of posture in conjunction with the strategic benefits it provides, and it may not be fully leveraging interagency perspectives as it defines future posture requirements.

What GAO Recommends

GAO recommends that DOD revise posture planning guidance to require comprehensive estimates of posture costs and provide for consistent analysis of posture alternatives, and that EUCOM clarify its posture planning process and methods to regularly obtain interagency perspectives. DOD agreed with GAO's recommendations and identified corrective actions, but additional steps are needed to fully address the recommendations.