Defense Infrastructure: Issues Need to Be Addressed in Managing and Funding Base Operations and Facilities Support
Published: 2005-06-15T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Concerns have surfaced in Congress and various media regarding the adequacy of funding for base operations support (BOS) functions of military installations as well as the quality and level of support being provided. As requested, this report addresses (1) the historical funding trends for BOS as contrasted with funding for facilities sustainment, restoration and modernization (S/RM); (2) how effectively the Department of Defense (DOD) and the military services have been able to forecast BOS requirements and funding needs; and (3) how the Army's and Navy's reorganizations for managing installations have affected support services, and whether the Air Force and Marine Corps could benefit from similar reorganizations.
section_title: What GAO Found
paragraphs: Congress has designated increased funding for BOS programs in recent years, sometimes more than requested, but because those amounts were often less than the cost of BOS services provided at installations, hundreds of millions of dollars designated for S/RM and other purposes were redesignated by the military services to pay for BOS. As GAO has previously reported, such funding movements while permissible are disruptive to the orderly provision of services, contribute to the degradation of many installation facilities, and can adversely affect the quality of life and morale of military personnel. The problem appears to be greatest in the Army. Further, in fiscal year 2004, U.S. military installations faced additional pressures in managing available BOS and S/RM funding as the services redesignated varying amounts of these funds to help pay for the Global War on Terrorism. Similar problems are reportedly occurring in fiscal year 2005. While difficult to quantify, installation officials at the locations GAO visited voiced concerns about the potential for these conditions to adversely affect operations and readiness in the future. Moreover, such movements of funds add considerable uncertainty regarding actual BOS requirements and the extent of underfunding. The ability of DOD and its components to forecast BOS funding requirements has been hindered by the lack of a common terminology across the military services in defining BOS functions as well as the lack of a mature analytic process for developing credible and consistent requirements comparable to the model developed for facilities sustainment. The lack of common definitions among the services, particularly where one service resides as a tenant on an installation operated by another service, can lead to differing expectations for installation services, and it obscures a full understanding of the funding required for BOS services. Because the military services have often based future requirements estimates largely on prior expenditures, they do not necessarily know if BOS services were provided at appropriate levels. DOD and the military services have a strategic plan for installations and have multiple actions under way to address these problems, but they have not synchronized varying time frames for accomplishing related tasks. Until these problems are resolved, DOD will not have the management and oversight framework in place for identifying total BOS requirements, providing Congress with a clear basis for making funding decisions, and ensuring adequate delivery of services. While the Army's and Navy's creation of centralized installation management agencies can potentially create efficiencies and improve the management of the facilities through streamlining and consolidation, implementation of these plans has so far met with mixed results in quality and level of support provided to activities and installations. Until more experience yields perspective on their efforts to address the issues identified in this report, GAO is not in a position to determine whether the approach should be adopted by the other services.

section_title: Letter
paragraphs: The Department of Defense (DOD) manages nearly 517,000 buildings and  structures (replacement value of $650 billion) and over 46,000 square miles  of real estate at its bases and installations worldwide. At the same time,  DOD recognizes that it maintains infrastructure in excess of its needs, and  that it faces challenges in allocating sufficient funds to maintain this  infrastructure and supporting other base operating needs. We have  previously reported on the impact resulting from such underfunding,  including the deterioration of facilities, and its negative effects on the  quality of life for those living and working at the installations and on their  ability to accomplish their mission activities. More recently, you and  others have expressed concerns about the adequacy of funding for overall  base operations and whether funds were being moved to meet other  pressing needs, leaving shortfalls in base operating accounts.
Operation and maintenance (O&M) funding is the primary category of  funds used to keep military installations running and the facilities in good  working order. Within O&M funding, there are distinct functional areas,  including (1) base operations support (BOS)—a term used to describe a collection of day-to-day programs, activities, and services needed to keep  the bases and installations running; (2) facilities sustainment, restoration  and modernization (S/RM)—the recurring maintenance and repairs needed  to keep facilities in good working order and in up-to-date condition; and  (3) mission support—the goods and services needed to prepare for and  conduct combat and peacetime missions, including training and weapons  systems maintenance.
For fiscal year 2004 O&M activities, Congress appropriated about  $83.5 billion for active duty forces and about $14.3 billion for reserve and  national guard forces, excluding DOD-wide and miscellaneous O&M  activities. Within the O&M appropriations, conference report data show  that Congress designated $14 billion for BOS, $5.5 billion for facilities  sustainment, and $78.3 billion for mission and other support. These  designations were based on the sum of a set of defined program elements  or activity groups and subactivity groups supporting the appropriation bill’s  conference report, and are not binding unless they are incorporated  directly or by reference into an appropriation act or other statute. Thus,  DOD and its components have considerable flexibility in using O&M funds  and can redesignate funds among activity and subactivity groups in various  ways. Accordingly, it is important to note that amounts designated in the services’ accounting records for O&M functional areas, such as BOS,  do not perfectly coincide with these congressional designations.  For example, according to historical data provided by the military services,  fiscal year 2004 O&M funds designated for BOS services totaled  $15.6 billion, about $1.6 billion more than data supporting the conference  report showed as being designated for BOS at the beginning of the fiscal  year. Service officials attributed the variance to their accounting for the  BOS services provided at their respective installations—the number and  names of which are different and expanded from the BOS subactivity  groups used for the conference report—and to funding redesignations that  occur during the year. Accordingly, this report uses the congressional  designations as adjusted by the services’ accounting and redesignations of  O&M funds for BOS and S/RM to depict funding trends.
Until recently, the Office of the Secretary of Defense (OSD) and the military  services have, for the most part, carried out installation management  functions at the local level, where installation commanders have set  priorities and regularly moved funds among BOS, S/RM, and mission  support accounts to pay for services and programs at their respective  installations. Increasingly, however, some of military services are moving to  centralize the management of these activities, with the expectation that  such efforts would help mitigate previous problems of funds intended for  installation management being redesignated to other purposes.
This report addresses (1) the historical funding trends for BOS functions,  as contrasted with funding for S/RM; (2) how effectively DOD and the  military services have been able to forecast BOS requirements and funding  needs; and (3) how the Army’s and the Navy’s reorganizations for managing  installations have affected the quality and level of support provided to  individual activities and installations, and whether the Air Force and  Marine Corps would benefit from similar reorganizations.
To address these questions, we met with officials in DOD’s Office of  Installations and Environment and with Army, Air Force, Navy, and Marine  Corps headquarters officials and collected and analyzed historical funding  data. We obtained data on historic funding levels from fiscal years 2001  through 2004 from the military services based on their categorization of  BOS functions, but we concentrated our analysis principally on fiscal year  2004, the most recent year for which obligation data were available. To  ensure consistency in analyzing funding trends from one year to the next,  the historical data provided by the services and used in this report do not include congressional adjustments of a one-time nature or supplemental  appropriations for O&M that Congress provided during a particular fiscal  year for such things as hurricane damage cleanup and repairs or for the  Global War on Terrorism. We determined that the data were sufficiently  reliable for the purposes of this review in indicating broad trends and  comparisons between identified requirements, budget requests, designated  funding amounts, and subsequent obligations of funds for BOS and S/RM  functions. However, various data limitations are noted throughout the  report, such as differences between conference committee designations for  BOS funding and amounts categorized by the services. We obtained  information on the roles that OSD and the military services play in the  overall base operations process, requirements determination, budgeting,  and installations management. We visited two Air Force bases; two Marine  Corps bases; three Army bases; six Navy bases; the Army’s Installation  Management Agency’s (IMA) Headquarters and Southwest and Northeast  regions; and the Commander, Navy Installations (CNI) Command’s  Headquarters and South and Southwest regions. We performed our work in  accordance with generally accepted government auditing standards from  April 2004 through April 2005. More details on our scope and methodology  are presented in appendix I.
subsections: section_title: Background
paragraphs: DOD manages nearly 517,000 buildings and structures (replacement value  of $650 billion) and over 46,000 square miles of real estate at its bases  and installations worldwide. These facilities must be properly maintained  or they are subject to premature deterioration. At these bases and  installations, DOD prepares for and conducts combat and peacetime  missions, including training and weapons systems maintenance. Doing  so requires significant amounts of BOS services, such as information  management; systems operations and maintenance; facilities engineering;  transportation; utilities; environmental, safety, and health services;  housing; food services; morale, welfare, and recreation services; security  and fire services; and disaster preparedness.
subsections: section_title: Funding for O&M
paragraphs: O&M funds finance the costs of operating and maintaining military  operations for active and reserve components, including related support  activities of DOD, but excluding military personnel costs. Included are  pay for civilians, services for maintenance of equipment and facilities,  fuel, supplies, and spare parts for weapons and equipment. Funding  requirements are influenced by many factors, including force structure  levels, such as the number of aircraft squadrons and Army and Marine  Corps divisions; installations; military personnel strength and deployments;  rates of operational activity; and the quantity and complexity of equipment  such as aircraft, ships, missiles, and tanks in operation. For fiscal year  2004, Congress appropriated $114 billion for O&M activities. DOD uses  distinct activities and accounting structures to manage O&M budgeting and  funding for functional areas such as the following:  BOS—a term that derives from the “base operations” program area  (which includes installation transportation, supply, information  management, food services, legal and accounting services, and so forth)  to which the military services have added other program areas including  family and quality of life programs, force protection, environmental  compliance and conservation programs, communications services, and  grounds maintenance, as well as other facilities services such as utilities, leases, and custodial services, which OSD has referred to  as real property services. Thus, in practice BOS is not a single,  well-defined program area but a collection of many diverse programs,  activities, and services. The different BOS functions and activities used  by the military services are shown in appendix II.
S/RM—the maintenance and repairs needed to keep facilities in good  working order and in up-to-date condition. Sustainment funds cover  expenses for all recurring maintenance costs and contracts, as well as  for major repairs of nonstructural facility components (for example,  replacing the roof or repairing the air conditioning system) that are  expected to occur during a facility’s life cycle. In addition to facilities  sustainment, O&M funds are sometimes used for facilities restoration  and modernization. Restoration includes repair and replacement work  needed to restore facilities damaged by inadequate sustainment,  excessive age, natural disaster, fire, accident, or other causes.  Modernization includes altering or modernizing facilities to meet new or  higher standards, accommodate new functions, or replace structural  components.
Mission support—the goods and services needed to prepare for and  conduct combat and peacetime missions, including training and  weapons systems maintenance. O&M funds are used by the armed  forces and defense agencies to prepare for and conduct combat and  peacetime missions. For example, DOD uses O&M funds to increase  combat proficiency through flying and ground training operations; to  acquire fuel, support equipment, and spare parts for training operations;  to pay supporting civilian personnel; and to purchase supplies,  equipment, and service contracts for the repair of weapons and  weapons systems.
