United States General Accounting Office

GAO Report to the Chairman, Subcommittee

on Military Installations and Facilities,

Committee on National Security,

House of Representatives

May 1997 DEFENSE

INFRASTRUCTURE

Demolition of

Unneeded Buildings

Can Help Avoid

Operating Costs

GAO/NSIAD-97-125

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-276460 

May 13, 1997

The Honorable Joel Hefley

Chairman, Subcommittee on Military Installations

 and Facilities

Committee on National Security

House of Representatives

Dear Mr. Chairman:

This report responds to your request that we examine selected aspects of

the services’ management of facilities infrastructure and their use of

demolition as an approach to reducing excess facilities and avoiding

unnecessary operating costs. This report addresses (1) the services’

funding obligations for maintenance and repair over the last 10 years,

changes in building square footage in space to be maintained, and the

impact of the changes on facility maintenance and repair; (2) the potential

for demolition to reduce excess facilities infrastructure and avoid

recurring costs; (3) the services’ plans for demolition; and (4) their overall

infrastructure management strategies.

Background Since the mid-1980s, the Department of Defense (DOD) has undergone

significant reductions in its budget, personnel, force structure, and basing

infrastructure. From fiscal years 1987 to 1996, DOD’s overall budget was

reduced in real terms by 31 percent. By fiscal year 1996, active military and

civilian personnel were reduced by 32 and 26 percent, respectively. During

the same period, there were significant reductions in the stationing of U.S.

forces overseas and increased reliance on power projection of forces from

bases in the United States. In addition, DOD and the services completed

four rounds of domestic base realignment and closure (BRAC) actions

between 1988 and 1995 that, when fully implemented, were expected to

reduce the number of major domestic bases by approximately 21 percent

by 2001.

Despite reductions in DOD’s basing infrastructure, various DOD and service

officials have continued to indicate that they still have excess, aging

facilities and insufficient funding to maintain, repair, and update them. At

the same time, other DOD officials are looking for reductions in

infrastructure costs to free up funding for weapon system modernization.

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Results in Brief Over the past 10 years, the reduction in the number of DOD facilities

worldwide, as measured by square footage of space, was only about

10 percent. This amount is much less than expected, considering the

amount of budget reductions and the execution of four base realignment

and closure rounds since 1988. However, funding by the services for real

property maintenance during the same time period decreased almost

40 percent.1

 As a result, installations have growing backlogs of deferred

maintenance and repair projects.

DOD and the services do not currently have complete, reliable information

on the costs associated with either maintaining their current facilities

infrastructure or with infrastructure reduction options. Such information

will be needed to develop a departmentwide strategic plan that considers

difficult infrastructure options to meet requirements of the Government

Performance and Results Act.2

 It will also be critical to meet the

requirements for more complete disclosure of the costs, associated with

facilities’ deferred maintenance and demolition in financial statements,

called for by the Chief Financial Officers Act of 1990.

Each of the services is recognizing the importance of demolition as an

option for eliminating old, excess buildings that are relatively costly to

maintain and a drain on declining operation and maintenance funding. The

Army has given the greatest emphasis to demolition in recent years,

demolishing about 39 million square feet of space since 1992. Demolition

offers a viable option for further infrastructure reductions and millions of

dollars in savings, but it requires an up-front cost. In fiscal year 1997, the

services plan to spend about $50 million of operation and maintenance

funds to demolish excess space. Data related to previous demolition

projects suggests that demolition costs can be recouped within a few

years, thereafter avoiding millions of dollars in recurring maintenance and

repair costs and utility costs. However, future demolition costs are

expected to rise as the services move beyond demolition of simple World

War II-era wooden structures to other structures in which environmental

factors, such as asbestos and lead paint removal, will likely play an

increasing role.

1

This report focuses on operation and maintenance (O&M) funding for real property maintenance, the

principal source of such funding. It also focuses on facilities infrastructure, excluding family housing.

2

The Government Performance and Results Act (P.L. 103-62) requires federal agencies to develop

agencywide strategic plans. The plans must describe how an agency intends to achieve its goals

through its activities and its human, capital, information, and other resources, such as facilities.

Agencies must also prepare annual performance plans that include measurable performance goals and

indicators for measuring performance.

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The services differ in the extent to which they have developed formal

demolition programs. The Army uses the greatest amount of funding for

demolition and is planning the most aggressive demolition program.

Conversely, the Air Force has the least centralized program and relies on

installation commanders to identify and fund demolition efforts. Although

requiring specific funding for demolition could strengthen program

emphasis and management and ensure that demolition occurs, it could

also limit the services’ flexibility to shift funds within their own operation

and maintenance accounts to meet the most pressing operational needs.

Most service officials do not want to require funding to be used

exclusively for demolition but would rather continue to use operation and

maintenance funding specifically for demolition as they deem necessary.

Overall strategic plans for maintenance and repair of facilities

infrastructure at the service headquarters and Office of Secretary of

Defense levels appeared to be limited. The plans lacked comprehensive

strategies for facilities revitalization, replacement, and maintenance tied to

measurable goals, specific time frames, and expected funding.

Faster Reductions in

Funding Than in

Space to Be

Maintained

In the past 10 years, maintenance and repair obligations for facilities,

excluding family housing, have fallen faster than the square footage of

space maintained by the services. Various DOD and service officials are

concerned about the impact of declining budgets on infrastructure

condition.

The O&M appropriation account provides the principal source of funds the

services use to pay for day-to-day activities at the installations and bases,

including maintenance and repair of most facilities.3

 From fiscal years

1987 to 1996, total O&M annual budget authority declined 25 percent in real

terms, reflecting the overall decline in defense spending.4

 However, annual

O&M obligations for facilities maintenance and repair, excluding family

housing, declined 38 percent in real terms during the same period—a

3

Maintenance and repair activities can be funded from different sources. Thus, because of difficulties

in combining all funding sources for maintenance and repair to make meaningful comparisons with

other infrastructure data, this report focuses principally on O&M funding and other comparable

infrastructure data for analyses.

4

This report focuses on obligations rather than budget requests or appropriations because obligations

provide an accounting of how funds are used for maintenance and repair activities. In addition,

although information on actual expenditures and costs would be preferable over obligations, DOD has

acknowledged that its inability to accumulate accurate and complete cost information is a

departmentwide problem.

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B-276460 

much steeper decline than that for total O&M obligations.5 Table 1 shows

changes in obligations for each service between fiscal years 1987 and 1996

(in fiscal year 1997 dollars).6

Table 1: Percent Change in O&M

Obligations for Maintenance and

Repair Between Fiscal Years 1987 and

1996

Fiscal year 1997 dollars in millions

Service FY 1987 FY 1996 Percent change

Army $2537.4 $1,288.4 –49

Air Force 2,764.9 1,709.7 –38

Navy 1,404.3 1,014.8 –28

Marine Corps 451.8 440.1a –3

Total $7,158.4 $4,453.0 –38

aThe Marine Corps’ fiscal year 1996 obligations are actually much higher than the previous year

due to a one-time increase of about $100 million for maintenance and repair that year. In fiscal

year 1995, the Corps’ obligations for maintenance and repair were about $294 million. Over the

10-year period, the Corps’ obligations for maintenance and repair peaked in fiscal year 1988 and

did not approach that level again until fiscal year 1996.

Source: Our analysis of service data.

Although servicewide maintenance and repair obligations fell about

38 percent between fiscal years 1987 and 1996, reductions in square feet of

space owned and managed by the services in the United States and

overseas were much less—about 10 percent.7

 Figure 1 shows the percent

change in facilities square footage by service during that time.

5

Available budget data indicates that further reductions in funding of maintenance and repair are

planned in most services for fiscal years 1998 and 1999. Although budget projections for future years

show an upward trend in funding after 1999, many service officials questioned whether this trend was

likely to occur.

6

Maintenance and repair obligations include spending for facilities measured in square feet and other

types of infrastructure, such as runways, that are measured using different metrics. The services were

unable to break out obligations by type of measurement but told us that the majority of maintenance

and repair obligations were for facilities measured in square feet.

7

This figure excludes property for which title is held by the services but used by defense agencies and

others.

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Figure 1: Percent Change in Facilities Square Footage Between Fiscal Years 1987 and 1996

Army Air Force Navy Marine Corps Total

0

500

1,000

1,500

2,000

Service

Millions of square feet

1987 1996 

-19%

-10% 2%

15%

-10%

Source: Our analysis of service data.

