Accessible Version

DEFENSE 

INFRASTRUCTURE

Energy Conservation 

Investment Program 

Needs Improved 

Reporting, 

Measurement, and 

Guidance

Report to Congressional Committees

January 2016

GAO-16-162

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-16-162, a report to 

congressional committees

January 2016

DEFENSE INFRASTRUCTURE

Energy Conservation Investment Program Needs 

Improved Reporting, Measurement, and Guidance 

Why GAO Did This Study

DOD established ECIP, which funds 

projects at military installations that are 

designed to conserve energy or water, 

generate electricity from renewable 

sources, promote energy security, or 

accomplish a combination of these 

goals. Senate Report 113-174 included 

a provision that GAO review energy 

savings from ECIP-funded projects. 

This report assesses the extent to 

which DOD has (1) reported 

anticipated returns on investment or 

reduced energy use from ECIP-funded 

projects; (2) found that completed 

ECIP projects have resulted in cost 

savings or lower energy use; and (3) 

developed and implemented a 

strategic vision for ECIP.

GAO obtained and analyzed the 

annual congressional notifications of 

the 441 proposed ECIP projects from 

fiscal years 2009 to 2015; analyzed 

applicable guidance, including DOD 

guidance from fiscal year 2011 for 

preparing ECIP proposals; developed, 

circulated, and analyzed a 

questionnaire to project managers; and 

analyzed project documentation to 

determine which contained attributes 

that formed part of DOD’s strategic 

vision.

What GAO Recommends

GAO recommends that DOD improve 

its reporting on anticipated ECIP 

savings; measure actual savings from 

ECIP projects; and review its goals and 

update guidance to best align projects 

with DOD’s strategic vision. DOD 

concurred or partially concurred with all 

of the recommendations. 

What GAO Found

The Department of Defense (DOD) collects information on how Energy 

Conservation Investment Program (ECIP) projects are expected to perform when 

operational, including anticipated returns on investment and energy or water 

savings. While DOD annually notifies congressional committees of proposed 

ECIP projects and includes some of this performance information with the 

notification, it does not do so consistently. In particular, for fiscal years 2009 

through 2015, DOD reported anticipated returns on investment for 79 percent of 

projects. However, it did not consistently update these data as projects were 

added and revised or report any information on expected energy or water 

savings. While DOD is not required by law or its own guidance to report this 

information, federal internal control standards provide guidance for 

communicating with external stakeholders information that may have a significant 

effect on an agency achieving its goals. However, DOD has not developed 

guidance to require reporting the additional performance information and thus 

congressional committees may not be able to assess the extent to which DOD 

expects to achieve ECIP program objectives.

Since fiscal year 2011, DOD has required the services to measure and verify the 

extent to which ECIP projects have realized their projected savings and energy 

efficiencies. However, of the 35 domestic projects that the services have started 

and reported as completed since that requirement was adopted, only 8 projects 

have resulted in documented savings or reduced energy use. Managers of the 

remaining projects either did not complete projects according to their original 

scope, or did not measure or verify cost savings or reduced energy use. 

Managers, with few exceptions, did not specifically budget for postcompletion 

measurement and verification costs in their project proposals. If the military 

services do not include these costs in project proposals, managers will be less 

likely to set aside resources needed for the measurement and verification actions 

necessary to determine whether projects realized anticipated benefits.

DOD developed guidance in fiscal year 2011 describing a strategic vision for the 

program where projects meet at least one of six attributes, such as fundamental 

performance improvements, that it described as “game-changing” (i.e., 

significant) benefits. However, about 80 percent of the ECIP-funded projects that 

GAO reviewed only anticipate benefits that DOD considers traditional rather than 

significant. DOD has not clarified how the military services and defense agencies 

should choose ECIP projects to best achieve DOD’s strategic vision. According 

to DOD officials, it is challenging to identify projects that align with DOD’s 

strategic vision and deliver the return on investment that DOD expects of $2 for 

every $1 invested. This challenge exists because significant projects also tend to 

be more expensive and therefore have a lower return on investment. If DOD 

does not review its strategic goals for ECIP and update guidance to clarify how 

its components should balance their portfolios among traditional and other 

projects, the department will be unable to meet its strategic vision for the 

program. 

View GAO-16-162. For more information, 

contact Brian J. Lepore at (202) 512-4523 or 

leporeb@gao.gov, or Frank Rusco at (202) 

512-3841 or ruscof@gao.gov. 
Letter 1

Page i GAO-16-162 DOD’s Energy Conservation Investment Program

Background 4

DOD Has Not Always Provided Congressional Committees with 

Information about ECIP Projects’ Anticipated Return on 

Investment or Reduced Energy and Water Use 10

DOD Has Not Consistently Verified Whether Completed ECIP 

Projects Have Resulted in Actual Cost Savings or Reduced 

Energy Use 14

DOD Has Developed a Strategic Vision for Energy Conservation, 

but Most of the Funded Projects Have Not Achieved Intended 

Benefits 19

Conclusions 26

Recommendations for Executive Action 27

Agency Comments and Our Evaluation 28

Appendix I: Scope and Methodology 32

Appendix II: Key Attributes of DOD’s “Game-Changing” Energy Conservation and Investment Program (ECIP) 

Projects 39

Appendix III: Comments from the Department of Defense 40

Appendix IV: GAO Contacts and Staff Acknowledgments 44

GAO Contacts 44

Staff Acknowledgments 44

Appendix V: Accessible Data 45

Agency Comment Letter 45

Data Tables 49

Related GAO Products 51

Table

Table 1: Key Attributes and Examples in Funded Projects 39

Data Table for Figure 2: Total DOD Energy Conservation 

Investment Projects (ECIP) and Projects with Return on 

Investment Omitted or not Updated for Congressional 

Committees, Fiscal years 2009 through 2015 49

Contents
Figures

Page ii GAO-16-162 DOD’s Energy Conservation Investment Program

Figure 1: Project Selection and Notification Process 7

Figure 2: Total DOD Energy Conservation Investment Projects 

(ECIP) and Projects with Return on Investment Omitted 

or not Updated for Congressional Committees, Fiscal 

years 2009 through 2015 12

Figure 3: Progression of Energy Conservation Investment 

Program Projects from 35 Reported 

Completed/Operational to 8 Documenting Full 

Measurement and Verification 15

Figure 4: Profile of Funded Energy Conservation Investment 

Program (ECIP) Projects 19

Figure 5: Solar Wall at Letterkenny Army Depot 22

Abbreviations

AT&L Acquisition, Technology and Logistics 

DOD Department of Defense

ECIP Energy Conservation Investment Program

FEMP Federal Energy Management Program

M&V measurement and verification

OSD Office of the Secretary of Defense

Recovery Act American Recovery and Reinvestment Act of 2009

SPIDERS smart power infrastructure demonstration for energy 

reliability and security
Page iii GAO-16-162 DOD’s Energy Conservation Investment Program

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Page 1 GAO-16-162 DOD’s Energy Conservation Investment Program

441 G St. N.W.

Washington, DC 20548

January 29, 2016

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 Charlie Dent

Chairman

The Honorable Sanford Bishop

Ranking Member

Subcommittee on Military Construction, Veterans Affairs, and Related 

Agencies

Committee on Appropriations

House of Representatives

The Department of Defense (DOD) is the largest energy consumer in the 

federal government, spending about $4 billion per year on energy for 

more than 500 installations and 500,000 buildings and structures. To help 

conserve energy at its installations, DOD, in fiscal year 1976, established 

the Energy Conservation Investment Program (ECIP), which funds 

projects every year through the defense-wide military construction 

appropriation. ECIP projects are designed to conserve electricity or water, 

generate electricity from renewable sources, promote energy security,1 or 

accomplish a combination of these goals. In fiscal year 2015, $160 million was 

provided for ECIP–$150 million for projects and $10 million for planning and 

 

1 Section 2924 of Title 10 of the United States Code defines a renewable energy source 

as electric energy generated from renewable sources, such as solar (including electricity), 

wind, biomass, landfill gas, ocean (including tidal, wave, current, and thermal), geothermal 

(including electricity and heat pumps), municipal solid waste, new hydroelectric generation 

capacity achieved from increased efficiency or additions of new capacity at an existing 

hydroelectric project, or thermal energy generated by any of the above. Section 2924 also 

defines energy security as having assured access to reliable supplies of energy and the 

ability to protect and deliver sufficient energy to meet mission- essential requirements. 

Letter
design–out of a total military construction budget authority of about $6.5 

billion.

The Office of the Secretary of Defense—through the Under Secretary of 

Defense for Acquisition, Technology and Logistics (AT&L) and the 

Assistant Secretary of Defense for Energy, Installations, and 

Environment—centrally manages ECIP and annually allocates project 

funding to the military services and defense agencies, collectively referred 

to as the “components.” The components submit project proposals to 

AT&L, which bases its funding decisions on factors such as projected 

cost savings, whether the project ranks as a high priority to a component, 

and the degree to which the project is expected to contribute to 

installations’ overall energy goals.

In Senate Report 113-174 to accompany a proposed bill for the Military 

Construction and Veterans Affairs, and Related Agencies Appropriations 

Act, 2015, the Appropriations Committee stated that it encouraged the 

transition of ECIP from funding small, rapid-payback projects, such as 

isolated heating, cooling and lighting efficiencies, to playing a central role 

in leveraging larger energy security and renewable energy projects. The 

committee urged DOD and the services to complete projects that would 

produce significant “game-changing” improvements to reduce carbon 

emissions, energy consumption, and energy costs, as well as projects to 

enhance installations’ energy security.

The committee report also included a provision for GAO to review 

realized energy savings associated with ECIP-funded projects. This 

report assesses the extent to which DOD has (1) reported anticipated 

returns on investment or reduced energy or water use from ECIP-funded 

projects; (2) found that completed ECIP projects have resulted in cost 

savings or lower energy use; and (3) developed and implemented a 

strategic vision for ECIP.

To determine the extent to which DOD has reported anticipated returns 

on investment or reduced energy use from ECIP-funded projects, we 

obtained and analyzed the annual notifications of the 441 proposed ECIP 

projects that DOD provided to congressional committees for fiscal years 

2009 through 2015, including projects funded by the American Recovery 

and Reinvestment Act of 2009, referred to hereafter as the Recovery Act.

Page 2 GAO-16-162 DOD’s Energy Conservation Investment Program

2

 

2

Pub. L. No. 111-5 (2009). 
These notifications included updates to projects included in prior year 

notifications. To verify the completeness and accuracy of these data, we 

compared them with a preliminary list of proposed ECIP projects in 

budget justification materials provided in support of the President’s annual 

budget request for fiscal years 2009 through 2015. We also performed 

logic checks and other analyses to identify, and in some cases correct, 

inconsistencies and other errors in the data. We verified our corrections 

and our compilation of projects with DOD. After making the corrections, 

we determined that the data were sufficiently reliable for the purpose of 

determining the extent that DOD reported returns on investment and 

reduced energy use from ECIP projects. We also obtained and reviewed 

DOD guidance on the criteria the department uses for funding ECIP 

projects and compared that to DOD data and other information on 

proposed projects. We also compared the level of information that DOD 

reports to Congress to the information and communications standard in 

the Standards for Internal Control in the Federal Government.

Page 3 GAO-16-162 DOD’s Energy Conservation Investment Program

3 Also, we 

interviewed AT&L officials and energy officials in the services’ headquarters.

