Defense Infrastructure: Changes in Funding Priorities and Strategic Planning Needed to Improve the Condition of Military Facilities
Published: 2003-02-19T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: GAO prepared this report in response to its basic legislative responsibilities. Its objectives are threefold: (1) to examine the historical funding trends and their impact on the condition of the active forces' facilities, (2) to evaluate the consistency of the services' information on facility conditions, and (3) to assess the Department of Defense's (DOD) long-term strategic plan and objectives to improve facility conditions.
section_title: What GAO Found
paragraphs: While the amount of money the active forces have spent on facility maintenance has increased recently, DOD and service officials said these amounts have not been sufficient to halt the deterioration of facilities. Too little funding to adequately maintain facilities is also aggravated by DOD's acknowledged retention of facilities in excess of its needs. From fiscal year 1998 to 2001, obligations for facility maintenance rose by 26 percent with increases coming from higher annual budget requests, congressional designations that exceeded those requests, supplemental appropriations, and the services' movement of funds to maintenance projects. Funding for military construction also increased during this period. However, military reports and testimonies state that these amounts have been insufficient, and GAO's recent visits to installations document the deteriorated conditions of facilities. There is a lack of consistency in the services' information on facility conditions, making it difficult for Congress, DOD, and the services to direct funds to facilities where they are most needed and to accurately gauge facility conditions. Although DOD developed a standard rating scale to summarize facility conditions (C-ratings), each service has the latitude to use its own system for assessing conditions, including the types of facility raters, assessment frequencies, appraisal scales, and validation procedures. Although DOD has a strategic plan for facilities, it lacks comprehensive information on the specific actions, time frames, responsibilities, and funding needed to reach its goals. Also, DOD has set up three objectives to improve its facility conditions--to fully fund sustainment, to achieve a 67-year average recapitalization rate by fiscal year 2007, and to improve facility conditions so that deficiencies have limited effects on military mission achievement by fiscal year 2010. However, the services have not proposed to fully fund all the objectives and have developed funding plans to achieve others that have unrealistically high rates of increase during the out-years. At the same time, the services have not developed comprehensive performance plans to implement DOD's vision for facilities.

section_title: Letter
paragraphs: Department of Defense (DOD) installations and facilities are critical to  supporting U.S. military forces, but they have not been sufficiently  maintained or recapitalized for years. Defense facilities are durable capital  assets that, if properly built and sustained, have useful lives ranging from  50 years and beyond. However, in the absence of proper maintenance,  these facilities perform poorly and decay prematurely. Without periodic  recapitalization, they can become obsolete and no longer be cost- effectively renovated and must be replaced with new construction.  Consequently, DOD and active military service officials report that 68  percent of facility classes rated by major commands are in such a  deteriorated condition that they negatively affect the quality of life of  military personnel and their families and their ability to achieve their  mission. Some officials estimate that it will cost tens of billions of dollars  spread over 6 to 9 years to restore DOD’s facilities, along with a steady,  predictable stream of sustainment and recapitalization funding after that  to prevent problems from reoccurring. DOD and Congress have  recognized the need to fully fund maintenance and recapitalization of  facilities, as well as to reduce the department’s inventory of facilities  through an upcoming round of base realignments and closures scheduled  for fiscal year 2005.
We prepared this report under our basic legislative responsibilities. We are  providing it to you because of your oversight responsibilities for DOD’s  facilities. This report (1) examines the historical funding trends for facility  maintenance and military construction (including budget requests, initial  congressional designations, and obligations) and their impact on the  condition of the active forces’ facilities, (2) evaluates the consistency of  the services’ information on facility conditions to help ensure that funding  decisions effectively target facilities in greatest need and reported ratings  accurately measure facility condition improvements, and (3) assesses the  department’s long-term strategic plan and objectives to sustain and  improve the condition of facilities. This is one of several reviews that we  have underway examining various aspects of facility conditions in the  department. We are also reviewing the physical condition of and  maintenance and recapitalization plans for military reserve facilities and  the management of housing for unaccompanied personnel.
In performing our work for this review, we examined DOD’s budget  requests, congressional designations, and obligations data for facilities  maintenance and construction since fiscal year 1998. In addition, we  visited 10 military installations and met with officials of the department,  the services, and six major commands to review the management and  physical condition of their facilities. During our visits to installations, we  discussed the evaluation methods and the condition assessment processes  with the facility raters and reviewers and toured various facilities to  observe their physical condition and deficiencies. We reviewed each  service’s system for assessing facility conditions and compared this  information across the services. We also examined DOD’s plans and  objectives to address the condition of facilities. We did not attempt to  validate DOD’s reported requirements for the sustainment of its facilities,  nor did we validate DOD’s facility inventory database. We conducted our  work between February and November 2002 in accordance with generally  accepted government auditing standards. A more thorough description of  our scope and methodology is in appendix I.
subsections: section_title: Background
paragraphs: In the United States, the active military services are responsible for nearly  380,000 facilities, with an estimated plant replacement value of over $435  billion. These facilities include buildings, such as barracks, administrative  space, classrooms, hangars, warehouses, maintenance buildings, churches,  and child development centers, as well as non-buildings, such as runways,  roads, railroads, piers, and utility structures and systems. If family housing  were included, the total number of facilities would rise to more than  524,000, with a plant replacement value of more than $477 billion.
subsections: section_title: Funding for Facilities
paragraphs: Historically, the military services used their own metrics, terminology, and  accounting structures to manage their facilities. In fiscal year 2002, DOD  replaced the operation and maintenance funded real property  maintenance program with two distinct activities and accounting  structures for (1) sustainment and (2) restoration and modernization,  having already created a separate accounting structure for demolition and  disposal in fiscal year 1999. In addition, DOD has developed a model for  estimating sustainment funding needs, and it is developing a model for  forecasting restoration and modernization funding requirements. The  Army and the Air Force began using the sustainment and restoration and  modernization programs in fiscal year 2002, while the Navy and the Marine  Corps asked for and were given permission to delay implementation of  these new programs until fiscal year 2003.
Operation and maintenance funds primarily support sustainment activities,  which are designed to keep facilities in good working order. Sustainment  funds cover expenses for all recurring maintenance costs and contracts, as  well as for major repairs of nonstructural facility components (e.g.,  replacing the roof or repairing the air-conditioning system) that are  expected to occur during a facility’s life cycle. Restoration includes repair  and replacement work 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. Both operation and maintenance and military  construction monies fund these activities, as well as demolition and  disposal activities. A fourth activity—new construction—is also funded  with both military construction and operation and maintenance monies.  This activity involves the construction of new buildings and other  facilities, referred to as new footprint projects. There are limitations to  the amount of operation and maintenance funds that can be used for new  construction and the alteration or conversion of existing facilities: a  maximum of $750,000 per project or up to $1.5 million if the project is  designed to correct a deficiency that threatens life, health, or safety. As  figure 1 illustrates, overlapping funding sources support DOD’s  sustainment, restoration, and modernization of military facilities, along  with its demolition program and new military construction.
According to DOD, fully funding sustainment is the most cost-effective  approach to managing facilities because it provides the most performance  over the longest period of time for the least investment. Without adequate  sustainment, expected service life is reduced and facilities must be  recapitalized sooner than expected. Yet, even with adequate sustainment,  over time facilities eventually either physically wear out or become  obsolete. An obsolete facility is one that is irrelevant to present-day  missions regardless of its condition; for example, a firehouse built in 1930  that is too narrow or too short to accommodate modern fire trucks. Once  facilities reach the end of their expected service life, they must be  replaced or extensively renovated or modernized—referred to as  recapitalization—if they are to continue providing adequate performance.  DOD estimates that an average recapitalization rate of 67 years allows  fully sustained facilities to meet their requirements. In fiscal year 2002,  DOD’s average recapitalization rate was 101 years, and it is projected to  increase to about 150 years in fiscal year 2003. Recapitalization  investments can also be made periodically throughout a facility’s service  life, which extends service life and delays the need for replacement.  Moreover, even after recapitalization investments are made, facility  performance can rapidly decline in the absence of adequate sustainment.
section_title: Rating of Facilities
paragraphs: In an attempt to standardize the rating of facilities across the services and  to provide a measure of facility conditions, DOD issued its first  Installations’ Readiness Report in 1999. Within the report, the services’  major commands report on each of their nine facility classes using a scale  of C-1 through C-4, as defined in table 1. For example, a C-4 rating is an  indication that a facility class for a specified installation or major  command has deficiencies that require workarounds or effectively  preclude satisfactory mission accomplishment. According to DOD’s  guidance to the services, they could implement this readiness reporting  system without modifying their existing assessment processes. As a result,  all four services are using different systems to assess facility conditions  and develop C-ratings. However, reporting their ratings to DOD requires  the services to implement additional processes to summarize information  by major commands using C-ratings for facility classes.
The nine facility classes are groupings of like facilities. These facility  classes are similar to the groupings traditionally used for military  construction budgets and are consistent with the real property inventories  the military services maintain. Table 2 lists the nine classes with examples  of the types of facilities included in each class.
In fiscal year 2001, DOD reported that 68 percent of facility classes rated  by the services’ major commands received C-3 or C-4 ratings, indicating  that they were in such deteriorated condition that they negatively affected  the quality of life of military personnel and their families and their ability  to achieve their mission. For example, the Army Forces Command did not  rate any of its facility classes as C-1, but it rated its medical class as C-2  and its remaining eight classes as C-3. During the same period, the Navy’s  Pacific Fleet did not rate any of its facility classes as C-1 or C-2, but it  rated its community and housing class as C-4 and its remaining seven  classes as C-3. The Pacific Fleet does not report ratings for the mobility  class.
section_title: Strategic Plan and Objectives for Facilities
paragraphs: DOD has labored in recent years to develop its Defense Facilities  Strategic Plan, which outlines a set of initiatives over a 20-year period that  are directly linked to the plan’s vision, mission, and goals. The vision set  forth in the plan is to have installations and facilities available when and  where needed to effectively and efficiently support missions. To achieve  its vision, the plan’s strategic goals are to (1) locate, size, and configure  defense installations and facilities to meet the requirements of today’s and  tomorrow’s force structures; (2) acquire and sustain defense installations  and facilities to provide mission-ready installations with quality living and  work environments; (3) leverage resources—money, people, and  equipment—to achieve the proper balance between requirements and  available funding; and (4) improve facility management and planning by  embracing best business practices and taking advantage of modern asset- management techniques and performance-assessment metrics.
In addition to the broad goals set forth in its strategic plan, DOD  established three key objectives. The objectives are (1) to fully fund  sustainment, starting in fiscal year 2004; (2) to achieve an average  recapitalization rate of 67 years, by fiscal year 2007; and (3) to concentrate  funding so as to eliminate C-3 and C-4 facility ratings, bringing the ratings  up to a minimal C-2 level by fiscal year 2010. As a point of reference,  although there were no specific funding targets for fiscal year 2002, the  military services intended to fund sustainment between 78 and 98 percent  of requirements and reach an average recapitalization rate between 63 and  163 years in fiscal year 2002. As well, departmentwide facility ratings show  that major commands rated 68 percent of facility classes C-3 or C-4. DOD  gradually phased in its guidance to the services on sustainment beginning  in fiscal year 2002 when it instructed the services to fund sustainment to  the maximum extent possible. For fiscal year 2003, DOD instructed the  services to attempt to fully fund sustainment to the levels specified by its  facilities sustainment model. For fiscal year 2004 and thereafter, DOD  instructed the services to fully fund sustainment to the levels defined by  the facilities sustainment model. To reduce the recapitalization rate and  eliminate C-3 and C-4 ratings, facilities need to be fully sustained.
