United States General Accounting Office

GAO Report to Congressional Requesters

March 1996 ARMY AVIATION

TESTING

Need to Reassess

Consolidation Plan

G O A

years

1921 - 1996

GAO/NSIAD-96-87

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-270877 

March 15, 1996

The Honorable Jon Kyl

The Honorable John McCain

United States Senate

The Honorable Howard P. (Buck) McKeon

The Honorable Ed Pastor

The Honorable Bill Thomas

House of Representatives

This report responds to your request that we examine a tentative decision

made by the Secretary of the Army on June 29, 1995, to move Army

aviation testing activities now at Edwards Air Force Base, California, to

Fort Rucker, Alabama, and retain Yuma Proving Ground. This decision

represented a shift from previous Army studies, which had recommended

consolidating all Army aviation testing at Yuma. Our report addresses

(1) the Army’s cost and savings analyses for three consolidation options

involving Edwards Air Force Base, Fort Rucker, and Yuma Proving

Ground and (2) Defense-wide implications of the Secretary’s tentative

decision.

Background Technical testing of Army aviation systems, such as helicopters, and

related support equipment is the responsibility of the Test and Evaluation

Command (TECOM), under the U.S. Army Materiel Command. Since 1990,

TECOM has maintained three principal aviation testing sites. The Aviation

Technical Test Center (ATTC) at Fort Rucker is the primary site for testing

aviation systems and support equipment. The Airworthiness Qualification

Test Directorate at Edwards Air Force Base is the primary site for

airworthiness qualification testing. Yuma Proving Ground tests aircraft

armaments and sensor systems. The principal customers for TECOM’s

aviation testing are the aviation program managers who purchase this

equipment for the Army and are currently headquartered at the Aviation

and Troop Command (ATCOM), St. Louis, Missouri.1

Significant reductions in funding, personnel, and test workloads in recent

years, as well as projections for continued reductions as part of overall

1

Under a decision approved by the 1995 Base Closure and Realignment Commission, ATCOM aviation

missions are slated to be relocated to Redstone Arsenal, Huntsville, Alabama.

Page 1 GAO/NSIAD-96-87 Army Aviation Testing
B-270877 

defense downsizing,2 drove TECOM in 1992 to examine options3 for reducing

its testing infrastructure. Internal TECOM studies resulted in a

recommendation ultimately endorsed by the Army’s Vice Chief of Staff in

late 1993 to consolidate all three Army aviation technical testing

organizations at Yuma Proving Ground. TECOM’s proposal was reinforced

by the results of a separate study sponsored by ATCOM and completed in

December 1993.

The 1995 base realignment and closure (BRAC) process also looked at

testing facilities from a Defense-wide perspective. That process identified

options for consolidating Army testing at a single-site as well as an option

for eliminating greater excess testing capacity by consolidating aviation

testing across service lines. Consolidation or cross-servicing of common

support functions such as test and evaluation activities proved very

contentious among the services in BRAC 1995 and produced limited results.

None of the aviation testing options were adopted as part of the BRAC

process. However, Army BRAC officials indicated to our staff in

January 1995 that a consolidation of its aviation testing was planned

outside the BRAC process.

While awaiting formal approval of the single-site consolidation at Yuma, in

the spring 1995, the Army Secretary’s staff updated TECOM’s cost and

savings analyses of two options: the single-site at Yuma and a dual-site at

Fort Rucker and Yuma. On June 29, 1995, the Secretary tentatively

approved the dual-site option because the analyses showed that greater

short-term savings could be achieved with that option.

Results in Brief Our analysis confirmed the Army’s position that a dual-site consolidation

involving Fort Rucker and Yuma Proving Ground provided the greatest

short-term savings to the Army and offers significant long-term savings. A

single-site consolidation at Yuma also offers significant long-term savings

and, according to various Army testing and program manager officials, a

more optimum testing environment for future testing. On the other hand,

the Office of the Secretary of Defense has raised questions about whether

either option would be the optimum choice from a Defense-wide

perspective if consolidation of testing activities across the services could

2

In January 1993, ATTC was authorized 119 military and 179 civilian positions. As of January 1996,

ATTC was authorized 95 military and 116 civilian positions for fiscal year 1996; those authorizations

are expected to be further reduced to 27 military and 102 civilian positions for fiscal year 1997.