To determine the extent to which DOD has found that completed ECIP 

projects have resulted in cost savings or lower energy use, we identified 

applicable guidance, including AT&L guidance for preparing ECIP project 

proposals issued for fiscal year 2011 and later. We began with fiscal year 

2011 because the annual ECIP guidance for fiscal year 2011 states that 

all projects should include a measurement and verification (M&V) plan to 

determine cost and energy savings. We then determined the 35 domestic 

ECIP projects that the military services had begun since AT&L issued its 

fiscal year 2011 guidance4and reported complete as of June 2015. We 

developed and circulated a uniform questionnaire to each of the project 

managers—all of whom responded—and we analyzed the results; we 

then followed up with respondents as needed. We reviewed documents, 

such as the projects’ military construction proposals, meter data, and 

records of incurred costs. Based on these documents, as well as project 

managers’ responses, we categorized the projects according to whether 

installations had realized cost or energy savings by (1) constructing 

 

3 GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999). 

4 We excluded overseas projects from our scope because varying national regulations may have

affected the time required for project completion, and we excluded defense agencies’ 

projects because the military services had most of the projects.
projects to the original scope and (2) developing and implementing 

measurement and verification plans, and documenting results.

To determine the extent to which DOD has developed and implemented a 

strategic vision for ECIP, we used the data that we compiled from DOD’s 

notifications to Congress to identify and review the military services’ 102 

domestic ECIP projects funded since fiscal year 2011, when DOD issued 

guidance to articulate its strategic vision. At the time of our review, DOD 

had not funded fiscal year 2015 projects. We analyzed documentation for 

each of these projects to determine which proposals contained any of the 

six attributes that DOD had identified as part of its strategic vision.

Page 4 GAO-16-162 DOD’s Energy Conservation Investment Program

5 We 

recorded the project document analysis into three categories: (1) projects 

that appeared to contain at least one of these attributes, (2) projects that 

did not appear to contain any of these attributes but were conventional 

military construction projects such as the installation of energy-efficient 

equipment, and (3) projects that received military construction funding but 

that we observed during the course of our review could potentially have 

been funded with operation and maintenance funds. Appendix I provides 

further information on our scope and methodology.

We conducted this performance audit from February 2015 to January 

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.

 

5These attributes include, for example: integrating multiple energy savings and technologies 

together in a creative, innovative, and productive manner; and dramatically changing the 

energy consumption at an individual or joint installation.

Background
Page 5 GAO-16-162 DOD’s Energy Conservation Investment Program

DOD Instruction 4170.11 provides that it is DOD policy6that installation 

energy management shall satisfy all goals and policies established by 

several provisions in statute related to conservation and renewable 

energy production, as well as a 2007 executive order. These goals and 

policies are as follows:

· The Energy Independence and Security Act of 2007,7 which amended a 

previous statutory goal to reduce energy usage in federal buildings. The new 

goal is to reduce energy usage by 30 percent by fiscal year 2015, 

relative to the fiscal year 2003 baseline.

· The Energy Policy Act of 2005,8 which directs the President, acting 

through the Secretary of Energy, to seek to ensure that, to the extent 

economically feasible and technically practicable, of the total amount of 

electric energy the federal government consumes during any fiscal 

year, the following amounts shall be renewable energy: (1) not less 

than 3 percent in fiscal years 2007 through 2009, (2) not less than 5 

percent in fiscal years 2010 through 2012, and (3) not less than 7.5 

percent in fiscal year 2013 and each fiscal year thereafter.

· Executive Order 13423, Strengthening Federal Environmental, 

Energy, and Transportation Management (Jan. 24, 2007), which 

directs the head of each agency to meet specific goals to boost 

energy efficiency and the use of renewable energy and to reduce 

 

6Department of Defense Instruction 4170.11, Installation Energy Management, (Dec. 11, 2009).

7

Pub. L. No. 110-140, § 431 (codified at 42 U.S.C. § 8253).

8

Pub. L. No. 109-58, § 203 (codified at 42 U.S.C. §15852).

DOD Guidance, Federal 

Laws, and an Executive 

Order Related to Energy 

and Water Conservation 

and Renewable Energy
greenhouse gas emissions and water consumption intensity, among 

other things.

Page 6 GAO-16-162 DOD’s Energy Conservation Investment Program

9

Additionally, the statutory provision that authorizes DOD to carry out ECIP 

projects also requires that the Secretary of Defense notify the appropriate 

committees of Congress prior to beginning an ECIP project, and DOD 

typically provides its ECIP notifications annually to Congress.

10

ECIP project proposals undergo a multistep selection process. AT&L 

initiates the process every year by issuing guidance that outlines its 

priorities; the components may provide supplementary guidance. The 

components then develop military construction proposals and life-cycle 

cost analyses based on this annual guidance. A military construction 

project is generally defined as including all military construction work 

necessary to produce a complete and usable facility or a complete and 

usable improvement to an existing facility.11 Among other things, an ECIP 

military construction proposal must estimate

 

9The goals are: (a) to improve energy efficiency and reduce greenhouse gas emissions of the 

agency, through reduction of energy intensity by (i) 3 percent annually through the end of fiscal 

year 2015, or (ii) 30 percent by the end of fiscal year 2015, relative to the baseline of the 

agency’s energy use in fiscal year 2003; (b) ensure that (i) at least half of the statutorily 

required renewable energy consumed by the agency in a fiscal year comes from new 

renewable sources, and (ii) to the extent feasible, the agency implements renewable 

energy generation projects on agency property for agency use; (c) beginning in fiscal year 

2008, reduce water consumption intensity, relative to the baseline of the agency’s water 

consumption in fiscal year 2007, through life-cycle cost-effective measures by 2 percent 

annually through the end of fiscal year 2015 or 16 percent by the end of fiscal year 2015. 

The executive order defines energy intensity as energy consumption per square foot of 

building space, including industrial or laboratory facilities, but does not separately define 

water intensity.

10Section 2914 of Title 10 of the United States Code authorizes the Secretary of Defense to carry 

out military construction projects for energy conservation, not previously authorized, using 

funds appropriated or otherwise made available for that purpose.

11See 10 U.S.C. § 2801 (b). Additionally 10 U.S.C. § 2801 (a) defines, military construction as 

any construction development, conversion, or extension of any kind carried out with 

respect to a military installation, whether to satisfy temporary or permanent requirements, 

or any acquisition of land or construction of a defense access road, and most military 

construction projects must be specifically authorized and funded by military construction 

appropriations, subject to certain exceptions. One exception is that minor military 

construction projects as defined in 10 U.S.C. § 2805 may be funded with operation and 

maintenance appropriations. Additionally, repairs or sustainment of facilities are also 

appropriately funded by operation and maintenance appropriations subject to limitations 

outlined in 10 U.S.C. § 2811.

ECIP Project Selection 

and Notification Process
· cost;

· payback, or number of years until the project recoups its costs; and

· savings-to-investment ratio, or return on investment. A return on 

investment of 2.0, for example, means that the completed project 

eventually realizes $2 in savings for every dollar spent.

Figure 1, below, depicts some major elements of the selection and 

notification process that begins once installation managers submit their 

proposals to their component headquarters (step 1).

Figure 1: Project Selection and Notification Process

Page 7 GAO-16-162 DOD’s Energy Conservation Investment Program

Engineering and installation management offices then further evaluate 

these proposals (step 2) and forward their choices to AT&L. AT&L selects 

as many of these proposals as DOD anticipates having budget authority 

to fund, according to criteria that may vary from year to year (step 3). For 

example, until fiscal year 2012, AT&L allocated project funding in 
proportion to the share of energy that each component consumed during 

the previous year.

AT&L then notifies Congress about the selected projects. Some projects 

first appear in the budget-justification materials that support the annual 

President’s budget request (step 4). Project design begins after DOD 

provides ECIP funding to the components, during which time DOD may 

determine that some projects are not feasible. Therefore, AT&L may 

cancel these projects and add others to replace them; these first appear 

in the formal ECIP notification to Congress (step 5). Since DOD 

sometimes cancels projects and adds others to replace them, the 

notification to Congress may not contain the same number of projects as 

appeared in budget-justification materials provided in support of the 

President’s annual budget request. Additionally, DOD may add or cancel 

projects, or modify the scope or cost of existing projects after the year in 

which the department first notifies Congress. These changes appear in 

annual updates that accompany initial notifications.

DOD and the services use several programs to accomplish energy 

conservation goals. ECIP is DOD’s primary source of directly 

appropriated military construction funding for energy conservation 

projects, but energy conservation features may be incorporated in other 

military construction projects, and the military services may also spend 

operation and maintenance

Page 8 GAO-16-162 DOD’s Energy Conservation Investment Program

12 funds on certain energy projects. For example, 

according to DOD, the department’s fiscal year 2015 budget request 

included approximately $500 million for direct investments in conservation 

and energy efficiency. Of this, the majority ($350 million) was funded in 

the military components’ operation and maintenance accounts, for 

sustainment and recapitalization projects. Such projects typically involve 

retrofits to incorporate improved lighting; high-efficiency heating, 

ventilation, and air conditioning systems; energy-efficient windows; 

energy management control systems; and new roofs. The remaining $150 

million was for ECIP projects.

DOD also uses alternative financing mechanisms to accomplish its 

energy conservation goals, for example, Energy Savings Performance 

 

12Operation and maintenance refers to a type of appropriation that funds a wide variety of 

costs, including maintenance, repair, minor construction projects, fuel, utility costs, and 

civilian compensation, among other things.

ECIP and Other Energy 

Conservation Programs
Contracts and Utility Energy Services Contracts. Under Energy Savings 

Performance Contracts, agencies use private funds to finance energy 

conservation measures. As part of these contracts, the agency and the 

contractor estimate the annual energy and cost savings expected from 

the energy conservation measures outlined in the contract and develop a 

plan to measure and verify that the savings are achieved over the life of 

the contract. Payments may be made only when the project is determined 

to be life-cycle cost-effective and when actual savings generated from the 

financed project exceed the payment amount in the same year. In a 

typical Utilities Energy Services Contract, a utility arranges funding to 

cover the capital costs of the project, which are repaid over the contract 

term from cost savings generated by the energy efficiency measures. In 

fiscal year 2014, DOD awarded about $336 million in Energy Savings 

Performance Contracts and about $37.8 million in Utilities Energy 

Services Contracts.

In June 2015, we reported on Energy Savings Performance Contracts.

Page 9 GAO-16-162 DOD’s Energy Conservation Investment Program

13

We reviewed selected agencies, including the Army, Navy, and Air Force, 

and found that the agencies awarded approximately $12.1 billion in fiscal 

years 1995 through 2014 and plan to continue using these contracts to 

help meet federal energy directives and initiatives. We found that cost 

and energy savings that contractors reported to agencies for most of 

these contracts met or exceeded expectations, but some of these savings 

may have been overstated. The seven agencies in our review had 

conducted limited oversight and evaluation of their Energy Savings 

Performance Contracts projects. We also provided information on the 

Department of Energy’s Federal Energy Management Program guidance, 

which outlines a range of options that contractors may select to measure 

and verify cost and energy savings. We made recommendations, with 

which DOD concurred or partially concurred, to improve oversight of 

projects funded through these contracts by means such as clearer 

reporting of savings, improved training, and systematic evaluations of 

portfolios. As of November 2015, DOD had not implemented our 

recommendations. A list of related GAO products is provided at the end of 

this report.