The types of facilities and the relative percentage of subcategories did not

change significantly between fiscal years 1987 and 1995.8

 For example, the

Army’s administration buildings comprised about 6 percent of its total

square footage in fiscal year 1987 and accounted for about 8 percent of the

total in fiscal year 1995. Other types of facilities managed by the services

include training, utilities, troop housing, shipyard maintenance, and

communication facilities.

Although combined U.S. and overseas facilities space managed by the

services fell about 10 percent between fiscal years 1987 and 1996, the

percentage change in the continental United States (CONUS) facilities was

8

The services were not able to provide this breakout for fiscal year 1996 in time for our review.

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B-276460 

much smaller—4 percent. Figure 2 shows the percent change in square

footage for CONUS facilities.

Figure 2: Percent Change in Square Footage for CONUS Facilities Between Fiscal Years 1987 and 1996

Army Air Force Navy Marine Corps Total

0

200

400

600

800

1,000

1,200

1,400

1,600

Service

Millions of square feet

1987 1996 

-5%

15%

2%

-10%

-4%

Source: Our analysis of service data.

One factor limiting the reduction in square footage to date is facilities yet

to close under the BRAC process.9

 Although some BRAC actions call for the

closure of a base, others call for portions of the land and facilities of a

base slated for closure to be transferred to an adjacent base. BRAC closures

are often predicated on construction of new facilities at another base

slated to receive missions from a closing base. Further, quality-of-life

initiatives, such as new and renovated barracks and family housing and

9

Although four rounds of BRAC were held between 1988 and 1995, BRAC legislation provides up to 6

years to close facilities; thus, some BRAC closures may not occur until closer to 2001.

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B-276460 

new child care centers, have added square footage requirements. These

initiatives will likely continue to add square footage for a number of years.

According to the services, square footage will likely decline about an

additional 144 million square feet between fiscal years 1997 and 2001 due

to remaining BRAC actions.10 DOD officials estimated that the four BRAC

rounds would result in about a 21-percent reduction in the plant

replacement value for domestic bases.11 Although square footage

reductions have been limited, even with the results of four BRAC rounds,

DOD still projects that it will realize significant recurring dollar savings

from the BRAC process—the largest portion of which are associated with

reductions in personnel and base operating costs.

Adequacy of Funding Is a

Growing Concern

Absolute standards for funding maintenance and repair activities do not

exist. However, recommendations of two study groups in recent years

offer some perspective on DOD’s current level of funding. DOD’s 1989 report

to the Congress recommended that the services annually budget a

minimum of 1.75 percent of the plant replacement value for maintenance

and repair, excluding backlogs.12

A 1990 report from the Building Research Board recommended that

federal agencies, including DOD, budget about 2 to 4 percent of the plant

replacement value for maintenance and repair.13 The report also suggests

that an even higher level of funding would be required to address

maintenance and repair backlogs. Since 1990, the report has been widely

quoted, but according to a Federal Facilities Council official, many federal

10This figure also includes reductions in family housing, which we were unable to break out separately

for the Army and the Air Force. If these reductions occur, then the CONUS facilities reductions would

increase to 14 percent. However, even that amount is not likely because of increases in square footage

in future years not related to BRAC, but we were unable to obtain data on precise amounts for such

increases.

11Plant replacement value is defined as the cost to replace current facilities using today’s construction

costs and standards.

12Renewing the Built Environment, Department of Defense, March 1989. This study, sponsored by the

Office of the Secretary of Defense (OSD), found that differences exist in how the services calculate

plant replacement value. A triservice study team reviewing plant replacement value in 1994

recommended that OSD hire a contractor to review all of the services’ databases, assign uniform

facility category codes, and establish a standard unit of measurement. OSD did not hire a contractor

because of the cost. Therefore, the plant replacement values presented here can provide a useful frame

of reference, but they should not be considered absolute.

13Committing to the Cost of Ownership, Building Research Board, National Research Council, 1990.

The study was requested by the Federal Facilities Council, which operates under the auspices of the

Board on Infrastructure and the Constructed Environment of the National Research Council. The

council is the operating arm of the Academy of Engineering and the National Academy of Sciences.

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B-276460 

agencies have not been able to use it because it is too general. In 1996, the

Federal Facilities Council initiated a study to develop more specific

guidelines. According to a council official, the study should be completed

by January 1998.

In contrast with these recommended funding levels, the services’

obligations for maintenance and repair activities in fiscal year 1996

equaled 1.3 percent of the applicable plant replacement value. Table 2

indicates the level of maintenance and repair funding as a percentage of

plant replacement value.

Table 2: O&M-Funded Maintenance

and Repair as a Percent of Plant

Replacement Value in Fiscal Year 1996

Fiscal year 1996 dollars in millions

Service

Facilities plant

replacement value

Maintenance and

repair obligations

Percent of plant

replacement value

Army $134,409 $1,257 0.9

Air Force 113,940 1,668 1.5

Navy 59,900 990 1.6

Marine Corps 25,760 429a 1.7a

Total $334,009 $4,344 1.3

aThe Marine Corps experienced a one-time increase of about $100 million for maintenance and

repair in 1996. Without this increase, the percent of plant replacement value represented by

maintenance and repair would be about 1.2 percent.

Source: Our analysis of service data.

According to a Federal Facilities Council official, there is no industry

standard for maintenance and repair funding on a square footage basis.

The official indicated that funding requirements vary by building type, age,

and level of use. The Army has developed a model that suggests, in the

aggregate, $4 per square foot is required; this figure includes some funding

to begin addressing deferred maintenance and repair.

Our analysis of current spending levels found that O&M obligations for

maintenance and repair declined by 31 percent, from $3.89 per square foot

in fiscal year 1987 to $2.69 in fiscal year 1996. However, table 3 shows the

differences in obligations between the services.

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Table 3: Percent Change in

Maintenance and Repair Obligations

per Square Footage of Facility Space

Between Fiscal Years 1987 and 1996

Service FY 1987 FY 1996 Percent change

Army $3.07 $1.93 –37

Air Force $5.46 $3.73 –32

Navy $3.39 $2.41 –29

Marine Corps $4.82 $4.10a –15a

aThe Marine Corps experienced a one-time increase of about $100 million for needed

maintenance and repair in 1996, which temporarily increased the dollar-per-square foot amount in

1996. Without this additional funding, the dollar-per-square foot amount would have been about

$2.76, and the percentage change would have been –43 percent.

Source: Our analysis of service data.

The impact of reduced funding on the services’ infrastructure is not clear.

Installation officials we contacted during this review cited increases in

backlogs of deferred maintenance and repair projects in recent years;

however, reliable composite information was not available due to

differences in how the services develop and maintain this data. Further,

recent efforts by OSD to develop a comprehensive system for performing

facilities condition assessments have not been successful. Even though the

services have their own approaches to performing condition assessments,

each of these systems has important limitations. (See app. I for further

discussion of this issue.)

Under the Chief Financial Officers Act of 1990, as amended, and the

Federal Financial Management Improvement Act of 1996, DOD and the

services are required to prepare financial statements and have them

audited. Beginning in fiscal year 1998, these statements must (1) identify

and disclose the estimated cost of deferred maintenance for DOD’s facilities

that are being used and (2) include the cost of any planned facility

demolitions. Such information will also be critical if DOD is to effectively

put in place the results-oriented program decision-making structure

envisioned by the Government Performance and Results Act. Our previous

work has shown that the quality of existing DOD data on the costs

associated with its existing infrastructure has eroded its usefulness to

decisionmakers. In addition, DOD has acknowledged its departmentwide

problem in capturing accurate and complete cost information for its

operations.

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B-276460 

Deteriorating Facilities Is a

Growing Concern

Despite the absence of reliable trend data, many installation officials told

us that recent reductions in funding and personnel had caused them to

defer maintenance and repair activities and forego recurring preventive

maintenance.14 This is a growing concern because of its potential to

impact operations as well as increase costs. The National Research

Council reported that it is often difficult to discern the direct

consequences of neglect of maintenance and repair because the physical

evidence may not be immediately visible. However, the council notes that

a decline in appearance, increased operating costs, and premature service

failures eventually occur.

