Defense Infrastructure: DOD Needs to Improve Its Efforts to Identify Unutilized and Underutilized Facilities
Published: 2014-09-08T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: GAO has designated DOD's Support Infrastructure Management as a high-risk area in part due to challenges DOD faces in reducing excess infrastructure. DOD manages a global real property portfolio of over 557,000 facilities DOD estimates to be valued at about $828 billion as of September 30, 2012. In September 2011, GAO found that DOD was limited in its ability to reduce excess inventory because OSD did not maintain accurate and complete data on the utilization of its facilities in its Real Property Assets Database.
House Report 113-102 mandated GAO to review DOD efforts to improve these data. This report examines the extent to which OSD has (1) improved the completeness and accuracy of facility-utilization data in its Real Property Assets Database and the military departments' use of data to identify consolidation opportunities, and (2) a strategic plan to manage DOD's real property efficiently and to facilitate the identification of unutilized and underutilized facilities. GAO analyzed OSD's real property data from fiscal years 2010 through 2013, visited 11 active DOD installations from the four services to reflect those with high numbers of buildings, and interviewed officials. While not generalizable, the interviews provided perspectives about facility utilization.
section_title: What GAO Found
paragraphs: The Office of the Secretary of Defense (OSD) has made some improvements, but OSD's utilization data continue to be incomplete and inaccurate; and data limitations affect the military departments' use of their databases to identify consolidation opportunities. GAO's analysis found that the percentage of total real property assets with a reported utilization rate in OSD's Real Property Assets Database increased from 46 to 53 percent over the past 4 fiscal years. OSD made some improvements in addressing inaccuracies in the utilization rates in its real property records, such as correcting records for those facilities reported with a utilization rate greater than 100 percent. The military departments use databases to a certain degree to identify opportunities to consolidate facilities, but primarily only in response to specific events, such as requests for space. Officials at all 11 installations GAO visited stated that inaccurate and incomplete data in the departments' databases limited opportunities to identify these opportunities. In September 2011, GAO recommended that the Department of Defense (DOD) develop and implement a methodology for calculating and recording utilization data, and modify processes to update and verify the accuracy of reported data. OSD partially concurred because it stated that it had some actions already underway to address the recommendation. However, at that time, OSD did not specify what actions it had undertaken. Moreover, the recommendation has not yet been fully implemented. Fully implementing GAO's recommendation would help provide reasonable assurance that the utilization data are complete and accurate and better position the department to use the databases to identify consolidation opportunities.
OSD does not have a strategic plan, with goals and metrics, to manage DOD's real property efficiently and facilitate identifying opportunities for consolidating unutilized or underutilized facilities. According to a DOD directive, it is DOD policy that DOD real property shall be managed to promote the most efficient and economic use of DOD real property assets, and in the most economical manner consistent with defense requirements. However, OSD officials stated that there is currently no OSD strategic plan to manage DOD's real property nor established department-wide goals, strategies to achieve the goals, or metrics to gauge progress for how it intends to manage its real property in the most efficient manner. Such goals could focus on correcting inaccurate and incomplete facility utilization data to provide better visibility on the status of facilities and to identify opportunities for consolidating unutilized or underutilized facilities and reducing operations and maintenance costs. GAO's prior work has shown that organizations need sound strategic planning to identify and achieve long-range goals and objectives. Without a strategic plan, it will be difficult for OSD to effectively manage its facilities and utilize them efficiently.
section_title: What GAO Recommends
paragraphs: GAO recommends that OSD establish a strategic plan to identify unutilized and underutilized facilities. In written comments on a draft of the report, DOD concurred with the recommendation.

section_title: Letter
paragraphs: Since 1997, we have designated the Department of Defense’s (DOD)  Support Infrastructure Management as a high-risk area, in part due to the  challenges DOD faces in reducing excess and obsolete infrastructure.  DOD manages a global real property portfolio that, according to DOD, as  of the end of fiscal year 2012 consisted of more than 557,000 facilities  (buildings, structures, and linear structures), located on over 5,000 sites  worldwide, covering more than 27.7 million acres, and with a value of  approximately $828 billion. The operation and maintenance of unutilized  and underutilized facilities consumes valuable resources that could be  eliminated from DOD’s budget or used by DOD for other purposes.
