United States General Accounting Office

GAO Report to Congressional Requesters

April 1996 MILITARY BASES

Opportunities for

Savings in Installation

Support Costs Are

Being Missed

G O A

years

1921 - 1996

GAO/NSIAD-96-108

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-271217 

April 23, 1996

The Honorable Duncan Hunter

The Honorable James Saxton

House of Representatives

Your March 14, 1995, letter requested that we explore whether support

costs for military bases located in close proximity to one another can be

reduced. This report addresses (1) the potential for cost savings through

increased reliance of one service on another for base support services or

functions, (2) the Department of Defense’s (DOD) past and current efforts

to promote interservicing,1

 and (3) impediments to interservicing

identified by DOD and service officials.

Background Even after several years of defense downsizing, DOD operates hundreds of

major military bases and many smaller facilities in the United States.

These bases can range in size from less than 10 acres to several hundred

thousand acres. There are bases, such as Fort Bragg and Pope Air Force

Base located in North Carolina, adjacent to each other; and there are

bases, while not adjacent, that are located within a relatively short

distance from each other. Base supporting services vary and can include

property maintenance, logistics, transportation and equipment

maintenance, personnel and professional support, and services to

individuals, such as food, housing, recreation, or education. Appendix I

provides a more detailed list of common base support functions.

Our analysis of the services’ operations and maintenance (O&M) budgets

indicate that a significant portion of these budgets are spent on

maintaining facilities and delivering services to installations.2 DOD has long

been concerned about and has sought ways to reduce the cost of military

base support, and DOD believes that greater economies and savings could

be achieved by consolidating and eliminating duplicate support services

for military bases located close to one another, or where similar functions

are performed at multiple locations. Over the years, DOD’s concerns have

1

While interservicing refers to reliance of one service on another for support, intraservicing refers to

greater reliance on consolidated support within a service. This report used the term interservicing type

arrangements to refer collectively to inter and intraservicing.

2

Based on funding associated with base operating program elements identified in the Defense Finance

and Accounting Service’s Financial Management Manual and numbers provided by the services’ Office

of Financial Management, we calculated that about 30 and 32 percent of the Air Force’s and the Army’s

fiscal year 1995 O&M budgets were devoted to base support activities; the percentage is smaller in the

Navy (17 percent), representing support for shore-based facilities versus ships. Total O&M budgets for

the three services for fiscal year 1995 were $16 billion.

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led to some large consolidation efforts, such as in the areas of logistics and

commissary services, as well as more recent consolidations involving

printing and finance.

DOD has also supported efforts to foster greater cooperation and

interservicing among the services on regional and local levels. However,

two of the most notable interservicing type efforts initiated in the 1970s

and 1980s were not successful, for reasons that appeared to have more to

do with how they were implemented than with the merits of the concept.

They involved consolidating real property management and contracting

activities at Air Force and Army bases in the San Antonio, Texas, area and

consolidating management of housing for each of the services in Oahu,

Hawaii. (See app. II for additional information regarding these two

consolidation efforts and circumstances contributing to their lack of

success.) Meanwhile, on an installation and regional basis, the services

have continued varying efforts, on a more limited basis, to develop

interservice support agreements where possible.

Downsizing and reduced defense budgets in recent years are now causing

the services to take a renewed interest in trying to achieve greater

economies, efficiencies, and cost savings in base operations. This includes

efforts to more vigorously examine the potential for greater inter and

intraservicing involving base support, as well as partnership arrangements

between military bases and local governments and communities.3

 At the

same time, DOD is advocating greater reliance on outsourcing (contracting

out) base support functions.4

Results in Brief DOD has long recognized the potential for savings in base support costs

through interservicing, but the extent of both potential and actual savings

are not easily calculated. Moreover, the services have not taken sufficient

advantage of potential opportunities to achieve significant savings in base

operating support costs through greater reliance on interservicing type

arrangements. However, the services recently have been considering a

3

These efforts are framed around the services continuing to control their respective bases. They do not

include the concept of a single service being responsible for overall base support for collocated bases

involving two or more services—a matter of interest to the requesters.

4

We found the terms contracting out, outsourcing, and privatization often used interchangeably.

However, the administration’s Reinventing Government Initiative, also known as the National

Performance Review differentiates between outsourcing and privatization. It describes outsourcing as

reflecting a decision by government to remain fully responsible for the provision of all services and

management decisions even though the private sector will perform the service. It says that

privatization implies the government is currently providing the service, but no longer sees the need to

be in direct control of its provision, operations, or maintenance.

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broad array of initiatives, including interservicing, to achieve greater

savings and economies in support costs. The Office of the Secretary of

Defense’s (OSD) recent program initiative on contracting out base support

operations could have the most potential for changing the services’

approach to obtaining base operations support. At the same time, the

potential exists for contracting out to be pursued without first maximizing

efficiencies through increased interservicing. Consolidations through

interservicing agreements reached in advance of contracting out could

enhance the potential for greater efficiencies and cost savings through

contracting out.