According to historical data provided by the military services, fiscal year  2004 O&M funds designated for BOS services totaled $15.6 billion, about  $1.6 billion more than data supporting the conference report showed as  being designated for BOS at the beginning of the fiscal year. Service  officials attributed the variance to their accounting for the BOS services  provided at their respective installations—the number and names of which  are different and expanded from the BOS subactivity groups used for the  conference report—and to funding redesignations that occur during the  year. Accordingly, this report uses the congressional designations as  adjusted by the services’ accounting and redesignations of O&M funds for  BOS and S/RM to depict funding trends. Further, to better project trend  data consistently, the historical data provided by the services included in  this report do not include congressional adjustments of a one-time nature  or supplemental appropriations for O&M that Congress provided during a  particular fiscal year for such things as hurricane damage cleanup and  repairs or for the Global War on Terrorism.
section_title: Services’ Organizational Structures for Managing Installations
paragraphs: Until recent years, the military services had, for the most part, carried out  installation management functions at the local level, where the installation  commanders received O&M funding for various subactivities and set  priorities among competing demands. They also had the flexibility to  make trade-offs in the face of funding limitations, shifting funds among  subactivities’ competing priorities, and to meet unanticipated demands. We  have previously reported on the movement of funds from BOS to alleviate  shortfalls in S/RM, and we have also reported instances where funds  intended for maintaining facilities had to be used to support base  operations or to cover other mission costs. However, such movements of  funds often raised or aggravated concerns about the adequacy of funding  for each of these areas or about how efficiently and effectively programs  were executed during the year.
The Army and the Navy have recently taken steps to reorganize and  centralize their installation management activities. One of the expectations  established in setting up these centralized activities was that they would  curtail or prevent the movement of funds from facilities and base  operations to other priorities and create greater stability in the execution  of those activities. IMA was activated on October 1, 2002, providing  consolidated management of Army installations worldwide. The services  managed by IMA include engineering, information technology, resource  management, and other installation support activities. The agency’s  objective is to standardize installation management services, providing  consistent and equitable facilities and services via common standards. IMA  is made up of seven regional offices, four in the continental United States  and three overseas. To establish IMA, the Department of the Army worked  with its major commands to identify the activities, personnel, and  resources that provided facilities and base operations support. These  service activities and the associated workforce were then organizationally  realigned from the major commands and their installation commanders to  establish IMA. Under the reorganization, IMA headquarters assumed  control of the BOS and S/RM budgets in fiscal year 2004 and determined the  funding for these programs and activities.
CNI was activated October 1, 2003, and is responsible for Navy-wide  installation management. Its mission is to provide uniform program, policy,  and funding management, along with oversight of shore installation  support. Prior to the activation of CNI, management of its base operations  support activities was conducted at regional levels. With the activation of  CNI, shore installation management and the personnel associated with  those functions were organizationally realigned under CNI’s control. CNI is  made up of 16 regions, 10 in the continental United States and 6 overseas.  Consolidation of the management of services provided at the regional and  installation levels was intended to reduce base operating support costs  through the elimination of unnecessary management layers, duplicative  overhead and redundant functions. The Army and Navy reorganizational  management structures are discussed further in appendix III.
The Marine Corps, because it is small, has always been somewhat centrally  managed, but it generally leaves to the individual base commanders the  decisions about the level of BOS services required and issues regarding  quality of life at an installation. The Air Force has integrated BOS and  installations management into its mission programs and continues to  manage in a decentralized manner, using Air Force-level guidance. In the  Air Force, major commands are actively engaged with subordinate  commanders in the funding and management of Air Force installations.
section_title: Strategic Plan for Installations
paragraphs: We have cited the need for and DOD has in recent years developed a  facilities strategic plan to guide future facilities efforts. Our February 2003  report noted that DOD’s strategic plan for facilities had weaknesses that  included a lack of comprehensive information on specific actions, time  frames, assigned responsibilities, and resources—the elements of a  well-developed strategic plan—that are required to meet the plan’s vision.
In September 2004, the Deputy Under Secretary of Defense for Installations  and Environment released the department’s updated Defense Installations  Strategic Plan, which outlines a set of initiatives with some milestones to  sustain, restore, and modernize installation assets. The vision set forth in  the plan is to have installation assets and services, including BOS, available  when and where needed, with the joint capabilities and capacities  necessary to support DOD missions effectively and efficiently.
section_title: Prior GAO Reports
paragraphs: Since 1997, we have identified DOD support infrastructure as a high-risk  area. We have completed a number of reviews in which we identified  numerous examples of the services’ moving O&M funds out of accounts  congressionally designated to support one functional area and into another  to meet competing needs. We examined the impacts on areas such as  facilities maintenance and BOS—areas that were already considered to be  underfunded against projected needs. For example, our February 2000  report compared the funding amounts that Congress had designated for  DOD’s O&M subactivities, including BOS and S/RM, with DOD’s obligations  for those same subactivities, and we showed that DOD consistently  obligated a different amount from what Congress had designated. In  February 2003, we reported that O&M funds designated for facilities  sustainment were reduced or held back at the service headquarters, major  command, and installation levels to cover more pressing needs or emerging  requirements. As a result of these holdbacks and movements, we  concluded that the amounts of funds spent on facilities maintenance and  repairs were not sufficient to reverse the trend of facility deterioration. Our  February 2003 report also noted the shifting of funds from one O&M  functional account to resolve funding shortfalls in another. For example, it  noted the difficulty that redesignating facilities sustainment funds to other  purposes makes for installations in implementing rational facilities  sustainment plans.
section_title: While Historical Trends Show an Increase in BOS Funding, the Services Have Redesignated Other Funds to Meet BOS Services
paragraphs: Congress has designated increased funding for BOS in recent years,  sometimes more than requested, but often to amounts that were lower than  the cost of BOS services provided at installations, particularly in the Army.  This has resulted in hundreds of millions of dollars originally designated  for facilities maintenance being redesignated by the services to meet BOS  needs. As a result, the Army has faced problems in executing planned  programs effectively. Supplemental funding may be made available to  installations late in the fiscal year, as occurred in fiscal year 2004, making it  difficult for an installation to execute many of its BOS and S/RM activities  promptly and efficiently. For example, base services may be reduced and  routine maintenance and repair of facilities may be deferred. (App. IV  highlights some key impacts of funding shortfalls and redesignations on  BOS and S/RM activities and locations we visited.) Such problems  adversely affect efforts to maintain facilities, provide base support  services, and conduct mission training, but the overall impact is often  difficult to gauge in the short term. We found similar, though less  pronounced, funding redesignations in the Navy, Marine Corps, and  Air Force.
subsections: section_title: Army Funding Trends
paragraphs: Available data show differences between the amounts the Army projected  as required for BOS and the amounts included in budget requests, the  congressionally designated amounts as adjusted by the Army, and the  amounts that were actually obligated for each fiscal year from 2001  through 2004. Congress gave the Army increasing funds for BOS in some  fiscal years, but these funds were less than the amounts projected by the  Army as being required and less than the amounts that were actually  obligated. As shown in figure 1, fiscal year 2004 data showed a spike in  projected requirements due at least in part to the Army’s use of a model  that projected requirements at a higher level of service than was previously  used in projecting budget requirements. Obligations were higher than funds  initially provided, with funds being moved to BOS from other accounts,  such as S/RM, to permit this increase. At the same time, funding  turbulence across BOS and facility sustainment accounts was exacerbated  in fiscal year 2004 as the Army withheld funds that otherwise would have  been designated to fund BOS and S/RM, to help pay for the Global War on  Terrorism, although some funding was restored toward the end of the  fiscal year. Such turbulence occurring during the year makes it difficult to  execute planned programs effectively and, as noted later, resulted in the  Army’s underexecuting its S/RM program in fiscal year 2004.
The data show that BOS funding provided by Congress increased in fiscal  year 2002, remained stable in fiscal year 2003, and declined in fiscal year  2004. They also show that BOS obligations increased, particularly in 2003  and 2004, and that the Army routinely obligates more for BOS services than  adjusted congressionally designated amounts, through redesignations of  funds from other accounts. For example, in fiscal year 2004, the Army’s  request for BOS funding—$5.756 billion—was about 65 percent of the  amount it projected as being needed to provide traditional levels of BOS  services. According to Army officials, while congressionally designated  amounts as adjusted by the Army—$6.009 billion—were somewhat more  than they requested, during the year they nevertheless had to reduce BOS  programs because they did not have sufficient funds to pay for traditional  levels of BOS services since they had to temporarily move some BOS funds  to pay for the Global War on Terrorism. To what extent the Army’s actual  needs increased over prior years is difficult to fully gauge because,  according to Army officials, the requirements model used for fiscal year  2004 budget requests reflected improved information on the resources  needed to provide BOS programs and services compared to what they had  used in prior years. At the same time, because many BOS programs  involved bills that must be paid in a timely manner (such as utilities and  contracts), during the year the Army moved $882 million from S/RM  accounts and $816 million from other O&M accounts and used  supplemental funding for the Global War on Terrorism to cover its essential  bills and BOS services (total amount obligated was $7.707 billion).
In contrast with BOS requirements, S/RM trend data show that S/RM  requirements and President’s budget requests have remained relatively  constant since fiscal year 2002. Army officials attributed this consistency to  improved facilities sustainment requirements forecasts achieved by using  DOD’s facilities sustainment model and a cost factors handbook, both of  which were developed for this purpose in recent years. However, as  shown by figure 2, the Army has consistently requested fewer funding  dollars for S/RM services than it had internally projected as being needed to  provide levels of S/RM services projected by the model. Furthermore, the  Army obligated fewer funding dollars for S/RM activities than adjusted  congressionally designated amounts in the last 3 years.
According to Army officials, the difference between the amounts  designated for S/RM services and the amounts obligated is made up of  funds moved from S/RM activities and redesignated to BOS activities to pay  for “must pay bills” (such as utilities and, increasingly, obtaining services  from contractors). This indicates a continuation of the historic trend of  funds being moved among various O&M subaccounts during the year, but a  reversal of a trend we saw a few years ago where BOS funds were more  likely to be redesignated to fund facilities maintenance and other needs.  S/RM services were also affected by the Army’s withholding O&M funds  that otherwise would have been designated to fund BOS and S/RM, to help  pay for the Global War on Terrorism. Similar problems reportedly are  occurring in fiscal year 2005. The Army ultimately was able to provide  additional funds to installations late in the fiscal year ($100 million in  August 2004 and another $100 million on September 30, 2004), as  supplemental funding was made available to cover warfighting costs, but  Army officials told us that the timing made it difficult for the installations to  execute many of their BOS and S/RM activities promptly and efficiently. We  noted that this resulted in the Army’s underexecuting its S/RM program by  $882 million in fiscal year 2004. As we have previously reported, such  problems adversely affect efforts to maintain facilities and provide base  support services. End-of-year figures shown in figures 1 and 2 mask  somewhat the level of turbulence that occurred during the year as funds  moved between accounts. Similar masking occurred in BOS and S/RM  accounts in the other military services.
section_title: Other Military Services Have Faced Similar Though Less Pronounced Problems
paragraphs: BOS and S/RM funding trends and problems identified in the Army also  occurred in the Navy, Marine Corps, and Air Force but were less  pronounced. Nevertheless, each of these services faced similar challenges  in its ability to execute planned programs effectively as a result of its  moving of funds among accounts. For example, we found the following:  Congress gave the Navy increased funding for BOS during some years,  though we found a smaller difference here than for the Army between  identified requirements and funding. The difference between the Navy’s  obligations and its funding also appears to be smaller than that for the  Army, but the Navy’s obligations for BOS still were greater than were its  congressionally designated amounts for BOS as adjusted by the Navy.  Navy officials said the difference between these adjusted  congressionally designated amounts and the amounts obligated is made  up of funds redesignated from S/RM activities to BOS activities to pay  essential BOS bills such as utilities and, increasingly, obtaining  contactor services.