The Defense Facilities Strategic Plan also notes that DOD needs to better  focus its sustainment and restoration and modernization dollars to cost- effectively operate and maintain its facilities to support its military  missions. The plan states that DOD should only fund sustainment and  restoration and modernization of those facilities that are needed. As  authorized by Congress in 2001, DOD intends to reduce its inventory of  facilities as the result of closing some installations and by consolidating  overlapping activities within and across the services through a round of  base realignments and closures scheduled for fiscal year 2005.
section_title: Prior GAO Reports
paragraphs: We have conducted a number of reviews where we identified areas in  which DOD and the services could improve their facilities management  program. Since 1997, we have identified DOD infrastructure management  as a high-risk area. In 2001, we reported that DOD needed to develop a  comprehensive long-range plan for its facilities infrastructure that  addresses facility requirements, recapitalization, and maintenance and  repair needs. We updated this report in January 2003, as well as  designated federal real property as a new high-risk area at the same time.  In September 1999, we reported on the management of DOD’s facility  maintenance and repair programs and recommended that the Secretary of  Defense (1) develop a way to link needs assessment with both resource  allocations and tracking systems that show whether high-priority needs  are receiving funding, (2) establish standardized condition assessment  criteria, and (3) have the services adopt a valid engineering-based  assessment system for facilities maintenance. In February 2000, we  reported on the funding amounts that Congress had designated for DOD’s  operation and maintenance subactivities and compared the amounts with  DOD’s obligations for those same subactivities. We found that DOD  consistently moved operation and maintenance funds into and out of  certain activities, usually because they were needed elsewhere. In a June  2002 report, we examined the condition of barracks used to house military  recruits in basic training and concluded that, to varying degrees, most  barracks were in significant need of repair, although some were in better  condition than others.
section_title: Many Facilities Remain in Deteriorated Condition, Even with Increase in Maintenance and Military Construction Funding
paragraphs: While the amounts of money DOD devoted to facility maintenance and  military construction increased between fiscal year 1998 and 2001 and  fiscal year 1998 and 2002, respectively, DOD and service officials said  these amounts have to compete with other defense programs and  priorities and have been insufficient to restrain the deterioration and/or  obsolescence of facilities used by the active forces. In general, the funding  increases for facility maintenance resulted from moderately higher annual  requests by the services, except in fiscal year 2000; congressionally  designated funding that was higher than that requested by the services;  supplemental appropriations; and the services’ movement of funds to  maintenance projects at the end of each fiscal year. The funding increase  in military construction resulted primarily from congressional  designations greater than initially requested by DOD. Even with these  increases, funding has fallen short of what is needed to reverse the  deteriorated state of many facilities, as highlighted in recent congressional  testimony and various studies conducted by the services. Recent  departmentwide facility ratings show that major commands rated 68  percent of facility classes C-3 or C-4. Our visits to 10 military installations  further underscored the scope of the deteriorated conditions.
subsections: section_title: Facility Maintenance Funding Increased from Fiscal Year 1998 to Fiscal Year 2001
paragraphs: DOD’s reported obligations for facility maintenance, funded with  operation and maintenance monies, show an increase between fiscal year  1998 and 2001. Moreover, these obligations were always more than the  services originally requested or that Congress initially designated. As  figure 2 shows, the amounts that DOD requested for facility maintenance  fluctuated between 1998 and 2001, increasing overall from $3.5 billion in  fiscal year 1998 to just above $4.6 billion in fiscal year 2001. During the  same period, Congress consistently designated more funding for facility  maintenance than DOD had requested. In addition, DOD’s reported  obligations for facility maintenance increased from over $3.8 billion in  fiscal year 1998 to more than $4.8 billion in fiscal year 2001, a 26 percent  increase during fiscal years 1998 through 2001, unadjusted for inflation.
While some funding increases for facility maintenance resulted from  moderately higher requests by the services (except in fiscal year 2000),  most of the growth stemmed from congressionally designated funding that  was above that requested by the services; supplemental appropriations  that increased facility maintenance funding in each fiscal year; and the  services’ internal movement of funds into facility maintenance from other  operation and maintenance-funded programs, such as operating tempo  programs. According to a DOD official, some of the growth in the  reported maintenance funding resulted from internal adjustments among  accounts—intrabudget transfers from other appropriations to facility  maintenance. The services also moved funds out of facility maintenance to  other programs such as base operations and force readiness during this  period; however, the outward movements of funds were generally less  than the amounts moved into facility maintenance. For example, during  fiscal year 2000, the Army initially moved $6.8 million out of facility  maintenance to base operations support but, by the end of the fiscal year,  had moved more than $10 million back into facility maintenance from base  operations support. In addition, it is important to note that in fiscal year  2000, DOD split its budget request for facilities between $2.8 billion for  facility maintenance and $1.8 billion for quality of life enhancements.  DOD specifically requested funds for quality-of-life enhancements in fiscal  year 2000 to reduce the services’ facility maintenance backlog and to  repair barracks, dormitories, and related facilities. Although Congress  initially designated only slightly more funds (approximately $64 million)  for facility maintenance than DOD requested, in its conference report  Congress moved more than $1.6 billion from DOD’s quality-of-life  enhancements into facility maintenance.
DOD has considerable flexibility in using operation and maintenance  funds and can move them in several ways. Congress makes appropriations  at the aggregated account level—that is, for the Army, the Air Force, the  Navy, the Marine Corps, and the Defense-wide operation and maintenance  accounts. However, to indicate how it expects operation and maintenance  funds to be spent, Congress designates, in its conference report on annual  appropriations acts, specific amounts for each subactivity group, such as  sustainment, restoration and modernization, or base operations. As  discussed further in appendix III, DOD has broad discretion in how it uses  operation and maintenance funds.
section_title: Military Construction Appropriations Increased from Fiscal Year 1998 to Fiscal Year 2002
paragraphs: At the same time that DOD’s reported obligations for facility maintenance  increased, appropriations for military construction also rose. However, the  amounts that DOD requested for military construction fluctuated between  fiscal year 1998 and 2001, from nearly $1.6 billion in fiscal year 1998, down  to about $1.2 billion in fiscal year 2000, and up to more than $3.9 billion in  fiscal year 2002. During the same period, as figure 3 shows, Congress  consistently appropriated more funding for military construction than  DOD had requested by adding construction projects. Although the  appropriated amounts slightly decreased between fiscal year 1998 and  1999 and again between fiscal year 2000 and 2001, total appropriations  increased from $2.1 billion in fiscal year 1998 to more than $4.1 billion in  fiscal year 2002, a 95 percent increase, unadjusted for inflation.
In fiscal year 2000, DOD requested less in military construction funds than  it had asked for in the previous two fiscal years but it also requested  advance appropriations for fiscal year 2001 totaling more than $1.5 billion  for the active services. Congress did not appropriate funds for the  advance appropriation request but appropriated military construction  funds for fiscal year 2000 that were greater than the initial request. In its  report on the fiscal year 2000 military construction appropriation bill, the  Senate Committee on Appropriations noted that the use of advance  appropriations was not consistent with the long-standing policy of fully  funding military construction and directed DOD to fully fund all military  construction projects in future budget requests. The Committee also noted  that it was concerned about DOD’s continued lack of investment in  military facilities and indicated that the fiscal year 2000 military  construction request failed to request sufficient funds to support DOD’s  efforts to modernize, renovate, and improve aging facilities. In fiscal year  2002, the administration requested $3.9 billion—$1.72 billion more than  requested in fiscal year 2001—for military construction to help eliminate  the most seriously degraded facilities and reduce the recapitalization rate.
section_title: Testimony and Studies Indicate that Services Have Underfunded Facility Maintenance
paragraphs: Even with the growth in funding for facility maintenance and military  construction, DOD and service officials said the amounts have fallen short  of what is needed to stop the deterioration and obsolescence of facilities  used by the active forces. In testimony in April 2001 before the House  Committee on Armed Services, Military Installations and Facilities  Subcommittee, officials from the military services attributed deteriorated  facility conditions to consistent underfunding. For example, Army officials  testified that average facility maintenance funding since the early 1990s  was approximately 60 percent of what was needed. These officials also  testified that available maintenance funding met only 70 percent of their  needs in fiscal year 2001. Likewise, Air Force officials testified that facility  maintenance funding shortfalls have hindered the service’s efforts to  sustain and operate Air Force facilities and only allow the Air Force to  provide day-to-day maintenance for facilities. Navy and Marine Corps  officials also testified that their services consistently underfunded facility  maintenance.
In addition to congressional testimony, DOD and the military services have  issued a number of recent reports that further underscore the insufficiency  of funding for facility maintenance. In its annual financial reports, DOD  reported that its deferred maintenance increased from $35.9 billion in  fiscal year 1998 to $50 billion in fiscal year 2001—a $14.1 billion increase  in 3 years. However, it is important to note that in fiscal year 2001, DOD  stopped reporting deferred maintenance because it found deferred  maintenance to be inaccurate, subjective, and unverifiable. In the  Installations’ Readiness Report for fiscal year 2001, the services reported  that 68 percent of their facility classes rated by major commands were C-3  or C-4. In a report on its facilities investment plan, the Air Force indicated  that, since fiscal year 1998, operation and maintenance facilities funding  was limited to 1 percent of the service’s total plant replacement value.  However, the full 1 percent rarely reached Air Force installations because  the funds were moved to other needs or used to pay for critical repairs or  upgrades to facilities, which are not considered maintenance activities.  Based on DOD’s facilities sustainment model, 1 percent of plant  replacement value is not enough to fully sustain facilities. In a 2002 report  on the Navy’s facilities maintenance program, the Naval Audit Service  stated that the Navy historically understated its maintenance requirements  and used its facility maintenance funds to resolve funding shortfalls in  other Navy programs. The Naval Audit Service concluded that, as a result  of these movements and the resulting reductions in maintenance funding  at the beginning of the fiscal year, it is difficult for the Navy to make or  implement rational plans for maintaining and repairing its facilities.
section_title: Deteriorated Condition of Military Facilities
paragraphs: Although we found new construction and renovations of buildings taking  place, we also observed numerous examples of deteriorated conditions of  military facilities during our visits to 10 installations across the country.  Moreover, we noted that while facilities may appear to be in relatively  good condition on the exterior, their interior conditions may be less so  with deteriorated heating, air-conditioning, and ventilation systems and  other deficiencies. Among the deficiencies observed were    buildings closed due to excessive mold and mildew;   motor pools forced to perform vehicle maintenance outdoors on gravel    administrative offices located in converted wooden barracks built in    maintenance performed on expensive electronic equipment inside  temporary structures with inadequate heating, air-conditioning, or  ventilation systems; and  runways policed regularly by base personnel to pick up debris and  identify cracked pavement.
