GAO 

United States Government Accountability Office

Report to Congressional Requesters

DEFENSE 

INFRASTRUCTURE 

Planning Challenges 

Could Increase Risks 

for DOD in Providing 

Utility Services When 

Needed to Support the 

Military Buildup on 

Guam 

June 2009 

GAO-09-653 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

June 2009

DEFENSE INFRASTRUCTURE 

Planning Challenges Could Increase Risks for DOD in 

Providing Utility Services When Needed to Support 

Highlights of GAO-09-653, a report to the Military Buildup on Guam 

congressional requesters 

The Department of Defense’s 

(DOD) plans to increase the U.S. 

military presence on Guam by 

more than two-and-a-half times the 

island’s current military population 

of 15,000 by 2020. To keep pace 

with this growth, DOD has 

determined that substantial 

upgrades to the island’s existing 

utilities infrastructure are required 

for electric power, potable water, 

wastewater treatment, and solid 

waste disposal to meet future 

utility needs. 

GAO was asked to examine (1) the 

condition and capacity of the 

existing utilities’ infrastructure on 

Guam, the military’s estimated 

utility requirements, and potential 

solutions for meeting the increased 

demand on the island’s utility 

systems as well as (2) the extent 

that DOD has developed a 

comprehensive plan to address any 

challenges it faces in its planning 

for new utility systems. GAO 

reviewed and analyzed plans and 

studies within DOD, the services, 

and several stakeholders on 

implementing new utility services 

associated with the Guam military 

buildup. 

Existing utility systems on Guam are currently near or at their maximum 

capacities and will require significant enhancements to meet anticipated 

demands of the expanding U.S. military population resulting from DOD’s 

planned buildup. Over the past 2 years, the Navy’s Joint Guam Program Office, 

which is leading DOD’s utility planning efforts in cooperation with the Naval 

Facilities Engineering Command, has conducted several studies to identify 

and evaluate possible long-term solutions and establish an implementation 

approach. Currently, DOD is determining its preferred solutions that will 

likely result in increasing (1) islandwide electric power generation capacity by 

31 percent, (2) Navy potable water production by 89 percent, and (3) 

wastewater collection and treatment capacity at a Guam Waterworks 

Authority plant by 50 percent. In addition, DOD plans to use the government 

of Guam’s new landfill to dispose of all DOD solid waste, which is likely to 

increase by 230 percent as a result of the buildup. DOD also determined that 

certain operating inefficiencies, outstanding deficiencies, and compliance 

issues with certain environmental regulations in the existing infrastructure—

especially related to those systems operated by Guam utility authorities—

would need to be addressed to implement some of its potential solutions. 

While the Navy’s Joint Guam Program Office has made progress in identifying 

requirements and solutions to meet future demands, it has not developed a 

comprehensive utility plan, which would be mutually developed with the 

government of Guam. Our prior work has shown that use of a comprehensive 

plan is an important planning tool for an organization to increase 

transparency and improve management of its efforts to achieve overall 

objectives. Such a plan generally would include information for stakeholders 

on schedules, costs, financing, goals and objectives, projects and activities, 

responsibilities, potential risks, challenges, and other factors that could affect 

implementation. Several challenges could adversely affect future planning 

efforts. First, the condition of existing Guam utility systems can affect 

implementation of some potential solutions. Second, the involvement of a 

number of diverse stakeholders complicates the planning process by requiring 

continuous coordination and sharing of information as plans are developed 

and implemented. Third, sources of funding have not been identified although 

DOD’s cost estimates indicate that the total cost for utilities is likely to exceed 

the amount of utility funding that the government of Japan has agreed to 

commit. Fourth, the use of a special purpose entity (utilities service provider) 

approach to provide new utility services has not been previously used by DOD 

for utility construction, and DOD may currently lack the statutory authority to 

implement certain aspects of this approach thus potentially increasing 

uncertainty about financing, stakeholder involvement, and schedules. Lastly, 

time frames for completing the buildup of utilities to meet DOD’s scheduled 

increase of military presence on Guam provide little flexibility to 

accommodate any major adjustments in milestone dates. Without a 

comprehensive plan, DOD lacks an important planning tool to address these 

challenges and provide consistent, detailed information to its stakeholders. 

What GAO Recommends

GAO recommends that DOD 

develop a comprehensive utility 

plan for Guam, in cooperation with 

the government of Guam, to 

strengthen DOD’s management of 

its utility planning efforts and 

provide additional transparency 

among its stakeholders. DOD 

agreed with our recommendation. 

To view the full product, including the scope 

and methodology, click on GAO-09-653.

For more information, contact Brian J. Lepore, 

202-512-4523, leporeb@gao.gov. 
Page i GAO-09-653 

Contents 

Letter 1

Background 4 

Guam’s Existing Utility Infrastructure Is Not Sufficient to Meet 

DOD’s Projected Utility Requirements without Further Upgrades 10 

DOD Lacks a Comprehensive Plan for Addressing Several Planning 

Challenges It Faces in Providing New Utility Services for Guam 19 

Conclusions 32 

Recommendation for Executive Action 33 

Agency Comments and Our Evaluation 33 

Appendix I Scope and Methodology 36 

Appendix II Department of the Navy’s Fena Reservoir Water 

Treatment Operations and Rates on Guam 40 

Appendix III Current Sources of Utility Services for Civilian and 

DOD Customers on Guam 44 

Appendix IV Comments from the Department of Defense 46 

Appendix V GAO Contact and Staff Acknowledgments 49 

Related GAO Products 50 

Tables 

Table 1: Projected Military Population Growth by Service from 

2009 through 2020 7 

Table 2: Key Steps that DOD Plans to Use to Increase Utility 

Infrastructure Capacities on Guam 9 

Table 3: Estimated Effect of DOD Growth on Electric Power Utility 

System (As of May 2009) 12 

 Defense Infrastructure 
Table 4: Estimated Effect of DOD Growth on Potable Water Utility 

System (As of May 2009) 14 

Table 5: Estimated Effect of DOD Growth on Wastewater 

Treatment Utility System (As of May 2009) 16 

Table 6: Estimated Effect of DOD Growth on Solid Waste Disposal 

System (As of May 2009) 18 

Table 7: Actions Needed to Implement the Special Purpose Entity 

Approach for Utilitiesa

 30 

Table 8: Organizations and Offices Contacted during Our Review 39 

Table 9: Current Source of Utilities Services for Guam Civilian and 

DOD Customers by Utility Sector 44 

Figure 

Figure 1: Map of the Territory of Guam and Location of Current 

and Projected U.S. Military Installations 5 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

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Page ii GAO-09-653 Defense Infrastructure
Page 1 GAO-09-653 

 

United States Government Accountability Office

Washington, DC 20548 

 

June 30, 2009 

The Honorable Solomon P. Ortiz 

Chairman, Subcommittee on Readiness 

Committee on Armed Services 

House of Representatives 

The Honorable Madeleine Z. Bordallo 

House of Representatives 

The Department of Defense’s (DOD) plans to increase the U.S. military 

presence on Guam by more than two-and-a-half times the island’s current 

military population by 2020. If implemented as planned, this realignment 

would increase the military population on Guam from about 15,000 in 2009 

to about 29,000 in 2014, and to over 39,000 by 2020. This growth will 

increase the current island population of 178,430 by about 14 percent over 

those years.1

 The largest portion of the military’s population growth is 

related to the relocation of about 8,000 Marines and their 9,000 dependents 

from Okinawa, Japan, to Guam as part of an initiative between the United 

States and government of Japan to reduce forces in Japan while 

maintaining a continuing presence of U.S. forces in the region. The 

populations of each of the other military services would also increase as a 

result of DOD plans to expand their operations and presence on Guam. 

To keep pace with the projected growth in the military’s population on 

Guam, DOD has determined that substantial upgrades to the island’s 

existing utilities infrastructure are required for electric power generation, 

potable water production, wastewater collection and treatment, and solid 

waste collection and disposal to provide the additional utility capacities 

and services. The Navy’s Joint Guam Program Office, which is leading the 

planning efforts among DOD components and other stakeholders to 

consolidate, optimize, and integrate the existing DOD infrastructure on 

1

 A recent report by the government of Guam’s Department of Public Works projected 

continued growth in the population of Guam. The report estimated that by 2030, the 2008 

civilian population of 176,000 would grow by 26 percent to 222,000 without the anticipated 

military buildup; with the military buildup, the report estimated the total population would 

increase by 44 percent to 253,000 in 2030 from the current population. Government of 

Guam, Department of Public Works, 2030 Guam Transportation Plan (Dec. 19, 2008). 

The population of Guam is estimated to be 178,430 in July 2009, according to the Central 

Intelligence Agency’s The World Fact Book, 

https://www.cia.gov/library/publications/the-world-factbook/ (accessed June 2009).

 Defense Infrastructure 
 

Guam associated with the buildup, in cooperation with the Naval Facilities 

Engineering Command, conducted a number of technical studies and 

business case analyses to evaluate potential solutions for meeting the 

increased demand for utility services. In addition, DOD is awaiting 

completion of its environmental impact statement study and associated 

record of decision before making final decisions on the long-term 

solutions and its implementation approach for developing the new utility 

services.2

 These solutions will be developed and possibly implemented by 

a special purpose entity or entities,3

 which DOD would help to create, to 

provide the technical expertise in constructing and operating the utilities. 

According to the Joint Guam Program Office, DOD plans to complete new 

utility construction on Guam and be operational by November 2014. 

This is one in a series of reports on DOD’s plans for increasing its presence 

on Guam.4

 At your request, this report reviewed DOD’s planning approach 

for improving Guam’s utilities’ infrastructure to meet the increased 

demand for services resulting from the significant growth in the military’s 

population. Specifically, we examined (1) the condition and capacity of 

 

2

 The National Environmental Policy Act of 1969, codified as amended at 42 U.S.C. § 4321-

4347, establishes environmental policies and procedures that shall be followed by all 

federal agencies to the fullest extent possible. In accordance with these requirements and 

the regulations for implementing the National Environmental Policy Act of 1969 established 

by the Council for Environmental Quality, federal agencies typically evaluate the likely 

environmental effects of a project they are proposing to undertake using an environmental 

assessment or, if the project constitutes a major federal action significantly affecting the 

quality of the human environment, a more detailed environmental impact statement. 

3

 DOD officials said that the special purpose entity would most likely be a limited liability 

company or partnership formed for the specific purpose of providing a particular utility 

service or services on Guam. A limited liability company is a company in which the liability 

of each shareholder or member is limited to the amount individually invested. A limited 

partnership is a partnership composed of one or more persons who control the business 

and are personally liable for the partnership’s debts (called general partners), and one or 

more persons who contribute capital and share profits but who cannot manage the 

business and are liable only for the amount of their contribution. 

4

 These reports include GAO, Defense Infrastructure: Overseas Master Plans Are 

Improving, but DOD Needs to Provide Congress Additional Information about the 

Military Buildup on Guam, GAO-07-1015 (Washington, D.C.: Sept. 12, 2007); Defense 

Infrastructure: Planning Efforts for the Proposed Military Buildup on Guam Are in 

Their Initial Stages, with Many Challenges Yet to Be Addressed, GAO-08-722T

(Washington, D.C.: May 1, 2008); Defense Infrastructure: Opportunity to Improve the 

Timeliness of Future Overseas Planning Reports and Factors Affecting the Master 

Planning Effort for the Military Buildup on Guam, GAO-08-1005 (Washington, D.C.: Sept. 

17, 2008); and High-Level Leadership Needed to Help Guam Address Challenges Caused 

by DOD-Related Growth, GAO-09-500R (Washington, D.C.: April 9, 2009). 

Page 2 GAO-09-653 Defense Infrastructure
 

the existing utilities’ infrastructure on Guam, the military’s estimated 

utility requirements, and potential solutions for meeting the increased 

demand on the island’s utility systems, and (2) the extent that DOD has 

developed a comprehensive plan to address any challenges it faces in its 

planning for new utility systems. You also requested that we review issues 

related to rates charged by the Navy for water from its Fena Reservoir 

water treatment operations on Guam, which are discussed in appendix II. 

To determine the current condition and capacity of Guam’s existing 

utilities infrastructure, the military’s estimated utility requirements, and 

potential solutions for meeting the increased demand on the island’s utility 

systems, we obtained and reviewed studies and assessments, briefings, 

annual reports, and other pertinent documentation prepared by DOD, 

government of Guam, and U.S. federal departments and agencies. We 

interviewed and discussed this information with officials at the Navy’s 

Joint Guam Program Office, Naval Facilities Engineering Command, 

U.S. Environmental Protection Agency, offices and organizations of the 

government of Guam, including the Consolidated Commission on Utilities, 

Guam Power Authority, Guam Waterworks Authority, and Department of 

Public Works. We also met with officials of Gershman, Brickner & Bratton, 

Inc.—the U.S. District Court of Guam appointed receiver for Guam’s solid 

waste operations. We analyzed data on the expected number and timing of 

military personnel arriving on Guam and reviewed several technical 

studies, business case analyses, and related studies on the projected utility 

requirements and associated capacities that would be needed to provide 

sufficient utilities services. We discussed DOD’s projected requirements 

and potential solutions for providing the needed new utility services with 

the Joint Guam Program Office, Naval Facilities Engineering Command 

headquarters and its Pacific and Marianas component commands, the 

U.S. Pacific Command and its service component commands, and Navy, 

Marine Corps, and Air Force headquarters. To determine the extent that 

DOD has developed a comprehensive plan to address any challenges it 

faces in its planning for new utility systems, we obtained and reviewed 

studies, reports, briefings, and other documentation and discussed this 

information with officials at the Joint Guam Program Office, Naval 

Facilities Engineering Command, U.S. Pacific Command and its service 

components, and other DOD organizations. To determine the key steps 

that DOD plans to use in its planning for the development of new utility 

systems on Guam, we interviewed officials with the Joint Guam Program 

Office, Naval Facilities Engineering Command, and other key stakeholder 

organizations and reviewed reports, studies, briefings, and other 

documentation related to the program. We developed a table of the key 

steps needed to implement utility solutions based on our audit work and 

Page 3 GAO-09-653 Defense Infrastructure
 

discussed and reached concurrence with Joint Guam Program Office 

officials on the contents of the table. To establish criteria to use in 

assessing DOD’s planning efforts for new utility services on Guam, we 

reviewed our prior reporting and related studies, as well as outside 

studies, to identify best practices and key elements of successful planning. 

