a

GAO

United States General Accounting Office

Report to Congressional Committees

May 2003 DEFENSE 

INFRASTRUCTURE

Changes in Funding 

Priorities and 

Management 

Processes Needed to 

Improve Condition 

and Reduce Costs of 

Guard and Reserve 

Facilities

GAO-03-516
Funding for maintaining and constructing reserve component facilities has 

increased. Obligations for facility maintenance rose by about 70 percent 

from fiscal year 1998 to fiscal year 2002 and annual appropriations for 

military construction rose 49 percent from fiscal year 1998 to fiscal year 

2003. Despite the increases, reserve components rated the condition of 

64 percent of their facilities as inadequate, and GAO’s visits to installations 

document the deteriorated condition of facilities. While GAO did not see any 

facilities that were not in use, the upcoming base realignment and closure 

round is expected to include an evaluation of reserve component facilities. 

The reserve components are unlikely to meet all of DOD’s three objectives 

for improving facilities: achieve 100 percent sustainment funding starting in 

fiscal year 2004; reach a 67-year average recapitalization rate by fiscal year 

2007; and improve the condition of facilities so that deficiencies have only a 

limited effect on mission performance by fiscal year 2010. Furthermore, 

some officials acknowledged that even when their components have 

expressed intent to meet DOD’s objectives, their funding plans might include 

unrealistically high rates of increases during the out-years when compared 

to previous funding trends and against other defense priorities. 

The reserve components face challenges in implementing two potential 

cost saving initiatives—joint construction projects and real property 

exchanges. Reserve component officials said that funding joint construction 

projects—where two or more components share space requirements and 

build one facility—is difficult to coordinate. In addition, while Congress has 

provided the components with authority to exchange real property with 

other public or private entities in return for the construction of new facilities 

of equal or greater value—the Office of the Secretary of Defense has not 

provided overall direction for the program, thus risking the exchange of 

property that may be needed by other DOD components. 

GAO prepared this report under 

its basic legislative responsibilities. 

Its objectives are threefold: (1) to 

examine the reserve forces’ 

trends for facility maintenance 

and construction funding and the 

condition of their facilities, (2) to 

assess the likelihood that they will 

meet the Department of Defense’s 

(DOD) objectives for improving 

facilities, and (3) to discuss the 

challenges in implementing two 

potential cost saving initiatives—

joint construction projects and real 

property exchanges. 

GAO is recommending that the 

Secretary of Defense direct the 

services to review and reevaluate 

the priorities to sustain and 

improve the condition of reserve 

facilities. GAO also recommends 

that the Secretary direct the 

Deputy Under Secretary of Defense 

for Installations and Environment 

to facilitate the coordination 

funding for joint construction 

projects among active and reserve 

components, and to establish a 

method to ensure that real property 

to be exchanged is not needed by 

other DOD components. GAO is 

also suggesting that Congress 

consider using DOD’s newly 

established budget structure to 

better coordinate and fund high 

priority joint construction projects. 

In commenting on a draft of this 

report, DOD agreed with the 

recommendations. 

www.gao.gov/cgi-bin/getrpt?GAO-03-516.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Barry W. 

Holman at (202) 512-8412 or 

holmanb@gao.gov. 

Highlights of GAO-03-516, a report to 

Congressional Committees 

May 2003

DEFENSE INFRASTRUCTURE 

Changes in Funding Priorities and 

Management Processes Needed to 

Improve Condition and Reduce Costs 

of Guard and Reserve Facilities 
Page i GAO-03-516 Defense Infrastructure

Contents

Letter 1

Results in Brief 3

Background 5

While Funding Has Increased, Most Facilities Are Considered 

Inadequate 13

Reserve Components Are Unlikely to Meet All of DOD’s Objectives 

for Improving Facilities 29

Challenges Exist in Implementing Joint Construction Projects and 

Real Property Exchanges 36

Conclusions 44

Recommendations for Executive Action 45

Matter for Congressional Consideration 46

Agency Comments and Our Evaluation 46

Appendixes

Appendix I: Scope and Methodology 50

Appendix II: Comments from the Department of Defense 56

Appendix III: GAO Contact and Staff Acknowledgments 59

Tables Table 1: Number of Locations and Facilities by Reserve Component 

as of September 30, 2002 6

Table 2: Military Construction Backlog by Reserve Component, 

Fiscal Years 1998 through 2001 17

Table 3: Listing of Various Reserve Component Locations GAO 

Visited 51

Figures Figure 1: Requested, Congressionally Designated Initially, and 

Reported Obligated Facility Maintenance Funding Levels 

for the Reserve Components, Fiscal Years 1998 through 

2002 14

Figure 2: Requested and Appropriated Military Construction 

Funding Levels for the Reserve Components, Fiscal Years 

1998 through 2003 16

Figure 3: Percent of Reserve Component Facilities Considered 

Inadequate, Fiscal Years 1998 through 2003 18

Figure 4: Typical Examples of Newly Constructed or Renovated 

Facilities at Various Reserve Component Locations 20
Contents

Page ii GAO-03-516 Defense Infrastructure

Figure 5: Typical Examples of Facility Improvements at Various 

Reserve Component Locations 21

Figure 6: Examples of Deteriorated Ramp, Runway, and Driveways 

at Various Reserve Component Locations 22

Figure 7: Examples of Damage at Various Reserve Component 

Facilities 24

Figure 8: Examples of Inadequate Space for Equipment at Various 

Reserve Component Facilities 25

Figure 9: Examples of Inadequate Storage Space at Various 

Reserve Component Facilities 27

Figure 10: Average Annual Sustainment Funding as a Percent of 

Requirement by Reserve Component, Aggregate for 

Fiscal Years 2003 through 2009 30

Figure 11: Average Annual Recapitalization Rate by Reserve 

Component, Aggregate for Fiscal Years 2003 through 

2009 32

Figure 12: Current and Projected Restoration and Modernization 

Funding by Reserve Component, Fiscal Years 2003 

through 2009 34

Figure 13: Current and Proposed Fire Station at Parks Reserve 

Forces Training Area, California, as of November 2002 41

Abbreviation

DOD Department of Defense

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Page 1 GAO-03-516 Defense Infrastructure

United States General Accounting Office

Washington, D.C. 20548

A

May 15, 2003 Letr

Congressional Committees

The Department of Defense’s (DOD) six reserve components—Army 

National Guard, Army Reserve, Naval Reserve, Marine Corps Reserve, 

Air National Guard, and Air Force Reserve—operate and maintain more 

than 41,000 buildings and structures sited in about 5,000 locations in the 

United States and its territories in which Congress provided about 

$950 million in funds for fiscal year 2003. The number of reserve facilities 

has grown by about one-third during the past 10 years, primarily due to 

new mission requirements and the transfer of certain active services’ 

facilities from bases that were either closed or realigned during the base 

closure process. While the number of facilities has grown, the reserve 

components consider 64 percent of their facilities to be inadequate. In the 

absence of proper maintenance, these facilities deteriorate prematurely, 

which could adversely affect missions supported by these facilities. 

Without consistent periodic recapitalization, they can become obsolete 

and no longer be cost-effectively renovated and must be replaced with new 

construction if there is a continuing need.1

 DOD and Congress have 

recognized the need to fully fund maintenance and recapitalization of 

facilities, as well as to reduce DOD’s inventory of facilities through an 

upcoming round of base realignments and closures scheduled for fiscal 

year 2005.2

1

 Recapitalization includes major renovation or reconstruction activities (including facility 

replacements) needed to keep facilities modern and efficient in an environment of changing 

standards and missions.

2

 As authorized by Congress in 2001, DOD intends to reduce its inventory of facilities by 

closing some installations and by consolidating overlapping activities within and across the 

services through a round of base realignments and closures in fiscal year 2005. DOD 

officials have testified that 20 to 25 percent of DOD’s infrastructure capacity is not needed to 

meet current mission requirements. Accordingly, as a result of the round of base 

realignments and closures in fiscal year 2005, DOD and the reserve components will have to 

adjust their facility maintenance and recapitalization plans.
Page 2 GAO-03-516 Defense Infrastructure

In August 2001, DOD issued a facility strategic plan3 and has recently 

established three objectives for improving its facilities: achieve 100 percent 

sustainment funding starting in fiscal year 2004,4

 achieve a 67-year average 

recapitalization rate by fiscal year 2007,5

 and improve the condition of 

facilities so that deficiencies have only a limited effect on mission 

performance by fiscal year 2010. In addition, as a way to achieve potential 

cost savings, the reserve components have initiated joint military 

construction projects, where two or more components combine their 

space requirements into one facility. They also have participated in real 

property exchanges, where they trade real property with other public or 

private entities in return for the construction of new facilities of equal or 

greater value.

We prepared this report under our basic legislative responsibilities as 

authorized by 31 U.S.C. § 717 and are providing it to you because of your 

Committee’s oversight responsibilities for DOD’s facilities. This report on 

the reserve components (1) examines their funding trends for facility 

maintenance and construction since fiscal year 1998 and the condition of 

their facilities over this same time period, (2) assesses the likelihood that 

they will meet DOD’s objectives for improving facilities, and (3) discusses 

the challenges in implementing two potential cost saving initiatives—joint 

construction projects and real property exchanges. This is one of several 

reviews that we have completed or have underway examining various 

aspects of facility conditions in DOD. For example, we recently reported 

that funding for facility maintenance and military construction has fallen 

short of what was needed to halt the deterioration of facilities used by the 

active military services.6

 Furthermore, we noted that there was a lack of 

consistency in the active services’ information on facility conditions and 

3

 U.S. Department of Defense, Defense Installations 2001: The Framework for Readiness 

in the 21st Century (Washington, D.C.: August 2001).

4

 Sustainment funding provides resources primarily from operation and maintenance funds 

for recurring maintenance and repair activities necessary to keep an inventory of facilities in 

good working order.

5

 The recapitalization rate is calculated by dividing recapitalizable plant replacement value 

by the total of restoration and modernization funding. The recapitalizable plant replacement 

value, as defined by DOD, is the cost of replacing an existing facility with a facility of the 

same size at the same location, using today’s building standards.

6

 U.S. General Accounting Office, Defense Infrastructure: Changes in Funding 

Priorities and Strategic Planning Needed to Improve the Condition of Military Facilities,

GAO-03-274 (Washington, D.C.: Feb. 19, 2003).
Page 3 GAO-03-516 Defense Infrastructure

that DOD’s facilities strategic plan and three key objectives to sustain and 

improve facilities have weaknesses that affected their effectiveness. In 

addition, we are currently reviewing the management of housing for 

unaccompanied personnel and the reserve components’ acquisition of 

facilities from prior base realignment and closure actions.

In performing our work, we examined DOD’s budget for facilities 

maintenance and construction from fiscal years 1998 through 2002. We 

performed our work at, and met with officials from, the Office of the 

Assistant Secretary of Defense for Reserve Affairs and the headquarters of 

the six reserve components—Army National Guard, Army Reserve 

Command, Naval Reserve Forces Command, Marine Forces Reserve, Air 

National Guard, and Air Force Reserve Command. We also visited 20 Army 

National Guard, 11 Army Reserve, 9 Naval Reserve, 7 Marine Corps 

Reserve, 5 Air National Guard, and 5 Air Force Reserve sites to discuss 

these issues further and to tour various facilities to observe their physical 

condition. We did not validate the reserve components’ requirements for 

facilities or reported requirements for the sustainment of their facilities, 

nor did we validate their recapitalization requirements. A more thorough 

description of our scope and methodology is presented in appendix I.