GAO, Excess Facilities: DOD Needs More Complete Information and a Strategy to Guide  Its Future Disposal Efforts, GAO-11-814 (Washington, D.C.: Sept. 19, 2011). an active status. We also found that DOD’s plans to eliminate excess  facilities in the future were unclear, as were its plans for taking into  account external factors, such as management of historical-preservation  requirements and environmental restrictions, which affect the disposal of  long-standing excess facilities that were identified before fiscal year 2008.  For example, we found that DOD had not defined the strategies and  measures it intended to employ to eliminate excess facilities on its  installations. We concluded that, to the extent that DOD has identified  unutilized and underutilized facilities, additional cost savings might be  realized through the consolidation or disposal of such real property  inventory. We made two recommendations to DOD, with which it partially  concurred, related to improving its data and developing strategies and  measures to enhance the management of its facilities, as discussed later  in this report.
House Report 113-102, accompanying a bill for the National Defense  Authorization Act for Fiscal Year 2014, mandated GAO to report to the  congressional defense committees on DOD’s efforts to improve the  accuracy of its real property database and the effect of those efforts on  DOD’s consolidation activities. This report addresses the extent to which  (1) OSD has improved the completeness and accuracy of facility  utilization data in its Real Property Assets Database, and the military  departments use the data contained in their respective real property  inventory databases to identify potential consolidation opportunities; and  (2) OSD has a strategic plan to manage DOD’s real property efficiently  and to facilitate the identification of unutilized and underutilized facilities.
To determine the extent to which OSD has improved the completeness  and accuracy of facility utilization data in its Real Property Assets  Database and the military departments use the data contained in their  respective real property inventory databases to identify potential  consolidation opportunities, we obtained selected data fields containing  the military departments’ real property records from OSD’s Real Property  Assets Database. We selected the same data fields we had used as part  of our methodology and analysis for our September 2011 report.
Specifically, we analyzed the utilization-rate data fields for fiscal years  2010 through 2013—the most recent full year available at the time of this  review—to determine whether more complete utilization-rate data had  been entered since our previous review of the fiscal year 2010 data. We  assessed the reliability of DOD’s real property inventory data by (1)  performing electronic testing for obvious errors in accuracy and  completeness, (2) reviewing existing information about the data and the  system that produced them, and (3) interviewing agency officials  knowledgeable about the data. We determined that the data were  sufficiently reliable to assess the trends of the utilization data reported in  OSD’s Real Property Assets Database for fiscal years 2010 through  2013. We also reviewed our prior work on excess and underutilized real  property to understand issues previously identified with real property  management. We gathered and analyzed documentation, such as a DOD  directive and instructions as well as military-department regulations,  reflecting OSD’s and the military departments’ management of real  property and how OSD used the data contained in its Real Property  Assets Database to identify unutilized or underutilized facilities or  potential consolidation opportunities. We interviewed officials in the Office  of the Under Secretary of Defense for Installations and Environment;  each of the three military departments, which include the four military  services; and the military service installations we visited, and discussed  their processes to manage real property. We selected 11 active military  installations to visit to include installations from the four military services   While the results of  and to reflect those with high numbers of buildings.our interviews and visits cannot be generalized to all installations, they  provided perspectives on how installations manage their real property.  Using OSD’s Real Property Assets Database and the utilization-rate data  fields discussed above, we used a fourth data field, which described the  asset as “utilized,” to determine inconsistencies between these data  fields. Using these four criteria, we reviewed the real property records for  the 11 installations we visited to identify the extent to which other  consolidation opportunities, if any, may exist on the installations and  potential inconsistencies and inaccuracies.
To determine the extent to which OSD has a strategic plan to manage  DOD’s real property efficiently and to facilitate the identification of  unutilized and underutilized facilities, we obtained and analyzed  documentation, such as the Office of the Deputy Under Secretary of  Defense for Installations and Environment report, 2013 Accomplishments  and 2014 Goals and Objectives, a DOD directive and instructions, and  military department regulations for the management of real property. We  also reviewed OSD’s Real Property Assets Database as of September  30, 2013—the most recent data available at the time of our review—to  identify what facilities, if any, were reported as being unutilized or  underutilized and ascertain how OSD implemented its policy and  guidance to manage real property in the most economical manner,  consistent with defense requirements. We discussed the policies and  guidance used in managing these facilities with officials in the Office of  the Under Secretary of Defense for Installations & Environment, and  compared OSD’s efforts and guidance to DOD instructions for real  property management and the results-oriented management framework   as a best practice for strategic planning.and methodology can be found in appendix I.