In the following sections, we describe some of the facility deficiencies we  observed at each of the 10 military installations we visited.
subsections: section_title: Deficiencies Observed at Army Installations
paragraphs: Established in 1918, Fort Bragg, North Carolina, is home to the 82nd  Airborne and its three brigades. At Fort Bragg, we observed a number of  newly constructed facilities, such as a medical center and a youth center,  as well as many facilities that were in relatively poor condition. For  example, we saw wooden buildings that were constructed during World  War II and were still in use for a variety of purposes, including  administrative space and storage. In fiscal year 2001, Fort Bragg’s  administrative facilities were rated C-4, which is defined by DOD as having  major deficiencies that preclude satisfactory completion of the mission.  These wooden buildings contain nearly 2 million square feet, or about 7  percent of the installation’s total facility space. Figure 4 shows the exterior  walls of one of these badly deteriorating buildings; the paint on the walls  was peeling and there were several holes in the wood. In addition, a  number of temporary structures were in use, including sheds used for  administration and training at a vehicle maintenance yard. At this location,  personnel also performed maintenance on vehicles on a gravel lot where  dirt and debris sometimes got into engine parts and compromised the  quality of their work.
Fort Leavenworth, Kansas, which was established in 1827, is home to the  Combined Arms Center that educates officers in operational command  and staff functions, the Command and General Staff College, the National  Simulation Center, and the U.S. Disciplinary Barracks. At Fort  Leavenworth, we saw a newly constructed prison and a recently renovated  visiting officers’ quarters but also numerous deteriorated facilities,  including a warehouse with a broken structural wood beam, as shown in  figure 5. Notwithstanding this hazard, personnel still worked in this facility  daily. In fiscal year 2001, Fort Leavenworth’s supply facilities, which  include warehouses, were rated C-4.
Pope Air Force Base, North Carolina, established as Pope Field in 1919, is  currently home to the 43rd Airlift Wing, which provides airlift support to  adjacent Fort Bragg. While we saw buildings at Pope that appeared to be  in good condition on the outside, officials advised us to drink only bottled  water because the installation’s water pipes were so thoroughly clogged  with rust and sediment that the water was considered unsafe to drink.  Figure 6 shows some of the water pipes that were removed from a  renovated building. Base officials told us that the fire station’s ventilation  system was unable to adequately remove diesel fire engine exhaust from  the air. We also learned that crumbling concrete and a decaying storm  drainpipe required the base’s main runway to be shut down in February  2002. While the runway and one taxiway were being repaired, all flight  operations, equipment, and personnel had to be transferred to other  installations for 30 days—at a cost of over $800,000. We were also told the  runway was policed regularly to clean up debris and identify cracked  pavement. The base’s operations and training facility class, including  runways and taxiways, was rated C-4 in fiscal year 2001.
Whiteman Air Force Base, Missouri, established in 1942 as Sedalia Army  Air Field, is a former missile base that is now home to the Air Force’s B-2  bombers. Even with new construction to accommodate B-2 maintenance  operations, the facilities exhibited a number of problems. Crumbling  pavement outside the entrance of a main cargo center threatened to topple  loaded forklift machinery (see fig. 7). A 48-year-old wood frame  warehouse had safety, lighting, and electrical code violations and a leaky  roof. The warehouse also had a loading dock that forklift operators were  told not to use because the dock’s cracked and pitted concrete might not  support the weight of the machinery. In fiscal year 2001, the base’s supply  facility class, including warehouses, was rated C-4.
Los Angeles Air Force Base, California, officially designated as Los  Angeles Air Force Station in 1964, is the current home of the Air Force  Space and Missile Systems Center whose mission involves acquisition and  research, development, and testing of missile systems. Base officials told  us that a number of buildings had asbestos in the interior walls and  ceilings, and we observed peeling lead-based paint on the exterior  surfaces. The officials also told us that at one of the base’s computer  laboratories the asbestos levels in the floor tiles were too high to risk  removing them. The base’s research, development, testing, and evaluation  facilities were rated C-4 in fiscal year 2001. Officials also showed us the  main electrical substation for the base, which used 1930s-era equipment  and was difficult to repair because parts were no longer available. The  substation once caught fire and was shut down; there was a great deal of  difficulty getting it completely operational. Some of its wiring was still  covered with asbestos insulation.
section_title: Deficiencies Observed at Navy Installations
paragraphs: At Naval Station San Diego, California, established in 1922 and homeport  to 89 Pacific Fleet ships, we observed several deteriorated facilities,  including piers with broken wooden fenders and cracked concrete. One  pier could not support heavy loading equipment. In addition, officials told  us the heating, ventilation, and air-conditioning systems at the radar  school have only been minimally maintained for many years due to a lack  of funds. In fiscal year 2001, Naval Station San Diego’s operations and  training class, of which these facilities are part, was rated C-3, which is  defined by DOD as having significant deficiencies that prevent performing  some missions.
During our visit to Naval Base Coronado, California, which was  established as Naval Air Station North Island in 1917 and is comprised of  the naval air station, Naval Amphibious Base Coronado, and five other  activities, we observed a severely deteriorated runway with large sections  of cracked and broken concrete that had, on at least one occasion, caused  minor damage to aircraft using the runway (see fig. 8). The operations and  training facility class, including runways, at Naval Base Coronado was  rated C-3 in fiscal year 2001. Moreover, officials told us that the base  continually dealt with large problems created by small maintenance  problems that were not addressed. For instance, they told us a toilet,  which did not shut off properly, flooded out one building, resulting in  $140,000 in cleanup costs. We also saw one of the base’s child  development centers, which was permanently closed in January 2002  because of severe problems with mold that had rotted the support  structure underneath the building’s floor. The building’s closure, which  affected more than 160 children for whom alternate care had to be found,  had a significant impact on the quality of life of military families at this  base.
At Naval Station Norfolk, Virginia, established in 1917 and homeport for 76  ships and 138 aircraft, we observed several facilities under renovation, but  we also saw many deteriorated facilities, including a large warehouse that  was evacuated because the wooden beams supporting the roof broke.  Likewise, during our visit to Naval Air Station Oceana, Virginia,  established in 1952 and home to 23 aircraft squadrons assigned to both the  Atlantic and Pacific Fleets, we saw several newly constructed facilities,  some of which were replacing obsolete facilities. Still, officials told us that  sections of the installation’s aircraft intermediate maintenance depot, the  Navy’s only F-14 aircraft electronics maintenance support center,  frequently shut down because the facility’s failing air-conditioning system  could not adequately cool room temperatures to the levels necessary for  aircraft repair equipment to function. As a result, according to base  personnel, there was a backlog of aircraft parts that needed repairs,  grounding some aircraft and forcing sailors to work long hours to make up  the backlog. In fiscal year 2001, Naval Air Station Oceana’s maintenance  and production facilities, including avionics maintenance shops, were  rated C-4. Figure 9 shows the aircraft intermediate maintenance depot’s  portable generator, used to supplement the internal air-conditioning  system, being cooled by a garden hose and a sprinkler to prevent  overheating. In addition, officials told us that some barracks at Naval Air  Station Oceana were not occupied because their heating, ventilation, and  air-conditioning systems were not maintained, allowing mold and mildew  to grow in walls, carpeting, and ceilings—all of which must be replaced.  Personnel who occupied these buildings had to find housing off base.
Quantico Marine Corps Base, Virginia, established in 1917, serves two  primary roles—as the location where Marine Corps’ concepts, doctrine,  training, and equipment are developed and as the focal point for Marine  Corps’ professional military education. While we saw a number of new  buildings in good exterior condition, we also saw a number of older,  deteriorated facilities at the base. For example, we observed buildings  with doors falling off their frames, barracks room walls cracked and  covered with mold, and air-conditioning systems close to failure. In one  building with a mess hall, living quarters, and classrooms, base officials  showed us corroded valves from the air-conditioning system (see fig. 10).  They told us that the system, which was imported from India in 1999,  constantly leaked and had corroded the two valves in only one year. They  added that because the system was only one of three in use in the United  States, it was difficult to obtain the parts needed to repair it.
Although the base’s operations and training facility class was rated C-2 in  fiscal year 2001, we visited two old classroom buildings that were still in  use but did not have adequate indoor bathroom facilities. As figure 11  shows, personnel must use outdoor portable facilities at one training  location.
section_title: Military Services’ Data on Facility Conditions Are Inconsistent
paragraphs: The information that the services have on the condition of their facilities is  inconsistent across the services, making it difficult for Congress, DOD,  and the services to direct funds to facilities that are in most need of repair  and to measure progress in improving facilities. Although DOD established  a standard rating scale to summarize facility conditions and ability to  support military mission, each service has the latitude to use its own  system for developing and validating the ratings. According to DOD’s  guidance to the services, they can implement this rating scale without  modifying their existing assessment processes. We found that the services,  and in some cases major commands within a service, employ different  types of facility raters and procedures, assessment scopes and  frequencies, appraisal scales, and validation procedures. This lack of  consistency makes it difficult for DOD and the services to direct funds to  facilities that are in most need of repair and to accurately measure the  progress of improvements in facility conditions. Therefore, Congress may  be relying on inconsistent data in its oversight responsibilities.
subsections: section_title: DOD Established a Standard Rating Scale to Summarize Facility Conditions
paragraphs: In fiscal year 1999, DOD developed a standard rating scale for  summarizing the condition of military facilities using C-ratings and  adopted the Installations’ Readiness Report as its method for reporting  facility conditions to Congress. DOD issued the Installations’ Readiness  Report to fulfill its reporting requirement to Congress under section 117 of  title 10 of the United States Code, which specifies that DOD measure the  capability of defense installations and facilities to provide appropriate  support to forces in the conduct of their wartime missions. DOD adopted  the report as a method for including the condition of installations and  facilities in its readiness reporting system, in which commanders rate the  readiness of their units to carry out required missions, and to help in the  decision-making process on how to allocate facility maintenance and  construction funds. Regardless of the creation of the standard scale for  summarizing facility conditions, each service has the latitude to develop  its own C-rating definitions and facility condition assessment system.  DOD’s guidance to the services state that they can implement this  readiness reporting system without modifying their existing assessment  processes.
section_title: Services Use Different C-rating Definitions
paragraphs: Although DOD developed a standard rating scale, the services’ C-ratings  have a somewhat different focus and definitions than DOD’s. DOD’s   C-rating definitions focus on the impact of facility deficiencies on mission  accomplishment and do not specify whether it is the mission of the  personnel who use the facilities or the mission of the facilities. In general,  the services’ C-rating definitions focus on the impact of deficiencies on the  ability of facilities to support or perform their assigned or required  missions. For example, the mission of a child development center is to  provide safe and adequate care for the children of military families. As a  result, C-ratings are not consistently defined across DOD and the services.  Table 3 compares DOD’s and the service’s C-rating definitions.