At the installations we visited, facilities were in various states of

maintenance and repair. For example, at Foot Hood, Texas, new barracks

construction and renovation were taking place (see fig. 3), and facilities

overall appeared to be in much better condition than at Fort Eustis,

Virginia, where less new construction has occurred. However, officials at

both installations cited growing backlogs in maintenance and repair in

other base facility areas, such as sewer and water systems.

Figure 3: New Army Barracks at Fort

Hood, Texas

14Preventive maintenance is defined as the planned, scheduled periodic inspection, adjustment,

cleaning, lubrication, parts replacement, and minor repair of equipment and systems.

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Army headquarters officials told us that many of its installations are in a

“breakdown maintenance mode,” resulting in increases in emergency

repairs and equipment breakdowns. Officials at Fort Eustis told us that

their emergency work orders increased from less than 300 for fiscal year

1992 to over 20,000 for fiscal year 1996. The officials also said that over 45

waterlines broke in fiscal year 1996. Available data on the condition of the

Army’s infrastructure suggests that these conditions exist throughout the

Army.

At Langley Air Force Base, Virginia, many facilities were in good

condition, supporting a view generally held by many service officials that

the Air Force spends more on facilities than the other services. However,

base engineering officials expressed concern about being able to maintain

and repair their facilities as they have in the past. Engineering officials at

Langley’s Air Combat Command—the Air Force’s largest command—said

that base in-house maintenance and repair funding for fiscal years 1997

through 1999 will remain constant but that contracts for maintenance and

repair jobs too large for in-house personnel would decline from

$211 million in fiscal year 1996 to about $6 million by fiscal year 1997.

Officials expect the $6 million to decline to almost zero by fiscal year 1999.

Navy headquarters officials told us funding levels allow only preventive

maintenance on mission-critical systems, such as electrical and water

pump distribution systems. The preventive maintenance is limited to

inexpensive repairs that take as little as 15 minutes. An official from the

U.S. Atlantic Fleet in Norfolk, Virginia, said most of its bases were reacting

to emergencies and were not able to be proactive in trying to prevent

them. Norfolk Naval Station engineering officials said they only do some

preventive maintenance. At the Naval Station in Norfolk (see fig. 4), about

half the piers are 50 years old and too narrow to accommodate today’s

larger ships. Many piers were in poor condition and, according to Navy

officials, limited the Navy’s ability to berth ships in transit and support its

deck side requirements, such as loading supplies.

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Figure 4: Portion of Aging Pier

Structure at Norfolk Naval Station,

Virginia

The Marine Corps’ Cherry Point and Camp Lejeune, North Carolina,

installations appeared in good condition. However, Marine Corps

headquarters officials said bases on the West Coast, such as Camp

Pendleton and Camp Barstow, California, were in worse condition. The

officials attribute the poor condition of these bases to a large inventory of

World War II-era wood facilities, strict State of California environmental

oversight, and high contract and labor costs.

Demolition Could

Reduce Maintenance

and Repair Costs

Faced with reductions in personnel and funding available to maintain their

facilities, many service officials recognize that they continue to have more

facilities than they can afford to maintain. One means of reducing facility

maintenance costs is to demolish older structures that may be relatively

more expensive to maintain when they become excess to the services’

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needs.15 In fiscal year 1997, the services plan to set aside about $50 million

of O&M funds for demolition.16

Army officials state that they have spent as little as $2.50 per square foot to

demolish old World War II-era barrack-type structures that were

unoccupied, but the officials consider $10 per square foot a more

reasonable amount for future demolition projects. This amount is more

than the Marine Corps’ estimate of $8 but less than the Air Force’s $11 and

Navy’s estimate of $12 per square foot. Costs vary depending on size and

type of construction and presence of environmental contaminants.

Demolition costs, once recouped, can provide the basis for recurring

savings to maintenance and repair and utility costs, which service officials

consider to be substantial. For example, with demolition costs of $10 per

square foot and operating costs totaling $3.50 per square foot

(maintenance and repair costs of $2.50 per square foot and utility costs of

$1 per square foot), the cost of demolition could be recouped in about

3 years.17 The $3.50 per square foot used in this example is a rough

estimate of actual expenditures across the entire building inventory.

Actual expenditures could be considerably less, depending on building

occupancy. Data were not available to predict with accuracy potential

savings or pay back period for an accelerated demolition program. In any

case, once up-front costs have been recouped, annual savings in

maintenance and repair, as well as utility costs, would begin.

On the basis of the preceding example and the services’ estimates of

square footage to be demolished, we believe the potential exists for

avoiding recurring costs of hundreds of millions of dollars once initial

investment costs are recouped.18 However, various officials indicated that

demolition costs are likely to rise in the future with the elimination of

simpler structures, such as the World War II-era wooden barracks-type

15Before a building is demolished, DOD must comply with legislation that governs the preservation of

historic buildings. The National Historic Preservation Act (16 U.S.C. § 470h-2) can prevent the services

from demolishing a historic building, even though the building is costly to maintain. DOD must also

comply with legislation concerning the use of unutilized and underutilized facilities to assist the

homeless. The McKinney Act (42 U.S.C. § 11411) requires DOD to work with the Department of

Housing and Urban Development to determine if such facilities are suitable for use by the homeless

before the buildings can be demolished.

16These funds are in addition to normal demolition associated with new construction, which is

typically funded as part of a military construction or family housing military construction

authorization.

17Utility costs used in this example are a rough approximation based on Army data, which divides total

expenditures on electricity by square footage of facility space.

18Although recurring costs may be avoided in the future, we were unable to calculate precisely the

total amount that could be avoided because, except for the Army, the services do not know the exact

amount of excess space they have.

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structures, particularly those that were no longer occupied. Increases are

expected in the future as more demolition projects require relocation of

occupants out of buildings slated for demolition.19 These additional costs,

along with the potential for demolition costs to increase due to

environmental considerations, will make it important to continue to

examine the cost-effectiveness of demolition projects on an individual

basis.

Service Views on Funding The services can derive benefits from formally earmarking, or “fencing,”

funds for demolition. Fencing funds ensures that the funds will be used to

accomplish a specific objective. For example, Navy funds are fenced for

family housing maintenance and repair. Family housing officials at the U.S.

Atlantic Fleet said they were able to better meet needed maintenance and

repair needs due to the fenced funds. Family housing maintenance and

repair funds are also fenced for the other services.

Various service officials expressed the view that earmarking and centrally

controlling funds for demolition at the service headquarters level may help

ensure that funds are used for demolition. However, officials told us they

were against fencing funds for demolition, citing the lack of flexibility to

use funds for higher priorities.

In deliberations on the Fiscal Year 1997 Department of Defense

Authorization Bill, specific authorization for demolition was considered

but ultimately not approved (H.R. 3230, 104th Cong., 2d sess.). The bill had

proposed adding $30 million for demolition ($10 million for each service).

The authorization would have limited O&M demolition projects to no more

than $300,000 and required demolition projects more than this amount to

be funded by the military construction appropriation. Under the same

provision, demolition projects over $500,000 had to be reported to the

Congress.

In response to the bill, DOD said it preferred to use O&M funds for

demolition. DOD further said the bill would prevent O&M funds from being

used for projects costing over $300,000 and require significant

administrative burdens and delays without clear benefits. In addition, base

commanders’ authority and flexibility would be severely limited in

responding to demolition and funding opportunities as they arise.

19Relocations costs can also include the minor alterations of facilities at receiving sites.

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By setting aside funds at the headquarters level, many service officials

think they have taken appropriate steps to ensure that funds would be

used for demolition purposes but still maintain flexibility to use funds to

meet other requirements. Generally, the services were opposed to more

restrictive funding. Navy and Marine Corps officials said they would not be

opposed to fencing funds for demolition if the funds were in addition to

their O&M funds. Officials preferred using O&M funds for demolition, even

though the funds could be used for higher priorities if necessary.

Service officials agreed that they wanted commanders to use available O&M

funds for demolition. As a result, the services, except for the Air Force,

centrally control the approval and funding for demolition. According to Air

Force officials, they will allow base commanders to identify, fund, and

demolish excess facilities on their own initiative.

Officials from the Army, the Navy, and the Marine Corps told us they used

most of the O&M funds they earmarked for demolition. The services, except

for the Navy, do not have a separate demolition account in their O&M

accounts, so we were not able to compare the amount they earmarked to

the amount they obligated for demolition. Service officials provided us

with a summary of what they obligated for demolition for a specific time

period by summing up obligations from individual demolition projects. For

example, in fiscal year 1996, the Navy obligated all of the $6.4 million it

earmarked, and the Marine Corps obligated over 80 percent of the

$4 million it earmarked. The Army did not earmark funds but had a target

goal to reduce square footage by about 5 million, which it met by

obligating about $15 million. Air Force headquarters does not currently

allocate demolition dollars every year; however, major commands

accomplish demolition using their own funds when available.