We identified a plan as an important element of successful planning to 

increase transparency of an organization’s efforts among stakeholders and 

to help improve an organization’s overall management of its efforts. Such a 

plan would include information on milestones and schedules, costs, 

financing and budgets, goals and objectives, projects and activities, 

organizational responsibilities, implementation strategies, and potential 

risks, challenges, and other factors that could affect implementation. 

We conducted this performance audit from June 2008 through May 2009 in 

accordance with generally accepted government auditing standards. Those 

standards require that we plan and perform the audit to obtain sufficient, 

appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives. See appendix I for more information on our 

scope and methodology. 

Because of Guam’s unique strategic location, the United States has long 

maintained a significant military presence on the island to support and 

defend its interests in the western Pacific Ocean region. The small remote 

U.S. territory is located about 1,600 miles east of Manila in the Philippines, 

1,560 miles south of Tokyo, Japan, and 3,810 miles west of Honolulu, 

Hawaii (see fig. 1). DOD currently controls about 29 percent of the land, 

which is about 62 square miles of the island’s total 212 square miles. 

The U.S. military presently operates two major installations on Guam: the 

U.S. Naval Base-Guam, located on the southwestern side of the island at 

Apra Harbor, and Andersen Air Force Base in the north. 

Background 

Page 4 GAO-09-653 Defense Infrastructure
 

Figure 1: Map of the Territory of Guam and Location of Current and Projected U.S. Military Installations 

Guam

PACIFIC

OCEAN

Japan

Hawaii

Fiji

Australia

Taiwan

Phillipines

Papua New Guinea

Indonesia

China

Russia

Seattle

San Francisco

Los Angeles

San Diego U.S. Naval Computer and Telecommunications Station Finegayan

South Finegayan Housing

Housing

Andersen Air Force Base

Apra Harbor

Naval Complex

Andersen South

Naval

Ordnance Annex

Apra Heights

Tenjo VIsta Tank Farm

Sasa Valley Tank Farm

Nimitz Hill

Naval Hospital

U.S. Naval Computer and Telecommunications Station Barrigada

Main ecampment

and family housing

Aviation operations

Embarkation and

amphibious training

Intelligence, surveillance,

and reconnaissance

Strike Force initiative

U.S. Marine Corps

U.S. Navy

U.S. Air Force

Aircraft carrier transit

berth and other waterfront work

0

0

5 Kilometers

5 Miles

Sources: U.S. Marine Corps, U.S. Navy, U.S. Air Force, U.S. Army, GAO and Map Resources.

Note: The location of the Army’s air and missile defense task force on Guam has not yet been 

determined. 

Page 5 GAO-09-653 Defense Infrastructure
 

To reduce the burden of the U.S. military presence on Japanese 

communities while maintaining a continuing presence of U.S. forces in the 

region, the U.S.-Japan Defense Policy Review Initiative5

 established a 

framework for the future of U.S. force structure in Japan, including the 

relocation of American military units in Japan to other areas, including 

Guam. As a part of this initiative, DOD plans to move 8,000 Marines and 

their estimated 9,000 dependents from Okinawa, Japan, to Guam by the 

2014 goal. Separate from the initiative, the United States also plans to 

expand the capabilities and presence of Navy, Air Force, and Army forces 

on Guam over the next several years. As a result of this planned 

realignment of U.S. forces, the military population on Guam is expected to 

grow by over 160 percent, from its current island population of 15,000 to 

over 39,000 by 2020. As shown in table 1, most of the population growth is 

related to the Marine move. It also shows that about 58 percent (about 

14,080) of the total planned increase of 24,402 in military personnel and 

dependents from all of the military services is expected to be reached by 

2014. Most of the extensive population growth and development resulting 

from the buildup will occur in the northern half of the island, primarily in 

the northwestern portion where DOD currently plans to construct a new 

Marine Corps base at Finegayan. The populations of each of the other 

military services would also increase as a result of DOD plans to expand 

its operations and presence on Guam. For example, the Navy plans to 

enhance its infrastructure, logistic capabilities, and waterfront facilities, 

including capabilities to support forward-based submarines and a 

transient nuclear aircraft carrier; the Air Force plans to develop a global 

intelligence, surveillance, and reconnaissance strike hub at Andersen Air 

Force Base; and the Army plans to place an Army air and missile defense 

task force on Guam. Joint Guam Program Office officials, however, told us 

that the currently projected schedules and levels of population growth and 

force structure could change as buildup plans are further refined and 

approved. 

 

5

 DOD officials refer to the process through which the United States and Japan negotiated 

the initiatives that realign U.S. forces in Japan as the Defense Policy Review Initiative. 

The realignment initiatives were the result of Security Consultative Committee meetings in 

2005 and 2006 between U.S. and Japan officials. The Security Consultative Committee is 

made up of the U.S. Secretaries of State and Defense and Japan’s Minister of Foreign 

Affairs and Minister of State for Defense. The committee sets overall bilateral policy 

regarding the security relationship between the United States and Japan. The results of 

these meetings established a framework for the future U.S. force structure in Japan, 

including the Marine Corps move from Okinawa, Japan, to Guam. 

Page 6 GAO-09-653 Defense Infrastructure
 

Table 1: Projected Military Population Growth by Service from 2009 through 2020 

Number of military personnel and dependents by military servicea

Year Marine Corps Air Force Navy Army

Coast 

Guard 

Special 

Operations 

Forces Total

2009 5 5,095 9,580 80 320 0 15,080

2014 10,895 7,451 10,130 130 504 50 29,160

2020 17,557 7,851 10,930 1,660 504 980 39,482

Total increase over 

period 2009-2020 17,552 2,756 1,350 1,580 184 980 24,402

Source: Joint Guam Program Office. 

Note: According to the Joint Guam Program Office, the projected military population shown in this 

table–which varied somewhat among utility studies–was used in developing the utility technical 

feasibility studies conducted by the program office and Naval Facilities Engineering Command to 

estimate utility system demand and capacity increase for the military buildup. While the estimated 

population and schedule for growth may change as plans evolve, the projected growth in population 

is considered to be the currently accepted estimates for planning purposes by the program office. 

a

The population growth shown in the table excludes transient military personnel that will visit Guam 

for brief periods. 

To keep pace with the projected growth in the military’s population on 

Guam, DOD has determined that substantial upgrades to the island’s 

existing utilities infrastructure are required for electric power generation, 

potable water production, wastewater collection and treatment, and solid 

waste collection and disposal to provide the additional utility capacities 

and services. In August 2006, the Deputy Secretary of Defense established 

the Joint Guam Program Office, within the Office of the Assistant 

Secretary of the Navy for Installations and Environment, to lead the 

coordinated planning efforts among DOD components and other 

stakeholders to consolidate, optimize, and integrate the existing DOD 

infrastructure on Guam to meet requirements associated with the 

relocation of Marine Corps forces from Okinawa, Japan, and the 

department’s joint basing initiative.6

 The Navy’s Joint Guam Program 

Office, in cooperation with the Naval Facilities Engineering Command, 

conducted a number of technical studies and business case analyses to 

evaluate potential solutions for meeting the increased demand for utility 

 

6

 Joint basing refers to a recommendation from the 2005 Base Realignment and Closure 

process that DOD develop a joint region on Guam which will realign installation 

management functions at Andersen Air Force Base to the Commander, U.S. Naval Forces 

Marianas. The joint basing initiative is intended to eliminate duplication in base support 

among installation services capabilities, such as utilities. Joint Region Marianas, Guam, was 

established January 31, 2009. 

Page 7 GAO-09-653 Defense Infrastructure
 

services. The studies considered a range of solutions in each utility sector 

that would either provide dedicated utilities for the new Marine Corps 

base only, dedicated utilities that would service only islandwide DOD 

demands, or upgrade government of Guam systems to meet islandwide 

DOD demands. The studies then ranked the potential solutions to 

determine the most likely solutions in each sector. With the exception of 

solid waste, DOD envisions that the selected solutions would be 

implemented by a special purpose entity or entities, which would 

participate in a public-private venture with private sector owners, 

developers, and operators and public sector stakeholders7

 to provide the 

technical expertise in constructing and operating the utility. DOD would 

then pay a negotiated set of rates to this special purpose entity for the 

services its uses.8

 However, the exact form of this business arrangement 

and the level of involvement by public sector stakeholders have yet to be 

determined. 

Based on our audit work, we developed table 2, which shows the key steps 

that the Navy’s Joint Guam Program Office confirmed for us that they plan 

to follow to identify requirements, examine potential solutions, and 

implement activities to develop and construct the utility infrastructure 

needed by DOD to support the expanding military population on Guam. 

 

7

 According to the Joint Guam Program Office, it is anticipated that the special purpose 

entity will be funded by a mix of public and private funding. 

8

The Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 states that it 

is the sense of Congress that the proposed utility infrastructure improvements on Guam 

should incorporate the civilian and military infrastructure into a single grid to realize and 

maximize the effectiveness of the overall utility system, if appropriate cost-sharing and 

quality standards are met. See Pub. L. No. 110-417 § 2821(c) (2008). DOD has not yet 

determined whether a single entity or multiple special purpose entities would construct 

and operate the new utility systems. 

Page 8 GAO-09-653 Defense Infrastructure
 

Table 2: Key Steps that DOD Plans to Use to Increase Utility Infrastructure Capacities on Guam 

Examine the condition and capacities of the existing Guam utility infrastructure. 

Initiate a series of technical studies and business case analyses to determine preferred technical alternatives and associated business 

models for meeting future utility requirements, including 

• breakpoint analysis regarding the capabilities of existing utilities on Guam and timeline for exceeding those capacities, 

• examination of interim utility alternatives designed to meet construction needs, 

• examination of long-term utility alternative designed to meet the needs of relocated Marine Corps forces and associated DOD 

growth, and 

• additional studies as required. 

Confer and coordinate with applicable stakeholders, including DOD service components, federal regulatory agencies, private entities, 

the government of Japan, the government of Guam, Consolidated Commission on Utilities, Guam Power Authority, and Guam Water 

Authority to gain concurrence in concept on proposed interim and long-term solutions and proposed business models. 

Complete the environmental impact statement and record of decision, required by the National Environmental Policy Act.a

Identify funding sources and develop procurement strategies to implement interim and long-term solutions, including the consideration 

of special purpose entities and other means to meet increased demand. 

Develop plans and schedule for implementation of interim solutions and construction of long-term utilities solutions. 

Monitor implementation. 

Source: GAO analysis of data provided by DOD. 

a

An environmental impact statement must include a purpose and need statement, a description of all 

reasonable project alternatives and their associated environmental impacts (including a “no action” 

alternative), a description of the environment of the area to be affected or created by the alternatives 

being considered, and an analysis of the environmental impacts of the proposed action and each 

alternative. 40 C.F.R. § 1502.13-1502.16. 

The program office also works closely with the governments of Japan and 

Guam, federal agencies, and Congress to manage the comprehensive 

buildup development effort. It has additional responsibilities for 

synchronizing funding among DOD components to meet critical timelines 

in development efforts on Guam and for coordinating DOD’s conduct of an 

environmental impact statement for moving the Marines to Guam. The 

Joint Guam Program Office also receives assistance from the Naval 

Facilities Engineering Command in conducting analyses, determining 

criteria and requirements, and developing an acquisition strategy in 

planning for infrastructure needed to support DOD’s operational 

requirements. 

Additionally, the Naval Facilities Engineering Command, in partnership 

with the program office, the services, and other DOD stakeholders, is 

developing the Guam Joint Military Master Plan that will form the baseline 

for military construction budget planning and facility and utility designs 

and provides a top-level view of the size and type of facility requirements, 

candidate and preferred land sites, and proposed use of the land to meet 

the requirements for new personnel and forces planned for Guam. It will 

Page 9 GAO-09-653 Defense Infrastructure
 

also describe the planning efforts for construction and development 

activities related to the buildup to ensure that buildings, utilities, roads, 

and other infrastructure are built in a compatible manner. The master 

plan, however, will not include a specific, detailed plan on DOD’s utility 

efforts for Guam. The master plan is expected to be completed shortly 

after a record of decision for the environmental impact statement that is 

currently planned to be signed in January 2010, and will be submitted to 

Congress when approved. 

