JOINT 

INTELLIGENCE 

ANALYSIS COMPLEX

DOD Needs to Fully 

Incorporate Best 

Practices into Future 

Cost Estimates

 

Report to Congressional Requesters

November 2016

GAO-17-29

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-17-29, a report to 

congressional requesters

November 2016

JOINT INTELLIGENCE ANALYSIS COMPLEX

DOD Needs to Fully Incorporate Best Practices 

into Future Cost Estimates 

What GAO Found

GAO assessed the cost estimate for the military construction project to 

consolidate and relocate the Joint Intelligence Analysis Complex (JIAC) at Royal 

Air Force (RAF) base Croughton and found that it partially met three and 

minimally met one of the four characteristics of a reliable cost estimate defined 

by GAO best practices, as shown in the table below. For example, it minimally 

met the credibility standard because it did not contain a sensitivity analysis; such 

analyses reveal how the cost estimate is affected by a change in a single 

assumption, without which the estimator will not fully understand which variable 

most affects the estimate. Unless the Department of Defense’s (DOD) 

methodology incorporates all four characteristics of a high-quality, reliable 

estimate in preparing future cost estimates for the JIAC construction project, it 

will not be providing decision makers with reliable information. 

GAO Summary Assessment of the Air Force’s February 2015 JIAC Cost Estimate

Characteristic GAO Assessment

Comprehensive Partially Met

Well documented Partially Met

Accurate Partially Met

Credible Minimally Met

Source: GAO analysis of DOD information. I GAO-17-29

Note: “Fully met” means the agency provided complete evidence that satisfies the entire criterion. 

“Substantially met” means the agency provided evidence that satisfies a large portion of the criterion. 

“Partially met” means the agency provided evidence that satisfies about half of the criterion. 

“Minimally met” means the agency provided evidence that satisfies a small portion of the criterion.

“Not met” means the agency provided evidence that does not satisfy any part of the criterion.

After DOD’s 2013 decision to consolidate the JIAC at RAF Croughton, DOD 

organizations conducted multiple reviews in response to congressional interest in 

Lajes Field, Azores (Portugal) as a potential alternative location for the JIAC, 

including

• U.S. European Command (EUCOM) September 2015 review, a cost 

comparison and location analysis of RAF Croughton and Lajes Field;

• Office of the Secretary of Defense Cost Assessment and Program Evaluation 

April 2016 cost verification for JIAC, an independent review of EUCOM’s 

September 2015 cost estimates and those developed by the House 

Permanent Select Committee on Intelligence in July 2015; and

• Defense Information Systems Agency May 2016 review on JIAC 

communications infrastructure requirements, an assessment and comparison 

of the communications infrastructures at Lajes Field and RAF Croughton with 

the intelligence mission support requirements, including the communications 

and technical requirements, for the JIAC.

These reviews produced different cost estimates, in particular for housing and 

communications infrastructure, because the DOD organizations that developed 

them relied on different assumptions. DOD officials said that these reviews were 

not conducted with the same level of rigor as formal cost estimates, because 

DOD had concluded its analysis of alternatives and no credible new evidence

had been produced to indicate the department should revisit its initial decision to 

consolidate the JIAC at RAF Croughton.

View GAO-17-29. For more information, 

contact Brian Lepore at (202) 512-4523 or 

leporeb@gao.gov.

Why GAO Did This Study

DOD’s JIAC, which provides critical 

intelligence support for the U.S. 

European and Africa Commands and 

U.S. allies, is currently located in what 

DOD has described as inadequate and 

inefficient facilities at RAF Molesworth 

in the United Kingdom. To address 

costly sustainment challenges and 

instances of degraded theater 

intelligence capabilities associated with 

the current JIAC facilities, the Air Force 

plans to spend almost $240 million to 

consolidate and relocate the JIAC at 

RAF Croughton in the United Kingdom.

GAO was asked to review analysis 

associated with consolidating and 

relocating the JIAC. This report (1) 

assesses the extent to which DOD’s 

cost estimate for the JIAC 

consolidation at RAF Croughton aligns 

with best practices and (2) describes 

key reviews DOD has conducted since 

spring of 2013 related to an alternative 

location for JIAC consolidation. GAO 

compared the Air Force’s February 

2015 JIAC cost estimate with GAO 

best practices for developing federal 

cost estimates, reviewed key DOD 

analysis of Lajes Field as a potential 

alternative location for the JIAC, and 

interviewed DOD officials.

What GAO Recommends

GAO recommends that DOD update its 

future construction cost estimates for 

consolidating the JIAC at RAF 

Croughton to comply with best 

practices for cost estimating identified 

by GAO. DOD did not agree, stating it 

would waste resources to continue to 

generate cost estimates once DOD

transitions to managing the project with 

actual cost data. GAO continues to 

believe that its recommendation is 

valid, as discussed in this report.
Page i GAO-17-29 Joint Intelligence Analysis Complex

Letter 1

Background 6

Air Force’s February 2015 Cost Estimate for the JIAC Military 

Construction Project Did Not Fully Meet Best Practices 11

DOD Conducted Multiple Reviews of Lajes Field as a Possible 

JIAC Location 17

Conclusions 29

Recommendation for Executive Action 29

Agency Comments and Our Evaluation 30

Appendix I Assessment of the Air Force’s February 2015 Cost Estimate for the 

Joint Intelligence Analysis Complex 33

Appendix II Information on Communications Infrastructure Requirements for the 

Joint Intelligence Analysis Complex 36

Appendix III Comments from the Department of Defense 38

Appendix IV GAO Contact and Staff Acknowledgments 39

Tables

Table 1: Department of Defense (DOD) Component Roles and 

Responsibilities Related to Joint Intelligence Analysis 

Complex Consolidation (JIAC) 8

Table 2: GAO Summary Assessment of the Air Force’s February 

2015 Joint Intelligence Analysis Complex Cost Estimate 12

Table 3: Cost Estimates and Supporting Assumptions for 

Communications Infrastructure Associated with Locating 

the Joint Intelligence Analysis Complex (JIAC) at Lajes 

Field in Department of Defense (DOD) Reviews 23

Table 4: Cost Estimates for Housing Associated with Locating the 

Joint Intelligence Analysis Complex at Lajes Field 24

Table 5: GAO’s Assessment of the Air Force’s February 2015 

Joint Intelligence Analysis Complex (JIAC) Cost Estimate 

Compared to Best Practices 34

Contents
Page ii GAO-17-29 Joint Intelligence Analysis Complex

Figures

Figure 1: Key Events and Reviews Related to the Department of 

Defense’s (DOD) Analysis of the Joint Intelligence 

Analysis Complex (JIAC) 18

Figure 2: Lajes Field Current Undersea Cable Configuration and 

Options for New Undersea Cables to Support the Joint 

Intelligence Analysis Complex 22

Abbreviations

CAPE Office of the Secretary of Defense, the Office of Cost 

Assessment and Program Evaluation

DIA Defense Intelligence Agency

DISA Defense Information Systems Agency

DOD Department of Defense

EUCOM U.S. European Command

JIAC Joint Intelligence Analysis Complex

MILCON Military Construction

RAF Royal Air Force

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Page 1 GAO-17-29 Joint Intelligence Analysis Complex

441 G St. N.W.

Washington, DC 20548

November 3, 2016

Congressional Requesters

The Joint Intelligence Analysis Complex (JIAC) in the United Kingdom 

provides intelligence support for the U.S. European Command (EUCOM), 

U.S. Africa Command and U.S allies. The Department of Defense (DOD) 

has stated that although the JIAC is a critical intelligence asset, its 21 

current facilities—located at Royal Air Force (RAF) base Molesworth—are 

inadequate and inefficient. According to DOD, the facilities at RAF 

Molesworth were not designed to support the JIAC’s intelligence 

missions, and this has led to costly sustainment challenges and instances 

of degraded theater intelligence capabilities. For example, the U.S. Air 

Force has reported that the JIAC has experienced numerous outages to 

facility-related information technology systems that have severely 

degraded theater command and control and intelligence capabilities for 

several hours at a time. To address these issues, DOD will invest 

approximately $240 million in military construction (MILCON) for the Air 

Force to consolidate and relocate the JIAC to provide additional space

specifically designed to support and fully enable the current intelligence 

mission.1

In the fall of 2009, DOD began its analysis of alternatives process for 

consolidating the JIAC and, as part of this analysis, considered potential 

alternative locations in Europe and the United States.2 By the spring of 

2013, DOD had concluded that its preferred alternative was to move the 

JIAC from its current location at RAF Molesworth and consolidate its 

facilities at RAF Croughton in the United Kingdom. According to the 

Deputy Secretary of Defense, the decision to locate the JIAC at RAF 

Croughton was the result of careful consideration of intelligence and 

operational requirements and factors and was informed by other criteria, 

such as diplomatic relationships and economic factors. The Secretary of 

 1

DOD officials explained that the department plans to save an estimated $74 million 

annually by closing two installations—RAF Molesworth and RAF Alconbury, a support 

installation—in the course of consolidating the JIAC at the new location.

2

The analysis of alternatives process is an analytical study that is intended to compare the 

operational effectiveness, cost, and risks of a number of potential alternatives to address 

valid needs and shortfalls in operational capability. This process helps ensure that the 

best alternative that satisfies the mission need is chosen on the basis of the selection 

criteria, such as safety, cost, or schedule. 

Letter
Page 2 GAO-17-29 Joint Intelligence Analysis Complex

Defense issued a Resource Management Decision in April 2013 to move 

ahead with the JIAC consolidation.3 After the selection of RAF Croughton, 

the Air Force developed a MILCON cost estimate and initiated a threephase MILCON project which, according to Air Force officials, it plans to 

complete by early 2021.

The consolidation of the JIAC is proceeding in three phases. In Phase I, 

according to the Air Force budget documentation, the Air Force plans to 

build EUCOM’s Intelligence Analytic Center, a data processing center, a 

warehouse, and various supporting facilities. In Phase II it plans to build 

the U.S. Africa Command’s Intelligence Analytic Center, the Intelligence 

Fusion Center of the North Atlantic Treaty Organization, a battlefield 

information system, and additional supporting facilities. Phase III will 

include a regional Joint Intelligence Training Facility and a physical fitness 

facility. In December 2014 and November and December 2015, Congress 

authorized and appropriated $92.2 million for Phase I and $94.2 million 

for Phase II. In September 2016, Congress appropriated $53.1 million for 

Phase III. The United Kingdom is serving as executive agent for JIAC 

construction, and in August 2015, DOD obligated Phase I funding to the 

United Kingdom. DOD officials told us that DOD obligated Phase II 

funding to the United Kingdom in July 2016. As of September 2016, DOD 

officials said they anticipate awarding a contract for Phases I and II in 

mid-2017 with construction to start in the fall of 2017.

Since 2013, Congress has required DOD to provide information on its 

JIAC consolidation effort and has taken a number of oversight actions. 

For example, House Report 113-102 directed DOD to provide detailed 

information on its plans for the JIAC consolidation at RAF Croughton.4

House Report 113-02 also directed the Secretary of Defense to submit a 

report on RAF Croughton and, among other things, provide a description 

of why the current facility, RAF Molesworth, was not sufficient to meet 

JIAC’s requirements and how the facility at RAF Croughton would meet 

them.5 In other statutory provisions, Congress has prohibited DOD from 

 3

A Resource Management Decision is a budget decision document issued during the joint 

review of Service budget submissions by analysts of the Office of the Secretary of 

Defense and the Office of Management and Budget. Resource management decisions 

reflect the decisions of the Secretary of Defense as to appropriate program and funding to 

be included in the annual defense budget request.