Army, Navy, and Marine Corps officials told us that demolition of facilities,

which appears to happen mostly in the last quarter of the fiscal year, is not

done at that time for lack of planning for demolition or use of end-of-year

funds. Navy and Marine Corps officials said that it can take until the last

quarter of the fiscal year for bases to complete their project designs and go

through contracting procedures.

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Formal Demolition

Programs Vary by

Service

The services vary in the scope of their efforts and the way in which they

administer their programs (centralized or decentralized). Table 4

compares each of the service’s programs.

Table 4: Service Demolition Programs

Square feet and dollars in millions

Service

Square footage to

be demolished in

fiscal year 1997

Square footage to

be demolished in

the future

Funding

designated for

demolition

Army 3.3 60.0a $620a

Navy 1.5 b 147a

Marine Corps 0.5 1.4c 16c

Air Forced 4.2 15.1a b

aThese figures are through fiscal year 2003.

bThese figures are unknown.

cThese figures are through fiscal year 2000.

dThe Air Force does not have an approved servicewide plan for facilities demolition. While the Air

Force had established a percentage goal to reduce space, it had not identified, until recently,

specific square footage to be demolished. Recently, Air Force headquarters surveyed its major

commands to identify square footage they planned to demolished.

Source: Our analysis of service data.

Army The Army has the largest and most centrally directed demolition program,

and it is targeting the largest amount of funds for demolition among the

services—$620 million through fiscal year 2003. The Army facilities

demolition program began in 1992 and was included in the service’s

October 1993 Long-Range Facilities Plan.20 Since then, Army officials

report they have spent approximately $95 million demolishing about

39 million square feet.

The Army determines excess space by using a model that compares an

installation’s inventory of space to standard Army requirements, which are

based on the installation’s mission. On the basis of this model, the Army

determined in 1996 that it had an excess of about 134 million square feet.

In fiscal year 1997, the Army plans to spend $20 million and demolish

3.3 million square feet. Starting in fiscal year 1998, the service plans to

20This plan provides a statement of broad principles and objectives for installation planning, such as

citing the need to establish and fund a capital investment plan to ensure installation revitalization,

replacement, and maintenance of facilities infrastructure. It is not much more specific on how this

broad objective will be accomplished over any specific time frame or at what cost.

Page 16 GAO/NSIAD-97-125 Defense Infrastructure
B-276460 

spend $100 million in O&M funds per year through fiscal year 2003 to

eliminate excess space at an estimated cost of $10 per square foot.

Therefore, we calculated that it would take the Army about 13 years to

eliminate the excess space at a cost of about $1.3 billion.

The Army’s demolition program is being given strong top-down emphasis

with project funding approved at the service headquarters level.

Installations propose demolition projects to the Army’s Installation

Management Office at headquarters, where they are reviewed and

approved. Projects are approved based on the amount of square feet to be

demolished and demolition costs. The Army funds the projects out of O&M

funds set aside and retained at the headquarters level for demolition.

Headquarters officials said that in fiscal year 1998 they will use an

accounting code to track and ensure that the funds are used for approved

demolition projects. If installation commanders do not use the funds as

designated, the installation will not be provided with more funds,

according to headquarters officials. Before this central control,

headquarters officials provided the installations with a target amount of

square feet to be demolished, but funds were not always used for

demolition.

According to headquarters officials, the Army plans to approve those

projects that will demolish the most square footage at the least cost. They

believe this process will help achieve the goal of eliminating

approximately 60 million square feet of World War II-era wood buildings

included in the 134 million total excess square footage that will be

demolished first.

The Army’s demolition program is also being done along with restrictions

on the amount of square feet that can be added to installations through

new construction. The program requires the Army to dispose of one

square foot of facilities to offset each square foot of new construction

added to the inventory. According to headquarters officials, the Army has

had this requirement since the early 1980s and kept the restriction as part

of its more recent facilities reduction program that started in fiscal year

1992. This requirement will help to control the growth of excess square

footage of space. (The other services do not use this restriction in

managing their infrastructure.)

According to Army officials, environmental costs and relocation expenses

associated with the Army’s demolition have not thus far been significant

Page 17 GAO/NSIAD-97-125 Defense Infrastructure
B-276460 

and have been funded out of O&M funds. Funds to cover these expenses in

the future are included in the $100 million the Army has earmarked for

demolition.

In demolishing facilities, the Army has used contractors as well as

in-house civilian engineering personnel. For example, at Fort Hood, a

55,000-square foot World War II-era building was being used as a troop

laundry facility for cleaning sheets, bedding, and towels. According to an

engineering official, the roof continued to leak, even though it had been

fixed several times; the laundry equipment was outdated; and the building

could not accommodate new equipment. In-house engineering staff

bulldozed the building late in fiscal year 1996 at a total cost of about

$134,000. A new laundry facility was not built, since the installation

contracted with a private laundry company. The space is currently being

used as a parking lot and marshalling area for troops.

Marine Corps The Marine Corps’ emphasis on demolition began in fiscal year 1994 but

was given additional emphasis with the Commandant’s fiscal year 1996

budget guidance, which directed headquarters to sponsor a program to

prioritize the demolition of unneeded structures.21 Since 1994, the Corps

has demolished about 1.5 million square feet of space at a cost of about

$8.3 million. The Corps plans to demolish an additional 1.8 million square

feet and spend about $4 million each year from fiscal years 1997 to 2000.

The Corps developed its demolition goal by asking its bases to determine

what they would like to demolish. According to Corps officials, the

amount of excess space may be based on requirements, since the base

commanders know their mission and the infrastructure needed to 

support it.

The Marine Corps’ facility database indicates that the Corps has an excess

of 1 million square feet, which is less than the amount of space that the

Corps plans to demolish by fiscal year 2000. Corps officials told us that

facilities marked as excess in its asset database may not be necessarily

marked for demolition. It is not clear how many facilities designated as

excess by the Corps’ database will actually be demolished. However,

Corps officials told us they are in the process of reconciling the amount of

21Demolition plans are included in the Marine Corps’ infrastructure plan, known as the Installations

and Logistics Campaign Plan, which was finalized and signed by the Commandant in 1996. The plan

outlines a goal of improving operations, processes, and systems in support of the Corps and ensuring

the best products and services at the least cost. The five key areas of emphasis in the plan include

combat service support, material support management, logistics information resources, supporting

establishment (infrastructure), and contracting.

Page 18 GAO/NSIAD-97-125 Defense Infrastructure
B-276460 

square footage in demolition plans with the amount of square footage that

bases reported as excess.

Marine Corps headquarters centrally funds and manages the demolition

program. The program is supported by O&M funds, which allows the Marine

Corps flexibility to use the funds for unforeseen mission requirements.

Demolition projects originate at the base level and are reviewed and

selected by headquarters. Marine Corps officials said that they have

funded, at a minimum, all design costs for demolition projects. They have

also funded related environmental cleanup as needed in demolition

projects. However, according to a headquarters official, no projects have

required the relocation of personnel or minor alterations. The officials said

the costs of these requirements will be made on a case-by-case basis to

determine whether they are to be funded at the base or headquarters

levels.

Navy The Navy describes its demolition program as a centralized initiative

funded from O&M funds and managed by its military construction division

at headquarters. The Navy’s formal emphasis on demolition began in fiscal

year 1996. However, according to service officials, some buildings were

demolished in prior years when funding was available, but program data

was not developed on a centralized basis. In fiscal year 1996, the Navy

demolished about 400,000 square feet at a cost of about $4.8 million and

spent $1.6 million to demolish other facilities not measured in square feet,

such as fuel tanks, for a total of $6.4 million.

The Navy’s current program is not based on a projected goal of reducing a

set amount of square footage; rather, it hinges on the expected availability

of O&M funding to demolish facilities that are (1) in excess of current

requirements, (2) costly to maintain and operate, (3) unsafe or potentially

harmful to the environment, and (4) unsightly and not in keeping with the

concept of “installations of excellence.”22 Because the program is only

1 year old, a Navy headquarters official said the Navy expected the

program to become more formalized as it progresses. Navy officials told us

they planned to spend about $25 million for demolition in fiscal year 1997.