 

13 GAO, Energy Savings Performance Contracts: Additional Actions Needed to Improve 

Federal Oversight, GAO-15-432 (Washington, D.C.: June 17, 2015).

Prior GAO work
DOD is statutorily required to notify appropriate congressional committees 

of proposed ECIP projects prior to beginning the projects. DOD does this 

annually and includes information about the project, such as the cost and 

location of the project. Additionally, DOD sometimes modifies the scope 

or cost of projects, or cancels projects and replaces them with other 

projects, after it has notified the committees. DOD provides these updates 

about prior years’ projects with its annual notifications to the committees. 

While DOD has collected information on how projects are expected to 

perform, the department has not always reported to Congress relevant 

information about all ECIP projects, such as the anticipated return on 

investment or anticipated reduced energy and water use.

Page 10 GAO-16-162 DOD’s Energy Conservation Investment Program

14 Specifically, for 

fiscal years 2009 through 2015, DOD notified congressional committees of 441 

proposed ECIP projects, reporting anticipated returns on investment for 79 

percent of the projects, but not for the remaining projects. Also, none of the 

notifications included information on the projects’ anticipated energy or 

water savings, or the anticipated renewable energy production.

As part of its project selection process, DOD collects information on how 

projects are expected to perform when they become operational. 

Specifically, DOD’s annual guidance for proposing ECIP projects requires 

installations to calculate the projected return on investment. This is 

important in assessing the cost-effectiveness of individual projects in 

contributing to the program’s conservation and renewable energy goals 

and in assessing the long-term cost of the program. The guidance also 

requires installations to estimate projected energy or water savings, or 

renewable energy production. This information is important to assessing 

individual projects’ contribution to meeting ECIP’s conservation and 

renewable energy goals. Additionally, DOD has taken steps to require 

more detailed information on project modifications. According to annual 

guidance for proposing ECIP projects (effective for fiscal year 2015 

projects), installations are to recalculate the return on investment and reestimate energy or water savings or renewable energy production, as 

applicable, should there be a significant change in the cost, scope or 

 

14The anticipated return on investment is an estimate of the long-term cost-effectiveness of a 

proposed project developed by calculating the extent to which reduced future costs may 

offset initial costs.

DOD Has Not Always 

Provided 

Congressional 

Committees with 

Information about 

ECIP Projects’ 

Anticipated Return on 

Investment or 

Reduced Energy and 

Water Use

DOD Requires the 

Collection of Information 

on Anticipated Project 

Performance
other aspect of the project.

Page 11 GAO-16-162 DOD’s Energy Conservation Investment Program

15 Installations report updates to service 

headquarters, which in turn provide this information to AT&L.

Return on Investment—We found that for a majority of, but not all, 

projects, the department included information on anticipated return on 

investment in its congressional notifications. However, DOD did not report 

the anticipated return on investment or did not provide updates in 

subsequent notifications on the anticipated return on investment following 

scope or cost changes for about 21 percent (93 projects) of the 441 

proposed projects for which it notified the congressional committees from 

fiscal years 2009 through 2015. Of the 93 projects for which DOD omitted 

or did not update the return on investment, DOD omitted the return on 

investment when it initially notified congressional committees of 37 of 

these projects. These projects were added to replace canceled projects. 

DOD did not update the return on investment for 56 projects when it 

notified congressional committees of a cost revision. Of these 56 projects, 

42 projects had a cost revision greater than 25 percent and 14 projects 

had a cost revision of 25 percent or less, according to DOD.16 Figure 2 

illustrates the reporting status of ECIP projects, including detail on projects 

where anticipated return on investment was either not reported or not 

updated.

 

15The guidance does not specify what constitutes a significant change to the cost, scope or other 

aspect of the project. However, previous annual guidance required installations to notify the 

Office of the Deputy Under Secretary of Defense (Installations and Environment) if the 

cost estimate of an ECIP project changed by more than 25 percent or the scope 

decreased by 25 percent. 

16The size of the cost revision is an absolute value–thus, a cost revision of greater than 25 

percent could be an increase or a decrease to the cost of the project.

DOD Has Not Consistently 

Reported Anticipated 

Project Performance
Figure 2: Total DOD Energy Conservation Investment Projects (ECIP) and Projects 

Page 12 GAO-16-162 DOD’s Energy Conservation Investment Program

with Return on Investment Omitted or not Updated for Congressional Committees, 

Fiscal years 2009 through 2015

Energy or Water Savings—In its annual notifications to congressional 

committees for fiscal years 2009–2015, DOD did not include information 

on the anticipated reduction in energy or water use for conservation 

projects or anticipated energy production for renewable energy projects 

for any of the 441 projects it proposed to carry out.17

DOD does not consistently report to Congress the ECIP projects’ 

anticipated return on investment or energy or water conservation because 

neither statute nor DOD guidance requires reporting this information.

Specifically, DOD has not issued guidance to require reporting to 

congressional committees

· the anticipated return on investment of a project added to replace a 

canceled project;

· an update to the anticipated return on investment of a project when 

DOD notifies the committees of a significant change to the project’s 

cost or scope;

 

17Not all ECIP projects are designed to conserve energy or water or produce renewable energy; a 

small number are classified as energy security and are designed to mitigate electrical grid 

vulnerability. 
· the anticipated energy or water savings, or renewable energy 

production, of a project; and

· an update to the anticipated energy or water savings, or anticipated 

renewable energy production, of a project when DOD notifies the 

committees of a significant change to the project’s cost or scope.

Although DOD is not required by law or its own guidance to provide 

congressional committees with information on the anticipated 

performance of ECIP projects, the Standards for Internal Control in the 

Federal Government provide guidance for communicating with external 

stakeholders information that may have a significant effect on an agency 

achieving its goals.

Page 13 GAO-16-162 DOD’s Energy Conservation Investment Program

18 For ECIP, including performance information such as 

the anticipated energy or water savings, or renewable energy production 

about proposed ECIP projects as part of DOD’s notifications to 

congressional committees would constitute an effective practice. DOD 

officials also acknowledged that they collect and circulate within the 

department performance information on ECIP projects including the 

return on investment and energy and water savings. However, the 

officials told us that they were concerned that reporting this information to 

congressional committees risked stimulating unnecessarily detailed 

questions about individual projects, but stated that the information is 

available to congressional committees if they ask for it.

Without consistent information on the anticipated return on investment, 

and information on the anticipated energy or water savings, or renewable 

energy production, from proposed ECIP projects, congressional 

committees may not be able to assess the extent to which DOD expects 

to cost-effectively achieve ECIP program objectives. Moreover, DOD 

guidance provides that each component’s annual portfolio of proposed 

ECIP projects must have a return on investment of at least 1.25 and the 

components should strive to achieve an annual portfolio average of 2.0.19

Without consistent and current information on the anticipated return on 

investment for every project, DOD and congressional committees will not 

know whether DOD components expect their overall portfolios to meet the 

minimum return on investment established by DOD.

 

18GAO/AIMD-00-21.3.1. 

19A return on investment of 2.0, for example, means that the completed project eventually realizes 

$2 in savings for every dollar spent.
Our review of the 35 domestic ECIP projects that the military services had 

begun—and reported as completed–since AT&L issued its fiscal year 

2011 guidance to plan for measurement and verification found that DOD 

installation managers have measured and verified data demonstrating 

actual cost savings or reduced energy use for 8 of these projects. 

However, of the remaining 27 projects, 2 were not operational, and 

managers of 25 of the remaining completed projects did not verify cost 

savings or reduced energy use. Moreover, 12 of these 25 projects 

underwent a reduction in scope but 8 did not demonstrate a reduction in 

cost, and in 6 of these cases costs increased.

DOD’s Instruction 4170.11 states that ECIP funding should generally be 

applied only to projects that directly produce energy savings or cost 

reduction and that realized savings should not only be auditable, but the 

initial submission of proposed projects shall identify the method planned 

for savings verification.

Page 14 GAO-16-162 DOD’s Energy Conservation Investment Program

20 Additionally, AT&L guidance for fiscal year 2011 

for preparing ECIP project proposals directed the defense components to identify 

an M&V plan and maintain consistent and current M&V reports.21 Finally, 

federal standards for internal control state that activities need to be 

established to monitor performance measures and indicators.22

We found that 8 of the 35 ECIP projects that we reviewed documented 

full M&V. Of the initial 35, 2 projects were not operational and 12 had a 

reduced scope compared to their original proposal, and the military 

services reported that they either did not perform M&V or collect complete 

data for 13, leaving 8 for which the services reported and documented full 

M&V. Figure 3 below depicts the progression of projects according to 

completion and M&V status.

 

20Department of Defense Instruction 4170.11, Installation Energy Management (Dec. 11, 2009).

21Under Secretary of Defense for Acquisition, Technology and Logistics, “Submission of Projects 

for the FY 2011 Energy Conservation Investment Program Congressional Notification and 

FY2012 Budget Exhibit” (Dec. 23, 2010). 

22GAO/AIMD-00-21.3.1.

DOD Has Not 

Consistently Verified 

Whether Completed 

ECIP Projects Have 

Resulted in Actual 

Cost Savings or 

Reduced Energy Use
Figure 3: Progression of Energy Conservation Investment Program Projects from 35 Reported Completed/Operational to 8 

Page 15 GAO-16-162 DOD’s Energy Conservation Investment Program

Documenting Full Measurement and Verification

Of the 33 operational projects, the services constructed 12 at a reduced 

scope compared to the project proposals. For example, one proposal 

included a photovoltaic array23 as well as digital heating, ventilation, and air 

conditioning controls for three buildings. According to installation energy 

staff, the completed project included the digital controls but not the array 

because contractors returned bids with higher than expected costs. When 

contractors bid higher than expected, installation energy staff may reduce 

a project’s scope to keep costs within the proposed budget. According to 

the installation’s records, the final cost of this project was more than 

originally proposed when it included the array. Officials on another project 

installed upgrades to the heating, ventilation, and air conditioning systems 

in seven buildings at an installation. Installation managers provided 

documentation showing that six of the seven proposed buildings received 

upgrades but that the six-building project cost more than the sevenbuilding proposal. We did not classify these projects according to M&V 

status because the M&V plans were not all revised to reflect reduced 

scope and therefore might no longer accurately reflect the project as 

constructed.

 

23Photovoltaic arrays convert sunlight (solar energy) directly into electricity. This allows an 

installation to generate electricity to supplement purchases from an external provider.
Further, we found that installation energy staff for 13 of the 21 operational 

projects that were completed as proposed either partially documented 

that they had achieved cost savings or lower energy use (6 projects) or 

did not document savings at all (7 projects). For example:

· Partial M&V–Energy staff at one installation planned two ECIP 

projects with “daylighting” systems

Page 16 GAO-16-162 DOD’s Energy Conservation Investment Program

24 and photovoltaic arrays. Installation 

energy staff stated that they read meters installed with the arrays to measure 

the energy produced, but said that they did not perform M&V to confirm 

the effect of the daylighting systems because they did not have 

sufficient resources. Another project included energy efficiency 

upgrades for five buildings. Officials stated that two of the five 

buildings have electricity meters that installation staff used to measure 

cost savings and lower energy use. For the other three buildings, 

installation staff hired a contractor to create baseline and after-project 

energy models to estimate the project’s savings. However, installation 

staff did not update the after-project portion of the model and, 

therefore, cannot determine the savings for those three buildings.