Although none of the C-ratings measures the impact of facility conditions  on readiness, DOD’s reporting of the ratings in its annual Installations’  Readiness Report to Congress attempts to link facility conditions to  military readiness. However, some service officials told us that it is  difficult to gauge the affect of facility conditions on military mission or  readiness. For example, an Atlantic Fleet official said it is hard to quantify  how a leaking roof affects the Navy’s readiness to protect sea lanes.
section_title: Services Have Different Assessment Systems for Developing and Validating Ratings
paragraphs: In determining C-ratings for its facility classes, each service developed its  own system for assessing and validating its facility conditions. Table 4  compares the basic characteristics of the assessment systems used by the  four services to develop C-ratings.
The services use different types of personnel and procedures to rate the  condition of their facilities. The Army relies on building occupants and  users to rate each facility using facility condition assessment worksheets.  The worksheets contain a list of Army required components for each type  of facility, such as condition of restrooms, adequacy of storage space, or  size and adequacy of administrative or training space. Booklets containing  illustrations showing conditions for facility components at each rating  level accompany the worksheets. The Air Force has no formal facility  assessment process. Instead, building occupants and users report any  deficiencies to building managers, who then review the deficiencies and  submit work orders to initiate repair projects. In addition, engineers and  engineering technicians also assess some facilities. The Navy uses mostly  engineers, engineering technicians, and certified journeymen to assess  facilities. They conduct the assessments by identifying and classifying  deficiencies as either critical or deferrable. The Atlantic Fleet, the Navy’s  second largest major command, however, developed its own assessment  system that uses criteria different from Navy-wide standards to classify  deficiencies. Atlantic Fleet facilities staff told us that they developed this  system because they were concerned about the lack of consistency under  the Navy-wide system. The Marine Corps depends on technicians and  personnel with skilled trade backgrounds to rate the condition of facilities’  major components and structural integrity. Based on the raters’ data, a  computer program then calculates both the cost of improvements and the  installations’ C-ratings.
subsections: section_title: Assessment Scopes and Frequencies Vary among the Services
paragraphs: The scopes and frequencies of facility assessments also differ among the  services. The Army assesses all of its facilities annually and uses some  sampling as part of the process. The Air Force does not formally assess  facilities; rather, installation officials identify deficiencies and program  repair projects throughout the year. In most Navy major commands,  facilities are inspected on a 3-year cycle, but in the Atlantic Fleet, facilities  are assessed on 2-, 3-, and 6-year cycles, depending on the type of facility.  The Marine Corps inspects some types of facilities annually but inspects  other types of facilities less frequently.
In addition, the services do not assess all facilities in their inventory. For  example, the Army does not report on the condition of its temporary  facilities, which includes World War II-era wood buildings. At Fort Bragg,  World War II-era facilities comprise nearly 2 million square feet of space,  or 7 percent of the installation’s total facility space. The Army does not  consider temporary facilities as meeting quantity requirements. In the Air  Force, some temporary structures are not considered part of an  installation’s facility inventory. At Pope Air Force Base, for instance,  temporary structures that have been used for electronic equipment  maintenance since the 1970s are not counted as part of the installation’s  facility inventory but, rather, are counted as equipment. According to one  Navy official, the service also does not assess temporary structures, such  as trailers.
section_title: Services Use Different Appraisal Scales
paragraphs: The four services also use different appraisal scales in assessing facility  conditions. In the Army, facilities receive a green, amber, or red rating  based on an assessment of physical conditions. A green rating signifies  that a facility meets standards and is in overall good condition. An amber  rating indicates that a facility does not fully meet facility standards, while  a red rating signifies a facility is substandard and in overall poor condition.  In the Air Force, projects are prioritized using the Facility Investment  Metric, which weights repair project costs by mission area, such as  primary mission and base support, and mission impact. Projects, not  facilities, are rated as minimal, degraded, or critical. A minimal rating  indicates marginal or little adverse impact to installation mission  capability. A degraded rating indicates a limited loss of installation mission  capability. A critical rating indicates a significant loss of installation  mission capability and frequent mission interruptions. In the Navy,  facilities are rated good, fair, or poor based on deficiencies identified  during assessments. A good rating indicates that a facility complies with  facility standards. A fair rating denotes a facility that does not meet  standards and is in overall poor condition. A poor rating indicates that a  facility requires replacement. In the Marine Corps, facilities are rated as  adequate, substandard, or inadequate based on renovation costs or the  condition of major facility components, as well as health or safety issues.  An adequate rating indicates that facility components (such as electrical  systems or fire protection) have only minor deficiencies, a substandard  rating signifies that facility components have significant deficiencies, and  an inadequate rating indicates that facility components have major  deficiencies that impair functionality.
In translating facility condition or project ratings into C-ratings reported to  DOD, the Army, the Navy, and the Marine Corps use similar computation  methods while the Air Force employs a different method. In general, the  Army, Navy, and Marine Corps systems assign C-ratings to facility classes  based on mathematical formulas that consider both the results of facility  condition assessments and the plant replacement value. These formulas  vary slightly from service to service. In contrast, the Air Force uses its  Facility Investment Metric to weight repair project costs by mission area  and impact. The total weighted repair project costs are summed and  divided by the total plant replacement value to obtain a percentage for  each facility class. Each percentage is converted to a C-rating using the  following break points: C-1: 0 to 10 percent; C-2: greater than 10 to 20  percent; C-3: greater than 20 to 40 percent; and C-4: greater than   40 percent.
section_title: Validation Procedures Are Not Comprehensive
paragraphs: Neither DOD nor the services have comprehensive validation procedures  for facility condition information, although some major commands and  installations review and verify their own data. However, such practices are  inconsistent within the services. In the Army, for instance, we found that  facilities personnel at Fort Leavenworth reviewed every Installation Status  Report worksheet. By comparison, at Fort Bragg there is no review  process. During our visit to that base, we reviewed Installation Status  Report worksheets where facility assessors rated all assessment  categories as amber. Facilities personnel told us that since an amber rating  requires no written explanation of deficiencies, as does a red rating,  building users often assign amber ratings so they can quickly complete  their assessment worksheets. Moreover, at Fort Leavenworth we found  that all building users responsible for assessing facilities were required to  attend a training session on completing Installation Status Report  worksheets. At Fort Bragg, on the other hand, we were told that no facility  assessors attended this year’s 1-hour training session while last year only  two individuals attended the training. In the Air Force, some major  commands send infrastructure sustain teams to visit installations on an   18-month cycle to identify and validate specific projects for major  infrastructure systems (e.g., airfield pavements, airfield lighting, etc.). In  the Navy, some regions and major commands have procedures for  reviewing facility condition information. For example, Atlantic Fleet  facilities personnel told us that facility assessors and installation staff  review and collaborate on all assessment data before they are submitted  for calculating facility condition ratings. They also told us that all critical  deficiencies are reviewed by a Navy public works center. The Pacific Fleet  relies primarily on its component regional commands to verify assessment  data but has developed a program called condition assessment validation  visits in which fleet, regional, and installation staff members visit bases to  review and evaluate assessment data. However, according to Pacific Fleet  officials, since the program began in fiscal year 2001 they have completed  only three visits and there are no funds currently programmed to support  future visits. The Marine Corps has no servicewide validation procedures.
section_title: Inconsistent Definitions and Data May Be Misleading
paragraphs: Without a DOD-wide standard system for defining, assessing, and  validating facility conditions, the services’ data on facility conditions are  not consistent. These inconsistent data, along with DOD’s attempt to link  the data to military readiness in its Installations’ Readiness Report, make  it difficult for Congress to fulfill its oversight responsibilities and for DOD  and the services to direct funds to facilities in greatest need and to  measure progress in improving facilities. Because the services’ C-rating  definitions do not directly link facility conditions with military readiness,  the ratings reported to Congress by DOD in the Installations’ Readiness  Report may not accurately indicate the ability of installations to support  military readiness. In addition, a facility at one service’s installation may  be rated C-4 for its deficiencies, but a comparable facility at another base  in the same service with similar deficiencies may not be rated C-4. For  example, the Atlantic Fleet found that a facility at one base was rated C-3  while a comparable facility at another base—with the same deficiency— was rated C-4, contributing to the fleet’s decision to develop its own  process for assessing facility conditions. Moreover, comparable types of  facilities with similar deficiencies may not be rated consistently across the  services.
In our previous review on the condition of barracks used to house military  recruits attending basic training, we found some apparent inconsistencies  in the application of C-ratings to describe the condition of barracks. For  example, as a group, the barracks at the Marine Corps Recruit Depot,  Parris Island, were the highest rated—C-2—among all the services’  training barracks. The various conditions we observed, however,  suggested that they were among the worst barracks in terms of physical  condition that we had seen. Marine Corps officials acknowledged that,  although they had recently inspected the barracks and had identified  significant deficiencies, the updated data had not yet been entered into the  ratings database. On the other hand, the barracks at the Marine Corps  Recruit Depot, San Diego, were rated C-3, primarily because of noise from  the adjacent San Diego airport. Otherwise, our observations indicated that  these barracks appeared to be in much better physical condition than  those at Parris Island. After we completed our work, the Marine Corps  revised its ratings for the Parris Island and San Diego barracks to C-4 and  C-2, respectively, in its fiscal year 2002 report. The Air Force barracks  were rated C-3, but we noted that they appeared to be among those  barracks in better physical condition and in significantly better condition  than the Army barracks that were rated C-3.
On the assumption that DOD and the services wish to target funding to  those facilities most in need of repair and with the greatest impact on  mission, the lack of standardization reduces the likelihood that funding  will be consistently directed to those facilities in greatest need. This means  that the limited funding available may not be accurately targeted, reducing  its cost-effectiveness. For instance, in fiscal year 2002, DOD added an  additional $2 billion to the services’ budget requests for military  construction. According to one DOD official, the additional amounts were  allocated to each service based on the services’ C-ratings. Furthermore,  some facilities are not rated by the services, such as the Army’s World War  II-era wood buildings. Although they receive sustainment funding, they  receive little restoration and modernization funds because they are not  rated.
section_title: Weaknesses in Strategic Plan and Key Objectives Limit the Services’ Ability to Sustain and Improve Facility Conditions
paragraphs: DOD’s Defense Facilities Strategic Plan, along with several key objectives  it adopted to sustain and improve the services’ facility conditions, have  weaknesses that limit their usefulness in providing direction to the  services and an understanding of DOD’s vision for facilities to Congress.  The strategic plan lacks comprehensive information on the 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 addition, three key objectives—fully funding sustainment,  67-year average recapitalization rates, and improvements in facility ratings  to ensure military mission achievement—which are not part of the  published strategic plan, are unlikely to be achieved because the services  do not propose to fully fund all of them, and others are based on future  funding plans that have unrealistically high rates of increase when  compared with previous funding trends and when considered against  other defense priorities. Moreover, achieving these objectives at the  service level still allows for a range of sustainment funding and facility  deficiencies at the installation level. For example, even though the services  intended to fund sustainment at more than 78 percent of requirements in  fiscal year 2002, we found that 7 of 10 installations we visited received  less. In addition, the services have not developed comprehensive  performance plans that include quantifiable and measurable performance  goals that fully address DOD’s objectives; indicators to determine if  programs are meeting the objectives; and the necessary resources,  particularly realistic and credible funding plans, for achieving those  objectives—elements of a comprehensive performance plan. On a positive  note, DOD and the services have undertaken several initiatives that are  designed to improve the monitoring and accountability of the facility  management program.
subsections: section_title: DOD’s Strategic Plan Is Not Comprehensive
paragraphs: DOD’s Defense Facilities Strategic Plan does not contain the  comprehensive information that is needed to guide DOD and the services  in their efforts to maintain thousands of facilities at defense installations.  Instead, the strategic plan identifies four overall goals in areas that DOD  believes can be significantly improved, such as planning, programming,  budgeting, and operations at all military installations and facilities. The  plan’s four goals are:    Right size and place—Locate, size, and configure defense  installations and facilities to meet the requirements of today’s and  tomorrow’s force structures.
