Defense Infrastructure: Actions Needed to Enhance Oversight of Construction Projects Supporting Military Contingency Operations
Published: 2016-09-08T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: For about 15 years, DOD has funded “contingency construction” projects to support operations in Iraq and Afghanistan. The range, complexity, and cost of construction vary (e.g., from concrete pads for tents to brick-and-mortar barracks). DOD funds the projects through MILCON or O&M appropriations. Base commanders can use O&M to fund lower cost projects.
Senate Report 113-174 includes a provision for GAO to review issues related to military construction in the CENTCOM area of responsibility in support of contingency operations in Iraq and Afghanistan. GAO evaluated, among other things, the extent to which DOD has (1) tracked the universe and cost of all contingency construction projects in support of contingency operations there, (2) developed a process to determine the appropriate level of construction for MILCON-funded contingency construction projects, and (3) developed a process for reevaluating contingency construction projects when missions change. GAO reviewed relevant guidance and project data.
section_title: What GAO Found
paragraphs: Since contingency operations began in Iraq and Afghanistan, the Department of Defense (DOD) has not tracked the universe and cost of all U.S. Central Command (CENTCOM) contingency construction projects supporting operations there. According to senior DOD officials DOD is not required to track all contingency construction projects separately from all other DOD projects, but DOD has been able to generate specific data on MILCON-funded contingency construction projects when requested. Senior DOD officials stated that they were unaware of the magnitude of their use of O&M funds because DOD has not tracked the universe and cost of O&M-funded unspecified minor military construction projects in support of contingency operations. GAO identified O&M-funded construction costs for fiscal years 2009-12 of at least $944 million for 2,202 of these projects in Afghanistan, costs that are significant compared with the $3.9 billion DOD reported as enacted for MILCON-funded projects there in the same period. DOD has routinely used O&M funding to more quickly meet requirements because the MILCON review process can take up to 2 years. However, DOD's use of O&M funding has posed risks. For example:
Financial risk: In 2010, DOD identified needed concrete shelters at Bagram Airfield, Afghanistan, staying below the O&M maximum by dividing a single requirement into separate projects. DOD reported in 2015 that it should have used MILCON funds for the shelters, determining that the obligations incurred had exceeded the statutory maximum for O&M-funded unspecified minor military construction projects, resulting in an Antideficiency Act violation.
Duplication risk : In 2015, officials at a base in the CENTCOM area of responsibility decided to use O&M funding for temporary facilities for a squadron while in the same year requesting MILCON funding for a permanent facility for the same squadron, which could result in providing the same service to the same beneficiaries.
For MILCON-funded contingency construction projects, DOD has guidance used for determining the appropriate level of construction, or building standard, based on the facility's life expectancy requirements, but as of July 2015 had not documented the rationale for such determinations for 11 of the 39 projects in fiscal years 2011-15 that cost over $40 million each. Further, for 8 of the 11 projects, senior DOD officials could not confirm what level of construction the projects represented based on DOD standards aimed at helping to match investments with requirements. Senior DOD officials acknowledged that an absence of such documentation could lead to DOD constructing facilities in excess of requirements because of the resulting lack of communication with those who design and construct the facilities.
DOD has not developed a formal process for reevaluating ongoing contingency construction projects when missions change. According to CENTCOM documentation, beginning in November 2011 DOD undertook five rounds of reviews of planned and ongoing projects in Afghanistan anticipating a change in the mission. However, without a requirement for such reviews, DOD risks constructing facilities that may be unneeded to support U.S. forces in the CENTCOM area of responsibility and in future contingencies worldwide.
section_title: What GAO Recommends
paragraphs: GAO made six recommendations including that DOD track the universe and cost of O&M-funded projects (DOD did not concur), review construction projects to ensure funds were properly used (DOD did not concur), examine approaches to shorten project approval times (DOD partially concurred), document level-of-construction determinations (DOD partially concurred), and require project reviews when missions change (DOD partially concurred). GAO maintains that its recommendations are valid.