Navy S/RM funding trend data show a spike in congressionally  designated amounts adjusted by the Navy and in obligations for fiscal  year 2003. According to Navy officials, 2003 was simply a well-funded  year for Navy shore facilities. However, in fiscal year 2004, S/RM  services were negatively affected by the Navy’s withholding of O&M  funds otherwise intended to fund BOS and S/RM to help pay for the  Global War on Terrorism. (Similar problems reportedly are occurring in  fiscal year 2005.) The Navy obligated fewer funding dollars for S/RM  activities in fiscal year 2004 than were initially designated. Although the  Navy also received supplemental funding for the Global War on  Terrorism for BOS and S/RM activities, such turbulence occurring  during the year makes it difficult to execute planned programs  effectively and resulted in the Navy’s underexecuting its S/RM program  by $393 million in fiscal year 2004.
The trend data for BOS obligations present a more mixed picture for  the Marine Corps. For half of the period (2 of 4 years), its obligations  were greater than both congressionally designated amounts, as adjusted  by the Marine Corps, and projected requirements. For example, in  fiscal year 2004, the Marine Corps’ BOS obligations of $1.164 billion  were $54 million more than its designated funding ($1.110 billion),  representing a movement of funds from other accounts to support  BOS activities.
S/RM trend data show that the Marine Corps obligated more funding  than adjusted congressionally designated amounts in fiscal years 2001  and 2003, and it obligated less funding than adjusted congressionally  designated amounts in fiscal year 2004. Marine Corps officials said the  differences were due to funds being moved and redesignated among  BOS and S/RM accounts.
Data were not readily available to provide a trend for the Air Force’s  projected BOS requirements. Funding trend data for BOS services and  programs within the Air Force show that budgetary requests, funding,  and BOS obligations remained more closely aligned than was the case  for the other services in most years. Nevertheless, some differences do  exist among budget requests, funding, and obligations.
Air Force trend data for S/RM activities during fiscal years 2001 through  2004 show that obligations were greater than funding or budget requests  in each of the 4 years. According to Air Force officials, BOS and other  O&M activities’ funds were redesignated by installation commanders in  fiscal year 2004 to supplement S/RM funds.
Additional details on funding trends for the Navy, Marine Corps, and  Air Force are included in appendix V.
section_title: Accurate Forecasts of BOS Requirements and Funding Needs Have Been Hampered by Several Factors
paragraphs: DOD and the military services’ ability to forecast BOS requirements and  funding shortfalls have been hindered by the lack of a common terminology  across the services for defining BOS functions, as well as by their lack of a  mature analytic process for developing BOS requirements comparable to  the one developed for facilities sustainment requirements. The lack of  common definitions for BOS services among the military services impairs  the development of a complete picture of total BOS requirements across  the military services, and it can lead to differing expectations where  multiple military services are colocated on a single installation.  Historically, each service has developed its own BOS requirements and  funding needs, based on previous expenditure levels and subject to its own  definition of BOS and the types and levels of services it has deemed  necessary to provide. Various efforts are under way to improve BOS  management and strengthen the ability of DOD and its components to  forecast future requirements, provide Congress with a clearer basis for  making funding decisions, and ensure adequate delivery of services, but  OSD and the services recognize that more are needed.
subsections: section_title: Lack of Common Definitions of BOS Functions and Services Leads to Different Expectations
paragraphs: In completing this review we found that what constitutes BOS functions  and services varies among the military services, thus contributing to the  existence of different expectations for the levels of BOS services being  provided. Also, this variation has carried over into the support  agreements and reimbursement practices used by the different commands  and military services located at the installations. In visiting various military  installations we found a variety of instances where the lack of a common  definition of BOS functions and services was problematic, most often  where multiple commands and military services were colocated at a single  installation.
For example, the Naval Air Station Corpus Christi, Texas, is host to  non-Navy tenants, including the Coast Guard, the U.S. Customs Service,  and an Army Depot. Coast Guard officials said that they enjoy numerous  benefits by being at the base, including no rent payments and better  security, housing, child care, and fitness centers—better conditions than  they had experienced before moving onto the base. Despite the benefits  afforded by their service agreement with the Navy base, Coast Guard  officials expressed concern over decreasing levels of BOS services,  including reductions that negatively impact their mission. For example,  Coast Guard officials said they cannot always meet their 30-minute launch  requirement for nighttime air missions because the base has cut back on  operating hours, keeping the airfield open only during the day. Therefore,  Coast Guard officials said, when performing after-hours missions, the flight  crew must get out of their aircraft, stop traffic, and manually unlock and  open a gate to access the runway. This process sometimes makes it  impossible for the Coast Guard to meet its 30-minute launch requirement.  In addition, Coast Guard officials said they could never be certain that  runway lights would be on when they needed to land late at night or  whether the tower would answer, and they are unable to conduct training  at the base at night, when the airfield is closed. Corpus Christi Army Depot,  another of the Naval Air Station’s tenants, also has a service agreement  with the base that identifies which services are to be provided by the Navy  at no cost and which services the Army Depot must pay for (through  reimbursements to the Navy). Army Depot officials told us that they were  incurring increasing costs but receiving reduced BOS services from the  Navy. Corpus Christi officials said they had no choice but to reduce  services because they did not have the BOS and S/RM funds needed to  maintain the levels of services they had provided in the past.
Tinker Air Force Base, Oklahoma, houses multiple Air Force missions  across multiple commands and also hosts the Navy as a tenant activity  on the base. An Air Force official from a command other than the one  responsible for managing the base told us that its support agreement,  signed in 1996, did not clearly specify the quantity or quality of services the  base would provide and that the base did not have enough money to  provide all of the needed services. As a result, the tenant said it spends  from $55,000 to $75,000 a year on BOS services from its O&M mission  accounts and works personnel extended hours to meet some needs. We  found that the Navy tenant has an interagency support agreement with the  Air Force, regarding which services the Air Force is to provide at no cost  (such as food services), which services the Navy will reimburse the Air  Force for (such as utilities), and which services the Air Force will not  provide due to the uniqueness of different approaches and governing  regulations between the military services (such as legal support  personnel). The Air Force at Tinker has contracted with the private sector  for much of its BOS, and the Navy shares in the cost of that contract, in  accordance with its interagency support agreement. While Navy officials  stated that overall the BOS services provided by the Air Force were  adequate, they nonetheless expressed concern about limitations in some  base support services, which forced them to pay separately for some BOS  services, such as security and education, out of other O&M funds. Navy  officials also expressed concern that some expected BOS services were  being scaled back; for example, mail service pickup and delivery were  reduced from twice to once per day, and fire department inspections and  repair and replacements of fire extinguishers were postponed. Navy  officials expressed further concern about service reductions in the  facilities sustainment area, compromising preventive maintenance and  contributing to further deterioration of the facilities.
According to Tinker Air Force Base officials, they do not have sufficient  funds to provide all BOS and S/RM services at the levels or timing desired  by their tenants, and they have worked to gain efficiencies in their  programs and have scaled back some programs that are not mission  critical. For example, they said that they can only replace carpet once every  10 years; thus, if a tenant’s carpet is worn out in 8 or 9 years, the tenant  must either wait 1 or 2 years or use other funds to pay for new carpet.  Tinker officials conceded that there is not as much money available for  preventive maintenance as they would like, but they believe that the base  has done a good job of fixing things when they break. They acknowledged  that the tenants might think things do not get fixed fast enough, but stated  that the base and its contractor are in full compliance with Air Force  standards for performing such services. In addition, they are negotiating  revisions to their support agreements to help clarify which BOS and S/RM  services the tenants should pay for and which services should be the  responsibilities of the base.
We found similar concerns at the other installations we visited, particularly  those with multiple commands represented on a single base or with one  service residing as a tenant at an installation operated by another service.  The potential magnitude of the problem of differing expectations is  significant, as the Army alone has about 1,200 agreements with the other  military services to provide BOS services and about 250 agreements with  other agencies for this purpose. As DOD increasingly emphasizes jointness  and potentially joint basing, problems such as those noted above are likely  to increase in the absence of clearer delineation of BOS service  requirements and common definitions of BOS functions.
section_title: Requirements and Funding Needs Have Historically Been Service Driven and Based on Previous Expenditure Levels
paragraphs: The Office of the Deputy Under Secretary of Defense for Installations and  Environment oversees the procedures that the military services use to  develop BOS requirements and funding needs, but each service has  historically developed its own BOS requirements and funding needs subject  to its own definition of BOS and the types and levels of services it deems  necessary to provide. Unlike the facilities sustainment area, in which DOD  has developed a model useful for forecasting funding requirements, for  BOS the services have had few institutional-level requirements-forecasting  tools. Until recently, they have relied heavily on previous expenditures as  the basis for stating their future requirements. But while the services can  tell Congress how much was spent in an area in the past, they do not  necessarily know whether these services were provided at appropriate  levels or how much it would or should cost to provide them in the future.  DOD and the services have recognized this as a problem and have various  initiatives under way to better develop and calculate BOS requirements and  funding needs, similar to what they have done in the facilities sustainment  area.
As noted earlier, DOD has taken steps to improve its identification of the  funding required to maintain its facilities. For example, as we previously  reported, in 1999 DOD issued its first defense facilities cost factors  handbook. Based on the guidelines in the handbook, DOD divides defense  facilities into approximately 400 categories and uses commercial  benchmark costs to determine the annual cost per square foot (or similar  unit of measure) to sustain each facility type. The purpose of the handbook  was to standardize the methods by which the services would determine the  sustainment costs of their facilities and to establish a minimum  sustainment funding level for facilities. Likewise, in 1999, DOD developed  the facilities sustainment model, which estimates the annual sustainment  cost requirement, adjusted for area costs, for each service and defense  agency, based on the number, type, location, and size of its total inventory  of facilities. Because of competing priorities, the services have not always  funded sustainment at 100 percent of requirements identified using these  tools, and we have reported instances where percentages of funding  reaching individual installations varied. Nonetheless, these tools offer a  superior basis for identifying requirements than existed previously. Similar  tools have not been developed for forecasting requirements in the BOS  area, although OSD and individual services are taking some steps to  improve forecasting BOS requirements.