4

H.R. Rep. No. 113-102, at 218 (2013).

5

In December 2013, DOD provided this report to the House Armed Services Committee. 
Page 3 GAO-17-29 Joint Intelligence Analysis Complex

obligating or expending military construction funds in the United Kingdom 

or awarding construction contracts in the EUCOM area of responsibility 

until it provides certain required information to Congress.6 In the National 

Defense Authorization Act for Fiscal Year 2016, Congress authorized 

funding for the JIAC consolidation but prohibited the expenditure of funds 

until the Secretary of Defense certifies to the congressional defense 

committees that RAF Croughton remains the “optimal location” for the 

consolidation of the JIAC and explains why.7 According to DOD officials, 

the department has provided the required certifications in response to 

committee direction and statutory provisions.8

We were asked to review the analysis associated with consolidating and 

relocating the JIAC.9 This report (1) assesses the extent to which DOD’s 

cost estimate for JIAC consolidation at RAF Croughton aligns with best 

practices and (2) describes key reviews DOD has conducted since spring 

of 2013 related to an alternative location for JIAC consolidation.

We performed our work at various DOD organizations, including U.S. Air 

Force Headquarters, U.S. Air Forces in Europe, the Basing Office of the 

Office of the Secretary of Defense, the Office of Cost Assessment and 

Program Evaluation (CAPE), the Defense Intelligence Agency (DIA), the 

Defense Information Systems Agency (DISA), the Office of the DOD 

Chief Information Officer, and the headquarters of EUCOM. In addition, 

we visited Lajes Field, Azores (Portugal) and met with representatives of 

the 65th Air Base Group.

 6

See, for example, the National Defense Authorization Act for Fiscal Year 2014, Pub. L. 

No. 113-66, § 2809 (2013) and the Military Construction and Veterans Affairs, and Related 

Agencies Appropriations Act, 2014, Pub. L. No. 113-76, Div. J, Title I (2014).

7

See Pub. L. No. 114-92, § 2310 (2015).

8

In response to the House Report 113-102 requirement, DOD provided information in 

August and December 2013. In response to the requirement in the National Defense 

Authorization Act for Fiscal Year 2016, DOD provided its certification in March 2016.

9

This is our second report on DOD’s plan to consolidate the JIAC at RAF Croughton. We 

previously reviewed the extent to which DOD applied best practices in its analysis of 

alternatives that concluded that RAF Croughton was the preferred location for the JIAC.

That review resulted in a classified report: GAO, Joint Intelligence Analysis Complex: DOD 

Did Not Fully Use Best Practices to Analyze Alternatives and Should Do So for Future 

Military Construction Decisions, GAO-16-563C (Washington, D.C.: June 28, 2016). We 

then issued a public version of that classified report: GAO, Joint Intelligence Analysis 

Complex: DOD Did Not Fully Use Best Practices to Analyze Alternatives and Should Do 

So for Future Military Construction Decisions, GAO-16-853 (Washington, D.C.: September 

30, 2016).
Page 4 GAO-17-29 Joint Intelligence Analysis Complex

To determine the extent to which DOD’s cost estimate for JIAC 

consolidation at RAF Croughton aligns with best practices, we gathered 

information on the department’s cost estimation process. We obtained the 

Air Force’s most recently completed and approved cost estimate for JIAC 

consolidation—dated February 2015—at the time of our review, and we 

obtained detailed information on the estimate, including DOD’s cost 

model, from officials responsible for the estimate.10 Using best practices 

criteria in GAO’s Cost Estimating and Assessment Guide, we evaluated 

the extent to which the JIAC cost estimate was comprehensive, accurate, 

well documented, and credible.11 The methodology outlined in GAO’s 

Cost Estimating and Assessment Guide is a compilation of best practices 

that federal cost estimating organizations and industry use to develop and 

maintain reliable cost estimates throughout the life of a government 

program. We met with DOD officials to discuss areas we identified 

through our analysis where the cost estimate did not conform to cost 

estimation best practices.

To describe the key reviews DOD has conducted since spring of 2013 

related to alternative locations for the JIAC, we reviewed key analyses 

developed by DOD to provide more information to Congress comparing 

the requirements for consolidating the JIAC at RAF Croughton with the 

 10In February 2016, for the fiscal year 2017 President’s budget, DOD submitted its most 

recent budget request, totaling almost $240 million in military construction funding to build 

the new, consolidated JIAC facilities—and several supporting facilities—at RAF 

Croughton, with Phase I totaling $92.2 million, Phase II $94.2 million, and Phase III $53.1 

million. We completed our analysis before the fiscal year 2017 budget was submitted. Our 

analysis is based on the cost information submitted by DOD in February 2015 for the fiscal 

year 2016 budget request for Phases I and II, as well as an estimate for Phase III, which 

was to be submitted as part of the fiscal year 2017 budget request. The only update made 

to the JIAC cost estimate for the fiscal year 2017 budget was to decrease Phase III from 

$54.6 million to $53.1 million (based on foreign currency fluctuation). This change did not 

affect our cost assessment analysis. Furthermore, the Air Force is the executive agent for 

the JIAC project and led DOD efforts to develop the JIAC cost estimate. For these 

reasons, we refer to the cost estimate for JIAC consolidation at RAF Croughton as the Air 

Force’s February 2015 JIAC cost estimate in this report.

11GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs, GAO-09-3SP (Washington D.C.: March 2009). Our 

Cost Estimating and Assessment Guide considers an estimate to be accurate if it is not 

overly conservative, is based on an assessment of the most likely costs, and is adjusted 

properly for inflation; comprehensive if its level of detail ensures that all pertinent costs are 

included and no costs are double-counted or omitted; well documented if the estimate can 

be recreated by an analyst unfamiliar with the project and can be traced to original 

sources through auditing; and credible if the estimate has been cross-checked with an 

independent cost estimate and a level of uncertainty associated with the estimate has 

been identified and quantified.
Page 5 GAO-17-29 Joint Intelligence Analysis Complex

requirements for consolidating at Lajes Field. Those analyses include 

work in response to statutory requirements—such as DOD’s responses to 

requirements in the National Defense Authorization Act for Fiscal Year 

2016—that DOD certify RAF Croughton as the optimal location for the 

JIAC and to determine the operational viability of Lajes Field, Azores 

(Portugal) for other functions, as required by the DOD Appropriations Act, 

2016. Those analyses also include key reviews that DOD conducted to 

develop cost estimates for relocating the JIAC to Lajes Field, such as 

EUCOM’s September 2015 JIAC Location Analysis, which included 

DISA’s Azores Telecommunications Feasibility Report and the DIA’s 

Azores Communications Cost Estimate; CAPE’s April 2016 Cost 

Verification for the JIAC; and the DISA’s updated May 2016 review of the 

JIAC Communications Infrastructure Requirements. We also reviewed 

DOD’s functional requirements for joint intelligence operations centers.12

Additionally, we met with DOD officials from EUCOM, DISA, the Office of 

the DOD Chief Information Officer, DIA, and CAPE to determine the 

context for these reviews, understand their analysis and efforts to develop 

these cost estimates, and identify underlying assumptions. We also met 

with Air Force officials from the 65th Air Base Group to determine the 

status of personnel streamlining efforts and current housing inventory and 

communications infrastructure on base, and to identify their efforts in 

developing an analysis on the JIAC locating to Lajes Field. Additionally, 

we received written answers from the Azorean Regional Government 

Association related to local operations on the Azores islands.

We conducted this performance audit from April 2016 to November 2016 

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.

 12DOD, Joint Intelligence Operations Center (JIOC) Enterprise Functional Requirements, 

(July 14, 2011). 
Page 6 GAO-17-29 Joint Intelligence Analysis Complex

The JIAC includes elements of three intelligence operations centers—one 

supporting EUCOM, a second supporting U.S. Africa Command, and a 

third supporting the North Atlantic Treaty Organization—as well as 

several other organizations that perform intelligence-related functions. 

According to DOD guidance, joint intelligence operations centers support 

the geographical combatant commands and other defense organizations, 

serving as focal points for intelligence planning, collection management, 

analysis, and production.13

• EUCOM Joint Intelligence Operations Center Europe executes 

intelligence operations that are synchronized and integrated with 

theater component, national, and partner nation organizations; 

enables EUCOM planning and execution; and enhances senior 

leaders’ decision-making across the entire spectrum of military 

operations.

• U.S. Africa Command Directorate for Intelligence at RAF Molesworth 

manages and executes defense intelligence for U.S. Africa 

Command, including protecting U.S. personnel and facilities, 

preventing and mitigating conflict, and building defense capabilities in 

order to promote regional stability and prosperity.

• North Atlantic Treaty Organization Intelligence Fusion Center provides 

intelligence to warn of potential crises and to support the planning and 

execution of the North Atlantic Treaty Organization’s operations.

• Regional Joint Intelligence Training Facility trains students from 

EUCOM, U.S. Africa Command, and the North Atlantic Treaty 

Organization nations, including the United Kingdom.

• United States Battlefield Information Collection and Exploitation 

Systems plans, builds, and operates the Coalition Intelligence and 

Information Enterprise to provide on-demand coalition informationsharing solutions for both episodic and enduring missions.

 13Joint Chiefs of Staff, Joint Publication 2-01 Joint and National Intelligence Support to 

Military Operations (Jan. 5, 2012). In addition to the six geographical combatant 

commands, the U.S. Cyber Command—a subunified command under U.S. Strategic 

Command—and United States Forces Korea—a subunified command under U.S. Pacific 

Command—operate joint intelligence operations centers.

Background

The JIAC Includes 

Elements of Three Joint 

Intelligence Operations 

Centers and Supports 

Other Intelligence-Related 

Functions
Page 7 GAO-17-29 Joint Intelligence Analysis Complex

A number of DOD organizations have been involved in the JIAC 

consolidation process. Overall guidance for DOD’s military construction 

efforts was provided by the Office of the Assistant Secretary of Defense 

for Energy, Installations, and Environment. This office is responsible for 

overseeing various aspects of the department’s military construction 

efforts.14 These responsibilities include, among other things, monitoring 

the execution of the military construction program to ensure the most 

efficient, expeditious, cost-effective accomplishment of the program, and 

issuing guidance for the implementation of DOD military construction 

policy.

Other DOD organizations—including U.S. Air Force Headquarters, the 

Basing Office of the Office of the Secretary of Defense, and the 

headquarters of both EUCOM and U.S. Africa Command—made up the 

team that conducted the JIAC analysis of alternatives.15 The participating 

organizations provided subject matter experts who were involved in the 

team’s day-to-day work and developed the analysis that is the foundation 

of the decision to consolidate the JIAC at RAF Croughton. DOD’s team 

conducted work from the initial concept proposal in the fall of 2009 to the 

Resource Management Decision issued by the Secretary of Defense in 

April 2013.

In July 2016, we reported on DOD’s analysis of alternatives process and 

recommended that the Secretary of Defense direct the Assistant 

Secretary of Defense for Energy, Installations, and Environment to 

develop guidance requiring the use of best practices for analysis of 

alternatives—including those practices we identified in the report—and 

that in this guidance, the Assistant Secretary should define the types of 

military construction decisions for which use of these best practices 

should be required.16 DOD did not agree with our recommendation, 

stating that the best practices do not wholly apply to decision-making 

processes for military construction projects.