· No M&V–One project included installing energy efficient lights, solar 

daylighting tubes, and a solar wall25 at an installation. However, the 

buildings are part of sensitive mission activities and access to them is 

restricted. Installation energy staff stated that they did not have 

access to the buildings so they did not collect baseline data or afterproject-completion data, and cannot verify the project cost savings or 

lower energy use. Another project included energy-efficient lights 

throughout a government-owned, contractor-operated installation. 

Although installation energy staff reported that they completed the 

project without issue, the staff did not include an M&V plan in the 

proposal, and have not performed M&V activities because the 

installation contract does not cover such activities.

Installation energy managers for 8 of the 21 operational projects that were 

completed as proposed reported that they measured and verified data to 

show that the projects achieved expected savings, and they provided 

 

24The installation describes the daylighting system as including skylights, replacement of 

high intensity discharge lights with fluorescent fixtures, and a smart lighting control system 

that adjusts lighting levels based on ambient sunlight in the space.

25 The solar wall system preheats colder outside air above 70 degrees and feeds it into a building, 

which reduces the amount of energy needed to heat the building. The solar walls are installed 

on the south-facing walls to maximize solar heat exposure. 
documentation that the projects achieved anticipated savings. For 

example, one project installed a photovoltaic array and energy-efficient 

lighting on the exterior of 14 buildings, interior of one building, and the 

perimeter of the installation. Installation energy staff collected data and 

documented that the project achieved the proposed savings. In a second 

example, project officials installed a ground-source heat pump to provide 

temperature control in a building. The installation energy staff 

documented that the project achieved the anticipated savings and return 

on investment.

The military services have not ensured that installation managers include 

M&V costs in project proposals. Installation managers cited various 

reasons why they could not execute their M&V plans, such as overly 

ambitious M&V plans, inaccessible meters to measure energy 

consumption or insufficient funds to replace broken meters, inadequate 

staffing, and failure to measure baseline performance. These reasons 

generally reflected a view that installation managers could not perform 

M&V within available installation resources. While we did not review the 

resources available to installation managers because it was outside the 

scope of our work, we noted that military construction proposals and lifecycle cost estimates for these projects, with five exceptions, did not 

account for post-completion M&V costs. As of October 2015, only the 

Navy has issued specific guidance to require installations to determine 

the costs of M&V.

Page 17 GAO-16-162 DOD’s Energy Conservation Investment Program

26 AT&L took a step toward such a requirement by directing 

in its fiscal year 2017 guidance27 that M&V plans shall propose M&V activities 

that have the most likelihood of being performed in the current budget and 

resource constrained environment, but did not provide examples of a 

range of options for M&V plans that are appropriate for ECIP projects of 

different sizes and types. As we have previously reported,28 the 

Department of Energy has published guidance for Energy Savings 

Performance Contracts that outlines a range of options that vary in their 

rigor and costs that contractors may select to measure and verify cost 

and energy savings. While this guidance does not apply to ECIP projects, 

 

26Naval Installations Command Instruction 4101.2, Evaluation of Energy Project Investment 

Performance, (Mar. 16, 2015).

27Assistant Secretary of Defense for Energy, Installations, and Environment, Submissions of 

Projects for the Fiscal Year 2017 Energy Conservation Investment Program (ECIP) and 

Plans for the Remainder of the Future Years Defense Program” (Oct. 14, 2015).

28GAO-15-432.
such guidance might serve as a model for ECIP, a smaller but similar 

program.

If the military services do not specifically budget for M&V costs as they 

develop project proposals, installation managers will be less likely to set 

aside resources needed for M&V. Officials from the services’ 

headquarters energy offices said that installation managers would be 

unlikely to devote any installation operation and maintenance funding to 

M&V, because they deem other tasks to have higher priority in a declining 

budget environment. Without performing M&V on all projects, neither 

installation energy managers nor component headquarters officials who 

evaluate subsequent proposals will know which projects realized 

anticipated benefits. Moreover, they may consequently miss opportunities 

to gather information that could improve future projects, such as project 

types that generated high returns on investment or factors that reduced 

(or increased) savings compared to estimates. Also, installation energy 

personnel may need to reduce the scope of projects to conform to 

available funding, but if they do so without recalculating return on 

investment based on the new scope, the original M&V plan will be 

obsolete. For example, projects that include plans to conserve energy 

and generate electricity from renewable sources would likely have a 

different return on investment and cost or energy savings without one 

element. Thus, even if installation energy staff performed M&V on such 

projects, they would already know that such projects are unlikely to 

achieve their anticipated return on investment.

Page 18 GAO-16-162 DOD’s Energy Conservation Investment Program
DOD has developed guidance describing a strategic vision

Page 19 GAO-16-162 DOD’s Energy Conservation Investment Program

29 for funding

construction projects that can achieve significant benefits–described by 

DOD as “game-changing”–in energy conservation, cost reduction, and 

energy security; however, the majority of the ECIP-funded projects that 

we reviewed have achieved traditional rather than significant benefits.30

We reviewed the 102 projects funded by the military services since DOD’s 

guidance was issued in fiscal year 2011, and found that about 10 percent of ECIP 

project proposals anticipated significant benefits in energy consumption, 

costs or security, while about 80 percent of projects anticipated traditional 

benefits such as the installation of energy-efficient equipment. We also 

found examples of projects approved to receive ECIP construction funds 

that could likely have been funded with operation and maintenance funds, 

which can be used for repairs or minor construction, among other things. 

Using construction funds for repairs reduces funding to meet the ECIP 

vision of achieving significant benefits. Figure 4 illustrates the three 

categories of ECIP projects, and depicts how many we placed in each 

category.

Figure 4: Profile of Funded Energy Conservation Investment Program (ECIP) 

Projects

Note: Significant, which DOD refers to as game-changing, refers to projects that include at least one 

of six attributes that produce significant improvements in energy consumption, costs, or security. 

Traditional refers to conventional military construction projects, such as replacement of equipment 

with more energy-efficient technology. Potential operation and maintenance projects are those that 

likely could have been funded with operation and maintenance, rather than military construction, 

funds. AT&L agreed that 7 of 8 service projects and two similar projects at the Pentagon that we 

provided for its review could have been funded with operation and maintenance funds

 

29Under Secretary of Defense for Acquisition, Technology, and Logistics, “Submission of Projects 

for the FY 2011 Energy Conservation Investment Program Congressional Notification and FY 

2012 Budget Exhibit” (Dec. 23, 2010). 

30DOD’s fiscal year 2011 guidance, which includes a strategic vision, uses the term “gamechanging” to describe major benefits from the integration of multiple energy savings and 

technologies in a creative, innovative, and productive manner.

DOD Has Developed 

a Strategic Vision for 

Energy Conservation, 

but Most of the 

Funded Projects 

Have Not Achieved 

Intended Benefits
DOD developed guidance that described a strategic vision for ECIP 

projects funded in fiscal year 2011 and thereafter. The guidance stated 

that project proposals should ideally include one or more of six attributes 

to produce significant, or what DOD called game-changing, improvements 

in energy consumption, costs, or security. These relate, in general, to 

performance improvement, implementation of new technologies, 

integration of multiple technologies, incorporation of renewable energy 

with storage, implementation of an energy security plan, and meeting 

energy goals. Appendix II provides detailed information on the six 

attributes as well as examples, where applicable.

We reviewed the military services’ 102 domestic ECIP projects funded 

since DOD issued guidance to articulate its strategic vision, and found 10 

projects that were aligned with DOD’s guidance of a strategic vision for 

producing significant improvements in energy consumption, costs, or 

security. These 10 projects included an energy grid at Marine Corps Air 

Station Miramar, California; a wind turbine at Tooele Army Depot, Utah; 

and a smart power infrastructure project at Joint Base Pearl HarborHickam, Hawaii. Specifically:

· The Marine Corps project is designed to transmit power from a landfill 

methane gas turbine to the installation’s electrical distribution station, 

which is designed to enhance energy security by providing back-up, 

on-site power in the event of a commercial power failure.

· The Army project plans to construct a 1,500-kilowatt wind turbine to 

provide renewable energy, achieve energy security, and achieve net 

zero energy

Page 20 GAO-16-162 DOD’s Energy Conservation Investment Program

31 status. According to DOD documents, this is the second wind 

turbine at the depot, and once it is operational, the two wind turbines together 

will produce about 60 percent of the depot’s energy.

 

31The Army developed a Net Zero strategy as part of its efforts to address its energy 

security and sustainability needs. The strategy strives to bring the overall consumption of 

resources at installations down to an effective rate of zero. The Net Zero concept 

encompasses management of energy, water and waste resources. A Net Zero Energy 

Installation produces as much energy on-site as it uses over the course of a year. A Net 

Zero Water installation limits the consumption of freshwater resources and returns water 

back to the same watershed so as not to deplete the groundwater and surface water 

resources of that region in quantity and quality over the course of a year. A Net Zero 

Waste installation reduces, reuses, and recovers waste streams, converting them to 

resource values with zero solid waste to landfill over the course of a year.

Few ECIP-Funded 

Projects Aligned with DOD 

Strategic Vision for Energy 

Conservation, Costs, and 

Energy Security
· The Navy smart power infrastructure

Page 21 GAO-16-162 DOD’s Energy Conservation Investment Program

32 project is designed to bolster 

energy security. The Navy project connects a cyber-secure micro-grid 

to a wastewater treatment plant, existing power generation, existing 

renewable power resources, and a hydrogen fuel cell. The project is 

designed to assure that the base’s wastewater treatment plant is able 

to operate independently of the main power grid for long periods of 

time in cases of commercial power outages and with assurance that 

cyber security is uncompromised.

As shown in figure 4 above, we found that 85 of the 102 ECIP projects 

that we compared with DOD’s fiscal year 2011 strategic vision provide 

traditional benefits such as replacement of equipment with more energyefficient technology, small-scale renewable energy projects,33 or water 

conservation projects. For example, the military services have installed 

solar wall projects at installations since 1997, including 11 that we 

reviewed. The solar wall system, as noted earlier, reduces the amount of 

energy needed to heat a building by preheating colder outside air and 

feeding the heated air into a building. According to an official at 

Letterkenny Army Depot, Pennsylvania, the solar wall heating system 

project at that location provides energy savings during the winter. Figure 

5 illustrates the solar wall on one of these buildings.

 

32The smart power infrastructure demonstration for energy reliability and security (SPIDERS) is a 

technology demonstration to enable a facility to operate independently from the main power grid 

for extended periods, with maximum assurance that cyber security is uncompromised.

33Small scale refers to renewable energy projects designed to produce less than 1,000 megawatthours of energy annually. See GAO, Renewable Energy Project Financing: Improved Guidance 

and Information Sharing Needed for DOD Project-Level Officials, GAO-12-401 

(Washington, D.C.: Apr. 4, 2012).
Figure 5: Solar Wall at Letterkenny Army Depot

Page 22 GAO-16-162 DOD’s Energy Conservation Investment Program

Other examples of ECIP projects with traditional benefits are: a 

daylighting and photovoltaic system and a new heating system. The first 

project included lights to increase illumination in the work area and a 

ground-mounted 25-kilowatt photovoltaic system to generate renewable 

energy for the administrative area of the air station. The second project 

consisted of a new heating system that was expected to save energy by 

removing portions of existing steam lines and replacing obsolete steam 

unit heaters with electric heaters.

