United States General Accounting Office

GAO Report to Congressional Requesters

February 1997 MILITARY BASES

Cost to Maintain

Inactive Ammunition

Plants and Closed

Bases Could be

Reduced

GAO/NSIAD-97-56

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-272660 

February 20, 1997

The Honorable Ronald V. Dellums

Ranking Minority Member

Committee on National Security

House of Representatives

The Honorable Gene Taylor

House of Representatives

As requested, we reviewed two issues related to the Department of

Defense’s (DOD) management of real property. First, we assessed the

opportunities to reduce the cost of maintaining inactive Army ammunition

plants. Second, we assessed the same issue as it relates to military bases

among all the services that were closed during the 1988 and 1991 base

realignment and closure (BRAC) process.

Background In accordance with the Defense Planning Guidance, the Army bases its

ammunition requirements on projected training, testing, and war reserve

requirements for two major regional contingencies. However, this

requirement is subject to review as (1) DOD rethinks its requirements to

respond to the two major concurrent regional conflicts, (2) war-fighting

strategies and weapons technology reduce current ammunition

requirements, and (3) DOD seeks to fund weapon modernization costs

through infrastructure cost reductions.

In 1993, the Army’s Industrial Operations Command (IOC), the Army’s

single manager for conventional ammunition, restructured its ammunition

industrial base to include 9 active and 10 inactive plants. (See fig. 1.) Of

the 10 inactive plants, 6 would be used to replenish ammunition

inventories after two major regional conflicts and 4 have unique

capabilities that, according to the Army, make them potentially important

for future production needs. The Kansas, Louisiana, Mississippi,

Riverbank, Scranton, and Sunflower ammunition plants are the six plants

that would be used to replenish ammunition. The Mississippi plant is to

produce the replenishment requirement for 16 percent of the shell metal

parts and 78 percent of the grenade metal parts and provide 40 percent of

the load, assemble, and pack capability. The Badger, Indiana, Longhorn,

and Volunteer ammunition plants are the four plants that have unique

capabilities.

Page 1 GAO/NSIAD-97-56 Military Bases
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Figure 1: Active and Inactive Army Ammunition Plants

Scranton, AAP

Iowa, AAP

Badger, AAP

Indiana, AAP

Crane, AAA

Riverbank

AAP

Radford, AAP

Holston, AAP

Active

Inactive

Volunteer, AAP

Milan, AAP

Mississippi, AAP

Pine Bluff, ARS

Louisiana, AAP

Longhorn, AAP

Lone Star, AAP

McAlester, AAP

Lake City, AAP

Sunflower, AAP

Kansas, AAP

After bases are closed, a disposal process is initiated. The property is first

offered to other federal agencies, then to state and local agencies, and then

to the public. Some property has remained in DOD’s possession for many

years while the communities have sought ways to use it. Meanwhile, DOD is

responsible for the expense of protecting and maintaining these bases.

Maintenance is conducted under a contract with a private entity or a

cooperative agreement between base and community authorities. Our

review of bases closed as a result of the BRAC process was restricted to the

1988 and 1991 rounds because sufficient time has not passed for the others

in subsequent rounds to take effect.

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Results in Brief The annual cost of maintaining the Army’s inactive ammunition plants,

which totaled about $118 million since 1990, has decreased over the years.

This decrease is the result of various initiatives, including downsizing

projects, reduced maintenance requirements, more rigorous contract

negotiations with operating contractors, and the Armament Retooling and

Manufacturing Support (ARMS) Act of 1992. The ARMS program provides

financial incentives to ammunition plant contractors to reuse idle

capacities by attracting commercial tenants to the facility. The contractors

act as landlords with authority to lease buildings and equipment to

commercial producers, and the revenue generated is used to offset the

ammunition plants’ maintenance costs. It should be noted that, while the

ARMS initiative has offset some of the Army’s maintenance costs,

maintaining ammunition plants in inactive status still represents a

significant cost to the federal government.

While some initial investments will likely be necessary, the Army could

further decrease its infrastructure costs by disposing of unneeded

property. The Kansas, Louisiana, and Sunflower plants—three of the six

inactive plants retained for replenishment purposes—contain 37,000 acres

of unneeded land, facilities, and infrastructure that could be declared

excess. None of the four inactive plants retained for their unique

capabilities—Badger, Indiana, Longhorn, and Volunteer—are needed

because alternative sources exist, such as other active ammunition plants

or the private sector, to provide the capabilities these plants provide.