 14DOD Directive 4270.5, Military Construction (Feb. 12, 2005). 

15According to CAPE officials, their office was not involved in DOD’s analysis of 

alternatives process for the JIAC consolidation efforts.

16GAO, Joint Intelligence Analysis Complex: DOD Partially Used Best Practices for 

Analyzing Alternatives and Should Do So Fully for Future Military Construction Decisions, 

GAO-16-853 (Washington D.C.: September 30, 2016).

DOD Organizations 

Involved in the JIAC 

Consolidation Process and 

Related Efforts
Page 8 GAO-17-29 Joint Intelligence Analysis Complex

Table 1 lists the roles and responsibilities of DOD components related to 

the JIAC consolidation, including their involvement in preparing 

information in response to congressional requests for information on the 

analysis of alternatives process and on Lajes Field as a possible location 

for the JIAC.

Table 1: Department of Defense (DOD) Component Roles and Responsibilities Related to Joint Intelligence Analysis Complex 

Consolidation (JIAC)

DOD Component Roles and Responsibilities 

U.S. European Command (EUCOM) Conducted the JIAC consolidation analysis of alternatives process with input from all 

stakeholders 

J2 (Operational Intelligence) Generated requirements for the U.S. portion of the JIAC military construction project

Provided the critical mission criteria for DOD’s JIAC analysis of alternatives

J4 (Logistics) Served as primary action office for collecting inputs for DOD’s response to congressional 

requests for information related to the analysis of alternatives and the JIAC military 

construction project

J6 (Cyber/C4) Served as the conduit to get information from the Defense Information Systems Agency 

(DISA) and Defense Intelligence Agency (DIA) for congressional requests for information 

related to JIAC

Office of the Assistant Secretary of 

Defense for Energy, Installations, 

and Environment’s Basing Office

Provided guidance on EUCOM’s JIAC analysis of alternatives process and subsequent 

evaluation of Lajes Field

Undersecretary of Defense for 

Intelligence

Provided oversight for the Department and coordinates DOD Intelligence Community 

mission and capabilities for the JIAC with the Office of the Director for National Intelligence 

Office of the Secretary of Defense, 

Cost Assessment and Program 

Evaluation

Provided independent verification of cost estimates and assumptions for Lajes Field and 

RAF Croughtona from EUCOM and the House Permanent Select Committee on Intelligence 

reviews

DIA Interpreted communications infrastructure requirements for the JIAC and developed a 

review that included cost estimates for the communications infrastructure at Lajes Fieldb

Provides Joint Worldwide Intelligence Communications System capability and analysis to 

support the JIAC

DISA Provided communications infrastructure expertise and related to cost estimates for Lajes 

Field 

U.S. Air Force Secretary of the Air 

Force, Office of the Assistant 

Secretary of the Air Force 

Installations, Environment and 

Energy

Provided military construction cost estimates and military construction requirements for the 

JIAC at RAF Croughton

Developed the Air Force’s military construction project development justification forms (DD

Forms 1391)

Air Force Civil Engineer Center Serves as the JIAC military construction manager and is responsible for overseeing and 

administering the JIAC military construction project

U.S. Air Forces in Europe Provided housing, personnel, and facilities inputs for cost comparison for Lajes Field versus 

RAF Croughton 

65th Air Base Group Provided installation level details on housing, facilities, and communication infrastructure for 

Lajes Field

Source: Based on DOD officials. | GAO-17-29
Page 9 GAO-17-29 Joint Intelligence Analysis Complex

a

On July 20, 2015, the staff of the House Permanent Select Committee on Intelligence conducted a 

review of the JIAC consolidation and compared locating the JIAC at RAF Croughton to locating it at 

Lajes Field and developed a business case analysis, which was sent to the ranking member of the 

House Armed Services Committee for consideration.

b

According to DIA officials, their estimate for the JIAC communications infrastructure for Lajes Field 

was developed by DIA’s Chief Information Officer.

In response a statutory requirement, DOD issued a memorandum that 

certified that Lajes Field, Azores (Portugal) was not the optimal location 

for the JIAC, based on an analysis of U.S. operational requirements and 

an evaluation of key criteria.17 The Azores is an autonomous region of 

Portugal situated about 850 miles west of continental Portugal. There are 

nine major Azorean islands, including Terceira, home of Lajes Field. 

Lajes Field is a dual military and civilian airfield and is also a Portuguese

military base; the 65th Air Base Group, a U.S Air Force unit, is also 

stationed there. The 65th Air Base Group’s mission supports DOD, allied 

nations, and other authorized aircraft in transit; its core mission is to 

service in-transit aircraft en route to eastern and southern destinations.

In 2010, the Air Force recommended a plan to reduce personnel and 

operations at Lajes Field and divest approximately 500 U.S. military and 

civilian billets, leaving approximately 165 U.S. personnel at Lajes Field to 

support the mission requirements. The Secretary of Defense approved 

the recommendation and announced his decision to streamline Lajes 

Field in October 2012. According to the Secretary of Defense, the 

frequency and volume of flights using Lajes Field had decreased, and the 

base was operating well below its capacity. The Air Force recommended 

reducing U.S. operations at Lajes from 24 hours, 7 days a week to 8 

hours, 7 days a week and downsizing the 65th Air Base Wing to an Air 

Base Group. According to the Secretary of Defense, the presence at 

Lajes Field exceeded mission requirements, and the mission 

requirements at Lajes Field could be supported with a smaller force. DOD 

has estimated that the streamlined footprint would yield approximately 

$35 million in annual savings. This Secretary of Defense’s October 2012 

decision was subsequently reaffirmed by the European Infrastructure 

Consolidation assessment, which the Secretary of Defense initiated on 

 17Consolidated Appropriations Act, 2016 (division C), Pub. L. No. 114-113, § 8114 (2015).

Lajes Field, Azores, 

Portugal
Page 10 GAO-17-29 Joint Intelligence Analysis Complex

January 25, 2013, to perform a comprehensive review of DOD facilities in 

Europe.18

The National Defense Authorization Act for Fiscal Year 2014 required that 

the Secretary of Defense provide Congress with certification that the 

actions taken to realign military forces at Lajes Field were supported by 

the European Infrastructure Consolidation assessment.19 The act required 

that DOD’s certification include an assessment of the efficacy of Lajes 

Field in support of the United States’ overseas force posture. On January 

6, 2015, the Secretary of Defense issued a memorandum certifying that 

the European Infrastructure Consolidation assessment supported DOD’s 

plan to adjust its presence at Lajes Field. Further, the Secretary of 

Defense noted that DOD had conducted a comprehensive review and 

determined that the reduction of U.S. personnel at Lajes Field supported 

the U.S. military’s European force posture.

DOD officials said that they will continue to provide 24-hour-a-day, 7-daya-week tower operations at Lajes Field after the base personnel are 

reduced, along with crash, fire, and rescue services and attendant airfield 

operations for the joint Portuguese military and civilian airfield. Air Force 

officials told us that, as of July 2016, U.S. flights to Lajes Field average 

two per day. Air Force officials told us that, as part of this effort to 

streamline and reduce the personnel at Lajes Field, they have identified 

various excess buildings, facilities, and housing units that are no longer 

needed. Specifically, Air Force officials have identified 350 housing units 

as excess and are in the process of returning those units back to the 

Portuguese government; the remaining housing will be used to support 

 18The objectives of the European Infrastructure Consolidation are to eliminate unneeded 

facilities to create long-term savings, realign infrastructure and eliminate the excess, and 

validate remaining infrastructure for sustaining DOD’s enduring presence in Europe, 

among other things.

19Pub. L. No. 113-66, § 341 (2013). In addition, section 2809 of the National Defense 

Authorization Act for Fiscal Year 2014 prohibited DOD from awarding any contract in 

connection with a construction project at any installation in the U.S. European Command’s 

area of responsibility until the Secretary of Defense certifies that these installations and 

military construction requirements are of an enduring nature; have been assessed as part 

of DOD’s European Consolidation Initiative efforts; and that military construction most 

effectively meets the combatant commander’s requirements at the authorized location. On 

January 6, 2015, the Secretary of Defense issued a memorandum that certified the fiscal 

year 2014 military construction project as required by section 2809.
Page 11 GAO-17-29 Joint Intelligence Analysis Complex

unaccompanied personnel at Lajes Field.20 In July 2016, Air Force 

officials said that they were in negotiations with the Portuguese 

government on the return of excess facilities per the personnel 

streamlining efforts. Specifically, the officials stated that there was 

disagreement on how the United States and Portugal interpret the 

technical agreement and policy on the return of excess facilities—the 

United States’ position was that all property excess to the needs of the 

United States would be turned over to Portugal in useable condition, while 

Portugal sought for the United States to demolish a majority of the 

facilities rather than returning them. According to these officials, Portugal 

also sought environmental remediation commitments from the United 

States. According to DOD officials, the demolition and environmental 

remediation of these facilities was contrary to long-standing DOD policy.

Our assessment of the Air Force’s February 2015 cost estimate for JIAC 

consolidation showed that it did not fully meet cost estimation best 

practices. According to the GAO Cost Estimating and Assessment Guide, 

a cost estimate created using best practices exhibits four 

characteristics—it is comprehensive, well documented, accurate, and 

credible. Each of the four characteristics is associated with a specific set 

of best practices. Our assessment found that the JIAC cost estimate 

partially met three and minimally met one of the four characteristics of a 

reliable cost estimate. If any of these characteristics is not substantially or 

fully met, then the cost estimate does not reflect the characteristics of a 

high-quality estimate and cannot be considered reliable. Table 2 lists 

each of the four characteristics, along with our summary assessment of 

the JIAC cost estimate.

 20The officials stated that according to The Agreement on Cooperation and Defense 

between the United States of America and Portugal Technical Agreement, which governs 

the relationship between the U.S. military and Portugal, the Portuguese government must 

approve all building and facilities that the 65th Air Base Group intends to return Portugal.

Air Force’s February 

2015 Cost Estimate 

for the JIAC Military 

Construction Project 

Did Not Fully Meet 

Best Practices
Page 12 GAO-17-29 Joint Intelligence Analysis Complex

Table 2: GAO Summary Assessment of the Air Force’s February 2015 Joint 

Intelligence Analysis Complex Cost Estimate

Characteristic GAO Assessment

Comprehensive Partially Met

Well documented Partially Met

Accurate Partially Met

Credible Minimally Met

Source: GAO analysis of DOD information. I GAO-17-29

Notes: “Fully met” means that the agency provided complete evidence that satisfies the entire 

criterion. “Substantially met” means that the agency provided evidence that satisfies a large portion of 

the criterion. “Partially met” means that the agency provided evidence that satisfies about half of the 

criterion. “Minimally met” means that the agency provided evidence that satisfies a small portion of 

the criterion. “Not met” means that the agency provided evidence that does not satisfy any of the 

criterion.

The following summarizes our analysis of the JIAC cost estimate for each 

of the four characteristics. Appendix I provides greater detail on our 

assessment.

• Comprehensiveness (Partially Met). According to best practices, 

agencies should develop accurate life-cycle cost estimates. Further, a 

life-cycle cost estimate should encompass all past (or sunk), present, 

and future costs for every aspect of the program, regardless of 

funding source—including all government and contractor costs. 