AT&L officials told us that they mostly funded projects with traditional 

benefits because it is difficult to identify and fund projects that align with 

DOD’s strategic vision and also achieve departmental goals for return on 

investment. These goals, according to a DOD Instruction, direct 

components to strive to attain an overall annual ECIP program return on 

investment of 2.0–that is, to realize $2 in return for every dollar of 

investment. Moreover, most individual projects must achieve a minimum 

return of 1.25; exceptions must generally contribute toward the 
department’s renewable energy goals.

Page 23 GAO-16-162 DOD’s Energy Conservation Investment Program

34 However, projects that meet DOD’s 

criteria for significant, or “game-changing,” tend to be more expensive 

than average and anticipate a lower return on investment. For example, 

of the 102 projects we reviewed, the 10 potentially “game-changing” 

projects were expected to cost an average of $7.3 million and to realize a 

return on investment of 1.1; the remaining 92 projects were expected to 

cost an average of $3.5 million and realize a return on investment of 2.4. 

Therefore, for every project with a low return, the components would need

to propose enough projects with higher returns to balance the total 

portfolio.

AT&L officials also said they funded few projects with anticipated 

significant benefits because the fiscal year 2011 guidance was supported 

by previous leadership and is now outdated. However, subsequent 

guidance continued to call for such projects, even though it did not clarify 

how the services should choose construction projects that can use new, 

validated technologies for achieving significant improvements while also 

greatly reducing energy costs. If DOD does not review its strategic goals 

for ECIP and update guidance accordingly so the components– military 

services and defense agencies–clearly understand how to balance their 

portfolios among traditional and “game-changing” projects, the 

components will be unable to consistently meet DOD’s strategic vision. 

For example, if DOD’s current priority is to achieve a substantial return on 

investment, or energy and water savings, or both, then its vision for 

“game-changers” may be in conflict with the program’s emphasis on 

traditional construction projects. Conversely, if DOD’s emphasis is to use 

ECIP to fund potential “game-changing” improvements, then DOD may 

not be able to achieve returns on investment of 2.0 or greater on specific

projects or even its total portfolio.

 

34DOD Instruction 4170.11, Installation Energy Management (Dec. 11, 2009). This instruction 

states that, with certain exceptions, ECIP funding should be applied only to construction 

projects that directly produce energy savings or cost reduction.
We also found examples of projects approved to receive ECIP military 

construction funds when the projects likely could have been funded with 

operation and maintenance funds–which may be used for repairs or minor 

construction– leaving less funding available to apply to energy 

conservation construction projects.

Page 24 GAO-16-162 DOD’s Energy Conservation Investment Program

35 For example, DOD used ECIP at two 

installations to retrofit and replace high-pressure sodium and metal halide 

light fixtures with energy-efficient light fixtures. At another installation, 

DOD used ECIP funds to replace old, damaged, or poorly-insulated siding 

of production facilities with new insulated panels. While these three 

projects replaced lights and insulation with more energy-efficient 

substitutes, major repairs or replacement of facility components that are 

expected to occur periodically throughout the life-cycle of a facility, such 

as roof replacement, replacement of tile or carpet, or replacement of 

heating and cooling systems, are classified as sustainment, and are 

generally funded with operation and maintenance funds.36 Such “repairs by 

replacement” may replace older facility components with components that 

are up to current standards or codes, and may, subject to certain 

conditions, replace energy-inefficient or obsolete facility components with 

more efficient or modern components.37 Also, AT&L’s annual ECIP 

guidance since fiscal year 2011 directed the DOD components to avoid 

seeking funding from ECIP for projects that would be candidates for

operation and maintenance funding.

We found that DOD has funded at least 9 repair-type projects with ECIP 

military construction funding—rather than seeking to fund those projects 

with operation and maintenance funding—because AT&L has not 

ensured that managers proposing repair and minor construction seek 

operation and maintenance funds. An AT&L official acknowledged that 9 

of 10 funded ECIP projects about which we inquired38 could have been 

funded with operation and maintenance rather than construction funds. 

 

35Appendix I, Scope and Methodology, provides further details on DOD’s funded ECIP projects 

from fiscal year 2011 through 2014 and how we identified projects that could have been 

funded with operation and maintenance funds.

36See Department of Defense Financial Management Regulation 7000.14-R, Vol. 2B, Chap. 8, 

Facilities Sustainment and Restoration/Modernization (June 2013).

37See, for example, Department of the Army Pamphlet 420-11, Project Definition and Work 

Classification, § 1-6 (Mar. 18, 2010).

38We provided AT&L with a list of 8 service projects and 2 similar projects at the Pentagon.

DOD Has Used ECIP 

Construction Funds 

Rather than Operation and 

Maintenance Funds or 

Alternative Financing for 

Certain Projects
The AT&L official also stated that the Budget Control Act

Page 25 GAO-16-162 DOD’s Energy Conservation Investment Program

39 and the funding 

reductions that followed the act overtook DOD’s strategic direction for the 

ECIP program, and some DOD installations may have submitted projects 

to ECIP that were focused on maintaining and repairing buildings. 

The official also stated that DOD does not clearly delineate which energy 

projects should be funded with operation and maintenance funds, ECIP 

construction funds, and third-party (alternative) financing. DOD’s 

installation energy management instruction calls partnerships with the 

private sector through alternative financing a crucial tool for financing 

energy efficiency measures and allowing installations to improve their 

infrastructure.40 The instruction also states that energy efficiency projects with 

higher return on investment components should first be pursued for alternative 

financing before consideration for ECIP funding. However, the instruction 

does not clarify what constitutes a higher return on investment for which 

components should pursue alternative financing.

If AT&L does not ensure that managers planning repairs and minor 

construction seek operation and maintenance rather than ECIP funding 

as appropriate, ECIP will have less funding available to apply to energyconservation construction projects and potentially less funding to realize 

DOD’s strategic vision. Moreover, if DOD does not revise its guidance to 

clarify an appropriate return on investment for projects for which the 

components should pursue alternative financing, managers at the 

component level may find it more difficult to develop a portfolio of ECIP 

projects that can meet the program’s strategic vision and also meet return 

on investment requirements. DOD and service officials with whom we 

discussed these points expressed reservations about how they could 

 

39Pub. L. No. 112–25 (2011). The Budget Control Act of 2011 established spending caps and an 

accompanying sequestration procedure through 2021, but the Bipartisan Budget Act of 2013 

extended the budget caps and sequestration through 2023. As a result of funding reductions from 

the Budget Control Act, the Bipartisan Budget Act of 2013, and related actions, DOD 

estimates that reductions in planned defense spending from fiscal years 2012 through 

2021 will exceed $1 trillion. Department of Defense, Estimated Impacts of SequestrationLevel Funding (Apr. 3, 2014). 

40DOD Instruction 4170.11 describes alternative financing through Utility Energy Services 

Contracts and Energy Savings Performance Contracts. These contracts include infrastructure 

upgrades (e.g., new cogeneration, renewable systems, and ancillary structures) and new 

equipment (e.g., heating, ventilation, and air conditioning; lighting; motors; fixtures; and 

controls) to help the installations reduce energy and water consumption. 
assemble portfolios of projects while excluding projects that also qualified 

for other funding sources.

While DOD and the services make use of several different programs to 

accomplish their energy goals, ECIP is DOD’s primary source of directly 

appropriated military construction funding for energy conservation 

projects. DOD is required to notify congressional committees of the ECIP 

projects that it plans to construct, although it is not required by either law 

or its own guidance to include in its notifications information on the 

anticipated performance of those projects, including the anticipated 

returns on investment, estimates of the energy or water savings, or 

renewable energy production. However, providing project notifications 

without including performance information reduces the committees’ ability 

to review in a single source what they can expect from the ECIP program, 

such as whether DOD components expect their overall portfolios to meet 

the minimum return on investment. Further, anticipated performance 

information would provide a baseline from which DOD and the 

committees could later evaluate the program’s implementation.

Although DOD installation managers have measured and verified data for 

some ECIP projects, they cannot verify that most of the projects begun 

since fiscal year 2011 and completed as of June 2015 achieved their 

anticipated cost savings or lower energy use, mainly because most 

projects did not budget for M&V activities. Because managers–the Navy’s 

excepted–are not required to do so, ECIP projects may not have 

information on whether the projects realized anticipated savings and other 

benefits, or which types of projects generate the greatest savings and 

return on investment. Additionally, given the large percentage of 

operational projects that were completed with a reduced scope since 

2011, without further guidance on how to scope ECIP projects to conform 

to available funding, future projects may continue to be constructed at a 

reduced scope compared to the project proposals.

Since fiscal year 2011, few of the funded ECIP projects have delivered 

what DOD refers to as game-changing improvements (e.g., integration of 

multiple technologies or incorporation of renewable energy with storage), 

but instead most projects have anticipated traditional benefits such as the 

installation of energy-efficient equipment . This situation is the result of 

components trying to achieve ECIP’s somewhat contradictory goals. 

Without reviewing its strategic goals and updating its guidance, DOD 

components will continue to lack clarity on how they should seek to 

balance their portfolios among different types of projects, and what return 

Page 26 GAO-16-162 DOD’s Energy Conservation Investment Program

Conclusions
on investment may qualify a project for alternative financing. Additionally, 

allowing components to use ECIP military construction funds to finance 

projects that could have been funded with operation and maintenance 

funds may continue to leave less funding available to accomplish the 

department’s strategic vision to make game-changing improvements in 

energy conservation, cost reduction, and energy security.

To help improve DOD’s ability to report on and measure anticipated and 

actual savings from ECIP projects, and to provide guidance to inform 

further project selection, we are making the following five 

recommendations to DOD:

1. The Secretary of Defense should direct the Under Secretary of 

Defense for AT&L to develop and implement guidance requiring that 

statutory notifications to congressional committees include

· the anticipated return on investment for all projects, including new 

projects added to replace canceled projects and existing projects for 

which there is a significant change to the cost or scope of the project; 

and

· information on the estimated energy or water savings, or renewable 

energy production, anticipated from proposed ECIP projects.

2. The Secretary of Defense should also direct the Under Secretary of 

Defense for AT&L to

direct the components to include projected M&V costs—in the military 

construction proposal or another appropriate document—as they develop 

projects; in so doing, the Under Secretary might build on existing Navy 

guidance, as appropriate.

3. provide the components with additional guidance on the range of 

options available when developing M&V plans that are appropriate for 

different project sizes and types; and how to scope ECIP projects to 

conform to available funding;

4. review the strategic goals for the ECIP program and make any 

needed adjustments to reflect current DOD priorities; and

5. after reviewing strategic goals and adjusting as needed, update 

installation energy management guidance and, as appropriate, annual 

ECIP guidance, to clarify:

Page 27 GAO-16-162 DOD’s Energy Conservation Investment Program

Recommendations for 

Executive Action
· how the components–military services and defense agencies–should 

balance their ECIP portfolios among what DOD describes as 

traditional and game-changing projects to best achieve DOD’s 

strategic vision for ECIP,

· what constitutes a higher-return project that should be proposed 

under alternative financing rather than ECIP, and

· that managers proposing repair and minor construction projects 

should seek operation and maintenance rather than ECIP funds.

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

provided written comments, which are summarized below and reprinted in 

appendix III. DOD concurred with one of our recommendations and 

partially concurred with four recommendations. DOD also provided 

additional comments, which we have incorporated as appropriate.