3

TECOM examined various options involving five sites for either a single- or dual-site consolidation of

its aviation testing infrastructure. They included Yuma Proving Ground, Arizona; Eglin Air Force Base,

Florida; Fort Rucker, Alabama; Edwards Air Force Base, California; and Naval Air Station, Patuxent

River, Maryland.

Page 2 GAO/NSIAD-96-87 Army Aviation Testing
B-270877 

be achieved. However, the services and the Department of Defense (DOD)

have not reached consensus about how best to downsize and consolidate

testing activities, even though Congress has encouraged them to do so.

Given this situation, DOD has an opportunity to seek other options from a

longer term DOD-wide perspective. This will require stronger commitment

and leadership on the part of the Office of the Secretary of Defense.

Adjustments to Army

Data Needed to Fully

Account for Projected

Consolidation Savings

Because TECOM analysts considered only the impacts on TECOM’s budget,

they did not fully account for projected savings in operating costs,

particularly in the personnel area. Also, some adjustments were needed in

the methodology for and calculations of recurring costs and savings

involving base operations, real property maintenance, and aircraft

maintenance to obtain a more complete picture of relative costs and

savings among the competing locations and the time required to offset

implementation costs. (See app. II for a discussion of adjustments.) 

Table 1 shows the Army’s projected one-time implementation costs;

annual recurring savings; and the time it takes, from the year consolidation

begins, for savings to begin to exceed costs from each consolidation

option.4

 Table 2 shows the same information based on our adjustments to

the Army’s data.

Table 1: Army Projections of One-Time

Costs, Annual Recurring Savings, and

the Time Needed to Offset Costs From

Three Consolidation Options

Dollars in millions

Fort

Rucker/Yuma

option

Edwards/

Yuma option

Yuma

single-site

option

One-time costs $3.2 $3.3 $16.5

Annual recurring savings 2.3 2.1 3.5

Years before savings exceed costs 1.4 1.6 4.7

Note: The Army assumed that savings would begin the same year in which the consolidation

action was initiated.

4

Since the updated data developed for the Secretary’s decision included only two consolidation

options, we also obtained data from the Army to update its previously considered Edwards/Yuma

dual-site option in order to more accurately compare the three options.

Page 3 GAO/NSIAD-96-87 Army Aviation Testing
B-270877 

Table 2: Adjusted Estimate of

One-Time Costs, Annual Recurring

Savings, and the Time Needed to

Offset Costs

Dollars in millions

Fort

Rucker/Yuma

option

Edwards/

Yuma option

Yuma

single-site

option

One-time costs $3.2 $3.3 $16.5

Annual recurring savings 4.4 3.0 to 3.3 5.4 to 6.3

Year savings exceed costs 1.8 2.2 to 2.1 4.4 to 3.9

Notes: 1. Our adjusted estimate assumes that savings would begin to accrue in the year following

initiation of the consolidation action.

2. Because of uncertainties about actual recurring savings under the consolidation options, our

adjusted data used the Fort Rucker/Yuma option as a baseline and reflected a range of recurring

savings at the other two locations. See discussion in appendix II.

As table 2 shows, the adjusted data indicates higher annual recurring

operating savings from each option. Recurring savings remain the greatest

from the Yuma single-site option, but the offsetting of implementation

costs (including military construction) still takes longer with this option

than with the other two options.

Long-Term Savings Like the Army, we projected savings from the consolidation options over a

20-year period, following the approach used by DOD in its base realignment

and closure process.5

 The Army discounted long-term savings at a

2.75 percent rate—the same rate it used in conjunction with its 1995 base

realignment and closure analysis.6

 However, as noted in our report on the

1995 BRAC process,7

 the current Office of Management and Budget

approved discount rate of 4.85 percent would have been more appropriate

for the 1995 BRAC process.

Table 3 shows the projected net present values of the savings for each

option using the Army’s cost data and the 2.75 percent discount rate. 

5

All BRAC costs and savings were projected to occur over a 20-year period and were adjusted, or

discounted, to fiscal year 1996 dollars. Discounting reflects the time value of money by transforming

gains and losses from different time periods to a common unit of measurement. The discount rate is

also used as a factor in determining the number of years before the government realizes a return on its

investment, that is, the point at which savings begin to exceed costs associated with the consolidation

action.