Further details on our scope  We conducted this performance audit from July 2013 to September 2014  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: DOD’s and Military Departments’ Guidance and Responsibilities for Managing Real Property
paragraphs: DOD’s Real Property Management Program is governed by statute and  DOD regulations, directives, and instructions that establish real property  accountability and financial reporting requirements. These laws,  regulations, directives, and instructions—a selection of which are  discussed below—require DOD and the military departments to maintain  a number of data elements about their facilities to help ensure efficient  property management and thus help identify potential facility  consolidation opportunities.
Department of Defense Directive 4165.06, Real Property (Oct. 13, 2004, certified current  Nov.18, 2008). includes Army Regulation 405-70; the Naval Facilities Engineering  Command P-78; and Air Force Policy Directive 32-10. The guidance  requires, among other things, that real property records be accurate and  be managed efficiently and economically. It also requires the military  departments to maintain a complete and accurate real property inventory  with up-to-date information, to annually certify that the real property  inventory has been reconciled, and to ensure that all real property  holdings under the military departments’ control are being used to the  maximum extent possible. Appendix II describes some of the guidance  from DOD and the military departments and includes excerpts of the  related requirements to manage real property.
In managing the real property under their control, the military departments  are responsible for implementing real property policies and programs to,  among other things, hold or make plans to obtain the land and facilities  they need for their own missions and for other DOD components’  missions that are supported by the military departments’ real property.  Additionally, the military departments are required to (1) budget for and  financially manage so as to meet their own real property requirements; (2)  accurately inventory and account for their land and facilities; and (3)  maintain a program monitoring the use of real property to ensure that all  holdings under their control are being used to the maximum extent  possible consistent with both peacetime and mobilization requirements.
The military departments’ processes for managing and monitoring the  utilization of facilities generally occur at the installation level. According to  OSD guidance, inventories are to be conducted every 5 years except for  those real property assets designated as historic, which are to be  reviewed and physically inventoried every 3 years. According to DOD  Instruction 4165.70, the military departments’ real property administrators  are accountable for maintaining a current inventory count of the military  departments’ facilities and up-to-date information regarding, among other  things, the status, condition, utilization, present value, and remaining  useful life of each real property asset. Inventory counts and associated  information should be current as of the last day of each fiscal year. When  DOD’s real property is no longer needed for current or projected defense  requirements, it is DOD’s policy to dispose of it. In addition, DOD  Instruction 4165.70 requires the military departments to periodically  review their real property holdings, both land and facilities, to identify  unneeded and underused property.
The three military departments maintain a number of real property  databases that are to be used to manage real property assets for the  Army, Navy, Marine Corps, and the Air Force as shown in table 1.
section_title: OSD’s Real Property Portfolio and Database
paragraphs: OSD’s Base Structure Report Fiscal Year 2013 Baseline (OSD’s Base  Structure Report) is a summary of DOD’s real property inventory and a  “snapshot” of DOD’s real property data collected as of September 30,  2012, and serves as the beginning balance for fiscal year 2013. The  report identifies DOD’s real property assets, including buildings,  structures, and linear structures, worldwide. Table 2 shows the total  assets, percentages, and plant replacement values of real property  assets for each of the military departments and the Washington  Headquarters Services.
OSD compiles and maintains the department’s real property assets  inventory in a single database, called the Real Property Assets Database.  OSD’s Real Property Assets Database contains specific reporting data on  the military departments’ real property records and is considered the  single authoritative source for all DOD real property inventory. OSD’s  objectives for the Real Property Assets Database are to comply with  current DOD business architecture, support the DOD standardized real  property requirements, and implement DOD Instruction 4165.14: Real  Property Inventory and Forecasting. The Real Property Assets Database  is the source used for OSD’s annual real property reporting that includes  the Federal Real Property Profile reportReport. OSD’s Base Structure Report is a snapshot of real property  assets as of September 30 of the previous fiscal year and serves as the  baseline for each contemporaneous fiscal year. It is a consolidated  summary of the three military departments’ real property inventory data,  submitted annually. The three military departments’ real property  inventory records, which are the source for compiling DOD’s real property  records on an annual basis, are uploaded to OSD’s Real Property Assets   and OSD’s Base Structure  Database. Additionally, the Secretaries of the military departments are to  certify annually that the real property inventory records have been  reconciled.