DOD partially concurred with our first recommendation, which states that 

the Secretary of Defense should direct the Under Secretary of Defense 

for AT&L to develop and implement guidance requiring that statutory 

notifications to congressional committees include (1) the anticipated 

return on investment for all projects, including new projects added to 

replace canceled projects and existing projects for which there is a 

significant change to the cost or scope of the project; and (2) information 

on the estimated energy or water savings, or renewable energy 

production, anticipated from proposed ECIP projects. DOD stated that it 

provides Congress with information on the anticipated return on 

investment (i.e., savings to investment ratio) for projects as part of its 

notification to Congress and that current reporting is pursuant to Title 10.

However, as we state in our report, DOD has not consistently provided 

information on the return of investment for projects that were added or 

revised since the original notification or report any information on 

expected energy or water savings. We do acknowledge in our report that 

DOD is not required by either law or its own guidance to include this 

information in its congressional notifications. Still, given that DOD already 

collects and internally circulates performance information on ECIP 

projects including the return on investment and energy and water savings, 

we believe reporting it to Congress should impose little additional burden 

and that it would provide more comprehensive information to 

congressional decision makers in evaluating ECIP. In addition, DOD 

stated that ECIP project selection is based primarily on proposed projects’ 

return on investment. DOD added that requiring submission on the 

Page 28 GAO-16-162 DOD’s Energy Conservation Investment Program

Agency Comments 

and Our Evaluation
estimated energy or water savings, or renewable energy production, 

anticipated from proposed ECIP projects would not provide a meaningful 

difference from what is already being submitted. However, as stated 

earlier, DOD does not report energy and water savings under its current 

practice. We continue to believe that providing project notifications 

without including performance information reduces the congressional 

committees’ ability to review in a single source what they can expect from 

the ECIP program. Further, anticipated performance information would 

provide a baseline from which DOD and the committees could later 

evaluate the program’s implementation. 

DOD partially concurred with our second recommendation, which states 

that the Secretary of Defense should direct the Under Secretary of 

Defense for AT&L to direct the components to include projected M&V 

costs—in the military construction proposal or another appropriate 

document—as they develop projects; and that in so doing, the Under 

Secretary might build on existing Navy guidance, as appropriate. DOD 

stated that current DOD guidance, in general, requires all ECIP projects 

to have an M&V plan, and that identifying the costs associated with M&V 

will assist the services in the budgeting process. However, even with 

projects having an M&V plan, without a requirement to include projected 

M&V costs, ECIP projects may not collect the information that DOD 

needs to determine whether the projects realized anticipated savings and 

other benefits, or which types of projects generate the greatest savings 

and return on investment. Further, DOD disagreed with the second part 

of our recommendation: that the Under Secretary might build on existing 

Navy guidance in directing the components to include projected M&V 

costs as they develop projects, as appropriate since each service does 

things in a way to meet its own mission. We agree with DOD’s comment 

that each service budgets and executes its own operations and 

maintenance funding in such a way that best meets its mission 

requirements. However, our recommendation that the Under Secretary 

might build on existing Navy guidance is to suggest an example of 

leveraging existing guidance. ECIP is a centrally-managed program, and 

we believe that the other services may be able to build on the Navy’s 

example, and potentially save time, effort, and resources.

DOD partially concurred with our third recommendation, which states that 

the Secretary of Defense should direct the Under Secretary of Defense 

for AT&L to provide the components with additional guidance on the 

range of options available when developing M&V plans that are 

appropriate for different project sizes and types; and provide guidance on 

how to scope ECIP projects to conform to available funding. DOD agreed 

Page 29 GAO-16-162 DOD’s Energy Conservation Investment Program
with the first part of the recommendation but suggested deleting the 

second part of our recommendation: for the Under Secretary of Defense 

for AT&L to provide the components with additional guidance on how to 

scope ECIP projects to conform to available funding. DOD stated that the 

department holds periodic working groups with DOD components and 

agencies that include discussions on best practices utilized to develop 

ECIP projects; the best practices include how to scope project 

requirements. While periodic working groups may be helpful, we continue 

to believe that DOD needs further guidance on how to scope ECIP 

projects to conform to available funding, given the large percentage of 

operational projects that were completed with a reduced scope since 

2011.

DOD concurred with our fourth recommendation, which states that the 

Secretary of Defense should direct the Under Secretary of Defense for 

AT&L to review the strategic goals for the ECIP program and make any 

needed adjustments to reflect current DOD priorities. However, DOD did 

not identify any actions that it plans to take nor the time frames to 

implement our recommendation. 

DOD partially concurred with our fifth recommendation, that DOD should 

update guidance to provide clarification in three areas: (1) how the 

components–military services and defense agencies–should balance their 

ECIP portfolios among what DOD describes as traditional and gamechanging projects to best achieve DOD’s strategic vision for ECIP, (2) 

what constitutes a higher-return project that should be proposed under 

alternative financing rather than ECIP, and (3) that managers proposing 

repair and minor construction projects should seek operation and 

maintenance rather than ECIP funds. DOD agreed with the second and 

third parts of our recommendation, stating that it intended to review and 

revise guidance as necessary to clarify the portions of the guidance 

dealing with projects that should be pursued using alternative (third-party) 

financing or operation and maintenance funds. We believe that by 

reviewing their strategic goals and updating their guidance, DOD 

components will obtain better clarity on how they should seek to balance 

their portfolios among different types of projects, and when to seek

alternative financing for a project based on its return on investment. 

Additionally, by clarifying its guidance, DOD may reduce the chances of 

components using ECIP military construction funds to finance projects 

that could have been funded with operation and maintenance funds. 

However, DOD did not agree with the first portion of our recommendation: 

that the Under Secretary of Defense for AT&L update installation energy 

management guidance and, as appropriate, annual ECIP guidance, to 

Page 30 GAO-16-162 DOD’s Energy Conservation Investment Program
clarify how the components should balance their ECIP portfolios among 

what DOD describes as traditional and game-changing projects to best 

achieve DOD’s strategic vision for ECIP. DOD stated that recent ECIP 

guidance, covering fiscal years 2016 and 2017, did not include the use of 

“game-changing” language. Instead, DOD’s strategic vision for ECIP 

looks to fund more holistic projects, leveraging the services’ investments 

in energy efficiency and energy cost reduction. While ECIP guidance for 

fiscal years 2016 and 2017 does not use the phrase “game-changing,” 

the stated goals continue to call for projects with the attributes that were 

described in earlier guidance as game changing. Therefore, we continue 

to believe that DOD needs to review its strategic goals for ECIP and 

update guidance accordingly so the components will clearly understand 

how to balance their portfolios with various projects to consistently meet 

DOD’s strategic vision. 

We are providing copies of this report to appropriate congressional 

committees; the Secretary of Defense; the Secretaries of the Army, the 

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

Director, Office of Management and Budget. In addition, the 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 

Brian Lepore at (202) 512-4523 or leporeb@gao.gov, or Frank Rusco at 

(202) 512-3841 or ruscof@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 members who made key contributions to this 

report are listed in appendix IV.

Brian J. Lepore

Director, Defense Capabilities and Management

Frank Rusco

Director, Natural Resources and Environment

Page 31 GAO-16-162 DOD’s Energy Conservation Investment Program
Appendix I: Scope and Methodology

To determine the extent to which the Department of Defense (DOD) has 

reported anticipated returns on investment or reduced energy use from 

Energy Conservation Investment Program (ECIP)-funded projects, we 

obtained the annual notifications of proposed ECIP projects that DOD 

provided to congressional committees for fiscal years 2009 through 2015, 

including projects funded by the American Recovery and Reinvestment 

Act (hereafter, the “Recovery Act”) of 2009.

Page 32 GAO-16-162 DOD’s Energy Conservation Investment Program

1 We chose these years because 

the notification to congressional committees of fiscal year 2015 ECIP projects 

was the most recent available at the time we were doing our work and 

because fiscal year 2009 was the first year for which the military services 

could consistently provide us with records. These notifications included 

updates to projects included in prior-year notifications. We compiled all of 

the information into one database, and counted the number of unique 

projects.

To verify completeness and accuracy of this database, we performed 

logic checks and other analyses to identify, and in some cases correct, 

inconsistencies and other errors in the data. For example, we noted 

cases where two apparently different projects had nearly identical project 

numbers with transposed digits, and determined that these were one 

project. We also compared the notification data to the preliminary list of 

proposed ECIP projects provided in the budget justification materials 

provided in support of the President’s annual budget requests for fiscal 

years 2009–2015. Based on this comparison, we made additional 

corrections to the notification database that we constructed. We verified 

our corrections and our compilation of projects with the Office of the 

Under Secretary of Defense for Acquisition, Technology and Logistics 

(AT&L). At the end of this process, there were three projects for which 

neither we nor AT&L could identify an adequate correction. We excluded 

these projects from our list of projects included in the notification 

database that we constructed. Based on this database, we determined 

that DOD notified congressional committees of 441 proposed ECIP 

projects for fiscal years 2009 through 2015, including projects under the 

Recovery Act. We reached this number by combining (1) the number of 

projects that first appeared in the annual notifications to congressional 

committees from 2009 through 2015, including Recovery Act projects, 

with (2) the number of projects added to replace cancelled projects that 

first appeared in the notifications during that time frame.

 

1

Pub. L. No. 111-5 (2009).

Appendix I: Scope and Methodology
Appendix I: Scope and Methodology

After making the corrections and verifying them with AT&L, we

determined that the data were sufficiently reliable for the purpose of 

determining the extent that DOD reported anticipated returns on 

investment and reduced energy use from ECIP projects. We did not 

attempt to analyze the data to determine whether DOD had correctly 

calculated projects’ anticipated return on investment because the data are 

prospective and examining each project to the necessary level of detail 

would have been beyond the scope of this review. We also obtained and 

reviewed DOD guidance on the criteria the department uses for selecting 

ECIP projects and compared that to DOD data and other information on 

proposed projects. We also compared the level of information that DOD 

reports to Congress to the information and communications standard in 

the Standards for Internal Control in the Federal Government.

Page 33 GAO-16-162 DOD’s Energy Conservation Investment Program

2 Also, we 

interviewed AT&L officials and energy officials in the services’ 

headquarters.

To determine the extent to which DOD found that completed ECIP 

projects resulted in cost savings or lower energy use, we identified and 

reviewed applicable guidance, including AT&L guidance, for preparing 

ECIP project proposals issued for fiscal year 2011 and later. We then 

searched the services’ ECIP databases to identify all of the projects 

begun since fiscal year 2011 that met certain criteria: domestic, 

developed by a service, and that the service listed as complete as of June 

2015. We began with fiscal year 2011 because the annual ECIP guidance 

for fiscal year 2011 uses language that emphasizes that all projects 

include a measurement and verification (M&V) plan to determine the cost 

and energy savings. We restricted our list to domestic projects due to the 

possibility of unique circumstances for construction at bases in other 

countries (for example, regulations in other countries that make military 

construction or ECIP projects more difficult to execute) and to the 

services—Army, Navy, Marine Corps, and Air Force—because most 

ECIP projects are executed by the services.

We compiled a list of 37 projects, which we sent to the services for 

review. Staff at the Army Corps of Engineers related that one of the Army 

projects listed was not executed. In addition, staff at Navy Installations 

Command related that three of the Navy projects listed in the Navy 

 

2GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1 

(Washington, D.C.: November 1999). 
Appendix I: Scope and Methodology

database were not ECIP projects and identified two additional ECIP 

projects not listed in the database. Thus, we identified 35 projects, as of 

the services’ responses in June 2015, that fulfilled our criteria.