6

While the Army staff applied a discount rate to project long-term savings, it did not use a discount rate

in determining a payback period. The payback periods for options that the Army staff briefed to the

Secretary of the Army, as shown in table 1, were developed using simple division rather than

discounted dollars.

7

See Military Bases: Analysis of DOD’s 1995 Process and Recommendations for Closure and

Realignment (GAO/NSIAD-95-133, Apr. 14, 1995).

Page 4 GAO/NSIAD-96-87 Army Aviation Testing
B-270877 

Table 4 shows our adjustments to the Army’s data, including use of the

4.85 percent discount rate.

Table 3: Discounted Savings Using the

Army’s Data Dollars in millions

Return period

Fort

Rucker/Yuma

option

Edwards/

Yuma option

Yuma

single-site

option

Short term (6 years) $9.7 $8.4 $3.0

Mid term (10 years) 17.2 15.1 14.2

Long term (20 years) 32.7 29.2 37.3

Note: Includes the Army’s assumption that savings would begin the same year in which the

consolidation action was initiated.

Table 4: GAO’s Estimate of Discounted

Savings

Return Period

Fort

Rucker/Yuma

option

Edwards/

Yuma option

Yuma

single-site

option

Short term (6 years) $15.6 $9.5 to 10.8 $6.8 to 10.6

Mid term (10 years) 27.6 17.7 to 19.8 21.6 to 27.9

Long term (20 years) 49.4 32.6 to 36.2 48.4 to 59.2

Notes:1. Assumes that savings would begin in the year following initiation of the consolidation.

2. Because of uncertainties about actual recurring costs under the consolidation options, our

adjusted data used the Fort Rucker/Yuma option as a baseline and reflected a range of recurring

savings at the other two locations. See discussion in appendix II.

As tables 3 and 4 show, the Fort Rucker/Yuma dual-site option offers the

Army the greatest short-term savings, which the Army considers important

in today’s constrained budget environment. The adjusted data show that

both the Fort Rucker/Yuma dual-site and Yuma single-site options have

long-term savings that are much greater than those for the Edwards/Yuma

dual-site option. The 20-year cost savings for the Yuma single-site option

are at least comparable to, and possibly greater than, the Fort

Rucker/Yuma dual-site option. Under the least savings case shown, for

those two options, there would be about a $1 million difference in

projected long-term savings between the two options—a difference that

could be eliminated with a reduction of about $100,000 in annual operating

costs for the Yuma single-site option. The costs and savings from the Yuma

single-site option are based on the premise that required military

construction would be completed before the consolidation. Completing

Page 5 GAO/NSIAD-96-87 Army Aviation Testing
B-270877 

the military construction after the consolidation would result in increased

operating costs and reduced savings.8

Other Cost and Savings

Issues

Neither we nor the Army included several factors in cost and savings

calculations because they were not easily quantified and because no

consensus could be reached on what those costs and savings should be.

According to officials at Edwards, movement of the base’s testing

operation to Fort Rucker could result in significant recurring costs to

transport test aircraft and personnel to distant ranges, such as Yuma, to

complete necessary testing operations. An Army aviation official at

Edwards estimated these costs could be about $400,000 per year, based on

prior tests conducted at Edwards. Another estimate from a Yuma official,

based on an evaluation of future testing of the new Comanche aircraft,

suggested that additional transportation costs could run as high as

$1 million annually. Fort Rucker officials, while acknowledging that

transportation costs could increase, believe that the actual costs would

not be as high as projected. A number of factors made it difficult for us to

identify the most likely costs. First, prior tests are not necessarily

indicative of future testing requirements. Second, Army testers already use

multiple sites around the United States for various tests—sites other than

the three discussed in this report. Third, Fort Rucker officials indicted

they would likely seek testing sites closer to Fort Rucker if the

consolidation plan is enacted. Thus, while we believe that additional

transportation costs are likely with the Fort Rucker/Yuma option, it is not

clear what those costs would be.