Despite the recognized potential for savings from interservicing, differing

service traditions and cultures, and concern over losing direct control of

support assets, often cause commanders to resist interservicing. Other

factors, such as differences in service standards and resource constraints,

also affect commanders’ willingness to embrace interservicing. While such

impediments have affected interservicing of base support functions on a

limited scale, comments by DOD and service officials suggest they could be

even greater impediments to interservicing on a larger scale, such as

having one base commander responsible for providing all base support to

collocated bases of two or more services.

Potential Savings

Through

Interservicing Are

Possible but Not Well

Documented

Numerous studies completed by DOD and the services have supported the

potential to save money in personnel, facilities, and operating costs by

consolidating various base support functions through interservicing.

However, the amount of these savings are not clear because some

consolidations on which some projected savings were based were either

not implemented, not implemented as planned, or terminated. These

include the San Antonio Real Property Maintenance Agency and

Contracting Center and the Oahu, Hawaii, housing programs. Both

programs, operational for several years, were disestablished after

encountering various problems and concerns on the part of affected

military commanders about their effectiveness.

DOD and the services have found it manpower intensive and often difficult

to track savings from interservicing agreements and difficult to

differentiate savings from cost avoidances; consequently, DOD does not

devote significant efforts to tracking savings from projects that are

implemented. However, DOD officials provided us with some ad hoc

examples of multimillion dollar savings spread over varying periods of

years involving such support functions as contracting, printing, training,

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recycling, teleconferencing, personnel services, and others. For example,

service officials in Charleston, South Carolina, reported a 1-year cost

avoidance of over $1 million in travel and per diem costs through shared

use of video teleconferencing capabilities. In another example, service

officials in Colorado Springs, Colorado, reported that a consolidated

regional natural gas contract resulted in cost savings of $9.5 million over a

3-year period.

In addition, potential savings today are clouded because the services are

increasingly looking for ways to consolidate and streamline operations

because of budget reductions. Service officials stated that they were

reluctant to identify further savings as part of new studies, fearing

additional reductions would be taken on top of the cuts that have already

been made.

Efforts to Facilitate

Interservicing Have

Often Produced

Limited Results

In 1972, DOD established the Defense Regional Interservice Support

program as its principal program to help identify and eliminate duplicative

base support services for activities in close proximity to each other. The

regulation governing the program, DOD Instruction 4000.19, required DOD

activities to first consider using other DOD and federal activity capabilities

unless a commercial source or developing an in-house capability

constituted a better value. DOD reinforced its emphasis on interservicing

and support consolidations in 1978 by establishing Joint Interservice

Resource Study Groups (JIRSG). These regional groups were expected to

evaluate the feasibility of savings through support service consolidations

in geographic areas where there were several relatively large military

installations within a 50-mile radius.

DOD and service officials told us that between 1978 and 1992, JIRSGs

conducted a variety of studies that identified potential savings and

efficiencies through interservicing. However, we were told that many of

these studies were ignored because no one, including local base

commanders, really wanted to implement them.5

 In April 1992, DOD revised

the JIRSG program so that its focus shifted from conducting regional

studies to providing interservice support. The JIRSG program ceased being

mandatory and was no longer required to review defined support service

categories as before. As a result of these changes, JIRSGs are now tasked

with facilitating communications among DOD and other federal activities,

sharing innovative ideas, and seeking opportunities for improving mission

5

We were unable to gauge the range of potential savings expected from these studies since they were

not retained on a centralized basis.

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quality, efficiency, and effectiveness through the use of support

agreements and other cooperative efforts.6

 Although participation in the

JIRSG program remains voluntary, OSD officials continue to emphasize the

program through such means as conducting national workshops for JIRSG

representatives and disseminating JIRSG newsletters, including information

on successful agreements and partnerships.

As of November 1995, there were 55 JIRSG regions throughout the United

States, Europe, the Pacific, and Panama. We contacted JIRSG officials from

21 of these regions and found that about 29 percent of these regions had

been inactive for the past several years, and many program offices did not

have personnel in key positions. We were told that the existence,

effectiveness, and success of a JIRSG program was often dependent on the

interest of both the local commander and the JIRSG program manager, if

there was one. Further, we were told that command interest in the

programs ebbed and flowed with changes in commanders and their

differing perspectives on the desirability of the program.

Despite fluctuations in program emphasis, we found a range of

interservicing agreements in place at the seven bases we visited. They

included agreements pertaining to such support areas as morale, welfare,

and recreation activities; laundry services; and utilities. Most could be

characterized as limited arrangements, pertaining to portions of functions,

such as a consolidated contract, rather than large-scale reliance of one

military base on another for support, such as for overall contract

administration. While many agreements were in place, OSD and service

officials stated that many interservicing opportunities remain. We saw this

at various collocated bases we visited. For example, both Fort Lewis and

McChord Air Force Base maintain separate airfield operations facilities,

and airfield operations was an area cited by Fort Lewis personnel as

having the potential for one facility to serve both bases. Likewise, both

Fort Bragg and Pope Air Force Base maintained separate contract

administration, supply and engineering, and other support areas, that an

Army official suggested had the potential for one service to provide to

both bases. Appendix III provides a more detailed list of base support

functions being performed at bases we visited where base personnel cited

at least portions of those functions having the potential for consolidation

and interservicing.

