Defense Infrastructure: Actions Needed to Strengthen Utility Resilience Planning
Published: 2016-11-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: DOD installations rely on utilities, such as electricity, to accomplish their missions and disruptions can hamper military operations. Senate Report 114-49 included a provision for GAO to report on DOD-owned utility disruptions. This report (1) describes the number, causes and impacts of utility disruptions caused by the failure of DOD-owned utility infrastructure for fiscal years 2009 through 2015; (2) assesses the extent to which owners and managers of DOD-owned systems have access to utility disruption information; and (3) assesses the extent to which the implementation of a standardized facility condition assessment process provides DOD consistent information about its utility systems.
GAO surveyed a representative group of 453 DOD-owned electric, water, wastewater, and natural gas utility systems, evaluated DOD policies and reports, interviewed officials, and conducted interviews with several survey respondents who experienced the most disruptions.
section_title: What GAO Found
paragraphs: Based on GAO's survey of Department of Defense (DOD) owned utility systems, there were 4,393 instances of utility disruptions caused by equipment failure for fiscal years 2009 through 2015 and the results of our survey and interviews with DOD installation officials indicated that these disruptions have caused a range of financial and operational impacts. Survey respondents identified several factors that contributed to equipment failures that led to disruptions, such as equipment operating beyond its intended life; poor equipment condition; and equipment not being properly maintained. Survey respondents reported over $29 million in financial impacts for fiscal years 2009 through 2015. Installation officials reported experiencing operational impacts such as a week-long shut down of operations at an Army facility on Joint Base McGuire-Dix-Lakehurst, New Jersey.
Information about utility disruptions is not consistently available to DOD utility owners and managers at the installation level. Specifically, 151 out of 364 survey respondents stated that they did not have information on utility disruptions for any fiscal year from 2009 through 2015. An overarching reason GAO found for disruption information not being available is that the services vary in the extent to which each has issued guidance to collect and retain utility disruption information at the installation level. The Army has some guidance to report utility disruptions, but we found that some installations did not consistently have this information available. The Air Force and Marine Corps do not have current guidance directing the installations to track utility disruption information. The Navy issued new guidance in 2015 which, if implemented as directed, may improve the collection of utility disruption information. According to installation and headquarters officials, there are benefits to collecting utility disruption information since it can be used to identify repairs and to prioritize funding for those repairs. However, without guidance directing installations to collect information about all types of utility disruptions, service officials may not have the information needed to make informed decisions or to compete effectively for limited repair funds.
DOD's implementation of the Sustainment Management System (SMS), a software tool to conduct standardized condition assessments, may not provide it with comparable and reliable facility condition index (FCI) data -- a metric used to make strategic investment decisions. In 2013, to improve the reliability of FCI data, DOD directed the services to use SMS which standardizes the way the services conduct condition assessments and calculate the FCI. According to officials, the SMS module for utility systems is still in development, but modules for other facilities, such as buildings, are complete and in use. While the SMS process is intended to provide DOD with credible FCI data, GAO found the process could result in differences in the FCI because the services are able to customize settings, called condition standards, within the process. Variation among the condition standards could result in facilities having differences in the FCI although the assessed physical conditions of the facilities are the same. As a result, the FCI data would not be comparable. Without taking steps to ensure that the services' condition standards for the utilities module, which is under development, will provide the department with comparable and reliable FCI data, the SMS utilities module may not provide DOD information that is comparable across the department.
section_title: What GAO Recommends
paragraphs: To improve utility system information, GAO is recommending that the Army, Air Force, and Marine Corps take steps or provide guidance to consistently collect disruption information, and that while the SMS utilities module is under development, DOD take steps to ensure that the services apply condition standards consistently. DOD concurred with the recommendations to collect disruption data and partially concurred with the other recommendation stating that it would determine if further consistent condition standards are needed.

section_title: Letter
paragraphs: Department of Defense (DOD) installations serve as platforms from which  the department employs forces across the full spectrum of military  operations. These installations rely on the use of utilities, such as  electricity and water, to accomplish their missions. For example, reliable  electric and water utility services are critical to the launch missions at  Cape Canaveral Air Force Station, Florida. Without electricity to power  key communication and radar functions and water to absorb the excess  heat and noise generated during rocket launches, a launch mission would  have to be cancelled. Risks to the reliable provision of utility services on  DOD installations can come from a variety of sources, such as extreme  weather, mechanical failures, and even cyberattacks. For example, in  2015 we found that Vandenberg Air Force Base had experienced  electrical disruptions in 2010 and 2013 due to failures from on-base  equipment, resulting in delayed satellite launches.
In 2015 we also found that disruptions caused by the failure of DOD- owned utility infrastructure, such as the disruption described above, may  have played a larger role in disruptions experienced by DOD installations  than had been indicated by DOD’s annual reporting on disruptions. We  found that because DOD had not specifically identified and logged  instances of disruptions caused by the failure of DOD-owned utility  infrastructure, the department did not have comprehensive information  about utility disruptions. Given the possibility that disruptions result in  serious operational impacts, decision makers need reliable information to  ensure that resources are available to take necessary steps at  installations and across the department to increase resilience.  Furthermore, according to a DOD official, an ongoing DOD study found  that the reliability of energy utility infrastructure on an installation is an  important factor to consider when determining the cost-effectiveness of  energy resilience strategies to enhance mission assurance.
According to DOD’s real property inventory from fiscal year 2014, DOD  manages nearly 562,000 facilities with a combined plant replacement  value that the department estimates at about $880 billion. This includes  more than 181,000-utility facilities with a plant replacement value of more  than $158 billion. According to DOD, all facilities, to include utility  infrastructure, are to be sustained and recapitalized, as necessary, to  ensure that they are in the right condition to support the department’s  missions. However, according to DOD, the department has been  accepting significant risk in its recent budgets for facilities, to include  utility infrastructure. For example, in April 2016, the Acting Assistant  Secretary of Defense for Energy, Installations, and Environment testified  that DOD has been accepting significant risk in its budgets for maintaining  facilities because its fiscal year 2017 budget request was 10 percent less  from the previous year and the department and has seen worsening  condition ratings for its facilities.
Senate Report 114-49 accompanying S. 1376, a bill for the National  Defense Authorization Act for Fiscal Year 2016, included a provision for  us to review information on utility disruptions on DOD installations due to  the failure of DOD-owned infrastructure, among other things. This report  (1) describes the number, causes and impacts of utility disruptions  caused by the failure of DOD-owned utility infrastructure for fiscal years  2009 through 2015; (2) assesses the extent to which owners and  managers of DOD-owned utility systems have access to information  about disruptions caused by equipment failures; and (3) assesses the  extent to which the department’s implementation of a standardized facility  condition assessment process provides it with consistent information  about the condition of utility systems.
To determine the number of disruptions of DOD-owned utility systems  that occurred between fiscal years 2009 through 2015, their causes, and  the impact of the disruptions, we conducted a survey of a stratified  random sample of 453 DOD electric, water, wastewater, and natural gas  utility systems that were owned by the active component of one of the  four military services and located on a U.S. or overseas installation with a  plant replacement value of $100 million or more. Our survey included  questions about the disruptions caused by equipment failure, the impacts  of those disruptions, and the characteristics of the DOD-owned utility  systems, among other things. To inform the design of our survey  instrument and help ensure the validity and reliability of our testimonial  survey evidence, we discussed the survey topics and appropriate  recipients with officials from the Office of the Secretary of Defense (OSD)  and the military services, developed the survey with GAO subject matter  analysts and technical survey experts, and conducted pretests with  officials who had work experience managing and operating DOD-owned  utility systems. Furthermore, the survey instrument was independently  reviewed by a survey design expert within GAO.
We based the analysis in this report on 364 completed surveys, which is  an 80 percent response rate. Generally, in this report, the results of this  survey are presented as statistical estimates about the population of  1,075 electric, water, wastewater, and natural gas utility systems  described in appendix I. In cases where we use these estimates, we  describe the results as estimates and we generally refer to the entire  population of “utility systems” or “utility managers.” Because some  questions did not apply to all respondents, some of the questions in our  survey were answered by an insufficient number of respondents to  reliably generate an estimate of the overall population. In these cases,  rather than presenting a population estimate, we report on the number of  respondents in our sample who answered that question. To obtain  additional information about the impact of utility disruptions caused by the  failure of DOD-owned utility infrastructure, we conducted follow-up  interviews with selected respondents who reported the most disruptions.  We asked respondents to describe the impacts of specific disruptions and  we also collected and reviewed documentation, such as records in  maintenance information systems and project proposals.