Results in Brief Although funding for maintaining and constructing reserve component 

facilities has increased since fiscal year 1998, reserve components report 

that the condition of most of their facilities are inadequate and that their 

construction backlog has increased to $12.2 billion. Reported obligations 

for maintaining facilities increased about 70 percent, from $444 million to 

$750 million from fiscal year 1998 to fiscal year 2002. In general, the 

increase in obligations resulted from the components’ higher annual 

funding requests, except in fiscal year 2000, and the movement of funds 

into facility maintenance from other operating accounts at the end of each 

fiscal year. Similarly, annual appropriations for military construction 

increased 49 percent, from $461 million to $688 million from fiscal year 

1998 to fiscal year 2003.7

 Of these appropriations, more than half came 

from add-ons by Congress. Even with these funding increases, reserve 

components rated the condition of 64 percent of their facilities as 

inadequate for fiscal year 2003. While deteriorated facilities are common, 

there is a lack of consistency in the reserve components’ information on 

7

 During this period, military construction appropriations peaked at $954 million in 

fiscal year 2002.
Page 4 GAO-03-516 Defense Infrastructure

facility conditions, making it difficult to direct funds to facilities where they 

are most needed and to accurately gauge facility conditions.

The reserve components are unlikely to meet all of DOD’s three objectives 

for improving facilities. While reserve components plan to meet some of 

the objectives from year to year, none are expecting enough funds to 

consistently meet DOD’s objective to fully fund sustainment from fiscal 

years 2003 through 2009, and only the Marine Corps Reserve and the Air 

National Guard are expecting to reach a 67-year average recapitalization 

rate during this period. In addition, all reserve components call for rapid 

increases in restoration and modernization funding at some point during 

this period. Assuming that all of the facilities are needed, reserve 

component officials also estimate that it would cost $7.8 billion to achieve 

DOD’s objective to concentrate funding to eliminate the most significant 

facility deficiencies by fiscal year 2010. However, some officials 

acknowledged that even when their components have expressed their 

intent to meet DOD’s objectives, their funding plans might include 

unrealistically high rates of increases during the out-years when compared 

to previous funding trends and against other defense priorities.

The reserve components face challenges in implementing two potential 

cost-saving initiatives: joint construction projects and real property 

exchanges. First, the Office of the Assistant Secretary of Defense for 

Reserve Affairs has estimated that joint construction projects could save 

up to 20 percent over the cost of two separate projects; reserve component 

officials said that the challenge to implementing these projects is the 

difficulty in simultaneously programming them in each of their respective 

budget requests. Recognizing this, in April 2001, the Office of the Secretary 

of Defense established a separate budget structure for funding joint use 

military construction projects, but it has not yet programmed any funds for 

this purpose. As a result, many joint construction projects that had the 

potential to generate future cost savings might not be initiated. Second, 

while Congress has provided the Secretary of Defense with authority to use 

real property exchanges,8

 the Office of the Secretary of Defense has not 

provided overall direction for the program. Currently, only the Army 

Reserve is using this authority and plans to use this authority to recapitalize

8

 See 10 U.S.C. § 18233. The Secretary of Defense may delegate this authority to any 

department, agency, or officer of DOD.
Page 5 GAO-03-516 Defense Infrastructure

10 percent of its facilities. Officials from the other reserve components 

said they were not aware of this authority and only now are exploring its 

potential use. While the Army Reserve has issued guidance and is gaining 

experience in implementing this authority, there is no process for collecting 

and sharing lessons learned with other reserve components. According to 

officials with the Office of the Secretary of Defense Installation and 

Environment, the Office of the Assistant Secretary of Defense for Reserve 

Affairs, and the active and reserve components of the Army, there is no 

method to assure that real property needed by other DOD components or 

for future missions is not being exchanged. Although DOD provides little 

guidance for real property exchanges, it does require the components to 

obtain the department’s approval when the real property being exchanged 

is valued at more than $1 million or involves more than 1,000 acres.9

However, the Army Reserve has interpreted this guidance to mean that it 

will notify DOD if the value of the real property received exceeds the value 

of the real property exchanged by $1 million, regardless if the real property 

exchanged is worth several millions of dollars.

We are making several recommendations to address funding priorities and 

management processes needed to improve the condition and reduce the 

costs of the reserve components’ facilities. To help promote increased 

consideration of joint construction projects, we are also suggesting that 

Congress may want to consider designating a portion of its military 

construction appropriations for DOD’s newly established budget structure 

to fund joint use military construction projects. In commenting on a draft 

of this report, DOD concurred with our recommendations.

Background The six reserve components—Army National Guard, Army Reserve, 

Naval Reserve, Marine Corps Reserve, Air National Guard, and Air Force 

Reserve—are responsible for maintaining facilities in almost 5,000 different 

locations within the United States and its territories, with an estimated 

plant replacement value of over $57 billion. These facilities consist of 

readiness and reserve centers plus other buildings and structures to equip, 

train, sustain, and deploy the reserve forces. These facilities are typically 

used to train reserve component members and units in classrooms and 

drill halls and to conduct other tasks such as unit planning; record keeping; 

storing of individual and unit equipment, weapons, and supplies; and 

9

 DOD Instruction 1225.8, Programs and Procedures for Reserve Component Facilities and 

Unit Stationing, enclosure 3, para. E3.1.2.9, September 6, 2001.
Page 6 GAO-03-516 Defense Infrastructure

maintaining vehicles and aircraft. The number of reserve component 

facilities has grown by 30 percent in the past decade, mostly due to new 

mission requirements and the transfer of certain facilities from installations 

that were either closed or realigned during the base closure process. 

Table 1 shows the number of locations and facilities by reserve component 

as of September 30, 2002.

Table 1: Number of Locations and Facilities by Reserve Component as of 

September 30, 2002

Source: Office of the Assistant Secretary of Defense (Reserve Affairs).

Note: Facility locations are counted as separate pieces of property; the number of buildings and 

structures includes maintenance shops, aircraft hangers, warehouses, equipment centers, and 

administrative buildings that are separately listed on the reserve components’ real property database; 

and readiness and reserve centers are the number of armories or centers where the reserve 

component unit drills.

With DOD’s increased reliance on the reserve components and the 

activation of about 224,500 reservists as of the end of April 2003, the 

reserve components have increasingly become an important resource 

in the implementation of DOD’s national defense strategy. Increased 

reliance on the reserve components to assume new missions, support 

overseas deployments, and provide support for homeland defense has 

highlighted the importance of adequate facilities to train reservists for 

their operational missions.

Reserve component Facility locations

Buildings and

structures

Readiness or

reserve centers

Army National Guard 3,158 28,540 3,040

Army Reserve 1,178 4,475 742

Naval Reserve 181 1,178 153

Marine Corps Reserve 183 564 22

Air National Guard 176 5,231 0

Air Force Reserve 70 1,278 0

Total 4,946 41,266 3,957
Page 7 GAO-03-516 Defense Infrastructure

Funding for Facilities Funding for sustaining and constructing facilities primarily comes from 

two separate appropriations—operation and maintenance and military 

construction. Operation and maintenance funds are used mostly to support 

sustainment, which covers the day-to-day expense of routine maintenance 

such as repairing or replacing broken windows, doors, or restroom 

plumbing, as well as larger repair and maintenance projects such as 

installing a new roof or air conditioning and heating systems. Congress 

indicates how it expects these funds to be spent by designating specific 

amounts at the subactivity group level such as for facilities sustainment, 

restoration, and modernization activities found in the operation and 

maintenance tables for each reserve component included in the 

appropriations act’s conference report.10 Both the operation and 

maintenance and the military construction appropriations can be used to 

fund facility restoration and modernization activities. Restoration funds are 

used to repair and replace items not considered routine, such as repairing 

or replacing items damaged by inadequate sustainment, excessive age, 

natural disaster, fire, accident, or other causes. Modernization funds are 

used to alter or modernize facilities to meet new or higher standards, 

accommodate new functions, or replace structural components. In 

addition, construction of new facilities is mostly funded with the military 

construction appropriation. Congress specifies the amounts and the 

projects for which military construction appropriations are to be used.

The reserve components compete for funds in the planning, programming, 

and budgeting process with their active service counterparts for operation 

and maintenance funding and military construction funding. The Office of 

the Secretary of Defense (Comptroller) and the active components review 

reserve component funding requirements and adjust the budget request 

based on DOD and service programs and priorities. The reserve 

components submit to Congress their own budget request submission 

separately from the active services as part of the President’s budget 

submission. Congress makes appropriations for each of the six reserve 

10 DOD financial management regulations, which reflect agreements between DOD and 

congressional authorization and appropriations committees, provide general guidelines for 

various reprogramming actions. For example, congressional notification was required for 

operation and maintenance reprogramming actions of $15 million or more in fiscal year 

2002. These DOD regulations also limit the amount of operation and maintenance funds that 

can be used for new construction and the alteration or conversion of existing facilities: a 

maximum of $750,000 per project or up to $1.5 million if the project is designed to correct a 

deficiency that threatens life, health, or safety. See DOD Financial Management Regulation 

7000.14-R, Budget Formulation and Presentation, vol. 2B, ch. 8, sec. 080201, June 2002.
Page 8 GAO-03-516 Defense Infrastructure

components in a separate operation and maintenance appropriation and a 

separate military construction appropriation—often adding construction 

projects to the appropriations. These appropriated funds are then managed 

by each reserve component command rather than by a centralized 

authority like the Office of the Assistant Secretary of Defense for Reserve 

Affairs, which generally serves as a liaison with the Office of the Secretary 

of Defense and provides policy and advisor-type functions among the active 

and reserve components. The Army has made recent changes to centralized 

facility management that now includes the Army Reserve. However, it is 

too early to assess how the management of sustainment, restoration, and 

modernization funds will change. The Navy has regional programs to 

manage its active installations and reserve component facilities and is 

moving toward a more centralized management structure similar to the 

Army’s facility management program by October 2003.

In addition, individual states contribute funds to maintain Army National 

Guard and Air National Guard facilities as outlined in National Guard 

Bureau regulations.11 Funding for facility maintenance of Army National 

Guard state-owned facilities is based on cooperative agreements between 

the respective states and the federal government and the type of facility 

involved. For example, the states are typically expected to contribute to the 

cost of repairs at their 3,040 readiness centers—up to 50 percent of the cost 

for major repairs, such as replacing roofs and air conditioning systems, and 

100 percent of the cost for minor repairs, such as unclogging toilets and 

painting walls. The states are also required to contribute up to 25 percent of 

the costs for both major and minor repairs to their equipment maintenance 

shops, but they are not required to contribute to facility maintenance of the 

Army National Guard’s training centers, local training areas, aviation 

support facilities, maneuver training equipment sites, unit training 

equipment sites, and facilities for civil support teams if weapons of mass 

destruction are used. Most of the Air National Guard facilities are located 

at airports, which are federally leased property, or are collocated on DOD 

installations. Thus, states do not contribute to the cost of sustaining many 

of these facilities.

11 Departments of the Army and the Air Force, National Guard Bureau, Grants and 

Cooperative Agreements, NGR 5-1/ANGI 63-101 (Washington, D.C.: July 7, 2000).
Page 9 GAO-03-516 Defense Infrastructure

Facility Strategic Plan and 

Objectives

In August 2001, DOD issued a facility strategic plan that outlined four 

long-term strategic goals for installations and facilities.12 The strategic 

goals are to (1) locate, size, and configure defense installations and 

facilities to meet the requirements of today’s and tomorrow’s force 

structures; (2) acquire and sustain defense installations and facilities to 

provide mission-ready installations with quality living and work 

environments; (3) leverage resources—money, people, and equipment—to 

achieve the proper balance between requirements and available funding; 

and (4) improve facility management and planning by embracing best 

business practices and taking advantage of modern asset-management 

techniques and performance-assessment metrics. In addition to the broad 

goals set forth in the strategic plan, DOD also established three key 

objectives to improve the condition of facilities: (1) fully fund sustainment 

starting in fiscal year 2004; (2) achieve an average recapitalization rate of 

67 years by fiscal year 2007; and (3) improve the condition of facilities so 

that deficiencies have only a limited effect on mission performance by 

fiscal year 2010.