6

Thus, after April 1992, JIRSG became an acronym for Joint Interservice Regional Support Group.

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Recent Initiatives to

Reduce Base Support

Costs

Defense downsizing and resource constraints in recent years have

reinforced the need to look for greater efficiencies and savings in base

support operations. A major initiative now being spearheaded by OSD

involves examining the potential for contracting out base support services.

Also, underway under service auspices, and initiated prior to OSD’s current

emphasis on contracting out, are a variety of initiatives ranging from a

greater emphasis on interservicing to broad regionalization of selected

support functions, to privatization of some functions, and contracting out.

These service initiatives go beyond traditional interservicing with other

DOD and federal agencies, including forming partnerships with local

governments and communities. The relationship of these efforts to OSD’s

current contracting out initiative raises questions as to whether DOD’s

strategy and approaches to reducing costs in these areas are likely to

achieve the maximum possible savings.

OSD Although DOD has historically placed some emphasis on contracting out,

that emphasis today is greater than ever before due to the administration’s

Reinventing Government Initiative, otherwise known as the National

Performance Review, and to recommendations of two recent DOD study

groups—the May 1995 Roles and Missions study, and the October 1995

Defense Science Board study on Quality of Life. Further, a provision in the

fiscal year 1996 Defense authorization legislation encourages DOD to look

to the private sector to meet its support needs. The 1993 report of the

National Performance Review noted that every federal agency needs

support services. The report advocated greater consideration of options in

obtaining those services and said that no agency should provide support

services in-house unless those services could compete with those of other

agencies and private companies. That report has resulted in a greater

emphasis being given to contracting out and privatizing support services.

The 1995 report of the Chairman of the Joint Chiefs of Staff dealing with

Roles and Missions recommended that essentially all commercial activities

in DOD be outsourced and that all new needs be channeled to the private

sector from the beginning. That recommendation followed the study

group’s review of the full spectrum of central support activities, including

installations and facilities. Activities that were not dependent on

specialized, defense-unique equipment such as base security, facilities

maintenance, and installation management services, were designated as

prime candidates for early outsourcing. According to the roles and

missions report, most of these nonspecialized or defense-unique services

have little direct association with combat forces and can be moved to

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private-sector markets where competition ensures adequate cost control.

The Roles and Missions’ report also stated that the many routine,

nonmilitary infrastructure functions associated with managing a military

base were better left to the private sector to manage.

The 1995 Defense Science Board Task Force on the Quality of Life was

tasked with examining quality of life issues as they apply to all military

personnel, their families and civilian employees, and recommending

improvements that could be quickly implemented. The task force

addressed housing, personnel tempo, and community and family services.

In the area of housing, the task force recommended that DOD achieve an

effective housing delivery system over a 3-year period by (1) using private

venture capital initiatives to construct new and revitalize existing housing;

(2) reviewing and revising housing policies, laws, standards, criteria and

regulations and find ways to improve ineffective and inefficient funding

practices; and (3) creating a nonprofit government corporation that could

act as an umbrella organization with the actual maintenance and

operations being executed through local private industry contracts. DOD is

currently examining how it can implement these recommendations and is

working with the services to identify obstacles to their implementation.

Section 357 of the National Defense Authorization Act for Fiscal Year 1996

(P.L. 104-106) encourages reliance on private-sector sources for

commercial products or services. It requires that not later than April 15,

1996, “. . . the Secretary shall transmit to the congressional defense

committees a report on opportunities for increased use of private-sector

sources to provide commercial products and services to the Department.”

In August 1995, DOD established a working group to determine which

military and civilian positions associated with base support operations

should be studied by each service for possible outsourcing. The services

are studying the potential to outsource work related to 60,000 full-time

equivalent positions, most involving DOD civilian personnel. The services

exempted another 323,000 positions from outsourcing consideration at

this time because they were considered as directly supporting the services’

warfighting missions. However, one working group official told us that

probably half of these exempt positions could be studied for outsourcing.

This official, however, acknowledged that with the 60,000 positions

selected for initial study, the military services have more than enough

work to review at the present time. According to this official, no

completion date for this effort has been determined.

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The individual service initiatives that are outside the current OSD

outsourcing initiative are described below.

Army Among the military services, the Army appears to have been the most

aggressive in pursuing interservicing, partnering, and other efforts to

reduce base operating costs. In fiscal year 1994, the Army created a

departmental level installation management office to provide central

oversight of installation support operations. The Army’s installation

management office serves as a focal point for the many initiatives

occurring within the Army, as well as, write policy and integrate doctrine

pertaining to the planning, programming, execution, and operation of

Army installations. The installation management office is encouraging

Army commands to undertake a broad range of initiatives that work

toward operating more efficiently. For example, one initiative suggests

that installations should become less self-sufficient by encouraging more

regionalizing, consolidating, and contracting out of base support services

and facilities.