After that time, they tentatively plan to spend $13 million each year

through 2000 for demolition. From fiscal year 2001 to 2003, the Navy plans

to spend a total of $83 million on demolition, but this goal may be

22The Navy has drafted its Shore Support Infrastructure Vision and Strategic Plan, which outlines a

broad strategy for reducing infrastructure costs and applying business practices to meet the Navy’s

fleet support mission. The plan cites demolition as the primary tool to reduce costs. The plan does not

identify cost and time frames for completion of the strategy.

Page 19 GAO/NSIAD-97-125 Defense Infrastructure
B-276460 

adversely affected by declining O&M funds. Navy officials stated that they

had established funding levels from O&M funds for the demolition program

but suggested that the amount spent could be less if O&M funds are needed

to meet unforeseen requirements in other areas.

Proposed Navy demolition projects originate at the activity level and are

forwarded to the claimant level, such as the Commander in Chief, U.S.

Atlantic Fleet. At the claimant level, projects are reviewed and prioritized

and then forwarded to Navy headquarters for further review, when factors

such as potential cost avoidance and O&M savings are considered. Although

Navy demolition projects are approved and funded at the headquarters

level, the Navy does not currently include funding for any environmental

cleanup or relocation of functions to other facilities. The Navy is in the

process of developing a system to track and monitor the execution of

demolition projects. A Navy official said that headquarters staff currently

make site visits to ensure completion of projects.

Air Force The Air Force has had the least centralized demolition program among the

services. Air Force officials state that they have demolished structures

using available O&M funding. However, funding was not tracked until fiscal

year 1996 when, according to officials, the Air Force spent $52 million to

demolish about 5 million square feet.

The Air Force has drafted a tentative goal to reduce its facilities square

footage by a net of 3 percent each year between fiscal years 1997 and 2005

through consolidation and demolition.23 However, it has not developed

detailed plans to accomplish this goal. According to officials, if a plan to

reduce its square footage is implemented, base commanders would use

O&M, military construction, or military family housing funds for demolition.

Program initiatives are the responsibility of individual commanders who

identify, fund, and execute individual demolition projects. In October 1996,

the Air Force began an initiative to develop a way to identify and track

excess square footage. As of February 1997, the Air Force was still

planning how it would implement this initiative. Tentative plans are to task

major commands with collecting the information.

23This goal is included in a draft strategic plan developed by the Air Force in 1996. The Air Force

expected to publish the plan in April 1997. The draft plan addresses four civil engineering core

functions: combat and contingency engineering; base operations, maintenance, and development;

environmental leadership; and housing excellence. The plan sets forth goals in each core function,

such as building a smart facility investment strategy and increasing the effectiveness and reducing the

cost of doing business. Each goal has objectives to achieve, but the plan does not address the amount

of funding needed to implement the goals and objectives or set year-to-year goals.

Page 20 GAO/NSIAD-97-125 Defense Infrastructure
B-276460 

Emphasis on Strategic

Planning Has Been

Limited

OSD’s and the services’ strategic planning for facilities maintenance and

repair, including the revitalization of facilities infrastructure, was limited.

Those plans that did exist were not focused on long-term comprehensive

strategies for facilities revitalization, replacement, and maintenance, and

they were not tied to measurable goals to be accomplished over specific

time frames or linked to funding.

Over the past 7 years, we have called attention to critical government

operations that are highly vulnerable to waste, fraud, abuse, and

mismanagement by designating them as high-risk areas. One area of focus

has been accountability and cost-effective management of defense

programs. Our February 1997 high-risk series of reports included defense

infrastructure as a new high-risk area.24 The defense infrastructure report

noted that DOD is spending funds to operate and maintain an aging,

underutilized, and excess facilities infrastructure. It noted that setting

forth a clear framework for a reduced defense infrastructure is key to

avoiding waste and inefficiency. It further noted that the Secretaries of

Defense, the Army, the Navy, and the Air Force need to give greater

structure to their efforts to attain infrastructure reductions by developing

an overall strategic plan. Such a plan could be expected to encompass

needed demolition as well as facilities revitalization.

The need for strategic planning for facilities infrastructure is also

underscored by the requirements of the Government Performance and

Results Act. The act requires federal agencies, including DOD, to develop

agencywide strategic plans by September 30, 1997, annual performance

plans for fiscal year 1999 and beyond, and annual program performance

reports beginning March 31, 2000. The strategic plans must cover at least a

5-year period and include an agency’s mission statement and goals. They

must also describe how an agency plans to achieve its goals through its

activities and its human, capital, information, and other resources, such as

facilities.

Performance plans must include measurable performance goals, where

feasible, and the indicators for measuring performance. Performance

reports must compare actual performance with performance goals and

explain what needs to be done when goals are not met. Such performance

reporting for DOD’s infrastructure should include, as part of DOD’s

assessment of the program’s efficiency in meeting performance goals, the

measurement of actual against expected facility infrastructure

maintenance costs. Such periodic reporting should also identify and

24High-Risk Series: Defense Infrastructure (GAO/HR-97-7, Feb. 1997).

Page 21 GAO/NSIAD-97-125 Defense Infrastructure
B-276460 

facilitate monitoring estimates of the costs associated with deferred

facility maintenance.

Strategic planning can help agency components and programs to develop

outcome-oriented goals and performance measures that are linked to and

support agencywide goals.25 Our report on DOD’s implementation of the

Government Performance and Results Act notes that the Senate and

House reports on the legislation anticipate that strategic planning will be

institutionalized and practiced at all organizational levels throughout the

federal government. Our report on DOD’s Logistics Strategic Plan notes the

need to link organizational components’ plans to agencywide strategic

plans.

Our executive guide to implementing the act notes that several

organizations, in implementing management reforms similar to those

required by the act, found a key to successful implementation was to

create clear, hierarchically linked goals and performance measures that

cascaded from the top to the bottom levels of the organization. Such

hierarchies of goals and measures provide a straightforward road map

showing how the work of managers and staff throughout an organization

contributes to attaining organizationwide strategic goals. The guide

stresses that performance measurement is one of the most important

features of the act. According to the guide, performance measures at each

organizational level should be outcome oriented to allow demonstrating

results, limited to those that are responsive to multiple priorities, and

linked to responsible programs. Key to assessing performance is the need

to collect sufficiently complete, accurate, and consistent data.

Conclusions Disproportionate reductions have occurred in funding devoted to

maintenance and repair compared with reductions in space being

managed by the services over the last 10 years. This finding is consistent

with concerns of various service officials that they continue to retain more

facilities than they can afford to maintain. Demolition is one means of

addressing this problem on installations that are being retained by the

services, and it can also help avoid unnecessary maintenance and repair

and utility costs in a period of declining resources. Each of the services

has some plans to emphasize the demolition of excess facilities, but the

Army appears to be providing the strongest program emphasis. Even

25See DOD’s GPRA Implementation (GAO/NSIAD/GGD-97-65R, Jan. 31, 1997), Logistics Planning:

Opportunities for Enhancing DOD’s Logistics Strategic Plan (GAO/NSIAD-97-28, Dec. 18, 1996), and

Executive Guide: Effectively Implementing the Government Performance and Results Act

(GAO/GGD-96-118, June 1996).

Page 22 GAO/NSIAD-97-125 Defense Infrastructure
B-276460 

though stronger emphasis in the other services might be desirable, it

appears that declining O&M funding levels could have the potential to

constrain the existing plans of each of the services.

Changes in square footage of space being maintained by the services can

provide an important basis for assessing progress of demolition and other

facility reduction measures. Such data can also provide a basis for

assessing changes in funding for repair and maintenance. Trend analyses

of this data could help DOD measure performance and meet reporting

requirements under the Chief Financial Officers Act. These analyses could

also be important to making more informed operational decisions

concerning facilities infrastructure programs, as contemplated by the

Government Performance and Results Act. It is critical that DOD make

marked strides to improve its ability to develop and disclose a complete

picture of the actual costs incurred to maintain its infrastructure, as well

as estimates of the costs it may incur to carry out facility maintenance that

was previously deferred.