To assess the extent to which owners and managers of DOD-owned  utility systems have information about disruptions caused by equipment  failures, we included a question in our survey regarding the availability of  information on disruptions for fiscal years 2009 through 2015 and a  question about the usefulness of disruption information in managing utility  systems. Based on the survey responses, we followed up with 143 survey  respondents who reported not having any information on disruptions for  any fiscal year, in order to confirm their responses and to determine the  reasons why information was not available. We also interviewed service  officials regarding policies and practices related to the collection and use  of utility disruption information. Finally, we compared installation practices  to standards regarding the identification, analysis and response to risks  as described in Standards for Internal Control in the Federal  Government. In addition, we reviewed reports from federal agencies  and utility management organizations, such as management guides  issued by the Environmental Protection Agency and the American Public  Power Association, which describe the information that is useful in the  management and operation of utility systems.
To assess the extent to which the department’s implementation of a  standardized facility condition assessment process provides DOD with  consistent information about the condition of utility systems, we reviewed  policy documents and reports describing the development and  implementation of a new standardized condition assessment process and  reviewed how DOD plans to use the condition information to monitor and  oversee the achievement of department-wide goals. Additionally, we  collected and reviewed documents such as briefings, training documents,  and a user guide that describe how the new standardized condition  assessment process will assess and rate the condition of utility systems  and related infrastructure. We also conducted interviews with DOD and  service officials regarding the development of the standardized process  and how the department intends to use the information to inform  decisions. Finally, we compared DOD’s process for generating the  condition information with standards regarding the use and management  of data as described in Standards for Internal Control in the Federal  Government. For more information about the scope and methodology,  please see appendix I.
We conducted this performance audit from July 2015 to November 2016,  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.
subsections: section_title: Background
subsections: section_title: Utility Infrastructure Owned by DOD
paragraphs: A DOD-owned electric, water, wastewater, or natural gas system is  composed of multiple components — the equipment, fixtures, pipes,  wires, and other structures used in the generation and distribution of  electric power, the supply of natural gas, the treatment and distribution of  potable water, or the collection and treatment of wastewater. According to  our review of records maintained by the Office of the Assistant Secretary  of Defense for Energy, Installations, and Environment, as of January 1,  2015, the military services own or have been operating and maintaining  as many as 1,954 electric, potable water, wastewater, and natural gas  utility systems located in the United States, in its territories, or overseas  (see table 1). From these 1,954 systems, we determined that 1,075 of  these electric, water, wastewater and natural gas utility systems were  owned by the active component of one of the four military services and  located on an installation with a plant replacement value of $100 million or  more.
In addition, the records maintained by the Office of the Assistant  Secretary of Defense for Energy, Installations, and Environment indicate  that DOD has privatized 570 electric, water, wastewater and natural gas  utility systems. According to DOD, since 1997 the department has been  attempting to privatize its utility systems because military installations  have been unable to maintain reliable utility systems due to inadequate  funding and competing installation management priorities. DOD officials  stated that privatization is the preferred method for modernizing and  recapitalizing utility systems and services by allowing military installations  to benefit from private-sector financing and efficiencies. We previously  reported that with private-sector financing, installations obtain major  upgrades to their utility systems and pay for these improvements over  time through the utility services contracts using operation and  maintenance funds. Furthermore, in 2005, that while utility privatization  may have provided for quicker system improvements than otherwise  might have been available, the services’ economic analyses of the costs  of privatization gave an unrealistic sense of savings.
section_title: Real Property Condition Metric: The Facility Condition Index
paragraphs: To promote efficient and economical use of America’s real property  assets and ensure management accountability for implementing federal  real property management reforms, the President on February 4, 2004,  signed Executive Order 13327, Federal Real Property Asset  Management. This executive order created the Federal Real Property  Council, established the role of the senior real property officer, and  authorized the creation of a centralized real property database. The  Federal Real Property Council worked with the General Services  Administration to develop and enhance an inventory system known as the  Federal Real Property Profile, which was designed to meet the executive  order’s requirement for a centralized database that includes all real  property under the control of executive branch agencies. The 2013  Federal Real Property Council guidance for real property inventory  reporting defines 25 real property data elements. One data element is the  facility condition index (FCI).
The FCI of real property under the control of executive branch agencies is  collected in the Federal Real Property Profile database. The FCI provides  a general measure of a building’s or structure’s condition at a specific  point in time, see figure 1.
Repair needs, as defined by the Federal Real Property Council, signify  the amount necessary to restore a building or structure to a condition  substantially equivalent to the original condition. Plant replacement value,  as defined by the Federal Real Property Council, signifies the cost of  replacing an existing building or structure so that it meets today’s  standards. The FCI is reported on a scale from 0 to 100 percent, in which  the higher the FCI, the better the condition of the building or structure.
According to a DOD official, the FCI is used to understand the health of  the department’s portfolio so that decision makers can be better informed  when making investment decisions. DOD guidance requires that each  service maintain a current inventory count and up-to-date information  regarding, among other things, the FCI of each facility in its inventory.  DOD calculates the FCI as defined by the Federal Real Property Council,  and records the FCI in its Real Property Assets Database. DOD grouped  FCI calculated ratings into four bands, ranging from good to failing  condition, to allow the services and defense agencies to group facilities  by condition for the purpose of developing investment strategies. The four  FCI categories are shown in table 2.
section_title: Real Property Management
paragraphs: Since 2003 we have issued several reports on federal real property  issues such as repair and maintenance backlogs, among other things.  For example, in October 2008 we reported that six real property holding  agencies, including DOD, respectively use different methods to define  and estimate their repair and maintenance backlogs. Further, we  reported that the backlog estimates do not necessarily reflect the costs  that agencies expect to incur to repair and maintain assets essential to  their missions or to avert risks to their missions. For example, the General  Services Administration identified $7 billion in repair needs for work to be  done from fiscal year 2007 and within the next 10 years on its facilities,  and DOD provided an FCI value for its facilities. We recommended that  the Office of Management and Budget, in conjunction with the Federal  Real Property Council and in consultation with the Federal Accounting  Standards Advisory Board, should explore the potential for developing a  uniform reporting requirement in the Federal Real Property Profile that  would capture the government’s fiscal exposure related to real property  repair and maintenance. We further recommended that such a reporting  requirement should include a standardized definition of repair and  maintenance costs related to all assets that agencies determine to be  important to their mission, and therefore capture the government’s fiscal  exposure related to its real property assets. The Office of Management  and Budget generally concurred with the report and agreed with our  recommendation. Our recommendation was implemented in 2011 when  the Federal Accounting Standards Advisory Board, as supported by the  Office of Management and Budget and in coordination with other federal  agencies, amended existing standards for financial reporting of deferred  repairs and maintenance to establish uniformity across reporting  agencies.
We also previously reviewed DOD’s efforts to manage its real property  inventory, including the need for continued management attention to  support installation facilities and operations, among other things. In 2011  we reported that within the DOD Support Infrastructure Management high  risk area, the management and planning for defense facilities  sustainment—maintenance and repair activities necessary to keep  facilities in good working order—no longer remained on the high risk list  because DOD had made significant progress in this area at that time.  Specifically, we found that DOD took steps to verify the accuracy of its  inventory of real property and to develop a facilities sustainment model  that provides a consistent and reasonable framework for preparing  estimates of DOD’s annual facility sustainment funding requirements. In  addition, since 2011 DOD has continued to take steps to improve its  ability to assess and record the condition of its infrastructure. One  improvement is the development of a standardized process for assessing  facility conditions. In 2016 we reported that individual services have  reported varying levels of progress in implementing this process. We  recommended that DOD revise its guidance to clarify how the services  are to indicate when a facility condition rating recorded in DOD’s Real  Property Assets Database is based on the standardized process. DOD  partially concurred with our recommendation and stated that the OSD  conducts periodic reviews of the service’s implementation of the  standardized process to ensure they are making progress.
section_title: Reported Disruptions of DOD-Owned Utility Systems Cause a Range of Financial and Operational Impacts
paragraphs: Respondents to our survey of DOD-owned utility systems identified 4,393  instances of utility disruptions caused by the failure of DOD-owned  equipment for fiscal years 2009 through 2015, and the results of our  survey and interviews with DOD installation officials indicated that these  disruptions have caused a range of financial and operational impacts.  Several factors contributed to the equipment failures that lead to  disruptions to DOD-owned utility systems, such as the utility equipment  operating beyond its intended life.
subsections: section_title: Reported Disruptions of DOD-Owned Utility Systems Caused by Equipment Failure
paragraphs: Of the 364 respondents to our survey, 143 reported a total of 4,393 utility  disruptions caused by equipment failure for fiscal years 2009 through  2015. Table 3 shows the number of survey respondents, respondents  reporting disruptions, and the total number of disruptions reported for  fiscal years 2009 through 2015, by service.
Of the 4,393 reported disruptions, the majority were on electric and water  utility systems. Specifically, 1,838 disruptions were on electric utility  systems and 1,942 were on water utility systems. In addition, 270  disruptions were on natural gas utility systems and 343 were on  wastewater systems. Figure 2 shows the number of reported disruptions  for fiscal years 2009 through 2015, by utility system type and by service.
section_title: Several Factors Contribute to Utility Disruptions
paragraphs: According to our survey results and interviews with installation officials,  several factors contribute to causing equipment failures that lead to  disruptions of DOD-owned utility systems. Survey respondents indicated  that some causes of equipment failures that led to utility disruptions  between fiscal years 2009 and 2015 included:  the equipment was used beyond its intended life;  the condition of the equipment was poor;  the equipment had not been properly maintained; or the equipment was handling service volumes beyond its intended  capacity.