The Army’s major commands that operate bases in the United States have

the lead in examining options for achieving greater efficiencies in base

operations. For example, Forces Command (FORSCOM) has been examining

a number of initiatives in the base operations area. One of these initiatives

is known as Installation XXI. Under this initiative, FORSCOM has tasked its

three garrison commanders at I, III, and XVIII Airborne Corps, and the U.S.

Army Reserve Command (USARC) with exploring options for more efficient

base operations in the future. The commander of I Corps was tasked with

reviewing the possibility of multiservice base operations; the commander

of III Corps was tasked with exploring development of “centers of

excellence” for various base functions so that one base would become

expert in and assume responsibility for certain functions such as contract

management for multiple bases; the commander of the XVIIIth Airborne

Corps was tasked with examining community partnerships; and the

commander of USARC was tasked with examining options for reserve

component support apart from reliance on active duty bases.

FORSCOM’s goal is to test and evaluate these various initiatives and

implement them beginning October 1, 1996. However, some initiatives are

being tested and implemented at the same time throughout FORSCOM. For

example, an initiative to test the effect of consolidating warehouses at one

location was found to be successful, and is now being expanded. Another

effort being implemented involves having a regional contract

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administration office for contracts over $500,000. In this and other similar

situations, we found service officials reluctant to identify specific cost

savings from these projects. They indicated that many of these efforts

were necessitated by previous budget reductions, and they were

concerned that if savings were identified their budgets would be further

reduced. We recognize this as a real concern to the extent budget

reductions have been made in anticipation of future savings that are not

achieved—a concern that was recently publicly acknowledged by the

Secretary of Defense regarding some previous Defense Management

Review studies within DOD. However, our work indicates that DOD has not

been effective in tracking savings for initiatives such as the Defense

Management Reviews.7

 Consequently, case-by-case analyses would be

needed to determine the validity of these concerns.

In addition, FORSCOM’s commander has been especially interested in the

interservicing concept, particularly between its I Corps installation at Fort

Lewis, Washington, and the nearby McChord Air Force Base. To facilitate

this effort, the Commanding General of FORSCOM wrote a letter to his

counterpart at the Air Force Air Mobility Command (AMC) on August 16,

1995, to get his support to allow the commanders at Fort Lewis and

McChord Air Force Base to study the feasibility of consolidating base

support functions that were currently being performed by both

installations. He asked for AMC’s support so that both commanders could

proceed beyond their informal discussions of identifying potential areas,

and overcome the historic barriers to consolidation or partnering. The AMC

commander responded on August 25, 1995, agreeing that feasibility and

cost-effectiveness of joint efforts might prove worthwhile, and therefore

gave the McChord wing commander his permission to study joint actions.

However, he also made the following statement:

“Air Force philosophy has always been that our Commanders must have the tools both to

accomplish their mission and take care of their people. Every time in the past that we have

deviated from this principle, especially in our rush to find efficiencies in base support

operations, the results have been less than satisfactory. That said, if cost savings or service

improvements can be realized without infringing on these two basic Command

responsibilities, then these opportunities should be explored.”

As of February 1996, FORSCOM officials told us that Fort Lewis and

McChord officials had not reached a consensus on support issues and that

discussions had been discontinued at the installation level.

7

See Defense Management Review (GAO/NSIAD-94-17R, Oct. 7, 1993).

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In another case, we were told by Army officials that further discussions

beyond identifying potential base support operations at Fort Dix, McGuire

Air Force Base, and Lakehurst Naval Air Station had not occurred. An Air

Force official at Pope Air Force Base told us that they are examining

cooperative support efforts with Fort Bragg in the areas of recycling,

medical training, and parachute rigging. FORSCOM officials told us that

interservicing will be further explored more broadly under another

Army-wide initiative that is being developed by FORSCOM.

Navy The Navy, with support from the Chief of Naval Operations, is also

emphasizing the need to reduce support costs. In our review of Navy

activities, we found that the Navy is currently emphasizing regionalization

and consolidation of support functions involving its own facilities more

than interservicing.8

 Officials stated this is because their installations, for

the most part, are not closely located to other service installations.

However, Navy officials told us that in places where Navy activities are

closely located to other service installations, they will cooperate with the

other services where it makes sense.

The Navy’s regionalization efforts are being conducted by its headquarters

level shore installation management office, with the support of the Chief of

Naval Operations. The Navy, like the Army, created this office in fiscal

year 1994 to oversee the operations of its installations. This office is

conducting two pilot studies to reduce Navy-wide infrastructure by

regionalizing base support functions under a one commander concept in

place of the multiple commanders now in place. These two pilot studies

are being conducted in Jacksonville, Florida, and San Diego, California.

The Jacksonville study began in September 1995, and the results are

expected to be reported out to the Chief of Naval Operations sometime in

April 1996. The San Diego study began in February 1996, and preliminary

results are expected by mid-May 1996.

The Navy estimates that $30 million a year could be saved through

regionalization of support functions of Navy bases in the Jacksonville area.

Preliminary study results from Jacksonville suggest the potential for

partial to full regionalization involving security, fire prevention, fuel

services, procurement, supply and data processing, resource management,

education, personnel services, environmental management, and

8

The Navy’s current efforts complement previously successful regionalization efforts within the Navy

such as their Public Works Centers, which perform real property maintenance and repair, utility

management, transportation management, service contracting, and some environmental services on a

regional basis in fleet concentration areas.