section_title: Our Prior Work on DOD’s Real Property Assets Database
paragraphs: we found that as of September 30, 2010, DOD’s  In September 2011,Real Property Assets Database reported utilization data for fewer than  half of DOD’s total inventory of facilities and that much of the data were  outdated and did not reflect the true usage of the structures. OSD stated  at the time that utilization data in its database did not cover the full DOD  inventory because the primary focus of the department’s efforts to collect  and record such data had been in response to reporting requirements  from the Federal Real Property Council, which requires annual reports on  utilization of five categories of buildings for the Federal Real Property  Profile. However, OSD annually reports all of its real property in its Base  Structure Report. Further, we found that when utilization-rate data were  recorded in OSD’s database, the recorded entry often did not reflect the  true usage of the facilities. For example, we found that in fiscal year 2010  the real property data for the Air Force reported a utilization rate of 0  percent for 22,563 buildings that were reported to be in an active status.  As a result, we recommended that the Secretary of Defense direct the  Deputy Under Secretary of Defense for Installations and Environment to  (1) develop and implement a methodology for calculating and recording  utilization data for all types of facilities and to modify their processes for  updating and verifying the accuracy of reported utilization data to reflect a  facility’s true status and (2) develop strategies and measures to enhance  the management of DOD’s excess facilities after the current demolition  program ends, taking into account external factors that might affect future  disposal efforts. OSD partially concurred with our first recommendation  because it stated that it had some actions already underway to address  the recommendation. However, at that time, OSD did not specify what  actions it had undertaken to date or the time frames for completing efforts  to improve the collection and reporting of utilization data. DOD concurred  with our second recommendation, but did not provide any details or  specific time frames for efforts to address it. As of June 2014, according  to OSD officials, they have not fully implemented these two  recommendations.
section_title: Results-Oriented Management Framework Approach
paragraphs: Our body of work on results-oriented management has shown that  successful organizations in both the public and private sectors use  results-oriented management tools to help achieve desired program  outcomes. These tools, or principles, derived from the Government  Performance and Results Act (GPRA) of 1993, provide agencies with a  management framework for effectively implementing and managing  programs and shift program-management focus from measuring program  activities and processes to measuring program outcomes. The framework  can include various management tools, such as long-term goals,  performance goals, and performance measures, which can assist  agencies in measuring performance and reporting results. Our prior work  has also shown that organizations need effective strategic management  planning in order to identify and achieve long-term goals. We have  identified key elements that should be incorporated into strategic plans to  help establish a comprehensive, results-oriented management framework  for programs within DOD.
Further our prior body of work has also shown that organizations  conducting strategic planning need to develop a comprehensive, results- oriented management framework to remain operationally effective,  efficient, and capable of meeting future requirements. A results-oriented  management framework provides an approach whereby program  effectiveness is measured in terms of outcome metrics. Approaches to  such planning vary according to agency-specific needs and missions;  however, irrespective of the context in which planning is done, our prior  work has shown that such a strategic plan should contain the following  seven critical elements: (1) a comprehensive mission statement; (2) long- term goals; (3) strategies to achieve the goals; (4) use of metrics to gauge  progress; (5) identification of key external factors that could affect the  achievement of the goals; (6) a discussion of how program evaluations will be used; and (7) stakeholder involvement in developing the plan.
section_title: OSD Has Made Some Improvements, but Facility Utilization Data Continue to Be Incomplete and Inaccurate; Data Limitations Affect Use of Departments’ Databases to Identify Consolidation Opportunities
subsections: section_title: OSD Has Made Some Improvements, but Facility Utilization Data Continue to Be Incomplete and Inaccurate
paragraphs: In our analysis of OSD’s Real Property Assets Database over the past 4  fiscal years, we found that although the department has made some  progress in improving its real property records, OSD continued to collect  incomplete utilization data for its real property assets. Specifically, we  found that OSD’s methodology for calculating and recording utilization  data has not changed since our September 2011 report and the data  continue to be incomplete and not encompass all of DOD’s assets. OSD  guidance requires that utilization rates be included for all categories of its  real property asset records. The percentage of total real property assets  with a reported utilization rate increased from 46 percent to 53 percent  over the past 4 fiscal years, as shown in table 3.
For example, as of September 30, 2013, we found that facility utilization  data were missing for 245,281 of DOD’s 524,189 assets—that is, about  47 percent of its total real property assets. Although the percentage of  facilities not reporting any utilization rate decreased since 2011, OSD’s  fiscal year 2013 database still reflects that almost half of DOD’s total real  property assets records do not reflect a utilization rate.
Further, related to accuracy of the data, we found a number of real  property assets reporting a zero utilization rate, which may indicate either  inaccurate records or some type of a consolidation opportunity. We used  three data fields to determine whether a facility’s utilization was  consistently reported in OSD’s Real Property Assets Database.  Specifically, we used the following three criteria—a utilization rate  reported as “zero” (indicating the facility was not being utilized), a status  reported as “active” (indicating the facility was being utilized), and the  type of asset described as a “building.” We found that as of September  30, 2013, OSD reported 7,596 buildings across the four military services with inconsistent or inaccurate reported utilization, as shown in table 4.