The overall cost to maintain bases closed in the 1988 and 1991 rounds was

approximately $290 million through fiscal year 1996. No trends in costs are

discernable because most bases have been closed only a few years and

because costs at individual bases vary widely, given their different sizes,

varying infrastructure, and diverse locations. Maintenance costs are higher

than they need to be because DOD does not tie maintenance levels to the

amount of time it takes to transfer bases to the community. The services

seldom reduce the maintenance levels, even when progress toward reuse

is slow. Continuing maintenance at initial levels keeps maintenance costs

high and reduces the savings from base closure.

Contractors at inactive ammunition plants and closed bases we visited

were satisfying the terms outlined in their maintenance contract. The

Federal Property Management Regulation allows for some deterioration of

buildings and equipment that are not considered critical to reactivation.

During our visits, we observed peeling paint and disassembled production

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lines at several ammunition plants; however, these conditions were within

contract maintenance requirements.

We are recommending that DOD dispose of all unneeded property at

inactive Army ammunition plants. We are also recommending that DOD

establish incentives for communities to speed up the transfer of closed

bases and, after the initial maintenance period has elapsed, DOD should

establish criteria for a phased drawdown of maintenance until minimum

levels are reached.

Maintenance Costs at

Inactive Ammunition

Plants Have

Decreased

As shown in table 1, costs to the Army to maintain the 10 inactive

ammunition plants have decreased from $21.8 million in fiscal year 1995 to

$15 million in 1996. These costs do not include the cost of ARMS or other

costs. As of May 31, 1996, $57.5 million had been obligated for ARMS

projects.

Table 1: Maintenance Costs of Inactive

Ammunition Plants Dollars in millions

Ammunition plant FY1994 FY1995 FY1996

Badger $5.3 $5.6 $3.9

Indiana 2.0 0.5 0

Kansas 0.1 0.2 0

Longhorn 0 0.4 0.7

Louisiana 0.5 1.6 0.7

Mississippi 4.3 3.4 3.0

Riverbank 3.1 3.3 1.5

Scranton a 0 0.2

Sunflower a 3.1 2.2

Volunteer 3.7 3.7 2.8

Total $19.0 $21.8 $15.0

aPlants were still in an active status.

Reasons for Cost Decrease In 1993, IOC began identifying and implementing downsizing projects that

reduced ammunition plant maintenance requirements and costs.

Downsizing projects included decontaminating and selling excess

equipment, removing sensitive items, documenting excess real property,

deactivating utilities, removing asbestos, consolidating activities, and

closing buildings. These measures reduce the cost to maintain these

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plants. For example, removing sensitive items reduces security costs,

while deactivation reduces operation and maintenance costs. Further,

excessing personal property reduces fire protection requirements and

property management costs.

IOC officials also state that they have reduced inactive plants’ maintenance

costs by streamlining maintenance requirements and more rigorously

negotiating contracts. IOC has started concentrating its maintenance

requirements on facilities that are critical to production requirements,

while reducing requirements at facilities that are less critical. For example,

IOC used to maintain all of the Indiana plant. IOC had estimated that the

maintenance cost for Indiana from 1993 to 1997 would be $53.5 million. In

1993, IOC determined that only the black powder capability was required to

be maintained for its unique capability and subsequently put 8,976 of the

9,790 total acres in modified caretaker status. This action contributed to

reducing maintenance costs by an estimated $47.5 million from 1993 to

1997. In another case, IOC did not renew a contract when the contractor’s

proposal for the scope of work was four times higher than IOC’s estimates.

IOC has increased the number of technical staff who evaluate and annually

renegotiate the maintenance contracts. As a result, IOC has been able to

reduce costs by negotiating reductions in the number of contractor

personnel. On the basis of their technical expertise, IOC staff determine the

maintenance required to keep each plant in a state of readiness and the

minimum number of personnel needed. For example, at the Indiana plant,

32 positions were eliminated in 1994.

The ARMS initiative has contributed to a reduction in maintenance costs at

inactive plants. Under that initiative, the Army authorizes the ammunition

plant contractor under a facility use contract to lease buildings and

equipment to commercial tenants. The terms and payments of these

third-party leases remain between the facility use contractor and the

tenant, simplifying the Army’s involvement. In return for this authority, the

facility use contractor reduces or offsets its charges to the Army for

maintenance at that plant.

There are facility use contracts in effect at nine of the inactive plants. At

all of these plants, the ARMS initiative has produced revenue used to offset

all or part of the maintenance costs. Revenue generated through leasing

activities at both Indiana and Kansas has helped to offset the cost of

maintenance; contractors at both of these plants provide the required

maintenance at no cost to the Army. Maintenance costs at the Mississippi,

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Riverbank, Sunflower, and Volunteer plants have been substantially

reduced, and IOC projects that within the next few years, these plants will

also be free of maintenance costs. For example, at Mississippi, leasing

activities have helped reduce maintenance costs from $4.3 million in fiscal

year 1994 to the current $3 million in fiscal year 1996. According to IOC

officials and the facility use contractor, the cost to IOC to protect and

maintain Mississippi should be zero by 1999. As leasing activity continues,

IOC will likely realize further cost reductions at the other inactive

ammunition plants. An IOC official explained that because of the funding

delays, the full impact of the ARMS initiative was not realized until 1996.