Until recently, the Army relied heavily on historical expenditures as the  basis for stating its future BOS requirements. In the mid-1990s, the Army  developed a model that forecasts its BOS requirements based on regression  cost-estimating relationships derived using historical data, demographics,  pacing measures, and quality factors. According to Army officials, they  continually work to improve the model and to update the information used  in it. They indicated that since the model currently reflects all the resources  needed to provide BOS programs and services at the highest standards  without any shortcomings, the Army does not expect to fully fund its  requirements and is working instead to ensure that the necessary and  affordable services are provided. Army officials told us that they are now  working to develop common level of support models that they will use to  provide definitive guidance, performance standards, and performance  measures for the uniform delivery of various BOS services at an affordable  support level across Army installations worldwide. The Army is evaluating  95 categories of services and plans to implement its common level of  support models incrementally, beginning in fiscal year 2005, as it completes  its evaluations of selected service categories. For example, the Army  analyzed the various activities that constitute recreation services— exercise programs, libraries, movie theaters, and sporting events—and  solicited the users’ priorities. It then determined which activities need no  longer be provided and developed common standards that it plans to  apply to remaining recreation services at each installation.
The Navy is also moving away from historical expenditures as the basis for  stating its future BOS requirements. In fiscal year 2004, the Navy  centralized its installations management and began costing out its BOS  services based on a selection of service capability options ranging from  1 (most) to 4 (least). According to Navy officials, by providing a range of  service levels and funding requirements associated with those levels for  various BOS services, decision makers can see what risks they face with  selecting given levels of funding. In an effort to reasonably balance the  levels of services provided against risk and affordability, Navy officials said  that no capability level 1 or 4 options were selected in implementing fiscal  year 2004 BOS programs and services. Instead, BOS programs and services  specifically tied to air and port operations, utilities, and some recreational  services at remote overseas locations were to be funded at level 2. All other  BOS programs and services—including such things as environmental  compliance, public safety, and human resources—were to be funded at  level 3. However, officials at Navy bases we visited told us that there were  not enough funds available to the installations in fiscal year 2004 to provide  services even at the reduced levels and that they were experiencing  degradation in the quality of some services, which in some cases had gone  to level 4. For example, Navy officials at Corpus Christi said that although  fire protection was to be funded at level 3 in fiscal year 2004, they received  only 82 percent of the funding needed to provide that level of service,  resulting in the actual service level provided being level 4. Navy officials  stated that the level of fire protection at Naval Air Station Corpus Christi is  in full compliance with DOD and Navy requirements.
The Marine Corps also has had few institutional-level tools for forecasting  requirements and, for the most part, has relied on historical expenditures  as the basis for stating its future BOS requirements. Marine Corps officials  told us that some BOS programs have performance requirements, such as  response times and minimum staffing necessary for their fire protection  and emergency response teams to effectively and safely operate during  emergencies. By utilizing the performance requirements and their metrics,  they can evaluate their response times to forecast staffing requirements to  operate a fire department, which in turn drives the program’s funding  requirement. Although based primarily on the previous year’s execution  amounts, Marine Corps officials told us that most Marine Corps BOS  programs and services are executed as required by the base commanders,  who have many competing needs, many of which vary annually. For  example, if the installation has a heavy snow year, the commander may  reduce the requirement to cut the grass to stay within budget.
The Air Force has historically based its BOS requirements on the average  of the previous 4-year obligations, with programmatic adjustments as  necessary. However, beginning with the fiscal year 2006 budget submission,  Air Force officials told us that BOS requirements for the active Air Force  major command installations were derived from a BOS cost projection  formula that used multiple linear regression analysis involving BOS  personnel, plant replacement value, and contractor manpower  equivalents. The Air Force Reserve and Air National Guard BOS requirements are still based on the 4-year average method. Air Force  officials said that their major commands are actively engaged with  subordinate commanders in the funding and management of BOS services  and programs at their installations.
section_title: OSD Has Launched Some Initiatives to Improve BOS Management and Enhance Requirements Determinations
paragraphs: In addition to the military services’ efforts to address BOS, OSD has  recognized BOS management as a problem and, in March 2004, the  Office of the Deputy Under Secretary of Defense for Installations and  Environment designated the improvement of BOS management as a  priority. According to office officials, DOD’s and the military services’  ability to forecast BOS requirements and funding needs has been hindered  by the lack of a common terminology across the military services for  defining BOS functions and the lack of common definitions impairs the  development of a complete picture of total BOS requirements and can lead  to differing expectations for services where multiple military services are  collocated on a single installation. Office officials explained that BOS is  not a single program but instead comprises many diverse functions  and activities—the Army has identified 95 different categories of BOS  functions, the Navy has identified 124 categories, and so forth. The  different BOS functions and activities used by the military services are  shown in appendix II. Recognizing that definitions of BOS functions varied  among the military services, officials in the Office of the Under Secretary  told us that they are working with the services to (1) develop a common  definition of BOS services and programs between the military services,  (2) improve the tracking of BOS funding, (3) model BOS requirements, and  (4) measure performance. Accomplishments through March 2005 include  updating the Defense Installations Strategic Plan to articulate the need to  define common standards and metrics, using commercial benchmarks as a  starting point to define and model each subfunction of facilities operations  (utilities, leases, custodial services, snow plowing, and the like) and  establishing cross-service working groups to examine definitions and  budget structures. Officials with the Office of the Under Secretary said that  common definitions and standards would be developed incrementally, a  process that could take several years for full development and  implementation.
In a related effort, in late 2004 a separate Senior Joint Basing Group that  was created to address installation management issues at joint bases began  efforts to resolve long-standing challenges involving support agreements  where one service is a tenant on an installation operated by another  service. Key enablers to this effort are common definitions and DOD-wide  standards, metrics, and reimbursement and costing rules for BOS services  and programs between the military services. This group has its own set of  time frames for resolving the long-standing inconsistencies among the  definitions of BOS services. Specifically, a Senior Joint Basing Group  official told us that by the end of 2005, the four military services expect to  have a common set of BOS services and programs to use in support  agreements at joint bases. It appears that a difference between OSD and  the group is that OSD focuses on developing common definitions of BOS  services for use in benchmarking funding requirements for future-year  programming and budgeting purposes at the DOD component level, while  the Senior Joint Basing Group focuses on developing common definitions  of BOS services for use in executing the programs and services at the  installation level in a joint environment. Also, DOD has attempted to gain  managerial control and better oversight of facilities and installations by  establishing an Installations Capabilities Council (formerly called the  Installations Policy Board). The council, chaired by the Deputy Under  Secretary of Defense for Installations and Environment, serves as the  coordinator and integrator of all installation tasks and activities.  Collectively, these initiatives offer an overall vision for resolving the  long-standing inconsistencies in the definitions of BOS services and the  development of analytically based requirements. Even so, we found that  time frames for completing BOS tasks were being reported differently by  different groups which raise questions about how well these efforts will be  coordinated, synchronized, and integrated.
Regarding DOD’s efforts in modeling BOS requirements, the same official  with the Office of the Deputy Under Secretary of Defense for Installations  and Environment expressed doubt regarding whether there could be a  single BOS model because BOS, as it currently exists, has too many diverse  activities to model (see app. II). Also, because various BOS functions are  managed by various offices in DOD this official told us there is no single  focal point, and therefore, it is likely that a suite of BOS tools will evolve. It  will take some time to fully develop them and each office in DOD may  ultimately run its own model or metric. As a starting point, the Office of the  Deputy Under Secretary of Defense for Installations and Environment is  developing a facilities operation model that will capture all the functions  related to facilities (utilities, fire protection, grounds maintenance, and so  forth). The requirements in this model will be driven by the facilities  inventory, commercial benchmarks, and local factors, including weather  and labor rates. The office has been building the cost factors for a few  months and simultaneously preparing the model. A prototype facilities  operations model, tested on March 31, 2005, is being validated and targeted  for implementation in fiscal year 2008. Next, the office expects to address  those installation services that are not related to facilities. These functions  include transportation, supply, and information management. There will  likely be a model or metric for each of these functions, such as a  “transportation activities model” or a “human resources management  metric.” An official in the Office of the Deputy Under Secretary of Defense  for Installations and Environment told us that a transportation activities  model may be very much like the facilities sustainment model, except that  instead of being based on an inventory of facilities, it could be based on an  inventory of vehicles. The human resources management metric may be  like the facilities recapitalization metric, except that instead of being based  on a facilities inventory, it may be based on an inventory of people. The  Office of the Deputy Under Secretary of Defense for Installations and  Environment and the Office of the Secretary of Defense for Program  Analysis and Evaluation will likely act as overseers of the whole process.  Specific time frames for developing the installations services models have  not been established.
section_title: Centralized Installation Management Has Many Benefits, but More Perspective Is Needed Before It Can Be Fully Evaluated
paragraphs: The Army’s and Navy’s creation of centralized installation management  agencies has resulted some operating efficiencies, according to many  officials at installations we visited, but their efforts to date have met with  mixed results in terms of the quality, level of support, and flexibility needed  to quickly respond to changing needs. A common concern was that the  centralized management efforts had not sufficiently recognized the diverse  needs of the installations’ many tenants who require quick reaction in the  face of changing circumstances. The centralized management approach  seeks efficiencies, and Army and Navy officials acknowledged the growing  pains associated with implementing the new approach. The Air Force and  Marine Corps, using a more decentralized facilities management approach  at the time of our review, also reported having achieved selective  consolidations and efficiency measures to improve operations and achieve  savings. Until more experience is gained under existing centralized  approaches, with opportunities to address issues identified herein, it is  difficult to recommend expanding the concept to the other military  services.
subsections: section_title: Army’s and Navy’s Centralized Management Approaches Seek Efficiencies
paragraphs: The Army’s IMA implements a centralized and streamlined installations  management concept that oversees all base operations and S/RM funds  for Army installations and supervises seven regional management centers  worldwide that are responsible for 10 to 30 installations each. IMA is  designed to bring together all BOS services to ensure optimal care,  support, and training of the Army’s fighting force at a standard level across  installations. Key objectives of the organizational structure include ending  the movement of funds among BOS, S/RM, and mission accounts by major  commands and implementing consistent standards across the Army for  designating these funds. IMA is also pursuing opportunities for increased  efficiencies and decreased expenditures at its installations. IMA  established a productivity improvement review process to identify and  implement hard savings and performance enhancements.