In an attempt to standardize the rating of facilities across the services 

and to provide Congress with a measure of facility conditions and their 

ability to support military missions, DOD issued its first Installations’ 

Readiness Report in 1999. Within the report, the services’ major commands 

report on the condition of their facilities using a scale of C-1 through C-4: 

C-1 facilities have only minor deficiencies with negligible impact on 

capability to perform missions; C-2 facilities have some deficiencies with 

limited impact on capability to perform missions; C-3 facilities have 

significant deficiencies that prevent performing some missions; and 

C-4 facilities have major deficiencies that preclude satisfactory mission 

accomplishment. According to DOD’s guidance, the services could 

implement this readiness reporting system without modifying their existing 

assessment processes. As a result, all four services are using different 

systems to assess facility conditions and develop C-ratings.

12 U.S. Department of Defense, Defense Installations 2001: The Framework for Readiness 

in the 21st Century (Washington, D.C.: Aug. 2001).
Page 10 GAO-03-516 Defense Infrastructure

According to DOD, providing full sustainment funding is the most 

cost-effective approach to managing facilities because it provides the 

most performance over the longest period for the least investment. 

Without adequate sustainment, the expected life of a facility is reduced 

and facilities must be recapitalized sooner, although, even with adequate 

sustainment, facilities eventually wear out or become obsolete over time. 

An obsolete facility is one that is irrelevant to present-day missions 

regardless of its condition; for example, a maintenance shop built in the 

1950s may be too narrow and small to accommodate large tanks and 

vehicles. Once a facility reaches the end of its expected service life, it must 

be recapitalized—that is, replaced or extensively renovated or modernized. 

DOD estimates that an average recapitalization rate of 67 years allows fully 

sustained facilities to meet the department’s requirements. Recapitalization 

investments can also be made periodically throughout a facility’s service 

life, which extends service life and delays the need for replacement. 

Moreover, even after recapitalization investments are made, facility 

performance can rapidly decline in the absence of adequate sustainment.

Use of Joint Construction 

Projects

According to officials of the Office of the Assistant Secretary of Defense 

for Reserve Affairs, joint construction is when two or more components 

agree to consolidate space requirements and build one facility to share 

instead of building separate facilities. The reserve components are required 

by 10 U.S.C. § 18234 to pursue the joint use of facilities by two or more 

components to the greatest extent practicable. DOD implemented this 

statutory requirement by establishing a Joint Service Reserve Component 

Facility Board in every state. Once a year, these boards are expected to 

review all proposed military construction projects and identify those for 

joint construction potential. In April 2001, DOD created a budget structure 

for the exclusive use of funding joint use military construction projects 

between two or more service components, whether active, reserve, 

or guard.
Page 11 GAO-03-516 Defense Infrastructure

Use of Real Property 

Exchanges

Real property exchange is a method the reserve components can use to 

construct or renovate facilities in exchange for military-owned real 

property. When most of the reserve components’ infrastructure was built 

prior to 1970, many facilities were originally located outside or near 

metropolitan areas. However, these properties are now in prime locations 

and are candidates for real property exchanges because of urban growth 

and the various complexes—such as shopping centers, commercial or 

industrial parks, and residential housing developments—that surround the 

properties. The reserve components can use the authority contained in 

10 U.S.C. § 18233 to acquire real property from a private or public entity in 

exchange for military-owned real property. The reserve components can 

also seek a congressionally directed exchange authority specific to an 

individual exchange project that typically has been included in defense 

authorization, appropriation, or military construction acts. Exchanging real 

property with a private or public entity is a method of obtaining new facility 

construction without the need for additional appropriated funds for 

property acquisition.13

Prior GAO Reports Since 1997,14 we have identified DOD infrastructure management as a 

high-risk area and, as such, we have issued several reports that address 

areas where DOD and the services could improve their facilities 

management program. In 2001, we reported that DOD needed to address 

facility requirements, recapitalization, and maintenance and repair needs.15

In a January 2003 report, we continued to identify DOD infrastructure 

management as a high-risk area and to report that transforming DOD’s 

support infrastructure remains a long-term challenge.16 In addition, for the

13 At the request of the Chairman, Committee on the Budget, United States Senate, we are 

identifying capital financing approaches that depart from a long-standing budget concept 

calling for the budget to include the full range of federal activities. Real property exchanges 

are one such approach.

14 U.S. General Accounting Office, High-Risk Series, GAO/HR-97-7 (Washington, D.C.: 

February 1997).

15 U.S. General Accounting Office, High-Risk Series: An Update, GAO-01-263

(Washington, D.C.: January 2001).

16 U.S. General Accounting Office, Major Management Challenges and Program Risks: 

Department of Defense, GAO-03-98 (Washington, D.C.: January 2003).
Page 12 GAO-03-516 Defense Infrastructure

first time we added federal real property as a high-risk area due to 

significant property repair and restoration needs, among other reasons.17

In February 2003, we reported that, while funding for facility maintenance 

and military construction for active services’ facilities increased during the 

past few years, the amounts had fallen short of what is needed to halt the 

deterioration of facilities used by the active military forces.18 In addition, 

we found that there was a lack of consistency in the services’ information 

on facility conditions, making it difficult for Congress, DOD, and the 

services to direct funds to facilities where they are most needed and to 

measure progress in improving facilities. We also reported that DOD’s 

facilities strategic plan and three key objectives for the services to sustain 

and improve the condition of their facilities have weaknesses that affect 

their effectiveness. We recommended that the Secretary of Defense 

(1) direct the services to reassess their funding priorities for facilities; 

(2) implement a consistent departmentwide process to assess, rate, and 

validate facility conditions; (3) revise DOD’s facilities strategic plan to 

include information on specific actions, time frames, responsibilities, and 

funding levels; (4) clarify DOD’s guidance by specifying the organizational 

level at which its facility improvement objectives should be achieved; and 

(5) direct the services to develop comprehensive performance plans to 

sustain and recapitalize their facilities. In commenting on a draft of that 

report, DOD concurred with our recommendations and outlined steps it 

was taking to address our concerns.

17 U.S. General Accounting Office, High-Risk Series: Federal Real Property, GAO-03-122

(Washington, D.C.: January 2003).

18 See GAO-03-274.
Page 13 GAO-03-516 Defense Infrastructure

While Funding Has 

Increased, Most 

Facilities Are 

Considered Inadequate

While funding for maintaining and constructing reserve component 

facilities has increased since fiscal year 1998, reserve components report 

that most of their facilities are inadequate and that their construction 

backlog had increased to $12.2 billion in fiscal year 2001. Reported 

obligations for facility maintenance increased about 70 percent from 

fiscal year 1998 to fiscal year 2002 and appropriations for military 

construction increased about 49 percent from fiscal year 1998 to fiscal year 

2003. Even with these increases in funding, reserve components rated 

64 percent of their facilities as inadequate for fiscal year 2003. Our visits to 

57 reserve components sites showed that the condition of facilities ranged 

from good to inadequate, and we observed unit inefficiencies and 

workarounds at some deteriorated facilities.

Funding Increased for 

Facility Maintenance

DOD’s reported obligations for facility maintenance, funded with operation 

and maintenance monies, show an increase between fiscal year 1998 and 

fiscal year 2002. Reported obligations for facility maintenance increased 

about 70 percent, from $444 million to $750 million during this period. As 

figure 1 shows, the request for facility maintenance also increased from 

$320 million to $705 million during the same period, representing an 

increase of 120 percent.
Page 14 GAO-03-516 Defense Infrastructure

Figure 1: Requested, Congressionally Designated Initially, and Reported Obligated 

Facility Maintenance Funding Levels for the Reserve Components, Fiscal Years 1998 

through 2002

a

In fiscal year 2000, Congress, in its conference report, moved funds requested for quality of life 

enhancements into facility maintenance.

b

The term “congressionally designated” refers to amounts set forth at the budget activity, activity group, 

and subactivity group level in an appropriation act’s conference report. These recommended amounts 

are not binding unless they are also incorporated directly or by reference into an appropriation act or 

other statute.

c

DOD reported obligated amounts to Congress in its budget submissions.

320

410

444

344

299

445

300 306

578

539 546

640

705 707

750

0

100

200

300

400

500

600

700

800

1998

Fiscal year

1999 2000 2001 2002

Dollars in millions

Requested

Congressionally designated initially

Reported obligations

Sources: DOD and Congress.

a

b

c
Page 15 GAO-03-516 Defense Infrastructure

In general, these funding increases resulted from two primary sources: the 

reserve components’ higher annual funding requests—except in fiscal year 

2000—and the movement of funds into facility maintenance from other 

operation and maintenance accounts at the end of each fiscal year. 

However, reserve officials said that even with these additional funds, they 

are still not funding all of their facility maintenance requirements. Reserve 

officials said that they have the flexibility to move funds out of the facility 

maintenance accounts early in the fiscal year and, as the year unfolds, 

move funds back into these accounts in addition to other funds that were 

not executed in other operation and maintenance accounts. It is difficult to 

determine what specific accounts these funding increases came from 

because funds moved out of one account cannot generally be traced 

directly to another account.

To prevent the movement of facility maintenance funds, the Army took 

action to establish a new organization—the Installation Management 

Agency—in October 2002. Reporting directly to the Army Assistant Chief 

of Staff for Installation Management, the new agency will oversee and 

manage all facility maintenance funds centrally as well as implement 

consistent standards across the Army. It will also manage facility funding 

for Army Reserve facilities but not the Army National Guard because 

officials said the Installation Management Agency might interfere with 

state rights. It is too early to assess the potential success of the Army’s 

facility management program.

Appropriations Increased 

for Military Construction 

During the same time period that the reserve components reported 

obligations for facility maintenance increased, appropriations for military 

construction also increased. From fiscal years 1998 through 2003, Congress 

consistently appropriated more military construction funds than the 

reserve components requested by mostly appropriating additional funds for 

projects already identified by the reserve components for funding in the 

out-years. As shown in figure 2, appropriations for military construction 

increased about 49 percent, from $461 million to $688 million from fiscal 

year 1998 to fiscal year 2003. During this period, military construction 

appropriations peaked at $954 million in fiscal year 2002.
Page 16 GAO-03-516 Defense Infrastructure

Figure 2: Requested and Appropriated Military Construction Funding Levels for the 

Reserve Components, Fiscal Years 1998 through 2003

Note: Obligated amounts for military construction are not shown because such funds are available for 

obligation over a 5-year period. For example, funds appropriated for military construction in fiscal year 

1998 can be obligated through fiscal year 2002.

a

Fiscal year 2003 requested and appropriated amounts include emergency response funds.

More than half of these aggregate appropriations came from add-ons by 

Congress. Reserve component officials stated that DOD and the active 

services have come to rely on these congressional increases while 

requesting funding for other priorities within DOD’s budgetary constraints. 

For example, Congress appropriated additional funding for 48 more 

projects than what was in the reserve components’ budget request for fiscal 

year 2003. However, even with these congressional increases, various 

reserve component officials said that many of their construction projects 

go unfunded. As shown in table 2, the backlog of military construction 

projects has increased from $7 billion to $12.2 billion from fiscal year 1998 

Dollars in millions

Source: Office of the Assistant Secretary of Defense (Reserve Affairs).

181

461

180

480

256

695

222

693

615

954

319

688

0

100

200

300

400

500

600

700

800

900

1,000

1998 

Fiscal year

1999 2000 2001 2002 2003

Requested

Appropriated

a
Page 17 GAO-03-516 Defense Infrastructure

to fiscal year 2001. However, if certain active services’ facilities from bases 

that were either closed or realigned during the base closure process were 

transferred to the reserve components, it could have a positive or negative 

impact on reducing the backlog of military construction projects.