However, the JIAC cost estimate included only MILCON costs and did 

not include costs associated with the life cycle of the project. Air Force 

and Office of the Secretary of Defense officials said they do not 

consider the JIAC cost estimate a life-cycle cost estimate and that the 

estimate’s scope is in line with DOD guidance on the development of 

budget requests for MILCON projects. According to DOD officials, the 

department does not have a full life-cycle cost estimate for the entire 

JIAC consolidation effort. DOD and Air Force officials further stated 

that the estimate covers the costs of infrastructure for the JIAC’s 

facilities, other supporting infrastructure (e.g., utilities serving the JIAC 

facilities), and certain other facilities for functions related to JIAC, such 

as family support (e.g., expanded capacity of the child development 

center). The associated Operation and Maintenance costs (e.g., 

family support costs like living allowances) were not included in the 

estimate, because they were considered out of scope, according to 

DOD and Air Force officials. However, without fully accounting for lifecycle costs, management may have difficulty successfully planning 

and programming resource requirements for the JIAC consolidation 

and making sound decisions.
Page 13 GAO-17-29 Joint Intelligence Analysis Complex

• Documentation (Partially Met). According to best practices, 

documentation is essential for validating and defending a cost 

estimate. The JIAC cost estimate is generally consistent with the 

sizing assumptions included in DOD documentation, laying out 

requirements for the JIAC’s facilities, inputs from appropriate experts, 

and relevant DOD guidance, such as the DOD Facilities Pricing 

Guide.

21 Also, DOD documented both the data sources and the 

methodology used for the JIAC cost estimate in an Excel spreadsheet 

model and a parametric cost engineering estimate summary. 

However, the documentation for the JIAC cost estimate is not 

complete. Specifically, the cost estimate does not provide sufficient 

documentation so that a cost analyst unfamiliar with the program 

could understand what had been done and replicate it. The cost 

estimate uses the DOD Facilities Pricing Guide (heretofore referred to 

as the Pricing Guide), which provides planning assumptions and 

prices for a variety of types of facilities, such as office buildings. In the 

cost calculation spreadsheet for the JIAC cost estimate, the cost 

estimators’ judgements regarding which type of facility to use from the 

Pricing Guide were not always consistent with the categories listed in 

the Pricing Guide. For example, there is no mention of intelligence 

facilities in the Pricing Guide, and we were unable to independently 

trace all of the unit costs from the JIAC cost estimate back to it. Air 

Force officials were able to show where in the Pricing Guide these 

numbers were drawn from; however, this is not documented in the 

estimating model, and there is no rationale provided to show that an 

intelligence facility would be the same as a communications center. 

Without a well-documented cost estimate, the Air Force may not be 

able to present a convincing argument for the validity of the JIAC cost 

estimate and answer decision makers’ and oversight groups’ 

questions.

• Accuracy (Partially Met). According to best practices, the cost 

estimate should provide results that are unbiased, and it should not be 

overly conservative or overly optimistic. An estimate is accurate when 

it is based on an assessment of most likely costs, adjusted properly 

for inflation, and contains no more than a few minor mistakes—if any. 

In addition, a cost estimate should be updated regularly to reflect 

changes in the program, for example when schedules or other 

assumptions change or actual costs change, so that it always reflects 

the current status. The JIAC estimate used historical data, did not 

 21DOD, Unified Facilities Criteria (UFC) 3-701-01, DOD Facilities Pricing Guide (March 

2011) (Change 8, July 2015). This guide is updated annually.
Page 14 GAO-17-29 Joint Intelligence Analysis Complex

contain mathematical errors, showed evidence of being updated, 

underwent a review process before final approval, and follows DOD 

construction cost estimation guidance on how to account for inflation. 

However, while the JIAC cost estimate has been updated, it has not 

been updated regularly. Specifically, the April 2013 estimate was 

updated in June 2013 to align with an update to the Pricing Guide but 

was not updated to align with the two subsequent updates to the 

Pricing Guide that occurred before the February 2015 JIAC cost 

estimate was submitted. Air Force officials said that the JIAC cost 

estimate was updated to reflect foreign currency fluctuations. 

According to these officials, the MILCON process assumes flexibility 

in the project timeline to allow adjustments to the estimate and 

focuses on establishing the project’s scope (e.g., the square feet or 

square meters associated with a project) in the Air Force’s project 

development justification forms.22 These Air Force officials also stated 

that the costs associated with MILCON projects are updated only with 

significant changes to the program and are typically permitted to be 

adjusted by as much as plus or minus 25 percent of the total costs—

even after funding has been appropriated—without needing to be 

reprogrammed. While updating an estimate in this way may be 

permissible within the established MILCON process, it is not 

consistent with cost estimating best practices, because the estimate is 

not updated regularly. Without updating the JIAC cost estimate on a 

regular basis, DOD and the Air Force may have difficulty analyzing 

changes in program costs for the consolidation project and may 

hinder the collection of up-to-date cost and technical data to support 

future JIAC cost estimates.

• Credibility (Minimally Met). According to best practices, a cost 

estimate should discuss any limitations of the analysis resulting from 

uncertainty or biases surrounding data or assumptions. Major 

assumptions should be varied, and other outcomes recomputed, to 

determine how sensitive the cost estimates are to changes in the 

assumptions. Also, risk and uncertainty analysis should be performed 

to determine the level of risk associated with the estimate. Without a 

sensitivity analysis that reveals how a cost estimate is affected by a 

 22According to Air Force Instruction 32-1021 on Planning and Programming Military 

Construction (MILCON) Projects, project development is one of the most important actions 

in MILCON programming and is documented using a DD Form 1391. The DD Form 1391 

should by itself explain and justify the project to all levels of the Air Force, the Office of the 

Secretary of Defense, the Office of Management and Budget, and Congress. In this 

report, we refer to Directives Division Forms 1391 as project development justification 

forms. 
Page 15 GAO-17-29 Joint Intelligence Analysis Complex

change in a single assumption, the cost estimator will not fully 

understand which variable most affects the cost estimate. The use of 

a sensitivity analysis is not specified in cost estimation guidance for 

MILCON projects from either DOD or the Air Force, and the JIAC cost 

estimate did not include such an analysis. According to Office of the 

Secretary of Defense and Air Force officials, a sensitivity analysis is 

part of the underlying unit cost development, because costs are 

developed through the use of both historical data and industry 

averages. These officials further stated that the Office of the Secretary 

of Defense uses actual data underpinned by relevant sensitivity and 

range analyses to develop its cost estimates. For example, Office of 

the Secretary of Defense and Air Force officials said that the Office of 

the Secretary of Defense uses the DOD Selling Price Index—which 

averages three commonly accepted national indexes for construction 

price escalation—to calculate actual project award cost data. 

However, for sensitivity analysis to be useful in informing decisions, 

careful assessment of the underlying risks and supporting data related 

to a specific MILCON project is also necessary. In addition, the 

sources of the variation should be well documented and traceable. 

Without conducting sensitivity analysis for the JIAC cost estimate to 

identify the effect of uncertainties associated with different 

assumptions, DOD and the Air Force increase the risk that decisions 

will be made without a clear understanding of the effects of these 

assumptions on costs.

Another key to establishing an estimate’s credibility is its review 

process. According to best practices, the estimate’s cost drivers 

should be crosschecked, and an independent cost estimate 

conducted by a group outside the acquiring organization should be 

developed to determine whether other estimating methods produce 

similar results. While the Air Force has a review process, the review it 

conducted for the JIAC cost estimate did not include the use of a 

checklist provided as a sample in DOD MILCON cost estimation 

guidance.23 The sample checklist, while not required, could have 

helped the Air Force to confirm the validity of assumptions and the 

logic used in estimating the cost of the JIAC construction tasks. Air 

Force officials stated that their review primarily looks at the numbers 

provided and the ranges from the Pricing Guide to see whether the 

estimate is within those ranges. These officials added that they would 

use the checklist only if there was a difference from the Pricing Guide. 

 23DOD, Unified Facilities Criteria (UFC) 3-740-05, Handbook: Construction Cost 

Estimating, at Appendix E (Nov. 8, 2010; Change 1, June 2011).
Page 16 GAO-17-29 Joint Intelligence Analysis Complex

However, the first phase of the JIAC cost estimate did not identify the 

stage of the estimate; did not separate costs for labor, equipment, or 

material; and did not calculate prime and subcontractor profit by the 

weighted guidelines method, which are items listed in the sample 

checklist.

When we shared the results of our analysis with officials from the Office 

of the Secretary of Defense, they said that they did not agree our best 

practices for cost estimating were entirely applicable to the JIAC cost 

estimate, since the estimate focused on MILCON costs. Furthermore, 

Office of the Secretary of Defense and Air Force officials said that 

construction is discussed in our Cost Estimating and Assessment Guide

as a subsidiary cost to be included in the life-cycle cost estimate. For 

example, these officials said that construction costs are to be considered 

as part of the overall ground rules and assumptions for a cost estimate. 

However, the methodology outlined in our Cost Estimating and 

Assessment Guide is a compilation of best practices that federal cost 

estimating organizations and industry use to develop and maintain 

reliable cost estimates, and this methodology can be used across the 

federal government for developing, managing, and evaluating capital 

program cost estimates, including military construction estimates. 

Furthermore, DOD guidance for estimating construction costs states that 

in the MILCON program, construction cost estimates are prepared 

throughout the planning, design, and construction phases of a 

construction project. These construction cost estimates are categorized 

as follows: programming estimate, concept estimate, final estimate, and 

government estimate.24 The Air Force provided us with the JIAC 

consolidation programming estimate for analysis, because it was the most 

complete and updated estimate at the time of our review. Even though 

our analysis shows that the programming estimate did not meet all of the 

four characteristics of a high-quality, reliable estimate, the Air Force will 

have opportunities to incorporate our best practices as it prepares future 

cost estimates for subsequent phases of the JIAC consolidation program. 

Without incorporating a methodology that is more closely aligned with our 

best practices for cost estimation and incorporates all four characteristics 

 24DOD, Unified Facilities Criteria (UFC) 3-740-05. According to this guidance, the 

programming estimate is based on preliminary project scope or mission requirements; the 

concept estimate is more refined, because the design criteria and project requirements 

have been further defined by this stage; and the pre-final estimate is based on the final 

plans and specifications. According to the GAO Cost Estimating and Assessment Guide,

the government estimate is used to document the government’s assessment of the 

program’s most probable cost and ensures that enough funds are available to execute it.
Page 17 GAO-17-29 Joint Intelligence Analysis Complex

of a high-quality, reliable estimate, the Air Force will not be providing 

comprehensive and high-quality information for decision makers to use.25

After its 2013 decision to consolidate the JIAC at RAF Croughton, DOD 

conducted multiple reviews to provide information on Lajes Field as a 

potential alternative location for the JIAC, in response to congressional 

interest and inquiries. These reviews were developed by different 

organizations within DOD during 2015 and 2016 and included both onetime and recurring costs. The reviews produced different cost estimates, 

in particular for communications infrastructure and housing, because the 

DOD organizations that developed the reviews used different 

assumptions. However, all of the reviews found that consolidating the 

JIAC at Lajes Field would be more costly than consolidating it at RAF 

Croughton. Additionally, in response to statutory requirements, DOD 

issued a memorandum certifying that the department had determined that 

RAF Croughton was the optimal location for the JIAC and, conversely,

that Lajes Field was not the optimal location, given the JIAC’s operational 

requirements.