Recommendations We recommend that the Secretary of Defense

• direct the services to use consistent and common criteria, to the extent

feasible, for developing (1) accurate and reliable trend data on

infrastructure condition, including square footage, plant replacement

value, and other relevant measurements, and (2) costs associated with

their current infrastructure and possible reduction options, including

information on deferring facility maintenance and demolishing excess

facilities;

• use the trend data as a starting point in formulating an overall strategic

plan for facilities infrastructure that links to the departmentwide strategic

planning requirements set forth in the Government Performance and

Results Act; and

• require the Air Force, the Navy, and the Marine Corps to demolish excess

infrastructure to the maximum extent feasible when facilities are being

replaced by new construction.

Matter for

Congressional

Consideration

The Congress may wish to consider requiring DOD and the services to

provide 7 to 10 years of comparable trend data on square footage of space

being maintained and other measurements, such as plant replacement

value and other facility unit measures, along with their O&M budget

submissions and justifications each year.

Page 23 GAO/NSIAD-97-125 Defense Infrastructure
B-276460 

Agency Comments

and Our Evaluation

DOD concurred with our recommendations. However, DOD took exception

to our observation that it did not currently have complete, reliable

information. DOD stated that, as is the case with any similar, large, complex

organization, all existing information is not and should not be immediately

available at the headquarters level. It also took the position that the

standard of “complete” information was too extreme and that each

proposal to collect data at the headquarters level must be carefully

evaluated for its cost-effectiveness.

Our statement regarding complete, reliable information was made in the

context of the need for information and cost associated with either

maintaining DOD’s current facilities infrastructure or reducing it. We also

note important limitations in DOD and service trend data. Therefore, we

continue to believe that it is beneficial for DOD and the services to develop

more complete data on a consistent and continual basis to provide

information for meaningful trend analyses. Although complete information

is desirable, our recommendation did not use that term. Rather, we

stipulated that the services needed to use consistent and common criteria,

to the extent feasible, for developing accurate and reliable trend data on

infrastructure condition and costs.

DOD also expressed the view that using 1987 as the beginning point for our

analysis of changes in square footage of space being managed understated

DOD’s accomplishments, since the recent BRAC efforts did not get underway

until 1991, and would continue until 2001. It further noted that fiscal years

1987-1990 represented 4 years of physical plant growth before beginning to

count the square footage drawdown.

For purposes of analysis, we chose a 10-year period, as suggested by the

requester, because of his interest in having data commencing before the

onset of the most recent BRAC rounds. Even extending out to 2001, the

reductions in square footage are much less than typically might be

expected given the approximately 21 percent reduction in domestic

infrastructure often cited by DOD in reporting the results of its BRAC

actions. That is one of the reasons we recommended DOD require the

demolition of excess infrastructure to the maximum extent feasible when

facilities are being replaced by new construction. The complete text of

DOD’s response is included as appendix III. The scope and methodology of

our review appears in appendix II.

We conducted our review between July 1996 and February 1997 in

accordance with generally accepted government auditing standards.

Page 24 GAO/NSIAD-97-125 Defense Infrastructure
B-276460 

Unless you publicly announce the contents of this report earlier, we plan

no further distribution of it until 15 days from its issue date. At that time,

we will send copies to the Chairmen and Ranking Minority Members of the

Senate and House Committees on Appropriations and on the Budget, the

Senate Committee on Armed Services, and the House Committee on

National Security; the Secretaries of Defense, the Army, the Navy, and the

Air Force; the Commandant of the Marine Corps; and the Director, Office

of Management and Budget.

Please contact me on (202) 512-5140 if you have any questions concerning

this report. Major contributors to this report are listed in appendix IV.

Sincerely yours,

Mark E. Gebicke

Director, Military Operations

 and Capabilities Issues

Page 25 GAO/NSIAD-97-125 Defense Infrastructure
Contents

Letter 1

Appendix I 

Systems for Assessing

Infrastructure

Condition

28

DOD 28

Army 28

Air Force 29

Navy 30

Marine Corps 32

Appendix II 

Scope and

Methodology

33

Appendix III 

Comments From the

Department of

Defense

39

Appendix IV 

Major Contributors to

This Report

41

Tables Table 1: Percent Change in O&M Obligations for Maintenance and

Repair Between Fiscal Years 1987 and 1996

4

Table 2: O&M-Funded Maintenance and Repair as a Percent of

Plant Replacement Value in Fiscal Year 1996

8

Table 3: Percent Change in Maintenance and Repair Obligations

per Square Footage of Facility Space Between Fiscal Years 1987

and 1996

9

Table 4: Service Demolition Programs 16

Figures Figure 1: Percent Change in Facilities Square Footage Between

Fiscal Years 1987 and 1996

5

Figure 2: Percent Change in Square Footage for CONUS Facilities

Between Fiscal Years 1987 and 1996

6

Figure 3: New Army Barracks at Fort Hood, Texas 10

Page 26 GAO/NSIAD-97-125 Defense Infrastructure
Contents

Figure 4: Portion of Aging Pier Structure at Norfolk Naval

Station, Virginia

12

Abbreviations

BRAC Base Realignment and Closure

CONUS continental United States

DOD Department of Defense

O&M operation and maintenance

OSD Office of the Secretary of Defense

Page 27 GAO/NSIAD-97-125 Defense Infrastructure
Appendix I 

Systems for Assessing Infrastructure

Condition

The Department of Defense (DOD) has recognized the need for a standard

data system that would provide comprehensive trend data on

infrastructure condition by service. However, it has not been successful in

implementing such a system. A recent study sponsored by the Office of the

Secretary of Defense (OSD) to develop such a system never progressed

beyond the pilot phase. Consequently, DOD and the services use their own

unique systems, all of which have significant limitations in providing trend

data and relating infrastructure condition to readiness.

DOD In the conference report accompanying the fiscal year 1992 Defense

Appropriations Act, the Congress provided for the implementation of a

pilot test program to conduct comprehensive maintenance surveys at

selected bases. The surveys, referred to collectively as the Condition

Assessment Survey, were a comprehensive effort led by OSD to develop a

consistent assessment of the condition of DOD facilities. The Senate report

stated that $50 million should be used for the pilot test, noting that a lack

of accurate and meaningful budget information on repair and maintenance

had precluded obtaining a reasonable assessment of DOD’s needs. The

conference report directed DOD to use funds from the real property

maintenance account to cover the cost of each survey. The survey was

then tested at 12 installations servicewide.

The pilot test of the survey was completed in 1995 and, according to an

OSD report, achieved all its goals set by the Congress and DOD to improve

the accuracy, consistency, and credibility of maintenance and repair data.

A feature of the survey was the ability of its information system to

calculate costs for repair and replacement and a condition index scale of 0

(poor) to 100 (excellent). In addition, the system automatically determined

when a repair should be done in a given time period based on data for the

facility’s return on investment. Despite these accomplishments, service

officials told us that the system’s information management system was

labor intensive and expensive to implement and maintain. DOD projected

the cost to implement the survey servicewide would be about $715 million,

but the services would be responsible for funding about $270 million of

this cost. According to an OSD official, the survey was not implemented

beyond the initial pilot phase primarily because of the costs.

Army To assess the condition of its infrastructure, the Army started using the

Installation Status Report in 1995. The report is a three-part information

system that is intended to provide decisionmakers with an objective

Page 28 GAO/NSIAD-97-125 Defense Infrastructure
Appendix I 

Systems for Assessing Infrastructure

Condition

assessment of the infrastructure, environment, and services at Army

installations. The report provides installation status in the form of

C-ratings, which are also used in the Army’s familiar Unit Status Report.

Part I of the report on infrastructure provides 2 years of data for fiscal

years 1995 and 1996. It shows the status of installations grouped into five

broad areas: mission facilities, strategic mobility facilities, housing

facilities, community facilities, and installation support. Part I also

provides separate C-ratings that indicate whether the Army has enough

facilities and the facilities meet Army standards.

The report does not provide trend data because the system has not been

fully implemented. According to Army officials, reliable trend data from

the report will not be available until fiscal year 2000. Until then, the Army

will be validating data and refining its data collection techniques.

Examples of these refinements include revising inspection standards for

utilities and including semipermanent buildings in inspections.

Additionally, the report does not relate infrastructure condition to

readiness. Army officials said they have not determined a measurement for

this relationship.

Air Force In September 1992, the Air Force began looking for a statistical tool to

support requirements for maintenance and repair. The Air Force’s Civil

Engineering and Studies and Analysis groups jointly developed an

assessment process called the Commanders’ Facility Assessment. The

assessment system was designed to link facility condition to mission

requirements to ensure that resources for maintenance, repair, and minor

construction are allocated to the most critical mission needs of field

commanders. Commanders are to use the assessments to stratify their real

property maintenance and repair and military construction requirements.