Cost of ARMS Initiative In 1992, under the ARMS initiative, the Congress appropriated $200 million

to encourage commercial use of ammunition plants, for the purpose of

reducing costs, creating private sector jobs, and retaining critical skills. IOC

has obligated $57.5 million in ARMS initiative funding at the inactive plants.

To date, $21.6 million has been spent on various projects, including

development of strategic plans, marketing, plant and tenant modifications,

and a variety of feasibility studies for reuse of existing production

equipment. For example, $15 million has been obligated and $3.4 million

spent to help generate interest in commercial leasing activity at the

Mississippi plant. Table 2 shows the total amount of ARMS funds obligated

at the inactive plants and the amount of funds actually spent on ARMS

projects.

Table 2: Amount Obligated and Total

Disbursements of ARMS Funds as of

May 31, 1996

Ammunition plant Obligated amount Total disbursements

Badger $364,000 $364,000

Indiana 21,011,000 12,725,000

Kansas 722,000 544,000

Longhorn 916,000 916,000

Louisiana 401,000 32,000

Mississippi 15,818,000 3,428,000

Riverbank 6,963,000 1,374,000

Scranton 559,000 559,000

Sunflower 513,000 511,000

Volunteer 10,254,000 1,135,000

Total $57,521,000 $21,588,000

IOC received $10 million in initial ARMS funding in the third-quarter of 1993

but did not receive any additional funds until the first-quarter of fiscal

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year 1995. At that time, the Army released an additional $40 million,

followed by $50 million in the fourth-quarter of the same year. In the

fourth-quarter of fiscal year 1995, the Army reprogrammed $100 million of

the $200 million ARMS appropriation to fund other Army programs.

In addition to the ARMS initiative, there are costs of downsizing and

modernization that are part of retaining inactive plants. For example,

downsizing projects at the inactive plants have cost the Army a total of

$56.2 million since 1990. In the last decade, over $52 million has been

appropriated for modernization projects at the Badger plant. The plant has

not been reactivated and the upgraded or new facilities have never been

used.

Opportunities to

Reduce Infrastructure

Costs Even Further

Retention costs of inactive plants could be eliminated if the Army

determines that these plants are unneeded and declares them excess.

Currently, the Army retains plants or large portions of plants that are in

excess of its mission requirements. The Federal Property Management

Regulation requires agencies to conduct annual reviews of real property to

ensure prompt identification and release of unneeded or underutilized

property. Additionally, each agency is to maintain the minimum inventory

necessary to conduct its mission.

Excess Replenishment

Property That Could Be

Eliminated at Three Plants

In 1996, IOC prepared an economic analysis of the 10 inactive plants. This

analysis shows that six of these plants might be needed to meet inventory

replenishment requirements following two concurrent major regional

conflicts. However, this requirement is subject to review as (1) DOD

rethinks its requirements to respond to the two major concurrent regional

conflicts, (2) war-fighting strategies and weapons technology reduce

current ammunition requirements, and (3) DOD seeks to fund weapon

modernization costs through infrastructure cost reductions.

Even if the Army retains all six replenishment plants, only a portion of the

property and infrastructure at the Kansas, Louisiana, and Sunflower plants

is needed to meet replenishment requirements. Table 3 shows that there

are over 37,000 acres of property in excess of what is needed for

replenishment requirements at these plants.

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Table 3: Acreage in Excess of IOC’s

Replenishment Requirement

Ammunition plant Total acres

Acres retained for

replenishment Excess

Kansas 13,727 121 13,606

Louisiana 14,974 90 14,884

Mississippi 4,377 4,377 0

Riverbank 168 168 0

Scranton 15.3 15.3 0

Sunflower 9,500 400 9,100

IOC officials state that they are unable to excess most of this property,

given the environmental contamination and the prohibitive cost of

remediation. Nevertheless, in July 1996, the Army Materiel Command, IOC’s

parent command, tasked IOC to review its requirements for real property

and to document any excess property. The Army Materiel Command

recommended that preliminary reports of excess property be submitted

without the extensive environmental documentation that normally

accompanies the report. According to IOC officials, they are in the process

of reviewing all of their property holdings. Further, an internal memo

states that the Army should no longer retain title to plants unless it has a

bona fide production requirement. Recent amendments to the

Comprehensive Environmental Response, Compensation, and Liability Act

could ease the transfer of contaminated property.