From 2015 through 2016, DOD conducted multiple reviews of Lajes Field 

as a potential location for the JIAC, in response to congressional interest 

and inquiries. Lajes Field was not originally included in DOD’s analysis of 

alternatives for the consolidation of the JIAC. DOD officials told us that 

the reviews of 2015 and 2016 were not conducted with the same level of 

rigor as a formal cost estimate, because DOD had already completed its 

analysis of alternatives, and the decision to consolidate JIAC at RAF 

Croughton had already been made. DOD officials also told us that no 

credible new evidence had been produced to indicate the department 

should revisit its initial decision. Figure 1 includes the key events and 

reviews related to DOD’s analysis of the JIAC, including reviews related 

to Lajes Field, the European Infrastructure Consolidation study, JIAC 

consolidation, authorization, and appropriations, and the execution of the 

JIAC consolidation project.

 25We are conducting a separate review of DOD’s cost estimating processes for military 

construction. The ongoing review will further explore any discrepancies between DOD’s 

processes for military construction cost estimating and our best practices for cost 

estimating. As the review is completed in 2017, we will consider any potential 

recommendations to improve the incorporation of our best practices into DOD’s military 

construction cost estimating process.

DOD Conducted 

Multiple Reviews of 

Lajes Field as a 

Possible JIAC 

Location

DOD Has Conducted 

Multiple Reviews of Lajes 

Field as a Possible 

Location for the JIAC
Page 18 GAO-17-29 Joint Intelligence Analysis Complex

Figure 1: Key Events and Reviews Related to the Department of Defense’s (DOD) Analysis of the Joint Intelligence Analysis 

Complex (JIAC)

According to officials from the Office of the Secretary of Defense, DOD 

did not alter or change its original decision to consolidate the JIAC at RAF 
Page 19 GAO-17-29 Joint Intelligence Analysis Complex

Croughton based on the results of these reviews and found that 

consolidating the JIAC at Lajes Field would be more costly than 

consolidating it at RAF Croughton.26 Additionally, according to the Deputy 

Secretary of Defense, DOD’s reviews determined that Lajes Field was not 

a suitable location for the JIAC, based both on operational requirements 

and costs including housing availability and the lack of adequate secure 

communications infrastructure.27 These reviews were led by EUCOM,

CAPE, and DISA.

• EUCOM’s September 2015 review. EUCOM developed an analysis 

comparing RAF Croughton with Lajes Field as potential locations for 

the JIAC. EUCOM officials told us that this review was in response to 

congressional interest and requests, and it included inputs from U.S. 

Air Forces Europe and officials at Lajes Field. The review compared 

cost estimates associated with locating JIAC at RAF Croughton with 

those associated with locating it at Lajes Field. These cost estimates 

included one-time costs, such as construction costs for the JIAC 

facilities, communications infrastructure, and housing, as well as 

recurring costs—including sustainment costs for base and 

communications infrastructure. The review estimated the one-time 

costs associated with locating the JIAC at RAF Croughton at $357 

million and the one-time costs associated with locating it at Lajes Field 

at $1.65 billion. For recurring costs, the review estimated that RAF 

Croughton would cost approximately $68 million annually and Lajes 

Field approximately $94 million annually.28 The largest differences 

between the cost estimates were in the one-time costs for the 

communications and housing infrastructure necessary to support the 

JIAC. Officials from the Office of the Secretary of Defense told us that 

DOD had provided this review, with its appendixes, to the House and 

 26For example, a EUCOM review concluded that Lajes Field does not have a sufficient 

footprint to accommodate the JIAC and its accompanying support functions, and therefore 

did not recommend altering the original decision to consolidate the JIAC at RAF 

Croughton. 

27DOD, Deputy Secretary of Defense Letter to The Honorable Devin Nunes, Chairman, 

House Permanent Select Committee on Intelligence (Sept. 1, 2016). 

28EUCOM did not include $32.7 million in sustainment costs for the communications 

infrastructure in its study’s recurring cost summary table but did include estimates for 

those costs in the DIA appendix. 

Additionally, DOD officials explained that the department plans to save an estimated $74 

million annually by closing RAF Alconbury and RAF Molesworth installations. EUCOM 

officials said that their review does not incorporate the cost savings associated with these 

closings under the European Infrastructure Consolidation scenario.
Page 20 GAO-17-29 Joint Intelligence Analysis Complex

Senate Armed Services Committees and the House and Senate 

Appropriations Committees in September 2015.

This review included two appendixes developed by DISA and DIA on the 

communications infrastructure needed to support the JIAC. DISA’s July 

2015 Azores Telecommunications Feasibility Report provided an analysis 

of the telecommunications infrastructure on the Azores Islands. This 

report indicated that the Azores did not have sufficient communications 

infrastructure to be a feasible location for a DISA telecommunications 

hub. The DIA Azores Communications Cost Estimate provided a brief 

summary on the current and proposed communications systems within 

the Azores Islands, as well as the costs associated with modernizing the 

systems. The appendix noted that it was developed in response to a 

request from the DIA Office of Congressional Affairs. For communications 

infrastructure, the DIA estimated that locating the JIAC at Lajes Field 

would require approximately $449 million in one-time costs and $32.7 

million in recurring annual sustainment costs.

• CAPE’s April 2016 cost verification for the JIAC. CAPE conducted an 

independent review of the cost estimates presented in EUCOM’s 

September 2015 review and those developed by the House 

Permanent Select Committee on Intelligence for its July 2015 

review.29 CAPE developed its own cost assumptions, which included 

housing and communications infrastructure costs, among other things, 

in its review of the cost calculations in the EUCOM and House 

Permanent Select Committee on Intelligence reviews, which produced 

alternative cost totals.30 CAPE officials told us that this review was in 

response to direction from the Deputy Secretary of Defense and that 

they briefed this review to the House Permanent Select Committee on 

Intelligence in May 2016 and the House and Senate Armed Services 

Committees in April 2016. CAPE’s review estimated the one-time 

costs associated with locating the JIAC at RAF Croughton at $356 

million and one-time costs associated with locating it at Lajes Field at 

$1.43 billion (compared with EUCOM’s estimates of $357 million and 

$1.65 billion respectively). For recurring costs, CAPE’s review 

 29The staff of the House Permanent Select Committee on Intelligence conducted an 

evaluation of DOD’s decision to consolidate the JIAC at RAF Croughton and developed a 

business case analysis. 

30CAPE officials told us that their objective was to identify reasonable cost assumptions 

and that they did not seek to validate or dismiss the assumptions in the reports conducted 

by EUCOM and the House Permanent Select Committee on Intelligence. Additionally, 

according to CAPE officials, they did not independently validate or verify these numbers. 
Page 21 GAO-17-29 Joint Intelligence Analysis Complex

estimated that RAF Croughton would cost approximately $53 million 

annually and Lajes Field approximately $59 million annually 

(compared with EUCOM’s estimates of $68 million and $94 million, 

respectively).

• DISA’s May 2016 review on the JIAC communications infrastructure 

requirements. In this update to its July 2015 review, DISA assessed 

and compared the communications infrastructures at RAF Croughton 

and Lajes Field with the intelligence mission support requirements, 

including the communications and technical requirements for the 

JIAC. DISA officials told us that this review included more refined cost 

estimates for the communications infrastructure than prior estimates 

and reflected new technical standards, such as operational bandwidth 

requirements. The review found that the communications 

infrastructure at Lajes Field did not meet technical and critical 

infrastructure requirements. To upgrade the communications 

infrastructure at Lajes Field, the review estimated a minimum of 

$267.7 million in one-time costs to procure and install three undersea 

cables and $6.8 million in annual sustainment costs. For locating the 

JIAC at RAF Croughton, the review determined that no procurement 

would be required and estimated sustainment costs for the 

communications infrastructure at $5.5 million annually.31 DOD officials 

told us that they briefed the results of this review to the House Armed 

Services Committee in September 2016.

DOD’s multiple reviews of Lajes Field as an alternative location for the 

JIAC produced different cost estimates, because these reviews relied on 

different assumptions in developing the cost estimates for 

communications infrastructure and housing.

DOD’s multiple reviews provide different cost estimates for the 

communications infrastructure that would be needed to support the JIAC 

at Lajes Field, because the reviews relied on different assumptions. 

Specifically, the reviews varied in the costs they included and the number 

of annual fiber cable breaks they expected would occur, among other 

 31According to EUCOM officials, the existing communications infrastructure at RAF 

Croughton meets the operational needs of the JIAC.

DOD’s Multiple Reviews of 

Lajes Field Produced 

Different Cost Estimates 

Because They Were 

Based on Different 

Assumptions

Assumptions for 

Communications Infrastructure 

Costs Differed
Page 22 GAO-17-29 Joint Intelligence Analysis Complex

details. The three reviews all assumed that three new fiber cables would 

be needed for Lajes Field. However, the distribution of these fiber cables 

differs in the reviews. Specifically, the September 2015 EUCOM review 

and the May 2016 DISA review assume one fiber cable from Lajes Field 

to mainland Portugal, one fiber cable to the United Kingdom, and one 

fiber cable to the United States, while the April 2016 CAPE review 

assumes two fiber cables from Lajes Field to the United States and one 

fiber cable to the United Kingdom. DOD officials told us that the cable 

distribution cited in the September 2015 EUCOM and the May 2016 DISA 

reviews reflect the current JIAC operational requirements, based on a 

May-June 2015 DIA operational assessment and that the CAPE review 

reflects a different JIAC operational design. Officials from DIA said that 

this change in operational requirements was made in various discussion 

sessions conducted among subject matter experts, and that the decision 

was not documented. Figure 2 shows the current cable configuration at 

Lajes Field and the new cables that would be necessary based on the 

September 2015 EUCOM review, the May 2016 DISA review, and the 

April 2016 CAPE review.

Figure 2: Lajes Field Current Undersea Cable Configuration and Options for New 

Undersea Cables to Support the Joint Intelligence Analysis Complex

Note: Option 1 refers to the new cables that would be needed based on the April 2016 Office of the 

Secretary of Defense Cost Assessment and Program Evaluation review. Option 2 refers to the new 

cables that would be needed based on the September 2015 U.S. European Command review and the 

May 2016 Defense Information Systems Agency review.
Page 23 GAO-17-29 Joint Intelligence Analysis Complex

The May 2016 DISA review had the lowest estimate for communications 

costs of the three reviews. DISA officials told us that these cost estimates 

were deliberately built on assumptions that would generate the lowest 

possible costs. However, DOD officials told us that DISA has not been 

able to validate all of its assumptions. Table 3 shows the cost estimates 

and supporting assumptions included in DOD’s multiple reviews for 

communications infrastructure associated with locating the JIAC at Lajes 

Field.

Table 3: Cost Estimates and Supporting Assumptions for Communications Infrastructure Associated with Locating the Joint 

Intelligence Analysis Complex (JIAC) at Lajes Field in Department of Defense (DOD) Reviews

September 2015 U.S. 