The government of Japan is anticipated to provide $6.09 billion, in U.S. 

fiscal year 2008 dollars, of the estimated $10.27 billion cost of developing 

facilities and infrastructure for the Marine relocation to Guam. Of the 

$6.09 billion, $740 million is anticipated to be provided by Japan in 

recoverable financing for development and construction of related utility 

infrastructure for the Marines.9

 However, specific allocation of the 

$740 million among the four utility sectors has not yet been worked out 

between the U.S. and Japanese governments. 

Projected requirements for utilities to serve the growing Guam civilian and 

U.S. military population over the next decade exceed available capacities 

of existing DOD and municipal systems, and DOD is evaluating possible 

options for supporting the expansion of these systems to meet future 

needs. While generally meeting current DOD and island requirements, 

existing utility systems—electric power generation, potable water 

production, wastewater collection and treatment, and solid waste 

collection and disposal—are largely operating at or near their maximum 

capacities and have limited reserve capacities to meet a significant new 

growth in demand for services. While DOD systems are relatively wellmaintained, systems operated by Guam utility authorities have 

experienced a number of operational and regulatory compliance issues 

that could affect plans for increasing their capacities. 

Guam’s Existing 

Utility Infrastructure 

Is Not Sufficient to 

Meet DOD’s Projected 

Utility Requirements 

without Further 

Upgrades 

 

9

 In addition to the $740 million, the government of Japan is anticipated to provide 

$2.55 billion in financing, of which $2.1 billion would be recoverable, for the development 

and construction on family housing for Marine Corps families. The government of Japan is 

also expected to provide $2.8 billion for construction of general administrative buildings, 

instruction buildings, barracks, and quality of life facilities. 

Page 10 GAO-09-653 Defense Infrastructure
 

Existing Utility Systems 

Have Limited Spare 

Capacity and Significant 

New Infrastructure Is 

Needed to Support 

Planned DOD Growth 

The Joint Guam Program Office has determined that significant increases 

to existing utility system capacities in all four sectors will be needed to 

meet the demands of the expanding military population on Guam. Utility 

systems on Guam—operated by either DOD or Guam utility authorities—

are capacity constrained and limited in their ability to satisfy growth in 

demand for services (see app. III for information on the current providers 

of utility services on Guam). Over the past 2 years, the Joint Guam 

Program Office has conducted a series of technical studies and business 

case analyses to identify reasonable alternatives and determine best 

business solutions for expanding each of the utility systems to meet 

interim and long-term demands. However, the final long-term solution for 

some systems will not be known until the special purpose entities, which 

will design, construct, and operate the new utility infrastructure, are 

selected and the precise business arrangements are negotiated. Further, 

depending on the form of business arrangement and level of involvement 

of public and private stakeholders, DOD may not possess statutory 

authority at this time to implement certain potential aspects of this plan, 

such as the authority to invest U.S. government resources into a special 

purpose entity for the purpose of improving a utility system outside the 

jurisdiction of the department. DOD officials told us that they are currently 

working with the Office of Management and Budget to formulate a 

legislative proposal that they hope will enable DOD to implement certain 

potential aspects of this special purpose entity construct. Additionally, 

DOD has determined that certain operating inefficiencies, outstanding 

deficiencies, and issues related to compliance with environmental 

regulations in the existing infrastructure—especially related to those 

systems operated by Guam utility authorities—would need to be 

addressed to implement some of its potential solutions. While Guam’s 

local utility authorities have taken significant actions to improve their 

systems over the past several years, many improvements and corrective 

actions remain to be taken. 

DOD’s power demands are estimated to increase by approximately 

233 percent—from 48 to 160 megawatts peak power. The Guam Power 

Authority’s electric power system—which currently serves all DOD 

activities on Guam—is operating at capacity meaning that new generating 

equipment will be needed to satisfy the increased DOD power load. In 

order to reliably satisfy the increased load, an estimated 170 megawatts of 

new generation capacity will be needed in addition to the 550 megawatts 

of generation capacity currently installed as part of the authority’s system, 

Electric power generation 

Page 11 GAO-09-653 Defense Infrastructure
 

which is a 31 percent increase.10 Table 3 summarizes DOD’s current and 

expected future demand for electric power. 

Table 3: Estimated Effect of DOD Growth on Electric Power Utility System (As of May 2009) 

DOD demand (megawatts) System capacity (megawatts) Current service 

provider Current Future Increase Current Future Increase Comment 

Guam Power 

Authority 

48 160 112 550 720 170 According to DOD’s 

analysis, Guam Power 

Authority needs to provide 

1.52 megawatt of capacity 

for every 1.0 megawatt of 

demand load. This means 

that 170 megawatt of new 

generation capacity is 

expected to be needed to 

satisfy DOD’s 112 megawatt 

demand increase. Values 

represent peak power 

measures. 

Source: GAO analysis of DOD technical study and business case analysis for meeting the electrical requirements on Guam. 

Note: The “future” columns represent the total demand load and associated system capacity that will 

be needed by 2020. 

The Guam Power Authority’s electric power system has experienced 

reliability problems over the years such as frequent power outages. 

A May 2008 Guam Chamber of Commerce report indicates that the 

authority has improved the reliability of its system over the past 10 years, 

in part, by entering into public-private partnerships with independent 

power producers to provide new generation facilities. However, the study 

noted that the system is still using obsolete and expensive generation that 

affects the overall reliability of the system. For example, DOD’s technical 

study indicates that the generators that provide approximately 50 percent 

of Guam Power Authority’s base capacity date back to the mid-1970s. In 

addition, according to the Guam Power Authority Generation Resource 

 

10Although the installed generation capacity in Guam Power Authority’s plants is 

approximately 550 megawatts, the current available generation capacity is 485 megawatts. 

This difference is largely related to units out service for extended periods of time and units 

not available to be scheduled into the generation capacity. To maintain system reliability 

standards, Guam Power Authority needs to provide 1.52 megawatts of capacity for every 

1.0 megawatt of demand load, according to DOD analysis. The reserve capacity allows for 

generators to be taken out of service for maintenance and provides an emergency source of 

power. Therefore, to meet the expected 112 megawatt increase in DOD demand load, 1.52 

times this amount, approximately 170 megawatts, of new generation capacity is needed. 

Page 12 GAO-09-653 Defense Infrastructure
 

Handbook, Fiscal Year 2008, the authority’s existing operations are 

constrained by the environmental operating permits issued for each power 

plant. Combined, these factors result in inefficiencies such as units being 

out of service for extended periods of time or simply unavailable for 

production. 

DOD’s preferred long-term technical solution for meeting the increased 

power demands is to maximize operating efficiencies by expanding Guam 

Power Authority’s electric power system capacity from 550 to 720 

megawatts. This solution would involve constructing a separate power 

plant that could supply new power to Guam Power Authority’s grid.11

Additionally, DOD is examining possible renewable energy systems, such 

as geothermal and solar power systems, to complement power provided 

by its preferred long-term solution and help achieve future goals related to 

renewable energy.12

To meet interim needs until the long-term solution is operational, DOD is 

considering options that include a combination of Guam Power Authority 

and DOD assets. By refurbishing idle generators at several existing plants 

on the island, DOD estimates that the authority could temporary provide 

up to 60 megawatts of additional power. In addition, DOD estimates that it 

could provide another 30 megawatts of temporary power by upgrading 

stand-by generators at a DOD-owned plant and using mobile generators. 

DOD potable water maximum daily demand is expected to increase by 

approximately 100 percent from 14.5 to 29.3 million gallons per day. The 

majority of the demand growth results from the planned concentration of 

Marine Corps personnel around the U.S. Naval Computer and 

Telecommunications Station in northern Guam, where demand is 

expected to grow from 0.4 to 12.1 million gallons per day. In addition, DOD 

growth at Andersen Air Force Base and Apra Harbor is expected to result 

Potable water production 

 

11Options for the separate power plant include configurations whereby (1) DOD loads are 

primarily satisfied by the new plant with excess power delivered to the Guam Power 

Authority grid, (2) power is provided primarily to the authority’s grid with DOD loads being 

satisfied by the authority, and (3) DOD loads are satisfied by the new plant that operates 

independently of the Guam Power Authority grid. 

12 For example, section 2911(e) of Title 10, U.S.C., states that it shall be DOD’s goal to 

produce or procure not less than 25 percent of the total quantity of electric energy it 

consumes within its facilities and in its activities during fiscal year 2025 and each fiscal 

year thereafter from renewable energy sources as defined in section 203(b) of the Energy 

Policy Act of 2005 (42 U.S.C. 15852(b)). 

Page 13 GAO-09-653 Defense Infrastructure
 

in demand increasing from 3.4 to 5.2 million gallons per day and from 

10.7 to 12.0 million gallons per day at these respective locations. To meet 

the growth in demand, production from the Navy’s water system would 

need to increase from the current level of 18.4 million gallons per day to 

34.6 million gallons per day, an increase of 88 percent.13 Table 4 

summarizes DOD’s current and expected future demand for potable water 

on Guam. 

Table 4: Estimated Effect of DOD Growth on Potable Water Utility System (As of May 2009) 

DOD demand (million gallons per day) System capacity (million gallons per day) Current service 

provider Current Future Increase Current Future Increase Comment 

Navy-operated 

system 

14.5 29.3 14.8 18.4 34.6 16.2 Planned 34.6 million gallons 

of water per day capacity is 

based on expected 29.3 

million gallons of water per 

day demand plus the size of 

the largest well in areas 

where the supply is from 

well sources. This is a 

safety factor to ensure that 

the system will continue to 

meet demand during 

circumstances where wells 

are out of service due to 

maintenance or other 

operational issues. DOD 

demand represents 

maximum daily values. 

Source: GAO analysis of DOD technical study and business case analysis for meeting the potable water requirements on Guam. 

Note: The “future” columns represent the total demand load and associated system capacity that will 

be needed by 2020. 

DOD’s preferred long-term solution for meeting expected growth in 

demand is to increase the production capacity of the Navy-owned water 

system by optimizing use of existing and developing new pumping, 

treatment, storage, and distribution facilities. While obtaining water from 

Guam Waterworks Authority’s system was considered by DOD 

consultants, their studies determined that DOD should maintain an 

independent system which can meet DOD needs. However, DOD is 

 

13Prior to consolidating under DOD’s joint basing initiative, the Navy and Air Force 

operated separate water systems that served all DOD needs on Guam. As a result of the 

consolidation which placed all base operating functions under Navy control, we refer to 

the water system as being Navy-owned. 

Page 14 GAO-09-653 Defense Infrastructure
 

working with the Guam Waterworks Authority to develop a long-term 

integrated water resource plan for the island. To increase the capacity of 

and operate its water system, DOD officials are considering a solution 

whereby a special purpose entity would implement the utility solutions. 

To meet interim needs until long-term solutions are in place, DOD expects 

to be able to phase in new capacity development to match the pace of the 

expected population growth. 

DOD wastewater volume is expected to increase by approximately 

275 percent from average flows of 1.2 to 4.5 million gallons per day. This 

increased wastewater flow will be concentrated in northern Guam—where 

the majority of the new military population is expected to be located—and 

will likely be treated at Guam Waterworks Authority’s Northern District 

Wastewater Treatment Plant.14 As the only treatment facility in northern 

Guam, the plant serves both military (Andersen Air Force Base and U.S. 

Naval Computer and Telecommunications Station Finegayan) and civilian 

populations. It is currently designed to process 12 million gallons per day 

on average with a peak capacity of 27 million gallons per day. Increased 

wastewater flows resulting from both the military buildup and the 

expected growth in Guam’s civilian population are expected to result in 

future total flows to the plant of approximately 17.6 million gallons per day 

on average with a peak of 35 million gallons per day. Based on the 

increased flows, the plant’s treatment capacity would need to be expanded 

by 50 percent (from 12 to 18 million gallons per day on average and from 

27 to 40.4 million gallons per day at peak). Table 5 summarizes the current 

and projected future DOD demand for wastewater treatment on Guam. 

Wastewater collection and 

treatment 

 

14 The Northern District Wastewater Treatment Plant on the northwestern coast of the 

island was commissioned in 1979 and is the largest of the Guam Waterworks Authority’s 

sewage treatment facilities. It currently uses only primary treatment (physical removal of 

floatable and settleable solids) and disposes of treated effluent through an outfall into the 

Philippine Sea. 

Page 15 GAO-09-653 Defense Infrastructure
 

Table 5: Estimated Effect of DOD Growth on Wastewater Treatment Utility System (As of May 2009) 

DOD demand 

(million gallons per day) 

System capacity 

(million gallons per day) Current 

service provider Current Future Increase Current Future Increase Comment 

Guam Waterworks 

Authority 

1.2 4.5 3.3 12

(27 peak)

18

(40.4 

peak)

6 

(13.4 

peak) 

Guam Waterworks Authority’s 

Northern District Wastewater 

Treatment Plant currently 

processes 1.2 million gallons of 

water per day of wastewater 

generated by military 

installations in northern Guam. 

This plant—capable of treating 

12 million gallons of water per 

day of wastewater—may be 

expanded to treat the estimated 

17.6 million gallons of water per 

day of wastewater that will be 

generated as a result of the 

military buildup and anticipated 

growth in Guam’s civilian 

population. Values represent 

average flows unless otherwise 

indicated. 

Source: GAO analysis of DOD technical study and business case analysis for meeting the wastewater treatment requirements on 

Guam. 