Page 34 GAO-16-162 DOD’s Energy Conservation Investment Program

3

We then developed a questionnaire, which we sent to installation project 

managers for the 35 domestic, service ECIP projects. The questionnaire 

focused on the projects’ scopes and M&V plans, and whether the projects 

achieved anticipated cost and energy savings. The questionnaires also 

included instructions for installation staff to provide us with copies of the 

projects’ most recent military construction proposals, also called DD1391s, which describe projects’ proposed scopes, M&V plans (which 

describe how installation managers plan to measure the cost savings or 

lower energy use from a project), and savings documentation, if available. 

We pretested the questionnaire with an installation energy staff member 

during a site visit to Letterkenny Army Depot, Pennsylvania. The staff 

member provided suggestions on how to clarify and improve the 

questionnaire. We also observed the technology installed as part of the 

ECIP project at that installation.

After we reviewed the completed questionnaires and the documentation 

provided by the installation managers, we followed up with the managers 

by e-mail or telephone to confirm our understanding of the projects’ scope 

and M&V activities. Specifically, we confirmed whether or not the 

completed projects matched the projects’ proposed scopes, as identified 

in their DD-1391s, and what M&V data installation managers collected or 

were in the process of collecting.

We used the completed questionnaires, follow-up e-mails and calls, and 

documentation to categorize the projects based on their scope and M&V 

activities. We categorized the projects according to whether installations 

had realized cost or energy savings by (1) constructing them to the 

original scope and (2) developing and implementing M&V plans. We 

determined that two projects at two installations were not operational. At 

one installation, a geothermal loop was constructed to improve the 

efficiency of water-source heat pumps for several buildings. The loop 

returned temperatures higher than expected and that are potentially 

damaging to the buildings’ heating systems, so the geothermal loop is 

 

3After consulting with installation energy staff, we found that two of the projects identified were 

not operational.
Appendix I: Scope and Methodology

currently deactivated. At another site, solar water heaters were installed 

in several buildings, but the project has had several construction issues 

that staff said they plan to address under warranty.

We assigned projects to one of two categories for scope: “same” or 

“changed.” We classified projects as “same” scope when the completed 

project reflected the construction identified in the project proposal. We 

classified projects as “changed” if the completed project reflected 

construction less than that identified in the proposal. The projects 

classified as “changed” did not reflect commensurate reductions in cost.

Page 35 GAO-16-162 DOD’s Energy Conservation Investment Program

4

We did not classify these projects according to M&V status because the M&V 

plans were not all revised to reflect reduced scope and therefore might no 

longer accurately reflect the project as constructed.

For M&V, we assigned projects to one of four categories: “full (evidence 

provided),” “full,” “partial,” or “none.” We classified projects as “full 

(evidence provided)” M&V if installation energy staff reported that the 

project had achieved the cost savings or lower energy use anticipated in 

the project proposal and provided documentation to support their 

statements.5 We classified projects as “full” M&V if installation energy staff 

reported that the project had achieved the savings anticipated in the 

project proposal, but did not provide documentation of these savings.

We classified projects as “partial” M&V if M&V data are either incomplete6

or project managers could not fully document that they had achieved cost 

savings or lower energy use.7 We classified projects as “none” for M&V if 

 

4Each completed military construction project includes a document, Transfer and Acceptance of 

DOD Real Property (known as a DD-1354), which formally transfers ownership from the 

constructing agency, such as the Army Corps of Engineers, to the installation. The DD-1354, 

in final form, provides the final cost of the project.

5We did not independently evaluate the evidence provided by the installations.

6

For example, installation staff are still in the process of collecting M&V data on a project. In 

such a case, a project may be reclassified as “full (evidence proved)” or “full” M&V after 

collecting M&V data.

7

For example, installation staff only collected M&V data for a portion of a project.
Appendix I: Scope and Methodology

installation energy staff could not perform M&V

Page 36 GAO-16-162 DOD’s Energy Conservation Investment Program

8 or had no plans to perform 

it.

To inform our review of installations’ M&V activities, we referred to the 

Department of Energy’s Federal Energy Management Program (FEMP) 

guidance on M&V. FEMP guidance outlines a range of options that 

contractors may select to measure and verify the cost and energy savings 

achieved by each energy conservation measure. The M&V options that 

FEMP guidance outlines vary in their rigor and costs. The option that is 

generally the least rigorous and costly involves measuring the key factors 

affecting energy use—such as the number of lighting fixtures or efficiency 

of a heating unit—before and after installation, but typically does not 

involve measuring such factors over the life of the project. In contrast, 

other options outlined in FEMP guidance generally involve ongoing 

measurements of energy use, or proxies of energy use, over the life of 

the project. FEMP guidance helps identify when each option should be 

used and states that the selection of a measurement and verification 

method is based on project costs and savings, complexity of the energy 

conservation measure, and the uncertainty or risk of savings being 

achieved, among others. According to FEMP guidance, costs for 

measurement and verification generally increase with the level of 

accuracy required in energy savings analyses and the number and 

complexity of variables that are analyzed, among other factors. Moreover, 

the incremental value of additional M&V will at some point be less than its 

cost.

To determine the extent to which DOD implemented its fiscal year 2011 

ECIP strategic vision,9 we identified the number of domestic ECIP projects 

funded from fiscal year 2011 through fiscal year 2014 by the military 

services;10 reviewed project information for the military services’ domestic 

ECIP projects; categorized the military services’ domestic ECIP projects 

into three categories: 1) ECIP projects that incorporated at least one of 

DOD’s “game-changing” attributes, 2) ECIP project with traditional 

 

8

For example, installation energy staff failed to collect baseline data for a project, making 

M&V impossible.

9Under Secretary of Defense for Acquisition, Technology and Logistics, “Submission of Projects 

for the FY20ll Energy Conservation Investment Program Congressional Notification and FY2012 

Budget Exhibit,” Dec. 23, 2010. 

10For this review, the military services include the Army, Navy, Marine Corps, and Air Force.
Appendix I: Scope and Methodology

benefits, and 3) repair projects that could potentially have been funded 

with operation and maintenance funds.

We utilized a subset of data, based on annual notifications of proposed 

ECIP projects that DOD provided to congressional committees for fiscal 

years 2009 through 2015, that were collected to answer the first research 

objective as described above. We excluded foreign projects from our 

scope because varying national regulations may have affected the time 

required for project completion, and we excluded defense agencies’ 

projects because the military services had developed the bulk of the 

projects. We excluded from our scope DOD’s fiscal 2015 ECIP projects, 

because at the time of our review DOD had not funded projects from that 

year. Based on data from DOD congressional notifications for fiscal year 

2011 through fiscal year 2014, we determined that DOD funded 102 

domestic military service ECIP projects.

We collected military construction project data

Page 37 GAO-16-162 DOD’s Energy Conservation Investment Program

11 for the 102 domestic 

military service ECIP projects. We reviewed relevant statutes12 and DOD 

guidance to determine work classification and fund type for ECIP military 

construction projects and repair projects. We reviewed DOD’s 2011 ECIP 

strategic vision to identify the six potentially game-changing ECIP project 

attributes. Two analysts independently reviewed and assessed military 

construction project data for the 102 domestic ECIP projects. The two 

analysts independently placed the ECIP projects into three categories–

ECIP projects with game-changing attributes, ECIP project with traditional 

benefits, and repair projects that could be potentially be funded by 

operation and maintenance funds. To categorize an ECIP project as a 

game-changing improvement, the analysts reviewed the project’s military 

construction project data scope of work and determined that the project 

was a military construction project, based on work-classification criteria, 

and had one or more of the six attributes found in the DOD fiscal year 

2011 ECIP strategic vision. To characterize an ECIP project with 

traditional benefits, the analysts reviewed the project’s military 

construction project data scope of work and determined that the project 

was a military construction project, based on work classification criteria, 

 

11DD Form 1391, Military Construction Project Data, is used by the Department of Defense to 

submit requirements and justifications in support of funding requests for military construction 

to Congress. 

12See 10 U.S.C, §§2801-2811, and 10 U.S.C. §2914.
Appendix I: Scope and Methodology

and that the ECIP project does not provide any of the six desirable 

attributes found in the DOD fiscal 2011 ECIP strategic vision. To 

characterize an ECIP project as a potential operation and maintenance 

project, the analysts reviewed the project’s military construction project 

data scope of work and determined that the project could potentially be 

funded with operation and maintenance funding, based on workclassification criteria. The analysts then compared their results to identify 

any disagreements and reached agreement on all items through 

discussion. We tentatively identified 10 projects as examples of potential 

operation and maintenance projects.

We provided AT&L with the list of projects that we had classified as 

eligible for operations and maintenance funding, and asked officials to 

corroborate our preliminary findings as well as to identify what elements 

or factors contributed to the classification of the projects as military 

construction rather than operation and maintenance repair or sustainment 

projects.

We conducted this performance audit from February 2015 to January 

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.

Page 38 GAO-16-162 DOD’s Energy Conservation Investment Program
Appendix II: Key Attributes of DOD’s “GameChanging” Energy Conservation and 

Investment Program (ECIP) Projects

Table 1 lists the key attributes of what the Department of Defense (DOD) 

terms “game-changing” projects, and provides examples of their use in 

recently funded ECIP projects, where these exist.

Table 1: Key Attributes and Examples in Funded Projects

Page 39 GAO-16-162 DOD’s Energy Conservation Investment Program

Department of Defense’s (DOD) key attributes for 

Energy Conservation and Investment Program (ECIP) 

projects from the fiscal year 2011 guidance Examples of funded projects (fiscal years 2011 through 2014)

1. Dramatically change the energy consumption at an 

individual or joint installation, for example, by 

fundamentally improving the performance of the 

power or steam plant.a

· Tooele Army Depot, Utah funded in fiscal year 2014 an Energy 

Management and Control System project with an anticipated energy 

reduction of 30 percent to 40 percent.

2. Implement across multiple installations a technology 

validated in a demonstration program sponsored by 

DOD (e.g., the Installation Energy Test Bed Initiative) 

or by the Department of Energy.b

· No funded project identified

3. Integrate multiple energy savings, monitoring, and 

renewable energy technologies to realize synergistic 

benefits.

· Dugway Proving Ground, Utah plans to install a 2-megawatt solar 

photovoltaic array to be integrated with energy storage, microgrid

control systems, advanced building controls and metering, and 

energy management control systems.

4. Integrate distributed generation and storage to 

improve supply resiliency for critical loads.

· Fort Bliss, Texas installed a 500 kilowatt photovoltaic array, a 

microgrid, and a 1 megawatt storage battery bank to supply 

emergency power for two mission critical buildings in case of a long 

term power outage. 

5. Implement an energy security plan, especially at an 

installation where such an investment would leverage 

a partnership with the Department of Energy. c

· No funded project identified

6. Maximize performance towards meeting the energy 

conservation and renewable energy goals of the 

department’s Strategic Sustainability Performance 

Plan.

· Tooele Army Depot, Utah awarded a contract to build a 1,500-

kilowatt wind turbine. According to military construction project data, 

this turbine will help the depot meet its renewable energy 

requirements mandated by the Energy Policy Act of 2005.

Source: GAO analysis of DOD data. | GAO-16-162

a

A DOD official stated that an ECIP project’s contribution towards reduction of energy consumption 

can be measured based on the installation’s total energy footprint as reported in the Annual Energy 

Management Report. 10 U.S.C. § 2925 requires DOD to submit to Congress an Annual Energy 

Management Report describing its facility energy activities.

bDOD established the Installation Energy Test Bed in 2009 to fund the demonstration of new energy 

technologies in a real-world environment to reduce risk, overcome deployment barriers, and to 

facilitate wide-scale commercialization.

cU.S. Department of Energy, Federal Energy Management Program, Performing Energy Security 

Assessments—A How-To Guide for Federal Facility Managers (January 2006), provides further 

information.