Right quality—Acquire and maintain defense installations and  facilities to provide quality living and work environments.
Right resources—Leverage resources—money, people, and  equipment—to achieve the proper balance between requirements and  available funding.
Right tools and metrics—Improve facility management and planning  by embracing best business practices and taking advantage of modern  asset-management techniques and performance-assessment metrics.
Our analysis of the plan, however, shows that it lacks the comprehensive  information that makes a strategic plan useful and that most strategic  plans encompass. It does not contain detailed information on (1) the  specific actions that are needed to achieve each of the four goals; (2) the  methods or processes that will be used to achieve each goal; (3) the  amount of funding or other resources needed to reach the goals; (4) the  time frames and milestones; (5) the assignment of responsibilities, in other  words what entity is accountable for completing each goal; and (6) the  performance measurement tools to use to determine the progress being  made toward each goal. DOD officials told us that the lack of specific  information in the plan resulted, in part, from the fact that the services  were unable to agree on many of the actions and time frames before the  plan was issued. In addition, some of the detailed information about  various actions, time frames, and resources needed to sustain and improve  facility conditions that is missing from the plan could be found in other  DOD guidance and directives. Examples include DOD’s annual Defense  Planning Guidance, which is not publicly available; DOD’s April 2001  report to Congress on the funding required to eliminate deficiencies in the  services’ facilities, DOD’s annual Installations’ Readiness Reports to  Congress; and various other briefings. The information in these  documents, however, is scattered and not always easily accessible.
section_title: DOD’s Three Objectives for Sustaining and Improving Facility Conditions May Not Be Achievable
paragraphs: Although not fully developed in the 2001 Defense Facilities Strategic Plan,  DOD has identified three key objectives—and assigned deadlines—that  are intended to ensure that the military services can stop the deterioration  of facilities at their installations. Officials of the Office of the Secretary of  Defense told us that DOD established these objectives in its annual  Defense Planning Guidance for fiscal year 2004 and other planning  documents. They are to ensure that the services (1) fund all of their  sustainment requirements, starting in fiscal year 2004; (2) reach a 67-year  average recapitalization rate for their facilities, by fiscal year 2007; and (3)  improve the condition of their facilities so that deficiencies have only a  limited effect on mission performance, by fiscal year 2010. However, these  objectives are not likely to be achieved because the services do not  propose to fully fund all of them or have developed funding plans that  have unrealistically high rates of increase in the out-years when compared  with previous funding levels and against other defense priorities. In  addition, achieving these objectives at the service level still allows for a  wide range of sustainment funding and facility deficiencies at the  installation level.
subsections: section_title: Services Do Not Plan to Fully Fund Their Sustainment Requirements in Fiscal Year 2004
paragraphs: To arrest the further deterioration of facilities, DOD instructed the  services to fully fund sustainment requirements of their facilities starting  in fiscal year 2004. However, in developing their fiscal year 2004 programs,  none of the services proposed to fully fund sustainment in fiscal year 2004,  even though the Marine Corps plans to fully fund sustainment in fiscal  year 2003. DOD and service officials said that funding for sustainment  must compete with other defense programs and priorities. While the  services had originally planned to fund sustainment at no less than   78 percent of requirements in fiscal year 2002, these levels of funding did  not reach the installations because service headquarters and major  commands withheld funds for other purposes, such as civilian pay,  emergency needs, and must-pay bills. This practice raises questions about  whether DOD’s requirement of fully funding sustainment, as currently  implemented by the services, will address all sustainment problems at the  installation level.
At the time of our review, as figure 12 shows, none of the services  proposed to fully fund sustainment during fiscal year 2004. While the Army  planned to come close, with 98 percent, in fiscal year 2002, its plan shows  a decline in funding to 94 percent of its requirement in fiscal year 2003,   79 percent of its requirement in fiscal year 2004, and 77 percent in fiscal  year 2005—short of DOD’s objective of 100 percent sustainment funding  starting in fiscal year 2004. Afterward, the Army proposes to gradually  increase its funding for sustainment activities to 94 percent from   82 percent of its requirements during fiscal years 2006 through 2009. The  Air Force, starting at 90 and 98 percent in fiscal years 2002 and 2003,  respectively, intends to fund 96 percent of its sustainment requirement in  fiscal year 2004—short of DOD’s objective. In fiscal year 2005, the Air  Force proposes to fund 97 percent of its sustainment requirement and fully  fund sustainment during subsequent fiscal years through 2009. The Navy,  on the other hand, projects that it will fund its sustainment activities at  about 78 and 84 percent of its requirements in fiscal years 2002 and 2003,  respectively, and at 90 percent annually thereafter through fiscal year  2009—short of DOD’s objective. The Marine Corps, which started at   80 percent in fiscal year 2002, proposes to fully fund sustainment in fiscal  year 2003 and at between 98 and 99 percent thereafter during fiscal years  2004 through 2009.
During our visits to major commands and installations, we found that  sustainment funds can be reduced or held back at the service  headquarters, major command, and installation levels. The reason that  service officials most often cited for moving funds was that these funds  were needed to cover more pressing needs or emerging requirements. As  figure 13 illustrates, in fiscal year 2002, service headquarters withheld  sustainment money to cover must-pay bills, such as civilian pay, emergent  needs, and other nonsustainment programs. Similarly, major commands  withheld sustainment funds to pay for emergent needs, nonsustainment  must-pay bills, commandwide sustainment contracts, restoration and  modernization projects, and other unspecified reductions. Finally,  individual installations that we visited moved sustainment funds in fiscal  year 2002 to pay for restoration and modernization emergent needs and for  other nonsustainment programs, such as utilities. As a result of fund  movements at all three levels, the amounts that installations obligated for  sustainment purposes were far less than the amounts necessary to meet  requirements as identified by DOD’s facilities sustainment model. In  addition, installation officials told us that because of these holdbacks and  movements, it was difficult for them to make or implement rational plans  for maintaining and repairing their facilities.
Some specific examples of where major commands moved sustainment  funds to cover emergencies or other priorities follow:  In fiscal year 2002, the Army’s Forces Command told us that it received  about 92 percent of its sustainment requirement, but it then had to  reduce the amounts passed on to component installations to 79 percent  in order to pay for expanded utilities modernization, engineering  services, municipal services upgrades, and fire emergency services.
In fiscal year 2002, the Navy Pacific Fleet moved about $130 million, or  29 percent of its total sustainment funding of $452 million, to support  nonsustainment programs such as base operating support functions,  unspecified requirements by the fleet’s commander in chief, and  reserve force mobilization after the September 11th attacks. Of the  $130 million, $25 million for reserve force mobilization was returned at  the end of the fiscal year, and the fleet applied this amount to  sustainment projects.
Early in fiscal year 2002, the Navy’s Atlantic Fleet used $146 million, or  34 percent, of its total sustainment funding of $425 million to help pay  for reserve force mobilization, the facilities condition assessment  program, the design of recapitalization and demolition projects for the  following fiscal year, the management of the facility maintenance  program, and a reserve fund for major storm damage. A fleet official  told us that the funds obligated for the assessment program, the design  of recapitalization and demolition projects, and the facility  management program benefited all of the fleet’s installations. At the  end of the fiscal year, the fleet received $98 million for reserve force  mobilization back, which it applied to sustainment projects, and  provided the remaining balance of the reserve fund to the installations.
Officials told us that the fiscal year 2002 actual obligations for 7 of the 10  installations we visited were well below the services’ planned funding  levels (see fig. 14). The Marine Corps base at Quantico, Virginia, Pope Air  Force Base, North Carolina, and Los Angeles Air Force Base, California,  which funded 97, 95, and 113 percent, respectively, of their sustainment  requirements in fiscal year 2002, were the exceptions. However, after  using a portion of their sustainment funding to pay for nonsustainment  related costs, the other 7 installations had only enough sustainment funds  to meet from 35 to 77 percent of their requirements as identified by DOD’s  facilities sustainment model (see fig. 14). Installation officials told us that  they had to obligate a portion of their fiscal year 2002 sustainment funds  for a variety of nonsustainment-related purposes, such as paying for  utilities and for restoration and modernization projects, including  emergency repairs. They said that their installations received very little  operation and maintenance funds for restoration and modernization  projects in fiscal year 2002. At Fort Bragg, North Carolina, sustainment  funding was reduced to just 57 percent of its requirement because of the  movement of funds to nonsustainment activities. This leads us to question  whether DOD’s guidance on fully funding sustainment is directed toward  the service or installation level. Thus, it is uncertain that the stated  objective of fully funding sustainment, as currently implemented by the  services, will address all sustainment problems at the installation level.
The Marine Corps base at Quantico, Virginia; Pope Air Force Base, North  Carolina; and Los Angeles Air Force Base, California, clearly stand out as  exceptions to the sustainment funding levels at the other installations (see  fig. 14). According to Marine Corps officials, their service does not permit  sustainment funds to be taken away from installations by intermediate  commands without the explicit permission of headquarters’ facilities staff.  There is no intermediate command between Quantico Marine Corps Base  and headquarters. Furthermore, the officials said the base received   $1 million in sustainment funding in September 2002 to replace heating,  ventilation, and air-conditioning systems in two buildings; this amount  alone accounted for 5 percent of its $18.6 million obligation for  sustainment in fiscal year 2002. Officials at Pope Air Force Base told us  that the base received 95 percent of its sustainment requirement in fiscal  year 2002 because its major command, Air Mobility Command, made a  concerted effort to repair some key facility problems at the installation  with funds the command had received at the end of the fiscal year. Air  Force officials also told us that Pope Air Force Base’s and Los Angeles Air  Force Base’s fiscal year 2002 sustainment obligations were higher than  amounts initially received by the bases for sustainment because major  commands provided additional funds during the fiscal year and moved  funds from other sources.