Note: The “future” columns represent the total demand load and associated system capacity that will 

be needed by 2020. 

The Guam Waterworks Authority’s wastewater treatment system 

continues to have a number of deficiencies that result from the effects of 

natural disasters, poor maintenance, and vandalism. The authority is 

currently operating under a stipulated order because of issues related to 

compliance with environmental regulations.15 Under terms of the order, 

the authority is to, among other requirements, submit schedules and plans 

for certain capital improvements to its system. However, according to the 

authority’s 2007 Water Resource Master Plan, the authority’s ability to 

fund needed capital improvements has been hampered by various factors 

such as uncollected water and sewer bills and excessive emergency repair 

costs resulting from deferred spending for facility repairs and failure to 

maintain stocks of critical repair parts. In particular, the master plan notes 

 

15 United States of America v. Guam Waterworks Authority and the Government of 

Guam, No. 02-00035, Stipulated Order for Preliminary Relief (D. Guam June 5, 2003). The 

stipulated order requires the authority to, among other matters, develop and submit a water 

and wastewater master plan and to submit schedules and plans for several different 

specified projects. 

Page 16 GAO-09-653 Defense Infrastructure
 

that the Northern District Wastewater Treatment Plant is in severe critical 

need of upgrading and equipment replacement. In addition, the treatment 

plant may need capital improvements that would enable it to become a 

secondary treatment facility.16 According to the Guam Waterworks Annual 

Report for Fiscal Year 2006, in January 2007 the authority contracted with 

a private company—Veolia LLC—to manage and operate its wastewater 

system. 

DOD’s preferred long-term technical solution is to have a special purpose 

entity that would expand the Guam Waterworks Authority’s Northern 

District Wastewater Treatment Plant, and according to DOD officials, 

upgrade the plant as required by regulatory authorities to process the 

expected increase in wastewater flows. If the option of using this plant is 

not possible, a separate wastewater treatment plant may be necessary to 

meet DOD’s needs.17 To meet its interim needs until the long-term solution 

is operational, DOD is working with the Guam Waterworks Authority to 

use the Northern District Wastewater Treatment Plant which, according to 

Joint Guam Program Office officials, may include expanding the treatment 

capacity of the plant. In addition, according to the program office, DOD is 

working with the Guam Waterworks Authority to consider ways to 

process wastewater generated by the growing construction workforce 

which will be on the island in advance of the arrivals of DOD personnel 

and dependents. 

Solid waste generation resulting from the increased DOD population on 

Guam is expected to grow by approximately 230 percent from 16,000 to 

53,000 tons per year. Table 6 summarizes the current and projected future 

DOD demand for solid waste disposal on Guam. 

Solid waste collection and 

disposal 

 

16According to officials in the Joint Guam Program Office, this may be a requirement from 

the Environmental Protection Agency for the Guam Waterworks Authority even without 

the military buildup. 

17Options for the separate wastewater treatment plant include (1) constructing a new 

facility with its own outfall near the proposed DOD development and (2) building a new 

facility at the Northern District Wastewater Treatment Plant site to treat DOD wastewater 

flows only and using the existing plant’s outfall. 

Page 17 GAO-09-653 Defense Infrastructure
 

Table 6: Estimated Effect of DOD Growth on Solid Waste Disposal System (As of May 2009) 

DOD demand (tons per year) Current service 

provider Current Future Increase Comment 

Navy-operated landfills 16,000 53,000 37,000 The Navy currently operates landfills at Apra Harbor Naval Base and 

Andersen Air Force Base. These landfills will be used during the 

initial stages of the military buildup. In 2011, the Navy is expected to 

stop using these landfills and begin disposing of all its solid waste at 

a new landfill being constructed by the government of Guam in 

southern Guam. 

Source: GAO analysis of DOD technical study for meeting the solid waste disposal requirements on Guam. 

Note: The “future” column represents the estimated total amount of solid waste that will be generated 

by DOD activities in 2020. 

To meet the expected solid waste disposal needs, DOD intends to utilize 

the new Guam landfill being constructed on the southern part of the island 

by U.S. District Court of Guam-appointed receiver—Gershman, Brickner & 

Bratton, Inc.—for the Solid Waste Management Division of the 

government of Guam’s Department of Public Works.18 The new Guam 

landfill will replace the government of Guam’s existing landfill that has 

been operating over-capacity for over 20 years and has historically been in 

noncompliance with environmental regulations. According to Joint Guam 

Program Office officials, DOD is currently in the process of developing a 

letter of intent with the receiver concerning an outline of the parameters 

for a future agreement concerning DOD’s use of the new landfill. DOD’s 

use of the landfill would require DOD entities on Guam to transport their 

solid waste from military installations, which are predominately in the 

northern section of the island, to transfer stations or the new landfill and 

pay tipping fees19 to the landfill operator for solid waste disposal services. 

Until the new landfill is operational, DOD will continue to use its existing 

landfills at Apra Harbor, within Naval Base Guam, and Andersen Air Force 

Base, which have very limited remaining service lives. According to 

officials in the Joint Guam Program Office, the Apra Harbor and Andersen 

Air Force Base landfills should be usable through 2018 and 2010, 

respectively, if current operating practices are followed. In addition, the 

Air Force is planning an expansion of the Andersen Air Force Base landfill 

 

18 United States of America v. Government of Guam, No. 02-00022 (D. Guam 

March 17, 2008). 

19 A tipping fee is the charge levied upon a given quantity of waste received at a waste 

processing facility or landfill. 

Page 18 GAO-09-653 Defense Infrastructure
 

to provide 1 to 2 years of additional capacity. The government of Guam’s 

new landfill is expected to be operational in 2011, which would allow DOD 

to use this facility before exceeding capacities at its own landfill facilities. 

However, according to the program office, options are being considered to 

extend the life of the DOD landfills should the new Guam landfill be 

delayed. 

Over the past 3 years, the Navy’s Joint Guam Program Office has made 

progress in leading DOD utility planning efforts to identify requirements 

and potential solutions to meet future demands, but DOD lacks a 

comprehensive plan for addressing the many challenges it faces as it 

moves forward. These planning challenges include the condition of 

existing Guam utility systems, extent of coordination required among 

stakeholders, sources of funding, approach chosen to implement 

solutions, and the schedule for completing key tasks. While DOD 

recognizes that these challenges could create potential risks for meeting 

the utility needs of Guam’s growing military population, it has not begun 

development of a comprehensive plan for utilities that provides its 

stakeholders with specific information on its planning efforts, including 

critical milestones and schedules, interim and long-term options under 

consideration, approach to be used for developing and implementing new 

utility services, costs and financing, and potential utility projects. Without 

a comprehensive plan for utilities, DOD lacks an important planning tool 

to use in managing the several challenges it faces and for informing 

stakeholders, including Congress, on the specific details of its utility 

planning for Guam. 

DOD Lacks a 

Comprehensive Plan 

for Addressing 

Several Planning 

Challenges It Faces in 

Providing New Utility 

Services for Guam 

A Comprehensive Plan is 

an Important Planning 

Tool to Increase 

Transparency and Improve 

Management of Program 

Efforts 

The Joint Guam Program Office faces many challenges that could 

adversely affect its planning efforts as it moves forward to meet the 

demands of the expanding military population on Guam; however, it has 

not used a comprehensive plan to help overcome these challenges. Our 

prior work has shown that a comprehensive plan is an important planning 

tool for an organization to increase transparency and improve 

management of its efforts to achieve overall objectives. A comprehensive 

plan would generally provide stakeholders with specific information on 

the organization’s program, including milestones and schedules, costs, 

financing and budgets, goals and objectives, projects and activities, 

organizational responsibilities, and potential risks, challenges, and other 

factors that could affect implementation of its plans. Such a plan would 

also generally provide a means to bring together all aspects of an 

organization’s plans into one central document and a source that updates 

Page 19 GAO-09-653 Defense Infrastructure
 

information on critical milestones and schedules, and if these are missed, 

what accommodations are being made. 

DOD Faces Five Planning 

Challenges in Providing 

New Utility Services for 

Guam 

DOD faces five planning challenges that could create risks that would 

adversely affect its efforts to provide new utility services when needed to 

support its growing military population in Guam. These challenges are: 

• condition of existing Guam infrastructure affects DOD’s selection and 

implementation of possible utility solutions; 

• involvement of a number of stakeholders complicates the DOD’s 

planning process for utilities; 

• proposed solutions are likely to require more than one funding source; 

• implementation of new approach to upgrade utility services on Guam 

lacks key details; and 

• tight schedule for meeting buildup requirements increases the 

complexity of utility planning efforts. 

Officials in the Navy’s Joint Guam Program Office told us that DOD 

recognizes the potential adverse effect that these challenges could have 

on its utility program and has taken some actions to address them. For 

example, the officials said that the program office developed an initial 

risk-based management approach in 2008 as part of an initiative to 

examine ways to improve its management effectiveness. Although Joint 

Guam Program Office officials told us that the approach still needs further 

refinement, they said the approach is in place and being used to access, 

mitigate, and monitor risks to its goals. 

Many of the potential solutions that DOD is considering using to provide 

the increased capacities and new utility services on Guam would involve 

either integrating with or using elements of Guam’s existing utilities 

infrastructure. In selecting solutions, various upgrades to the existing 

infrastructure may need to be made and a number of operating 

inefficiencies, outstanding deficiencies, and certain regulatory compliance 

issues would need to be resolved in time for implementation. 

Condition of Existing Guam 

Infrastructure Affects Selection 

and Implementation of Possible 

Solutions 

Prior to DOD’s military buildup decision, the Consolidated Commission on 

Utilities, Guam utilities authorities, and the government of Guam had done 

long-term utility planning to upgrade, expand, and repair Guam’s power, 

water, and wastewater systems to support a larger population, according 

to the chairman of the Consolidated Commission on Utilities. This 

planning was based on the island’s population growing by 25 percent by 

2025. Under the current military buildup plans, however, this same level of 

growth would be achieved by 2014. As a result, some upgrades to its 

Page 20 GAO-09-653 Defense Infrastructure
 

existing infrastructure may need to be completed earlier than was 

originally planned by the Guam utilities partly as result of the buildup. 

For example, on the basis of its Water Resources Master Plan projections, 

the Guam Waterworks Authority did not anticipate expanding its Northern 

District Wastewater Treatment Plant, which currently provides 

wastewater treatment service to both the civilian population and the 

military population at Naval Computer and Telecommunications Station 

Finegayan and Andersen Air Force Base in northern Guam, until 2015. 

Officials in the Joint Guam Program Office noted that many of these 

upgrades and repairs in the near-term are also driven by the need to 

address existing operational and regulatory compliance issues in Guam’s 

utilities regardless of the buildup. According to the officials, for the 

infrastructure upgrades related to the military buildup, DOD will provide 

funds through customer fees which will support the Guam Power 

Authority’s and Guam Waterworks Authority’s planned activities. 

For activities which may be implemented earlier than originally planned 

due to the military buildup, the program office officials stated that the 

Consolidated Commission on Utilities will coordinate with DOD and 

Guam’s utilities authorities to address such projects. 

Additionally, officials from the Governor of Guam’s Civilian-Military Task 

Force20 told us that the influx of a large force of about 15,000 temporary 

workers—most of them from outside Guam—required to construct the 

military’s planned facilities will place significant demands on the existing 

utility infrastructure sooner than the arriving new military personnel and 

dependents. The government of Guam, Consolidated Commission on 

Utilities, Guam Power Authority, and Guam Waterworks Authority are in 

the initial stage of adjusting their long-term plans to fund and to make the 

necessary improvements and repairs to their utility systems needed to 

support DOD’s buildup plans. 

Some solutions that DOD is considering would depend on Guam utility 

authorities being able to develop new or upgrade existing systems when 

needed to support military population growth. For example, DOD is 

considering using a new islandwide landfill that the government of Guam, 

through a court-appointed receiver, plans to develop and complete by 

 

20 According to the Guam Civilian-Military Task Force, the task force was created in 2006 

by the Governor of Guam’s Executive Order 2006-10 to maximize opportunities for the 

civilian and military community resulting from increases in military presence, and that one 

of the task force’s responsibilities is to develop a comprehensive master plan that would 

accommodate the military buildup and relocation of the Marines to Guam. 

Page 21 GAO-09-653 Defense Infrastructure
 

mid-2011. DOD plans to be a customer and officials in the Joint Guam 

Program Office told us that they are in the process of developing a letter of 

intent with the receiver concerning an outline of the parameters, such as 

the tipping fee to use the new landfill, for a future agreement. Using the 

government of Guam’s landfill allows DOD to forego developing its own 

new landfill and close its two existing ones that are nearing the end of 

their service lives. However, if the completion of the new Guam landfill is 

delayed, DOD may need to consider other alternatives. 

Additionally, selection of some DOD solutions may also depend on 

whether corrective actions can be taken to address a number of operating 

inefficiencies, outstanding deficiencies, and regulatory compliance issues 

with the existing Guam infrastructure in time for implementation. DOD is 

considering a solution, for example, that would expand and upgrade the 

Guam Waterworks Authority’s Northern District Wastewater Treatment 

Plant to handle its planned significant increase in treatment capacity. 