Officials at Fort Rucker noted that it has a contractor-operated mini-depot

repair capability to maintain the large number of aircraft associated with

its aviation school. Documentation showed that the aviation test center

can use this capability, particularly the electronic equipment test facility,

to achieve significant savings in time and dollars over the costs of repair at

a regular depot facility. Center officials estimated 1-year savings of about

$1.9 million through the use of this contract. Army testing officials at Yuma

and Edwards agreed that this mini-depot does provide an advantage to

aviation testing at Fort Rucker. However, our other reviews of depot

operations have shown that the services have excess depot capacity,

which increases customer costs. At the same time, to the extent to which

the practices of the mini-depot at Fort Rucker minimize customer costs

8

The chief of ATCOM’s Test and Evaluation office told us that it would be difficult to consolidate

testing at Yuma without completing the military construction.

Page 6 GAO/NSIAD-96-87 Army Aviation Testing
B-270877 

over those at a regular depot, it raises a question why depot maintenance

practices should not be modified more broadly so that such savings would

not be limited to just Fort Rucker. These variables make it unclear what

maintenance savings should be attributed to any testing consolidations

involving Fort Rucker.

Officials at each of the locations identified additional benefits and

synergism from being located with other activities at their respective

locations. However, such benefits, while undoubtedly real, were more

qualitative in nature and not easily quantified from a cost standpoint or

had cost advantages insufficient to affect the relative savings associated

with a particular consolidation option. Additionally, other issues such as

air space, safety, and weather were raised by officials at selected locations

to suggest the relative merits of one location over the other. These also

were more qualitative in nature and not easily quantified from a cost

standpoint. While various Army officials and Army testing consolidation

studies point to Yuma Proving Ground as providing the optimum testing

environment for the Army, we found no indication that testing could not

be conducted safely at the other locations.

Excess Capacity in

DOD Testing

Infrastructure Signals

Need for

Consolidations

Various studies in recent years, including DOD’s 1995 base realignment and

closure review, have concluded there is excess aviation test and

evaluation capacity across DOD and have noted the need for reductions in

keeping with overall defense downsizing. Likewise, Congress has urged

DOD to downsize and consolidate testing activities. However, the services

have been unable to agree on how best to achieve such consolidations.

During the 1995 BRAC process, a cross-service review group, comprising

representatives of each of the services and the Office of the Secretary of

Defense, identified several alternatives for the services to consider as they

evaluated their bases for potential closure or realignment. One alternative

was to shift Army aviation testing from Fort Rucker and Edwards Air

Force Base to Yuma. Another option, with greater excess capacity

reduction potential across the services, was to consolidate the test and

evaluation of air vehicles at a single DOD center at either the Navy’s

Patuxent River, Maryland, testing facility or Edwards Air Force Base.

Consolidation of Army aviation testing at one of these sites was contingent

upon agreement by the Air Force and Navy for consolidation of their

aviation testing. However, the services disagreed greatly over how to

Page 7 GAO/NSIAD-96-87 Army Aviation Testing
B-270877 

reduce their excess testing capacity, and little progress was made,

particularly in the area of cross-servicing.9

Congress has also encouraged downsizing, consolidation, and

restructuring of the services laboratories and test and evaluation

infrastructure, including rotary wing aircraft. Section 277 of the National

Defense Authorization Act for Fiscal Year 1996 (P.L. 104-106), requires that

the Secretary of Defense, acting through the Test and Evaluation Agent

Executive Board of Directors,10 develop and report to congressional

defense committees, by May 1, 1996, a plan to consolidate and restructure

DOD’s laboratories and test and evaluation centers by the year 2005.

Of more immediate concern to DOD was the Army Secretary’s June 1995

tentative decision to consolidate Army aviation testing at Fort

Rucker/Yuma. The Director, Test Systems Engineering and Evaluation, in

the Office of the Under Secretary of Defense for Acquisition and

Technology, expressed concern that Fort Rucker was not part of DOD’s

Major Range and Test Facility Base (MRTFB). He noted in a letter to the

Test and Evaluation Executive Agent Board of Directors on September 12,

1995, that there had been a long-standing understanding within the DOD

testing community that any consolidation of test and evaluation activities

should be at a MRTFB facility unless there was a compelling reason

otherwise. He also noted the principle of selecting courses of action that

are optimum for DOD rather than for a single program or service. The

Army, tasked with responding on behalf of the Board, noted that personnel

and budget constraints required the Army to take immediate action to

reduce costs in many areas; additionally, the Army noted that it was these

economic circumstances, as well as the Army requirement to achieve

short- and medium-term budgetary savings, that led to its decision.