We then assessed these facilities and found that 30 percent (2,255 of the  7,596 facilities) were also described as “utilized” in the Real Property  Assets Database. Having a utilization rate of zero and being in an active  status and described as utilized shows potential inconsistencies or  inaccuracies in the data.
We analyzed the inconsistencies across the four services and found the  following:
The Army reported 6,391 real property records with a zero utilization  rate, but 1,734 (about 27 percent) of those buildings were described  as utilized; the remainder of the Army’s records noted 37 buildings  (about 0.01 percent) described as underutilized; and 4,620 (about 72  percent) of those buildings had no utilization description.
The Navy’s 13 buildings and the Marine Corps’ 18 buildings that were  reported with a zero utilization rate had no utilization description.
Of the Air Force’s 1,174 buildings reported with a zero utilization rate,  521 (about 44 percent) were described as utilized and 653 (about 56  percent) had no utilization description.
Our analysis also showed that OSD has made some improvements in  addressing some other inaccuracies in the utilization rates in its real  property records. For example, we found that OSD corrected its real  property records for those reported with a utilization rate greater than 100  percent. Specifically, our analysis showed that OSD had previously  reported real property records of 2,270; 2,093; and 999, in fiscal years  2010, 2011, and 2012, respectively, with a utilization rate greater than  100 percent. In fiscal year 2013, OSD had addressed this inaccuracy and  reported no real property records with a utilization rate greater than 100  percent.
As another example, according to OSD’s real property inventory data  element dictionary, the utilization rate for its real property records should  be reported as a whole number from 0 percent to 100 percent. Our  analysis found that, since fiscal year 2010, OSD has been making  progress in addressing the utilization rates that were not reported as  whole numbers and that, overall, the total number of real property records  in OSD’s Real Property Assets Database reporting a utilization rate that is not a whole number has steadily decreased over the past 4 fiscal years.
section_title: Incomplete and Inaccurate Utilization Data Limit Use of Military Departments’ Databases to Identify Consolidation Opportunities
paragraphs: As with our analysis of OSD’s Real Property Assets Database, we found  that the military departments do not collect and maintain accurate real  property records in their respective databases, which limits the use of the  databases as a tool to identify consolidation opportunities. We found, first,  that at all 11 of the military service installations we visited, according to  the installation officials, the utilization data are not systematically updated,  but instead are updated when (1) there is a request for space; (2) a  facility is consolidated or remodeled; (3) an area is being reviewed for  potential military construction projects; (4) there may be a transfer of  personnel at the installation; or (5) there is a periodic review of their real  property holdings, both land and facilities, to identify unneeded and  underused property. Real property officials at all 11 of the military  service installations we visited told us that evaluating the utilization of  facilities requires physical inspections to verify and validate the accuracy  of the utilization data within their real property inventory records. For  example, according to Army Regulation 405-70, Army installations are  required to perform an annual utilization survey and report findings of   The Navy and the Air  unused, underutilized, or excess real property.Force do not have a similar requirement for annual utilization surveys.  The Army regulation requires a report containing a list of unused or  underutilized buildings by facility classes and category code, building  number, total gross square feet, gross square feet available, type of  construction (permanent, semi-permanent, or temporary), and disposition.  However, the real property officials at the three Army installations we  visited told us that they had not completed the annual utilization surveys  for their installations, because they did not have the manpower, the time  to accomplish what they characterized as a time-consuming task on an  annual basis, or the resources to pay a contractor to accomplish the task.
Secondly, we found during our discussions with service headquarters  officials and visits to installations that those real property inventory  records that are maintained in the military departments’ authoritative real  property inventory databases are not always accurate. For example:
Army headquarters officials demonstrated a recently developed  program called the Army’s Quality Assurance Reporting Tool, which is  used to detect inaccuracies within its real property inventory database  at the installation level. In August 2013, Army officials showed us  more than 45,000 errors of all types within the real property database  for one of the installations we planned to visit.
As of August 2013, Army headquarters officials provided us with a  listing from one of their real property databases showing the dates  when the installation facilities were reviewed. Based on our analysis  of the list of facility review dates, we found significant anomalies. For  example, we found that the list of facility review dates included such  erroneous entries as the years 0012, 0013, 0201, 0212, 0213, 1012,  1776, 1777, 1839, 1855, 1886, 1887, 1888, 1889, 2020, 2030, 2114,  2114, 2201, and 3013. We told Army headquarters’ officials about  these particular facility review dates, and they responded that they  would correct them. Table 5 below shows our analysis of the Army’s  review dates, building count, and percentage reviewed.