European Command 

(EUCOM) Reviewa

April 2016 Cost Assessment 

and Program Evaluation 

(CAPE) Reviewb

May 2016 Defense 

Information Systems Agency 

(DISA) Review

One-time costs for communications 

infrastructure

$449 million $408 million $288.7 million

Recurring costs for 

communications infrastructure 

$32.7 million $10.8 million $6.8 million

Assumptions about fiber cables 

from Lajes Field

Three cables needed: one to 

the United States, one to the 

United Kingdom, and one to 

mainland Portugal 

Three cables needed: two to 

the United States, and one to 

the United Kingdom

Three cables needed: one to 

the United States, one to the 

United Kingdom, and one to 

mainland Portugal

Assumptions about annual fiber 

cable breaksc 9 cable breaks per year 1 cable break per year 1 cable break per year

Source: GAO analysis of DOD information. I GAO-17-29

a

EUCOM’s estimates were derived from the Defense Intelligence Agency (DIA) information appendix 

included in the September 2015 EUCOM review.

b

CAPE’s estimates were derived from a prior DISA estimate.

c

EUCOM based its assumption on the DIA appendix. DISA officials told us their review used 

assumptions that would generate the lowest possible costs. The CAPE review used a DISA estimate.

Appendix II contains additional information on the requirements for the 

communications capabilities related to the JIAC.

Two of DOD’s reviews provided cost estimates for the housing needed to 

support the JIAC at Lajes, but the estimates were based on different 

assumptions. Specifically, EUCOM estimated the one-time housing costs 

for locating the JIAC at Lajes Field at $390.5 million, while CAPE 

estimated these costs at $188 million. EUCOM’s review assumed that 

1,031 new housing units would be needed on the base at Lajes Field, and 

CAPE’s review assumed that as few as 385 new units would be needed 

on base. Additionally, EUCOM’s estimate assumes that there would be a 

252-person dorm unit shortfall for unaccompanied military personnel, and 

Assumptions for Housing 

Costs Differed
Page 24 GAO-17-29 Joint Intelligence Analysis Complex

CAPE assumed a shortfall of 368 dorm units. Table 4 shows the two cost 

estimates for the housing and the assumptions that each review used.

Table 4: Cost Estimates for Housing Associated with Locating the Joint Intelligence Analysis Complex at Lajes Field 

September 2015 U.S. European 

Command (EUCOM) Review

April 2016 Office of the Secretary of 

Defense Cost Assessment and 

Program Evaluation (CAPE) Review

One-time costs for on-base housing $390.5 million $188.0 million

Recurring costs for on- and off-base housing $7.0 million $7.9 million

Total housing units required 1,812a 1,260

Existing housing units on base 456 550b

Existing and expected family housing units off 

base

325 325

Total new housing needed on base 1,031 385

Total shortfall in dorm units for 

unaccompanied military personnel 

252c 368

Source: GAO analysis of DOD information. | GAO-17-29

a

EUCOM’s figures for total housing units required also include housing units for 204 unaccompanied 

civilians.

b

CAPE’s review assumed 550 existing on-base housing units, based on the House Permanent Select 

Intelligence Committee’s 2015 review. According to CAPE officials, they did not independently 

validate or verify these numbers.

c

EUCOM did not include the dorm unit shortfall in its estimate of total housing needed on base.

EUCOM and CAPE used different assumptions when developing their 

cost estimates for the number of housing units needed to support the 

JIAC at Lajes Field. Specifically, EUCOM reported that 1,812 housing

units were needed to support the JIAC and that those units would include 

not only housing for the accompanied personnel working at the JIAC 

(around 1,200 personnel) but also housing units for the additional base 

operations and support personnel to support the JIAC (around 330 

personnel) and personnel associated with the reversal of the personnel 

streamlining initiative at Lajes Field (around 751 personnel).32 EUCOM 

determined its estimate for accompanied housing units required for the 

 32In 2012, the Secretary of Defense approved the plan to streamline and reduce 

personnel and operations at Lajes Field. According to the Secretary of Defense, the 

presence at Lajes Field exceeded its requirements and that a smaller force could support 

its current requirements. As a result, approximately 500 U.S. military and civilian billets 

would be divested, which would leave approximately 168 U.S. personnel at Lajes Field. 

According to Air Force officials, DOD has begun the streamlining of Lajes Field personnel 

and facilities and expects it to be completed by the end of 2016. 
Page 25 GAO-17-29 Joint Intelligence Analysis Complex

JIAC at Lajes Field by using Air Force personnel standards and JIAC 

planning factors.33 On the other hand, CAPE’s estimates assumed that 

1,260 accompanied housing units would be needed, that dorm units 

would be used, and unaccompanied civilians would live off base to 

minimize the effect on military family housing. A factor in the difference 

between EUCOM’s and CAPE’s housing cost estimates is the addition of 

751 personnel (resulting in a need for 451 additional accompanied 

housing units) that EUCOM included in its cost estimate when the Lajes 

personnel streamlining initiative was reversed. CAPE officials told us that 

their estimate did not assume that reversing the personnel streamlining 

initiative would result in the addition of so many personnel, and that 

therefore there would be a reduced need for additional housing.34

However, CAPE assumed that more base operations and support 

personnel would be needed (CAPE assumed that 500 support personnel 

would be needed, while EUCOM assumed 330) to support the JIAC at 

Lajes Field.35

Both reviews also provided housing estimates for unaccompanied military 

personnel. EUCOM’s review assumed that 469 unaccompanied military 

 33Specifically, EUCOM’s review used the Air Force personnel standards to account for 

historical averages and JIAC planning factors to account for the make-up and grade 

structure of JIAC personnel and multiplied the number of accompanied personnel by the 

respective Air Force standard planning factor and the JIAC non-standard planning factor 

to determine the amount of housing units needed. EUCOM officials stated that the typical 

Air Force standard planning factor of 60 percent was used, because it is the historical 

percentage of accompanied personnel and was applied to the estimate for the personnel 

associated with the JIAC to determine the number of housing units that were needed to 

support base operations and support personnel and for personnel that were needed as a 

result of the reversal of the personnel streamlining efforts. Additionally, EUCOM officials 

stated that an 80 percent non-standard planning factor was applied to the estimate for 

personnel associated with the JIAC and that the typical Air Force standard planning factor 

of 60 percent was not used because JIAC personnel are usually more senior officers and 

would likely require more military family housing than a typical Air Force mission and 

organization.

34CAPE reported that it did not assume that the Lajes streamlining initiative would be fully 

reversed, and that the increase in base operations and support personnel alone would 

have been sufficient to support the JIAC personnel increase. Officials from CAPE told us 

that fully reversing the streamlining initiative and increasing personnel to pre-streamlining 

levels would require adding facilities and personnel that could not be validated as 

necessary to support the JIAC. However, a CAPE official told us that its increase of base 

operations and support personnel would constitute a partial reversal of the Lajes 

streamlining efforts. 

35Air Force officials told us that additional base operations and support personnel would 

be needed at Lajes Field to support the JIAC security requirements, such as perimeter 

building defense. 
Page 26 GAO-17-29 Joint Intelligence Analysis Complex

personnel would reside in the existing 217 dorm spaces at Lajes Field, 

and there would be a shortfall of 252 dorm spaces (32 of those dorm units 

would be built using the JIAC military construction funds and the other 

220 units represent the shortfall).36 CAPE’s review assumed that 

unaccompanied military personnel would reside in the existing 217 dorm 

units at Lajes Field and that DOD would build two additional dorms (for 

168 and 200 personnel) to accommodate the unaccompanied military 

personnel.37 Additionally, EUCOM’s review assumed that 204 

unaccompanied civilians would live on base and CAPE’s review assumed 

that 91 unaccompanied civilians would live off base in small family 

housing.38

EUCOM’s review used the military family housing inventory of the U.S. Air 

Forces in Europe to determine the number of housing units on the base 

(456 housing units), while CAPE’s estimate assumes that there were 550 

housing units at Lajes Field. In July 2016, Air Force personnel at Lajes 

Field confirmed that there were 456 available housing units at Lajes 

Field.39 Also, both CAPE’s and EUCOM’s reviews used the January 2007 

Housing Requirements Market Analysis40 for Lajes Field to determine the 

number of housing units that were available for rent off base 

 36EUCOM did not include the costs associated with the 220 dorm-unit shortfall in their 

housing estimate. 

37According to CAPE officials, building two additional dorms would result in excess 

capacity for transient personnel. 

38EUCOM’s review used Air Force Instruction 32-6001, Family Housing Management to 

determine the number of housing units that were needed to support unaccompanied 

civilians. The instruction states that commanders may provide housing to eligible civilian 

employees under any one of the follow conditions: (1) the civilian employees are key and 

essential and living on base is a condition of employment; (2) when appropriate and 

adequate housing, support services and facilities do not exist and are not readily available 

off-base or cannot be used without restrictions; or (3) there is housing on base excess to 

the needs of military personnel assigned, attached, or in the area. 

39U.S. Air Forces in Europe officials told us that the total number of military family housing 

units at Lajes Field on Air Force real property records was 456 units. Additionally, 

according to Air Force officials, as part of DOD’s efforts to reduce personnel at Lajes Field 

in response to reduced mission demands, they have identified 350 housing units as 

excess and are in the process of returning those units to the Portuguese government. 

40The Housing Requirements Market Analysis is a structured analytical process that 

assesses both the suitability and the availability of the private sector’s rental market, 

assuming specific standards related to affordability, location, features, and physical 

conditions and the housing requirements of the installation’s total military population. 
Page 27 GAO-17-29 Joint Intelligence Analysis Complex

(approximately 229 housing units).41 However, according to information 

provided by Terceira’s municipalities, there are currently 1,693 houses in 

the Island of Terceira available for rent, and almost 400 were recently 

occupied by U.S. military personnel and their families. According to the 

2007 Housing Requirements and Market Analysis DOD conducted at 

Lajes Field, the Lajes rental market is separated into two areas—housing 

units that are specifically marketed to U.S. military personnel, have been 

inspected for suitability, and are listed in the Lajes Field housing rental 

database, and housing units that are part of the local rental market but 

not of sufficient quality and without the amenities required by U.S. military 

and civilian personnel.42 Further, EUCOM officials told us that the 1,693 

housing units available on the Island of Terceira may not all be suitable 

for U.S. military forces.43 Air Force officials told us that there were only 

225 rental properties in their off-base referral database.44 Both EUCOM’s 

and CAPE’s estimates assumed that there were 225 rental properties on 

the island and that another 100 would be built (for a total of 325) to 

support the personnel for the JIAC.

Both reviews assumed that no additional housing units would be 

necessary at RAF Croughton, based on the 2016 Housing Requirements 

Market Analysis for RAF Croughton.45 According to Air Force officials, 

past housing and United Kingdom basing trends indicate that personnel 

associated with the JIAC would live off base in the private rental market, 

and the private rental market could sufficiently absorb the housing needs 

 41Although the 2007 Housing Requirements and Market Analysis for Lajes Field listed 469 

units as being available off base, only half of these units (229) were deemed suitable for 

military families. 

42According to the analysis, although the Lajes local rental market is considered open to 

all rental housing demands, the local rental market does not contain rental housing units 

within market segments that the U.S. military and U.S. civilian personnel seek.

43The 2007 Housing Requirements and Market Analysis of Lajes states that suitability is a 

function of cost, number of bedrooms, proximity to the major work centers in the market 

area, health and safety concerns, construction quality, and environmental factors. The 

analysis stated that, in 2006, about 36 percent of the units around Lajes Field were 

unsuitable.

44According to Air Force officials, the Lajes Field off-base housing database was no longer 

needed and was dissolved during the personnel streamlining initiative that reduced the 

personnel on base. 