Several service officials we met with also questioned the selection of a

non-MRTFB facility (Fort Rucker) in light of future directions of aviation

testing. These officials indicated that advanced helicopter systems are

increasingly employing integrated electronics and, as a result, it is

important to test the electronics and airworthiness at the same time.

Various officials also suggest that it is important to do testing of the

aircraft configured with its weapon systems, operating the electronic

equipment, and firing the weapons. They also said it is important to do

9

See Military Bases: Analysis of DOD’s 1995 Process and Recommendations for Closure and

Realignment (GAO/NSIAD-95-133, Apr. 14, 1995).

10According to an agreement reached in August 1993, the vice chiefs of staff of the services serve as a

board of directors with executive agent authority over the services’ test and evaluation infrastructure

investments and consolidation.

Page 8 GAO/NSIAD-96-87 Army Aviation Testing
B-270877 

integrated testing to avoid gaps in testing programs. ATCOM’s 1993 study of

aviation testing noted that as weapons and electronic warfare equipment

become a more integral part of the air vehicle, it is increasingly important

that the whole system, not merely its parts, be tested. This suggests the

importance of locating testing at a MRTFB facility.

Recommendation There is a continuing need to reduce and consolidate excess infrastructure

within DOD, including that which exists within the services testing

community. Also, the Army has a compelling need to consolidate its

aviation testing because of reductions in its workload and continuing

reductions in authorized personnel. Consequently, we recommend that the

Secretary of Defense, in conjunction with the Test and Evaluation

Executive Agent Board of Directors, reexamine the Army’s aviation

consolidation plan within the context of its congressionally mandated plan

for consolidating laboratories and test and evaluation facilities. Such a

reexamination should include a timely determination of whether DOD could

reduce excess testing capacity and achieve greater long-term savings

Defense-wide through consolidation of Army aviation testing on a

cross-service basis and, if so, determining the appropriate locations and

action plan for achieving such a consolidation.

Agency Comments

and Our Evaluation

In official oral comments, DOD generally concurred with this report and

agreed to examine the Army’s aviation consolidation plan within the

context of its congressionally mandated plan for consolidating

laboratories and test and evaluation facilities, due to Congress by May 1,

1996. However, DOD also agreed to the Army proceeding with it’s current

aviation consolidation plan, but only to the extent that near-term savings

can be realized, and holding in abeyance any actions such as construction

or other investments that could be lost if far-term consolidation plans

differ from the Army’s short-term actions. DOD’s agreement with the Army

moving forward with its current consolidation plan raises questions about

the extent to which the issue of cross-servicing will be dealt with in the

near-term. We continue to believe that a serious examination of the

potential for cross-servicing in the test and evaluation arena is warranted.

DOD also expressed the view that our adjustments to the Army’s cost and

savings analysis, while not affecting the outcome of our review, did result

in what it considered an inflated estimate of expected annual savings in

our report. Our approach, following methodology employed in the BRAC

process, made appropriate and consistent calculations of one-time and

Page 9 GAO/NSIAD-96-87 Army Aviation Testing
B-270877 

long-term costs and savings for each location option; in doing so, we

considered costs and savings both to the Army as a whole as well as to the

test and evaluation program. We believe that this is an appropriate

approach to fully account for expected costs and savings.

Our scope and methodology are discussed in appendix I.

Unless you announce its contents earlier, we plan no further distribution

of this report until 15 days after its issue date. At that time, we will send

copies to the Chairmen, Senate Committee on Armed Services;

Subcommittee on Defense, Senate Committee on Appropriations; House

Committee on National Security; and Subcommittee on National Security,

House Committee on Appropriations; the Director, Office of Management

and Budget; and the Secretaries of Defense and the Army.

Please contact me at (202) 512-8412 if you or your staff have any questions

concerning this report. Major contributors to this report were Barry W.

Holman, Assistant Director; Raymond C. Cooksey, Evaluator-in-Charge;

and David F. Combs, Senior Evaluator.