section_title: Letter
paragraphs: The Department of Defense (DOD) has spent billions of dollars on  “contingency construction” projects, such as command and control  facilities, troop housing, and guard towers, in the U.S. Central Command  (CENTCOM) area of responsibility to support operations in Afghanistan  (beginning in 2001) and Iraq (beginning in 2003). The range, complexity,  and cost of contingency construction projects can vary greatly. For  example, with respect to troop housing, contingency construction projects  might range from tents on concrete slabs to brick-and-mortar barracks. To  help match the investment in these projects with requirements, DOD  identifies three levels of construction for contingency environments:  “initial” (for use for up to 6 months), “temporary” (generally for use for up  to 5 years), and “semi-permanent” (for use for up to 10 years and, with  maintenance and upkeep, for up to 25 years). DOD operates under  multiple statutory authorities to fund these projects through either the  Military Construction (MILCON) or Operation and Maintenance (O&M)  appropriations.
Senate Report 113-174 included a provision for us to review matters  related to military construction in the CENTCOM area of responsibility in  support of contingency operations in Iraq and Afghanistan. We evaluated  the extent to which DOD has (1) tracked the universe and cost of all  contingency construction projects in the CENTCOM area of responsibility  that support contingency operations in Iraq and Afghanistan, (2)  developed a process for determining the appropriate level of construction  for MILCON-funded contingency construction projects, (3) developed a  process for reevaluating contingency construction projects when missions  change, and (4) established an approach for sharing lessons learned  from contingency construction projects in support of contingency  operations in Iraq and Afghanistan.
For objective one, we obtained and analyzed available DOD contingency  construction project data from fiscal years 2001 through 2016 maintained  by the Office of the Under Secretary of Defense (Comptroller), the Army,  the Air Force, and the Army Corps of Engineers to determine the extent to  which DOD tracks contingency construction projects undertaken in  support of contingency operations in Iraq and Afghanistan separately  from all other construction projects undertaken by DOD, both MILCON-  and O&M-funded. We determined the data to be sufficient and reliable  for the purposes of our reporting objectives by interviewing  knowledgeable agency officials, tracing selected construction projects to  source documents, and manually testing data for outliers and obvious  errors. For both MILCON- and O&M-funded contingency construction  projects, we assessed existing contingency construction project review  and approval, identification, documentation, information quality, and  control activity processes against GAO’s Standards for Internal Control in  the Federal Government, which state among other things that agencies  should use quality information to achieve an entity’s objectives and  design control activities to achieve objectives and respond to risks by, for  example, clearly documenting all transactions and other significant events  in a manner that allows the documentation to be readily available for  examination. We also reviewed DOD and CENTCOM guidance and  standards for contingency construction, as well as roles and  responsibilities for managing, executing, and overseeing projects. We  discussed with officials at service component commands and bases in the  CENTCOM area of responsibility the approaches commanders used to  manage these projects, including the use of available statutory authorities  for funding them and the potential risks to individual projects—identified  by base officials or in our review of project files—that relied on O&M  funding for contingency construction. We interviewed officials from the  Under Secretary of Defense (Comptroller), the Joint Staff, CENTCOM,  the Army Central Command, the Air Force Central Command, the U.S.  Forces-Afghanistan, the Army Corps of Engineers, and the Air Force Civil  Engineer Center. We also conducted site visits to bases in the  CENTCOM area of responsibility, selecting those bases on the basis of  those with the highest number of military construction projects in  CENTCOM countries, excluding Iraq and Afghanistan due to the closure  of our audit offices there and the difficulties and risks associated with  travel in those countries.
For objective two, we examined processes that apply to determining the  level of construction when executing MILCON-funded contingency  construction projects in the CENTCOM area of responsibility. We  compared these processes, along with relevant DOD and CENTCOM  guidance, with GAO’s Standards for Internal Control in the Federal  Government, which states among other things that management should  establish an organizational structure, assign responsibility, and delegate  authority to achieve the entity’s objectives. In addition, we reviewed  available data from the Army Corps of Engineers database as of February  2015 for MILCON-funded contingency construction projects in the  CENTCOM area of responsibility. Out of these data we analyzed all  projects with programmed amounts equal to or over $40 million, to  account for the highest value projects equating to the top one-third of  programmed amounts for projects, to determine the extent to which DOD  had documented level-of-construction determinations for the projects with  the highest programmed amounts. The results of this analysis were not  generalizable to projects with programmed amounts below $40 million.  We determined the data to be sufficient and reliable for the purposes of  our report objectives by reviewing related documentation, interviewing  knowledgeable agency officials, and reviewing related internal controls.