In addition to the 10 installations we recently visited, we found similar  underfunding for sustainment at bases with barracks used to house  military recruits. Our analysis of cost data generated by DOD’s facilities  sustainment model showed, for example, that Fort Knox required about  $38 million in fiscal year 2002 to sustain its facilities. However, base  officials told us they had received about $10 million, or 26 percent, of the  required funding. Officials at other Army basic training sites also told us  that they had received less funding, typically 30 to 40 percent, than what  they considered was required to sustain their facilities. Army officials told  us that, over time, the sustainment funding shortfalls at their training  bases have been caused primarily by the movement of funding from  facility sustainment to other priorities, such as the training mission.
section_title: Achieving a 67-Year Average Recapitalization Rate by Fiscal Year 2007 Is Unlikely
paragraphs: To restore and modernize facilities, DOD instructed the services to  achieve a 67-year average recapitalization rate by fiscal year 2007. The  recapitalization rate is based on an assessment of the expected service life  of different types of facilities and is defined as the number of years it  would take to restore or replace those facilities at a given level of  investment. The recapitalization rate is derived by dividing recapitalizable  plant replacement value by the total restoration and modernization  funding. In general, the recapitalization rate declines as more restoration  and modernization funds are spent for facilities. While all the services plan  to improve their fiscal year 2002 average recapitalization rates by fiscal  year 2009, the rates are expected to worsen before they recover. Also, all  of the plans, except for the Army’s, call for rapid funding increases  between fiscal year 2003 and 2009 that are uncertain when compared to  prior funding levels and the need for funds for other defense priorities.  Furthermore, DOD’s guidance does not specify that each installation  should achieve a 67-year average recapitalization rate and therefore allows  for a range of recapitalization rates at the installation level.
While all the services plan to improve their fiscal year 2002 average  recapitalization rates, as shown in figure 15, nearly all of the improvement  is expected to occur in the later years, when only the Air Force and the  Navy expect to exceed DOD’s objective of 67 years by fiscal year 2007.  Under its funding proposal, the Army projects its average recapitalization  rate will increase from 70 years in fiscal year 2002 to 122 years in fiscal  years 2003 and 2004 and then improve again to 83 years in fiscal year  2007—falling short of DOD’s objective of 67 years. Afterward, the Army  tends to achieve 84- and 87-year recapitalization rates in fiscal years 2008  and 2009, respectively. The Air Force expects that its average  recapitalization rate will increase from 163 years in fiscal year 2002 to   257 years in fiscal year 2003 and then improve to 61 years in fiscal years  2006 and 2007—meeting DOD’s objective of 67 years. It also plans to  achieve 55- and 57-year recapitalization rates in fiscal years 2008 and 2009,  respectively. The Navy estimates that its rate will increase from 113 years  in fiscal year 2002 to 116 and 134 years in fiscal years 2003 and 2004,  respectively, and then decrease from 129 years in fiscal year 2005 to   69 years in fiscal year 2006. Between fiscal year 2007 and 2009, the Navy’s  average recapitalization rate is projected to decrease from 64 to 47 years— exceeding DOD’s 67-year objective. Under its funding plan, the Marine  Corps projects its average recapitalization rate will increase from 63 years  in fiscal year 2002 to 155 years in fiscal year 2003 and then decrease to   81 years in fiscal year 2004. Afterward, it plans to maintain recapitalization  rates between 79 and 73 years during fiscal years 2005 through 2007— falling short of DOD’s objective of 67 years. However, the Marine Corps  plans to meet this objective in fiscal years 2008 and 2009 by achieving   66- and 42-year recapitalization rates, respectively, in these years.
To achieve these recapitalization rates, all the services, except for the  Army, call for rapid increases in restoration and modernization funding  between fiscal year 2003 and 2009, but this growth appears unrealistic  when compared with prior funding levels. As shown in figure 16, using  constant fiscal year 2002 dollars, the four services propose to decrease  their restoration and modernization funding between fiscal year 2002 and  2003. From a low of $1.3 billion in fiscal year 2003, the Army proposes to  increase its restoration and modernization funding 31 percent, to   $1.7 billion in fiscal year 2009. It is important to note again that figure 15  shows the Army does not plan to achieve DOD’s recapitalization target of  67 years anytime during this period. From a low of $553 million in fiscal  year 2003, the Air Force proposes to increase its restoration and  modernization funding 316 percent to $2.3 billion in fiscal year 2009. A  significant part of this increase is planned in one budget year, between  fiscal year 2005 and 2006, when the Air Force expects to increase its  restoration and modernization funding by 123 percent, to $2 billion from  $895 million. While the Navy proposes a decrease from fiscal year 2003 to  fiscal year 2004, it intends to increase its restoration and modernization  funding 145 percent—from $857 million in fiscal year 2003 to $2.1 billion in  fiscal year 2009. More than half of this increase is planned in one budget  year, between fiscal year 2005 and 2006, when the Navy proposes to  increase its restoration and modernization funding by 80 percent, to   $1.4 billion from $777 million. The Marine Corps plans a 188 percent  increase in restoration and modernization funding, from a low $145 million  in fiscal year 2003 to $418 million in fiscal year 2009.
Defense installation officials referred to the services’ out-year funding  plans as “hockey sticks” because of their abrupt increases in funding in the  out-years, indicating skepticism about the likelihood that the services  would be able to achieve such rapid increases. They told us that they  recommended the services revise their plans so that the funding increases  would not be so steep, by proposing more funding for the early years of  the period. At the time of our review, DOD had not finished its review of  the services’ funding plans. Marine Corps officials described their  proposed increase as much larger than any amount they had ever seen and  expressed doubt about whether the service would actually come up with  the funds.
The services’ rapid increases in restoration and modernization funding  between fiscal year 2003 and 2009 also appear uncertain when compared  with the need for funds for other defense priorities, such as the war on  terrorism, weapon system modernization, and force transformation. As a  result of the war on terrorism, DOD is seeking higher than previously  planned funding for a number of pressing priorities against which facilities  maintenance must compete, such as military readiness, training,  antiterrorism, force protection, weapons procurement, and research and  development. For example, in the Army’s fiscal year 2004 program  objective memorandum, the Army plans to increase funding for force  protection by $2.7 billion, or 60 percent; for future combat systems by  $19.1 billion, or 197 percent; and for force transformation by $16.6 billion,  or 37 percent. In addition, facilities maintenance must compete with the  Air Force’s plans to modernize space forces and procure new weapons  systems and with the Navy’s plans to procure new ships and weapons  systems.
section_title: Bringing Facility Ratings Up to a Minimal C-2 Level by Fiscal Year 2010 Is Unlikely
paragraphs: To improve the overall condition of facilities, DOD set an objective for the  military services to concentrate funding in order to eliminate C-3 and C-4  facility ratings, bringing them up to a minimal C-2 level by fiscal year 2010.  However, at the time of our review, the Army and the Navy were not  planning to meet this objective. The Air Force and the Marine Corps only  plan to meet this objective through proposed funding increases, shown in  figure 16, which are uncertain when compared to prior funding levels and  the need for funds for other defense priorities. DOD estimates that it  would cost $62 billion (or $7 billion annually during fiscal years 2002  through 2010) to achieve this objective departmentwide. This amount  would only be enough to bring all facilities up to the minimal C-2 level, or  “minimal acceptable performance,” in DOD’s rating system. DOD  estimates that it would cost more than $160 billion over the same time  period to reach a C-1 level for all facilities.
DOD’s guidance for this objective allows a wide range of facility  deficiencies at installations. A service could have some facility classes  rated C-3 and C-4 and still have an overall C-2 rating because of a  preponderance of C-1 and C-2 rated classes. For example, in its facility  strategy, the Army plans to concentrate restoration and modernization  funding on certain types of facilities to raise their rating to a C-1, and thus  raise the Army’s overall rating to a C-2 level. Furthermore, because there is  no common, standardized system by which to rate the condition of  facilities, there is no assurance that achieving a minimal C-2 level would  result in similar facility conditions across the services.
section_title: Services Have Not Developed Comprehensive Performance Plans to Implement DOD’s Strategic Plan and Objectives
paragraphs: The services have not developed plans that include quantifiable and  measurable performance goals that fully address DOD’s objectives;  indicators to determine if programs are meeting the objectives; and the  necessary resources, particularly realistic and credible funding plans, for  achieving those objectives—elements of a comprehensive performance  plan. Of those services—the Army, the Air Force, and the Marine Corps— that have developed plans for facilities, their plans do not contain  comprehensive information for implementing DOD’s facilities strategic  plan or achieving DOD’s objectives for sustaining and improving facility  conditions. For example:    While the Army has developed a installation plan, our analysis shows  that it is unlikely to meet any of DOD’s objectives of fully funding  sustainment in the near term, achieving a 67-year average  recapitalization rate for facilities by 2007, and eliminating C-3 and C-4  facility ratings, bringing them up to a minimal C-2 level by fiscal year  2010. The Army’s plan does not provide realistic and credible funding  plans to achieve DOD’s objectives.
The Air Force’s facilities investment plan outlines the requirements  that must be addressed in order to meet DOD’s objectives of fully  funding sustainment across the future years defense plan, reducing the  average recapitalization rate to 67 years by fiscal year 2007, and  eliminating C-3 and C-4 facility ratings by fiscal year 2010. The plan  also lists metrics to be used to measure successful implementation of  the plan. However, the plan is vague in how it will be implemented, and  the funding strategy outlined in the plan to achieve DOD’s objectives is  unrealistic. As the plan notes, “projected fiscal year 2004 restoration  and modernization funding is almost double that of fiscal year 2003,  while fiscal year 2007 funding is nearly quadruple the fiscal year 2004  level.” In addition, in a 2002 report the Secretary of the Air Force states  that the Air Force must still defer restoration and modernization with  only the most urgent requirements addressed and leaving important  projects postponed.
Although the Navy does not have a plan for meeting DOD’s objectives,  Navy officials told us the service is developing a plan to address both  the Navy’s and Marine Corps’s sustainment and restoration and  modernization programs. The Navy does not plan to meet DOD’s  objectives of fully funding sustainment in the near term or eliminating  C-3 and C-4 ratings for facility classes by fiscal year 2010.
While the Marine Corps issued a vision statement for its installations in  April 2001, the statement does not provide comprehensive information  on goals, actions, or time frames for sustaining and improving  facilities. The statement fails to discuss any of DOD’s objectives. In  addition, the statement does not provide specific metrics to measure  performance or credible and realistic funding plans to achieve these  objectives.
section_title: DOD Has Taken Other Steps to Improve Facilities Management
paragraphs: In addition to its strategic plan and objectives, DOD has taken other steps  to improve the management of its facilities, including the demolition of  obsolete facilities, and is attempting to build upon these steps to further  improve military facilities. At the same time, the Army has implemented a  new organizational structure to manage its facilities in an attempt to better  control the use of sustainment, restoration, and modernization funds, and  the Navy is moving toward a more centralized structure of its regional  management of facilities. However, it is too soon to assess their likely  impact.
DOD has put in place a number of changes intended to revamp its facility  management, enhance accountability, and better measure and track  performance. These changes have included:    Facilities assessment database. In 1997, DOD created an integrated  facilities assessment database from stand-alone service inventories.  This database tracks key facility inventory and cost data, including  quantity, type, location, and status of buildings, structures, and all  other military facility assets.
Cost factors handbook. In 1999, DOD issued its first defense facilities  cost factors handbook, which categorizes 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 method by which the services would determine the  sustainment costs of their facilities and to establish a minimum  sustainment funding level for facilities.
Facilities sustainment model. 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.