Table 2: Military Construction Backlog by Reserve Component, Fiscal Years 1998 

through 2001

Source: Office of the Assistant Secretary of Defense (Reserve Affairs).

Note: At the time of our review, data on the military construction backlog had not been collected for 

fiscal year 2002.

Reserve Components 

Consider Many of Their 

Facilities to Be Inadequate

While funds devoted to facility maintenance and military construction have 

increased, the overall condition of facilities has not improved significantly. 

At the beginning of fiscal year 2003, the reserve components considered 

64 percent of their buildings and structures to be inadequate (see fig. 3).19

While deteriorated facilities are common at many locations, reserve 

component officials have said that the age and size of these facilities 

contribute to them being inadequate because many facilities built in the 

1950s and 1960s have not been modernized or expanded to accommodate 

changes in missions and equipment requirements.

Dollars in billions

Reserve component 1998 1999 2000 2001

Army National Guard $2.5 $2.5 $5.5 $7.1

Army Reserve 1.9 1.9 2.1 2.1

Naval Reserve 0.4 0.4 0.3 0.3

Marine Corps Reserve 0.3 0.1 0.3 0.3

Air National Guard 1.3 1.2 1.5 1.7

Air Force Reserve 0.6 0.6 0. 6 0.7

Total $7.0 $6.7 $10.3 $12.2

19 This percentage compares with 68 percent of active component facilities reported as 

inadequate in fiscal year 2001.
Page 18 GAO-03-516 Defense Infrastructure

Figure 3: Percent of Reserve Component Facilities Considered Inadequate, 

Fiscal Years 1998 through 2003

Notes: According to reserve component officials, the variation from fiscal years 2001 through 2003 is 

primarily the result of changes in the procedures used to assess facility conditions such as weight 

factors for individual facility components that can change the facility condition assessment and not 

necessarily the result of a significant change in facility conditions.

Fiscal year 2003 data represents facility conditions as of September 30, 2002.

Source: Office of the Assistant Secretary of Defense (Reserve Affairs).

53

62 61

64 64 64

0

10

20

30

40

50

60

70

80

90

100 Percent

1998 

Fiscal year 

1999 2000 2001 2002 2003
Page 19 GAO-03-516 Defense Infrastructure

In our February 2003 report on the active services’ facilities, we noted there 

was a lack of consistency in the services’ information on facility conditions, 

making it difficult for Congress, DOD, and the services to direct funds 

where they are most needed and to measure progress in improving 

facilities.20 Our analysis showed differences among the services in terms 

of facility raters and procedures, assessment scopes and frequencies, 

appraisal scales, and validation procedures, all of which result in 

inconsistencies and a lack of comparability in the ratings. The reserve 

components follow the policies and procedures directed by the active 

services in rating facility conditions. Without a consistent cross-service 

system for assessing facility conditions and developing ratings, DOD and 

the reserve components cannot be assured that their funding decisions 

effectively target facilities in greatest need and reported ratings accurately 

measure progress in facility condition improvements. In our prior report, 

we recommended that the Secretary of Defense instruct the military 

services to implement a consistent departmentwide process to assess and 

validate facility conditions. In commenting on a draft of that report, DOD 

concurred with our recommendation and outlined steps for implementing a 

departmentwide process.

Conditions of Reserve 

Components’ Facilities We 

Visited Ranged from Good 

to Inadequate

During our visits to 57 reserve component sites across the country, we 

observed a variety of conditions ranging from newly constructed facilities 

that were in good condition to outdated and deteriorated facilities that 

were inadequate and led to inefficiencies and workarounds. While we did 

not see any facilities that were not in use except those scheduled for 

demolition, the upcoming base realignment and closure round is expected 

to evaluate the extent reserve component facilities are utilized. Among the 

newly constructed or renovated facilities we observed were a newly 

constructed air traffic control tower; new reserve centers and fire stations; 

installed air conditioning and heating units; replaced roofs, windows, and 

doors; renovated restrooms, showers, and locker areas; and upgraded 

electrical systems. Some examples of these facilities are shown in figure 4.

20 See GAO-03-274.
Page 20 GAO-03-516 Defense Infrastructure

Figure 4: Typical Examples of Newly Constructed or Renovated Facilities at Various 

Reserve Component Locations

Source: GAO.

(Clockwise from top left): A newly constructed air traffic control tower at Selfridge Air National Guard 

Base, Michigan; a renovated Army Reserve facility at the Army National Guard Maneuver Training 

Center, Fort Pickett, Virginia; a newly constructed distance-learning center at an Army National 

Guard facility in Taylor, Michigan; and a renovated dining facility at Parks Reserve Forces Training 

Area, California.
Page 21 GAO-03-516 Defense Infrastructure

We also observed facilities—such as classrooms, restrooms, and offices—

that were being constructed or undergoing restoration and repairs. We saw 

maintenance and repair activities in progress, such as replacing roofs, 

remodeling office space, laying new floor tile, maintaining heating units, 

and paving parking lots. Some of the facility improvement projects we 

observed are shown in figure 5.

Figure 5: Typical Examples of Facility Improvements at Various Reserve Component 

Locations

Source: GAO.

(Clockwise from top left): The construction of a Marine Corps Reserve facility at Grissom Air Reserve 

Base, Indiana; a restoration project for the Air Force Reserve Command headquarters building at 

Robins Air Force Base, Georgia; a renovation project for an Air National Guard facility at Harrisburg 

International Airport, Harrisburg, Pennsylvania; and the replacement of a roof at the Naval Reserve's 

Naval Support Activity in New Orleans, Louisiana.
Page 22 GAO-03-516 Defense Infrastructure

In contrast, we observed many facilities that were degraded and 

deteriorated, such as cracked building foundations and walls; crumbling 

taxiways and driveways; water damaged walls, ceilings, and aircraft 

parking ramps; inadequate electrical power systems; poor heating, 

ventilation, and air conditioning systems; peeling lead paint; and leaking 

roofs. Some examples of a deteriorated ramp, runway, and driveways that 

we observed are shown in figure 6.

Figure 6: Examples of Deteriorated Ramp, Runway, and Driveways at Various 

Reserve Component Locations 

Source: GAO.

(Clockwise from top left): A water damaged parking ramp for C-130 aircraft at Dobbins Air Reserve 

Base, Georgia; a damaged runway with cracks and humps at Grissom Air Reserve Base, Indiana; a 

deteriorated driveway with potholes, and cracked and missing pavement at a Marine Corps Reserve 

facility in Detroit, Michigan; and a washed-out, deteriorated driveway at the Army National Guard 

Maneuver Training Center, Fort Pickett, Virginia.
Page 23 GAO-03-516 Defense Infrastructure

At Dobbins Air Force Base, Georgia, we observed a C-130 parking ramp 

that sustained water damage as pictured in figure 6. With limited funds to 

repair the ramp for an estimated cost of $40,000, base officials 

concentrated on higher-priority items, leaving the ramp problem 

unresolved for about a year. DOD officials stated they intend to repair the 

ramp with unobligated funds available at year-end. At Grissom Air Reserve 

Base, Indiana, Air Force Reserve officials told us that the condition of the 

taxiways is so deteriorated in spots that pilots must taxi further distances 

up the runway to avoid damaging their aircraft, as also pictured in figure 6. 

Officials told us that when they acquired the property through the base 

realignment and closure process, they were not familiar with managing 

runways and thus the runways deteriorated faster because of base 

maintenance inexperience. At the Marine Corps Reserve Center in Detroit, 

Michigan, the driveway leading into the facility had several large potholes 

with cracked and missing pavement. Officials told us that due to other 

priorities, funds were not available to fix the driveway, leaving the problem 

unresolved. While at the Army National Guard Maneuver Training Center, 

Fort Pickett, Virginia, we saw a washed-out, deteriorated driveway that 

officials said had existed for years and occurred because of inadequate 

water drainage that resulted in land erosion. At this location, we saw other 

washed-out driveways, walkways, and stairs due to inadequate water 

drainage.

We also noted facility damage at various facilities that were in use, such as 

broken windows, cracks in walls and floors, crumbling floor and ceiling 

tiles, peeling lead paint, and leaky roofs. Officials told us that, although 

several self-help projects have been done to improve the condition of these 

facilities, renovations are still needed. Some examples of damage to 

facilities that we observed are shown in figure 7.
Page 24 GAO-03-516 Defense Infrastructure

Figure 7: Examples of Damage at Various Reserve Component Facilities

Source: GAO.

(Clockwise from top left): Crumbling tile in a shower that is currently in use at a Naval Reserve facility at 

Selfridge Air National Guard Base, Michigan; broken windows at an Army National Guard facility in Fort 

Worth, Texas; a cracked wall with floor separating from foundation at a Naval Reserve facility at 

Selfridge Air National Guard Base, Michigan; and damaged ceiling caused by a hurricane over 4 years 

ago at an Air National Guard facility at Harrisburg International Airport, Harrisburg, Pennsylvania.
Page 25 GAO-03-516 Defense Infrastructure

During our visits to selected sites, we were told about and observed 

examples of inadequate space for equipment at various reserve component 

facilities, as shown in figure 8.

Figure 8: Examples of Inadequate Space for Equipment at Various Reserve 

Component Facilities

Source: GAO.

(Clockwise from top left): An aircraft hangar too small to completely cover a C-5 aircraft for 

maintenance purposes at Robins Air Force Base, Georgia; an aircraft hangar too small to completely 

cover a KC-135 aircraft for maintenance purposes at Grissom Air Reserve Base in Indiana; earthmoving engineering equipment that cannot fit into maintenance bays built in the 1940s at an Army 

Reserve facility at the National Guard Training Center, Fort Indiantown Gap, Pennsylvania; and a 

helicopter maintenance area that has limited space because of changed mission requirements at an 

Army National Guard facility at the National Guard Training Center, Fort Indiantown Gap, Pennsylvania.
Page 26 GAO-03-516 Defense Infrastructure

As shown in figure 8, hangers at Robins Air Force Base, Georgia, and at 

Grissom Air Reserve Base, Indiana, were too small to hold an entire C-5 and 

KC-135 aircraft, respectively. Maintenance work on the hydraulics gear 

located on the aircraft’s tail must be done in an enclosed space. To work on 

the hydraulics gear, engineers at Robins Air Force Base designed and built 

an extension that is large enough to enclose the aircraft’s tail and that can 

be rolled up next to the hangar. At the National Guard Training Center, Fort 

Indiantown Gap, we saw heavy earth-moving vehicles that could not fit into 

maintenance bays that were built during World War II. As a result, vehicle 

maintenance and training must be done outdoors, which creates unsafe 

working conditions during the winter because of the snow and ice. Also at 

the National Guard Training Center, Fort Indiantown Gap, Pennsylvania, 

we saw a helicopter maintenance facility that could hold four of the unit’s 

older 2-rotor blade helicopters but only one of the unit’s newer 4-rotor 

blade helicopters in the same space. Maintenance officials told us that the 

inadequate space requires a constant workaround effort to contend with 

various sizes of the aircraft to maximize facility usage. For example, it now 

takes them longer to conduct maintenance because they take the rotor 

blades off the newer helicopters in order to fit more helicopters into the 

maintenance hanger. 
Page 27 GAO-03-516 Defense Infrastructure

At other locations, we saw overcrowded and outdated supply and storage 

areas, as shown in figure 9.