For objective three, we collected and reviewed available supporting  documentation for reviews that the U.S. Forces-Afghanistan conducted  beginning in November 2011 of planned or ongoing contingency  construction projects in Afghanistan. We compared these reviews with  DOD guidance, which states that the combatant commanders are  responsible for assessing the operational environment at critical  milestones to determine contingency basing requirements within their  respective area of responsibility.  Contingency basing includes the  planning, designing, constructing, operating, managing, and transitioning  or closing of a non-enduring location supporting a combatant  commander’s requirements. We interviewed officials from the Joint Staff,  CENTCOM, the Army Central Command, and the Army Corps of  Engineers regarding their roles in construction project reviews when  mission changes occur in Iraq and Afghanistan. We also reviewed the  May 2015 Special Inspector General for Afghanistan Reconstruction  report on an unused command and control facility in Afghanistan and  discussed this report with the Special Inspector General staff who  conducted the underlying work. Further, during site visits to the  CENTCOM area of responsibility, we interviewed base officials regarding  the impact of mission requirement changes on planned or ongoing  construction projects.
For objective four, we compared CENTCOM lessons learned data  recorded in the Joint Lessons Learned Information System with  guidelines found in DOD guidance, which specifies that Joint Lessons  Learned Program stakeholders, when appropriate, will contribute  information, data, and lessons learned that are germane to improving joint  capabilities and readiness, to determine what processes the department  has in place to develop contingency construction-related lessons learned.  Additionally, we reviewed observations found in the Joint Lessons  Learned Information System. We also interviewed DOD officials regarding  the mechanisms they used for communicating contingency construction  lessons learned.
We conducted this performance audit from November 2014 to September  2016 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives. See appendix I for more  details on our objectives, scope, and methodology.
subsections: section_title: Background
subsections: section_title: Definition of “Contingency Construction” Project
paragraphs: For the purposes of this review, we use the term “contingency  construction” to describe any construction, alteration, development,  conversion, or extension of any kind carried out with respect to a military  installation in support of contingency operations. Different organizations  and personnel within DOD would consider different categories of projects  to be contingency construction, reflecting the project type or  categorization that is most relevant to their function. Although DOD does  not have a consistent definition for what constitutes a “contingency  construction” project, officials from various DOD entities identify and  describe contingency construction projects based on criteria including  location, funding source, statutory authority, construction standards, and  a facility’s intended use. Specifically:
Location. Contingency construction projects may be identified by  their geographic location (such as a country or region) or as those  occurring at contingency locations, which DOD defines as non- enduring locations outside of the United States that support and  sustain operations during named and unnamed contingencies or other  operations as directed by the appropriate authority and are  categorized by mission life-cycle requirements as initial, temporary, or  semi-permanent.
Funding Source. Contingency construction projects may generally be  identified by the source of funding, such as the “overseas contingency  operations” portion of the budget, which may include MILCON and  O&M appropriations.
Statutory Authority. Contingency construction projects may be  identified by the statutory authority used to undertake the construction  project. For example, Contingency Construction Authority is a  statutory authority specifically associated with contingency  construction operations.
Construction Standards. Contingency construction projects may be  identified by the construction standard used, such as those  construction standards specified for contingency locations in  CENTCOM guidance.
Facility’s Intended Use. The purpose of the construction—whether  specifically for contingency operations or for some degree of use for  contingency operations—might be considered when identifying  contingency construction projects.
section_title: Statutory Authorities for Carrying Out Military Construction Projects
paragraphs: DOD uses various statutory authorities to carry out military construction  projects, including contingency construction projects, and uses MILCON  and O&M appropriations to fund the construction. The statutory  authorities for military construction projects, several of which DOD has  used for contingency construction in the CENTCOM area of responsibility  to support contingency operations in Iraq and Afghanistan, are outlined in  table 1. Appendix II provides further details on these authorities.
Table 1 shows that DOD may use MILCON appropriations under five of  the six statutory authorities and may use O&M appropriations under two  of the six authorities. Depending on a project’s cost, DOD may use either  MILCON or O&M appropriations for unspecified minor military  construction. In addition to using O&M appropriations for unspecified  minor military construction, DOD may also use O&M appropriations for  projects under the Contingency Construction Authority. To distinguish  between the two statutory authorities that may use O&M funding, for the  purposes of this review we refer to O&M-funded projects undertaken  using section 2805 of Title 10, U.S. Code (Unspecified Minor Military  Construction authority) in support of contingency operations as “O&M- funded unspecified minor military construction projects” and to O&M- funded projects using Contingency Construction Authority as  “Contingency Construction Authority projects.”
section_title: Roles and Responsibilities Related to Contingency Construction
paragraphs: CENTCOM and its component commands have key roles and  responsibilities for contingency construction within CENTCOM’s  geographic area of responsibility. CENTCOM is one of six combatant  commands that have a defined geographic area of responsibility, which is  a specific region of the world where the combatant commanders plan and  conduct operations. Figure 1 shows CENTCOM’s area of responsibility,  which includes Iraq and Afghanistan.