During our visits to IMA-managed installations, we observed firsthand the  emphasis being placed on cost efficiencies and decreased expenditures at  the installations. Typical efficiency actions completed or under way  included consolidations of contracts and services. Officials at IMA’s  Southwest Region told us that one benefit was the ability to look across  multiple major commands and then realize benefits through consolidations  or other efficiencies. For example, common phone services at three of the  region’s installations, each previously managed by a different major  command, ranged from about $54 per month to more than $100 per month  per employee. Officials said they were in the process of combining the  three contracts into a single contract with reduced rates.
The Navy’s installation management agency is an organizational concept  that through centralized management of its installations, is intended to  permit mission commanders to focus their energies on their respective  mission accomplishment. According to CNI officials, consolidating  eight offices into a single office responsible for installation planning,  programming, budgeting, and resource execution enabled CNI to realize an  immediate benefit. Through this consolidating and streamlining event, the  Navy increased its visibility over installation management and resources  and gained an ability to allocate resources between functional programs,  regions, and installations to better support the overall Navy. As the single  responsible office, advocate, and point of contact for Navy installations,  CNI is pursuing, among other things, opportunities for increased  efficiencies and decreased expenditures at its installations.
During our visits to CNI-managed installations, we observed firsthand the  emphasis being placed on cost efficiencies and decreased expenditures at  the installations. Typical efficiency actions completed or under way  included eliminating the installation-level management structure and in its  place installing a regionalized management structure for such activities as  housing management, contracting, supply, business and administrative  management, maintenance, and warehousing. Officials at CNI’s Southwest  Region told us that consolidated and centralized management would  eliminate 2,175 civilian personnel positions in the region. The officials had  also consolidated more than 50 contracts into 12. Similarly, officials at  CNI’s South Region told us that regionalized management would generate  $43 million of savings and cost avoidances throughout the region over  5 years by eliminating installation-level management and by consolidating  contracts and services.
section_title: Growing Pains in Implementing Army’s and Navy’s Centralized Management Approaches
paragraphs: Officials at the Army and Navy installations we visited expressed concerns  regarding the reduced levels of BOS and S/RM services they were receiving,  but they did not always distinguish between changes brought about by a  new management structure and changes necessitated by funding shortfalls  and the need to move funding to warfighting priorities. The most critical  issue involved the different major commands’ mission and support needs.  Officials at the Army and Navy installations we visited contended that a  “one-size-fits-all” approach was not working well; they expressed concern  that although air and ground operations and various training missions each  required a different level of BOS, they did not perceive that difference  always being recognized by the centralized management agencies. Officials  from commands on Navy bases stated that CNI needed to step back and  identify service levels appropriate for their customers’ needs and recognize  changes in operations (such as increases in the sailor population), and  then fund to those levels. Officials from major commands claimed that  a disconnect existed between their mission needs for BOS and CNI’s  perspective and that in their judgment CNI should not be responsible for  determining the relative priorities of various mission activities’ BOS needs.  For example, Navy Mine Warfare Command officials told us that in fiscal  year 2004 they had to spend $327,000 of O&M mission funds for BOS  services because the command no longer received BOS funds and CNI  either delayed funding or did not pay for the services out of its BOS funds.
Citing growing pains associated with the centralization of installation  management above the installation level, installation officials raised  concerns about staffing levels, cited delays in obtaining funding guidance,  and articulated concerns with IMA’s ability to quickly respond to shifting  needs. For example, during fiscal year 2004, IMA opted not to redesignate  available S/RM funds to meet an emerging funding need in BOS activities.  At Fort Eustis, an installation affected by IMA’s decision, officials told us  that the installation commander had the flexibility to move funds where  needed before the creation of IMA, and the installation commander would  have done so this year but doing so would have caused significant facilities  maintenance work to be deferred. These officials explained that because  IMA directed installations to use existing S/RM funds for maintaining  facilities while BOS funds were depleted, Fort Eustis and other  installations had to request an additional $200 million of BOS funds from  IMA headquarters. They did not receive these funds until the end of the  fiscal year.
In visiting various military installations we found instances where a lack of  clarity existed concerning who or what source was responsible for funding  select base support functions—installation tenants and their O&M funding  or the installation’s O&M funding. Furthermore, we found many cases  where delays in funding from the installation management agency  prompted an installation’s tenants to fund BOS services from mission  funds. For example, installations in IMA’s Southwest Region and their  tenants could not agree on who should pay for such services as the  following: information management services and specialized information  technology equipment (such as cell phones and pagers), dedicated  administrative use vehicles, long-distance phone service, postage,  dedicated copiers, hazardous waste disposal, and tactical equipment  maintenance.
Officials with major command organizations at Naval Base San Diego and  Naval Air Station Corpus Christi said that under CNI they are seeing the  closing of automobile hobby shops, libraries, swimming pools, and other  recreational activities. The officials said they were concerned that the  reduction or elimination of base services would encourage military  personnel to spend more time away from the bases and in less-controlled  or less-desirable places. In addition, officials said mission operations have  been affected by funding shortages. For example, at Naval Base San Diego,  tugboat operating hours were cut back and the number of tugboats being  used was reduced from six boats to four boats, at CNI’s direction. Although  this action saved money on fuel operations and overtime pay, once San  Diego’s port operations demonstrated that they could not meet mission  requirements with fewer tugs, CNI authorized that an additional tugboat  be returned to service. Navy officials stated that some facility closures  (e.g., auto hobby shops) are due to lack of interest and are offset by facility  openings (e.g., cyber cafes).
Finally, officials at various installations expressed concern that they  were not receiving sufficient facilities sustainment funding to maintain  their facilities at levels they had expected relative to DOD’s facilities  sustainment model, which was congressionally funded at 94 percent of  the facilities sustainment requirement in fiscal year 2004. For example,  Naval Station Ingleside, Texas, provided documentation showing that  facilities sustainment funds available to it were only 62 percent of its  facilities sustainment requirement under the model. An official at another  installation claimed facilities sustainment funding to be as low as  45 percent of their facilities sustainment requirements under the model.  As we have previously reported, such funding shortfalls adversely affect  efforts to maintain facilities and provide base support services. DOD  officials stated that the facilities sustainment model is a macro  programming tool that establishes an average annual investment across  entire defense components for categories of facilities over the life of those  facilities and, therefore, the actual requirement for a single facility or small  set of facilities can be expected to vary across sets of facilities or  installations and from year to year. They stated that when the sustainment  program is funded at 94 percent of requirements, they would not expect  every installation and every facility to be funded at 94 percent of its  individual requirement. We recognize that facilities sustainment funding  levels at individual installations may vary from overall funding levels in a  given year, depending upon where the facilities are in the sustainment  cycle. However, this view was not widely recognized at the installations we  visited, particularly when an installation’s sustainment funding was  significantly less than overall sustainment funding levels. Military barracks  and housing repairs were frequently delayed due to lack of S/RM funding,  according to installation officials, and the following problems have been  typical: leaking roofs; peeling painting; worn carpet; lack of hot water in the  showers; energy inefficient windows; cracked sinks in bathrooms; broken  heating, ventilation, and air conditioning systems; and molded ceilings  and walls. Although funding shortfalls have been disruptive to planned  maintenance and support programs and have potentially caused adverse  effects on quality of life and morale, it is difficult to measure any direct  impact they may have on readiness. Officials with major command  operations at the installations we visited often voiced concerns about the  potential impact on operations and readiness in the future, should these  conditions continue. They were particularly concerned with the cumulative  impact of continually working military personnel extra hours and  weekends to make up for the lack of funding in S/RM and BOS programs.
Army IMA and Navy CNI installation management officials we contacted  viewed these concerns and problems as being temporary in nature and  attributable to organizational growing pains and, to some extent, to  personnel’s resistance to the changing the role of the installation  commander. They told us that while having consistent levels of services  from one installation to the next was their goal, they have made exceptions  when warranted. The officials also pointed to factors outside their  control—including unforeseen contract increases, cost of war  assessments, replacing military personnel with civilians, and funding  shortfalls—that either delayed or masked the real impact of their efforts.
section_title: Marine Corps and Air Force Report Having Achieved Efficiencies without Centralization
paragraphs: Marine Corps officials said that the Marine Corps’ BOS and S/RM activities  have always been somewhat centrally managed, but they generally defer to  the individual installation commanders the decisions about the level of  BOS services required and issues regarding quality of life at installations.  Marine Corps officials also emphasized eliminating inefficiencies in the  areas of installation management and achieving success without changing  the organizational structure used to manage installations. The Marine  Corps uses five broad activities to manage its O&M appropriations—Pacific  forces, Atlantic forces, reserve forces, logistics, and other activities—and  BOS is a crosscutting program blended into several subactivity groups  across these activities.
Without the centralized installations management structure being used by  the Army and Navy, the Marine Corps has been able to achieve cost savings  and efficiencies. For example, during our visits to Marine Corps bases  Camp Pendleton and Miramar Air Station in California, we found that in  recent years increased management emphasis had been placed on  regionalizing and consolidating resources to reduce costs. For example,  Camp Pendleton is the site of several of the logistical functions for Marine  Corps bases in the region (such as 29 Palms and Miramar), including a  regional contracting office, a regional motor pool, and a central supply  center. According to officials at Camp Pendleton, the regional approach has  already produced savings of more than $1.5 million dollars, and additional  regionalization efforts are being pursued.
The Air Force has integrated BOS and installations management into its  mission activities and continues to manage in a decentralized manner,  using Air Force-level guidance. The Air Force views centralized installation  management as less flexible in providing BOS services than base-level  organizations and less responsive to the urgency and priorities of the bases’  requirements. Air Force major commands are actively engaged with  subordinate commanders in the funding and management of Air Force  installations. The Air Force uses four broad activities to manage its O&M  appropriations—operating forces (air, combat, and space); mobilization;  training and recruiting; and administration and servicewide operations  (logistics, security, international support, and other servicewide  operations). BOS is a crosscutting program blended into several subactivity  groups across these activities.
Without using a centralized installations management structure  comparable to those being used by the Army and Navy, the Air Force has  succeeded in achieving some cost savings and efficiencies. For example,  officials at Randolph Air Force Base, Texas, said they saved $190,000 a year  by consolidating a packaging process at the base’s hazardous waste  accumulation facility and were pursuing additional savings by  consolidating and standardizing such services as cell phone contracts,  printers and copy machines, and garbage pickup. In addition, the base had  an active employee self-help program that performed a lot of activities after  hours, including painting walls and buildings, standardizing workstations,  and internal training.
section_title: Insufficient Basis for Expanding Centralized Management Concept at This Time
paragraphs: At each of the military installations we visited, we observed reductions in  BOS and S/RM services related to funding constraints. (App. IV highlights  some key impacts of funding shortfalls and redesignations on BOS and  S/RM activities and locations we visited.) BOS services that were being  scaled back or eliminated at the various installations we visited included  the numbers of rescue and firefighter operations; port and airfield  operating hours and accessibility; and recreational and leisure facilities.  We also observed the impacts of delayed maintenance on facilities,  including deterioration of buildings (leaking roofs and ceilings, energy  inefficient windows, and broken stairwells and fire escapes); breakdown of  equipment (heating, ventilation, and air conditioning and boilers); cracked  pavement at airfields; damaged storm drains and sewer lines; and reduced  structural upgrades and replacements (painting, carpet, and furniture). We  also observed reductions in other O&M funded activities (medical and  emergency services). However, there are many unresolved questions  regarding the centralized management agencies’ culpability for the  reductions in the levels of BOS and S/RM services that were being provided  at these installations.