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meteorology functions. Navy officials told us that because the Jacksonville

effort is the first to be completed, its results and lessons learned will

benefit their San Diego effort, and additional efforts that the Navy plans to

pursue, including Pearl Harbor, Hawaii; Puget Sound, Washington; and

Norfolk, Virginia.

Air Force As previously mentioned, we found, during our visits to selected bases,

that interservicing arrangements did exist between the Air Force and the

other services. At the same time, we found less emphasis within the Air

Force at the headquarters and major command level than in the other

services in terms of emphasizing regionalization or interservicing of base

support functions. However, we did identify some recent efforts at the Air

Force headquarters level that could strengthen program emphasis in the

future. For example, in December 1995, all Air Force major commands

were asked to gather information regarding the level of savings that had

been achieved through interservicing over the past 2 years; this

information is expected to be accumulated by April 1996. A headquarters

official expressed hope that such information could be used as a catalyst

to expand interservicing efforts. Also, the Air Force has a computerized

support agreement system that previously was used to create interservice

agreements, but which has recently been upgraded to provide more of a

management information capability. This system is being made available

to the other military services.

Views on

Impediments to Base

Support

Consolidations and

Interservicing

While interservicing of some common base support functions has

occurred, our discussions with DOD and service officials at all levels

pointed to a variety of problems and impediments that they believed

historically have limited base support consolidation and interservicing

efforts and can serve as impediments to such efforts today. These views

cover a wide range of issues each requiring individual analyses to confirm

the extent of their validity. Such an analysis was beyond the scope of this

review. However, where we have prior work relating to an issue, it is

presented along with the views of DOD and service officials. Many service

officials questioned the effectiveness of large-scale DOD consolidation

efforts in recent years in such areas as finance and accounting and

printing. Many personnel voiced concern that these functions, after

consolidation, appeared to be less responsive, less timely, and perhaps

more costly than when each of the services were separately responsible

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for these functions.9 These views, regardless of their validity, affect

consideration of related initiatives. Also, many personnel were familiar

with the failed San Antonio real property maintenance and contracting

programs and the consolidated housing program in Hawaii and saw these

as additional reasons for caution and skepticism.

Another broad concern that frequently surfaced in our discussions

involving base support functions was resistance to change and

commanders’ concerns about losing direct control over their support

assets, and their inability to influence servicing priorities that they deem

important to supporting their military missions. We were told that if

commanders perceive a problem, they want to have direct control over the

activity rather than have to go through another service or activity. Having

one service provide large-scale base support to another service also raised

concern about the receiving base losing its identity and appearing to be

subsumed by the base providing support. We believe this suggests the

need for stronger OSD leadership to overcome such concerns where they

related to parochial interests, rather than valid mission concerns.

Differences in traditions, cultures, practices, and standards among the

services also were often cited as inhibiting greater emphasis on

interservicing arrangements. For example, various Air Force personnel

pointed out that their base support personnel are organizationally aligned

with an installation’s combat forces and are considered mission

deployable. On the other hand, Army base support personnel are typically

not organizationally aligned with their combat forces and are not expected

to deploy with them. Also, the Air Force, in contrast with the Army,

depends more on military than civilian personnel in meeting its base

support requirements. Another example involves differences in the

services’ accounting systems, including lack of standards in unit costing

that can make it difficult to reach agreement on costing of services. While

these do represent real differences between the services, we do not

believe that they are insurmountable barriers to increased cooperation and

interservicing.

Base housing was often cited as an area having the potential for

interservicing. However, within the services, we found widely held views

9

Other GAO work examining finance and accounting and printing consolidations while identifying

some implementation problems found that over time DOD expects to achieve significant infrastructure

reductions and savings from these efforts. See DOD Infrastructure: DOD’s Planned Finance and

Accounting Structure Is Not Well Justified (GAO/NSIAD-95-127, Sept. 18, 1995); Government Printing:

Comparison of DOD and GPO Prices for Printing and Duplicating Work (GAO/NSIAD-95-65, Feb. 1,

1995); and Government Printing: Legal and Regulatory Framework Is Outdated for New Technological

Environment (GAO/NSIAD-94-157, Apr. 15, 1994).

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about differences in quality of on-base housing provided to service

personnel among the services, with the Air Force being known for

providing a higher standard of housing than the other services. More

generally, the perception often existed that the Air Force had a higher

quality of life standard and was willing or able to devote more resources to

maintaining that standard than the other services. These differences were

seen as having significant implications for interservicing arrangements and

were factors in the failed Hawaii housing consolidation effort. While there

are numerous examples of one service’s housing being used by the other,

there are other examples of one service sometimes not wanting to use

another service’s housing because of its condition. Further, for one service

to be fully dependent on another service for housing in a given area could

raise the specter of one service having to devote more money to housing

maintenance than it otherwise would or another service perceiving itself

having to settle for a lesser standard of housing than it would otherwise

expect. Some service officials suggested that overcoming these

impediments may require OSD operational control and funding. As already

indicated, DOD is currently examining alternatives for providing military

housing.