Figure 9: Examples of Inadequate Storage Space at Various Reserve Component 

Facilities

As shown in figure 9, we saw a small arms vault used by an Army National 

Guard military police unit that no longer stored all of the required weapons 

at one location with the unit. According to unit officials, members of the 

police unit are required to travel to several different storage locations to 

obtain all of their required equipment. Consequently, they noted that if the 

police unit had to rapidly respond to an emergency, such as a terrorist 

attack, the unit would not have immediate access to all of its weapons and 

the response time would be longer. At an Armed Forces Reserve Center in 

California, additional secured storage containers were built to store 
Page 28 GAO-03-516 Defense Infrastructure

controlled unit equipment in the drill hall area. Subsequently, a Marine 

Corps Reserve unit that shares this facility with the Army Reserve stopped 

drilling in this space because it could no longer accommodate the 

100 personnel unit. While at a Marine Corps Reserve facility in Michigan, 

officials told us that the overcrowded vehicle maintenance bay lacks 

adequate space for its purpose as well as office space for maintaining 

required maintenance records. At an Army National Guard facility in 

California, the unit was forced to store crates of packed camouflage netting 

outdoors due to a lack of covered storage space. When the crates became 

wet, $50,000 worth of packed netting subsequently rotted.

It is difficult to quantify the effect of deteriorated facilities on mission 

readiness, but we observed that deteriorated facilities could create 

operating inefficiencies. This was also recognized in the Air Force’s 

Facility Investment Plan, which states that degraded facilities create 

inefficiencies, workarounds, and higher costs to meet mission readiness.21

It also noted that the higher costs created by these inefficiencies have often 

been borne by military and civilian personnel who are willing to devote 

extra time and effort to their tasks and who endure disruptive work 

schedules and difficult working conditions.

It is also difficult to quantify the states’ role in funding portions of facility 

maintenance on the overall condition of Army National Guard facilities 

given the absence of a central data source for this information. However, at 

some locations we visited, Army Guard officials told us that certain types 

of facilities are better maintained than others where the federal percentage 

of funding is higher relative to others where it is less based on the 

cooperative agreement.22 For example, Army National Guard officials told 

us that usually their vehicle maintenance shops are consistently in better 

shape than their readiness centers because maintenance shops can receive 

up to 75 percent federal funding for repairs whereas readiness centers can 

receive up to 50 percent federal funding for repairs. Also, facilities for the 

Army National Guard training centers and areas are usually in better shape 

than maintenance shops and readiness centers because they are 

100 percent federally supported for facility repairs. However, National 

Guard Bureau officials told us it was difficult to provide us with 

21 U.S. Department of the Air Force, United States Air Force Facilities Investment Plan

(Washington, D.C.: Aug. 14, 2002).

22 Departments of the Army and the Air Force, National Guard Bureau, Grants and 

Cooperative Agreements, NGR 5-1/ANGI 63-101 (Washington, D.C.: July 7, 2000).
Page 29 GAO-03-516 Defense Infrastructure

information on the states’ share of facility funding because, depending on 

the cooperative agreement between the state and the federal government, 

cost data will vary from state to state and by facility type. Also, as noted, 

data on state contributions are not aggregated at a central location.

Reserve Components 

Are Unlikely to Meet 

All of DOD’s Objectives 

for Improving Facilities

Similar to the situation we found with the active services, the reserve 

components are unlikely to meet all of DOD’s three objectives for 

improving facilities: achieve 100 percent sustainment funding starting in 

fiscal year 2004; reach a 67-year average recapitalization rate by fiscal year 

2007; and improve the condition of facilities so that deficiencies have only a 

limited effect on mission performance by fiscal year 2010. While we did not 

see any facilities that were not in use, except those scheduled for 

demolition, the upcoming base realignment and closure round is expected 

to evaluate the extent reserve component facilities are utilized. At the same 

time, reserve component officials are concerned that the components may 

not receive significant funding increases for facility recapitalization 

activities in the out-years because the reserve components are considered a 

low priority based on prior experiences. They also said that the reserve 

components do not compete well with their active counterparts and 

facilities generally do not compete well with other DOD programs and 

priorities when formulating budget requests.

Reserve Components Do 

Not Plan to Consistently 

Meet DOD’s Objective to 

Fully Fund Facility 

Sustainment

None of the reserve components are projecting enough funds to 

consistently meet DOD’s objective to fully fund facility sustainment 

requirements during fiscal years 2003 through 2009. To stop the further 

deterioration of facilities, DOD issued budget planning guidance 

instructing the services to fund their sustainment requirements at 

100 percent starting in fiscal year 2004. According to DOD, fully funding 

sustainment is the most cost-effective approach to managing facilities 

because it provides the most performance over the longest period of time 

for the least investment. However, average planned sustainment funding 

from fiscal years 2003 through 2009 by the reserve components ranges from 

61 percent to 99 percent (see fig. 10).
Page 30 GAO-03-516 Defense Infrastructure

Figure 10: Average Annual Sustainment Funding as a Percent of Requirement by 

Reserve Component, Aggregate for Fiscal Years 2003 through 2009

a

Marine Corps Reserve sustainment funding covers fiscal years 2004 through 2009. In fiscal year 

2003, DOD used a new model to calculate facilities sustainment requirements that DOD intended to be 

applied to a large population of facilities. Instead, the model incorporated the Marine Corps Reserve’s 

smaller sustainment requirements in with its active service's requirements for fiscal year 2003.

As shown in figure 10, the Air Force Reserve plans to fund more of its 

sustainment requirements than any of the other reserve components. While 

it is also the only component expressing the intent to meet DOD’s objective 

in fiscal years 2004 and 2005, available data suggest it will not reach that 

goal in the other out-years. The Air Force Reserve is expecting to decrease 

its sustainment funding to 88 percent and 86 percent in fiscal years 2006 

and 2007, respectively, then increase funding to 91 percent in fiscal years 

2008 and 2009. None of the other reserve components, however, plan to 

Percent of requirement

Source: Office of the Deputy Under Secretary of Defense for Installations and Environment.

89

93

78

61

90

99

0

10

20

30

40

50

60

70

80

90

100

Army

National

Guard

Army

Reserve

Naval

Reserve

Marine Corps

Reserve

Air National

Guard

Air Force

Reserve

DOD’s objective to fully fund sustainment

a
Page 31 GAO-03-516 Defense Infrastructure

meet DOD’s fully fund sustainment objective during fiscal years 2004 

through 2009, as the following examples show:

• The Army National Guard expects to fund its sustainment requirements 

at 93 percent in fiscal year 2004, decrease funding to 74 percent in fiscal 

year 2005, and then gradually increase funding to 94 percent by fiscal 

year 2009.

• The Army Reserve plans to follow a funding pattern similar to the Army 

Guard for future funding of its sustainment requirement. It plans to fund 

at 93 percent in fiscal year 2004, decrease funding to 72 percent in fiscal 

year 2005, then increase funding to 96 percent of its sustainment 

requirements by fiscal year 2007, and then stay at 96 percent for fiscal 

years 2008 and 2009.

• The Naval Reserve plans to fund its sustainment requirements at 

89 percent in fiscal year 2004, then gradually decrease sustainment 

funding each fiscal year until fiscal year 2007 when it expects to fund its 

sustainment requirements at 69 percent. After which, it plans to increase 

funding to 77 percent the next fiscal year and then decrease funding to 

76 percent for fiscal year 2009.

• The Marine Corps Reserve intends to fund its sustainment requirements 

at 69 percent starting in fiscal year 2004, then decrease funding to 

64 percent in fiscal year 2005, and then decrease funding again to 

57 percent of its sustainment requirements in fiscal year 2007. In fiscal 

years 2008 and 2009, it expects a slight increase in funding to 58 percent 

of sustainment requirements.

• The Air National Guard plans to fund sustainment at 81 and 82 percent, 

respectively, in fiscal years 2004 and 2005, then increase funding to 

91 percent of its sustainment requirement during fiscal years 2006 to 

2008, and then increase funding slightly to 92 percent in fiscal year 2009.

Most Reserve Components 

Are Unlikely to Achieve a 

67-Year Average 

Recapitalization Rate

Averaging the projected restoration and modernization funding during 

fiscal years 2003 through 2009, four of the six reserve components will not 

meet DOD’s objective to achieve a 67-year average recapitalization rate. 

Facilities must be replaced or extensively renovated or modernized once 

they reach the end of their expected service life if they are to continue to 

provide adequate performance. DOD estimates that an average 

recapitalization rate of 67 years allows fully sustained facilities to meet this 
Page 32 GAO-03-516 Defense Infrastructure

requirement, and recapitalization rates higher than 67 years means it will 

take longer to recapitalize facilities. The recapitalization rate is based on 

funding to restore and modernize facilities and is defined as the number of 

years it would take to restore or replace facilities at a given level of 

investment. Only the Marine Corps Reserve and the Air National Guard are 

planning to reach the 67-year average recapitalization rate. Overall, the 

average projected recapitalization rate by the reserve components ranges 

from 21 years to 183 years during fiscal years 2003 through 2009 

(see fig. 11).

Figure 11: Average Annual Recapitalization Rate by Reserve Component, 

Aggregate for Fiscal Years 2003 through 2009

Source: Office of the Deputy Under Secretary of Defense for Installations and Environment.

DOD's objective of a 67-year average recapitalization rate

183

81

107

21

48

84

0

20

40

60

80

100

120

140

160

180

200

Army

National

Guard

Army

Reserve

Naval

Reserve

Marine Corps

Reserve

Air National

Guard

Air Force

Reserve

Years
Page 33 GAO-03-516 Defense Infrastructure

During the period depicted above, each reserve component’s average 

recapitalization rate varies widely from year to year. For example, the:

• Army National Guard is expecting to achieve a recapitalization year rate 

ranging from 388 years in fiscal year 2004 to 101 years in fiscal year 

2009—short of DOD’s objective in every year.

• Army Reserve is expecting to achieve a recapitalization year rate 

ranging from 152 years in fiscal year 2004 to 41 years in fiscal year 

2009—meeting DOD’s objective in fiscal years 2008 and 2009.

• Naval Reserve is expecting to achieve a recapitalization year rate 

ranging from 515 years in fiscal year 2007 to 59 years in fiscal year 

2003—meeting DOD’s objective only in fiscal year 2003.

• Marine Corps Reserve is expecting to achieve a recapitalization year 

rate ranging from 895 years in fiscal year 2006 to 5 years in fiscal year 

2003—meeting DOD’s objective in fiscal years 2003, 2004, 2007, and 

2008.

• Air National Guard is expecting to achieve a recapitalization year rate 

ranging from 170 years in fiscal year 2004 to 31 years in fiscal year 

2008—meeting DOD’s objective in fiscal years 2006 through 2009.

• Air Force Reserve is expecting to achieve a recapitalization year rate 

ranging from 197 years in fiscal year 2003 to 50 years in fiscal year 

2006—meeting DOD’s objective in fiscal years 2006 and 2007.

To achieve these recapitalization rates, all of the reserve components call 

for rapid increases in restoration and modernization funding at some point 

during fiscal years 2003 through 2009 (see fig. 12). However, according to 

reserve component officials, they are concerned that the components may 

not receive significant funding increases for facility recapitalization 

activities in the out-years because the reserve components are considered a 

low priority, based on past experience. They also said the reserve 

components do not compete well with the active services and facilities 

generally do not compete well with other DOD programs and priorities 

during the budgeting process. Further, reserve component officials told us 

that they doubt that funding increases of the size indicated in figure 12 will 

occur given the low funding levels in the past and the uncertainty of future 

funding priorities.
Page 34 GAO-03-516 Defense Infrastructure

Figure 12: Current and Projected Restoration and Modernization Funding by 

Reserve Component, Fiscal Years 2003 through 2009
Page 35 GAO-03-516 Defense Infrastructure

Officials told us that, historically, budget plans for maintaining real 

property have had more dollars programmed in the out-years than were 

submitted in budget requests to Congress. As shown in figure 12, this may 

be the case with respect to most reserve components expecting significant 

funding increases to restore and modernize their facilities. For example, in 

constant fiscal year 2003 dollars, the

• Army National Guard is expecting a 283 percent funding increase from 

$76 million to $291 million from fiscal year 2004 to fiscal year 2009,

• Army Reserve is anticipating a 268 percent funding increase from 

$67 million to $247 million from fiscal year 2004 to fiscal year 2009,

• Naval Reserve is expecting a 532 percent funding increase from 

$6 million to $40 million from fiscal year 2004 to fiscal year 2009,

• Air National Guard is expecting nearly a 200 percent funding increase 

from $91 million to $272 million from fiscal year 2005 to fiscal year 2006 

and a 422 percent funding increase from $62 million to $325 million from 

fiscal year 2004 to fiscal year 2009, and

• Air Force Reserve is anticipating a 188 percent funding increase from 

$31 million to $90 million from fiscal year 2004 to fiscal year 2006.