As noted above, various Army and Navy installation officials cited growing  pains associated with the centralization of installation management,  including adequacy of funding, services provided, and ability to quickly  respond to shifting needs. At the same time, we recognize that a centralized  approach does offer opportunities to obtain economies and efficiencies in  providing services that may be difficult to attain otherwise. Nevertheless,  until more experience is gained under the existing centralized approaches,  with opportunities to address concerns identified to date, we are not in a  position to endorse expanding the concept to the other services at this  time.
section_title: Conclusions
paragraphs: DOD’s Office of the Deputy Under Secretary of Defense for Installations  and Environment and the services have acknowledged a lack of common  definitions for BOS and standards for BOS services, along with related  difficulties in identifying analytically based BOS funding requirements.  Until these problems are resolved, DOD will not have the management and  oversight framework in place that it needs for identifying total BOS  requirements, providing Congress with a clear basis for making funding  decisions, and ensuring adequate delivery of services, particularly in a joint  environment. Action is needed to expedite development and consistent  implementation of an analytically sound and consistently applied model for  determining BOS requirements comparable to the approach used in  defining facilities sustainment requirements. Until this is done,  uncertainties will remain concerning actual requirements, and S/RM and  other O&M funding will likely continue to be redesignated to fund BOS  costs rather than used for its intended purpose. Furthermore, as we have  previously reported and continue to note in this report, DOD’s installations  and facilities have been insufficiently maintained and recapitalized for  several years, a problem that is exacerbated when S/RM funds are  redesignated to cover BOS programs and services. Thus, the adverse  effects on BOS programs and facility maintenance efforts attributable to  moving funds among these activities can also negatively affect quality of  life, morale, and readiness should these conditions continue. Because DOD  is still in the early stages of developing its BOS initiatives, time frames for  accomplishing many of the specific actions under way or planned have  either not been established or have not been synchronized among the  working groups addressing them.
section_title: Recommendations for Executive Action
paragraphs: To better synchronize the efforts and milestones of the various groups  working to improve the management and funding of BOS activities, we  recommend that the Secretary of Defense update DOD’s Defense  Installations Strategic Plan to include specific actions and establish time  frames first, to resolve long-standing inconsistencies among the definitions  of BOS services and, second, to help expedite the development and  implementation of an analytically sound and consistently applied model for  determining BOS requirements.
section_title: Agency Comments and Our Evaluation
paragraphs: In commenting on a draft of this report, the Deputy Under Secretary  of Defense for Installations and Environment concurred with our  recommendations and indicated that actions were under way or planned  to implement them. He noted that our draft report did not properly  differentiate sustainment programs from restoration and modernization  programs. As suggested, we revised our report to make clearer this  distinction. In addition, he commented that our draft report implied that  each installation should receive funding to match the overall sustainment  rate every year. We did not intend to imply that each installation’s  sustainment funding should match exactly the overall rate each year and  we clarified our report accordingly. While we recognize that sustainment  funding at individual installations may vary somewhat from year to year,  we also note that it is often significantly less than one might expect given  the difference between projected overall levels of funding and what is  actually experienced at the installation level. For example, one installation  we visited received funding for only 45 percent of its sustainment  requirement.
The Deputy Under Secretary of Defense’s comments are reprinted in  appendix VI. DOD also provided technical clarifications, which we  incorporated as appropriate.
We are sending copies of this report to interested congressional  committees and members; the Secretary of Defense; the Secretaries of the  Army, Air Force, and Navy; and the Commandant of the Marine Corps.  The report is also available at no charge on GAO’s Web Site at  http://www.gao.gov.
If you or your staff have any questions on the matters discussed in this  report, please contact me at (202) 512-5581 or holmanb@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 major  contributions to this report are listed in appendix VII.
section_title: Scope and Methodology
paragraphs: To determine the historical funding trends for base operations support  (BOS) as contrasted with funding for facilities sustainment, restoration  and modernization (S/RM), we reviewed financial data, such as budget  requests, congressionally designated amounts as adjusted, and obligations  for fiscal years 2001 through 2004 that we obtained from the Army, Air  Force, Navy, and Marine Corps. We compared funding requirements,  budget requests, adjusted congressionally designated amounts, and  obligations across the services to identify historical trends for BOS and  how it compared with funding for S/RM from the operation and  maintenance (O&M) appropriation. We determined how actual funding for  BOS and S/RM compared with the projected funding requirements  identified by individual military services. We discussed the differences we  found with officials from the Office of the Secretary of Defense (OSD) and  the services to obtain a more thorough understanding of BOS and S/RM  funding.
For our historical analyses and for purposes of achieving consistency in the  analyses, we used data provided by each of the military services. In doing  so, we recognize that the funding amounts designated in the services’  accounting records for O&M functional areas such as BOS do not coincide  perfectly with the congressional conference report designations that were  based on a set of defined but nonetheless diverse program elements and  subactivity groups among the services. Service officials attributed the  variance to their accounting for the BOS services provided at their  respective installations—the number and names of which are different and  expanded from the BOS subactivity groups used for the conference  report—and to funding redesignations that occur during the year.  Accordingly, this report uses the congressional designations as adjusted by  the services’ accounting and redesignations of O&M funds for BOS and  S/RM to depict funding trends. (The Department of Defense (DOD) is  currently seeking to restructure these accounts with improved tracking  mechanisms.)
Also, to project trend data more consistently, the historical data provided  by the services and included in this report do not include congressional  adjustments of a one-time nature or supplemental appropriations for O&M  that Congress provided during a particular fiscal year for such things as  hurricane damage cleanup and repairs or for the Global War on Terrorism.  We did not otherwise independently determine the reliability of the  reported financial information. To determine the impact the funding trends  had on the levels of BOS and S/RM services being provided to individual  activities and installations, we visited and met with officials and viewed the  condition of facilities firsthand at 13 installations across the country:  Randolph Air Force Base, Texas; Tinker Air Force Base, Oklahoma; Naval  Air Station Corpus Christi, Texas; Naval Air Station Kingsville, Texas; Naval  Station Ingleside, Texas; Fort Sam Houston, Texas; Fort Monroe, Virginia;  Fort Eustis, Virginia; Marine Corps Base Camp Pendleton, California;  Miramar Air Station, California; Naval Base San Diego, California; Naval  Base Coronado, California; and Naval Base Point Loma, California. In  addition, we obtained a briefing from officials with the Naval Air Station  Joint Reserve Base at Carswell Field, Fort Worth, Texas. We also  interviewed these officials by telephone. We selected these installations  because they represent a range of BOS programs, missions, major  commands, and geographic locations. We recognize that the conditions we  observed at these 13 installations may not represent conditions at other  DOD installations, and we did not attempt to project the results of our  visits to all military installations.
To evaluate how DOD and the military services forecast BOS requirements  and funding needs, we reviewed OSD, Army, Air Force, Navy, and Marine  Corp information pertaining to base operations requirements and funding  and their roles in the overall base operations process. We reviewed the  processes, planning documents, and proposals that DOD and the services  use to forecast their needs. We interviewed officials from DOD’s Office of  the Under Secretary of Defense for Installations and Environment and  Senior Joint Basing Group. To determine the services’ definition of BOS, we  interviewed OSD officials and representatives from each of the services  and asked them to provide their working definition of BOS as used to  determine BOS funding requests.
To determine extent to which the Army and Navy reorganizations for  managing installations have affected the quality and level of support  provided to individual activities and installations and whether the Marine  Corps and Air Force would benefit from similar reorganizations, we  reviewed the guidance, procedures, and practices from the Army and Navy  that specifically address reorganization, including comparisons to pre- reorganization data. We interviewed officials from the U.S. Army  Installation Management Agency (IMA); IMA Southwest Region; IMA  Northeast Region; Commander, Navy Installations (CNI) Command; CNI  Region South; and CNI Region Southwest. We discussed the processes used  in the incipient formation of centralized installation management  organizations. We discussed the effects these changes have had on the  planning and implementation of base operations support services as well as  on the personnel and quality of life at the local level. We contrasted these  data with information obtained from Marine Corps and Air Force officials.
We conducted our review from April 2004 through April 2005 in accordance  with generally accepted government auditing standards.
section_title: BOS Functions and Activities Used by the Military Services
paragraphs: Each of the military services has a different approach to BOS and uses  somewhat differing categories and definitions of services included in BOS.  For example, the Army has identified 95 different categories of BOS  functions, and the Navy has identified 124 different categories of BOS  functions. For each service, BOS is a complex group of programs that  support base operations and quality of life. The Office of the Deputy Under  Secretary of Defense for Installations and Environment designated the  improvement of BOS management as a priority and has announced plans to  develop a common definition of BOS services and programs.
subsections: section_title: BOS Functions and Activities Used by the Army
paragraphs: The Army categorizes BOS under nine major service areas. Within these  broad service areas are 38 specific functions, and within these functions,  the Army provides 95 different BOS services. The BOS functions and  activities used by the Army are shown in figure 3.
subsections: section_title: BOS Functions and Activities Used by the Navy
paragraphs: The Navy categorizes BOS under operating forces support, community  support, and base support programs. Within these general categories, nine  major service areas are broken down into 29 functions. These functions are  broken down further to include 124 BOS services such as food service  contracts, recreation, and so forth. The BOS functions and activities used  by the Navy are shown in figure 4.
section_title: BOS Functions and Activities Used by the Marine Corps
paragraphs: The Marine Corps categorizes its BOS functions and activities under seven  major service areas. Within these broad service areas are 37 BOS services.  The BOS functions and activities used by the Marine Corps are shown in  figure 5.
section_title: BOS Functions and Activities Used by the Air Force
paragraphs: The Air Force provides BOS functions and services within its four broad  mission areas—operating forces, mobilization, training and recruiting, and  administration and servicewide activities. Within these mission areas are 11  functional areas. These functional areas are the framework for 63 BOS  services. The BOS functions and activities used by the Air Force are shown  in figure 6.
section_title: Army and Navy Base Operations Support Management Structure
subsections: section_title: With IMA:
paragraphs: Management decisions and funding designations now flow through IMA  headquarters and its seven regional offices, four in the continental United  States and three overseas, directly to installations for execution. IMA’s  intent with this structure is to support and enable mission commanders,  achieve regional efficiencies, and provide consistent and equitable facilities  and services with common standards. According to IMA officials, seven  regions is the right size for efficient management; however, they said they  would revisit their organizational structure following the outcome of the  2005 round of base realignment and closure. Figure 8 shows IMA’s current  locations.
subsections: section_title: Commander, Navy Installations
paragraphs: A key event leading to the creation of CNI occurred in 1998 when the Navy  consolidated or “regionalized” installation management functions.  Regionalization was done to reduce BOS costs through the elimination of  unnecessary management layers, duplicative overhead, and redundant  functions. In conjunction with regionalization, the Navy reduced the  number of its major claimants involved in the installation management  business from 18 to 8. To further reduce costs the Navy stood up CNI in  October 2003, further consolidating the Navy’s installation management  business under a single claimant. The CNI organization is shown in figure 9.