In order to determine if established internal control procedures over the Air Forces’ real  property were operating effectively, a Real Property Assertion Team consisting of  representatives from Headquarters Air Force, Civil Engineering, Asset Accountability and  Optimization, the Deputy Assistant Secretary, Accounting and Financial Operations, and  independent contractors was assembled. and the authoritative real property inventory system provided  inaccurate data and could not support audit readiness assertions over  real property assets.  Included in an Air Force Audit Agency report at one of the  installations we visited are five recommendations to develop and  implement oversight procedures to validate the accuracy of Air  Force’s real property data.
Military installation-level officials at all 11 locations we visited told us that  they use the departments’ databases as a tool to help identify space  requirements and potential consolidation opportunities; however,  incomplete and inaccurate data limit the usefulness of the databases to  do so. Specifically, according to these installation-level officials, because  the utilization data currently contained in their databases are often  missing, out of date, or inaccurate, the installations rely on physical  verifications of facilities’ utilization to identify consolidation opportunities.  The installation-level officials stated that these physical verifications are  performed as a result of requests for space or other common real  property management processes, such as changes to mission and  personnel at the installation. For example, at the 11 installations we  visited, we found that consolidations had been performed in the past  reactively in response to events, such as new or changing mission  requirements, changes to force structure, or requests for facility space.  Overall, the four military services use similar criteria and methodologies to  address changes in mission requirements or requests for space at an  installation. The installations’ civil engineers, real property planners, and  facility specialists analyze the installations’ mission requirements and the  space that is authorized to fulfill those missions in order to determine  different potential courses of action for use of installation facilities. The  installations are required by DOD Instruction 4165.14 to perform physical  inventories every 5 years for real property and every 3 years for historical  real property. Thus, according to the military installation-level officials,  they generally complete 20 percent of the inventories each year, including  verifying and correcting real property record data such as the utilization  rate.
We analyzed OSD’s Real Property Assets Database as of September 30,  2013, to determine whether some of the data fields could be used to  identify potential consolidation opportunities.among the 11 locations we visited, that there were 12 real property assets  or facilities that had data fields that indicated that they may have potential  consolidation opportunities, which were located at 3 of the locations we  visited.
In our analysis, we found,  At the first location, with 7 such facilities (including 4 office facilities),  according to the real property officer, one of the office facilities was  demolished in December 2013 and the real property record removed in  January 2014. Another of the office facilities was demolished in  November 2007, and the real property record should have been removed,  yet it was present in DOD’s September 30, 2013, real property records— reflecting an error that has been ongoing for more than 6 years. In  addition, the real property officer noted that the remaining 2 office  facilities that had reported zero utilization rates could be identified as  potential consolidation opportunities, but had not been identified until we  pointed out our findings to the official. The 3 other facilities at that location  (which were not offices) were marked for demolition.
The second location had 1 facility, and, according to the Public Works  official, this facility is 100 percent utilized and the real property record was  reported correctly in the Army’s General Fund Enterprise Business  System. However, the official noted that this facility had two real property  unique identifier numbers—reflecting an error in DOD’s Real Property  Assets Database, which had not been found until we identified it.
The third location had 4 facilities, and, according to the real property  officer, 2 of the facilities were put on the installation’s demolition list as of  February 2014 and the other 2 facilities have usable space that is being  considered for reuse by other activities needing space.
OSD and the military departments have taken some steps to make  improvements to the completeness and accuracy of their data since 2011;  however, based on our analysis of OSD’s Real Property Assets  Database, there continues to be incomplete and inaccurate data. In  September 2011, we recommended that DOD develop and implement a  methodology for calculating and recording utilization data for all types of  facilities, and modify processes to update and verify the accuracy of  reported utilization data to reflect a facility’s true status. As previously  discussed, DOD partially concurred with the recommendation and stated  that it recognized the need for further improvements in the collection and  reporting of utilization data across the department. Further, DOD stated at  the time that it had already begun some efforts to improve utilization data,  but it did not specify what actions it had completed to date or the time  frames for completing efforts to improve collection and reporting of  utilization data. Fully implementing our September 2011 recommendation  would help provide reasonable assurance that the utilization data are  complete and accurate, which could also help better position the military  services to identify consolidation opportunities and realize the potential  attendant cost avoidance from no longer maintaining and operating more  facility space than needed.