Fully Eliminating the Most 

Deteriorated Facilities by 

Fiscal Year 2010 Is Likely to 

Be a Challenge

As with DOD’s 67-year average recapitalization rate, eliminating the most 

deteriorated reserve component facilities requires funding that the 

components are unlikely to obtain. To improve the overall condition of 

facilities, the reserve components estimate that it would cost $7.8 billion to 

achieve DOD’s objective to concentrate funding to eliminate C-3 and C-4 

facility ratings by fiscal year 2010. This amount would be enough to bring 

all facilities up to the minimal C-2 level or improve the condition of 

facilities so that deficiencies have only a limited effect on mission 

performance in DOD’s rating system. However, as shown in figure 12, 

collectively these funding increases remain unrealistic when compared to 

prior funding levels, the disproportionate reliance on high levels of funding 

in the out-years, and the need for funds for other defense priorities. 

Further, officials of the Army National Guard, the Army Reserve, the Air 

Force Reserve, and the Air National Guard said that they expect to meet 

DOD’s objective to eliminate facilities rated C-3 and C-4 by 2010, but only if 

expected restoration and modernization funding levels stay on target. 

However, they said the expected out-year amounts are generally reduced 
Page 36 GAO-03-516 Defense Infrastructure

when the out-years get closer to the budget year because expected funds 

are likely to be budgeted for other DOD program priorities. A Naval 

Reserve official told us they are uncertain about funding increases because, 

starting in October 2003, facility funds will be managed by its active 

counterpart as part of a Navywide reorganization to streamline facility 

management. The Marine Corps Reserve officials said that they do not 

expect to eliminate their most deteriorated facilities by fiscal year 2010 but 

plan to meet this DOD objective in fiscal year 2013.

Challenges Exist in 

Implementing Joint 

Construction Projects 

and Real Property 

Exchanges

The reserve components have made use of two approaches—joint 

construction projects and real property exchanges—to achieve improved 

facilities and potential cost savings; however, the reserve components face 

challenges in implementing the approaches. The Office of the Assistant 

Secretary of Defense for Reserve Affairs estimated that joint construction 

projects could save up to 20 percent of the total cost of two separate 

projects. However, reserve component officials told us that a major 

challenge to implementing joint construction projects involved achieving 

effective coordination among the components to simultaneously program 

the projects in their respective budget requests. Concerning real property 

exchanges, Congress has provided the reserve components with authority 

to use real property exchanges, but the overall program direction is limited.

Challenges in Implementing 

Joint Construction Projects

The reserve components stated that the funding for joint construction 

projects—where two or more components share space requirements and 

build one facility—is difficult to coordinate. Although Congress, the 

Assistant Secretary of Defense for Reserve Affairs, and the six reserve 

commands have all acknowledged the economic advantages to 

constructing more facilities jointly and have expressed a desire to achieve 

more joint construction projects, few projects have actually resulted. For 

example, reserve components’ data show that a little more than 1 percent 

of the 41,266 reserve facilities are considered joint facilities.23 Reserve 

officials said that joint construction projects require the reserve 

components to simultaneously program the projects in their budget 

23 According to officials in the Office of the Assistant Secretary of Defense for Reserve 

Affairs, the exact number of jointly constructed facilities is not known because of varied 

interpretations of the definition of jointness by the reserve components, but they suggested 

it might even be lower than 1 percent.
Page 37 GAO-03-516 Defense Infrastructure

requests, but that the various service component priorities made this 

difficult to accomplish.

The reserve components are required by 10 U.S.C. § 18234 to pursue the 

joint use of facilities to the greatest extent practicable. This statutory 

requirement was implemented by establishing a Joint Service Reserve 

Component Facility Board in every state.24 These boards are expected to 

meet at least once a year to validate future military construction projects 

and recommend specific projects for joint construction. According to the 

Office of the Assistant Secretary of Defense for Reserve Affairs, these 

boards did a good job of identifying joint projects. Of 714 projects, 101 were 

identified by the boards as having joint construction potential in 2002.

Joint construction of military facilities offers opportunities to achieve cost 

savings and efficiencies through sharing of common space—as much as 

20 percent savings according to an estimate provided by the Office of the 

Assistant Secretary of Defense for Reserve Affairs. These dollar savings 

would be achieved as a result of reduced construction requirements as well 

as reduced costs to design and construct a project. Furthermore, the 

savings typically continue after a joint project is completed due to reduced 

requirements to sustain joint common areas, such as administrative space, 

classrooms, dining facilities, restrooms, medical examination rooms, drill 

halls, and assembly areas. Joint construction among reserve components 

also increases a facility’s utilization because they can alternate drill 

weekends and use a single facility more often than two separate buildings. 

For example:

• A joint Armed Forces Reserve Center at Gray, Tennessee, which 

combined construction projects for the Army Reserve, the Army 

National Guard, and the Marine Corps Reserve into a single facility 

project, as reported by DOD, saved millions of dollars by not 

constructing three separate facilities.25

• At Sand Springs, Oklahoma, the Army National Guard and the Army 

Reserve estimated that if they constructed their facilities separately, it 

24 DOD Directive 1225.7, Reserve Component Facilities Programs and Unit Stationing, 

June 6, 2001, and DOD Instruction 1225.8, Programs and Procedures for Reserve 

Component Facilities and Unit Stationing, enclosure 3, para. E3.1.2.9, September 6, 2001.

25 See DOD’s Defense Installations 2001: The Framework for Readiness in the 21st Century

(Washington, D.C.: August 2001).
Page 38 GAO-03-516 Defense Infrastructure

would cost almost $21 million. However, by jointly constructing a single 

facility, they expect the cost to be about $13.4 million, resulting in an 

anticipated savings of $7.3 million, or 35 percent. This savings only 

included lower construction and contract design and planning costs—

not anticipated savings from reduced sustainment costs.

Officials at all of the reserve components said that the principal challenge 

to implementing joint construction projects was the lack of funding 

coordination between the components. These officials stated that it was 

difficult for the components to simultaneously program the joint projects in 

their respective budget requests because of different service component 

priorities. For example, most joint construction projects identified by the 

Joint Service Reserve Component Facility Boards do not have funds 

programmed because, according to reserve component officials, the 

reserve components’ projects do not compete well when they are assessed 

along with the active services’ construction projects during the budget 

process. As a consequence, reserve projects tend to be lower on the active 

services’ list of priorities for military construction funds, making the 

simultaneous funding from two or more reserve components difficult to 

achieve. For example, several joint construction projects, such as those in 

Augusta, Georgia, Mobile, Alabama, and Kansas City, Kansas, were not 

initiated because the different reserve components could not coordinate 

the funding. Often, while one reserve component might be able to program 

the funds it needs for a joint construction project, the other component 

involved cannot get funds programmed into its budget, or the funds are 

programmed so far into the future that the project is unlikely to be 

completed.

Not only is funding for joint construction projects difficult to coordinate 

between different reserve components, such as the Naval Reserve and the 

Air Force Reserve, it is also difficult to coordinate the funding between two 

components within the same service, such as the Army National Guard and 

the Army Reserve. For example, at Moreno Valley, California, the Army 

National Guard and the Army Reserve wanted to construct a joint facility 

reviewed by the California Joint Service Reserve Component Facility 

Board, but the Army National Guard obtained funds for the project in fiscal 

year 2003 whereas the Army Reserve planned to request funds in fiscal year 

2007. The Army National Guard will be proceeding with its construction 

plans unilaterally because it needs the facility now to activate a new unit. 

The Army Reserve is negotiating with the Naval Reserve and the Marine 

Corps Reserve about jointly constructing a facility at Moreno Valley.
Page 39 GAO-03-516 Defense Infrastructure

In April 2001, the Office of the Secretary of Defense established a 

separate budget structure for funding joint construction projects, but it 

has not yet programmed any funds for this purpose.26 According to DOD 

officials, the services are reluctant to fund joint projects using the newly 

created budget structure because of concerns that their budgets will be 

reduced elsewhere.

Challenges in Implementing 

Real Property Exchanges

Congress has provided the reserve components with authority to 

participate in real property exchanges, but DOD has provided little overall 

direction for the real property exchange program. The Army Reserve is 

using its real property exchange authority the most and is planning on 

using this authority to recapitalize 10 percent of its facilities involving real 

property valued at hundreds of millions of dollars. Having the potential to 

avoid military construction costs, the other reserve components are just 

now exploring its use. However, a process to collect and share the Army 

Reserve’s lessons learned with other reserve components does not exist. 

Further, DOD does not have a method to ensure that real property needed 

by other DOD components or for future missions is not being given up, nor 

does it have assurances that the reserve components are seeking its 

approval for exchanges valued at more than $1 million, as called for in DOD 

instruction.27

Congress Has Provided 

Authority for Real Property 

Exchanges, but DOD Has Not 

Provided Overall Direction

Congress has provided the reserve components with authority to use real 

property exchanges as contained in 10 U.S.C. § 18233; to date, only the 

Army Reserve is making use of the authority. Other reserve components 

have indicated they are only now exploring using it. At the same time, the 

Office of the Secretary of Defense has not provided overall direction for 

the real property exchange program.28 Specifically, DOD and reserve 

component officials could not direct us to any comprehensive guidance 

on real property exchanges except for guidance prepared by the Army

26 DOD established a new program element in its Future Years Defense Program structure 

for its Program Objective Memorandum 2003-2007 to fund joint use military construction 

projects.

27 DOD Instruction 1225.8, Program and Procedures for Reserve Component Facilities and 

Unit Stationing, enclosure 3, para. E3.1.2.9, September 6, 2001.

28 In addition to this authority, individual legislative provisions may authorize real property 

exchanges affecting specific reserve component locations.
Page 40 GAO-03-516 Defense Infrastructure

Reserve.29 DOD officials told us they delegated authority to acquire and 

manage facilities to the service secretaries and the reserve components.30

An official in the Office of the Secretary of Defense said DOD does not 

always provide written direction for all congressional authorities the 

military departments use and is not planning on developing policy for 

exchanges conducted under 10 U.S.C. § 18233 because of concerns that 

DOD might be micromanaging the reserve components. On the other hand, 

we believe that some oversight might be beneficial in ensuring lessons 

learned are captured and shared across the reserve components.

Army Reserve Plans to Increase 

Its Use of Exchange Authority

Using the exchange authority, the Army Reserve plans to identify 

80 real property exchanges in order to recapitalize 10 percent of its 

facilities over the next 8 years. The Army Reserve has already identified 

about $500 million in potential exchange projects and has signed exchange 

agreements for four projects, as of February 2003. In contrast, officials 

from the other reserve components said they were not aware of this 

congressional authority and are only now exploring its use.

At Parks Reserve Forces Training Area, California, the Army Reserve 

signed an exchange agreement with a private land developer in October 

2002 for about 11 acres at the training area in exchange for construction of 

a fire station. The developer wanted the land to construct an access road 

into its new housing development. In exchange for the property, appraised 

at $1.8 million, the Army Reserve will receive a new fire station valued at 

$3.9 million. Figure 13 shows the fire station scheduled for replacement 

and an architectural drawing of the proposed new fire station.