CENTCOM is responsible for assessing the operational environment at  critical milestones to determine contingency basing requirements and  designating or recommending to the Chairman of the Joint Chiefs of Staff  the lead service component for managing a contingency location.  CENTCOM, through the command engineer, is also responsible for  coordinating with service components to develop construction project  priorities and for establishing theater contingency construction  standards. CENTCOM provides its plans for activities and operations in  theater (e.g., an engineer support plan, a theater campaign plan, etc.) to  its service component commands, such as the Army Central Command  and the Air Force Central Command. Under the Joint Lessons Learned  Program, CENTCOM is also responsible for providing and maintaining  support for theater-specific joint and interoperability lessons learned  activities.
Military Departments. The military departments develop, review,  approve, and submit proposed construction projects identified by the  combatant commands and service component commands in their annual  budget justification materials. The lead service component command for a  contingency location is to ensure that the location’s construction projects  support the mission and tenants, which are driven by the plan CENTCOM  provides. According to Army Central Command and Air Force Central  Command officials, in developing the needed footprint for a contingency  location, the service component commands identify construction projects  and define level-of-construction requirements to provide the shelter and  space needed to conduct planned operations. Once developed, according  to Army Corps of Engineers officials, the lead service submits those  projects to CENTCOM for review and validation. After CENTCOM and its  component commands have validated a construction project, the service  component command conveys project details, including the level of  construction needed, to the Army Corps of Engineers for projects  exceeding $1 million. The Army and Air Force have delegated approval  for unspecified minor military construction projects below that level to the  service component commanders and subordinate commands, including  the installation commander in the case of the Air Force. Once  appropriations are received, the military departments provide funds to  DOD construction agents to be used for approved construction projects.
Army Corps of Engineers. The Army Corps of Engineers is the  designated DOD construction agent for CENTCOM’s area of  responsibility. As such, it is responsible for performing design and  construction services for MILCON-funded projects and service  component-requested O&M-funded projects. Additionally, it is responsible  for obligating, expending, and accounting for MILCON and O&M funds for  assigned projects. According to Army Corps of Engineers officials, when  performing design and construction services, the functions of the  construction agent include estimating the cost of construction projects in  the CENTCOM area of responsibility to meet level-of-construction  requirements determined by the service component commands. When  the volume of construction projects exceeds the Army Corps of  Engineers’ personnel capacity for managing projects, it may call upon the  Air Force Civil Engineer Center to manage the design and construction  for some projects in the CENTCOM area of responsibility.
Various Office of the Secretary of Defense organizations and the Joint  Staff also have roles and responsibilities related to contingency  construction.
The Under Secretary of Defense for Acquisition, Technology, and  Logistics exercises general oversight of the military construction  program and has been delegated certain statutory authorities of the  Secretary of Defense.
The Office of the Assistant Secretary of Defense for Energy,  Installations, and Environment is, among other things, responsible for  administering the provisions of DOD Directive 4270.5, regarding  military construction, including issuing implementing guidance.  Additionally, it is to monitor the execution of the military construction  program to ensure the most efficient, expeditious, and cost-effective  accomplishment of the program by DOD construction agents.  Furthermore, it is responsible for developing DOD-wide master  planning policy; facilities and construction standards; and real  property accountability policy for contingency basing.
The Under Secretary of Defense (Comptroller) submits budget  justification materials annually to Congress, identifying construction  projects to be funded and their cost. For major military construction  projects specified in the National Defense Authorization Act, the  Comptroller also reports on the status of funds appropriated for each  project, including obligations and disbursements. Additionally, the  Secretary of Defense has delegated approval authority for the use of  Contingency Construction Authority to the Under Secretary of  Defense (Comptroller).