David R. Warren, Director

Defense Management Issues

Page 10 GAO/NSIAD-96-87 Army Aviation Testing
Page 11 GAO/NSIAD-96-87 Army Aviation Testing
Contents

Letter 1

Appendix I 

Scope and

Methodology

14

Appendix II 

Adjustments to the

Army’s Cost and

Savings Data

15

Tables Table 1: Army Projections of One-Time Costs, Annual Recurring

Savings, and the Time Needed to Offset Costs From Three

Consolidation Options

3

Table 2: Adjusted Estimate of One-Time Costs, Annual Recurring

Savings, and the Time Needed to Offset Costs

4

Table 3: Discounted Savings Using the Army’s Data 5

Table 4: GAO’s Estimate of Discounted Savings 5

Abbreviations

ATTC Aviation Technical Test Center

ATCOM Aviation and Troop Command

BRAC Base Realignment and Closure

DOD Department of Defense

GAO General Accounting Office

MRTFB Major Range and Test Facility Base

TECOM Test and Evaluation Command

Page 12 GAO/NSIAD-96-87 Army Aviation Testing
Page 13 GAO/NSIAD-96-87 Army Aviation Testing
Appendix I 

Scope and Methodology

We obtained and reviewed various studies completed by the Army’s Test

and Evaluation Command (TECOM) and others pertaining to the

consolidation of aviation test facilities. Discussions were held with

pertinent officials at the Department of the Army headquarters; TECOM

headquarters at Aberdeen Proving Ground, Maryland; and TECOM test sites

at Yuma Proving Ground, Arizona; Edwards Air Force Base, California;

and Fort Rucker, Alabama. We obtained and analyzed various data at each

of these locations to assess the completeness and reasonableness of the

data included in the Army’s consolidation studies and data used by the

Secretary of the Army in making his June 1995 tentative decision to

consolidate testing and two sites. We did not attempt to develop budget

quality data, but focused on the adequacy of data to provide relative

comparisons among competing locations. Because we had concerns about

the comparability of private sector wage data used by the Army in

projecting aircraft maintenance costs, we obtained current Department of

Labor wage rate data to provide another basis for comparing potential

costs. In assessing projected costs and savings for each consolidation

option, we also performed selected sensitivity analyses to determine how

changes in some data elements would affect the relative costs and savings

of each location.

To broaden our perspective on aviation test and evaluation issues and

future requirements, we held discussions with key testing officials in the

Office of the Secretary of Defense, the Army’s Aviation and Troop

Command, the Air Force Flight Test Center at Edwards Air Force Base,

and the Naval Air Warfare Center at Patuxent River, Maryland.

Additionally, we reviewed pertinent documentation and analyses from the

1995 base realignment and closure process.

We conducted our work between August 1995 and January 1996 in

accordance with generally accepted government auditing standards.

Page 14 GAO/NSIAD-96-87 Army Aviation Testing
Appendix II 

Adjustments to the Army’s Cost and Savings

Data

We made adjustments to the Army’s costs and savings data to obtain a

more complete picture of expected savings from consolidated testing

activities. We factored in savings in two areas not fully reflected in the

Army’s analysis. The first involved the fact that TECOM had claimed only the

savings proportional to its direct funding. Approximately 40 percent of

TECOM’s budget involves direct funding; the remainder is derived from

customer billings. We, therefore, adjusted the savings upward to more

fully account for total Army savings. The second area involved savings

attributable to reductions in military personnel that would occur as a

direct result of the consolidations. TECOM’s written organizational concept

outlining plans for consolidation cited specific expected reductions in

military personnel because of consolidation. It had not included these

savings in its analysis; we added them in.1

 These changes produced

significant increases in projected annual recurring and long-term savings

to the Army.

We made some adjustments to the Army’s calculations of base operating

support and real property maintenance services. Cost comparisons for this

area had proven problematic for the Army, since the Aviation Technical

Test Center was not billed for these services at Fort Rucker. Therefore,

TECOM opted to develop average base operating and real property

management costs based on actual costs at Fort Rucker and Edwards Air

Force Base and apply that average to all three locations. TECOM officials

did not have actual cost data for Yuma. We used the Army’s data for Fort

Rucker and Edwards to assess the impact on base operating costs for the

various consolidation options. The effect was some decrease in projected

savings from a consolidation at Edwards Air Force Base and increase in

savings at Fort Rucker. Because comparable base operating cost data

were not readily available for Yuma, and assuming that actual base

operating costs at Yuma would likely be somewhere between those at Fort

Rucker and Edwards, we applied an average cost figure to base operating

costs at Yuma. The effect on the Yuma option was negligible.