Four Plants That Could Be

Eliminated

IOC officials state that the Badger, Indiana, Longhorn, and Volunteer plants

are retained for their unique production capabilities that could be vital for

future needs. However, according to Department of Army guidance, these

plants must be economical to retain. IOC contends that the alternative

sources it has identified for the items produced at these plants have

experienced production delays and that the risks of not being able to

obtain these items justify the cost of maintaining these plants. Table 4 lists

the four plants’ unique capabilities and the alternative sources available.

Table 4: Alternative Production

Sources for Items Produced at Inactive

Plants Retained for Unique

Capabilities

Plant Item

Alternate sources

currently identified

Badger Propellent

Ball propellent

Radford Ammunition Plant

Olin-St. Marks

Indiana Black powder Goex, Inc.

Longhorn HMX (MUSALL) Holston Ammunition Plant

Volunteer Trinitrotoluene (TNT) Radford Ammunition Plant

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The Badger and Volunteer plants are retained to back up Radford, an

active plant. IOC retains these plants because Radford has experienced

production delays due to explosions. However, after the last explosion in

1985 impaired Radford’s ability to manufacture an item that could be

produced at Badger, IOC did not reactivate Badger; instead, it used a

commercial supplier. According to an IOC official, reactivating Badger

would have been administratively difficult and too expensive. In addition,

IOC justifies retaining the Indiana plant on the basis of its being the only

government source of black powder. However, IOC purchases black

powder from a commercial supplier to meet its requirements.

In June 1996, IOC declared Longhorn excess to its mission, when the

operating contractor’s proposal to maintain the facility was higher than

IOC’s estimates. According to an IOC official, on the basis of the economic

analysis, excessing the Longhorn plant was the most cost-effective option.

Nevertheless, the Army has yet to formally excess Longhorn or initiate the

disposal process.

Even if the Army believes that the unique capabilities justify the cost of

retaining these plants, only a small portion of the facilities at the Indiana

and Badger plants is needed to meet those requirements. The map in 

figure 2 shows the small portion of the Indiana plant that is retained for

the black powder capability. A similar situation exists at the Badger plant.

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Figure 2: Indiana Army Ammunition Plant

Powder Preparation

Area

Propellent 

Charge

Lines Igniter

Lines

Igloo Area

River Ridge

Housing

Ohio River

Propellent & Explosives Area

Propellent Charge Lines

Black Powder Manufacturing

Plant

Source: U.S. Army.

Maintenance Costs

Differ at Bases Closed

Under the BRAC

Process

Maintenance costs at each base vary depending on its size, infrastructure,

location, and the extent and conditions of leases. Maintenance costs at the

35 bases in our review ranged from $13,000 to $9 million in 

fiscal year 1996. (App. II shows maintenance costs at these bases.) For

example, maintaining Moffet Field Naval Air Station (which was originally

1,577 acres, of which 1,440 acres were transferred to the National

Aeronautics and Space Administration) cost $13,000. At the other extreme,

DOD spent $9 million at Loring Air Force Base. The high cost of

maintenance at Loring Air Force Base relates to its size (8,700 acres),

infrastructure (over 3 million square feet of facilities), and location (the

most northernly portion of Maine, where the winter is harsh).

There is no set formula for establishing maintenance levels at each base.

For example, not all housing has heat and air-conditioning provided—only

those units identified with reuse potential are maintained. The services are

supposed to collaborate with the community to determine what

maintenance levels will be performed. In cases where communities are not

actively involved in reuse, the services will establish maintenance levels

on their own. The level of activities is related to the community’s intended

Page 10 GAO/NSIAD-97-56 Military Bases
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reuse, the amount and type of infrastructures, the base’s size, and climatic

conditions.

The cost of maintaining bases is also affected by leasing. Leasing is

encouraged by the services, because it reduces the level of funding they

must provide to closed installations but still preserves federal assets.

Leasing is also valued by communities, as it can both provide a source of

revenue and stimulate redevelopment on the base. Leases may be for rent

or maintenance services. In general, leasing decreases the services’

maintenance costs, because either tenants’ rental payments offset the

services’ costs or tenants provide these services in lieu of rent.

Although the first round of base closure decisions occurred in 1988, it is

too early to determine trends in maintenance costs. Because these bases

did not close immediately after they were identified for closure, not

enough data are available for identifying cost trends. For example, George

Air Force Base closed in December 1992, 4 years after it was identified in

the BRAC 1988 round. Further complicating the analysis, closures often

occurred midyear and the associated maintenance costs reflect only that

period. Those costs cannot be compared with a full year of maintenance

cost to determine if costs are increasing or decreasing. Additionally,

one-time costs associated with the closure, such as purchasing

maintenance uniforms and computers or the movement of personnel, may

or may not be included in the first year’s costs and thus make comparisons

with the second year’s cost data difficult.