The assessment requires field commanders to identify recurring and

nonrecurring requirements. Recurring requirements include those that are

necessary to accomplish day-to-day maintenance to preclude further

deterioration of the real property facilities and infrastructure.

Nonrecurring requirements are broken down into three levels of facility

requirements. Level I (unsatisfactory) reflects deficiencies that cause

frequent mission interruptions, accelerate facility deterioration, resulting

in high life-cycle maintenance costs, curtail or eliminate some operations,

and degrade livability and workplace conditions. These deficiencies

require a major upgrade within 2 years. Level II (degraded) reflects

Page 29 GAO/NSIAD-97-125 Defense Infrastructure
Appendix I 

Systems for Assessing Infrastructure

Condition

deficiencies that impair mission support, reduce effectiveness of the work

force, and speed deterioration of the facility. These deficiencies require a

major upgrade within 2 to 6 years. Level III (adequate) reflects facilities

that do not impair mission accomplishment, although minor deficiencies

may exist. These requirements improve operational productivity and

reduce operation costs, such as facility consolidations, demolitions, and

energy conservation measures.

The assessment includes six major areas: real property maintenance (host

and tenant); current mission military construction (host and tenant); all

medical facility requirements; nonappropriated fund activities; Defense

Business Operations Fund—Transportation (unique to the Air Mobility

Command); and Defense Maintenance Industrial Fund—Research,

Development, Test, and Evaluation (unique to the Air Force Material

Command). However, the assessment excludes other areas, such as new

mission military construction, military family housing, and environmental

compliance.

The assessment only provides condition data for Air Force facilities for

fiscal years 1993 and 1995. Air Force officials cited several areas that need

improvement, such as clarifying guidance to the field and improving the

assessment’s software. They also said that assessment training was poor

and that the assessment was too complex and labor intensive. The Air

Force recently completed the validation of 1995 data. It plans to

implement the assessment again in fiscal year 1997 and complete an

upgrade of the software in fiscal year 1998. Air Force officials were

reluctant to state that the assessment would provide an indication of how

infrastructure related to readiness. They stated that the assessment was

more oriented toward linking facilities to mission requirements rather than

readiness.

Navy The Navy assesses the condition of its facilities through the Annual

Inspection System, which is prepared by each activity (i.e., a base).

According to Navy officials, the system started in the 1960s. The objective

of the system is to provide an annual condition assessment report of

unfunded repair and maintenance deficiencies. The system report

classifies its facilities maintenance requirements into two categories:

critical and deferrable. Critical requirements need to be completed in 

12 months, whereas deferrable requirements are not as pressing, and thus

corrective actions are not critical. Each activity reports its backlog of

critical deficiencies to the Navy, which uses this information to prepare its

Page 30 GAO/NSIAD-97-125 Defense Infrastructure
Appendix I 

Systems for Assessing Infrastructure

Condition

departmentwide system report. Navy officials said they consider the

system to be an assessment of the condition of their facilities, even though

the system only tracks backlogs.

The system is a compilation of inspections performed throughout the

assessment year, but not all facilities are inspected each year. Inspections

performed through the year are control inspections on the physical

condition of structural, mechanical, and electrical facilities; preventive

maintenance inspections on critical dynamic equipment, such as electrical

and water pump distribution systems; and inspections of

operator-assigned major equipment. Navy guidance requires all facilities to

be inspected completely within a 3-year cycle. Navy activities prepare

annual maintenance action plans that are their management tools for

performing repair and maintenance activities. The plans provide data that

is incorporated into the system and updated annually.

Although historical data from the system is available, Navy officials told us

that they are concerned about the quality of this data. One official told us

that the data suffers from the lack of consistent and standardized

guidelines for the inspections. That official also indicated that the quality

of the inspections could vary with the experience and expertise of the

inspectors. A 1995 report of the Navy Internal Audit Office’s review of the

U.S. Atlantic Fleet’s annual inspection process cited the lack of a centrally

managed quality assurance program. In response, the Commander,

Atlantic Fleet, contracted with the Navy’s Public Works Center to conduct

all fleet annual inspection reports to ensure greater consistency and

accuracy in reporting its backlog of repair and maintenance. Fleet officials

told us that they are now more confident with their system data but that

only 1 year of data is currently available. The quality of previous data is

problematic in terms of establishing trends.

The Navy also started a Shore Base Readiness Reporting System in 1982.

The system was created to link financial data to shore-based readiness

missions. The system measures personnel, facilities, and equipment by

their ability to support mission operations. Assets are rated from C1 to C4,

and C3 and C4 ratings indicate that the assets are only marginally or not

meeting mission requirements. The data is not tied to funding

requirements. The system is prepared by commanding officers and staff at

the activity level who review data from the annual inspection system and

determine a rating by mission categories. The Navy was able to provide

trend data by activity on the number of facilities that were rated C1 to C4.

Page 31 GAO/NSIAD-97-125 Defense Infrastructure
Appendix I 

Systems for Assessing Infrastructure

Condition

Marine Corps The Marine Corps determines its infrastructure condition by inspections,

which have been done since the 1960s. Each organization has a

maintenance or inspection office to perform these inspections. The

inspectors are trained for performing various types of reviews, such as

electrical and utilities. Before the inspections, the inspectors examine data

on backlogs in the particular area they are about to review. The inspectors

use engineering performance standards and estimate the cost of repair,

labor, and material, using industry information and catalogs. The activity

control office generally manages the standard documentation from the

inspections.

The Marine Corps’ annual control inspection is required to identify the

base’s total maintenance and repair requirements, assess physical

condition, update real property records, and determine the effectiveness

of maintenance programs. The inspection integrates data from various

base inspections, such as preventive, cyclic, and operator inspections.

Results from the inspections help build the Marine Corps bases’ long-range

maintenance and annual work plans. Data from the annual control

inspection appears in the Marine Corps’ Backlog of Maintenance and

Repair report. This report contains only valid items of maintenance and

repair work that remain as firm requirements in annual work plans but

could not be funded in the fiscal year. The Marine Corps includes all

maintenance deficiencies in its report.

The Marine Corps is in the process of developing a Commanders’

Readiness Reporting System to link facility condition and mission

readiness. A Marine Corps official told us that the first readiness report

was expected to be prepared by April 1997. The Marine Corps has a system

to report trend data on its backlog of maintenance and repair.

Page 32 GAO/NSIAD-97-125 Defense Infrastructure
Appendix II 

Scope and Methodology

To determine the extent that the services’ obligations for maintenance and

repair correlate to changes in building square footage, we obtained

worldwide operation and maintenance (O&M) funding information for

maintenance and repair and minor construction obligations.1

 We limited

the scope of our review to active Army, Air Force, Navy, and Marine Corps

forces only. We selected data for fiscal years 1987 through 1996 because

those years comprise the most recent 10-year period and represent a point

in time before the onset of the recent period of Base Realignment and

Closure (BRAC) actions.

We focused on maintenance and repair and minor construction obligations

because obligations from these accounts directly affect the condition of

facilities and represent the day-to-day care and upkeep of the services’

facilities. We focused on budget obligations rather than budget requests or

appropriations because obligations provide a more complete accounting

of funds used for maintenance and repair activities than budgets or budget

requests.2

 Obligations represent commitment of funds, such as contracts

awarded. The liquidation of such obligations may not occur for some time

after they are recorded.

We also obtained a breakdown of O&M funding in the continental United

States and overseas from the Army and the Marine Corps; however, the Air

Force and the Navy were unable to provide such a breakdown because

these services do not track obligation data this way. As a result, we were

not able to make DOD-wide comparisons between overseas and continental

U.S. obligations. In analyzing obligation data, we converted the obligation

amounts for different years into constant fiscal year 1997 dollars so that

the dollar amounts of the different years could be compared without the

impact of inflation. We excluded military family housing from our review

because we were unable to obtain complete obligation and square footage

data comparable to the data we obtained for other types of facilities and

because military family housing is not funded by the regular O&M funded

budget.

We also obtained and evaluated data showing changes in square footage of

facilities owned and managed by the services for fiscal years 1987 through

1996 as well as the changes projected to occur in future years. We selected

square footage as an indicator of infrastructure size because square

1

Although maintenance and repair activities are funded from different sources, we focused on O&M

because it provides between 73 and 98 percent of each service’s maintenance and repair funds.