The Chairman of the Joint Chiefs of Staff, in coordination with the  combatant commanders, is responsible for assigning priority among  competing requests from the combatant commands for military  construction projects using certain authorities. The Chairman of the  Joint Chiefs of Staff also reviews combatant command  recommendations for the designation of a lead service for each semi- permanent contingency location and provides a recommendation to  the Under Secretary of Defense for Acquisition, Technology, and  Logistics.
section_title: DOD Has Not Tracked the Universe and Cost of All Contingency Construction Projects in the CENTCOM Area of Responsibility That Support Operations in Iraq and Afghanistan
paragraphs: Since contingency operations began in Iraq and Afghanistan, DOD has  not tracked the universe and cost of all CENTCOM contingency  construction projects supporting operations there. Although DOD does  not track all contingency construction projects separately from all other  DOD projects in the CENTCOM area of responsibility, DOD maintains  consolidated financial records of all MILCON projects and has been able  to generate more specific data on contingency construction projects when  requested. DOD was until recently required to track the universe and cost  of O&M-funded projects supporting operations in Iraq and Afghanistan  using the Contingency Construction Authority—one of two statutory  authorities using O&M funding.  However, senior DOD officials stated  that they do not track and so were unaware of the magnitude of their use  of O&M funds for projects under the other statutory authority—section  2805 of Title 10, U.S. Code—projects that we found constituted a  substantial segment of overall contingency construction. According to  senior DOD officials, DOD is not required to track the universe and cost of  those projects. DOD has routinely used O&M funding for these projects to  more quickly meet requirements because the MILCON review process  can take up to 2 years. However, in some instances, DOD's use of O&M  funding has posed financial, operational, and duplication risks.
subsections: section_title: DOD Has Consolidated Data on MILCON Projects That Support Contingency Operations and Has Been Able to Generate More Specific Data on Contingency Construction Projects When Requested
paragraphs: The department does not track MILCON-funded contingency construction  projects separately from other MILCON-funded construction projects.  According to senior department officials, DOD is not required to track  contingency construction projects separately from all other DOD projects  and any MILCON projects supporting contingency operations are  managed sufficiently within the standard DOD processes used for all  military construction. For the CENTCOM area of responsibility, the  department maintains consolidated financial records on MILCON projects,  whether or not those projects support contingency operations, and has  been able to generate more specific data on contingency construction  projects when requested. Comptroller officials also stated that the  department accounts for construction costs at the level authorized and  appropriated by law. Specifically, the department captures obligation and  disbursement data for MILCON projects in a monthly report of budget  execution data for the period that funds are available for obligation plus 5  additional years. For example, DOD’s December 2015 monthly report  reflected obligations of $1.4 billion for projects funded with overseas  contingency operations MILCON funds in the CENTCOM area of  responsibility from fiscal year 2010 through fiscal year 2016. According to  Comptroller officials, obligations and disbursements for projects prior to  this period—for which accounts have been closed—are not retained in an  automated system; therefore, reconstructing these data would be an  intensive manual effort.
A senior official in the Office of the Assistant Secretary of Defense  (Energy, Installations, and Environment) stated that DOD does not  expend resources to track contingency construction project expenditures  at a level of detail beyond what is required by Congress and instead relies  on data queries should this level of detail be required. For example,  according to a Comptroller official, in 2012 DOD responded to a request  from the House Appropriations Committee, Security and Investigations  Subcommittee, to provide data on obligations and disbursements for  military construction in Iraq and Afghanistan. DOD was able to collect the  requested data through data queries of the Defense Finance and  Accounting Services and DOD Comptroller databases. The data indicated  that as of September 30, 2012, the department had obligated $4.2 billion  in MILCON funding (both base and overseas contingency operations  funding) for specified military construction projects, as well as $1.3 billion  in O&M funding (under Contingency Construction Authority), from fiscal  years 2004 through 2012.
section_title: DOD Has Not Tracked the Universe and Cost of All O&M-Funded Contingency Construction Project Expenditures Supporting Contingency Operations in Iraq and Afghanistan
paragraphs: DOD was until fiscal year 2016 required to track the universe and cost of  projects supporting contingency operations in Iraq and Afghanistan using  the Contingency Construction Authority, one of two statutory authorities  using O&M funding. According to Comptroller officials, DOD has been  able to generate obligation and disbursement data for Contingency  Construction Authority projects funded with O&M under the Contingency  Construction Authority established by section 2808 of the National  Defense Authorization Act for Fiscal Year 2004 (as amended).  Specifically, DOD has maintained records for all 112 projects constructed  under this authority since fiscal year 2004, when it was established. For  these projects, the department has maintained a cumulative record of  obligations and expenditures to fulfill the statutory requirement for  reporting this information to congressional committees on a quarterly  basis. As of September 2015, DOD had obligated and expended $1.4  billion in O&M funds using the Contingency Construction Authority from  fiscal years 2004 through 2015.