According to installation officials, some utility systems are experiencing or  are at risk of experiencing disruptions because the equipment is operating  beyond its intended life. For example, an official from Naval Station Great  Lakes, Illinois, stated that the water system is more than 90 years old —  beyond its serviceable life which she estimates at about 50-60 years. The  increasing age of the system causes the system’s condition to deteriorate  and results in more unplanned disruptions. In another example, Air Force  officials from Joint Base Elmendorf-Richardson, Alaska, stated that the  majority of the installation’s water distribution pipes were originally  installed in the 1940’s and due to the age of these pipes there is an  increased risk for a significant disruption. However, officials stated that  they are currently not experiencing frequent or severe disruptions to the  water system due to equipment failure.
Based on our survey results, the majority of DOD-owned utility systems  are between 55 and 65 years old but have also completed a repair project  that replaced a significant part or parts of the system in the last 15 years.  Specifically, we estimate, based on information reported in our survey  responses, that approximately 25 percent of DOD-owned utility systems  were originally installed between 1941 and 1950 and approximately 24  percent between 1951 and 1960 (see figure 3).
To supplement the information about the age of the utility systems,  through our survey we also collected information on when a significant  part or parts of the system was repaired or replaced. Over time parts of  the utility systems are repaired and replaced through maintenance  activities because certain parts have a shorter serviceable life than  others. Describing the age of the system based on when the system was  originally installed does not capture the fact that parts have been replaced  over time and that certain components of a system may be newer than  other components. Based on our survey results, more than half of DOD- owned utility systems have had a significant part or parts of the systems  replaced in the last 15 years. Specifically, we estimate that approximately  16 percent of DOD-owned utility systems have most recently completed a  significant repair between 2001 and 2010, and 37 percent between 2011  and 2015 (see figure 4).
In addition, according to our survey results the poor condition of  equipment is a contributing factor leading to disruptions. For example,  officials from Naval Station Mayport, Florida, stated that some of the  disruptions they reported in the survey were caused by electrical  equipment that was in poor condition. Specifically, the officials reported  that the existing distribution system serving the installation’s on-base  housing is unreliable, not in compliance with code, poorly designed, and  past its expected useful lifespan of 50 years.
Furthermore, according to some installation officials we interviewed, the  utility systems experienced failures because the systems have not been  properly maintained. For example, officials from Joint Base Lewis- McChord, Washington, stated that some of the disruptions they reported  resulted from the lack of expertise to perform maintenance. Specifically,  these officials stated that a well failed in the summer of 2015 because  prior repairs to the well were performed improperly, in part because they  were performed by personnel without specialized training, and tools had  been mistakenly left inside the well. In other examples, officials told us  that they are aware of necessary repairs, however, they have been  unable to complete them due to lack of funding. According to responses  provided to our survey, we estimate that approximately 29, 32, and 35  percent of DOD-owned utility systems experienced funding shortfalls for  fiscal years 2013, 2014, and 2015 respectively.
To mitigate the funding shortfall, based on the survey responses we  estimate that approximately 33 percent of utility managers deferred entire  planned maintenance and repair projects and 41 percent deferred  portions of planned maintenance and repair projects. In an interview  with officials from Naval Station Bremerton, they stated that an electrical  substation has experienced several failures, disrupting electricity to  shipyard operations, because there are several condition deficiencies and  it is poorly configured (i.e., the substation has a mixture of different parts  and equipment that do not function efficiently together), making the  operation and maintenance of the substation challenging. Officials  reported that they have known about these issues with the substation for  years, but they have not submitted a project to update the system  because they believed it would not compete well for funding. Officials said  that a lack of available funding for the electric system has caused them to  delay a utility infrastructure project on this substation, a critical component  of the electric system. In another example, an official from Naval Station  Great Lakes, Illinois, stated that an assessment study of the water system  recommended a phased recapitalization of the system, however, these  repairs have been deferred due to lack of funding. In another example,  officials from Marine Corps Air Station Yuma stated that the installation’s  wastewater 50-year old infrastructure does not comply with current  standards and guidelines, but due to funding shortfalls repairs or  replacements have not been completed.
section_title: Reported Financial and Operational Impacts of Utility Disruptions
paragraphs: Based on our survey responses and follow-up interviews with installation  officials, disruptions of utility systems caused by the failure of DOD- owned equipment caused a range of financial and operational impacts.  Of the 143 respondents who reported experiencing one or more utility  disruptions, 100 reported information about financial impacts – the money  spent repairing the disruption and mitigating its effects. These  respondents reported experiencing a total of over $29 million in financial  impacts for fiscal years 2009 through 2015 (see table 4). Respondents  reported experiencing financial impacts that ranged from no financial  impacts, or zero, to those indicating as much as $7.5 million in impacts in  1 year. Table 4 shows the total financial impacts by survey respondents  for utility disruptions caused by equipment failure for fiscal years 2009  through 2015 by service and utility type.
In our follow-up interviews with survey respondents, some officials  explained that they were unable to estimate the financial impacts of  disruptions. For example, an official from MacDill Air Force Base, Florida,  stated that they did not report any financial impacts of disruptions  because it would have been too difficult and time consuming to manually  search through all of the records to identify the costs. In addition, officials  from Naval Station Bremerton explained that any estimate of the costs  associated with the fiscal impacts of the disruptions would be unreliable  because they could not definitively calculate the total costs of all of the  repair work performed for each disruption. However, they stated that the  Navy conducted an in-depth study of unplanned utility outages on the four  major Navy shipyards, in part to determine the causes of the outages and  the impacts of the outages on the Navy’s ship repair and maintenance  efforts. According to Navy officials, the study determined that the  unplanned outages were mostly caused by the equipment failure of Navy- owned utility equipment and that the outages had led to delays in repair  efforts and approximately $58 million in lost productivity.
In addition, based on our survey responses, disruptions caused by the  failure of DOD-owned equipment cause a range of operational impacts. In  our survey, we asked the respondents who reported one or more utility  disruptions to report how common various operational impacts were.  Based on their responses, in fiscal year 2015, we estimate that  approximately 39 percent of DOD-owned utility managers commonly or  very commonly experienced no operational impacts from disruptions,  approximately 51 percent commonly or very commonly experienced  minor operational impacts, and approximately 27 percent commonly or  very commonly experienced moderate operational impacts, such as  delays or reduced capability of some assets. Further, major operational  impacts were less common. Also in fiscal year 2015, we estimate that  approximately 9 percent of DOD-owned utility managers commonly or  very commonly experienced major operational impacts.
Our interviews with installation officials provided additional examples of  operational impacts of disruptions. For example, an official from Joint  Base McGuire-Dix-Lakehurst, New Jersey, provided an example of a  moderate operational impact. He stated that a power line exploded on the  Lakehurst annex and caused an electric disruption to a major Army  facility. The official explained that the power line that exploded was  installed in 1945 and was past its expected service life. Operations at the  Army facility were shut down for an entire week while staff arranged to  have several large generators installed at the facility. The facility ran on  generator power for the next 3 weeks while contracted repairs to the line  were completed. Figure 5 shows a burnt electrical feeder cable that  caused a major disruption to this Army facility.
Similarly, in another example the Naval Undersea Warfare Center located  in Keyport, Washington, officials stated that in 2013 a complete base  electrical disruption was caused when a battery failed at a switching  station and then led to cascading failures across the base. Officials stated  that operations at the Naval Undersea Warfare Center stopped because  there was minimal back-up electricity generating capability at the time.
In addition, the lack of preventive maintenance has led to disruptions.  Officials from Naval Auxiliary Landing Field San Clemente Island,  California, stated that the installation experienced an 8-hour island-wide  electrical disruption because seven utility poles caught fire in May 2014.  Officials were able to re-route power to some areas of the island, but  some areas were without power for the full 8 hours. The utility poles  caught fire because the insulator – a specific type of support used to  attach an electrical distribution line to the utility pole that prevents the  electricity from flowing to the pole itself – was corroded and covered with  salt, dust and debris. The salt and dirt formed a conductive layer on the  insulator that can create a “flashover” where the electricity flashes over  the corroded and polluted insulator and can lead to a fire on the utility  pole. Officials stated that these insulators can be washed to mitigate the  potential for such incidents. However, the system needs to be shut down  in order to perform the work, and, because of the installation’s continuous  training operation schedule, it is difficult to schedule this maintenance.
In another example, Navy officials from Naval Station Mayport, Florida,  stated that a series of electric disruptions in enlisted housing resulted in a  proposed $2.9 million project for improvements to the distribution system.  According to the project documentation from April 2015 we reviewed, the  poor condition of the infrastructure had caused 20 disruptions in the past  two years. Some of the disruptions affected the entire neighborhood, and  the disruptions lasted between 6 and 20 hours each.