Resource constraints in today’s downsizing environment were also cited

as making commanders reluctant to pursue interservicing arrangements,

particularly where they would be assuming additional responsibilities to

provide services to another activity or service. Growing budget constraints

were seen as complicating improvements in the backlog of real property

maintenance in the base operations area and also adversely affecting the

potential for interservicing. Many service officials believed that deep

reductions in their funding and authorized personnel, reductions that they

perceive as being greater than reductions in their workload requirements,

have already constrained their ability to do existing work. Reducing

funding and personnel make it even more difficult to assume additional

work, knowing that additional personnel resources likely would not be

forthcoming. Some service officials believe that there is a need for

financial incentives allowing commanders to retain some portion of

savings achieved to apply to other areas where they have unmet

requirements as an inducement to pursue greater interservicing.

A number of service officials said that the relatively short tours of duty of

base commanders limits institutional knowledge and often results in their

focusing on short-term projects and not major changes in base operations

involving long-term planning and implementation. We were also told that

differences in philosophy from one commander to another can sometimes

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lead to a reversal of previously initiated interservicing efforts. Some

service officials suggested that these impediments could be overcome

either through greater reliance on civilian management of base operations

and/or basing a portion of an installation commander’s proficiency

assessment on his or her efforts to foster greater efficiencies in base

operations. Our general management review work has shown that

continuity of management is a key factor to ensuring the ultimate success

of major initiatives in other federal agencies.

Finally, interservicing agreements reached in advance of outsourcing

could enhance the potential for greater efficiencies and cost savings;

however, a proposed change in Office of Management and Budget’s (OMB)

guidance for contracting out could reduce the potential for interservicing.

At the same time, some service officials stated that with outsourcing and

privatization appearing to be such high priority within DOD, the current

efforts to economize base operations through inter and intraservicing

efforts may receive less emphasis. At the time we completed our review,

OMB was considering a change to its Circular A-76 policy guidance

supplement on contracting out. That change would require that agencies

not “. . . retain, create or expand capacity for the purpose of providing new

or expanded levels of interservice support services, unless justified by the

cost comparison requirements of this Supplement.” Some DOD officials

were concerned that the change could serve as a significant disincentive to

base commanders and smaller activities being willing or having the

capability to conduct the private sector cost studies that would be

required as a prerequisite to interservicing type arrangements. Such cost

comparisons previously were not required as a prerequisite to

interservicing.

Recommendations Given the potential for significant savings in base support costs through

interservicing type arrangements, we recommend that the Secretary of

Defense (1) identify options and take steps to minimize the impediments

to interservicing and (2) emphasize interservicing as part of contracting

out deliberations to maximize potential savings and efficiencies.

Agency Comments

and Our Evaluation

DOD concurred with our report and its recommendations. In written

comments to our draft report, DOD stated that they had prevailed with a

request to OMB to remove from the draft Circular A-76 supplement a

requirement to conduct A-76 cost comparisons prior to initiating

interservice support agreements. DOD also said that it was implementing a

Page 14 GAO/NSIAD-96-108 Military Bases
B-271217 

policy directive to encourage first looking to interservice support for

needed base operations, unless a better value is available from commercial

sources. DOD also indicated that it would take other steps to minimize

impediments to interservicing.

DOD also expressed concern that our report did not adequately recognize

Air Force and Defense Logistics Agency efforts to achieve major savings

through interservice support. It cited a couple of initiatives recently

undertaken by the Air Force and a variety of interservicing agreements

administered by the Defense Logistics Agency. Although our review

focused primarily on the Army, the Navy, and the Air Force, we recognize

that Defense Logistics Agency activities are active participants in

interservicing. We recognize the efforts cited on behalf of the Air Force as

having been recently undertaken. Those recent actions not withstanding,

we believe our report adequately captures the extent of Air Force

activities regarding interservicing relative to the other services. Our scope

and methodology are discussed in appendix IV. See appendix V for the

complete text of DOD’s comments.

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, the Senate Committee on Appropriations, the

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, the Air Force,

the Army, and the Navy.

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; Kevin B. Perkins, Evaluator-in-Charge; and

Robert R. Poetta, Evaluator.