As shown in figure 10, CNI is organized into 16 regions, 10 in the  continental United States and 6 overseas. At the time of this report there  was discussion regarding the possibility of further consolidating CNI’s  regional structure. According to CNI officials, maintaining 16 regions may  be more than is ultimately needed for the most efficient management  structure; however, they said any decision to consolidate further would  depend on the outcome of the 2005 round of base realignment and closure.
subsections: section_title: Naval forces
section_title: Impact of Funding Constraints on BOS and S/RM Activities
paragraphs: At each of the military installations we visited, we observed reductions in  BOS and S/RM services related to funding constraints. BOS services that  were being scaled back or eliminated at the various installations that we  visited included the numbers of rescue and firefighter operations, airfield  and port operating hours and accessibility, and recreational and leisure  facilities. We also observed the impacts of delayed maintenance on  facilities, including deterioration of buildings (leaking roofs and ceilings,  energy inefficient windows, and broken stairwells and fire escapes);  breakdown of equipment (heating, ventilation, and air conditioning and  boilers); cracked pavement at airfields; damaged storm drains and sewer  lines; and reduced structural upgrades and replacements (painting, carpet,  and furniture). We also observed reductions in other O&M funded activities  (medical and emergency services).
subsections: section_title: Observations at Army Installations
subsections: section_title: Fort Eustis, Virginia
paragraphs: Created in 1918, Fort Eustis is the home of the U.S. Army Transportation  Corps and the Transportation Corps Regiment. At Fort Eustis and its  satellite installation, Fort Story, officers and enlisted soldiers receive  education and on-the-job training in all modes of transportation, aviation  maintenance, logistics, and deployment doctrine and research. Officials  told us that BOS funding shortfalls at Eustis have had some indirect  impacts on training. For example, reductions in dining hall support may be  a contributing factor to long lines in dining facilities, potentially causing  soldiers to be tardy for training classes.
We found indications of Fort Eustis’s barracks needing repairs. Mold and  deteriorating stairwells were an issue in the older barracks. Delayed  barracks renovations include adding nonskid tracking to the stairwells  and replacing cracked sinks in the bathrooms. Officials also said that  Fort Eustis has deteriorated fencing, road paving, and heating and air  conditioning for training facilities. Officials also showed us mission  facilities with repair needs that have not been completed due to funding  issues. At Fort Eustis’s third port, concrete is crumbling and the repair of  airfield hangar doors, roofs, and heating and air conditioning systems and  routine maintenance of training facilities have yet to be completed.
Public works officials at Fort Eustis also told us about storm drains that  have been damaged and clogged by tree roots. They have similar problems  with their sewer lines.
section_title: Fort Monroe, Virginia
paragraphs: Fort Monroe is located in the city of Hampton, Virginia, and is headquarters  of the Army’s Training and Doctrine Command, which supports the Army’s  fighting forces through the development of doctrine and equipment  requirements and training for combat. We observed a training facility that  had extensive termite damage; to keep the facility in use, support beams  had been added to the flooring to prevent it from caving in. Fort Monroe  also closed several fire escapes due to eroding of the structures; had rusted  and peeling metal staircases; and had heating, ventilation, and air  conditioning systems that need to be overhauled.
At the installation’s marina, we also saw evidence of delayed repairs due to  funding constraints. The foundation of the facility had rust and cracks  caused by high tides, and pieces of the building were falling off. According  to installation officials, the marina repairs, estimated to cost at least  $300,000, have been backlogged for 3 to 4 years.
section_title: Fort Sam Houston, Texas
paragraphs: In 1876, the Army began to move its facilities to the present site of Fort Sam  Houston. Today, Fort Sam Houston is headquarters for various activities  including the Army Medical Command, Fifth U.S. Army, U.S. Army South,  and Brooke Army Medical Center. We observed some buildings and roads  in need of repairs. We obtained information showing that, due to funding  shortages in the BOS area, S/RM funds for painting projects, electrical  repairs, and other preventive maintenance were being redesignated to pay  for BOS services.
section_title: Observations at Navy Installations
subsections: section_title: Naval Air Station Corpus Christi, Texas
paragraphs: Naval Air Station Corpus Christi started its first flight training on  May 5, 1941. Its general command assignment is still pilot training, as  headquarters for the Chief of Naval Air Training. However, recent cutbacks  in BOS services reportedly constrained airfield operations, leading to  overdue repairs and reduced hours of operation. A Coast Guard tenant  representative told us about several airfield conditions that need repair.  For example, we were told that deteriorating power systems were prone to  failure, and when the power goes off, security gates have to be opened  manually to access runways. Aged and unreliable hangar doors also  delayed some launches. We were told that the naval base has been closing  its field operations at night to reduce operational costs. As a result, Coast  Guard tenants are uncertain whether runway lights will come on when  their aircraft are landing late at night or whether the tower will answer  their calls. Lastly, Corpus Christi Air officials said that they could not afford  to pay for the required number of on duty firefighters at the airfield. To  prevent the cancellation of training efforts and other air operations, the  airfield operated under a safety waiver whereby no manned fire truck had  to be present on the landing strip.
Funding shortages also reportedly caused cutbacks in services at the Naval  Hospital at Corpus Christi. Officials told us that due to decreased O&M  funding, the hospital now operates as a clinic in terms of the level of  services it is able to provide and that it refers some patients to other  hospitals. Other reductions in services attributed to cost-saving measures  at Corpus Christi included reducing pool hours from 42 to 20 hours per  week (saving $50,000 for the year) and closing the enlisted members club at  the installation. Base officials said it is less desirable for military personnel  to go off base for entertainment and leisure services.
Due to the lack of S/RM funding, base officials identified some barracks  that were in poor condition. Officials showed us buildings with leaking  roofs and water damage and mold. For example, a mold problem at one  newly constructed housing facility was attributed to a design defect  involving the placement of air conditioning vents, and officials estimated it  would cost $1.6 million, which they did not have, to correct the problem.
section_title: Naval Base Coronado, California
paragraphs: Established in 1917, Naval Base Coronado comprises two main units: the  Naval Air Station North Island and Naval Amphibious Base Coronado.  North Island itself plays host to 23 squadrons and 80 additional tenant  commands. Officials from tenant organizations told us that the number  of fire fighters had been reduced due to BOS funding constraints.  Specifically, they said that there are supposed to be a total of 10 firefighters  on duty—6 for fire response to facilities and housing areas and 4 for the  airfield—but the number of firefighters on duty is being reduced to 4.  Officials said that when the firefighters have to respond to a structural fire  on base, the airfield would be without fire protection and would have to  shut down. Navy officials stated that the level of fire protection at Naval  Base Coronado is in full compliance with DOD and Navy requirements.
Officials said that because they have not had the amounts of S/RM funds  needed to perform sufficient levels of maintenance and repairs, they have  the following conditions at their facilities: frayed carpeting and rotted  wood in barracks, broken water pipes, balcony railings with corrosion,  cracked shower doors, poor shower drainage, and mold.
section_title: Naval Air Station Kingsville, Texas
paragraphs: Naval Air Station Kingsville was commissioned in July 1942, and its primary  mission is to train tactical jet pilots. Officials told us that several safety and  security projects supporting this mission were eliminated due to lack of  funding. For example, there is no longer an emergency response team on  base. Therefore, if an accident occurs during a training operation, the base  has to rely on emergency response from the local community. Also, as a  result of limited O&M funding, there were no dentists at the dental clinic  and no emergency services available at the medical clinic.
section_title: Naval Base San Diego, California
paragraphs: Naval Base San Diego was established on February 23, 1922, as a  destroyer base and later was named a naval repair base. Today, the base  provides a wide range of both direct and indirect fleet support, including  waterfront operations, security, supply, civil engineering, and many other  administrative and leisure functions. Officials cited tugboat support as an  example of a support program that has been scaled back due to the lack of  BOS-designated funding. They said that the base had scaled back its  number of operating tugs from six to four, but port officials could not meet  mission requirements with fewer tugs. The number of tugs was  subsequently increased to five. In other cost-saving initiatives, San Diego  has recently scaled back its transportation service and uses vans instead of  buses, has reduced the number of firefighters on duty, and is considering  closing its driving range and officer’s club. The library has also been closed,  and due to mold problems, the child development center has been closed.
section_title: Naval Base Point Loma, California
paragraphs: On October 1, 1998, six installations were consolidated as Naval Base Point  Loma. Point Loma provides support services for submarines in the U.S.  Pacific Fleet. In carrying out its mission to provide quality of life services  for the operating forces, Point Loma is also the site of the Navy Alcohol  Rehabilitation Center. We found examples of reductions in several leisure  and recreational services due to BOS funding shortages in fiscal year 2004.  For example, Point Loma has closed two libraries and an auto body shop,  and is considering the possibility of closing a chapel. Also closed are the  outdoor equipment rental facility and the leisure travel office.
We also found several unattended maintenance issues at Point Loma. For  instance, due to reduced maintenance, some barracks needed painting and  new carpet. Installation officials complained about brown water in the  drains of older barracks as well as leaking roofs. They also told us that  windows are not energy efficient, which drives up energy costs, and that  several parking lots needed to be repaved.
section_title: Naval Station Ingleside, Texas
paragraphs: Naval Station Ingleside is one of three south Texas installations in Naval  Region South. Ingleside’s mission is to provide logistics and base support  services to 41 commands—including 21 ships and 3,900 personnel—that  make up the Mine Warfare forces. As a result of budget constraints  experienced in fiscal year 2004, Ingleside officials told us they had to  reduce port operations working hours from 24 hours a day, 7 days per  week, to 12 hours per day, 5 days per week; reduce overtime for personnel  involved ship movements in port by 30 percent; and reduce personnel  involved in various BOS programs.
section_title: Observations at Marine Corps Installations
subsections: section_title: Marine Corps Air Station Miramar, California
paragraphs: On October 1, 1997, Naval Air Station Miramar was renamed Miramar  Marine Corps Air Station as a part of a DOD realignment. Marine Corps Air  Stations El Toro and Tustin were closed and their assets moved to Miramar  by the end of 1999. Miramar is home for eight Hornet jet squadrons, four  Super Stallion helicopter squadrons, one KC-130 transport and refueling  squadron, and nine station support aircraft.