Navy officials from Naval Support Facility Indian Head, Maryland, stated  that in 2012 the installation’s water system experienced a major rupture to  a segment of pipe that typically carries approximately 4,000 gallons per  minute. The rupture caused a drop in pressure that decreased the volume  of water going through the pipe to about 700 to 800 gallons per minute.  This disruption caused a temporary shut-down in mission activities  because the drop in water pressure impacted the fire suppression  capabilities. The officials stated that they ultimately replaced 5 of their 60  miles of water pipe due to this incident which cost approximately $2.0  million. Figure 6 shows a water pipe rupture at Naval Support Facility,  Indian Head, Maryland.
In situations with smaller leaks in the water pipes, it may be more difficult  to find the problem. Figure 7 below demonstrates an example of repair  work associated with a leak or break in a water pipe at Naval Station  Great Lakes, Illinois. Officials explained that the trench is not typically this  large, but the leak could not be found initially. The maintenance workers  had to dig the trench where the water was initially seen to be coming out  of the ground and had to continue expanding the trench until the leak was  found.
section_title: Owners and Managers of DOD- Owned Utility Systems Do Not Have Consistently Available Information about Utility Disruptions
paragraphs: Based on our analysis of survey responses and our follow-up interviews,  we determined that information on utility disruptions is not consistently  available to owners and managers of utilities at the installation level.  According to our survey responses, 151 out of 364 survey respondents  reported that they did not have information on utility disruptions for any  fiscal year from 2009 through 2015. By contrast, 213 out of 364 survey  respondents stated that they had information on disruptions for at least  one fiscal year, and the availability of information on disruptions increased  for the more recent years.
We followed up with the respondents who reported not having information  on disruptions to confirm their responses and to determine why such  information was not available. We confirmed that 53 respondents did not  have information, 52 stated that they did have information, several of  whom said that they misread the question and their answer should have  been that they had information but experienced no disruptions, and 38 did  not respond to our follow-up. In addition, we did not follow up with 8  respondents, 6 of whom said that they were unfamiliar with the system or  whom did not believe they had the information necessary to complete the  survey, and 2 of whom submitted survey responses after we began our  follow up efforts.
The 53 respondents who reported not having disruption information  provided various reasons why the information was not available. Some  reasons include that the maintenance of the system is provided by a  contractor and the contract does not require the collection and reporting  of the disruption information; that the maintainers of utilities do not always  indicate in the records they keep the cause of the outage, such as  disruptions caused by equipment failure, versus other causes, such as  storm damage; and that the maintenance history is not always available  due to personnel turnover. In addition, some respondents reported that  they might be able to determine the number of disruptions caused by  equipment failure, but that they would need to manually search through  the maintenance records which is a time-consuming task.
An overarching reason we found for disruption information not being  available is that the services vary in the extent to which each has issued  guidance to collect and retain utility disruption information at the  installation level. Specifically,
The Army has an annual requirement for utility managers to report a  wide range of information about utility systems through the Installation  Status Report process. This process requires utility managers to  report unplanned electric utility disruptions and interruptions to water  distribution infrastructure. Further, the process has requirements to  report instances of equipment failure for water treatment and  distribution equipment and wastewater treatment and collection  equipment. There is not a specific requirement to report disruptions of  natural gas systems, but there is a requirement to report on surveys  done to detect the presence of leaks in the distribution piping.  However, we found that some of the Army installations did not  consistently have information about disruptions.
The Air Force does not have a requirement for installations to collect  and retain utility disruption data. Air Force installation officials stated  that there used to be an instruction from a major Air Force command  that required the reporting of utility disruption information, but that this  instruction was superseded and the reporting requirement for utility  disruptions was not included in the new guidance.
The Marine Corps also does not have a requirement for installations  to collect and retain utility disruption data. A Marine Corps  headquarters official stated that he was considering developing such  guidance.
The Navy issued guidance in September 2015 to improve its ability to  collect timely and accurate information about utility disruptions that  occur on Navy installations by requiring the collection and reporting of  disruption data beginning in fiscal year 2016. According to the  guidance, the Navy needs accurate utility disruption data in order to  make informed decisions for utility investments because disruption  data is a key factor utilized in prioritizing utility repair projects, among  other things. In the guidance, the Navy included specific instructions  for how the utility disruption data were to be documented at the  installation level. Specifically, the guidance instructs the public works  departments or base operations and support contractors to track all  utility outages in the Navy’s maintenance work order information  system known as “MAXIMO”. For example, for unplanned utility  outages lasting greater than 5 minutes, the installation officials or  contracting staff are to enter information about the incident, response  and repair in a MAXIMO work order outage log. In addition,  installation officials or contracting staff are required to identify the  cause of the utility outage and to enter that numerical code into  MAXIMO (that is, 0 for false alarm, 1 for loss of commercial  power/utility, 2 for weather-related disruptions, 3 for equipment  failures, and so on). Furthermore, the guidance states that any new  base operating and support contracts should include a provision for  the contractors to report utility disruption information into MAXIMO  and to include instructions on how to report that information.
Standards for Internal Control in the Federal Government states that  management should identify, analyze, and respond to risks related to  achieving the defined objectives, and that analyzing and estimating the  significance of risks provides the basis for responding to the risks. In  addition, we reviewed reports from federal agencies and utility  management organizations that recommend that utility system managers  record and use information about the disruptions that occur on their  systems in order to manage their systems effectively. For example,  according to the American Public Power Association, reliability statistics  calculated by using data on disruption frequency and duration constitute a  quantitative basis for good decision making.
The collection and retention of utility disruption information is useful for  two reasons. First, installation-level officials stated that disruption  information is useful in operating and maintaining the utility system.  Based on the responses to our survey, we estimate that 82 percent of  utility managers considered this information to be somewhat or very  useful. In addition, installation officials we interviewed identified several  ways in which they used disruption information. For example, at Naval  Station Great Lakes, Illinois, an official stated that while she was not  aware of a policy requiring that she track disruptions to the utility systems,  she did track disruptions on the water system, including information on  the disruption’s location and date. She stated that she used the  information to focus on areas of the water system that were experiencing  multiple disruptions, to plan maintenance, and to inform funding  decisions. In addition, an official from Fort Campbell, Kentucky, stated  that he tracks outages because it is considered a good engineering  practice. He stated that tracking disruptions on the electric system helped  him to determine reliability, operations and maintenance budgets,  preventative maintenance requirements, and areas of the system that  needed more attention.
Second, utility disruption information may help installations compete for  project repair funding. According to Army, Navy, and Air Force officials,  they use disruption information, among other information, when  prioritizing funding for utility repairs in a particular budget year. For  example, the Air Force’s risk-based project funding model uses utility  outage information, among other variables, to prioritize projects. Also, as  discussed above, the Navy’s utility project prioritization process to make  risk-based investment decisions uses utility disruption information, among  other variables, to determine the highest priority projects. According to the  Navy’s guidance, the prioritization process helps them ensure that limited  repair funding is directed to the most important projects.
Installations that collect and retain information about utility disruptions  may be better able to manage and operate the utility system and compete  for scarce project funds because they have the available data to justify  the project. A Marine Corps official stated that he was considering  developing a requirement for installations to track utility disruption  information. In addition, as stated above, the Navy recently issued  guidance to improve its ability to track utility disruptions because it needs  this information to make informed decisions. The Navy’s guidance, if  implemented as directed, may help installations track utility disruption  information and thus enable them to make sound decisions. On the other  hand, installation-level utility system owners and managers who do not  have access to information about disruptions may not have the  information they need to make informed decisions or to compete  effectively for limited repair funds.
section_title: DOD Is Implementing a Standardized Condition Assessment Process to Improve Data Reliability, but It Could Result in Differences in the Facility Condition Index across the Services DOD Is Implementing a Standardized Condition Assessment Process to Improve Data Reliability
paragraphs: DOD is currently implementing a standardized condition assessment  process to improve the data reliability of its facility condition data. DOD’s  standardized assessment process for utility systems is currently in  development, and the initial version has limited capabilities to assess the  condition of the utility infrastructure. Further, the military services are  allowed to customize certain settings within the process which could  result in differences in the FCI across the services.
In 2013, the Office of the Secretary of Defense (OSD) directed the  services to implement a standardized condition assessment process in  order to improve data reliability, and specifically the credibility of the  FCI. Prior to 2013 the guidance issued by OSD did not require a  standardized condition assessment process, and the respective services  used different methodologies to assess the condition of their facilities,  including utility systems. As a result of the services’ nonstandardized  approach, OSD determined that the FCI data lacked credibility as a  measure of DOD facility quality.