However, the U.S. Environmental Protection Agency has recently issued a 

notice of proposed action under the Clean Water Act and Environmental 

Protection Agency regulations containing a tentative decision to deny an 

application for a renewed variance from certain secondary treatment 

requirements21 at the Northern District Wastewater Treatment Plant. The 

agency’s tentative decision has been made available for public comment, 

and at the completion of the public comment period, the Environmental 

Protection Agency will consider these comments and make a final 

decision. DOD officials stated that the resolution of this waiver issue could 

be further delayed if the agency’s final decision is challenged in court by 

the government of Guam. If implemented, Guam Waterworks Authority 

and Naval Facilities Engineering Command officials stated that the costs 

for upgrading to provide secondary treatment could be substantial. 

Additionally, while not necessarily affecting DOD’s selection, other 

solutions would benefit from improvements made to existing systems by 

the Guam utility authorities, which are needed independent of the buildup. 

For example, while significant upgrades are needed to improve Guam 

Power Authority’s aging transmission and distribution system, making 

 

21 Secondary treatment is the second step in most waste treatment systems during which 

bacteria consume the organic parts of the wastes. This is accomplished by bringing the 

sewage, bacteria, and oxygen together in trickling filters or within an activated sludge 

process. Secondary treatment removes all floating and settling solids and about 90 percent 

of the oxygen demand from substances and suspended solids. Disinfection by chlorination 

is the final stage of the secondary treatment process. The Environmental Protection 

Agency establishes secondary treatment standards for publicly owned treatment works. 

Page 22 GAO-09-653 Defense Infrastructure
 

these upgrades would also be useful in supporting DOD’s future electrical 

needs. 

Stakeholders, which include DOD components, government of Japan, 

government of Guam, various federal departments and agencies, and 

private companies, require a significant level of communication and 

coordination to share information, resolve issues, reach agreements, and 

make decisions to facilitate effective planning and implementation 

activities. For instance, DOD would need to reach agreement with the 

government of Guam’s utility organizations, which currently own and 

operate the utilities, as well as the government of Japan, which is expected 

to contribute funds toward the utilities, as well as other public and private 

stakeholders that may contribute funds and expertise to this venture, in 

order to select and implement utility solutions that involve using a special 

purpose entity to improve existing Guam infrastructure. Further, 

depending on the precise business model that is ultimately selected, DOD 

may not have statutory authority at this time to implement certain 

potential aspects of this plan, such as the authority to invest U.S. 

government resources into a special purpose entity for the purposes of 

improving a utility system outside the jurisdiction of the department. 

DOD officials told us that they are currently working with the Office of 

Management and Budget to formulate a legislative proposal that they hope 

will enable DOD to implement certain potential aspects of this special 

purpose entity construct. DOD would also need to later negotiate with the 

special purpose entity that is ultimately selected to determine specific 

details of its business arrangement in designing, constructing, and 

operating the new utility systems. 

Involvement of a Number of 

Stakeholders Complicates the 

Planning Process 

The Joint Guam Program Office communicates and coordinates its 

activities with a widerange of public sector entities including the 

government of Japan, government of Guam and its utility organizations, 

other DOD entities, and U.S. federal departments and agencies, such as the 

Environmental Protection Agency, and private sector consultants and 

contractors. The program office, according to officials with the Joint 

Guam Program Office, has established routine conference calls, meetings, 

briefings, E-mail, conferences, and other communication methods among 

the many stakeholders to provide information, discuss planning and 

issues, coordinate actions, and obtain agreement on a range of activities. 

Officials with the program office and the government of Japan, for 

instance, engage in monthly meetings to discuss and share information on 

the progress of plans and associated activities. Similarly, program office 

officials meet weekly with various officials in the Naval Facilities 

Engineering Command, the services, and other federal agencies to discuss 

Page 23 GAO-09-653 Defense Infrastructure
 

utility planning efforts and resolve issues. The program also holds frequent 

meetings with government of Guam organizations and conducts 

community meetings with the Guam civilian population to discuss 

concerns and provide information. 

However, despite the level of coordination that the Joint Guam Program 

Office has attempted to maintain, program office officials told us that it is 

often difficult to satisfy the immediate information needs of all 

stakeholders. These officials believe this is partly the result of the 

preliminary nature of utility plans for which studies and other analyses are 

still being refined, decisions are yet to be made, and funding and specific 

schedules are still being determined. A transportation engineer with the 

Federal Highway Administration Region 9 Field Office, who has 

responsibilities for planning road infrastructure improvements in Guam, 

told us that without knowing the specific details of utility solutions under 

consideration, it is difficult coordinating with DOD to identify possible 

conflicts between planned road and utility improvements, such as new 

power transmission lines that may encroach on a road’s right-of-way, and 

scheduling of projects. The official also said that the highway 

administration needs to obtain sufficient information from DOD to ensure 

that its projects are funded and completed when needed to support the 

buildup. Officials in the Joint Guam Program Office told us that the 

program office has provided as much information to its stakeholders when 

available and that they recognize the difficulty of stakeholders developing 

their own plans with preliminary data and analyses. 

Additionally, Guam utility officials said that while DOD has provided 

preliminary information on its utility plans, they believe that DOD has not 

provided the level of detail that is needed for the government of Guam and 

its utility organizations to do comprehensive utilities planning. The 

Chairman of the Consolidated Commission on Utilities told us that for the 

government of Guam to adjust its planning for the buildup, it needs 

information, such as the final numbers and arrival schedules for DOD 

personnel and dependents. The Chairman also said that there is a need for 

closer coordination and involvement between the government of Guam 

and the Joint Guam Program Office, DOD, and other federal agencies to 

better integrate their efforts for utilities planning and to obtain funding for 

their planning efforts and to make the required improvements. 

Officials in the Joint Guam Program Office told us that DOD has provided 

an unprecedented level of information to the government of Guam but 

many details are still being worked on or pending final decisions. The 

program office officials said that it would not be appropriate to release 

Page 24 GAO-09-653 Defense Infrastructure
 

these details since they are likely to change during ongoing reviews. In 

February 2009, the Joint Guam Program Office began to provide more 

specific information on the range of utility proposals under consideration 

and its preferred solutions to the government of Guam and its utility 

organizations. 

DOD’s cost estimates indicate that the total cost for utilities is likely to 

exceed the amount of utility funding that the government of Japan is 

anticipated to provide towards the Marine Corps’ move to Guam. While 

the total capital costs of implementing long-term utility solutions are not 

known at this time, cost estimates for various solutions being examined by 

DOD indicate that the total cost of implementation could significantly 

exceed the financing anticipated from the government of Japan. As a 

result, additional funding would likely need to be obtained from other 

public and/or private sources to implement its long-term utilities 

infrastructure plans. Further, DOD will not know the ultimate cost of 

implementing its long-term utility solutions until the special purpose 

entity—essentially a service provider of a utility commodity—is 

established and begins development and design work on utility solutions 

concepts. However, our review of preliminary cost estimates that were 

developed as part of DOD’s business case studies for each utility sector 

indicate that implementing various combinations of solutions across the 

utility sectors could significantly exceed the $740 million in equity 

investments and loans tentatively committed by the government of Japan 

and thereby require additional sources of financing. For instance, while 

the cost estimates are still preliminary and subject to change as the 

solutions are refined and developed, our analysis shows that the total cost 

of implementing long-term solutions across the four utility sectors could 

range from $1.35 billion to $1.79 billion, which would exceed the 

government of Japan financing by $614 million and $1.05 billion, 

respectively. 

Proposed Solutions Are Likely 

to Require More Than One 

Funding Source 

Additional funding could come from the United States,22 the government of 

Guam, other public and private sources, or a combination of these 

 

22 However, depending on the precise business model that is ultimately selected, it is 

unclear whether statutory authority exists at this time to enable DOD to invest 

U.S. government resources into a special purpose entity for the purposes of improving a 

utility system outside the jurisdiction of DOD. DOD officials told us that they are currently 

working with the Office of Management and Budget to formulate a legislative proposal that 

they hope will enable DOD to implement certain potential aspects of this special purpose 

entity construct. 

Page 25 GAO-09-653 Defense Infrastructure
 

organizations, but the cost of financing from these sources could be higher 

and more difficult to obtain than the loans provided by the government of 

Japan through its Japan Bank of International Cooperation.23 The Joint 

Guam Program Office, in a written response to us, stated it is likely that 

Japanese funding will offer lower cost financing than that obtained 

through the commercial lending market or the business arrangements with 

special purpose entities. While the Guam Power Authority and Guam 

Waterworks Authority may be able to provide financing through their 

capacity to raise public debt, both authorities have had bond ratings that 

were below investment grade.24 In December 2008, the bond rating for the 

Guam Power Authority was upgraded by Standard and Poor’s Ratings 

Services to a rating of medium investment grade because of its sustained 

trend of improved operational and financial performance. The Guam 

Waterworks Authority’s bond rating was also recently upgraded but still 

remains slightly below investment grade. Even with better bond ratings, 

the authorities may still have some difficulty obtaining favorable rates 

because of the recent downturn in global financial markets. A senior 

official in the Joint Guam Program Office told us that Guam is in the 

process of seeking federal aid through grants, loans, and the normal 

federal budget process to improve its ability to fund its improvements and 

repairs. The official stated that low-cost rural development loans from the 

U.S. Department of Agriculture to the government of Guam are being 

considered as a source of funding to support Guam’s utility infrastructure 

improvements.25 Additionally, as part of a special purpose entity’s 

 

23 The Japan Bank for International Cooperation is one of four policy-based financing 

institutions that are part of the Japan Finance Corporation, which is a public corporation 

wholly owned by the Government of Japan. In conducting its operations to fulfill its 

mission of contributing to the sound development of the Japanese and international 

economy, the bank’s role is to complement the financing provided by private sector 

financial institutions. 

24 When a bond is rated investment grade, its issuer is considered able to meet its 

obligations, exposing bondholders to minimal default risk, which makes it easier to attract 

investors and obtain lower interest rates. 

25 In testimony before the U.S. Senate Committee on Energy and Natural Resources on 

May 1, 2008, the Acting Deputy Assistant Secretary of the Interior for Insular Affairs stated 

that as is typical for government loan programs, the rural development loans from the 

U.S. Department of Agriculture require that the government get an appropriation only for 

the risk associated with the loan rather than the entire loan amount. Loans where there is a 

reasonable risk of default will have a higher cost than those which typically do not default. 

For instance, the renewable energy guaranteed loan program has a 10 percent subsidy rate 

compared to the hardship electric loan program which has a 0.12 percent subsidy rate. 

Because utilities typically have little risk of default, financing of electric loans is secure and 

carries a low up-front financing cost on behalf of the federal government. 

Page 26 GAO-09-653 Defense Infrastructure
 

proposal, the entity could also include funds obtained from loans in the 

commercial lending market for implementing their utility plans. However, 

it is not clear what type of rates these investors may be able to obtain 

under current financial conditions. 

With the exception of solid waste collection and disposal, the Naval 

Facilities Engineering Command plans that a special purpose entity would 

develop, construct, and operate the new long-term utility infrastructure 

needed on Guam to meet DOD’s future demands for electric power, water, 

and wastewater. Command officials stated that the entity would likely be a 

limited liability company or partnership formed for the specific purpose of 

providing these utility services, which would likely participate in a publicprivate venture with private sector owners, developers, operators, and 

public sector stakeholders. While the command, which is responsible for 

planning and managing construction related activities for the buildup, has 

often used a public-private venture approach for developing military 

housing, it has not used this approach before for the development of 

utilities on the scale envisioned for Guam. Further, DOD may not possess 

statutory authority at this time to enable DOD to implement certain 

proposed aspects of this special purpose entity approach, such as the 

authority to invest U.S. government resources into a special purpose entity 

for the purposes of improving a utility system outside the jurisdiction of 

DOD. Additionally, many specific details about the special purpose entity, 

such as the entity’s scope, business and financial arrangements, utility 

system cost and rate structure, and specific projects have not yet been 

determined. The entity, or entities, is scheduled to complete 

implementation of the new long-term utility systems by November 2014, 

according to the Joint Guam Program Office. 

Implementation of New 

Approach to Upgrade Utility 

Services on Guam Lacks Key 

Details 

Although officials at the Joint Guam Program Office and the Naval 

Facilities Engineering Command agree that the lack of specific details at 

this time about use of the special purpose entity approach creates some 

uncertainty about implementing utility solutions when needed on Guam, 

these officials said that the Naval Facilities Engineering Command has 

gained experience in its public-private ventures for housing that will 

provide the ability to link the interests and the needs of the stakeholders 

and derive the best business arrangement to meet DOD’s utility needs. 

The Joint Guam Program Office noted that large-scale public-private 

housing projects also involve the construction and privatization of 

significant utility infrastructure. It further stated that developing a 

revenue-based, commercially acceptable financing structure, with the 

added dimension of public-private partnership, is a particular skill that the 

Naval Facilities Engineering Command has gained through its publicPage 27 GAO-09-653 Defense Infrastructure
 

private venture housing efforts. However, the authorities available under 

chapter 169 of Title 10, U.S. Code, are available only for the purposes of 

the Military Housing Privatization Initiative, and as stated above, it is 

unclear to what extent DOD possesses authority to implement certain 

proposed aspects of this special purpose entity approach for utilities on 

Guam. 