45This Housing Requirements and Market Analysis for RAF Croughton, United Kingdom, 

assesses the ability of the private sector housing market to meet the needs of military 

families and unaccompanied personnel. 
Page 28 GAO-17-29 Joint Intelligence Analysis Complex

of the JIAC personnel. Further, EUCOM reported that the United Kingdom 

had the capacity to absorb the number of personnel associated with the 

JIAC move and that they would not need to build additional military family 

housing at RAF Croughton. The 2016 Housing Requirements Market 

Analysis for RAF Croughton reported that the private rental market was 

very active, that there was a total private rental stock of 69,364 rental 

units, and that the housing supply was projected to grow to 72,905 units 

by 2020.46

In addition to its multiple reviews, DOD issued a memorandum in March 

2016 stating that the department had determined that RAF Croughton 

remained the optimal location for the JIAC and that Lajes Air Field is not 

an optimal location for the JIAC. Specifically, the Deputy Secretary of 

Defense issued a memorandum in response to several requirements in 

Section 2310 of the National Defense Authorization Act for Fiscal Year 

2016;47 House Report 114-144 accompanying HR 2596, the Intelligence 

Authorization Act for Fiscal Year 2016; and Section 8114 of the DOD 

Appropriations Act for Fiscal Year 2016 (division C).48 The memorandum 

states that DOD’s decision was based on an analysis of U.S. operational 

requirements and an evaluation of multiple locations using five criteria: 

effect on intelligence operations (critical criterion); impact on bilateral and 

multinational intelligence collaboration (critical criterion); impact on 

international agreements and relationships; impact on community quality 

of life; and business case analysis.49 According to officials from the Office 

of the Secretary of Defense, DOD reviewed existing analysis and did not 

conduct new in-depth analysis to support the certification memorandum. 

The analysis DOD used to support the memorandum was based on the 

original analysis of alternatives process that DOD developed for the JIAC 

consolidation—which did not include Lajes Field as an alternative 

 46The Housing Market Area is normally defined as the greater of a one-hour commute or 

20-mile drive originating from the installation’s headquarters building during peak traffic in 

privately owned vehicles assuming normal weather conditions.

47Pub. L. No. 114-92, § 2310(a) (2015).

48Pub. L. No. 114-113, § 8114 (2015). In addition, in response to House Report 114-144, 

DIA appointed a point of contact for the congressional intelligence committees to further 

direct inquiries concerning JIAC consolidation to appropriate DOD offices.

49On September 1, 2016, the Deputy Secretary of Defense also issued a letter to the 

House Permanent Select Committee on Intelligence reaffirming the decision to locate the 

JIAC at RAF Croughton. 

DOD Responded to 

Statutory Requirements by 

Certifying that RAF 

Croughton is the Optimal 

Location for the JIAC
Page 29 GAO-17-29 Joint Intelligence Analysis Complex

location—and on subsequent comparisons of Lajes Field and RAF 

Croughton. The officials stated that no additional in-depth analysis was 

warranted because no credible new evidence had been produced to 

indicate the department should revisit its initial decision.

To address costly sustainment challenges and instances of degraded 

theater intelligence capabilities associated with the current JIAC facilities 

at RAF Molesworth, DOD plans to spend almost $240 million for the Air 

Force to consolidate and relocate the JIAC’s facilities at RAF Croughton. 

However, the Air Force’s cost estimate did not fully meet cost estimating 

best practices that are intended, when followed, to produce high-quality, 

reliable estimates. For example, the JIAC cost estimate included only 

MILCON costs and did not include costs associated with the life cycle of 

the project. Without fully accounting for life-cycle costs, management may 

have difficulty successfully planning and programming resource 

requirements for the JIAC consolidation and making sound decisions. 

Furthermore, the JIAC cost estimate lacked a sensitivity analysis, which 

would assess the underlying risks and supporting data. Without 

identifying the effects of uncertainties associated with different 

assumptions for the JIAC consolidation project, there is an increased risk 

that decisions will be made without a clear understanding of these effects 

on costs. Unless DOD uses best practices as it prepares future cost 

estimates for the remaining design and construction phases of the JIAC 

consolidation project, decision makers will not receive complete and 

reliable information on the total anticipated costs for the JIAC 

consolidation efforts for which they need to conduct oversight and make 

informed funding decisions. Furthermore, addressing limitations in future 

JIAC cost estimates can provide DOD better information to predict costs 

and make informed decisions about the JIAC consolidation.

To better enable DOD to provide congressional decision makers with 

complete and reliable information on the total anticipated costs for the 

JIAC consolidation efforts, we recommend that the Office of the Assistant 

Secretary of Defense for Energy, Installations, and Environment’s Basing 

Office—in coordination with the Office of the Assistant Secretary of the Air 

Force Installations, Environment and Energy—update future construction 

cost estimates for consolidating the JIAC at RAF Croughton using best 

practices for cost estimating as identified in the GAO Cost Estimating and 

Assessment Guide. Specifically, cost estimates for the JIAC consolidation 

should fully incorporate all four characteristics of a high-quality, reliable 

estimate.

Conclusions

Recommendation for 

Executive Action
Page 30 GAO-17-29 Joint Intelligence Analysis Complex

We provided a draft of this report to DOD for review and comment. DOD 

provided written comments on our recommendation, which are reprinted 

in appendix III. The department also provided technical comments that we 

incorporated as appropriate.

In its written comments, DOD did not concur with our recommendation. 

DOD agreed that many components in the GAO Cost Estimating and 

Assessment Guide are broadly applicable in the decision process leading 

up to a military construction budget request. However, DOD further stated 

that once military construction funds are authorized and appropriated by 

Congress, the department transitions to a project management mode, 

and it would be a waste of resources to continue to generate cost 

estimates once they have transitioned to managing project execution 

using actual cost data. However, as we note in the report, DOD guidance 

for estimating construction costs, DOD’s Unified Facilities Criteria 3-740-

05, states that in the MILCON program, construction cost estimates are 

prepared throughout the planning, design, and construction phases of a 

construction project to account for the refinement of the project’s design 

and requirements. The final estimate should document the department’s 

assessment of the program's most probable cost and ensure that enough 

funds are available to execute it. As of October 2016, the military 

construction funds had not been authorized by Congress for the third 

phase of the JIAC construction project. According to DOD officials, 

construction is not scheduled to begin until fall of 2017, and the contract 

has not yet been awarded.

Further, the GAO Cost Estimating and Assessment Guide states that

regardless of whether changes to the program result from a major 

contract modification or an overtarget budget, the cost estimate should be 

regularly updated to reflect all changes. This is also a requirement 

outlined in OMB’s Capital Programming Guide. The purpose of updating 

the cost estimate is to check its accuracy, defend the estimate over time, 

and archive cost and technical data for use in future estimates. After the 

internal agency and congressional budgets are prepared and submitted, it 

is imperative that cost estimators continue to monitor the program to 

determine whether the preliminary information and assumptions remain 

relevant and accurate. Keeping the estimate updated gives decision 

makers accurate information for assessing alternative decisions. Cost 

estimates must also be updated whenever requirements change, and the 

results should be reconciled and recorded against the old estimate 

baseline. 

Agency Comments 

and Our Evaluation
Page 31 GAO-17-29 Joint Intelligence Analysis Complex

Therefore, we continue to believe that DOD’s implementation of our 

recommendation to update future JIAC cost estimates using the best 

practices identified in the GAO Cost Estimating and Assessment Guide 

would assist in ensuring that decision makers have complete and reliable 

information about costs associated with the JIAC consolidation and as the 

third phase of the JIAC project is authorized. Implementing our 

recommendation would also ensure that DOD develops a reliable 

historical record for the cost of the JIAC that can be used to estimate 

other similar projects in the future. 

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

date of this report. At that time, we will send copies of this report to the 

appropriate congressional committees and to the Secretaries of Defense, 

the Army, the Navy, and the Air Force; the Commandant of the Marine 

Corps; and the Assistant Secretary of Defense for Energy, Installations, 

and Environment. In addition, this report will be available at no charge on 

the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

me at (202) 512-4523 or leporeb@gao.gov. Contact points for our Offices 

of Congressional Relations and Public Affairs may be found on the last 

page of this report. GAO staff who made key contributions to this report 

are listed in appendix IV.

Brian J. Lepore

Director, Defense Capabilities and Management
Page 32 GAO-17-29 Joint Intelligence Analysis Complex

List of Requesters

The Honorable John McCain

Chairman

Committee on Armed Services

United States Senate

The Honorable Mark Kirk

Chairman

The Honorable Jon Tester

Ranking Member

Subcommittee on Military Construction, Veterans Affairs, and Related

Agencies

Committee on Appropriations

United States Senate

The Honorable Mac Thornberry

Chairman

Committee on Armed Services

House of Representatives

The Honorable Jason Chaffetz

Chairman

Committee on Oversight and Government Reform

House of Representatives

The Honorable Devin Nunes

Chairman

Permanent Select Committee on Intelligence

House of Representatives

The Honorable Rodney Frelinghuysen

Chairman

Subcommittee on Defense

Committee on Appropriations

House of Representatives
Appendix I: Assessment of the Air Force’s 

February 2015 Cost Estimate for the Joint 

Intelligence Analysis Complex

Page 33 GAO-17-29 Joint Intelligence Analysis Complex

According to the GAO Cost Estimating and Assessment Guide, a cost 

estimate is a critical element in any acquisition process to help decision 

makers evaluate resource requirements at milestones and other 

important decision points.1 Cost estimates establish and defend budgets 

and drive affordability analysis. The guide identifies four characteristics of 

a high-quality, reliable cost estimate: it is comprehensive, well 

documented, accurate, and credible. A cost estimate is considered

• comprehensive when it accounts for all possible costs associated with 

a project, details all cost-influencing ground rules and assumptions, is 

technically reasonable, is structured in sufficient detail to ensure that 

costs are neither omitted nor double-counted, and the estimating 

teams’ composition is commensurate with the assignment;

• well documented when supporting documentation for the estimate is 

accompanied by a narrative explaining the process, sources, and 

methods used to create the estimate and contains the underlying data 

used to develop the estimate;

• accurate when the estimate is neither overly conservative nor too 

optimistic and is based on an assessment of the costs most likely to 

be incurred; and

• credible when the estimate has been cross-checked with independent 

cost estimates, the level of confidence associated with the point 

estimate—the best guess at the cost estimate given the underlying 

data—has been identified, and a sensitivity analysis has been 

conducted. During the sensitivity analysis, the project will have 

examined the effect of changing one assumption related to each 

project activity while holding all other variables constant in order to 

identify which variable most affects the cost estimate.

Our analysis of the Air Force’s February 2015 cost estimate for the Joint 

Intelligence Analysis Complex (JIAC) showed that, when compared with 

best practices, it minimally met one and partially met three of the four 

characteristics of a reliable cost estimate (see table 1). According to the

GAO Cost Estimating and Assessment Guide, a cost estimate is 

considered reliable if the overall assessment ratings for each of the four 

characteristics are substantially or fully met.2 If any of the characteristics 

is not met, minimally met, or partially met, then the cost estimate does not 

 1

GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs, GAO-09-3SP (Washington D.C., March 2009).

2

GAO-09-3SP.