Recapitalization metric. In 2001, DOD began using the facilities  recapitalization metric, which determines the rate of restoration and  modernization relative to the average expected service life of the  inventory. It is also developing a recapitalization funding model.
Improved budgeting methods. In 2002, DOD changed the way that  facilities funding is reported and tracked, replacing real property  maintenance with sustainment, and restoration and modernization,  having already created a separate structure for demolition and disposal  in fiscal year 1999. By tracking each element separately, it is now  possible to link programs and budgets directly to program objectives  and to better track performance relative to the objectives. DOD gave  the Navy and the Marine Corps permission to delay this change until  fiscal year 2003.
DOD also developed and implemented the facilities demolition and  disposal program, in which more than 62 million square feet of excess and  obsolete facilities were demolished during fiscal years 1998 to 2001.  According to DOD officials, one reason for the success of this program is  that the services’ budgets were not reduced in advance by the estimated  maintenance costs of the facilities to be demolished. Instead, as an  incentive to dispose of what the services did not need, their budgets were  left intact and the forecasted savings were reprogrammed by the services  to other needs within their programs. By closing some installations and  consolidating overlapping activities within and across the services, DOD  also intends to further reduce its inventory of facilities through an  upcoming round of base realignments and closures starting in 2005, as  authorized by Congress in 2001. DOD officials have testified that 20 to   25 percent of DOD’s infrastructure is not needed to meet current mission  requirements. The process of realigning and closing bases, however, will  take some years to accomplish and, while it is expected to produce  significant long-term savings, typically it has required considerable up- front expenses.
To prevent major commands from moving funds to other priorities, the  Army centralized and streamlined its facility management in October 2002.  The new Installation Management Agency, which reports directly to the  Army Assistant Chief of Staff for Installation Management, oversees all  facilities maintenance funds for Army installations and supervises seven  regional management centers worldwide that are responsible for 10 to   30 installations each. The key objectives of the new organizational  structure include ending the movement of sustainment funds and  restoration and modernization funds to other priorities by major  commands and implementing consistent standards across the Army for  allocating these funds. The organizational structure has a centralized base  operations funding process that funnels sustainment funds and restoration  and modernization funds directly to installations without major commands  moving funds away from facilities. Army officials said that if the total  funding allocated by the service for these purposes continues to fall short  of requirements, the new agency would be greatly challenged in meeting  its facilities goals. Officials believe that the Army would likely continue to  use sustainment, restoration, and modernization funds to pay for legacy  weapons programs and other nonsustainment priorities.
The Navy has had a less centralized, regional-based installation  management program for several years but continues to underfund its  sustainment requirements and restoration and modernization  requirements. For example, the Naval Audit Service reported in August  2002 that funds intended for facility maintenance were being used for  nonsustainment purposes. Specifically, it noted that both the Atlantic and  Pacific Fleets were using sustainment funds and restoration and  modernization funds to resolve other base operating support shortfalls. It  concluded that this generally occurred because sustainment, restoration,  and modernization were not considered high enough priorities within the  Navy leadership to preclude movement of funds away from these  activities. While the Navy is now moving toward a more centralized  management structure similar to the Army’s facility management program,  it is too early to assess the potential success of either facility program.
section_title: Conclusions
paragraphs: The military services have not made sustaining and improving facilities a  funding priority because of other defense programs and emerging  requirements. Funding for facility maintenance and recapitalization has  been inadequate for many years, resulting in deteriorated facilities that  negatively affect the quality of life and service for military and civilian  personnel and, in some cases, hindered the satisfactory performance of  their mission. Yet, the services do not meet all of DOD’s objectives for  sustaining and improving facilities, nor have they developed credible and  realistic funding plans to do this in the future. In addition, Congress, DOD,  and the services do not have consistent information on the condition of  facilities to ensure that their funding decisions are targeting facilities in  greatest need, to measure the progress in facility improvement, and to  provide to Congress for its oversight responsibilities. Along with these  inadequate data, weaknesses in DOD’s Defense Facilities Strategic Plan  further impede DOD’s efforts to sustain and improve facilities. In  developing a comprehensive strategic plan, it is important that DOD  clearly establish goals and milestones, assign responsibilities for managing  and coordinating its efforts, and identify needed funding to sustain and  recapitalize facilities. However, the Defense Facilities Strategic Plan  lacks comprehensive information on the specific actions, time frames,  assigned responsibilities, and resources that are needed to meet DOD’s  vision for facilities. Moreover, it is unclear whether DOD’s stated  objectives for sustaining and improving facility conditions are to be  achieved at the service or installation level. In addition, the services have  not developed plans that include quantifiable and measurable performance  goals that fully address DOD’s objectives; indicators to determine if  programs are meeting the objectives; and the necessary resources,  particularly realistic and credible funding plans, for achieving those  objectives—elements of a comprehensive performance plan.
section_title: Recommendations for Executive Action
paragraphs: We recommend that the Secretary of Defense direct the secretaries of the  military services to reassess the funding priorities the services have  attached to sustaining and improving the condition of their facilities  relative to other needs and funding limitations. In addition, we recommend  that the Secretary of Defense (1) instruct the military services to  implement a departmentwide process to consistently assess and validate  facility conditions; (2) revise the Defense Facilities Strategic Plan to  identify specific actions needed, time frames, responsibilities, and funding  levels—elements of a comprehensive strategic plan; (3) clarify DOD’s  guidance by specifying the organizational level (service, major command,  or installation) at which its three objectives to fully fund sustainment,  achieve a 67-year average recapitalization rate, and eliminate C-3 and C-4  facility ratings, bringing them up to a minimal C-2 level, should be  achieved; and (4) direct the services to develop comprehensive  performance plans implementing the Defense Facilities Strategic Plan,  which would provide specific metrics to measure performance and  credible and realistic funding plans to sustain and recapitalize facilities.
section_title: Agency Comments
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 underway or planned to  deal with our recommendations. The comments are included in this report  in appendix IV. DOD also provided technical clarifications, which we  incorporated as appropriate.
We are sending copies of this report to the Secretaries of Defense, the  Army, the Navy, and the Air Force; the Commandant of the Marine Corps;  and the Director, Office and Management and Budget. We will also make  copies available to others upon request. In addition, the report will  available at no charge on GAO’s Web site at www.gao.gov.
Please contact me on (202) 512-8412 if you or your staff have any  questions regarding this report. Other key contributors to this report are  listed in appendix V.
section_title: Appendix I: Scope and Methodology
paragraphs: To examine the historical funding trends for facility maintenance and  military construction and their impact on the condition of the active  forces’ facilities, we examined the Department of Defense’s (DOD) budget  requests, congressional designations, and obligation data for facility  operation and maintenance and military construction for fiscal years 1998  through 2002. Because they are responsible for developing and  implementing policies regarding the condition of defense facilities, we  interviewed and were briefed by facility management officials from DOD’s  Office of Installations and Environment and from each service’s  headquarters. We also examined key documents related to the funding and  condition of defense facilities from DOD and the services. These  documents included funding requests, initial congressional designations,  and obligations for sustainment, restoration and modernization, and  military construction; Installations’ Readiness Reports compiled by DOD;  assessments of the condition of facilities produced by each service;  congressional testimony by DOD and service officials; documentation of  unfunded requirements within each service; and other relevant reports and  documents. We compared the operation and maintenance amounts that  DOD requested in its budget submissions with the amounts that Congress  designated in its conference reports for DOD’s appropriation acts and with  DOD’s reported obligations. We discussed any differences we found with  officials from DOD and the services to obtain a better understanding about  overall fund movements.
To determine the impact of historical funding on the condition of DOD’s  facilities and to view the condition of facilities firsthand, we visited and  met with officials from 10 military installations across the country: Fort  Bragg, North Carolina; Fort Leavenworth, Kansas; Pope Air Force Base,  North Carolina; Whiteman Air Force Base, Missouri; Los Angeles Air Force  Base, California; Naval Station Norfolk, Virginia; Naval Air Station Oceana,  Virginia; Naval Station San Diego, California; Naval Base Coronado,  California; and Marine Corps Quantico Base, Virginia. We recognize that  the conditions we observed at these 10 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 determine the perspective of the major commands on the impact of  historical and current funding on the condition of DOD’s facilities, the  factors that have led to the deterioration of facility conditions, and the  effect of deteriorated facilities on personnel and overall mission, we met  with officials from Army Forces Command, Air Force Air Mobility  Command, Air Force Space Command, Air Force Air Combat Command,  Navy Atlantic Fleet, and Navy Pacific Fleet.
To evaluate the consistency of the services’ information on facility  conditions, we reviewed each service’s system for assessing facility  conditions and compared this information within and across each service  to identify differences in facility raters and procedures, assessment scopes  and frequencies, appraisal scales, computation methods, and validation  procedures. We also interviewed officials at DOD, the services’  headquarters, and major commands to identify the processes they used to  assess facilities and collect information to support the condition rating  and the underlying reasons for the current condition of the facilities.  During our visits to installations, we discussed the evaluation methods and  condition assessment process with the facility raters and reviewers and  toured facilities to observe and compare their physical condition and  deficiencies with the facilities’ C-ratings. During these visits, we also  interviewed engineering staffs to discuss the cause of the deficiencies we  observed, the actions needed to correct the deficiencies, and the impact of  the deficiencies on the quality of life of military personnel and their  families and on military operations and military mission achievement.
To assess DOD’s long-term strategic plan and objectives to sustain and  improve the condition of facilities, we reviewed DOD’s Defense Facilities  Strategic Plan and other strategic planning documents for evidence of the  critical elements of a strategic plan and performance plan—as embodied  in the Government Performance and Results Act of 1993 and in our prior  reports. These elements include information on (1) the specific actions  that are needed to achieve each of the four goals identified in DOD’s  strategic plan; (2) the methods or processes that will be used to achieve  each goal; (3) the amount of funding or other resources needed to reach  the goals; (4) the time frames and milestones; (5) the assignment of  responsibilities, in other words what entity is accountable for completing  each goal; and (6) the performance measurement tools to determine the  progress being made toward each goal. In examining DOD’s three  objectives for sustaining and improving facility conditions, we identified  funding metrics designed by DOD to address the condition of facilities,  including the implementation of a facilities sustainment model and the  development of a recapitalization metric. We did not attempt to validate  the facilities sustainment model.
To assess the services’ plans to implement DOD’s strategic plan and  achieve its objectives, we compared the plans with key elements of a  comprehensive performance plan and reviewed projected funding levels  for sustaining and recapitalizing facilities for fiscal years 2002 through  2009. In computing sustainment obligations as a percentage of  requirements at the 10 installations visited, we divided each installation’s  reported sustainment obligation for fiscal year 2002 by its sustainment  requirement generated by DOD’s facilities sustainment model for the same  year. In addition, we interviewed service headquarters officials  responsible for managing installations and programming operation and  maintenance and military construction funds. We also examined the  services’ initiatives, such as the Army’s new regional facilities management  plan. We discussed DOD’s objectives for sustainment and recapitalization  with service and installation officials to determine whether they are viable  and attainable within the time frames DOD has set forth, impediments to  achieving the goals, and other approaches to sustaining and improving  facility conditions. Also, we evaluated the services’ ability to meet DOD’s  objectives and initiatives regarding the sustainment and improvement of  facility conditions by determining the magnitude of each service’s facility  problems through our site visits and reviews of rating reports. Finally, we  compared the services’ prior obligations for facility maintenance with their  future funding projections designed to reach DOD’s objectives to  determine whether the services’ plans to address these issues are credible  and realistic.