David R. Warren

Director, Defense Management Issues

Page 15 GAO/NSIAD-96-108 Military Bases
Contents

Letter 1

Appendix I 

Common Base

Support Functions

18

Appendix II 

Examples of

Unsuccessful

Interservice

Consolidations

19

The San Antonio Real Property Maintenance Agency and the San

Antonio Contracting Center

19

The Oahu, Hawaii, Consolidated Family Housing Office 20

Appendix III 

Base Support

Functions Having the

Potential for

Interservicing

22

Appendix IV 

Scope and

Methodology

23

Appendix V 

Comments From the

Department of

Defense

24

Table Table 3.1: Base Support Functions Having the Potential for

Interservicing

22

Page 16 GAO/NSIAD-96-108 Military Bases
Contents

Abbreviations

AMC Air Mobility Command

DOD Department of Defense

FORSCOM Forces Command

JIRSG Joint Interservice Resource Study Group/Joint Interservice

Regional Support Group

O&M operations and maintenance

OMB Office of Management and Budget

OSD Office of the Secretary of Defense

SACC San Antonio Contracting Center

SARPMA San Antonio Real Property Maintenance Agency

USARC U.S. Army Reserve Command

Page 17 GAO/NSIAD-96-108 Military Bases
Appendix I 

Common Base Support Functions

Administrative services Mail service

Audio and visual information services Mail postage service

Automated data processing and automated

services

Mail transportation overseas

Chapel & chaplain services Military personnel support

Civilian personnel services Mobilization support

Clubs Morale, welfare, and recreation activities

Command support Mortuary services

Common use facility construction,

operations, maintenance, and repair

Museums

Communication services Occupational and industrial health services

Community relations Police services

Community services Printing services

Custodial services Public affairs

Disaster preparedness Purchasing and contracting services

Duplication services Refuse collection & disposal

Education services Resource management

Environmental cleanup Safety

Environmental compliance Security services

Equipment maintenance, repair, and

calibration

Shuttle services

Explosive ordnance support Social actions

Facility construction and major repair Storage and warehousing

Facility maintenance and minor repair Supply services

Finance and accounting Technical and legal libraries

Fire protection Training services

Food services Transportation services

Health services Utilities

Housing and lodging services Vehicle support

Laundry and dry cleaning Weather services

Legal services

Page 18 GAO/NSIAD-96-108 Military Bases
Appendix II 

Examples of Unsuccessful Interservice

Consolidations

Two of the most notable interservicing type efforts initiated in the 1970s

and 1980s proved unsuccessful. They involved consolidated management

of real property maintenance and contracting activities in the San Antonio,

Texas, area, and consolidated family housing for military personnel in

Oahu, Hawaii.

The San Antonio Real

Property Maintenance

Agency and the San

Antonio Contracting

Center

In the mid-to-late 1970s, Air Force and Army installation real property

maintenance and contracting services in the San Antonio, Texas, area,

were consolidated, creating the San Antonio Real Property Maintenance

Agency (SARPMA) and the San Antonio Contracting Center (SACC). Both

efforts, to be managed by the Air Force, were expected to save $2.2 million

annually in personnel, supplies, and equipment, or $24 million over the

11-year life of the program. The Department of Defense (DOD) agreed to

disestablish both efforts in 1989 at the Air Force’s request.1

 By fall 1989,

both efforts had ceased operating and their functions were returned to the

control of individual base commanders.

In a 1989 report2

 we stated that DOD approved the request to dissolve the

consolidation based on studies performed by it and the Air Force that

cited installation commanders’ concern over lack of command and control

of their engineering support functions. In its justification, the Air Force

cited a September 1986 DOD directive giving installation commanders

broad authority to decide how to accomplish their engineering functions

and made them accountable for those resources, and stated that

mandating SARPMA was at variance with this authority. One Air Force study

questioned SARPMA’s customer responsiveness and productivity, yet

concluded that it provided services at about the same level as before the

consolidation. However, it also noted that customers resented the loss of

direct control of the civil engineering work resulting in a negative

perception of SARPMA’s performance. In retrospect, various service officials

have suggested that this had been a situation in which DOD had pushed the

services toward a consolidation that the services had not really bought

into.

A December 1990 Defense Management Report Decision concluded that

comparisons of SARPMA savings was not possible due to the dramatic

differences in program funding, environmental issues, hiring freezes, and

1

Due to its significantly larger budget and number of employees, SARPMA was the main focus of the

disestablishment efforts. SACC was dissolved because its main customer was SARPMA.

2

Base Support Services: Disestablishment of Two Consolidated Organizations in San Antonio

(GAO/NSIAD-89-97, Mar. 8, 1989).

Page 19 GAO/NSIAD-96-108 Military Bases
Appendix II 

Examples of Unsuccessful Interservice

Consolidations

other factors that impacted DOD during the period the consolidation

existed. Also, the original concepts of organization, supply, personnel,

procurement support, automated data processing, and the client base

SARPMA was to serve never materialized. The report went on to say that,

considering the range of fundamental management problems and

mistakes, such as severe understaffing, an inadequate computer system,

and not promptly reimbursing vendors that caused these vendors to refuse

to deal with SARPMA, to blame its failure on consolidation alone was

unwarranted.

The Oahu, Hawaii,

Consolidated Family

Housing Office

In July 1982, DOD directed the four services to consolidate family housing

operations and maintenance on Oahu, Hawaii, by October 1, 1983, under

U.S. Army, Pacific. DOD based the decision on a feasibility study performed

by a contractor that concluded that a consolidation would reduce

personnel costs by about $737,000 annually. However, on September 30,

1994, after operating for about 11 years, the Oahu Consolidated Family

Housing Office closed and control of this function was returned to each

individual service. We were unable to determine the extent of savings

realized from this consolidation.