2

See Operation and Maintenance Funding: Trends in Army and Air Force Use of Funds for Combat

Forces and Infrastructure (GAO/NSIAD-96-141, June 4, 1996).

Page 33 GAO/NSIAD-97-125 Defense Infrastructure
Appendix II 

Scope and Methodology

footage is a consistent measure across services. Although the services’

total infrastructure is measured by factors other than square footage and

includes other measures, such as linear feet of runways, service officials

told us that square footage represents the best measure for the majority of

their facilities. Also, the majority of O&M funded maintenance and repair

obligations are used to maintain and repair facilities measured in square

feet.

Due to time constraints, we did not assess the services’ internal controls

associated with infrastructure data management, including the validity of

the square footage data provided for our review. However, we determined

the extent to which the services had validated their data to provide an

indication of the data’s relative level of accuracy and completeness. We

relied on the services to provide us the best representative data regarding

square footage, and the rigor of the data depended partly on whether the

service used square footage to manage its infrastructure.

The Army used square footage to manage its infrastructure, and Army

officials stated that recent data is about 85 to 90 percent accurate because

of initiatives undertaken in the early 1990s to improve the integrity of the

data. These initiatives included the use of a contractor to ensure and then

update the accuracy of the Army’s data, reliance on Army Audit Agency

audits, and BRAC certifications. The square footage data for fiscal years

1987 through 1990 for the Army may not be as reliable as data after 1990

because the Army initiated its efforts to ensure square footage accuracy

after that date. However, Army officials said that the data for 1987 through

1990 provided to us was the best available data for that time. We found

that the data for these 4 years was generally in line with the Army’s overall

square footage data.

Navy and Marine Corps officials expressed confidence in the accuracy of

their data. A February 1995 audit by the Naval Audit Service, performed

along with the 1995 BRAC process, indicated a 90-percent accuracy rate for

data sampled.

We had some initial concerns about the completeness and accuracy of the

Air Force data. We encountered discrepancies in some initial data sets

provided by Air Force officials and therefore requested the Air Force to

provide us with revised data sets. The Air Force provided us with data on

the square footage of space it owned and managed for 3 fiscal

years—1987, 1995, and 1996—but it could not readily provide such data for

Page 34 GAO/NSIAD-97-125 Defense Infrastructure
Appendix II 

Scope and Methodology

fiscal years 1988 through 1994. Air Force officials said that the square

footage data they provided us was the best available.

In analyzing our data to determine the correlation between obligations and

square footage, we compared the percent change in obligations to the

percent change in square footage between fiscal years 1987 and 1996. We

made these calculations by service and then calculated a servicewide

figure. We tried to determine if the decline in obligations had impacted the

condition of the services’ facilities over the 10-year period. We asked the

services for trend data on the condition of their facilities and the level of

emergency work orders and other work orders done at the installation and

base levels. The Army was the only service that had a system that

conveyed the actual physical condition of its facilities; however, the Army

implemented the system in 1995, and service officials indicated that

additional work was still needed to refine and accumulate data before

meaningful trends could be developed. Trend data on emergency work

orders and other types of work orders at the installation and base levels

was not available for the 10-year period, and this information was not

summarized beyond the installation and base levels.

To determine the extent that the services examined the potential for

long-term savings in demolishing excess infrastructure, we sought

cost-benefit analyses in this area. Each of the services provided estimates

for the potential savings per square foot. However, we found these

estimates were often rule-of-thumb estimates or were based on simple

averages associated with prior demolition activities rather than formal

cost-benefit analyses.

All of the services, except the Air Force, provided the amount of excess

facilities for 1996. Air Force officials told us their major commands had

been required to submit annual reports on the extent that their excess

facilities could be demolished, but the Air Force discontinued this

requirement several years ago because the report was considered

unnecessary. The Army had the most rigorous method to determine excess

space. The Army developed a model that compared required square

footage based on mission needs with actual square footage. This data

could be summarized at the installation, major command, or headquarters

level. The Navy obtained one estimate of excess from its asset database.

However, in terms of identifying square footage of space for demolition

purposes, the Navy relies on its bases to estimate the amount of square

footage to be reduced from demolition. For the Marine Corps,

Page 35 GAO/NSIAD-97-125 Defense Infrastructure
Appendix II 

Scope and Methodology

headquarters officials periodically ask the bases to report the amount of

square footage they consider excess and want to demolish.

To determine the extent that the services developed a formal demolition

program as a means of reducing excess space as part of an overall

infrastructure management plan, we reviewed the services’ demolition

programs and plans and evaluated the extent to which they were included

as part of overall service infrastructure management plans. We

interviewed service officials responsible for infrastructure planning to

determine the services’ current efforts to include demolition, condition

assessment survey data, and funding needs in their overall infrastructure

plans. We visited the following locations:

Office of the Secretary of

Defense

Office of the Deputy Under Secretary of Defense, Industrial Affairs and

Installations, Washington, D.C.

Directorate of Installation Management, Arlington, Virginia

Readiness, Programs, and Assessment Directorate, Washington, D.C.

Comptroller, Military Construction, Washington, D.C.

Department of the Army Assistant Secretary of the Army, Financial Management (Business

Resources), Washington, D.C.

Office of the Assistant Chief of Staff, Installation Management,

Washington, D.C.

Resource Integration Office, Installation Management, Washington, D.C.

Facilities and Housing Directorate, Washington, D.C.

Army Forces Command, Fort McPherson, Georgia

Army Training and Doctrine Command, Fort Monroe, Virginia

Army Base, Fort Eustis, Virginia

Army Base, Fort Hood, Texas

Page 36 GAO/NSIAD-97-125 Defense Infrastructure
Appendix II 

Scope and Methodology

Center for Public Works, Army Corp of Engineers, Fort Belvoir, Virginia

Army Military District of Washington, Fort McNair, Washington, D.C.

Army Materiel Command, Alexandria, Virginia

Department of the 

Air Force

Air Force Deputy Chief of Staff for Installations and Logistics, Office of the

Civil Engineer, Washington, D.C.

Office of the Assistant Secretary of the Air Force, Financial Management,

Budget Operations Division, Washington, D.C.

Air Force Real Estate Agency, Bolling Air Force Base, Washington, D.C.

Air Combat Command, Langley Air Force Base, Virginia

1st Fighter Wing, Langley Air Force Base, Virginia

Department of the Navy Office of the Assistant Secretary of the Navy, Financial Management

Comptroller, Washington, D.C.

Naval Facilities Engineering Command Headquarters, Alexandria, Virginia

Naval Facilities Engineering Command—Atlantic Division (Engineering

Field Division), Norfolk, Virginia

Chief of Naval Operations, Shore Installation Management Office, 

Crystal City, Virginia

Commander in Chief, U.S. Atlantic Fleet, Norfolk, Virginia

Norfolk Naval Station, Norfolk, Virginia

Navy Public Works Center, Norfolk, Virginia

Commandant of the 

Marine Corps

Marine Corps Headquarters, Installation and Logistics

Department—Facilities Branch, Housing Management Section, and 

Land Use and Military Construction Branch, Arlington, Virginia

Page 37 GAO/NSIAD-97-125 Defense Infrastructure
Appendix II 

Scope and Methodology

Marine Corps Air Station, Cherry Point, North Carolina

Marine Corps Base, Camp Lejeune, North Carolina

Other The Association of Higher Education Facilities Officers, Alexandria,

Virginia

Federal Facilities Council, Washington, D.C.

Page 38 GAO/NSIAD-97-125 Defense Infrastructure
Appendix III 

Comments From the Department of Defense

Page 39 GAO/NSIAD-97-125 Defense Infrastructure
Appendix III 

Comments From the Department of Defense

Page 40 GAO/NSIAD-97-125 Defense Infrastructure
Appendix IV 

Major Contributors to This Report

National Security and

International Affairs

Division. Washington,

D.C.

Sharon A. Cekala

Karen S. Blum

Barry W. Holman

Janice V. Morrison

Charles W. Perdue

Donna M. Rogers

Atlanta Field Office Lorelei H. Hill

Harry F. Jobes

Karen B. Thompson

Office of the General

Counsel

Richard Seldin

(703166) Page 41 GAO/NSIAD-97-125 Defense Infrastructure
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