section_title: OSD Does Not Have a Strategic Plan to Manage DOD’s Real Property Efficiently and Facilitate the Identification of Opportunities for Consolidating Unutilized or Underutilized Facilities
paragraphs: OSD does not have a strategic plan to manage DOD’s real property  efficiently and facilitate the department in identifying opportunities for  consolidating unutilized or underutilized facilities. According to DOD  Directive 4165.06, it is DOD policy that DOD real property shall be  managed to promote the most efficient and economic use of DOD real  property assets and in the most economical manner, consistent with  defense requirements. In addition, our prior work has shown that  organizations need sound strategic management planning in order to  identify and achieve long-range goals and objectives. Our prior work also  identified critical elements that should be incorporated into strategic plans  to establish a comprehensive, results-oriented management framework. A  results-oriented management framework approach includes a strategic  plan with, among other things, long-term goals, and strategies to achieve  the goals, and metrics or performance measures to gauge progress of the  implementation to meet the goals.
While OSD has established a directive and a number of instructions for  the management of real property, including for the maintenance of data  elements about their facilities, OSD has not developed a strategic plan  nor established department-wide goals, strategies to achieve the goals, or  metrics to gauge progress for how it intends to manage its real property in  the most economical and efficient manner. Two critical elements of a  strategic plan are the establishment of long-term goals and a description  of strategies to achieve those goals. Such goals could be focused on  correcting inaccurate and incomplete facility utilization-rate data in OSD’s  Real Property Assets Database to provide better visibility on the status of  the utilized, unutilized, and underutilized facilities. Another goal could be  to identify opportunities for consolidating unutilized or underutilized  facilities in order to effectively and efficiently use facilities as well as to  reduce operation and maintenance costs in a time of declining defense  budgets. Further, OSD has not established department-wide metrics for  assessing progress related to real property management. Such metrics  could be used to gauge progress in the efficient utilization of DOD’s  current real property inventory. For example, a metric could be  established for the military departments to complete a 100 percent  inventory of all their real property at their respective installations within a  specific time frame in order to baseline the number of utilized, unutilized,  and underutilized facilities, which could help them to identify consolidation  opportunities. OSD officials acknowledged that there is currently no OSD  strategic plan that clearly establishes long-term goals, strategies to  achieve the goals, and the use of metrics to gauge progress to manage  DOD’s real property, because DOD has focused on other priorities.  However, real property management is a long-standing issue and DOD’s  real property assets represent significant resources, as well as the  opportunity for cost savings through the consolidation or disposal of  unutilized or underutilized inventory. Without a strategic plan that includes  long-term goals, strategies to achieve the goals, and metrics to gauge  progress, it will be difficult for OSD to effectively manage its facilities, and  it may be missing opportunities to identify additional consolidation  opportunities, and therefore may not be utilizing its facilities to their  utmost extent.
section_title: Conclusions
paragraphs: OSD has made some progress in improving the completeness and  accuracy of its facility utilization data in its Real Property Assets  Database. However, there continues to be incomplete and inaccurate  data at the OSD and military-service level. We continue to believe that  fully implementing our 2011 recommendation to develop and implement a  methodology for calculating and recording utilization data for all types of  facilities, and to modify processes to update and verify the accuracy of  reported utilization data to reflect a facility’s true status, would help  provide reasonable assurance that the utilization data are complete and  accurate. Further, OSD’s lack of a strategic plan to facilitate the  department’s management of its real property puts OSD and the military  departments at risk for missing consolidation opportunities. As part of a  results-oriented management framework, such a strategic plan should  contain, among other things, long-term goals; strategies to achieve the  goals; and the use of metrics to gauge progress. Without an OSD  strategic plan, OSD and the military departments will be challenged in  managing their real property in an efficient and economical manner, as  required, and in identifying utilized, unutilized, or underutilized facilities as  well as consolidation opportunities.
section_title: Recommendation for Executive Action
paragraphs: To better enable DOD to manage its real property inventory effectively  and efficiently, we recommend that the Secretary of Defense direct the  Deputy Under Secretary of Defense for Installations and Environment to  establish a strategic plan as part of a results-oriented management  framework that includes, among other things, long-term goals, strategies  to achieve the goals, and use of metrics to gauge progress to manage  DOD’s real property and to facilitate DOD’s ability to identify all unutilized  or underutilized facilities for potential consolidation opportunities.
section_title: Agency Comments
paragraphs: We provided a draft of this report to DOD for official review and comment.  In its comments, DOD concurred with our recommendation and stated  that a strategy review is currently underway with initial guidance and  initiatives to be identified by the close of the calendar year. DOD also  provided technical comments which we incorporated in our report as  appropriate. DOD’s written comments are reproduced in their entirety in  appendix III.