According to the 2013 OSD memorandum, the department needed to  implement the standardized assessment process to ensure that it had  consistent and reliable condition data in order to make sound strategic  investment decisions. According to an OSD official, the department relies  on the FCI to make these decisions, in part, because the FCI allows OSD  to assess the department’s and the individual services’ abilities to  maintain the facilities at the condition necessary to achieve the  department’s missions. In addition, decision makers use the FCI to  monitor progress toward department-wide goals and to prevent further  accumulation of deferred maintenance. Those goals include the  establishment of an inventory-wide 80 percent minimum FCI score for  each military service to meet annually for the facilities they manage,  beginning in fiscal year 2016. Another goal is the identification of facilities  in failing condition, with an FCI of below 60, in support of the  department’s efforts to reduce the inventory of failing facilities.
Our survey results indicate that operators of DOD-owned utility systems  stated that knowledge about the condition of the infrastructure is useful.  Specifically based on our survey responses, we estimate that utility  managers consider knowledge about the condition of the system to have  a somewhat or very positive effect on the ability to avoid or prevent  equipment failure (68 percent); to manage risk associated with equipment  failure (72 percent); to identify funding needs (76 percent); and to extend  the utility system’s usable service life (71 percent), among other things.
The 2013 OSD memorandum directed the services to use the  Sustainment Management System (SMS) software, developed by the  U.S. Army Corps of Engineers, Construction Engineering Research  Laboratory, as the standardized condition assessment process. SMS is a  suite of web-based software modules designed to help facility engineers,  technicians, and managers make asset management decisions regarding  when, where, and how best to maintain facilities and their key  components. According to the 2013 OSD memorandum, the services are  required to use SMS both to derive and to record the FCIs of facilities  supported by SMS in their respective real property databases by  September 2017. For assets not yet supported by SMS, such as utilities,  the 2013 OSD memorandum directed the services to perform inspections  with qualified personnel to determine existing physical deficiencies and to  estimate the cost of maintenance and repairs using industry cost  guides. According to U .S. Army Corps of Engineers officials, they are  still in the process of developing modules that will respectively cover the  following utilities: water, sewer, storm sewer, electrical, gas, and thermal  systems.
subsections: section_title: Standardized Condition Assessment Process for Utility Infrastructure is under Development, and the Initial Version Has Limited Capabilities
paragraphs: According to officials from the U.S. Army Corps of Engineers, DOD’s  standardized process for assessing the condition of utility infrastructure is  currently under development, and the initial version has limited  capabilities to assess the condition of the utility infrastructure. U.S. Army  Corps of Engineers officials stated that the initial version of the SMS  module for electric and water utility systems has been under development  since 2014 and is scheduled to undergo initial testing in November 2016.  Further, according to U.S. Army Corps of Engineers officials, their  organization and the Air Force are the two organizations working on  development of the utilities SMS module, but representatives from the  other services have participated in the utilities SMS working committee  meetings. In addition, according to Air Force Officials, the Air Force has  provided funding to the U.S. Army Corps of Engineers to fund the  development of the initial version of the SMS utilities module for electric  and potable water utility systems. However, according to U.S. Army  Corps of Engineer officials, additional funding from the other services is  needed to further develop the capabilities of the electric and water  modules and to develop additional modules for other utility systems, such  as for wastewater or natural gas systems.
U.S. Army Corps of Engineers officials responsible for developing DOD’s  initial version of the utilities module stated that the initial version uses a  simplified condition assessment process. The simplified condition  assessment process uses two variables, age and expected service life, to  determine the condition of the utility infrastructure. Alternatively, in SMS  modules for other facilities, such as buildings, more comprehensive  assessment processes are used to determine the condition of the facility.  These comprehensive assessment processes provide objective and  repeatable inspections on various facility components based on  knowledge of component criticality, the expected and observed  deterioration of components, among other things. Upon completion of the  inspection any identified defects are recorded and categorized by distress  type (for example, blistered, broken, damaged, cracked, or corroded),  among other things.
According to U.S. Army Corps of Engineers officials, the rating criteria for  future versions of the SMS utilities module will be established with  consideration of existing rating systems from within DOD and industry.  For example, Navy officials told us that they provided funding to U.S.  Army Corps of Engineers in fiscal year 2015 to evaluate the integration of  Navy utility condition assessment rating methods into the SMS utilities  module. This study examines the Navy’s utility condition assessment and  risk-based rating methods for integration into the SMS condition  assessment process for utilities. According to Navy officials, as of May  2016, the service has not received the results of the U.S. Army Corps of  Engineer integration study. Navy officials indicated that they use  disruption information as one variable in their rating methodology.
As discussed previously in this report, installation officials and our survey  respondents have stated that disruption information is useful when  making decisions about the utility system. The Army, Navy, and Air Force  use disruption information as one variable in their frameworks for  prioritizing funding for utility projects. According to one installation official  at Altus Air Force Base, Oklahoma, the official would like to be able to  use the disruption information with the SMS module to support repair and  investment decisions. The installation officials stated that age may not  always be a good indicator of condition for a utility system, as a  component or part might be relatively new but causing disruptions  nonetheless. Furthermore, Navy installation officials from Naval Station  Mayport, Florida, told us that information about disruptions is especially  useful when much of the utility infrastructure is below ground and cannot  be easily observed.
section_title: Differences among Services’ Settings within the Standardized Condition Assessment Process Could Result in Differences in the Facility Condition Index
paragraphs: DOD’s standardized process allows the military services to customize  certain settings in the SMS system that affect repair need decisions,  which can result in differences in the FCI. The customizable settings are  called “condition standards,” and these are the standards at which the  service wishes to maintain the facility’s components or equipment. These  condition standards may vary depending upon how critical a particular  component is to the overall facility or mission and each service develops  their own condition standards. For example, U.S. Army Corps of  Engineers hypothetically explained that on the one hand the Navy may  want to set a high condition standard for a water system that is used to  supply water to cool nuclear reactors for its home-ported nuclear  submarines because this is a critical mission. On the other hand, the  Army may want to set a lower condition standard for its water system that  is used to supply water for grounds maintenance because this is a lower  priority.
These standards are compared to the current condition assessment of  the facility. Differences between the standards and the assessment  determine when repair work is needed for a particular piece of  infrastructure, and whether or not repair work is needed affects the FCI  calculation. If the inspected condition is above the condition standard then  the SMS system does not identify any repair work. If the inspected  condition falls below the condition standard then the SMS system  identifies the necessary repair work. SMS estimates the costs of the  identified repair work and then the system users determine if they want to  conduct the repairs. The SMS system uses the estimated cost of the  repair as the numerator in the FCI equation.
According to U.S. Army Corps of Engineers officials, the services have  not yet developed condition standards for their utilities because the SMS  module for utilities is still being developed. However, the services have  developed condition standards for use in other SMS modules and U.S.  Army Corps of Engineers officials stated that the design of the SMS  module for utilities will be similar to other existing SMS modules. Further,  the officials stated that the condition standards for the utilities module will  operate similarly to how the condition standards operate in existing SMS  modules. Therefore, to conduct our analysis we reviewed the condition  standards used by the services in an existing SMS module for buildings,  called “BUILDER”.
The services have grouped condition standards into categories, such as  high, medium, and low. According to U.S. Army Corps of Engineer  officials, condition standards in the high category would be assigned to  facilities that are mission-critical or generally more important to maintain.  For example, officials at Cape Canaveral Air Force Station, Florida, stated  that the installation’s electric and water systems are critical to supporting  the launch mission, however, the wastewater system is not as essential.  Specifically, the electric system powers equipment for communication and  radar tracking and the water system provides water to the launch pads to  absorb excess heat and noise generated during launches. If the utility  SMS module is implemented at Cape Canaveral, an Air Force official  indicated that they would likely assign high condition standards to the  electric and water systems and a lower condition standard to the  wastewater system.
We found that while the four services generally use similar categories of  condition standards – such as high, medium, and low – they respectively  assign different numerical values to standards within the same category.  For example, each service has a category called “medium,” but the  values range from 60 to 75 depending on the service. Figure 8 depicts the  service condition standards for the BUILDER SMS module.
To illustrate how different condition standards affect the FCI calculation,  we developed a notional example, as illustrated in table 5, showing an  electric distribution system. The example assumes that each  hypothetical organization owns and operates an electric distribution  system, A through D, and each system has exactly the same  infrastructure – overhead power lines, a transformer, and a switching  station — was installed at the same time, and has the exact same plant  replacement value ($500,000). Also, each part of the system has the  same assessed physical condition from SMS. However, each hypothetical  organization has different condition standards for this notional electric  distribution system. We used the “Medium/Intermediate” condition  standard found in figure 8 for this notional example. We created notional  maintenance and repair costs for cases when the assessed physical  condition from SMS was lower than the condition standard. As shown in  our example, the result of differences in the condition standards is that  the FCIs are different, even though the assessed physical condition is the  same. In this notional example, hypothetical organizations A, B, and D  appear to have repair needs, while hypothetical organization C does not  appear to have any repair needs. Table 5 illustrates how different  condition standards from four hypothetical organizations produce different  FCI values.