However, according to senior DOD officials, DOD is not required to track  contingency construction projects funded with O&M appropriations under  the other statutory authority, section 2805 of Title 10, U.S. Code,  separately from all other DOD projects. Senior DOD officials stated that  they were unaware of the magnitude of their use of O&M funds for  unspecified minor military construction projects in the CENTCOM area of  responsibility because DOD did not track the O&M-funded contingency  construction projects using that authority. During the course of our review,  we found that the Army, which programs the majority of these O&M- funded unspecified minor military construction projects in the CENTCOM  area of responsibility, had not tracked or documented these projects and  was unable, therefore, to provide us with a comprehensive list accounting  for them. DOD officials from other organizations, including the Office of  the Under Secretary of Defense for Acquisition, Technology, and  Logistics; the Office of the Under Secretary of Defense (Comptroller);  CENTCOM; the Army Central Command; the Air Force Central  Command; the Army Corps of Engineers; and the Air Force Civil Engineer  Center also could not provide us with a comprehensive list of O&M- funded unspecified minor military construction projects in the CENTCOM  area of responsibility. Office of the Assistant Secretary of Defense for  Energy, Installations, and Environment; Joint Staff; and CENTCOM  officials told us that accounting for these projects was a service  responsibility or was otherwise left to the services.
According to Army Central Command officials, a list could be developed  using information from operating bases where the construction occurred;  however, most of the bases in Afghanistan and Iraq have been closed  and locating such information would be problematic. For example, though  O&M-funded contingency construction project files for fiscal years 2009  through 2010 for construction projects in Afghanistan are located in hard  copy in filing cabinets at Army Central Command headquarters at Shaw  Air Force Base, South Carolina, neither U.S. Forces-Afghanistan nor  Army Central Command could provide records prior to 2009. Further,  according to a U.S. Forces-Afghanistan official, an effort to review,  collect, and analyze historic construction project data after the fact would  be too resource-intensive given the drawdown of operations in  Afghanistan and the other higher priorities occupying the limited U.S.  Forces-Afghanistan personnel available to undertake such an effort.
Absent a comprehensive list of DOD’s O&M-funded unspecified minor  military construction projects, we used the limited information available to  identify O&M-funded unspecified minor military construction projects  supporting operations in Iraq and Afghanistan, and found that these  projects constituted a substantial segment of overall contingency  construction. Specifically, using available U.S. Forces-Afghanistan  information for fiscal years 2009 through 2012, we identified records  indicating that the command had approved at least $944 million in O&M  funding for 2,202 of these projects in Afghanistan alone. This use of  O&M funding appears significant when compared with the $3.9 billion  DOD reported as enacted for other construction projects in Afghanistan  over the same period using MILCON funding. Further, the 2,202  contingency construction projects we identified in the U.S. Forces- Afghanistan data may not include all construction projects funded under  section 2805 of Title 10, U.S. Code, in Afghanistan during fiscal years  2009 through 2012 because, according to Army Central Command  officials, U.S. Forces-Afghanistan delegated authority to its four regional  commands to approve and fund projects independently. Therefore, the  $944 million in O&M funding we identified may not include construction  projects independently approved at the regional command level during  this period. Additionally, Army Central Command officials were not able to  provide information on O&M-funded unspecified minor military  construction projects in Afghanistan prior to 2009, as discussed earlier.  Nor were they able to provide this information for projects in Iraq and  other countries in their area of responsibility for all fiscal years where,  according to Army Central Command officials, O&M-funded construction  activities took place. During the course of our review, we shared the  results of our analysis with DOD officials, who agreed that the amount of  O&M funding we identified constituted a significant segment of  contingency construction expenditures. Army Central Command officials  further noted that on the basis of their experience the costs that we had  identified were likely conservative relative to the universe of O&M-funded  unspecified minor military construction projects in the CENTCOM area of  responsibility. These officials told us that it is likely that the majority of  contingency construction projects are funded as unspecified minor  military construction projects using O&M appropriations. Further, Army  Central Command officials acknowledged that while individual projects  may not warrant tracking on the basis of their specific construction cost,  collectively across all projects the amounts are likely to be more  significant, as was the case with the $944 million we identified. According  to GAO’s Standards for Internal Control in the Federal Government,  management should design control activities to achieve objectives and  respond to risks by, for example, clearly documenting all transactions and  other significant events in a manner that allows the documentation to be  readily available for examination. DOD’s O&M-funded unspecified minor  military construction projects collectively constitute significant events and,  therefore, DOD’s control activities should include a means for  documenting and tracking these projects.