Joint Guam Program Office officials told us that, while the technical 

aspects of utility systems and their construction have natural differences 

from military housing public-private efforts, the Naval Facilities 

Engineering Command brings together subject-matter expertise from 

across DOD to address the relevant technical, financing, and business 

management issues that will arise. In addition to in-house capabilities, the 

command plans to use outside consultants that have significant 

experience with public-private efforts. For example, the command has 

contracted with an economics and real estate development advisory firm 

to conduct a study that will enable DOD to better understand market 

conditions affecting potential investments and develop the needed 

business model. The business model will provide a notional assessment of 

how a special purpose entity could be organized and operate and would 

include information on estimated capital costs to construct potential 

utility systems and forecasted utility rates that would be assessed to 

recover capital costs and fund the systems’ operations and maintenance. 

The Naval Facilities Engineering Command plans to use the model for 

developing DOD’s request for information to industry to solicit proposals 

and for negotiating with the selected special purpose entity on the terms 

and conditions of their utility services agreement. 

Joint Guam Program Office’s utility plans entail meeting a number of key 

milestones and associated events over the next 5 years to complete its 

environmental impact statement process, select a special purpose entity to 

develop and implement its long-term, and possibly its interim, solutions, 

and finish utility construction by November 2014. Keeping pace with this 

tight schedule not only becomes critically important to meeting the utility 

needs of the continuously growing military population, but also to the 

successful execution of schedules for major military construction, 

movement of Marines and other forces, and other related buildup 

activities. While the program office has taken some actions to mitigate 

schedule risks, the schedule for utilities provides little flexibility to 

accommodate any major adjustments in milestone dates. 

Tight Schedule for Meeting 

Buildup Requirements 

Increases the Complexity of 

Planning Efforts 

Page 28 GAO-09-653 Defense Infrastructure
 

Environmental impact statement completion 

Currently the Joint Guam Program Office is working toward completion of 

its environmental impact statement for relocating the Marines to Guam. 

Officials from various offices within DOD, government of Guam, and 

federal agencies told us that the amount of time allotted for completing 

milestones within the study is very compressed when compared to other 

impact studies that are less complex and smaller in scope. The Joint Guam 

Program Office plans to distribute a working draft of the environmental 

impact statement to various cooperating agencies and DOD organizations 

for initial review and plans to release the draft environmental impact 

statement for a 60-day public comment period in the final quarter of fiscal 

year 2009. The office intends to issue a record of decision in January 2010 

to begin its planned fiscal year 2010 construction program for the buildup 

on time. Environmental Protection Agency Region 9 officials told us the 

short period allotted for receiving and resolving comments creates 

possible risks that federal agencies, such as the Fish and Wildlife Service, 

may not be able to complete their reviews, and possible environmental 

challenges from public and private interests could delay approval of the 

study and affect the implementation of other buildup events. 

The tight schedule has also affected how long-term utility solutions were 

examined during the conduct of DOD’s environmental impact statement 

for the Marine relocation. Because the final size, scale, and specific details 

of potential utility projects needed to implement the long-term solutions 

will not be known until they are developed by the selected special purpose 

entity at a later date, officials from the Joint Guam Program Office told us 

that the long-term solutions for utilities will be considered at a high level 

in the environmental impact statement that is planned for completion in 

2010. The program office stated that a site specific environmental impact 

statement for the long term utility solutions will be conducted at a later 

date, but before DOD enters into any underlying contracts for long term 

services from the special purpose entity. 

Creation of special purpose entity 

The next series of major milestones relate to the selection of a special 

purpose entity and the creation of a business model whereby the entity 

would develop, implement, and construct the long-term solutions for 

electric power, water, and wastewater utilities. As table 7 shows, there are 

a number of actions that need to be taken to create the special purpose 

entity for utilities, including development and approval of a business 

model for the special purpose entity, the evaluation of qualifications and 

Page 29 GAO-09-653 Defense Infrastructure
 

service proposals, the selection and creation of the entity, and 

construction. However, according to the Joint Guam Program Office, while 

the plan is to complete utility construction by November 2014, the 

program office has not yet finished its coordination within DOD to 

determine the intervening dates for completing the actions needed to 

implement the special purpose entity approach and begin design and 

construction of the potential utility projects. A Joint Guam Program Office 

official told us that the program office does not believe at this time that the 

undetermined schedule dates will affect its ability to meet its construction 

completion date. 

Table 7: Actions Needed to Implement the Special Purpose Entity Approach for Utilitiesa

Complete preliminary development of business model for the special purpose entity. 

Obtain U.S. government approval of the business model. 

Obtain government of Japan approval of business model. 

Advertise Request for Qualifications for prospective special purpose entity offerors. 

Complete evaluation of requests for qualifications from prospective offerorsb

Receive proposals from qualified offerors. 

Select winning special purpose entity and begin exclusive negotiation, design development, and permitting. 

Execute business and/or real estate documents that formalize the agreement between the special purpose entity and the U.S. 

government for the provision of utility services. Items such as service availability dates and utility rates would be established in the 

agreement. 

Special purpose entity completes site permitting and begins construction. 

Special purpose entity completes construction of utilities. 

Special purpose entity operates the utilities. 

Source: Joint Guam Program Office. 

a

DOD officials told us that they are currently working with the Office of Management and Budget to 

formulate a legislative proposal that would enable DOD to implement certain potential aspects of this 

special purpose entity construct. Thus, obtaining legislative authority would be a critical step in DOD’s 

ability to implement several aspects of this special purpose entity approach. 

b

Prospective special purpose entity offerors who meet the qualification criteria will be allowed in a 

future step to submit proposals to provide utility services. 

Addressing capacities gaps 

The current capacities of existing Guam utility systems will be exceeded 

by the needs of the continuously growing military population before the 

special purpose entities can complete new utility construction and be 

operational by November 2014. The Naval Facilities Engineering 

Command conducted breakpoint studies for each of the utility sectors to 

Page 30 GAO-09-653 Defense Infrastructure
 

predict when utility capacities would be exceeded. 26 Although the 

predicted breakpoint date varied by utility sector, the studies determined 

that there are potential deficiencies in electricity, water, and wastewater 

about 2 years into the Marine Corps relocation effort, which would require 

interim operating solutions to bridge the gaps in needed capacity until the 

long-term solutions were in place. Joint Guam Program Office officials 

told us that to control implementation costs of the utilities, the interim 

utility solutions are planned as a part of the long-term solutions. As part of 

DOD’s current environmental impact statement study for the Marine 

buildup, the Naval Facilities Engineering Command stated that they have 

included an evaluation of these interim solutions for possible 

environmental impacts. Although the command at this time expects that 

DOD will bear most of the costs of implementing interim solutions, 

estimates of these costs have not yet been fully developed. Additionally, 

the role that the special purpose entity or entities would have in 

implementing the interim utility solutions has also not been determined. 

DOD Lacks a 

Comprehensive Plan for Its 

Utility Efforts on Guam 

DOD has not developed and communicated a comprehensive plan for its 

utility efforts on Guam to use in managing the several challenges it faces 

and provide its stakeholders, including Congress, with a central source for 

obtaining specific information on its critical milestones and schedules, 

interim and long-term options, approach for utilities development, costs 

and financing for utility projects, and challenges. Officials in the Navy’s 

Joint Guam Program Office told us that while the program office intends 

to develop a comprehensive utility plan, the pre-decisional nature of the 

work performed for the environmental impact statement, the pending 

selection of preferred utility solutions, uncertainty about costs and 

financing for utility projects, and associated challenges have precluded the 

plan’s development. The Deputy Director of the Joint Guam Program 

Office also told us that while meeting DOD’s mission requirements would 

be the ultimate goal of such a plan, the program office recognizes that the 

plan should be developed in collaboration with the government of Guam 

so that Guam’s concerns are sufficiently addressed, and integrated 

islandwide utility solutions are considered that will benefit Guam 

residents. 

 

26 Breakpoints were developed by matching the supply of the existing utility to the demand 

from forces (to include service members, contractor support and dependents) at their 

projected arrival on Guam. 

Page 31 GAO-09-653 Defense Infrastructure
 

Nevertheless, without a comprehensive plan for utilities development, 

DOD does not have use of an important tool to address the risks and 

uncertainty posed by several critical challenges—the condition of existing 

Guam utility systems, extent of coordination required among stakeholders, 

sources of funding, approach chosen to implement solutions, and the 

schedule for completing key tasks—it faces in carrying out DOD’s 

planning and implementation of utility solutions on Guam. Such a plan 

would also help increase transparency among stakeholders and improve 

DOD’s overall management of its efforts by providing a central source of 

consistent, detailed information on various aspects of DOD’s planning for 

utility development to meet future demands on Guam. An opportunity now 

exists to begin development of a comprehensive plan as DOD completes 

its environmental impact statement effort and the Guam Joint Military 

Master Plan is finalized. It is expected that such a plan would evolve in its 

content and be updated as information is better refined and decisions are 

made. 

Expanding the U.S. military presence on Guam by more than two-and-ahalf times the current population is expected to put great stress on Guam’s 

infrastructure, especially when significant increases are expected as soon 

as 2014 with further increases continuing over the next several years to 

2020. Although DOD has taken a number of actions to identify its 

requirements and potential solutions for meeting this significant demand, 

it has not begun development of a comprehensive utilities plan to use as 

an important planning tool in managing and informing stakeholders, 

including Congress, on the several challenges that pose considerable risk 

to the success of building up the infrastructure to meet the demand and 

ensure utilities are available when needed. Without sufficient utility 

services, major construction projects, movement of Marines and other 

forces, and other buildup activities may fall behind schedule and increase 

implementation costs due to further compression of the timeline near the 

end of the implementation period. Congress would also benefit from 

having an additional source of details on DOD’s utility efforts and its 

progress in addressing planning challenges and implementing utility plans 

to better inform its decisions and ensure proper congressional oversight of 

DOD’s military buildup on Guam, including the potential need for greater 

levels of appropriations. 

Conclusions 

Page 32 GAO-09-653 Defense Infrastructure
 

Because of the importance that DOD places on developing the utility 

infrastructure needed to support its planned military buildup on Guam, we 

recommend that the Secretary of Defense direct the Secretary of the Navy, 

in consultation with the Joint Guam Program Office and the Naval 

Facilities Engineering Command, to take the following action: 

• Develop a comprehensive plan for DOD’s utility development efforts 

that includes specific information on options under consideration; 

projected costs; sources of financing and related budget information; 

schedules with associated critical milestones; the construct for the 

special purpose entity approach or alternative approaches that would 

be used to plan, develop, construct, and operate the new utility 

infrastructure; organizational relationships and associated 

responsibilities; status of government of Guam actions to improve its 

existing infrastructure that may have application to DOD plans; and, 

potential risks, challenges, and other factors affecting implementation 

of DOD’s plans. Additionally, this plan should be: 

• developed in cooperation with the government of Guam; 

• prepared in time so that an initial version of the plan can be 

included with DOD’s submission of its final comprehensive Guam 

Joint Military Master Plan for the buildup to Congress in 2010; 

• provided to congressional defense committees, with subsequent 

versions of the plan provided as they become available; and 

• updated, as needed, to adapt to changing circumstances. 

In written comments to a draft of this report, the Executive Director of the 

Navy’s Joint Guam Program Office agreed with our overall assessment of 

DOD’s planning efforts to increase the capacities and services on Guam to 

support the planned U.S. military buildup over the next several years and 

with our recommendation that the Joint Guam Program Office, in 

consultation with the Naval Facilities Engineering Command, should 

develop a comprehensive plan that would provide specific information on 

DOD’s utility planning for Guam, information such as options under 

consideration, projected costs, schedules with critical milestones, and 

other factors affecting implementation of DOD’s plans. The Executive 

Director also agreed that this plan should be prepared in time so that an 

initial version of the plan could be included with the department’s 

submission of its final comprehensive Guam Joint Military Master Plan in 

2010 and be provided to congressional defense committees, with 

subsequent versions provided as they are updated. However, while the 

Executive Director stated in his comments that our recommendation was 

Recommendation for 

Executive Action 

Agency Comments 

and Our Evaluation 

Page 33 GAO-09-653 Defense Infrastructure
 

fair because it focuses on DOD’s utility development, he suggested we 

clarify our recommendation so as not to create the impression that DOD’s 

development of a comprehensive utility plan would account for all utility 

needs on Guam and would need mutual agreement with the government of 

Guam. While we continue to believe that collaboration with the 

government of Guam is important because many of DOD’s preferred 

solutions described in this report involve utilization of utilities currently 

owned and operated by the government of Guam, we have clarified our 

recommendation, as DOD suggested, to now state that the comprehensive 

utility plan for Guam should be developed “in cooperation” with the 

government of Guam rather than “in collaboration.” Further, the Executive 

Director stated that DOD’s span of control and influence to resolve overall 

utilities concerns on Guam is limited. We agree that DOD is limited in its 

ability to resolve overall utilities concerns on Guam, and have identified 

the extent of coordination required among stakeholders as a planning 

challenge throughout this report. 