According to DOD officials and the Army Audit Agency, the consolidated

family housing program failed because of funding uncertainties and

shortfalls, as well as the services’ prejudice toward retaining control over

their own housing, a reluctance on the part of the services from the

beginning to fully participate, and various problems associated with the

Army’s management of the program. Reluctance to participate was

illustrated by the fact that the other services continued to maintain their

own housing organizations to some extent while the Army was officially

responsible for managing the program and paying the bills.

The quality of housing on Oahu at the time of the consolidation was also a

factor that affected future operations. Various officials pointed to

significant differences in the condition of the housing from each of the

services with the Navy housing being in the worst condition and requiring

the highest maintenance priority. Also, several officials cited differences in

the quality of housing standards as a factor impeding the efforts of the

consolidated office because customers expected services provided to meet

their own unique criterion. Further, given that the most senior military

officials on Oahu outranked the most senior Army officer raised some

question about the degree of real control that could be exerted by the

Page 20 GAO/NSIAD-96-108 Military Bases
Appendix II 

Examples of Unsuccessful Interservice

Consolidations

Army in managing the program. A 1992 Army Audit Agency report3 was

critical of DOD for not providing the Army any guidance on how to

implement a consolidated operation that it concluded led to some of the

problems encountered throughout the life of the effort. Subsequently, the

Army manager of the consolidated housing office at the time the program

was terminated told us that a $33-million funding reduction in fiscal 

year 1994 (from $176 million to $143 million), and no funding for military

construction were the primary reasons for dissolving the office. The

manager said that these shortfalls prevented his office from making any

housing repairs during that time. He also said that although the other

services were aware of the funding problems, they were unable to help

because budgetary controls precluded any transferring of funds to the

Army.

3

Family Housing Maintenance, Oahu, Hawaii (Report WR 92-7, 24 July 1992).

Page 21 GAO/NSIAD-96-108 Military Bases
Appendix III 

Base Support Functions Having the

Potential for Interservicing

Military personnel at the collocated military bases we visited cited a range

of base support functions being performed at their collocated bases—ones

where at least one of the services had identified at least portions of those

functions as having the potential for consolidation and interservicing.

Table 3.1: Base Support Functions

Having the Potential for Interservicing

Accident investigation Magistrate court

Airfield operations Management and maintenance of 

family housing

Biological assessments Nonaircraft supply parts storage

Bulk fuel storage Official travel arrangements

Chaplain services Passports

Child care services Public works management

Civilian personnel services Publishing and printing services

Communication systems maintenance Recycling

Contracting services Roads and grounds maintenance

Craft shops Safety

Dining facilities Small arms maintenance

Education centers Support services, facility maintenance,

and construction contracting

Employment office/equal employment

opportunity services

Tactical vehicle maintenance

Environmental programs Telephone services

Family advocacy services Training services

Fire protection services Transportation management office

Housing services Utility repairs

Identification cards Vehicle transportation and maintenance

Legal assistance and claims Water and sewage plant operations

Library services

Page 22 GAO/NSIAD-96-108 Military Bases
Appendix IV 

Scope and Methodology

To obtain a historical perspective on interservicing, we held discussions

with cognizant Office of the Secretary of Defense (OSD), Army, Navy, Air

Force, and Defense Logistics Agency officials and obtained and reviewed

available reports completed by various audit and DOD agencies dealing

with prior consolidation efforts. Likewise, we held discussions with OSD

and service officials regarding the status of existing interservice efforts

and to determine impediments to such efforts. A discussion was also held

with an Office of Management and Budget (OMB) official regarding OMB

Circular A-76 in relation to interservicing. We made a limited telephone

inquiry to a judgment sample of Joint Interservice Regional Support Group

(JIRSG) regions to gauge the level of ongoing activity regarding interservice

support agreements and efforts to foster additional interservicing.

We also had discussions with installation officials at seven installations

that were located in close proximity to one another to determine the

existing level of interservicing type arrangements, the potential for

additional ones, and any impediments to such efforts. Locations visited

included: Fort Dix, McGuire Air Force Base, and Lakehurst Naval Air

Station in New Jersey; Fort Bragg and Pope Air Force Base in North

Carolina; and Fort Lewis and McChord Air Force Base in Washington.

Additional discussions were held with Army officials at Headquarters

Forces Command, Atlanta, Georgia, and Training and Doctrine Command,

Fort Monroe, Virginia. We also contacted officials of the Navy’s

Commander in Chief, Atlantic and Pacific Fleets, and the Naval Air and

Sea Systems Commands; and the Air Force’s Air Combat and Air Mobility

Commands to discuss efforts underway to foster inter and intraservicing

of base support operations. Additionally, we observed a meeting of the

Navy’s Fleet Support and Quality Management Board that discussed

various base support issues, and also attended a national JIRSG training

workshop.

We conducted our review between July 1995 and February 1996 in

accordance with generally accepted government auditing standards.

Page 23 GAO/NSIAD-96-108 Military Bases
Appendix V 

Comments From the Department of Defense

Page 24 GAO/NSIAD-96-108 Military Bases
Appendix V 

Comments From the Department of Defense

(709160) Page 25 GAO/NSIAD-96-108 Military Bases
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