29 Army Regulation 140-483, Army Reserve Land and Facilities Management, July 30, 1994.

30 DOD Directive 5100.10, Delegation of Authority With Respect to Reserve Forces 

Facilities, March 16, 1972.
Page 41 GAO-03-516 Defense Infrastructure

Figure 13: Current and Proposed Fire Station at Parks Reserve Forces Training 

Area, California, as of November 2002

A description of the three other Army Reserve projects follows:

• At East Windsor, Connecticut, the Army Reserve exchanged about 

6 acres of its property with a local automobile wholesaler that wanted 

the land to facilitate its operations. In exchange for the property, the 

Reserve received almost 8 acres of land contiguous to the Army Reserve 

Center as well as a maintenance bay and paving, landscaping, and 

fencing improvements. The Reserve exchanged land appraised at 

$270,000 for other land and improvements valued at $450,000. The deed 

exchange occurred in January 2003.
Page 42 GAO-03-516 Defense Infrastructure

• At Fort Snelling, Minnesota, the Army Reserve exchanged about 7 acres 

of its property with the Minnesota Department of Transportation and 

the Metropolitan Council for constructing a highway interchange and 

expanding a light rail train system. In exchange for the property 

appraised at $2 million, the Army Reserve received a 38,000-square foot 

addition to its permanent facility worth about $5.1 million. The bill of 

sale occurred in November 2002.

• Also at Fort Snelling, the Army Reserve exchanged about 11 acres of its 

property with the Metropolitan Airport Commission in order to expand 

the runway at the Minneapolis-St. Paul International Airport. In 

exchange for the property appraised at $1.4 million, the Reserve will 

receive a newly constructed maintenance facility in St. Joseph, 

Minnesota, valued at $1.7 million. The exchange agreement was signed 

August 2002.

Lessons Learned Not Being 

Captured

While the Army Reserve is gaining experience in implementing the 

authority to conduct real property exchanges, it has not established a 

process for collecting and sharing its lessons learned with other reserve 

components. One such lesson regards the appraisal value of real property 

being considered in an exchange. The Army Reserve’s policy requires it to 

obtain no less than the fair market value for the real property to be 

exchanged. In obtaining fair market value, there are multiple methods to 

appraise real property, and appraisals can fluctuate greatly depending on 

the approach used by an appraiser. For example, the exchange at Parks 

Reserve Forces Training Area, California, included land that was initially 

valued at $75,500 by the developer based on the land’s condition at that 

time, which the appraiser considered to be agricultural. However, the 

appraised value significantly underestimated the fair market value because 

the appraiser did not consider the potential best use of the property by the 

developer and the value and use of land nearby. The Army Corps of 

Engineers reappraised the land, taking into consideration these factors. 

This new appraisal puts the value of the land at $1.8 million.

In addition, the Army Reserve expects to gain additional experience as it 

begins to actively solicit public or private interest in exchange projects. 

Previously, the Army Reserve would only start an exchange project when a 

private or public entity approached it with an offer to exchange real 

property. However, officials told us that they are now taking a more 

proactive approach by advertising the availability of property and obtaining 

best financial offers for consideration. For example, the Army Reserve is 

considering a process to request price proposals from public or private 
Page 43 GAO-03-516 Defense Infrastructure

entities to exchange 187 acres at Parks Reserve Training Area, in return for 

renovating about 40 buildings, also at Parks. The value of this land was 

estimated to be at $200 million to $300 million at the time of our review.

Navy Reserve officials said they will need to look to the Army Reserve as a 

guide as the Navy Reserve plans to implement the exchange program using 

the exchange authority and considers whether to implement a competitive 

approach to its exchanges. The Navy Reserve has begun to assess the 

potential for exchanges at its 181 sites in anticipation that it may identify 

20 to 30 real property exchange projects in the near future. In addition, 

these officials said that the Navy Reserve is interested in the competitive 

exchange approach and will be looking for lessons learned from the Army 

Reserve. Officials of the other four reserve components said they do not 

plan to use this authority for their exchange projects.

No Method to Ensure That 

Needed Property Is Not Being 

Exchanged by the Reserve 

Components

According to officials of the Office of the Secretary of Defense Installations 

and Environment, the Office of the Assistant Secretary of Defense for 

Reserve Affairs, the Army, and the Army Reserve, there is no method to 

ensure that real property needed by other DOD components or for future 

missions is not being exchanged by the reserve components. DOD officials 

told us that because the department has delegated authority to manage 

facilities to the service secretaries, they do not oversee exchanges by the 

reserve components. As such, the Department of the Army provides 

oversight for Army Reserve real property exchanges by determining that 

each exchange is within the proper authority, approving each exchange at 

the concept stage and again at the execution stage, and conducting the 

required notification to Congress. However, neither the Army nor the Army 

Reserve determines if the land to be exchanged is needed (1) by the other 

reserve components or the active services or (2) for future missions. 

Several reserve component officials stated they believe that the Joint 

Service Reserve Component Facility Boards, as discussed earlier in this 

report, could serve in this role.

Although DOD requires approval of high value exchanges involving 

property valued at more than $1 million or 1,000 acres, the Army Reserve 

has interpreted DOD’s guidance to only apply to an exchange where the 

difference in the value of the property exchanged exceeds $1 million.31 As 

such, Army Reserve officials said that they notify DOD of an exchange only 

31 DOD Instruction 1225.8, Programs and Procedures for Reserve Component Facilities 

and Unit Stationing, September 6, 2001.
Page 44 GAO-03-516 Defense Infrastructure

if the value of the real property received exceeds the value of the real 

property exchanged by $1 million. In practice, the Army Reserve has not 

been seeking DOD’s approval of its exchanges. For example, the Army 

Reserve would notify DOD of the exchange if land valued at $50 million 

was exchanged for recapitalized facilities valued at more than $51 million 

because the net value was more than $1 million. The Army Reserve would 

not, on the other hand, notify DOD if the exchanged land valued at 

$50 million was exchanged for recapitalized facilities also valued at 

$50 million because the net value was zero. As a result, DOD is not aware of 

the Army Reserve’s high value exchanges, which can involve many millions 

of dollars in real property.

Conclusions Despite recent efforts to have the military services increase their 

sustainment funding, DOD did not make sustaining and improving reserve 

component facilities a funding priority prior to fiscal year 2004 because of 

other defense programs and emerging requirements. While DOD has issued 

guidance emphasizing the need to improve funding of sustainment and 

recapitalization of facilities, funding trends and priorities create an 

uncertain picture regarding the extent to which facility improvements and 

achievement of DOD’s objectives are likely to be realized. Continuation of 

this trend will make it difficult for reserve components to meet all of DOD’s 

objectives for sustaining and improving facilities, which may lead to further 

deterioration of facilities and increase the use of workarounds to meet 

mission requirements. However, the upcoming base realignment and 

closure round, which is expected to evaluate the extent reserve component 

facilities are utilized, could affect the reserve components’ expected need 

for facilities and their plans to met DOD’s objectives. 

Even though the reserve components are not likely to consistently meet 

DOD’s objectives, they have initiated joint construction projects to achieve 

potential cost savings and have participated in real property exchanges to 

replace older buildings—a practice that can serve to better leverage the use 

of available resources than otherwise would have occurred. However, 

without better funding coordination for joint construction projects or 

utilization of DOD’s newly established budget structure for joint use 

military construction projects, many projects that have the potential to 

generate future cost savings might not be initiated. In addition, the reserve 

components can also participate in real property exchanges to replace 

older facilities. Without procedures in place for cross service coordination 

as the number and size of projects grow, the reserve components risk 

exchanging real property that is needed by other DOD components or for 
Page 45 GAO-03-516 Defense Infrastructure

future missions. Although DOD’s guidance requires approval of exchanges 

where the real property is valued at more than $1 million, the Army Reserve 

only notifies DOD of exchanges where the net value exceeds $1 million. 

Thus, DOD is not always aware nor approves of exchanges involving high 

value property. While the Army Reserve is expanding its program under the 

authority to conduct real property exchanges and is using competitive 

offers to exchange property, there is no method to capture lessons learned 

and to share them with the other reserve components. As a result, the other 

reserve components may incur unnecessary costs when they initiate 

exchanges without the benefit of the Army Reserve’s experience. 

Recommendations for 

Executive Action

We recommend that the Secretary of Defense direct the secretaries of the 

military departments, in consultation with their respective reserve 

components, to periodically review and reevaluate the priorities given to 

sustaining and improving the condition of reserve components’ facilities if 

the reserve components are expected to meet DOD’s objectives for 

improving facilities. In addition, we recommend that the Secretary of 

Defense direct the Deputy Under Secretary of Defense for Installations and 

Environment, in consultation with the reserve components and the active 

services, to

• facilitate the coordination among the reserve components and their 

service counterparts for programming identified military joint 

construction projects in their future budgets;

• examine ways to employ the budget structure DOD established for 

funding high priority joint construction projects;

• establish a method to ensure that real property to be exchanged is not 

needed by the other reserve components or the active services or for 

future missions; and

• clarify DOD’s guidance requiring approval of exchanges when the real 

property is valued at more than $1 million.

Finally, we recommend that the Secretary of Defense direct the Office of 

the Assistant Secretary of Defense for Reserve Affairs to monitor the Army 

Reserve’s experience with implementing the authority to conduct real 

property exchanges and assist it in capturing lessons learned for the benefit 

of other reserve components, especially as the Army Reserve expands its 

use of a more competitive process.
Page 46 GAO-03-516 Defense Infrastructure

Matter for 

Congressional 

Consideration

To further encourage the use and funding of joint construction projects, 

Congress may want to consider designating a portion of its military 

construction appropriations for DOD’s newly established budget structure 

to fund joint use military construction projects.

Agency Comments and 

Our Evaluation

In commenting on a draft of this report, the Assistant Secretary of Defense 

for Reserve Affairs concurred with our recommendations and indicated 

that actions were underway or planned to deal with our recommendations. 

In commenting on our recommendation for the services to review and 

reevaluate the priorities to sustain and improve the condition of reserve 

facilities, DOD stated it has implemented our recommendation and has 

directed the services to fund sustainment at 100 percent in fiscal year 2006 

and achieve a 67-year recapitalization rate in fiscal year 2008. However, as 

we pointed out in the report, achieving these goals call for rapid increases 

in restoration and modernization funding that are unlikely when compared 

to prior funding trends and with the need to fund other defense priorities 

and programs. Similarly, the Assistant Secretary of Defense for Reserve 

Affairs noted that a key component of the budget process is setting 

priorities and accepting risks in certain areas and that DOD has accepted 

various infrastructure risks during the budget process. He also 

acknowledged that reserve components have more requirements than 

requested funds and that they do not expect to meet DOD’s objective of a 

67-year recapitalization rate, even with increases in obligations and 

congressional add-ons. Accordingly, we believe that this issue requires 

continued reevaluation and have modified this recommendation to reflect 

the need to periodically reassess the priorities given to sustaining and 

improving the condition of reserve components’ facilities. DOD’s 

comments are included in appendix II of this report.

We are sending copies of this report to 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. We will also make 

copies available to others upon request. In addition, the report is available 

at no charge on GAO’s Web site at www.gao.gov.
Page 47 GAO-03-516 Defense Infrastructure

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

regarding this report. Key contributors to this report are listed in 

appendix III.