We are sending copies of this report to the appropriate congressional  committees; the Secretary of Defense; Deputy Under Secretary of  Defense for Installations and Environment; the Secretaries of the Army,  Navy, and Air Force; the Commandant of the Marine Corps; and the  Director, Office of Management and Budget. In addition, the report is  available at no charge on the GAO website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-4523 or leporeb@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix IV.
section_title: Appendix I: Scope and Methodology
paragraphs: To determine the extent to which the Office of the Secretary of Defense  (OSD) has improved the completeness and accuracy of facility utilization  data in its Real Property Assets Database and the military services use  the data contained in their respective real property inventory databases to  identify potential consolidation opportunities, we obtained selected data  fields containing the military services’ real property records from OSD’s  Real Property Assets Database. We selected the same data fields we  had used as part of our methodology and analysis for our September  2011 report. Specifically, we analyzed the utilization-rate data fields for  fiscal years 2010 through 2013—the most recent full year available at the  time of this review—to determine whether more complete utilization-rate  data had been entered since our previous review of the fiscal year 2010  data. We assessed the reliability of the Department of Defense’s (DOD)  real property inventory data by (1) performing electronic testing for  obvious errors in accuracy and completeness, (2) reviewing existing  information about the data and the system that produced them, and (3)  interviewing agency officials knowledgeable about the data. We  determined that the data were sufficiently reliable to assess the trends of  the utilization data reported in OSD’s Real Property Assets Database for  fiscal years 2010 through 2013. We also reviewed our prior work on  excess and underutilized real property to understand issues previously  identified with real property management. We gathered and analyzed  documentation, such as a DOD directive and instructions as well as  military department regulations, reflecting OSD’s and the military  departments’ management of real property and how OSD used the data  contained in its Real Property Assets Database to identify unutilized or  underutilized facilities or potential consolidation opportunities. We  interviewed officials in the Office of the Under Secretary of Defense for  Installations & Environment; each of the three military departments, which  include the four military services; and the military service installations we  visited, and discussed their processes to manage real property. We  selected 11 active military installations to visit to include installations from  the four services and to reflect those with high numbers of buildings.While the results of our interviews and visits cannot be generalized to all  installations, they provided perspectives on how installations manage  their real property. Using OSD’s Real Property Assets Database and the  following data fields—the utilization rate, the status as “active,” and the  property description as “building,” we used a fourth data field, which  described the asset as “utilized,” to determine any inconsistencies that  might exist between these data fields. Using these four criteria, we  reviewed the real property records for the 11 installations we visited to  identify the extent to which other consolidation opportunities, if any, may  exist on the installations and potential inconsistencies and inaccuracies.  We contacted and received information from DOD representatives, as  delineated in table 6.
To determine the extent to which OSD has a strategic plan to manage  DOD’s real property efficiently and to facilitate the identification of  unutilized and underutilized facilities, we obtained and analyzed  documentation, such as the Office of the Deputy Under Secretary of  Defense for Installations and Environment report, 2013 Accomplishments  and 2014 Goals and Objectives, a DOD directive and instructions, and  military department regulations for the management of real property. We  also reviewed OSD’s Real Property Assets Database as of September  30, 2013—the most recent data available at the time of our review—to  identify what facilities, if any, were reported as being unutilized or  underutilized and ascertain how OSD implemented its policy and  guidance to manage real property in the most economical manner. We  discussed the policies and guidance used in managing these facilities  with officials in the Office of the Under Secretary of Defense for  Installations & Environment and compared OSD’s efforts and guidance to  the DOD directive and instructions for real property management and the  results-oriented management framework as a best practice for strategic  planning.
We conducted this performance audit from July 2013 to September 2014  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Key DOD and Military Department Real Property Guidance and Excerpts of the Requirements
paragraphs: The Department of Defense’s (DOD) Real Property Management  Program is governed by statute and DOD regulations, directives, and  instructions that establish real property accountability and financial  reporting requirements. Table 7 describes some of the guidance from  DOD and the military departments and includes excerpts of the related  requirements to manage real property.
section_title: Appendix III: Comments from the Department of Defense
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Harold Reich (Assistant Director),  James Ashley, Ronnie Bergman, Pat Bohan, Tracy Burney, Cynthia  Grant, Mary Catherine Hult, Cheryl Weissman, and Michael Willems  made key contributions to this report.