According to the 2013 OSD memorandum, the department requires  reliable condition information, in the form of the FCI, to manage the  department’s facilities and to make informed investment decisions. OSD  officials stated that the FCI is one of multiple sources of information that  can be used to support the department’s investment decisions concerning  a single asset or portfolio of assets. Further, according to Standards for  Internal Control in the Federal Government, to be useful, information  should be accurate, complete, and credible, among other factors.
However, DOD has not taken action to ensure that the condition  standards to be developed by the services for the utilities module will  provide the department with comparable and reliable FCI data. According  to DOD officials, the services should have the flexibility to set the  condition standards for their utility infrastructure and other facilities as  they deem appropriate based on mission criticality and other factors.  DOD officials stated that the services need to have the flexibility to  prioritize the condition of some utility systems and facilities above others  so that they can direct their limited repair and maintenance budgets to the  most important needs. We agree that some facilities may need to be put  in the high standard versus the low or medium standard based on mission  criticality, but it is unclear why the standards vary within the same  category (i.e., high, medium low). Further, according to the OSD 2013  memorandum, DOD is implementing a new standardized process to  assess the condition of its facilities because its previous guidance allowed  the services to implement an unstandardized approach to assessing the  condition of their facilities, which resulted in a FCI that lacked credibility.
OSD officials also stated that they had not compared the services’  existing condition standards and that they would consider looking into the  differences of these standards across the services. Without taking steps  to ensure that the services’ condition standards for the utilities module  and other modules will provide the department with comparable and  reliable FCI data, the SMS utilities module, currently under development,  may not provide DOD information that is comparable across the  department’s facilities. As a result, DOD may not be able to reliably  assess progress toward meeting department-wide goals and DOD may  continue to receive FCI data that lacks credibility as a measure of DOD  facility quality.
section_title: Conclusions
paragraphs: Disruptions to DOD-owned utility systems have caused financial impacts  and impacts to DOD operations and missions. Information about these  disruptions can help DOD operate and maintain the utility systems,  including identify these impacts and take steps to prevent or mitigate such  disruptions. However, utility disruption information is not consistently  available at the installation-level. We determined that some military  services had guidance in place that required installations to collect and  report some utility disruption data, and others did not. The Army has a  service-wide requirement to collect and report electric and water utility  disruption data, instances of equipment failure for water and wastewater  systems, and to perform leak detection surveys for natural gas systems.  However, we found that some of the Army installations did not  consistently have information about disruptions available. The Air Force  and Marine Corps do not have a service-wide requirement to collect and  report utility disruption data. The Navy issued new reporting guidance  beginning in fiscal year 2016 that if implemented as directed may provide  the Navy installations with the guidance and procedures necessary to  collect disruption information to make informed decisions for utility  investments. The majority of DOD-owned utility system owners and  managers consider this type of information to be beneficial, for example  some officials stated they use this information to determine where  resources need to be focused to maintain the utility infrastructure. As a  result, those who do not have such information may be at a disadvantage  when making maintenance decisions or competing effectively for limited  repair funds.
The current standardized process for assessing condition in the SMS  modules already developed allows the military services to customize  certain settings – called condition standards. The military services have  developed different thresholds for the various categories of condition  standards, which can result in different FCI ratings across the services for  facilities assessed in the same condition. OSD’s goal for implementing  the SMS assessment system is to have consistent, comparable and  reliable FCIs across its portfolio of assets to make informed management  decisions. Without taking steps to ensure that the services’ condition  standards for the utilities module will provide the department with  comparable and reliable FCI data, the SMS utilities module, currently  under development, may not provide DOD information that is comparable  across the department’s facilities. As a result, DOD may not be able to  reliably assess progress toward meeting department-wide goals. Further,  DOD risks continuing to receive FCI data that lacks credibility as a  measure of DOD facility quality.
section_title: Recommendations for Executive Action
paragraphs: To improve the information that DOD, military service officials, and  installation-level utility system owners and maintainers need to make  maintenance or other investment decisions, we recommend that the  Secretary of Defense take the following three actions:
Direct the Secretary of the Army to take steps to implement existing  guidance so that disruption information is consistently available at the  installation level;
Direct the Secretary of the Air Force to issue guidance to the  installations to require the collection and retention of disruption; and
Direct the Commandant of the Marine Corps to issue guidance to the  installations to require the collection and retention of disruption  information.
To provide DOD with more consistent information about the condition of  DOD-owned utility systems as DOD continues to develop the SMS  module for utility systems, we recommend that the Secretary of Defense  direct the Assistant Secretary of Defense for Energy, Installations, and  Environment, in coordination with the military services, take actions to  govern the consistent use of condition standards of utility systems to be  assessed using the SMS utilities module, and if applicable, for other  facilities assessed using other SMS modules.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to DOD for review and comment. In its  written comments, reproduced in appendix III, DOD concurred with our  first three recommendations that the Secretary of Defense direct the  Army, Air Force, and Marine Corps to take steps or provide guidance to  consistently collect disruption information. DOD partially concurred with  our fourth recommendation that the Secretary of Defense take steps to  implement the consistent use of condition standards for utility systems to  be assessed using the SMS utilities module. DOD stated it will continue to  work with the Military Departments to determine if further opportunities  exist to establish consistent condition standards within the SMS for utility  systems. We continue to believe, by taking such steps the department will  have assurances that the SMS utilities module will provide the  department with comparable and reliable FCI data, which decision  makers use to monitor progress towards department-wide goals and  prevent further accumulation of deferred maintenance.
We are providing copies to the appropriate congressional committees; the  Secretaries of Defense, the Army, the Navy, and the Air Force; the  Assistant Secretary of Defense for Energy, Installations, and  Environment; and the Commandant of the Marine Corps. In addition, the  report is available at no charge on the GAO website at  http://www.gao.gov.
If you or your staff have any questions about this report, please contact  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. GAO staff who made key contributions to this report  are listed in appendix IV.
section_title: Appendix I: Scope and Methodology
paragraphs: To determine the number of disruptions of DOD-owned utility systems  that occurred between fiscal years 2009 and 2015, their causes, and the  impact of the disruptions, we administered a survey to a representative  sample of 453 DOD-owned utility systems located in the United States  and overseas, producing results generalizable to the DOD-owned utility  population.
A copy of the full questionnaire and aggregate responses for all close- ended questions are included in appendix II. The practical difficulties of  conducting any survey may introduce errors, commonly referred to as  nonsampling errors. For example, difficulties in interpreting a particular  question or sources of information available to respondents can introduce  unwanted variability into the survey results. We took steps in developing  the questionnaire, collecting the data, and analyzing them to minimize  such nonsampling error (see below).
subsections: section_title: Sample Design and Survey Development and Administration
paragraphs: Using records maintained to manage and oversee DOD’s Utility  Privatization Program within the Office of the Secretary of Defense of  Energy, Installations, and Environment, we took several steps to identify  the utility systems included in our study population and our sample  design. Our scope included electric, water, wastewater, and natural gas  utility systems that were owned by the active component of one of the  four military services and located on a U.S. or overseas installation with a  plant replacement value of $100 million or more. Some utility systems,  mostly those located overseas, may not be owned by the military service  but the military service may be responsible for funding the operation and  maintenance of the system. When we refer to DOD-owned utility systems  in this report we are including both systems that are owned by one of the  military services and systems where the military service pays for the  majority of the operation and maintenance of the utility system.
To determine the electric, water, wastewater and natural gas systems  owned by DOD, we reviewed records maintained by the Installation  Energy Office under the Assistant Secretary of Defense for Energy,  Installations, and Environment and we identified 1,954 systems located  within and outside the United States. Next, we compared this list of utility  systems with the fiscal year 2015 Base Structure Report to determine  which systems resided on installations with a plant replacement value of  $100 or more and that were owned by the active component of one of the  military services. This resulted in a total of 1,075 systems — 770 systems  located in the United States and 305 systems located outside the United  States – that made up our study population (see table 6).
We drew a random stratified sample of 469 utility systems from the  population frame of 1,075 systems (see table 7). In order to be able to  make generalizable statements about each of the four types of utilities,  we did the following. First, we split the sample population into five strata;  the first four correspond to the four types of utilities located in the United  States. The fifth stratum comprises all utilities located on U.S. military  installations outside the United States. The reason we used a fifth stratum  for the systems outside of the United States was because the ownership  status of these systems was not clear from the records maintained by the  department. By separating these systems into their own strata we could  draw our sample in such a way that we would still be able to generalize  the survey results for the utility systems within the United States even if  all of the overseas systems were in fact not owned by one of the military  services nor did the services pay for the majority of the operation and  maintenance of the utility system. Furthermore, in order to verify that the  systems we included in our sample were within our scope, we included a  question in the survey which asked respondents to state if the system  was owned by the military service and if the service was responsible for  paying the majority of the operation and maintenance of the system, as  discussed below.
In each stratum we used systematic random selection to identify the  systems to include in the sample. Each armed service was represented in  the sample in proportion to the total number of each type of utility system  which they operate. In addition, the sample from each stratum received  an allocation large enough to support an estimate with a margin of error  no larger than plus or minus 10 percentage points at the 95 percent level  of confidence. This was then adjusted for an expected response rate of  70 percent. See table 7 for the original sample size adjusted for an  assumed 70 percent response rate.