Barry W. Holman, Director

Defense Capabilities and Management
Page 48 GAO-03-516 Defense Infrastructure

List of Congressional Committees

The Honorable John Warner

Chairman

The Honorable Carl Levin

Ranking Minority Member

Committee on Armed Services

United States Senate

The Honorable Ted Stevens

Chairman

The Honorable Daniel K. Inouye

Ranking Minority Member

Subcommittee on Defense

Committee on Appropriations

United States Senate

The Honorable Kay Bailey Hutchison 

Chairman

The Honorable Dianne Feinstein

Ranking Minority Member

Subcommittee on Military Construction

Committee on Appropriations

United States Senate

The Honorable Duncan Hunter

Chairman

The Honorable Ike Skelton

Ranking Minority Member

Committee on Armed Services

House of Representatives

The Honorable Jerry Lewis

Chairman

The Honorable John P. Murtha

Ranking Minority Member

Subcommittee on Defense

Committee on Appropriations

House of Representatives
Page 49 GAO-03-516 Defense Infrastructure

The Honorable Joe Knollenberg

Chairman

The Honorable Chet Edwards

Ranking Minority Member

Subcommittee on Military Construction

Committee on Appropriations

House of Representatives
Page 50 GAO-03-516 Defense Infrastructure

Appendix I

Scope and Methodology AAppenednxidexiIs

We prepared this report under our basic legislative responsibilities as 

authorized by 31 U.S.C. § 717. We performed our work at, and met with 

officials from, the Office of the Assistant Secretary of Defense for Reserve 

Affairs; the Army National Guard; the Air National Guard; and the 

headquarters of the Army Reserve Command, Naval Reserve Forces 

Command, Marine Forces Reserve, and Air Force Reserve Command. We 

also visited 20 Army National Guard, 11 Army Reserve, 9 Naval Reserve, 

7 Marine Corps Reserve, 5 Air National Guard, and 5 Air Force Reserve 

sites, as shown in table 3. During our visits, we toured various facilities to 

observe their physical condition. We discussed funding trends, systems for 

assessing facility conditions, and plans for improving facilities to include 

the funding for joint construction projects and the participation in real 

property exchanges. Our review covered only those facilities funded by 

operation and maintenance and military construction funds and not by 

other sources, such as revolving and management funds, military family 

housing and overseas facilities funds, and defense health program funds for 

hospitals and medical clinics.
Appendix I

Scope and Methodology

Page 51 GAO-03-516 Defense Infrastructure

Table 3: Listing of Various Reserve Component Locations GAO Visited

Reserve component Facility or installation Location

Army National Guard Army National Guard Arlington, Virginia

National Guard Training Center at Fort Indiantown Gap Annville, Pennsylvania

Army National Guard Maneuver Training Center at Fort Pickett Blackstone, Virginia

Harrisburg Military Post Harrisburg, Pennsylvania 

Readiness Center Detroit, Michigan

Readiness Center Grand Prairie, Texas

Readiness Center Concord, California

Readiness Center Hershey, Pennsylvania

Readiness Center Lebanon, Pennsylvania

Readiness Center Moreno Valley, California

Readiness Center Norfolk, Virginia

Readiness Center Pittsburg, California

Readiness Center Portsmouth, Virginia

Readiness Center Richmond, California

Readiness Center Suffolk, Virginia

Readiness Center Taylor, Michigan

Readiness Center Vallejo, California

Readiness Center Virginia Beach, Virginia

Readiness Center at Cobb Park Fort Worth, Texas

Readiness Center at Sandage Fort Worth, Texas

Readiness Center at Shoreview Fort Worth, Texas

Army Reserve Army Reserve Command Atlanta, Georgia

Armed Forces Reserve Center Concord, California

Armed Forces Reserve Center Southfield, Michigan

Armed Forces Reserve Center Harrisburg, Pennsylvania

Reserve Center Moreno Valley, California

Reserve Center Grand Prairie, Texas

Reserve Center at East Point Atlanta, Georgia

Reserve Center at Forest Park Atlanta, Georgia

Reserve Center at Fort Indiantown Gap Annville, Pennsylvania

Reserve Center at Fort Pickett Blackstone, Virginia

Army Reserve at Selfridge Air National Guard Base Mount Clemens, Michigan

Parks Reserve Forces Training Area Dublin, California
Appendix I

Scope and Methodology

Page 52 GAO-03-516 Defense Infrastructure

Source: GAO.

To examine the reserve components’ funding trends for facility 

maintenance and construction since fiscal year 1998 and the condition of 

the components’ facilities over this same time period, we analyzed the 

reserve components’ budgets for operation and maintenance funding and 

military construction funding and the military construction backlogs and 

visited 57 reserve locations. For facility maintenance, we analyzed budget 

Naval Reserve Naval Reserve Forces Command New Orleans, Louisiana

Naval Air Reserve Activity at Selfridge Air National Guard Base Mount Clemens, Michigan

Naval Air Station Joint Reserve Base Fort Worth, Texas 

Naval Air Station Joint Reserve Base New Orleans, Louisiana

Naval and Marine Corps Reserve Center Alameda, California

Naval and Marine Corps Reserve Center Harrisburg, Pennsylvania

Naval and Marine Corps Reserve Center Moreno Valley, California

Naval Reserve Center Southfield, Michigan 

Naval Reserve Center Detroit at Selfridge Air National Guard Base Mount Clemens, Michigan

Naval Support Activity New Orleans, Louisiana

Marine Corps Reserve Marine Forces Reserve New Orleans, Louisiana

Armed Forces Reserve Center Concord, California

Armed Forces Reserve Center Grand Prairie, Texas

Marine Corps Reserve Center Detroit, Michigan

Marine Corps Reserve Center Newport News, Virginia

Marine Corps Reserve Center at Naval Air Station Joint Reserve Base Fort Worth, Texas

Marine Corps Reserve Center at Selfridge Air National Guard Base Mount Clemens, Michigan

Naval and Marine Corps Reserve Center Harrisburg, Pennsylvania

Air National Guard Air National Guard at Andrews Air Force Base Camp Springs, Maryland

Air National Guard at Fort Indiantown Gap Annville, Pennsylvania

Air National Guard at Harrisburg International Airport Harrisburg, Pennsylvania

Air National Guard at March Air Reserve Base Riverside, California

Air National Guard at Naval Air Station Joint Reserve Base Fort Worth, Texas

Selfridge Air National Guard Base Mount Clemens, Michigan

Air Force Reserve Air Force Reserve Command at Robins Air Force Base Macon, Georgia 

Air Force Reserve at Naval Air Station Joint Reserve Base Fort Worth, Texas

Air Force Reserve at Selfridge Air National Guard Base Mount Clemens, Michigan 

Dobbins Air Reserve Base Marietta, Georgia

Grissom Air Reserve Base Peru, Indiana

March Air Reserve Base Riverside, California

(Continued From Previous Page)

Reserve component Facility or installation Location
Appendix I

Scope and Methodology

Page 53 GAO-03-516 Defense Infrastructure

data from the reserve components’ sustainment, restoration, and 

modernization subactivity group in their operation and maintenance 

appropriations. We compared the amounts that the reserve components 

requested in their budget submissions with the amounts that Congress 

designated in conference reports for the Department of Defense (DOD) 

appropriation acts and with the amounts the reserve components reported 

as obligated in their budget submissions for fiscal years 1998 through 2002. 

We also looked at the reserve components’ military construction budget 

requests and congressional designations for fiscal years 1998 through 2003. 

For military construction, we compared the amounts that the reserve 

components requested in budget submissions with amounts that Congress 

designated in its conference reports for DOD military construction 

appropriation acts. We discussed amount differences for operation and 

maintenance and military construction with DOD and reserve component 

officials to obtain a better understanding about overall fund movements. 

We did not review the obligated amounts for military construction because 

such funds are available for obligation over a 5-year period and cannot 

easily be tied back to the year requested.

To determine the impact of historical and current funding on the condition 

of reserve facilities, the factors that have led to the deterioration of facility 

conditions, and the effect of deteriorated facilities, we met with officials 

from the Army National Guard; U.S. Army Reserve Command; Commander, 

Naval Reserve Forces; Marine Forces Reserve Command; Air Force 

Reserve Command; and the Air National Guard. To view the condition of 

facilities firsthand, we visited 57 reserve locations across the country. 

Given the large number of reserve component facilities to select from, we 

relied on suggestions from reserve component officials. We visited facilities 

that ranged from good to poor condition for the six reserve components 

throughout the United States. During our visits, we met with the facilities’ 

occupants and took pictures to document facility conditions. The 

conditions we observed at these 57 locations might not be representative of 

conditions at other reserve facilities. We did not examine the individual 

states’ required share of the costs for major repairs to Army National Guard 

facilities. However, we obtained an understanding of how state funding 

differs according to the type of facility needing repair, such as a readiness 

center, a maintenance shop, or a training facility. Officials with the National 

Guard Bureau told us that specific data on facility maintenance 

contributions were retained by the states and were not readily available. 

This was not a limitation with the Air National Guard because many of its 

facilities are located at airports, which are federally leased property. Thus, 

states do not contribute to the cost of maintaining these facilities.
Appendix I

Scope and Methodology

Page 54 GAO-03-516 Defense Infrastructure

To assess the likelihood that the reserve components will meet DOD’s three 

objectives for improving facilities, we examined the reserve components’ 

current and projected funding plans for sustaining, recapitalizing, 

restoring, and modernizing facilities to determine whether these plans 

would allow them to meet DOD’s objectives by specified deadlines. We did 

not validate the reserve components’ reported requirements for the 

sustainment and recapitalization of their facilities.

To identify challenges in implementing two potential cost saving 

initiatives—joint construction projects and real property exchanges—we 

met with officials at the reserve components’ headquarters and discussed 

the benefits and challenges of the initiatives. To determine the challenges 

faced with implementing joint construction projects, we met with officials 

at the Office of the Assistant Secretary of Defense for Reserve Affairs and 

the headquarters of the six reserve components and contacted the Office of 

the Under Secretary of Defense (Comptroller). We examined the funding 

provisions available to implement joint construction projects and 

discussed with officials the challenges in implementing these funding 

provisions for joint construction projects. To assess the reserve 

components’ participation in real property exchanges, we reviewed 

10 U.S.C. § 18233 authorizing such exchanges and related guidance and 

regulations associated with these exchanges. We met with officials from 

DOD’s Office of the Deputy Under Secretary of Defense for Installations 

and Environment, the Office of the Assistant Secretary of Defense for 

Reserve Affairs, the Army’s offices of the Assistant Secretary for 

Installations and Environment and the Army Reserve, and the Army Corps 

of Engineers to understand real property exchanges.

In performing this review, we used the same accounting records and 

financial reports DOD and reserve components use to manage and justify 

budgets for their facilities. We did not independently determine the 

reliability of the reported financial information. However, in our recent 

audit of the federal government’s financial statements, including DOD’s and 

the reserve components’ statements, we questioned the reliability of 

reported financial information because not all obligations and expenditures 

are recorded to specific financial accounts.1

 In addition, we did not validate 

DOD’s reported requirements for the sustainment of its facilities, nor did 

we validate its facility inventory database.

1

 GAO-03-98.
Appendix I

Scope and Methodology

Page 55 GAO-03-516 Defense Infrastructure

We conducted our work from May 2002 through February 2003 in 

accordance with generally accepted government auditing standards.
Page 56 GAO-03-516 Defense Infrastructure

Appendix II

Comments from the Department of Defense ApendxiI
Appendix II

Comments from the Department of Defense

Page 57 GAO-03-516 Defense Infrastructure
Appendix II

Comments from the Department of Defense

Page 58 GAO-03-516 Defense Infrastructure
Page 59 GAO-03-516 Defense Infrastructure

Appendix III

GAO Contact and Staff Acknowledgments ApendxiI

GAO Contact Mark A. Little (202) 512-4673

Acknowledgments In addition to the individual named above, Janine Cantin, 

George Duncan, Oscar Mardis, Malvern Saavedra, Laura Talbott, 

and R.K. Wild made key contributions to this report.

(350199)
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