Maintenance Levels Are

Not Tied to Amount of

Time It Takes to Transfer a

Base to Community

As a benefit to the community, the services usually continue maintaining

closed bases at initial levels until the property is conveyed. In most cases,

it takes several years—sometimes 6 or more—before final agreements are

reached with the community to convey the property. The length of time

that the services are required to maintain these properties at initial levels

varies depending on the closure round. Levels of initial maintenance for

bases closed in the 1988 round could be reduced by late 1995; maintenance

levels at bases closed in the 1991 round could be reduced as of mid-1996.1

Once the period for the initial levels of maintenance elapses, the services

are to reduce the levels of maintenance consistent with federal

government standards for surplus property. However, if requested by the

communities, these initial levels can be extended by the service

secretaries.

1

Subsequently, in the 1993 and 1995 rounds, the time frame for reducing the initial maintenance levels

was shortened to 1 year after operational closure or 180 days after the record of disposal was

approved by the service secretary.

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Service officials told us that, in general, maintenance levels have not been

reduced from their initial levels, even where progress toward reuse has

been slow. They noted that the communities strongly advocate

maintaining existing levels of maintenance and that the Congress and the

President have supported efforts to assist communities experiencing base

closures. Further, the services’ maintenance manuals recognize that the

public and the Congress expect facilities to be maintained to support

reuse.

While we understand that there is a need to provide maintenance, there

are indications the cost of doing this may be higher than necessary. For

example, service and Office of the Secretary of Defense officials note that,

while they are committed to supporting communities’ reuse of the

property, maintenance costs are not declining and may extend beyond the

6-year BRAC time frame for closures. To contain these costs the services

are considering ways to tie maintenance funding to each community’s

redevelopment progress. For example, the services are developing criteria

to assess community redevelopment efforts. Recently, when the Air Force

was negotiating provisions for the extension of the cooperative agreement

for maintenance at Loring, the Office of the Secretary of Defense

suggested that the Air Force negotiate some performance criteria (e.g.,

leases signed, jobs created, areas occupied, or increases in state or local

expenditures on the reuse implementation effort) to assess the

community’s efforts to develop the property.

Navy officials stated that they have an obligation to maintain BRAC

property at initial levels for some period of time. However, to address the

ongoing costs of providing maintenance, the Navy plans to implement a

policy to control maintenance costs at BRAC bases by tying levels of

maintenance to the communities’ redevelopment plans and establishing

clear limits on the level and amount of funding that will be provided to

those bases that are not in active reuse. The Navy policy would decrease

the amount of funding available over the 6-year period in which closures

must take place. By the 6th year, if the property was not in active reuse,

the Navy would turn off utilities, abandon unoccupied facilities, and

provide only minimal security to prevent trespassing.

This policy would give the Navy some leverage at sites where the

community has expressed interest in the property, but progress toward

reuse appears minimal. For example, the Navy has been negotiating the

disposal of Hunters Point Annex with the city of San Francisco, but

agreeing on the terms of transfer has been difficult. The Navy has entered

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into many small-business leases at the base, but the leases generate only

about $1 million in revenue, compared with the $3 million the Navy now

spends on providing caretaker services at the site. An established Navy

policy of reduction in services could provide some incentive to settle the

terms of transfer.

Contractor

Maintenance Is

Adequate

Ammunition Plants Inactive plants are maintained by the contractors who formerly operated

them; IOC retains the operating contractors for their technical expertise

and to ensure that critical skills are preserved. IOC determines what

maintenance tasks are required at each facility to ensure that the plant can

meet its production commitment in the required time frames. These tasks

are contained in the scope of work or maintenance plan.

At the plants we visited, contractors were satisfactorily performing the

maintenance tasks called for in the scope of work established by IOC.

Civilian Army personnel were ensuring that the tasks were completed

properly. During site visits, we compared activities in the scope of work

with the physical conditions at the plant. We verified by comparing

requirements with maintenance records that contractors were meeting

their contract commitments. According to IOC officials, they monitor the

contractors to ensure they fulfill their contractual obligations and, if

problems are identified, processes exist to ensure they are corrected.

The Army contracts only for a level of maintenance necessary to allow a

plant to reactivate and meet production levels within a required time

frame. This does not require keeping plants in a higher operating

condition. For example, we inspected the Mississippi plant, randomly

selecting buildings and equipment, and saw some deterioration. We

observed peeling paint and disassembled production lines. Figure 3 shows

disassembled equipment at the Mississippi plant. Contractor and Army

personnel explained that (1) the paint was peeling off of galvanized steel

and would not impair production capabilities and (2) production

equipment is disassembled and left at its original location to facilitate

reassembly, prevent the potential loss of components, and eliminate the

cost of storage. The conditions we saw at Mississippi were not unique; we

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found similar conditions at other plants. Army and contractor personnel

explained that these were common occurrences and were appropriately

addressed given the scope of work requirements.