Appendix I: Assessment of the Air Force’s 

February 2015 Cost Estimate for the Joint 

Intelligence Analysis Complex
Appendix I: Assessment of the Air Force’s 

February 2015 Cost Estimate for the Joint 

Intelligence Analysis Complex

Page 34 GAO-17-29 Joint Intelligence Analysis Complex

fully reflect the characteristics of a high-quality estimate and cannot be 

considered reliable.

Table 5: GAO’s Assessment of the Air Force’s February 2015 Joint Intelligence Analysis Complex (JIAC) Cost Estimate 

Compared to Best Practices

Characteristic Related best practices for developing cost estimates

Detailed assessment of the February 2015 JIAC 

cost estimate

Comprehensive • The cost estimate includes all life-cycle costs, 

completely defines the program, reflects the current 

schedule, and is technically reasonable.

• The work breakdown structurea is product-oriented, 

traceable to the statement of work/objective, and at 

an appropriate level of detail to ensure that cost 

elements are neither omitted nor double-counted.

• All cost-influencing ground rules and assumptions 

are documented.

Partially Met

The cost estimate did not contain all life-cycle costs, 

because the Air Force did not consider it a life-cycle 

cost estimate. The Air Force’s military construction 

project development justification forms included a 

separate area for Operation and Maintenance costs for 

the JIAC once it is consolidated and developed by U.S. 

European Command (EUCOM). However, this estimate 

did not specify the time range for the Operation and 

Maintenance costs, and there were differences in the 

appropriations in the EUCOM estimate compared to the 

costs reported in the Air Force’s military construction 

project development justification forms.

The cost estimate provided a high-level work 

breakdown structure, since the program is just starting 

its design phase. However, the estimate did not define 

the individual elements of the work breakdown 

structure. Without defining these elements, the 

estimate’s structure and consistency cannot be 

ensured. The estimate’s assumptions as described by 

the Air Force are reasonable; however, the 

requirements document contained only a few ground 

rules and assumptions. Furthermore, the requirements 

document was developed in concert with the cost 

estimate, so it would not reflect any updates made to 

the cost estimate that may have occurred during its 

development. It also implies that decision makers did 

not have time to approve and review the ground rules 

and assumptions contained in the requirements 

document prior to the estimate’s submission.

Well documented • The documentation should capture the source data 

used, the reliability of the data, and how the data 

were normalized.

• The documentation describes in sufficient detail the 

calculations performed and the estimating 

methodology used to derive each element’s cost.

• The documentation describes step by step how the 

estimate was developed, so that a cost analyst 

unfamiliar with the program could understand what 

was done and replicate it.

• The documentation discusses the description of the 

technical baseline, and the data in the baseline are 

consistent with the estimate.

Partially Met

The documentation contained the source data used 

and showed how these data generated the cost 

estimate, but the sufficient documentation did not 

describe, step by step, how to re-create the estimate. 

However, the cost estimate did not have any errors and 

was relatively consistent with the requirements 

document. Management has approved the estimate.
Appendix I: Assessment of the Air Force’s 

February 2015 Cost Estimate for the Joint 

Intelligence Analysis Complex

Page 35 GAO-17-29 Joint Intelligence Analysis Complex

Characteristic Related best practices for developing cost estimates

Detailed assessment of the February 2015 JIAC 

cost estimate

• The documentation provides evidence that the cost 

estimate was reviewed and accepted by 

management

Accurate • The cost estimate results are unbiased, not overly 

conservative or optimistic, and based on an 

assessment of the most likely costs.

• The cost estimate has been adjusted properly for 

inflation.

• The cost estimate contains few, if any, minor 

mistakes.

• The cost estimate is regularly updated to reflect 

significant changes in the program so that it is 

always reflecting current status.

• Variances between planned and actual costs are 

documented, explained, and reviewed.

• The cost estimate is based on a historical record of 

cost estimating and actual experiences from other 

comparable programs.

Partially Met

A confidence level associated with the estimate was 

not determined, so the results may not be unbiased. 

The cost estimate was updated, but it was not updated 

regularly. The cost estimate was adjusted for inflation 

and was based on historical information.

Credible • The cost estimate includes a sensitivity analysis that 

identifies a range of possible costs based on 

varying major assumptions, parameters, and data 

inputs.

• A risk and uncertainty analysis was conducted that 

quantified the imperfectly understood risks and 

identified the effects of changing key cost driver 

assumptions and factors.

• Major cost elements were cross checked to see 

whether results were similar.

• An independent cost estimate was conducted by a 

group outside the acquiring organization to 

determine whether other estimating methods 

produced similar results.

Minimally Met

While the JIAC estimates provided contingency factors 

in line with Air Force MILCON cost estimating policy 

and guidance, they did not provide a quantifiable 

confidence level, sensitivity analysis, or independent 

cost estimate, as recommended in our best practices. 

Additionally, while MILCON cost-estimating policy 

requires several reviews to be performed on estimates, 

these were not done before the Air Force submitted the 

estimates in the Air Force budget request via its project 

development justification forms. 

Source: GAO Analysis of the Air Force’s February 2015 JIAC Cost Estimate | GAO-17-29

Notes: “Fully met” means that the agency provided complete evidence that satisfies the entire 

criterion. “Substantially met” means that the agency provided evidence that satisfies a large portion of 

the criterion. “Partially met” means that the agency provided evidence that satisfies about half of the 

criterion. “Minimally met” means that the agency provided evidence that satisfies a small portion of 

the criterion. “Not met” means that the agency provided evidence that does not satisfy any of the 

criterion.

a

A work breakdown structure defines in detail the work necessary to accomplish program objectives.
Appendix II: Information on Communications 

Infrastructure Requirements for the Joint 

Intelligence Analysis Complex

Page 36 GAO-17-29 Joint Intelligence Analysis Complex

The May 2016 review by the Defense Information Systems Agency 

(DISA) discussed technical requirements and developed minimum 

standards for developing its cost estimates for communications 

infrastructure associated with locating the Joint Intelligence Analysis 

Complex (JIAC) at Lajes Field. The standards support the Department of 

Defense’s (DOD) position that locating the JIAC at Lajes Field would 

require the procurement and installation of three undersea cables. The 

DISA review stated that capabilities for global intelligence 

telecommunications at the JIAC must be secure, highly available, reliable, 

and redundant.1 The review also listed technical requirements based on 

these four characteristics, none of which—according to the review—the 

infrastructure at Lajes Field currently meets. One of these requirements is 

a critical infrastructure protection practice from the DOD Director of 

National Intelligence, which prohibits the use of communication paths that 

could result in denial of service or could compromise the integrity of 

information. The review characterizes DOD’s meeting this requirement at 

Lajes Field as a high risk, noting that non-DOD personnel from Huawei, a 

Chinese telecommunications company, could disconnect one fiber of the 

two-fiber ring at Lajes Field, which would eliminate the redundancy of the 

two cables and increase the risk that JIAC personnel would not be able to 

use the communications infrastructure to meet their operational 

requirements. The DISA review also listed a technical requirement that 

the communications infrastructure be able to operate at 56 gigabits per 

second, which the review noted is the minimum operational requirement 

for Non-classified Internet Protocol Router Network; Secret Internet 

Protocol Router Network; Joint Worldwide Intelligence Communications 

System; and voice, video, and data.2 According to the review, the current 

capabilities at Lajes Field do not meet this requirement. In comparison, 

 1

These four characteristics—secure, highly available, reliable, and redundant—are also 

discussed in special publications from the Department of Commerce’s National Institute of 

Standards and Technology (SP 800-53a, and SP 800-34). 

2

Non–classified Internet Protocol Router Network is the unclassified but sensitive network 

used to support unclassified Internet protocol data communications services for combat 

support applications to DOD, Joint Chiefs of Staff, military departments, and combatant 

commands. The Secret Internet Protocol Router Network is DOD’s largest interoperable 

command and control data network, supporting the global command and control system, 

the defense message system, collaborative planning, and numerous other classified 

warfighter applications. Joint Worldwide Intelligence Communications System, owned and 

operated by the Defense Intelligence Agency (DIA), is the Top Secret/Sensitive 

Compartmented Information component of the Defense Information Services Network that 

connects members of the DOD intelligence information systems community, the non–

Department of Defense intelligence information systems community, and the intelligence 

community. A gigabit is a unit of information equivalent to one billion bits. 

Appendix II: Information on Communications 

Infrastructure Requirements for the Joint 

Intelligence Analysis Complex
Appendix II: Information on Communications 

Infrastructure Requirements for the Joint 

Intelligence Analysis Complex

Page 37 GAO-17-29 Joint Intelligence Analysis Complex

the capacity at RAF Croughton allows for 800 gigabits per second, the 

capacity at U.S. Central Command also allows for 800 gigabits per 

second, and the capacity at U.S. Pacific Command allows for 100 gigabits 

per second. According to the review, DOD technical requirements also 

specify that the communications cables must be available at 99.999 

percent or higher, which equates to just a few minutes of downtime per 

year. As indicated by DISA in its review, this level of availability requires 

sufficient redundancy. The capabilities at Lajes Field do not meet this 

requirement, according to DISA’s review. DISA officials provided us data 

on the number of average fiber cable outages per week in 2015—6.8 

average outages per week for transatlantic cables and 4.4 average 

outages per week for Pacific cables. The frequency with which the cables 

experience outages highlights the need for redundancy in fiber cable 

routes. Without procuring and installing three undersea cables, Lajes 

Field would not have the availability, redundancy, capacity, and security 

necessary to house the JIAC.

The September 2015 review by U.S. European Command (EUCOM) also 

references standards; however, it did not discuss these standards in 

detail. Its appendix on communications infrastructure, developed by DIA,

says that the minimum threshold for fiber cables is two protected 

pathways to mainland Europe and one to the continental United States. 

Additionally—similar to the May 2016 DISA review—the EUCOM review 

indicated that three new undersea systems would have to be installed at 

Lajes Field to meet DOD requirements. DIA officials also told us that their 

assessment was based on DOD guidance and requirements, such as the 

Joint Intelligence Operations Center Enterprise Functional Requirements

document and the Chairman of the Joint Chiefs of Staff Instruction 

6211.02D Defense Information Systems Network (DISN) Responsibilities,

(Jan. 24, 2012).3

The review by the Office of Cost Assessment and Program Evaluation 

(CAPE) did not discuss requirements or standards for the

communications infrastructure, because it relied on DISA’s previous cost 

estimates. CAPE officials stated that they had deferred to DISA’s 

estimate, because DISA is the authoritative source for communications 

infrastructure design.

 3

DOD’s Joint Intelligence Operations Center Enterprise Functional Requirements lists the 

“ability to have secure communications and connectivity to coalition partner systems” as 

one of its capabilities. 
Appendix III: Comments from the Department 

of Defense

Page 38 GAO-17-29 Joint Intelligence Analysis Complex

Appendix III: Comments from the 

Department of Defense
Appendix IV: GAO Contact and Staff

Acknowledgments

Page 39 GAO-17-29 Joint Intelligence Analysis Complex

Brian Lepore, (202) 512-4523 or leporeb@gao.gov

In addition to the contact named above, Brian Mazanec (Assistant 

Director), Jennifer Andreone, Tracy Barnes, Jennifer Echard, Justin 

Fisher, Joanne Landesman, Jennifer Leotta, Amie Lesser, Jamilah Moon,

Carol Petersen, and Sam Wilson made key contributions to this report.

Appendix IV: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(100829)
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