We performed our work at the Office of the Secretary of Defense and the  headquarters of each military service. Additionally, we met with officials  from Army Forces Command, Air Force Air Mobility Command, Air Force  Space Command, Air Force Air Combat Command, Navy Atlantic Fleet,  and Navy Pacific Fleet. We also met with officials from the 10 installations  visited: Fort Bragg, North Carolina; Fort Leavenworth, Kansas; Pope Air  Force Base, North Carolina; Whiteman Air Force Base, Missouri; Los  Angeles Air Force Base, California; Naval Station Norfolk, Virginia; Naval  Air Station Oceana, Virginia; Naval Station San Diego, California; Naval  Base Coronado, California; and Marine Corps Quantico Base, Virginia. We  selected these installations because they represent a range of facility  conditions, missions, major commands, and geographic locations. During  the review, we focused on the services’ active force facilities in the United  States. These facilities ranged from administrative offices, airfields and  terminals, and piers to classrooms and other training buildings, water  treatment plants, warehouses, barracks, and child development centers.  Our review covered only those facilities funded by operation and  maintenance and military construction monies and not by other sources,  such as revolving and management funds, military family housing and  overseas facilities funds, and the defense health program (hospitals and  medical clinics).
In performing this review, we used the same accounting records and  financial reports DOD and the military services use to manage and justify  budgets for their facilities. We did not independently determine the  reliability of the reported financial information. However, our recent audit  of the federal government’s financial statements, including DOD’s and the  services’ statements, questioned the reliability of reported financial  information because not all obligations and expenditures are recorded to  specific financial accounts. In addition, we did not validate DOD’s  reported requirements for the sustainment of its facilities, nor did we  validate its facility inventory database. Also, our prior reports have  highlighted DOD’s inability to sufficiently track funding status.
section_title: Appendix II: DOD’s Facilities Life-Cycle Management Model
paragraphs: DOD’s facilities life-cycle model calls for fully funding sustainment  activities and regularly investing in restoration and modernization projects  to maintain high performance and extend the useful service life of  facilities (see fig. 17).
Sustainment funding provides resources for maintenance and repair  activities to keep facilities effectively functioning throughout an expected  life cycle. Restoration and modernization funding is designed to  recapitalize facilities after normal aging occurs or to update facilities to  meet new mission standards. Restoration includes repair and replacement  work to restore facilities damaged by inadequate sustainment activities,  excessive age, natural disasters, fire, accidents, and other causes.  Modernization includes the alteration of facilities solely to implement new  or higher standards, to accommodate new functions, or to replace  standard building components. At the end of the life cycle in figure 17, a  facility may be worn out or functionally obsolete or will require  recapitalization by either replacement or large-scale renovation.
According to DOD’s facilities life-cycle model, full sustainment and  restoration and modernization investments are necessary to maintain the  condition and performance of facilities. Without full funding of  sustainment activities, facilities can deteriorate more quickly than would  be expected under their average life cycle, requiring premature  recapitalization of facilities (see fig. 18). As facilities deteriorate without  full sustainment, their level of performance also diminishes. For example,  Naval Station San Diego, California, has deferred a project to repair quay  walls and pier fenders for the past 4 years, resulting in continued  deterioration and increased costs to maintain service. In 2 of these years,  the installation spent more than $100,000 annually for temporary repairs to  fenders. DOD estimates that, with full sustainment funding, facilities  should have an expected average life of 67 years. Expected service life is  defined as the number of years a fully sustained inventory provides service  before requiring a major restoration or replacement project.
section_title: Appendix III: How Operation and Maintenance Funds Are Moved during the Fiscal Year
paragraphs: DOD has considerable flexibility in using and moving operation and  maintenance funds. After Congress passes the operation and maintenance  appropriation, the conferees make an initial congressional designation of  the appropriation by program activity, such as real property maintenance.  However, after the initial appropriation is made, DOD can adjust funding  through adjustments directed by Congress in conference reports on  appropriations acts and fact-of-life adjustments DOD believes are  necessary due to changes, such as unplanned force structure changes, that  have occurred since the budget was formulated.
After making these initial fund movements, DOD establishes an adjusted  congressional designation that it refers to as “appropriated amount.” Using  the initial congressional designation as the baseline, the following actions  can occur:  fact-of-life adjustments that DOD believes are necessary due to  changes, such as unplanned force structure changes, which have  occurred since the budget was formulated,  reprogramming actions to move funds from one budget activity to  another within the same account,    statutorily authorized transfers to move funds from other DOD  appropriations (such as procurement),  transfers from congressionally established, centrally managed accounts  (such as for drug interdiction),    supplemental appropriations by Congress that provide additional funds  during the year, and   rescissions by which Congress cancels appropriated funds.
These movements in operation and maintenance funds and the time  frames within which they can occur are illustrated in figure 19.
section_title: Appendix IV: Comments from the Department of Defense
section_title: Appendix V: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: In addition to the individuals named above, Nancy Benco, Rebecca  Gambler, David Keefer, Adam Roye, and Jonathan R. Tumin made key  contributions to this report.
section_title: Glossary
paragraphs: Advance appropriation: An advance appropriation is one made to  become available one fiscal year or more beyond the fiscal year for which  the appropriation act is passed. For instance, advance appropriations in  fiscal year 2000 appropriations acts became available for programs in  fiscal year 2001 and beyond. Since these appropriations were not available  until after fiscal year 2000, the amounts were not included in fiscal year  2000 budget totals.
Commanding Officer’s Readiness Reporting System: The  Commanding Officer’s Readiness Reporting System is a decision support  system designed to help commanders and other decision makers evaluate  the quality and quantity of facilities on Marine Corps installations. The  system compares the quantity of on-hand facilities to requirements and  evaluates the quality of facilities with respect to Marine Corps standards.
Congressionally designated: Congressionally designated refers to  amounts set forth at the budget activity, activity group, and subactivity  group level in an appropriation act’s conference report. These  recommended amounts are not binding unless they are also incorporated  directly or by reference into an appropriation act or other statute.
Expected service life (recapitalization target): The expected service  life is the number of years that facilities are expected to provide adequate  performance, given full sustainment, before wearing out or becoming  obsolete. The number is usually applied as an average to the total  inventory of facilities. In the absence of incremental recapitalization  investments, facilities typically must be replaced or extensively renovated  at the end of their expected service life.
Facility Investment Metric: The Facility Investment Metric was  developed by the Air Force to identify and prioritize operation and  maintenance restoration and modernization funding requirements based  on the impact of requirements in four mission areas: mission, mission  support, base support, and community support.
Facilities sustainment model: DOD’s facilities sustainment model  generates an annual sustainment funding requirement for facilities based  on the expected life cycle of those facilities. The model uses standard  facility-specific cost factors, based on commercial benchmarks and  variable area costs, to compute a sustainment cost for each type of  military facility.
Installations’ Readiness Report: DOD issued its first Installations’  Readiness Report in fiscal year 1999 to give an overall assessment of the  condition of all military installations and facilities and their ability to  support military mission. DOD developed the Installations’ Readiness  Report to fulfill its reporting requirement to Congress under section 117 of  title 10 of the United States Code, which specifies that DOD measure the  capability of defense installations and facilities to provide appropriate  support to forces in the conduct of their wartime missions. Major  commands rate each of the nine facility classes, using standard readiness  definitions, and use these ratings to help decide how to allocate repair and  construction funds.
Installation Readiness Reporting System: The Installation Readiness  Reporting System is a decision support system developed by the Navy to  help commanders and other decision makers evaluate the quality and  quantity of facilities on Navy installations. The system allows an  installation to compare the quantity of its on-hand facilities to its  requirements and evaluate the quality of these facilities with respect to  Navy standards.
Installation Status Report: The Installation Status Report was  developed by the Army as a way to assess installation-level conditions  against Army-wide standards.
Military construction: The military construction appropriation is DOD’s  source of funding for the repair or replacement of facilities, as well as for  construction of facilities for new missions.
Modernization: Modernization funding provides funds for improving  facilities. Modernization includes altering facilities solely to implement  new or higher standards, to accommodate new functions, or to replace  standard building components. Modernization activities are funded by  operation and maintenance and military construction funds.
New footprint military construction: New footprint military  construction funds are used for the construction of new facilities. These  are not recapitalization resourcesthey are not used to replace or  modernize existing facilities.
Obligations: Obligations are binding agreements that will result in  outlays, immediately or in the future. Budgetary resources must be  available before obligations can be incurred legally.
Operation and maintenance: Operation and maintenance is DOD’s  single largest appropriation group. It funds training, maintenance, and  other key readiness-related activities, as well as other expenses, such as  maintaining and operating bases.
Plant replacement value: Plant replacement value is the cost to replace  an existing facility with a facility of the same size at the same location,  using today’s building standards.
Quality of life enhancements: The quality of life enhancements defense  appropriation was established by Congress to fund DOD’s backlog of  facility maintenance, including minor construction and major maintenance  and repair of barracks, dormitories, and related facilities.
Recapitalizable plant replacement value: This is a subset of the whole  plant replacement value. Some types of facilities excluded are  facilities for which there is no recapitalization requirement, such as  one-time use facilities and facilities scheduled for demolition or  disposal, and  facilities that currently are recapitalized using specialized methods or  metrics, or for which future recapitalization funding cannot currently  be estimated, such as family housing; privatized facilities; and missile,  aircraft, and ammunition production facilities.
Recapitalization: Recapitalization includes major renovation or  reconstruction activities (including facility replacements) needed to keep  facilities modern and efficient in an environment of changing standards  and missions. Recapitalization extends the expected service life of  facilities or restores lost service life and includes the restoration and  modernization of existing facilities but not the acquisition of new facilities  or the demolition of old ones.
Recapitalization rate: This is the number of years required to replace or  renovate facilities at a given level of investment. The recapitalization rate  is computed by dividing recapitalizable plant replacement value by total  restoration and modernization investments.
Restoration: Restoration funding provides funds for improving facilities.  Restoration includes repair and replacement work to restore facilities  damaged by inadequate sustainment, excessive age, natural disaster, fire,  accident, or other causes. Restoration activities are funded by operation  and maintenance and military construction funds.
Supplemental appropriation: A supplemental appropriation is an act  appropriating funds in addition to those in an annual appropriations act.  Supplemental appropriations are enacted when the need for funds is too  urgent to be postponed until the next regular annual appropriations act.
Sustainment: Sustainment funding provides resources primarily from  operation and maintenance funds for recurring maintenance and repair  activities necessary to keep an inventory of facilities in good working  order. Sustainment includes regularly scheduled maintenance as well as  anticipated major repairs or replacement of components that occur  periodically during a facility’s life cycle. Due to obsolescence, sustainment  alone does not keep facilities like new indefinitely, nor does it extend their  service life.