Figure 3: Disassembled Equipment at

Mississippi Plant

Closed Bases The bases we selected for site inspection were maintained according to

contracts or agreements with DOD. We visited six BRAC bases and compared

the maintenance levels with the physical conditions at all six bases. We

randomly selected buildings and toured the premises, finding that the

majority of the buildings and grounds were being maintained according to

the levels set forth in the cooperative agreement or maintenance contract.

Additionally, civilian military and service personnel were in most cases

ensuring that the tasks were completed. Most community officials were

likewise satisfied with the bases’ conditions. Figures 4 and 5 show the

condition of the bases we visited.

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Figure 4: Housing, Loring Air Force

Base

Figure 5: Housing, Fort Sheridan

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At each selected base, we inspected the premises for evidence of

deterioration. In the majority of cases, the buildings were weather tight

and secure. However, in one instance, we found substantial deterioration.

At Brooklyn Naval Station, buildings were vandalized and looted. (See 

fig. 6.) External and internal plumbing, stoves and refrigerators, and

essentially anything that was removable were taken. Naval personnel

explained that the vandalism occurred between 1991 and 1994, when the

Navy essentially provided no maintenance other than heat and electricity.

According to the Commanding Officer, the Navy abandoned Brooklyn to

minimize its expenses. However, a full-time security force now patrols the

base 7 days a week, 24 hours a day.

Figure 6: Naval Hospital, Brooklyn

Naval Station

Recommendations We recommend that the Secretary of the Army begin the disposal

determination process for (1) all excess real property not needed for

replenishment requirements at the Kansas, Louisiana, and Sunflower Army

ammunition plants and (2) all inactive plants retained only for their unique

capabilities when those capabilities can be adequately provided by other

sources. An integral part of this process will be identifying the costs

involved in accomplishing the disposal of unneeded properties.

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We also recommend that the service secretaries establish incentives for

communities to speed up the transfer of closed bases. Specifically, after

the initial maintenance period has elapsed, which varies by BRAC rounds,

the services should establish criteria for a phased drawdown of

maintenance until minimum maintenance levels are reached.

Scope and

Methodology

Our review included the 10 inactive army ammunition plants and the 35

bases closed in the 1988 and 1991 BRAC rounds that had maintenance

contracts or cooperative agreements in place.2

 We selected the 1988 and

1991 rounds because cost information was available. Cost information for

the 1993 or 1995 rounds is generally not available, since operational

closure in the majority of cases has not yet occurred. We performed work

at the Pentagon, Army Material Command, Industrial Operations

Command, Air Force Base Conversion Agency, and the Naval Facilities

Engineering Command. We interviewed DOD officials, operating

contractors, local reuse authorities, and tenants. We obtained and

reviewed information provided by the services and visited the following

selected sample of installations: Badger Army Ammunition Plant,

Wisconsin; Indiana Army Ammunition Plant, Indiana; Mississippi Army

Ammunition Plant, Mississippi; and Volunteer Army Ammunition Plant,

Tennessee; Brooklyn Naval Shipyard, New York; Fort Sheridan, Illinois;

Hunters Point Annex, California; Jefferson Proving Ground, Indiana;

Loring Air Force Base, Maine; and Williams Air Force Base, Arizona. We

chose these bases because they were located across the continental

United States and in both urban and rural areas and were generally among

the most costly.

To calculate the cost to maintain all 35 military installations in our sample,

we collected and analyzed historical cost information. In the sample

selected for site visits, we also reviewed contracts or cooperative

agreements for maintenance and contractor cost data. The scope of our

work did not include an in-depth review of the cost of the ARMS program.

We did not review or test the reliability of DOD’s reported cost information

discussed in this report as part of this assignment. However, DOD has

acknowledged, and our financial statement audit work has consistently

confirmed, significant problems with the comprehensiveness and accuracy

of DOD’s reported cost information. We present this cost information

because it was the only relevant data readily available and because it was

2

Forty-two major bases in total were closed during the 1988 and 1991 closure rounds. However, only 35

bases had either cooperative agreements or maintenance contracts in place.

Page 17 GAO/NSIAD-97-56 Military Bases
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not practical within the constraints of this review for us to identify and

accumulate more reliable cost information from other sources.

Consequently, the DOD-reported cost information presented in this report

should be considered as an order of magnitude estimate of actual costs. As

such, actual costs may be significantly greater or less than DOD’s reported

costs.