Additionally, the Executive Director stated in his comments that our 

report was unclear on how a comprehensive plan would increase 

transparency or what such transparency would entail. He therefore 

suggested that we modify or consider deleting references to transparency 

in the report. We have acknowledged in our report that DOD has provided, 

to the extent possible, a significant amount of information to its 

stakeholders, including the government of Guam, to provide transparency 

of its utility efforts. We also stated, however, that a comprehensive plan 

for utilities is another important planning tool that DOD can use to 

improve the management of its efforts and provide its stakeholders with 

detailed, consistent information on its utility planning efforts—thereby 

providing an additional level of transparency to its stakeholders. Such a 

plan would also generally provide a means to bring together all aspects of 

those plans into one central document and a source that updates 

information on critical milestones and schedules, and if these are missed 

what accommodations are being made. DOD’s preparation of a 

comprehensive utility plan would also mutually reinforce the utility 

planning being conducted by the government of Guam to support both the 

needs of the military buildup and those of the civilian population. As the 

Executive Director suggests in his comments, an example of a more 

quantitative method of achieving transparency could be the inclusion of 

additional review milestones with the government of Guam as the 

comprehensive plan is being developed. Additionally, we believe that 

another example would be for DOD to set review milestones with other 

stakeholders, such as the Environmental Protection Agency and the 

Federal Highway Administration, in preparing its plan. Such additional 

Page 34 GAO-09-653 Defense Infrastructure
 

coordination could help to ensure those stakeholders’ mutual interests, 

plans, and budgets, which support the needs of the military and island 

populations, are aligned in DOD’s plan. For these reasons, we have 

retained our discussion of transparency in the report. 

DOD’s comments are reprinted in their entirety in appendix IV. Also, 

DOD provided technical comments on a draft of this report, which we 

incorporated as appropriate. 

As agreed with your office, unless you publicly release the contents of this 

report earlier, we plan no further distribution until 30 days from the report 

date. At that time, we will send copies of this report to interested 

congressional committees, the Secretary of Defense, the Secretary of the 

Navy; and the Governor of Guam. In addition, the report will be available 

at no charge on GAO’s Web site at http://www.gao.gov. 

If you or your staff have any questions about this report, please call me 

at (202) 512-4523 or leporeb@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. Other major contributors to this report are listed in 

Brian J. Lepo

appendix V. 

re, Director 

Defense Capabilities and Management 

Page 35 GAO-09-653 Defense Infrastructure
Appendix I: Scope and Methodology Appendix I: Scope and Methodology 

To determine the current condition and capacity of Guam’s existing utility 

infrastructure, the military’s estimated utility requirements, and potential 

solutions for meeting the increased demand on the island’s utility systems, 

we obtained and reviewed studies and assessments, briefings, annual 

reports, and other pertinent documentation prepared by the Department 

of Defense (DOD), government of Guam, U.S. federal departments and 

agencies, and private companies. We interviewed and discussed this 

information with officials at the Department of the Navy’s Joint Guam 

Program Office, Naval Facilities Engineering Command, U.S. 

Environmental Protection Agency, offices and organizations of the 

government of Guam, including the Consolidated Commission on Utilities, 

Guam Power Authority, Guam Waterworks Authority, Department of 

Public Works, Guam Environmental Protection Agency, and the Guam 

Civilian Military Task Force. We also spoke with officials of Gershman, 

Brickner & Bratton, Inc.—the U.S. District Court of Guam appointed 

receiver for Guam’s solid waste collection and disposal operations—to 

discuss the status of actions being taken to correct outstanding 

operational deficiencies with solid waste operations and the development 

of a new landfill in Guam. We discussed electric power approaches and 

considerations used in the Hawaiian islands with officials at the Hawaiian 

Electric Company to provide us with a comparative basis for power 

operations in Guam. We analyzed data on the expected number and timing 

of military personnel arriving on Guam and reviewed several technical 

studies, business case analyses, and related studies on the projected utility 

requirements and associated capacities that would be needed to provide 

sufficient utility services. We discussed DOD’s projected requirements and 

potential solutions for providing the needed new utility services with the 

Joint Guam Program Office, Naval Facilities Engineering Command 

headquarters and its Pacific and Marianas component commands, the 

U.S. Pacific Command and its Navy, Marine Corps, and Air Force 

component commands, and U.S. Navy, U.S. Marine Corps, and U.S. Air 

Force headquarters. We obtained data on the current capacities of Guam’s 

existing utility systems from the Naval Facilities Engineering Command. 

These data are of undetermined reliability; they were obtained from utility 

studies that were conducted by the command’s contractors who worked 

directly with the government of Guam and its utility organizations in 

establishing current utility system capacities and DOD demand and for 

providing a baseline to determine the extent of additional capacities 

needed to meet future DOD demands. We used these data in order to 

consider the planning required to increase the capacities of the existing 

utilities. Joint Guam Program Office officials told us that the Naval 

Facilities Engineering Command is in the process of verifying and 

validating the data used in its technical utility studies. 

Page 36 GAO-09-653 Defense Infrastructure 
Appendix I: Scope and Methodology 

To determine the extent that DOD has developed a comprehensive plan to 

address any challenges it faces in its planning for new utility systems, we 

obtained and reviewed studies, analyses, reports, briefings, planning 

documents, and other supporting and relevant documentation. We also 

held discussions with officials at the Joint Guam Program Office, Naval 

Facilities Engineering Command and its Pacific and Marianas component 

commands, U.S. Pacific Command and its service component commands, 

and other DOD organizations and offices. To determine the key steps that 

DOD plans to use in its planning for the development of new utility 

systems on Guam, we interviewed officials with the Joint Guam Program 

Office, Naval Facilities Engineering Command, and other key stakeholder 

organizations and reviewed reports, studies, briefings, and other 

documentation related to the program. We developed a table of the key 

steps needed to implement utility solutions based on our audit work and 

discussed and reached concurrence with Joint Guam Program Office 

officials on the contents of the table. To establish criteria to use in 

assessing DOD’s planning efforts for new utility services on Guam, we 

reviewed our prior reporting and related studies, as well as outside 

studies, to identify best practices and key elements of successful planning. 

We identified a plan as an important element of successful planning to 

increase transparency of an organization’s efforts among stakeholders and 

to help improve an organization’s overall management of its efforts. Such a 

plan would include information on milestones and schedules, costs, 

financing and budgets, goals and objectives, projects and activities, 

organizational responsibilities, implementation strategies, and potential 

risks, challenges, and other factors that could affect implementation. We 

reviewed the Joint Guam Program Office sanctioned technical studies and 

business case analyses that were used to develop possible solutions for 

providing increased utility capacities and services to support the growth in 

the military population. From these studies we obtained information on 

potential costs, possible impacts on the existing Guam utility 

infrastructure, and implementation approaches, which we discussed with 

Joint Guam Program Office and Naval Facilities Engineering Command 

officials. To better understand stakeholder relationships, we met with 

officials within the Joint Guam Program Office, Naval Facilities 

Engineering Command, Joint Staff, Office of the Secretary of Defense, the 

Service headquarters, U.S. Pacific Command and its service components, 

the government of Guam, particularly its utility authorities, U.S. 

Environmental Protection Agency, and private companies. Regarding the 

environmental impact statement that is being conducted for the Marine 

Corps move to Guam, we reviewed planning documents, status reports, 

and other documentation, which we discussed with officials from DOD 

Page 37 GAO-09-653 Defense Infrastructure
Appendix I: Scope and Methodology 

organizations, government of Guam, U.S. Environmental Agency Region 9, 

as well as other cognizant officials. 

Additionally, we obtained information on the Department of the Navy’s 

Fena Reservoir water treatment operations on Guam, the determination 

process used to establish the rates it charges its customers for water, and 

the feasibility of consolidating Fena water operations with the Guam 

Waterworks Authority’s water system. We obtained and reviewed 

briefings, studies, reports, official correspondence, and other pertinent 

documentation related to the Navy’s Fena Reservoir water operations on 

Guam and the Navy Working Capital Fund, which establishes the 

procedures used by the Navy to manage the costs of its operations and 

provides the process for determining water rates. We also discussed this 

information with appropriate officials at the Naval Facilities Engineering 

Command Marianas, Naval Facilities Engineering Command Headquarters, 

Guam Waterworks Authority, and Guam’s Consolidated Commission on 

Utilities. Additionally, we discussed the operational and water rate issues 

with the Department of the Navy’s Naval Audit Service, which was 

conducting a review of the process used by the Department of the Navy to 

establish the water rates that it charges the Guam Waterworks Authority 

on Guam. We obtained and reviewed the Naval Audit Service’s final April 

2009 report issued on the results of its Guam water rates’ review. 

We conducted this performance audit from June 2008 through May 2009 in 

accordance with generally accepted government auditing standards. Those 

standards require that we plan and perform the audit to obtain sufficient, 

appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives. Table 8 shows the organizations and offices 

we contacted during our review. 

Page 38 GAO-09-653 Defense Infrastructure
Appendix I: Scope and Methodology 

Table 8: Organizations and Offices Contacted during Our Review 

Washington, D.C., area 

• Joint Guam Program Office, Assistant Secretary of the Navy (Installations and Environment) 

• Naval Facilities Engineering Command, Headquarters 

• Joint Staff, Logistics Engineering Division 

• Office of the Deputy Under Secretary of Defense, Installations and Environment Division 

• Marine Corps Headquarters, Defense Policy Review Initiative, Installations and Implementation Branch 

• Commander, Navy Installations Command 

• Air Force Headquarters 

• Naval Audit Service, Department of the Navy 

• Gershman, Brickner & Bratton, Inc. 

Oahu, Hawaii, area 

• U.S. Pacific Command, Headquarters 

• U.S. Pacific Fleet 

• U.S. Marine Forces Pacific 

• U.S. Pacific Air Forces 

• Naval Facilities Engineering Command, Pacific 

• U.S. Department of Transportation, Region 9, Federal Highways Administration 

• First Hawaiian Bank 

• Hawaiian Electric Company 

Guam 

• Joint Guam Program Office Forward 

• Naval Facilities Engineering Command Marianas 

 Government of Guam 

• Civilian/Military Task Force, Office of the Governor of Guam 

• Consolidated Commission on Utilities 

• Department of Public Works, Solid Waste Division 

• A.B. Won Pat Guam International Airport Authority 

• Guam Coastal Management Program 

• Guam Power Authority 

• Guam Waterworks Authority 

• University of Guam, Water and Environmental Research Institute of the Western Pacific 

• Guam Environmental Protection Agency 

San Francisco, California, area 

• Environmental Protection Agency, Region 9 

Source: GAO. 

Page 39 GAO-09-653 Defense Infrastructure
Appendix II: De

Reservoir W

Rates on 

partment of the Navy’s Fena 

ater Treatment Operations and 

Guam

Page 40 GAO-09-653 

Appendix II: Department of the Navy’s Fena 

Reservoir Water Treatment Operations and 

Rates on Guam 

During our review we obtained information on the (1) Navy’s Fena 

reservoir water treatment operations, (2) process used by the U.S. Navy 

to set rates for its military customers and the Guam Waterworks Authority 

for water obtained and produced from the Navy’s Fena reservoir water 

treatment operations, and (3) feasibility of consolidating the Fena water 

operations with the Guam Waterworks Authority’s water system. 

DOD currently produces and provides potable water to meet all of its 

needs at military installations on Guam. In the northern half of the island, 

its water comes from a network of wells on DOD land that pumps fresh 

water from an underground aquifer. In the south, its water is obtained 

from surface freshwater resources, including the Fena Reservoir, which 

the Navy constructed in 1951, to provide the primary source of water to 

Naval Base Guam operations, military personnel, and dependents. Water 

is pumped from the manmade reservoir and two nearby springs to the 

Navy Fena Water Treatment Plant where raw water is treated by 

coagulation, sedimentation, and filtration to reduce turbidity and 

chlorinated. The plant is the largest and most complex water treatment 

plant on Guam and, according to the Commanding Officer of the Naval 

Facilities Engineering Command Marianas, has complied with the Safe 

Drinking Water Act over the past 5 years, with the exception of a few 

minor monitoring and reporting issues. 

Navy’s Fena Reservoir 

Water Treatment 

Operations 

To augment the water supply for civilian residents its serves on Guam, the 

Guam Waterworks Authority1

 purchases about 3 million gallons of water 

of the Navy’s daily production at its Fena water treatment plant. The 

purchased water serves the authority’s customers in three villages in close 

proximity to the reservoir and/or its water distribution pipes but can also 

be conveyed to other customers in its water system. The Navy’s plant 

currently turns out about 9 million gallons of water each day but is capable 

of producing upwards of 13.5 million gallons each day. 2

 According to the 

Naval Facilities Engineering Command, the Fena water treatment 

 

1

 The Guam Waterworks Authority, which is a public corporation responsible for the 

production, treatment, distribution, and sale of drinking water, provides water services to 

the entire civilian population of Guam. Most of its water—about 70 percent—comes from 

wells that pump water from the northern aquifer; the remaining 30 percent comes from 

surface water sources, including rivers and reservoirs (ground level and elevated tanks). 

2

 A memorandum of understanding in 1991 between the U.S. government and the 

government of Guam set the Navy’s daily commitment at upwards of 4.39 million gallons of 

water. 

 Defense Infrastructure 
Appendix II: Department of the Navy’s Fena 

Reservoir Water Treatment Operations and 

Rates on Guam 

operation on Guam is the only Navy water operation that sells water to an 

off-base entity. 

The Navy’s water production and distribution systems in Guam are 

operated through the Navy Working Capital Fund, which is a revolving 

fund that relies on sales revenue instead of direct congressional 

appropriations to finance its operations. The fund must recover the full 

cost of its operations, and rates for its products and services are set so its 

operations will break even over time, thereby neither making a profit nor 

incurring a loss.3

 The Navy has used this financing approach for over 

30 years for its water operations and as a basis for its water rates for both 

its military and civilian customers in Guam. 