According to a senior official from the Office of the Assistant Secretary of  Defense for Energy, Installations, and Environment and senior DOD  Comptroller officials, DOD does not plan to collect and analyze data on  these O&M-funded projects, either in the CENTCOM region or in any  other location. The officials noted that, while DOD could invest resources  to track and document how much O&M funding they have used and are  using for construction projects to support contingency operations, current  DOD systems and processes are not set up to automatically provide this  level of detail for these projects. Further, they noted that without changing  DOD’s current systems and process, identifying this information would be  resource and labor intensive. However, Army Central Command officials  noted that each project undertaken using O&M funding for construction  under the authority of section 2805 of Title 10, U.S. Code, requires a  documented identification and classification of a project’s estimated  construction costs and a legal determination to validate the base  commander’s construction cost estimates for each project, to ensure that  the $1 million maximum is not exceeded. While we recognize that locating  all records of construction costs for completed construction projects at  this point would be problematic, data on the construction costs for  ongoing and future projects should continue to be readily available at the  time of a project’s approval decision. Base commanders could therefore  compile these readily available cost data and report them through the  chain of command, for example, to the Under Secretary of Defense  (Comptroller) and other decision makers. Given the magnitude of these  O&M funds we identified that DOD used for contingency construction  projects in Afghanistan in fiscal years 2009-12, establishing a means to  track and document information on the universe and cost of all ongoing  and future unspecified minor military construction projects funded with  O&M would improve DOD’s ability to manage and oversee funds made  available for such projects using O&M funding. Further, GAO’s Standards  for Internal Control in the Federal Government states that management  should use quality information to achieve the entity’s objectives—such as  executing construction responsibilities and administering funds—by, for  example, designing a process that identifies the information requirements  needed. In the context of O&M funds, which are available for a variety of  functions including construction, quality information on the use of O&M for  construction activities in the contingency environment would be helpful for  understanding the overall cost of contingency operations and the  availability of funds for other operational purposes. Clearly tracking O&M- funded unspecified minor military construction projects is important for  administering O&M funds and determining the funding needed to support  operations in Iraq and Afghanistan, as well as for projecting funding  needed for future contingency operations. DOD officials agreed that  without comprehensively tracking and documenting unspecified minor  military construction projects funded with O&M appropriations, the military  services and other stakeholders are limited in their ability to manage and  oversee funds made available for military construction, including  contingency construction projects. Without information on the universe  and cost of these projects funded with O&M, the military services cannot  maintain awareness of how much O&M funding they are using for  construction projects to support contingency operations versus other  O&M-funded operational requirements.
section_title: DOD’s Reliance on O&M Funding for Contingency Construction Projects Creates Financial, Operational, and Duplication Risks
paragraphs: CENTCOM commanders have frequently relied on O&M funding to  support contingency construction projects because, according to officials,  O&M-funded projects take less time from development through  construction than do MILCON-funded projects. However, this reliance on  O&M funding has the potential to create financial, operational, and  duplication risks.
Due to the urgency of contingency operations, CENTCOM personnel  must often construct facilities as rapidly as possible in their area of  responsibility. For example, CENTCOM Regulation 415-1 notes that  contingency basing locations support immediate but temporary  contingency operations. It also states that O&M funds will be used to the  maximum extent possible. However, for projects exceeding a cost of $1  million—the maximum amount currently available for O&M-funded  projects under section 2805 of Title 10, U.S. Code—base officials in the  CENTCOM area of responsibility stated they do not have a funding  process that adequately supports contingency construction projects  needed within a short time frame, since MILCON-funded projects can  take up to 2 years for review and approval in addition to the time needed  to complete construction.