To determine if inactive facilities are still needed, we reviewed the

Defense Planning Guidance, which is used to established requirements for

facilities. We reviewed documents to identify facilities or portions of

facilities needed to satisfy the requirements. We interviewed agency

officials to confirm the requirements. We reviewed the Federal Property

and Administrative Services Act of 1949, as amended, and the Federal

Property Management Regulation to determine what should be done with

facilities that are no longer needed.

To determine the adequacy of contractor maintenance, we reviewed

maintenance contracts or agreements and compared maintenance

procedures with requirements. For the ammunition plants, we reviewed

the procedures followed by IOC and contractor personnel for assessing the

maintenance required to ensure the plants could be remobilized and meet

production in the required time frames. We did not test to determine

whether the levels of maintenance contained in the scope of work would

allow a plant to meet remobilization time frames. We did randomly inspect

facilities to ensure that maintenance procedures were followed and

completed as stipulated in the contract or cooperative agreement. In

addition, we interviewed Administrative Contracting Officers, Contracting

Officer Representatives, and site managers to assess services’

performance in ensuring that contract requirements are met. We

performed our review in accordance with generally accepted government

auditing standards between April and November 1996.

Agency Comments In commenting on a draft of this report, DOD partially concurred with the

report, partially concurred with the first recommendation, and concurred

with the second recommendation. DOD said that the Army is currently

assessing the ammunition industrial base and the assessment is to be

completed and submitted to the Congress by June 1997. Therefore, at this

time, DOD only agreed with the disposal of Longhorn Army Ammunition

Plant and said that it would address the other plants in its June report to

the Congress. DOD’s comments are provided in appendix I.

Page 18 GAO/NSIAD-97-56 Military Bases
B-272660 

We are sending copies of this report to the Secretaries of Defense, the

Army, the Navy, and the Air Force; the Director, Office of Management and

Budget; and other interested parties. We will also make copies available to

others upon request.

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

concerning this report. Major contributors to this report are listed in

appendix III.

David R. Warren, Director

Defense Management Issues

Page 19 GAO/NSIAD-97-56 Military Bases
Contents

Letter 1

Appendix I 

Comments From the

Department of

Defense

22

Appendix II 

Protection and

Maintenance Costs at

Closed Bases

25

Appendix III 

Major Contributors to

This Report

27

Appendix IV 

Related GAO Products

28

Tables Table 1: Maintenance Costs of Inactive Ammunition Plants 4

Table 2: Amount Obligated and Total Disbursements of ARMS

Funds as of May 31, 1996

6

Table 3: Acreage in Excess of IOC’s Replenishment Requirement 8

Table 4: Alternative Production Sources for Items Produced at

Inactive Plants Retained for Unique Capabilities

8

Figures Figure 1: Active and Inactive Army Ammunition Plants 2

Figure 2: Indiana Army Ammunition Plant 10

Figure 3: Disassembled Equipment at Mississippi Plant 14

Figure 4: Housing, Loring Air Force Base 15

Figure 5: Housing, Fort Sheridan 15

Figure 6: Naval Hospital, Brooklyn Naval Station 16

Page 20 GAO/NSIAD-97-56 Military Bases
Contents

Abbreviations

ARMS Armament Retooling and Manufacturing Support

BRAC base realignment and closure

DOD Department of Defense

IOC Industrial Operations Command

Page 21 GAO/NSIAD-97-56 Military Bases
Appendix I 

Comments From the Department of Defense

Page 22 GAO/NSIAD-97-56 Military Bases
Appendix I 

Comments From the Department of Defense

Now p. 16.

Now on p. 17.