Appendix II: Key Attributes of DOD’s “GameChanging” Energy Conservation and 

Investment Program (ECIP) Projects
Appendix III: Comments from the Department 

of Defense

Page 40 GAO-16-162 DOD’s Energy Conservation Investment Program

Appendix III: Comments from the 

Department of Defense
Appendix III: Comments from the Department 

of Defense

Page 41 GAO-16-162 DOD’s Energy Conservation Investment Program
Appendix III: Comments from the Department 

of Defense

Page 42 GAO-16-162 DOD’s Energy Conservation Investment Program
Appendix III: Comments from the Department 

of Defense

Page 43 GAO-16-162 DOD’s Energy Conservation Investment Program
Appendix IV: GAO Contacts and Staff 

Acknowledgments

Brian J. Lepore, (202) 512-4523 or leporeb@gao.gov and Frank Rusco, 

(202) 512-3841 or ruscof@gao.gov.

In addition to the contacts named above, the following individuals made 

contributions to this report: Maria Storts, Assistant Director; Hilary 

Benedict, Assistant Director; James Ashley; Randy De Leon; Charles 

Egan; Amie Steele Lesser; Ethan Levy; Sally Newman; Richard 

Powelson; Terry Richardson; and Michael Willems.

Page 44 GAO-16-162 DOD’s Energy Conservation Investment Program

Appendix IV: GAO Contacts and Staff 

Acknowledgments

GAO Contacts

Staff 

Acknowledgments
Appendix V: Accessible Data

Page 45 GAO-16-162 DOD’s Energy Conservation Investment Program

OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE

3400 DEFENSE PENTAGON

WASHINGTON, DC 20301-3400 

ENERGY, INSTALLATIONS AND ENVIRONMENT

JAN 15 2016

Mr. Brian J. Lepore

Director, Defense Capabilities and Management

U.S. Government Accountability Office

441 G Street, N.W.

Washington, DC 20548 Dear Mr. Lepore:

Enclosed is the Department of Defense (DoD) response to the 

Government Accountability Office (GAO) Draft Report, GA0-16- 162, 

"DEFENSE INFRASTRUCTURE: Energy Conservation Investment 

Program Needs Improved Reporting, Measurement and Guidance," dated 

December 7, 2015 (GAO Code 352015).

Sincerely,

Peter J. Potochney

Deputy Assistant Secretary of Defense (Basing)

Performing the Duties of the Assistant Secretary of Defense

Appendix V: Accessible Data

Agency Comment 

Letter

Text of Appendix III: 

Comments from the 

Department of Defense

Page 1
Appendix V: Accessible Data

(Energy, Installations and Environment) 

Enclosure:

As stated

GAO DRAFT REPORT DATED DECEMBER 7, 2015 GA0-16-62 (GAO 

CODE 352015) 

"DEFENSE INFRASTRUCTURE: ENERGY CONSERVATION 

INVESTMENT PROGRAM NEEDS IMPROVED REPORTING, 

MEASUREMENT, AND GUIDANCE"

DEPARTMENT OF DEFENSE COMMENTS TO THE GAO 

RECOMMENDATION 

RECOMMENDATIONS: To help improve DOD's ability to report on and 

measure anticipated and actual savings from ECIP projects , and to 

provide guidance to inform further project selection, the GAO made the 

following five recommendations: 

(1) The Secretary of Defense should direct the Under Secretary of 

Defense for AT&L to develop and implement guidance requiring 

that statutory notifications to congressional committees include: 

· the anticipated return on investment for all projects , 

including new projects added to replace canceled projects 

and existing projects for which there is a significant change 

to the cost or scope of the project , and

· information on the estimated energy or water savings, or 

renewable energy production, anticipated from proposed 

ECIP projects.

DoD RESPONSE: The DoD partially concurs. DoD provides Congress 

project Savings to Investment Ratio (SIR) (estimated discounted lifetime 

savings ($) divided by investment($)) and Simple Payback in years as 

part of notification to Congress pursuant to Title 10, U.S .C., section 

2914(b) and DoD guidance . However , the current authority for ECIP 

projects provided by Title 10 allows the use of the current method of 

reporting changes in past fiscal years' programs to Congress. Also, ECIP 

project selection is primarily based upon the SIR which currently provides 

savings to investment ratio information. Thus, requiring submission on the 

Page 46 GAO-16-162 DOD’s Energy Conservation Investment Program

Page 2
Appendix V: Accessible Data

estimated energy or water savings, or renewable energy production, 

anticipated from proposed ECIP projects will not provide a meaningful 

difference from what is already being submitted. 

RECOMMENDATIONS cont.: The Secretary of Defense also direct the 

Under Secretary of Defense for AT&L to:

(2) direct the components to include projected measurement and 

verification (M&V) costs - in the military construction proposal or 

another appropriate document - as they develop projects . In so 

doing, the Under Secretary might build on existing Navy guidance, 

as appropriate.

DoD RESPONSE: The DoD partially concurs. Current DoD guidance, in 

general, requires all ECIP projects to have a measurement and 

verification (M&V) plan. Identifying the costs associated with M&V will 

assist the Services in the budgeting process. 

DoD suggests deleting the second sentence, "In so doing, the Under 

Secretary might build on existing Navy guidance, as appropriate." Each 

Service budgets and executes their operations and maintenance (O&M) 

funding in such a way that best meets their mission requirements. For 

example, the Army has an established process to address M&V. 

(3) provide the components with additional guidance on the range of 

options available when developing M&V plans that are appropriate 

for different project sizes and types; and how to scope ECIP 

projects to conform to available funding.

DoD RESPONSE: The DoD partially-concurs. DOD suggests re-wording 

to, "provide the components with guidance on the range of options 

available when developing M&V plans that are appropriate for different 

project sizes and types ;" and deleting ". ..and how to scope ECIP 

projects to conform to available funding." The current DoD ECIP guidance 

provides requirements that must be included in a project's M&V plan, and 

provides the Department of Energy I Federal Energy Management 

Program, FEMP M&V Guidelines: Measurement and Verification for 

Federal Energy Projects. The guidelines provide a range of options 

available when developing M&V plans that are appropriate for different 

project sizes and types. Additionally, DoD holds periodic working groups 

with DoD Components and Agencies which include discussions on best 

practices utilized to develop ECIP projects which includes how to scope 

project requirements.

Page 47 GAO-16-162 DOD’s Energy Conservation Investment Program

Page 3
Appendix V: Accessible Data

(4) review the strategic goals for the ECIP program and make any 

needed adjustments to reflect current DOD priorities. 

DoD RESPONSE: The DoD concurs with this recommendation.

(5) after reviewing strategic goals and adjusting as needed , update 

installation energy management guidance and, as appropriate , 

annual ECIP guidance, to clarify:

· how the components - military services and defense 

agencies - should balance their ECIP portfolios among 

what DOD describes as traditional and game- changing 

projects to best achieve DOD 's strategic vision for ECIP, 

· what constitutes a higher-return project that should be 

proposed under alternative financing rather than ECIP, and 

· that managers proposing repair and minor construction 

projects should seek operation and maintenance rather 

than ECIP funds.

DoD RESPONSE: The DoD partially concurs with this recommendation. 

DoD suggests removing the first bullet, "how the components - military 

services and defense agencies - should balance their ECIP portfolios 

among what DOD describes as traditional and game-changing projects to 

best achieve DOD's strategic vision for ECIP." Historically, the Services, 

in their efforts to meet mandated goals, funded energy efficiency projects 

with O&M funding. Due to sequestration in FY13 and the budget 

constraints that followed, the Services no longer had O&M funds available 

to accomplish energy efficiency projects. Thus, other methods of funding 

were needed to assist the Services in their efforts to meet mandated 

goals. To address this need the FY16 ECIP program guidance of 

September 2, 2014, did not include the use of "game-changing" language 

; this is also the case for the FYl 7 ECIP guidance of October 14, 2015. 

Instead, DoD Strategic Vision for ECIP looks to fund more holistic 

projects, leveraging the Services' investments in energy efficiency and 

energy cost reduction. Also, current DoD guidance already provides 

language which directs the focus of the Services on proposed projects 

that would not necessarily be candidates for third party financing or O&M 

funds. DoD intends to review and revise guidance as necessary to make 

this portion of the guidance more clear.

ADDITIONAL DoD COMMENTS ON DRAFT REPORT: 

Page 48 GAO-16-162 DOD’s Energy Conservation Investment Program

Page 4
Appendix V: Accessible Data

1. Recommended revision on page 8, after "Energy Savings 

Performance Contracts, agencies use private funds to finance 

energy conservation measures." Recommend stating, "Under 

Energy Savings Performance Contracts, agencies contract third -

party energy service companies (ESCOs) that provide the up-front 

capital investment in energy conservation measures. Agencies 

make annual payments to the ESCOs over the life of the contract 

from realized savings." 

2. For clarity on page 10, recommend revising sentence "Of these 56 

projects , 42 projects had a cost revision greater than 25 percent 

and 14 projects had a cost revision of 25 percent or less, 

according to DOD." to ". .. 14 projects had a cost revision of 25 

percent or less (DOD does not require notification from 

Components and Agencies for projects that have cost or scope 

revisions of less than 25 percent.) 

3. Recommended revision of the first bullet on page 18, "The Marine 

Corps project will construct a micro -grid that will allow the Air 

Station to utilize power provided from a landfill methane gas 

turbine which currently supports daily/normal operations to now 

also be utilized in the event of an emergency situation where 

service from the local utility is interrupted." The generated power 

is not going to an "energy storage plant" but instead will directly 

enter the Station's electrical distribution station; and power, which 

currently supports normal operations, will also be able to be 

utilized if there is a disruption in electrical supply from the local 

company.

Data Table for Figure 2: Total DOD Energy Conservation Investment Projects (ECIP) 

Page 49 GAO-16-162 DOD’s Energy Conservation Investment Program

and Projects with Return on Investment Omitted or not Updated for Congressional 

Committees, Fiscal years 2009 through 2015

Anticipated return on investment reported (348 projects) 79%

Anticipated return on investment not reported or not updated (93 projects) 21%

Anticipated return on investment not reported or not updated (93 projects) 

i.e. 21% of pie chart is subdivided into three categories:

Projects with cost estimate revision greater than 25 percent (42 projects)

10%

Data Tables
Appendix V: Accessible Data

Page 50 GAO-16-162 DOD’s Energy Conservation Investment Program

Projects with cost estimate revision greater than 25 percent (42 projects)

10%

Projects added to replace canceled projects (37 projects) 8%

Projects with cost estimate revision 25 percent or less (14 projects) 3%
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Planning. GAO-15-749. Washington, D.C.: July 23, 2015.

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Improve Federal Oversight. GAO-15-432. Washington, D.C.: June 17, 

2015.

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and Processes to Better Account for Potential Impacts. GAO-14-446. 

Washington, D.C.: May 30, 2014.

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Defense Infrastructure: Department of Defense Renewable Energy 

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The Department of Defense’s Energy Conservation Investment Program 

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13, 1982.

Page 51 GAO-16-162 DOD’s Energy Conservation Investment Program

Related GAO Products

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