Navy’s Process for 

Determining Water 

Rates 

Because gains or losses in revenue may occur as a result of variations in 

operations, the Navy water rates are adjusted each year to recover the full 

costs of operations and break even over time. In accordance with normal 

Navy Working Capital Fund procedures, the Navy’s Naval Facilities 

Engineering Command Marianas initially sets a new water rate for its Fena 

reservoir operations through its budget process 2 years prior to the fiscal 

year of execution. The proposed new rate is determined from actual and 

estimated costs available at the time of development and knowledge of 

future costs and sales volume events, such as an increase in population or 

customer base. According to water rate historical data provided by the 

Naval Facilities Engineering Command Marianas used in preparing its 

fiscal year 2009 rate, operation costs included direct labor, overhead, 

material (fuel), depreciation, equipment rental, electricity, hazardous 

waste disposal, water laboratory testing, engineering support, and 

contracts for operations and maintenance, minor repairs, ground 

maintenance, major repairs, data collection, management software, and 

other services. 

The Naval Facilities Engineering Command Marianas reflects the proposed 

new water rate in its supporting budget documentation that it submits to 

the Naval Facilities Engineering Command-Pacific for the associated fiscal 

year budget submission. In turn, the documentation is provided to the 

Naval Facilities Engineering Command Headquarters, which reviews the 

documentation and submits it as part of its consolidated budget to the 

 

3

 See 10 U.S.C. § 2208; see DOD 7000.14-R, Department of Defense Financial Management 

Regulation, Vol. 2B, Ch. 9, § 09010 (Sept. 2008). 

Page 41 GAO-09-653 Defense Infrastructure
Appendix II: Department of the Navy’s Fena 

Reservoir Water Treatment Operations and 

Rates on Guam 

Navy’s Office of Budget/Business and Civilian Resources Division. 

Subsequently, the consolidated budget is presented to the Office of the 

Secretary of Defense’s Comptroller. After the Office of the Secretary of 

Defense’s review, a program budget decision is published establishing the 

new water rate for the associated fiscal year and any needed adjustments 

are made to the Naval Facilities Engineering Command Marianas’ budget. 

In regard to the feasibility of consolidating the Navy’s Fena water 

operations with Guam Waterworks Authority’s water system, the Naval 

Facilities Engineering Command told us that the command has 

consistently maintained ownership of water rights on Navy land 

throughout the world and the Navy would like to maintain this right for its 

reservoir on Navy land in Guam. Further, the Government of Guam 

recognized the fee simple title and ownership of the United States’ real and 

personal property used by the Navy to produce and distribute potable 

water, (which includes the Fena Reservoir) in a 2003 Consent Decree.4

The Commanding Officer of the Naval Facilities Engineering Command 

Marianas, in an October 2008 letter to the Chairman of Guam’s 

Consolidated Commission on Utilities, stated that the Command sees few 

engineering, operational, or financial benefits that would result from 

consolidation. He stated that while the Guam local water system has 

undergone significant improvements in the quality of its drinking water, 

the system still has a very high loss rate of approximately 50 percent and 

continues to lack adequate water transmission and storage infrastructure. 

In contrast, the Navy water system’s loss rate is 17 percent, which is close 

to the industry standard of 15 percent or less. The commanding officer 

also stated that the Guam Waterworks Authority’s primary water system in 

northern Guam is largely separate and distinct from the Navy’s system. 

Another Naval Facilities Engineering Command Marianas official told us 

that most of the authority’s water comes from the island’s northern 

aquifer. According to the command, while the water is of sufficient quality 

to not require treatment, the authority’s rates remain higher than those of 

the Navy, which operates a full water treatment plant. Additionally, the 

officer told us that because the Fena reservoir is located within the Naval 

Base Guam Ordnance Annex,5

 there are security, liability, and 

Feasibility of 

Consolidating Navy 

and Guam Water 

Systems 

 

4 United States of America v. Government of Guam, No. 99-00102 (D. Guam Apr. 24, 2003). 

5

 The Naval Base Guam Ordnance Annex is located approximately 1 mile southeast of the 

main base. It encompasses nearly 18,000 acres and is a major storage and supply point for 

many types of weapons. The annex is also the site of the Fena reservoir. 

Page 42 GAO-09-653 Defense Infrastructure
Appendix II: Department of the Navy’s Fena 

Reservoir Water Treatment Operations and 

Rates on Guam 

antiterror/force protection concerns that would be raised by nonmilitary 

ownership of the reservoir. 

The Chairman of the Guam’s Consolidated Commission on Utilities told us 

it is the long-term goal of the government of Guam to integrate DOD’s and 

Guam’s water systems under the control of the Guam Waterworks 

Authority. However, the chairman told us that for the time being the 

government of Guam has shifted its focus to planning for the buildup and 

looking for opportunities to collaborate with DOD on developing 

integrated water and wastewater solutions for the buildup. He further 

stated that the government of Guam would revisit the ultimate integration 

of the entire system at a later time. 

Page 43 GAO-09-653 Defense Infrastructure
Appendix III: Current Sources of Utility 

Services for Civilian and DOD Customers on Appendix III: Current Sources of Utility Guam 

Services for Civilian and DOD Customers on 

Guam 

DOD current sources of utility services for electric power, potable water, 

wastewater treatment, and solid waste disposal come from both militaryand government of Guam-owned and operated systems. The Guam Power 

Authority provides DOD with all of its electric power services. The 

Guam Waterworks Authority provides wastewater collection and 

treatment services for all of DOD’s installations in northern Guam, such as 

Andersen Air Force Base, but DOD provides its own treatment services for 

the Naval Base Guam in the south. DOD currently produces all of its own 

potable water and handles all of its solid waste collection and disposal. 

Table 9 summarizes the sources of utility services for Guam civilian and 

DOD customers by utility sector. 

Table 9: Current Source of Utilities Services for Guam Civilian and DOD Customers by Utility Sector 

Utility sector Customer sector Current source of utility services 

Electric power generation Guam civilian • Guam Power Authority provides all power services. 

DOD (Navy and Air Force 

bases)a

• Purchases all of its power services though a customer services 

agreement with Guam Power Authority.b

Guam civilian • Guam Waterworks Authority produces most of its own water but 

purchases some water from the Navy’s Fena reservoir water 

operations. 

Potable water production 

DOD (Navy and Air Force 

bases) 

• Navy Base Guam and Andersen Air Force Base produce and 

provide water to all DOD customers. 

Guam civilian • Guam Waterworks Authority operates seven wastewater 

treatment plants and basins that treat wastewater from resident 

and military customers.c

 An estimated 41 percent of island 

residents use individual wastewater disposal systems, such as 

septic tanks. 

Wastewater collection and 

treatment 

DOD (Navy and Air Force 

bases) 

• The Navy treats all of its wastewater in southern Guam at its 

own treatment plant at Naval Base Guam. 

• Guam Waterworks Authority handles wastewater from Andersen 

Air Force Base and Navy facilities in northern Guam. 

Guam civilian • Guam Department of Public Works maintains a single landfill 

and only provides solid waste services for civilian customers in 

Guam.d

Solid waste collection and 

disposal 

DOD (Navy and Air Force 

bases)a

• Joint Region Marianas maintains a landfill at both Navy Base 

Guam and Andersen Air Force Base and provides solid waste 

services for the bases. 

Source: DOD and government of Guam. 

a

Beginning January 31, 2009, the Navy Region Marianas assumed responsibly for installation support 

services, including utilities, on all military bases and DOD facilities on Guam under DOD’s joint basing 

initiative as recommended by the 2005 Base Realignment and Closure Commission, and was 

designated as Joint Region Marinas, Guam. 

Page 44 GAO-09-653 Defense Infrastructure 
Appendix III: Current Sources of Utility 

Services for Civilian and DOD Customers on 

Guam 

b

According to information provided by DOD officials, the Guam Power Authority supplies power to 

each DOD facility up to the base transformer; from there, each base is responsible for its on-base 

power distribution. According to DOD officials, the customer services agreement between the Guam 

Power Authority and DOD establishes the electrical rates paid to the Guam Power Authority and 

states that DOD will be a customer of the authority. It further states that the operations and 

maintenance of the islandwide power system will be the responsibility of the authority. DOD plans to 

renegotiate the agreement, which is in force until 2012. 

c

According to the Guam Waterworks Annual Report, in January 2007 the authority contracted with a 

private company—Veolia LLC—to manage and operate its wastewater system. 

d

In March 2008, the U.S. District Court of Guam appointed Gershman, Brickner & Bratton, Inc, as 

Receiver for Guam’s solid waste operations. 

Page 45 GAO-09-653 Defense Infrastructure
Appendix IV: Comments from the Department Appendix IV: Comments from the of Defense 

Department of Defense 

Note: Page numbers in 

the draft report reviewed 

by agency may differ from 

those in this report. 

Page 46 GAO-09-653 Defense Infrastructure 
Appendix IV: Comments from the Department 

of Defense 

Page 47 GAO-09-653 Defense Infrastructure
Appendix IV: Comments from the Department 

of Defense 

Page 48 GAO-09-653 Defense Infrastructure
Appendix V: 

A

GAO Contact and Staff 

cknowledgments 

Page 49 GAO-09-653 

Appendix V: GAO Contact and Staff 

Acknowledgments 

Brian J. Lepore, (202) 512-4523 or leporeb@gao.gov GAO Contact 

In addition to the contact named above, Mark A. Little, Assistant Director; 

Michael W. Armes; Raj C. Chitikila; Grace A. Coleman; 

Katherine S. Lenane; Mahender Dudani; Patrick E. Peterson; and 

Mark J. Wielgoszynski, Analyst-in-Charge, made major contributions to 

this report. 

Acknowledgments 

 Defense Infrastructure 
Related GAO Products Related GAO Products 

High-Level Leadership Needed to Help Guam Address Challenges Caused 

by DOD-Related Growth, GAO-09-500R, Washington, D.C.: April 9, 2009. 

Defense Infrastructure: Opportunity to Improve the Timeliness of Future 

Overseas Planning Reports and Factors Affecting the Master Planning 

Effort for the Military Buildup on Guam.GAO-08-1005. Washington, D.C.: 

September 17, 2008. 

Defense Infrastructure: High-Level Leadership Needed to Help 

Communities Address Challenges Caused by DOD-Related Growth. 

GAO-08-665. Washington, D.C.: June 17, 2008. 

Defense Logistics: Navy Needs to Develop and Implement a Plan to 

Ensure that Voyage Repairs are Available to Ships Operating Near 

Guam When Needed. GAO-08-427. Washington, D.C.: May 12, 2008. 

Defense Infrastructure: Planning Efforts for the Proposed Military 

Buildup on Guam Are in Their Initial Stages, with Many Challenges Yet 

to Be Addressed. GAO-08-722T. Washington, D.C.: May 1, 2008. 

Defense Infrastructure: Challenges Increase Risks for Providing Timely 

Infrastructure Support for Army Installations Expecting Substantial 

Personnel Growth. GAO-07-1007. Washington, D.C.: September 13, 2007. 

Defense Infrastructure: Overseas Master Plans Are Improving, but DOD 

Needs to Provide Congress Additional Information about the Military 

Buildup on Guam. GAO-07-1015. Washington, D.C.: September 12, 2007. 

U.S. Insular Areas: Economic, Fiscal, and Financial Accountability 

Challenges. GAO-07-119.Washington, D.C.: December 12, 2006. 

DOD’s Overseas Infrastructure Master Plans Continue to Evolve. 

GAO-06-913R. Washington, D.C.: August 22, 2006. 

U.S. Insular Areas: Multiple Factors Affect Federal Health Care Funding. 

GAO-06-75. Washington, D.C.: October 14, 2005. 

Results-Oriented Government: Practices That Can Help Enhance and 

Sustain Collaboration among Federal Agencies. GAO-06-15. Washington, 

D.C.: Oct. 21, 2005. 

Page 50 GAO-09-653 Defense Infrastructure
Related GAO Products 

Opportunities Exist to Improve Future Comprehensive Master Plans for 

Changing U.S. Defense Infrastructure Overseas. GAO-05-680R. 

Washington, D.C.: June 27, 2005. 

Results-Oriented Government: GPRA Has Established a Solid 

Foundation for Achieving Greater Results. GAO-04-38. Washington, D.C.: 

March 10, 2004. 

Environmental Cleanup: Better Communication Needed for Dealing 

with Formerly Used Defense Sites in Guam. GAO-02-423. Washington, 

D.C.: April 11, 2002. 

Compact of Free Association: Negotiations Should Address Aid 

Effectiveness and Accountability and Migrants’ Impact on U.S. Areas. 

GAO-02-270T. Washington, D.C.: December 6, 2001. 

Foreign Relations: Migration From Micronesian Nations Has Had 

Significant Impact on Guam, Hawaii, and the Commonwealth of the 

Northern Mariana Islands. GAO-02-40. Washington, D.C.: October 5, 2001. 

Overseas Presence: Issues Involved in Reducing the Impact of the U.S. 

Military Presence on Okinawa. GAO/NSIAD-98-66. Washington, D.C.: 

March 2, 1998. 

U.S Insular Areas: Development Strategy and Better Coordination 

Among U.S. Agencies Are Needed. GAO/NSIAD-94-62. Washington, D.C.: 

February 7, 1994. 

(351225) Page 51 GAO-09-653 Defense Infrastructure
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