We recognized a concern expressed by the Edwards community that

actual Army/TECOM reimbursements to the Air Force for base operations

were about $400,000 less than those included in the Army’s analysis. A

counter, according to TECOM officials, is that the Aviation Technical Test

1

It has been the standard practice of each military service, in recent Base Realignment and Closure

Commission (BRAC) rounds, to include projected savings from military personnel reductions

associated with BRAC actions. Such was the case regarding the Army in the 1995 BRAC round,

although there was no indication that the Army expected to make commensurate adjustments in its

authorized end strengths. To the extent end-strength reductions are not made, these reductions do not

result in direct budgetary savings to the government. However, they, like other reduction savings, do

free up resources to be reassigned elsewhere as needed, providing a broader benefit to the Army.

Page 15 GAO/NSIAD-96-87 Army Aviation Testing
Appendix II 

Adjustments to the Army’s Cost and Savings

Data

Center is not directly billed for any base operating support costs at Fort

Rucker. Absent time for a more detailed assessment of base operating

costs at each of the locations, we considered the Army’s methodology,

with adjustments as noted above, to represent a reasonable approach for

comparing such costs. Nevertheless, we conducted a sensitivity analysis,

reducing base operating costs at Edwards by $400,000 to determine the

impact on recurring savings at Fort Rucker and found that the relative cost

advantage of each competing location remained unchanged.

In reviewing contracted aircraft maintenance cost estimates, we found

broad differences in estimates of labor costs at the three locations. The

Army’s most recent study had used a wage differential of 5.7 percent

between Fort Rucker and Yuma, based on actual experience at the two

locations. However, it used a wage difference of 19 percent between Fort

Rucker and Edwards Air Force Base, based on federal wage grade tables.

The study assumed the work, if moved to Edwards, would be contracted

out. Most recent Department of Labor wage rate data for aircraft

mechanics showed the differences between Fort Rucker and Yuma and

between Fort Rucker and Edwards Air Force Base, to be 28.2 percent and

25.8 percent, respectively. While Department of Labor wage rates provide

a uniform basis for comparison, various Army officials have expressed

concern that actual costs at the time a contract would be negotiated would

be somewhat less than indicated by the Department of Labor data. For

uniformity in comparing differences among the three locations, we chose

to adjust the Army’s data to reflect current Department of Labor wage

differences among the three locations. However, assuming that actual

costs could likely fall somewhere between the two approaches, our

adjusted data on savings show a range of savings to reflect each approach.

The low end, with smaller recurring savings, are based on Department of

Labor wage differentials.

Our adjustments to the Army’s data affected various cost and savings data

elements. For example, the aircraft maintenance adjustments had the

effect of increasing projected annual operating costs at Yuma and

Edwards relative to Fort Rucker and reducing projected long-term savings

at those locations. Also, while Yuma, as a single-site option, had greater

savings in personnel costs, Yuma’s aggregate savings were diminished by

higher projected contract maintenance costs attributed to differences in

area wage rates.

(709165) Page 16 GAO/NSIAD-96-87 Army Aviation Testing
Ordering Information

The first copy of each GAO report and testimony is free.

Additional copies are $2 each. Orders should be sent to the

following address, accompanied by a check or money order

made out to the Superintendent of Documents, when

necessary. VISA and MasterCard credit cards are accepted, also.

Orders for 100 or more copies to be mailed to a single address

are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 6015

Gaithersburg, MD 20884-6015

or visit:

Room 1100

700 4th St. NW (corner of 4th and G Sts. NW)

U.S. General Accounting Office

Washington, DC

Orders may also be placed by calling (202) 512-6000 

or by using fax number (301) 258-4066, or TDD (301) 413-0006.

Each day, GAO issues a list of newly available reports and

testimony. To receive facsimile copies of the daily list or any

list from the past 30 days, please call (202) 512-6000 using a

touchtone phone. A recorded menu will provide information on

how to obtain these lists.

For information on how to access GAO reports on the INTERNET,

send an e-mail message with "info" in the body to:

info@www.gao.gov

PRINTED ON RECYCLED PAPER
United States

General Accounting Office

Washington, D.C. 20548-0001

Official Business

Penalty for Private Use $300

Address Correction Requested

Bulk Rate

Postage & Fees Paid

GAO

Permit No. G100