Page 23 GAO/NSIAD-97-56 Military Bases
Appendix I 

Comments From the Department of Defense

Page 24 GAO/NSIAD-97-56 Military Bases
Appendix II 

Protection and Maintenance Costs at Closed

Bases

Dollars in millions

Closure date FY 1994 FY 1995 FY 1996 Total

Army Installation

Army Material Technology Laboratory, Mass. 9/95 a a $1.702 $1.702

Fort Sheridan, Ill. 5/93 $2.965 $3.912 3.045 9.922

Fort Wingate, N.Mex. 1/93 0.639 0.222 0.334 1.195

Hamilton Army Airfield, Calif. 10/93 b 0.929 0.414 1.343

Jefferson Proving Ground, Ind. 9/95 0.054 0.910 0.333 1.297

Woodbridge Research Facility, Va. 9/94 a 0.400 0.232 0.632

Total Army $3.658 $6.373 $6.060 $16.091

Navy Installation

Brooklyn Naval Station, N.Y. 7/93 b $1.717 $1.429 $3.146

Davisville Naval Construction Battalion Center, R.I. 4/94 b 0.757 0.712 1.469

Hunters Point Annex, Calif. 4/94 $0.809 4.059 3.456 8.324

Long Beach Naval Hospital, Calif. 3/94 b 0.332 0.229 0.561

Long Beach Naval Station, Calif. 10/94 b 0.485 1.116 1.601

Moffett Field Naval Air Station, Calif. 7/94 b 0.026 0.013 0.039

Philadelphia Naval Hospital, Pa. 9/93 b 1.598 0.373 1.971

Philadelphia Naval Station, Pa. 1/96 b 0.436 5.381 5.817

Puget Sound Naval Station (Sand Point), Wash. 9/95 b 1.229 1.892 3.121

Warminster Naval Air Warfare Center, Pa. 3/97 b a 0.098 0.098

Total Navy $0.809 $10.639 $14.701 $26.149

Air Force Installation

Carswell Air Force Base, Tex. 9/93 $7.540 $4.117 $4.354 $16.011

Castle Air Force Base, Calif. 9/95 0.300 4.060 4.468 8.828

Chanute Air Force Base, Ill. 9/93 8.162 5.845 2.399 16.406

Eaker Air Force Base, Alaska 12/92 3.521 4.205 2.267 9.993

England Air Force Base, La. 12/92 4.156 8.009 0.854 13.019

George Air Force Base, Calif. 12/92 4.919 4.716 1.813 11.448

Grissom Air Force Base, Ind. 9/94 5.285 3.268 1.640 10.193

Loring Air Force Base, Maine 9/94 9.054 7.091 9.063 25.208

Lowry Air Force Base, Colo. 9/94 7.686 6.128 2.665 16.479

Mather Air Force Base, Calif. 9/93 11.559 6.888 4.864 23.311

Myrtle Beach Air Force Base, S.C. 3/93 2.725 3.139 2.715 8.579

Norton Air Force Base, Calif. 3/94 8.530 5.486 3.810 17.826

Pease Air Force Base, N.H. 3/91 8.350 7.581 1.246 17.177

Richards-Gebaur Air Reserve Station, Mich. 9/94 2.113 2.085 0.858 5.056

(continued)

Page 25 GAO/NSIAD-97-56 Military Bases
Appendix II 

Protection and Maintenance Costs at Closed

Bases

Dollars in millions

Closure date FY 1994 FY 1995 FY 1996 Total

Air Force Installation

Rickenbacker Air Guard Base, Ohio 9/94 $1.732 $3.539 $4.082 $9.353

Williams Air Force Base, Ariz. 9/93 5.102 4.615 3.354 13.071

Wurtsmith Air Force Base, Mich. 6/93 11.440 9.619 5.237 26.296

Total Air Force $102.174 $90.391 $55.689 $248.254

Total DOD $106.641 $107.403 $76.450 $290.494

Notes:

1. The table excludes environmental remediation costs.

2. Figures at Army installations exclude onetime costs funded by the base closure and

realignment process.

3. The table excludes Chase Naval Station and Salton Sea Test Base because the Navy did not

provide figures due to minimal costs at these bases.

aNot applicable because the services indicated that costs were not incurred.

bData were not provided by the services.

Source: Army, Navy, Air Force

Page 26 GAO/NSIAD-97-56 Military Bases
Appendix III 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

James F. Wiggins

John J. Klotz

Dallas Field Office Patricia J. Nichol

San Francisco Field

Office

Gary W. Ulrich

Leo G. Acosta

Julie M Hirshen

Jonathan Silverman

Page 27 GAO/NSIAD-97-56 Military Bases
Appendix IV 

Related GAO Products

Military Bases: Update on the Status of Bases Closed in 1988, 1991, and

1993 (GAO/NSIAD-96-149, Aug. 6, 1996).

Military Bases: Closure and Realignment Savings Are Significant, but Not

Easily Quantified (GAO/NSIAD-96-67, Apr. 8, 1996).

Closing Maintenance Depots: Savings, Workload, and Redistribution

Issues (GAO/NSIAD 96-29, Mar. 4, 1996).

Military Bases: Case Studies on Selected Bases Closed in 1988 and 1991

(GAO//NSIAD-95-139, Aug. 15, 1995).

Military Bases: Challenges in Identifying and Implementing Closure

Recommendations (GAO/T-NSIAD-95-107, Feb. 23, 1995).

Military Bases: Environmental Impact at Closing Installations

(GAO/NSIAD-95-70, Feb. 23, 1995).

Military Bases: Reuse Plans for Selected Bases Closed in 1988 and 1991

(GAO/NSIAD-95-3, Nov. 4, 1994).

(709191) Page 28 GAO/NSIAD-97-56 Military Bases
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