To identify the survey respondents, we supplied a list of the sampled  utility systems to each of the military services, which reviewed the list and  identified the appropriate official at the installation to respond to our  survey. During this process, 16 of the systems were removed because,  for example the military service officials informed us that the system had  been privatized, or that the installation on which the survey was located  had been closed, among other things. We removed these 16 systems  from our original sample of 469 systems, which left 453 systems.
To inform the design of our survey instrument and help ensure the validity  and reliability of our results, we met with officials from OSD and the  military services and explained the intent and design of the survey to  ensure that, in general, the intended survey recipients would have the  knowledge and resources to respond to our survey. GAO analysts and  technical survey experts designed the survey and conducted four  pretests, one with each military service, with officials who had work  experience managing and operating DOD-owned utility systems at the  installation level to ensure that survey questions collected the expected  information and to obtain any suggestions for clarification. Furthermore,  the survey instrument was independently reviewed by a survey design  expert within GAO. Our survey included questions about the number of  disruptions that occurred on the installation for fiscal years 2009 through  2015 caused by equipment failure, the impacts of those disruptions, and  the characteristics of DOD-owned utility systems, among other things.
To distribute the survey, we sent an email to each respondent with a link  to the web-based version of the survey with a unique user name and a  password. To ensure the most possible responses, we kept the military  services informed of the completion status and we also kept the survey  open from December 18, 2015, through March 31, 2016. In total, we  distributed 453 surveys.
subsections: section_title: Analysis of Respondents
paragraphs: Out of the 453 surveys distributed, 379 managers or operators of DOD- owned utility systems completed the survey for a response rate of 84  percent. To verify that the completed surveys were within our scope, we  analyzed the results of a question in the survey which asked respondents  to state if the system was owned by the military service and if the service  was responsible for paying the majority of the operation and maintenance  of the system. We determined that 15 respondents reported that the utility  system was neither owned by the military service nor operated and  maintained using a majority of appropriated funds. We removed these 15  surveys from our list of completed surveys, which resulted in a list of 364  completed and in-scope surveys. The analysis in this report is based on  those 364 survey responses.
Because we followed a probability procedure based on random  selections, our sample is only one of a large number of samples that we  might have drawn. Since each sample could have provided different  estimates, we express our confidence in the precision of our particular  sample’s results as a 95 percent confidence interval. This is the interval  that would contain the actual population value for 95 percent of the  samples we could have drawn. Confidence intervals are provided along  with each sample estimate in the report. Generally in this report the  results of this survey are presented as statistical estimates about the  population of 1,075 electric, water, wastewater, or natural gas utility  systems described above. In cases where we are using these estimates,  we describe the results as estimates and generally refer to the entire  population of “utility systems” or “utility managers.” Because some  questions did not apply to all respondents, some of the questions in our  survey were answered by an insufficient number of respondents to  reliably generate an estimate of the overall population. In these cases,  rather than presenting a population estimate, we reported on the number  of respondents in our sample who answered that question.
To obtain additional information about the impact of utility disruptions  caused by the failure of DOD-owned utility infrastructure, we conducted  follow-up interviews with a selected set of respondents who reported the  most disruptions. We asked respondents to describe the impacts of  specific disruptions and we also collected and reviewed documentation,  such as records in maintenance information systems and project  proposals.
To assess the extent to which owners and managers of DOD-owned  utility systems have information about disruptions caused by equipment  failures, we included a question in our survey regarding the availability of  information on disruptions from fiscal year 2009 through 2015 and a  question about the usefulness of disruption information in managing utility  systems. Based on the survey responses, we followed-up with all 146  survey respondents who reported not having any information on  disruptions for any fiscal year to confirm their responses and to determine  the reasons why information was not available. We received responses  from 89 survey respondents. We also interviewed service officials  regarding policies and practices related to the collection and use of utility  disruption information. Finally, we compared installation practices to  standards regarding the identification, analysis, and response to risks as  described in Standards for Internal Control in the Federal Government.  In addition, we reviewed reports from federal agencies and utility  management organizations, such as management guides issued by the  Environmental Protection Agency and the American Public Power  Association, which describe the information that is useful in the  management and operation of utility systems.
To assess the extent to which the department’s implementation of a  standardized facility condition assessment process provides DOD  consistent information about the condition of utility systems, we reviewed  policy documents and reports regarding DOD’s efforts to improve the  reliability of the condition information it collects to manage its  infrastructure. We reviewed policies and documents describing the  development and implementation of a new standardized condition  assessment process, called the Sustainment Management System,  developed by the U.S. Army Corps of Engineers, and how DOD plans to  use the condition information to monitor and oversee the achievement of  department-wide goals. Additionally, we collected and reviewed  documents such as briefings, training documents, and user guides that  describe how the new standardized condition assessment process will  assess and rate the condition of utility systems and related infrastructure.  We also conducted interviews with DOD officials and the military services  regarding the development of the standardized process and how the  department intends to use the information to inform decisions. Finally, we  compared DOD’s process for generating the condition information with  standards regarding the use and management of data as described in  Standards for Internal Control in the Federal Government.
We conducted this performance audit from July 2015 to November 2016,  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.
section_title: Appendix II: Survey on DOD-Owned Utility Resilience
subsections: section_title: Survey Overview
paragraphs: The questions that we asked in our survey on DOD-owned utility systems  are shown below. Our survey was comprised of mostly close-ended  questions. In this appendix, we include all survey questions and  aggregate results of responses to the closed-ended questions; we do not  provide information on responses provided to the open-ended questions.  See appendix I for details of the analysis that led to the results reported  here.
subsections: section_title: Section 1: Respondent Characteristics
paragraphs: 1. What is your current role with the utility system? 2. How long have you been in this role?
Estimated average number  of months  95 percent confidence  interval – lower bound  (percentage)
95 percent confidence  interval – upper bound  (percentage)
3. How long have you worked with the utility system?
Estimated average number  of months  95 percent confidence  interval – lower bound  (percentage)
95 percent confidence  interval – upper bound  (percentage)
4.
Does your military service own the infrastructure of this utility system? (Check one.)
95 percent confidence  interval – lower bound  (percentage) a) Does your military service pay for the majority of the operation and maintenance of this utility system through appropriated sustainment, restoration and modernization (SRM) funding? (Check one.)
95 percent confidence  interval – lower bound  (percentage)
95 percent confidence  interval – upper  bound (percentage)
section_title: Section 2: DOD-Owned Utility System Characteristics
paragraphs: This section asks about some of the characteristics of this utility system.  Please answer only for utility infrastructure that is DOD-owned.  5. Does the utility system perform the following functions? (Check one per row.)
95 percent  confidence interval  – lower bound (percentage)
95 percent  confidence interval  – upper bound (percentage)
6. When was this utility system originally installed? (Check one.)
95 percent  confidence interval –  lower bound  (percentage)
7.  When was the most recent recapitalization project completed on this  utility system, which replaced a significant part or parts of the system?  (Check one.)
95 percent  confidence interval –  lower bound  (percentage)
95 percent  confidence interval –  upper bound  (percentage)
8.  Which of the following best describes the types of employees that  conduct maintenance on this utility system, as of September 30,  2015? (Check one.)
95 percent  confidence interval –  lower bound  (percentage)
95 percent  confidence interval –  upper bound  (percentage)
9.  How many full-time equivalent (FTE) government employees operate  and maintain this utility system, as of September 30, 2015? (Check  one.)
95 percent  confidence interval –  lower bound  (percentage)
95 percent  confidence interval –  upper bound  (percentage)
10. For fiscal year 2015, what was the size of this utility system in terms  of the amount of commodity delivered on a typical day? (Enter  number.)  11. How many people use this utility system during a typical weekday?  (Check one.)
95 percent  confidence interval –  lower bound  (percentage)
section_title: Section 3: DOD-Owned Utility System Condition Information
paragraphs: 12. In which fiscal year (FY) were the facility condition index ratings for  the infrastructure associated with this utility system last updated?  (Check one.)
95 percent  confidence interval –  lower bound  (percentage)
95 percent  confidence interval –  upper bound  (percentage)
13. How frequently is the facility condition index rating for the  infrastructure associated with this utility system updated? (Check  one.)
95 percent  confidence interval –  lower bound  (percentage)
95 percent  confidence interval –  upper bound  (percentage)
14. Did you use any of the following to update the facility condition index  rating for the infrastructure associated with this utility system? (Check  one per row.)
95 percent  confidence  interval – lower  bound  (percentage)
95 percent  confidence  interval – upper  bound  (percentage)
15. To what extent do the following represent challenges in updating the  facility condition index of the utility system? (Check one per row.)