Several unexpected expenses affected the BOS funding needs at Miramar  during fiscal year 2004. Although electricity rates increased by more than  70 percent, there was no corresponding increase in BOS funding to cover  these unanticipated increases. To offset some of the costs, Miramar and  other Marine Corps installations increased tenant rates for utility services  and obtained $2.3 million in supplemental funding. In an effort to stop  programs from moving mission operations funds to pay for BOS programs,  the installation reduced services of less essential, non-mission-related  projects, such as furniture and carpet replacement.
section_title: Camp Pendleton, California
paragraphs: Camp Pendleton was established in September 1942. Camp Pendleton is an  amphibious training facility and offers a wide array of training facilities,  including firing ranges, landing beaches, parachute drop zones, and mock  urban warfare towns. But in providing this training support, Pendleton  anticipates a shortfall in BOS funding for fiscal year 2005. For example,  utilities’ costs are projected to be higher than the budgeted amount.  Disaster preparedness may also be constrained because quantities of gas  masks and advanced emergency communications systems have also not  been funded.
Other programs at Camp Pendleton have also been delayed due to funding  constraints. Base officials told us that some construction projects have  been funded, but the new infrastructure creates an additional demand for  BOS services that the installations are fiscally unable to provide. For  example, Marine Corps Headquarters has $750,000 of military construction  money to build permanent latrine facilities. However, the installation  cannot afford to install plumbing on that side of the base nor does it have  the money to furnish, service, or maintain the new facility. Officials told us  that several new vehicles have been purchased, but no additional funding  has been provided to cover the associated costs of new maintenance tools,  garages, or fuel. In addition, there is a backlog in providing new furniture  because funding was being used to cover other BOS expenses.
section_title: Observations at Air Force Installations
subsections: section_title: Randolph Air Force Base, Texas
paragraphs: Randolph Air Force Base was dedicated on June 20, 1930 as a flying  training base and continues that mission today. More specifically, the  installation is one of the few bases that does instructor pilot training, and it  is also home to Joint Undergraduate Navigator and Electronic Warfare  Officer Training. To cut costs at the installation, Randolph has implemented  some changes to BOS services such as custodial and dining hall support.  For instance, Randolph increased waste container sizes and reduced the  number of waste collections to once per week, performed custodial  services after hours when they could be done in less time by avoiding the  presence of workers, and cut the dining hall budget.
Shortfalls in S/RM funding have also led to the deferring of routine facilities  maintenance at Randolph. Officials told us about reports of rusted drinking  water pipes, oil in one of the water wells, and mold and water damage from  leaking water pipes.
section_title: Tinker Air Force Base, Oklahoma
paragraphs: Tinker Air Force Base was established on April 8, 1941, as a maintenance  and repair depot. Today, Tinker’s largest organization is the Oklahoma City  Air Logistics Center, one of three depot repair centers in the Air Force  Materiel Command. Tinker is also home to seven major Department of  Defense, Air Force, and Navy activities with critical national defense  missions. These activities include the 552nd Air Control Wing (which  flies the E-3 Sentry aircraft and is part of the Air Force’s Air Combat  Command mobile strike force); the Navy’s Strategic Communications  Wing ONE (a one of a kind unit in the Navy that provides a vital,  secure communications link to the submerged fleet of ballistic missile  submarines); and the 507th Air Refueling Wing (an Air Force Reserve  flying unit).
Tinker has contracted with the private sector for much of its BOS and has  reported selective consolidations and efficiency measures to improve  BOS operations and achieve savings. For instance, mail service pickup  and delivery were reduced from twice to once per day, fire department  inspections and repair and replacements of fire extinguishers were  postponed, and worn carpet was not being replaced.
section_title: Navy, Marine Corps, and Air Force Funding Trends
subsections: section_title: Navy Funding Trends
paragraphs: Available Navy data show differences between amounts the Navy projected  as required for BOS and amounts included in budget requests, designated,  and actually obligated each fiscal year from 2001 through 2004 (see fig. 11).  As it did for the Army, Congress gave the Navy increasing funding for BOS  in some years, but we found a smaller difference between identified  requirements and funding here than in the Army.
The difference between the Navy’s congressionally designated funding and  obligations also appears to be smaller than that for the Army, but the Navy’s  obligations for BOS still were greater than its congressionally designated  amounts for BOS as adjusted by the Navy. For example, in fiscal year 2004,  the Navy’s BOS obligations—$3.427 billion—were more than its BOS  funding—$3.217 billion. As in the Army, Navy officials said the difference  between the congressionally designated amounts for BOS services, as  adjusted by the Navy, and the amounts obligated is made up of funds  moved from S/RM activities to BOS activities to pay “must pay bills” such  as utilities and, increasingly, to obtain contactor services. This also  indicates a continuation of the historic trend of funds being moved among  various O&M subaccounts during the year. Navy installation officials also  reported instances of funds being withheld during the year and being  redesignated to support warfighting needs. More specifically, we were told  that the Navy withheld $300 million in O&M funds, including $199 million  that otherwise would have been designated to fund BOS and $101 million  to fund S/RM, to help pay for the Global War on Terrorism. Navy officials  told us that during the year they had to scale back and cut BOS programs  and move $504 million from S/RM to pay for essential BOS services until  supplemental funding became available and they could move funds back  to S/RM.
Navy S/RM funding trend data displayed in figure 12 show a spike in  congressionally designated amounts adjusted by the Navy and  obligations in fiscal year 2003. According to Navy officials, 2003 was  simply a better-funded year for Navy shore facilities infrastructure than  other years. However, in fiscal year 2004, S/RM services were affected by  the Navy’s withholding of O&M funds during the year, that otherwise would  have been designated to fund BOS and facilities sustainment, to instead  help pay for the Global War on Terrorism. Similar problems are reportedly  occurring in fiscal year 2005. The Navy obligated fewer funding dollars for  facilities sustainment activities in fiscal year 2004 than were initially  designated. Although the Navy also received supplemental funding for the  Global War on Terrorism for BOS and facilities sustainment activities, such  turbulence occurring during the year makes it difficult to execute planned  programs effectively and resulted in the Navy’s underexecuting its facilities  sustainment program by $393 million in fiscal year 2004. As we have  previously reported, such problems adversely affect efforts to maintain  facilities and provide base support services.
subsections: section_title: Marine Corp Funding Trends
paragraphs: Available data show some differences between amounts the Marine Corps  projected as required for BOS and amounts included in budget requests,  amounts designated, and amounts actually obligated each fiscal year from  2001 through 2004, with some increase in projected requirements, requests  and funding occurring in recent years (see fig. 13).
The trend data present more of a mixed picture for the Marine Corps in  terms of obligations when contrasted with data for the other military  services. In 2 of 4 years the Marine Corps’ obligations were greater than  congressionally designated amounts, as adjusted by the Marine Corps, as  well as projected requirements. For example, in fiscal year 2004, the Marine  Corps’ BOS obligations of $1.164 billion were $54 million more than its  designated funding ($1.110 billion), representing a movement of funds from  other accounts to support BOS activities.
S/RM trend data show that the Marine Corps obligated more funding than  adjusted congressionally designated amounts in fiscal years 2001 and 2003,  and it obligated less funding than adjusted congressionally designated  amounts in fiscal year 2004. Marine Corps officials said the differences  were due to funds being moved and redesignated among BOS and S/RM  accounts (see fig. 14).
As shown by figure 14, in fiscal year 2004, adjusted congressionally  designated amounts were about 98 percent of the projected S/RM  requirement. However, the Marine Corps underexecuted its S/RM program  by $59.2 million in fiscal year 2004. This underexecution occurred because,  as noted above, the Marine Corps redesignated millions of dollars of S/RM  funds to cover the difference between designated BOS funding and BOS  obligations.
section_title: Air Force Funding Trends
paragraphs: Data were not readily available to provide a trend in the Air Force’s  projected BOS requirements. Funding trend data for BOS services and  programs within the Air Force show that budgetary requests, designated  funding, and BOS obligations remained more closely aligned than was  the case for the other services in most years. Nevertheless, some  differences do exist between budget requests, designated funding, and  obligations. As shown by figure 15, only in fiscal year 2004 were BOS  obligations—$4.896 billion—less than the congressionally designated  amounts, as adjusted by the Air Force—$5.260 billion. This indicates that  BOS funds were being redesignated to meet other needs in that year, but  funds from other O&M accounts were redesignated to BOS in earlier years.  Air Force headquarters officials told us that rather than being headquarters  directed, the Air Force relied on its major commands to redesignate BOS  and S/RM funds as needed for the Global War on Terrorism and to decide  which BOS programs and services would be scaled back.
Air Force trend data for S/RM activities during fiscal years 2001 through  2004 show that obligations were greater than designated funding or budget  requests in each of the 4 years. According to Air Force officials, BOS funds  were redesignated by installation commanders in fiscal year 2004 to  supplement S/RM funds. Since both BOS and S/RM obligations exceeded  their funding designations in fiscal years 2001, 2002, and 2003, this would  suggest that funds were redesignated to these areas from other O&M  activities in those years (see fig. 16).
section_title: Comments from the Department of Defense
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: In addition to the individual named above, Latasha Brown, Erica Haley,  Mark Little, Erica Miles, Tanisha Stewart, Roger Tomlinson, Cheryl  Weissman, and Michael Zola made key contributions to this report.
section_title: Related GAO Products
paragraphs: Defense Infrastructure: Long-term Challenges in Managing the Military  Construction Program. GAO-04-288. Washington, D.C.: February 24, 2004.
Defense Infrastructure: Changes in Funding Priorities and Management  Processes Needed to Improve Condition and Reduce Costs of Guard and  Reserve Facilities. GAO-03-516. Washington, D.C.: May 15, 2003.
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.
Defense Management: Army Needs to Address Resource and  Mission Requirements Affecting Its Training and Doctrine Command.  GAO-03-214. Washington, D.C.: February 10, 2003).
Defense Budget: Real Property Maintenance and Base Operations Fund  Movements. GAO/T-NSIAD-00-101. Washington, D.C.: March 1, 2000.
Defense Budget: Analysis of Real Property Maintenance and Base  Operations Fund Movements. GAO/NSIAD-00-87. Washington, D.C.:  February 29, 2000.
Defense Budget: DOD Should Further Improve Visibility and  Accountability of O&M Fund Movements. GAO/NSIAD-00-18.  Washington, D.C.: February 9, 2000.
DOD Budget: Budgeting for Operation and Maintenance Activities.  GAO/T-NSIAD-97-222. Washington, D.C.: July 22, 1997.
Depot Maintenance: Some Funds Intended for Maintenance Are Used for  Other Purposes. GAO/NSIAD-95-124. Washington, D.C.: July 6, 1995.
Army Training: One-Third of 1993 and 1994 Budgeted Funds Were Used  for Other Purposes. GAO/NSIAD-95-71. Washington, D.C.: April 7, 1995.
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