95 percent  confidence  interval – lower  bound  (percentage)
95 percent  confidence  interval – upper  bound  (percentage)
Lack of time to  conduct an  assessment  Lack of trained  or qualified  personnel  Lack of the  necessary  equipment to  perform the  assessment  Infrastructure  is  underground  and difficult to  access  21.3  95 percent  confidence  interval – lower  bound  (percentage)
95 percent  confidence  interval – upper  bound  (percentage)
Conducting  the  assessment  requires that  the utility  system be  shut down  Conducting  the  assessment  may damage  the utility  infrastructure  Assessment  results do not  provide useful  information  5.2  95 percent  confidence  interval – lower  bound  (percentage)
95 percent  confidence  interval – upper  bound  (percentage)
16. Does information about the condition of the utility system positively or  negatively effect your ability to do the following? (Check one per row.)
Very or  somewhat  positive effect  Don’t know Very or  somewhat  negative effect  No Effect  Very or  somewhat  positive effect  Don’t know  7.3  95 percent  confidence  interval – lower  bound  (percentage)
95 percent  confidence  interval – upper  bound  (percentage)
17. How confident are you about the current reliability of this utility  system? (For the purposes of this survey, reliability is the ability of a  utility system to perform its functions under normal and extreme  operating conditions.) (Check one.)
95 percent  confidence interval –  lower bound  (percentage)
95 percent  confidence interval –  upper bound  (percentage)
18. Do the following issues negatively impact your confidence in the  current reliability of this utility system? (Check one per row.)
95 percent  confidence  interval – lower  bound  (percentage)
95 percent  confidence  interval – upper  bound  (percentage)  44.8  95 percent  confidence  interval – lower  bound  (percentage)
95 percent  confidence  interval – upper  bound  (percentage)
Poor condition  of the  infrastructure  Excessive  demand beyond  designed  system  capabilities  Age (the  system is  nearing or has  reached its  expected  serviceable life)
section_title: Section 4: DOD-Owned Utility System Funding Information
paragraphs: 19. How many major maintenance and repair projects (projects costing  more than $250,000) were completed on this utility system in the  following fiscal years? (Please only include those major maintenance  and repair projects that were planned projects, please do not include  unplanned projects.) (Check one per row.)
95 percent  confidence interval  – lower bound  (percentage)
20. From fiscal years 2013 to 2015, were there funding shortfalls for this  utility system?
95 percent  confidence interval  – lower bound  (percentage)
95 percent  confidence interval  – upper bound  (percentage)
21. From fiscal years 2013 to 2015, did the following factors contribute to  a shortfall of funding for this utility system?
95 percent  confidence  interval – lower  bound  (percentage)
95 percent  confidence  interval – upper  bound  (percentage)
Other funding  needs within the  service had a  higher priority  Other funding  needs on the  installation had a  higher priority  Increase in  unplanned  maintenance  needs  35.9  95 percent  confidence  interval – lower  bound  (percentage)
95 percent  confidence  interval – upper  bound  (percentage)
22. From fiscal years 2013 to 2015, did you take any of the following  actions to mitigate the shortfall?
95 percent  confidence  interval – lower  bound  (percentage)
95 percent  confidence  interval – upper  bound  (percentage)
Deferred  entire planned  maintenance  and repair  projects  Deferred  portions of  planned  maintenance  and repair  projects  18.4  95 percent  confidence  interval – lower  bound  (percentage)
95 percent  confidence  interval – upper  bound  (percentage)
Sought  opportunities  to obtain  alternative  funding  sources (i.e.,  3rd party  financed  projects) a.  If you deferred entire maintenance and repair projects due to  funding shortfalls then to what extent did this deferred  maintenance effect the reliability of this utility system?
95 percent  confidence interval –  lower bound  (percentage) b.  If you deferred portions of maintenance and repair projects due to  funding shortfalls then to what extent did this deferred  maintenance effect the reliability of this utility system?
95 percent  confidence interval –  lower bound  (percentage)
95 percent  confidence interval –  upper bound  (percentage)
section_title: Section 5: DOD-Owned Utility System Disruption Information
paragraphs: For the purposes of this survey, please report the following type of  disruptions on this utility system.
Include:
Disruptions in this utility system to users or to (a) mission-reliant  asset(s) lasting more than 5 minutes due to the failure of DOD-owned  equipment or the under-performance of utility infrastructure based on  operating environment standards  Do not include:
Disruptions of less than 5 minutes
The failure of a commercial or privatized electricity generation system
Natural events such as a storm, earthquake, fire, etc. that damage the  Intentional or planned disruptions  23. To what extent is information about utility disruptions due to  equipment failures useful in operating and maintaining the utility  system? (Check one.)
24. For which of the following fiscal years do you have information on the  disruptions cause by equipment failure on this utility system? (Check  one per row.)
95 percent  confidence interval  – lower bound  (percentage)
95 percent  confidence interval  – upper bound  (percentage)  32.8  95 percent  confidence interval  – lower bound  (percentage)
95 percent  confidence interval  – upper bound  (percentage) a.  In each fiscal year, how many disruptions did this utility system  experience?  (For zero disruptions, check “no disruptions”.)
Section completed (If there were no disruptions in this fiscal year,  skip the rest of the questions in this fiscal year and go to next  fiscal year)  b.  Approximately how many minutes was the utility service disrupted  for during each fiscal year?  c.  Approximately what were the fiscal impacts of the utility  disruptions reported for each fiscal year?  (Fiscal impact is the money spent repairing the disruption and  mitigating the effects. For example, the cost of the replacement  parts and the cost of the personnel needed to complete the repair  would be considered in the fiscal impact.)
Dollars_____________  d.  How common were the following operational impacts of the utility  disruptions reported in each fiscal year?  (Operational impacts are any impacts that the disruptions had on  the ability of the installation to operate and to accomplish its  mission.)
No Operational Impacts.
Very  uncommon or  uncommon  Very common  or common  Don’t know Very  uncommon or  uncommon  Very common  or common  Don’t know Very  uncommon or  uncommon  Very common  or common  Don’t know  Minor Operational Impacts, such as causing minimal delays.
Very  uncommon or  uncommon  Very common  or common  Don’t know Very  uncommon or  uncommon  Very common  or common  Don’t know Very  uncommon or  uncommon  Very common  or common  Don’t know Very  uncommon or  uncommon  Very common  or common  Don’t know  (Other)
25. How common are the following causes of disruptions on this utility  system? (Check one per row.)
Common or  very common  Don’t know  9.0  95 percent  confidence  interval – lower  bound  (percentage)
95 percent  confidence  interval – upper  bound  (percentage)
26. How likely would any of the following prevented some of the  disruptions on this utility system? (Check one per row.)
95 percent  confidence  interval – lower  bound  (percentage)
95 percent  confidence  interval – upper  bound  (percentage)
Improved  preventative  maintenance,  inspections  and repairs  10.5  95 percent  confidence  interval – lower  bound  (percentage)
95 percent  confidence  interval – upper  bound  (percentage)
section_title: Appendix III: Comments from the Department of Defense
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Laura Durland, Assistant  Director; Michael Armes; Carl Barden; Tracy Barnes; Jon Ludwigson;  Carolyn Cavanaugh; Randy De Leon; Steven Putansu; Amie Lesser;  Cheryl Weissman; Erik Wilkins-McKee; and Tonya Woodbury made key  contributions to this report.
Defense Facility Condition: Revised Guidance Needed to Improve  Oversight of Assessments and Ratings. GAO-16-662. Washington, D.C.:  June 23, 2016.
Facilities Modernization: DOD Guidance and Processes Reflect Leading  Practices for Capital Planning. GAO-15-489. Washington, D.C.: July 27,  2015.
Defense Infrastructure: Improvements in Reporting and Cybersecurity  Implementation Needed to Enhance Utility Resilience Planning.  GAO-15-749. Washington, D.C.: July 23, 2015.
High Risk Series: An Update. GAO-11-278. Washington, D.C.: February  2011.
Defense Infrastructure: DOD Needs to Periodically Review Support  Standards and Costs at Joint Bases and Better Inform Congress of  Facility Sustainment Funding Uses. GAO-09-336. Washington, D.C.:  March 30, 2009.
Federal Real Property: Government’s Fiscal Exposure from Repair and  Maintenance Backlogs Is Unclear. GAO-09-10. Washington, D.C.:  October 16, 2008.
Defense Infrastructure: Continued Management Attention Is Needed to  Support Installation Facilities and Operations. GAO-08-502. Washington,  D.C.: April 24, 2008.
Defense Infrastructure: Actions Taken to Improve the Management of  Utility Privatization, but Some Concerns Remain. GAO-06-914.  Washington, D.C.: September 5, 2006.
Defense Infrastructure: Issues Need to Be Addressed in Managing and  Funding Base Operations and Facilities Support. GAO-05-556.  Washington, D.C.: June 15, 2005.
Defense Infrastructure: Managing Issues Requiring Attention in Utility  Privatization. GAO-05-433. Washington, D.C.: May 12, 2005.
Defense Infrastructure: Changes in Funding Priorities and Strategic  Planning Needed to Improve the Condition of Military Facilities.  GAO-03-274. Washington, D.C.: February 19, 2003.