CENTCOM officials noted that a construction project can use either  MILCON or O&M funding, and should be designed to address a single  construction requirement. Under general construction authorities (i.e.,  major military construction specified in the National Defense Authorization  Act and unspecified minor military construction under section 2805 of Title  10, U.S. Code), commanders must use MILCON funding for projects  costing more than $1 million ($750,000 prior to fiscal year 2015). Army  Central Command officials, however, stated that MILCON-funded projects  can take 12 to 18 months to develop and submit, 12 to 24 or more  months to review and approve, and 18 to 24 months to construct,  equating to about 3 to 5 years in total before a project is completed and in  use. By comparison, commanders can use O&M funding to meet  construction requirements for projects at or below that maximum, and  such projects can usually be reviewed and approved at the component or  subordinate command level in 2 to 3 months and constructed in less than  1 year. Officials noted that even unspecified minor military construction  projects using MILCON funds involve a lengthy review process, and  commented that commanders seeking to use these funds must compete  with projects from around the world within their respective service for a  relatively limited amount of funding.
In addition to the general construction authorities, DOD may use other  authorities for construction projects in emergency and contingency  circumstances. According to senior officials in the Office of the Assistant  Secretary of Defense for Energy, Installations, and Environment, these  authorities can provide a means for funding contingency construction  projects that exceed the O&M-funding maximum. For example, according  to these officials, in an extraordinary instance the department could  review, approve, and fund a contingency construction project in as few as  60 days using the Contingency Construction Authority. Nonetheless,  these officials acknowledged that this process is still time-consuming in  the eyes of commanders. Further, while service component and base  officials in the CENTCOM area of responsibility acknowledged that these  authorities are available and can be used in certain instances, they view  them as inadequate because of the time required to get projects  approved. Specifically, according to Office of the Assistant Secretary of  Defense for Energy, Installations, and Environment and Army Central  Command officials, these authorities involve an approval process from  higher military department headquarters and DOD similar to that required  under general construction authorities that can be lengthy (6 months or  longer) and involve considerable DOD and congressional scrutiny.  According to Army Central Command officials, in some instances, use of  these other authorities also involves a request to reprogram funds,  thereby adding another 3 to 8 months to the process. Officials noted that  units on relatively short rotations (about 9 to 10 months) may no longer  need the project by the time construction begins. Further, officials noted  that commanders may perceive these authorities as requiring competition  among various projects for funding, sometimes on a worldwide basis, and  as a result believe that they will be unable to obtain approval.
However, when using O&M funds for construction, base commanders  must be careful as they consider the scope of a project, particularly when  developing multiple projects to address similar requirements or an  overarching or single requirement. Specifically, section 2801 of Title 10,  U.S. Code provides that a military construction project includes all military  construction work necessary to produce a complete and usable facility or  a complete and usable improvement to an existing facility. GAO and the  military departments have noted that the construction of a single  “complete and usable” facility or project may involve the construction of  several related buildings, structures, or other improvements to real  property. As GAO has previously noted, the key factor is that a single  building, structure, or other improvement could not satisfy the need that  justified carrying out the construction project. Military department  guidance provides that a single project or requirement may not be split  into smaller projects solely in order to stay below the funding “threshold”  (i.e., maximum). Whether multiple buildings should be programmed and  funded as one project is a case-by-case determination that depends on  various factors. However, multiple construction projects in support of a  similar requirement may raise funding concerns or, in extreme cases,  result in a violation of the Antideficiency Act.
During our site visits to CENTCOM bases, officials told us that using O&M  funding for projects is the quickest option available to address immediate  contingency construction requirements. However, during the course of  our review, we found instances of contingency construction requirements  that might have entailed projects with construction costs above the $1  million maximum ($750,000 prior to fiscal year 2015) for O&M-funded  projects but that, according to officials, needed to be completed more  quickly than would have been possible under the existing MILCON review  and approval process, which can take 2 years. While the extent of DOD’s  use of the practice is unknown because DOD has not tracked the  universe and cost of O&M-funded unspecified minor military construction  projects, we identified examples where commanders had modified a  project’s specifications or where commands had developed multiple  projects below the O&M maximum to address a single requirement, which  could then be completed more quickly. DOD’s reliance on O&M funding in  these instances increased the risks of (1) potential concerns regarding  the appropriate use of funding, (2) negative operational impacts, and (3)  unnecessary duplication of effort.
Following are the examples that we identified where commanders had  modified a project’s specifications or commands had developed multiple  projects to address similar requirements or an overarching or single  requirement, potentially raising concerns or underrating risk regarding the  appropriate use of funding:  In August 2010, base officials at Bagram Airfield, Afghanistan,  identified the need for additional housing at the base and designed 28  projects for the construction of concrete shelters—referred to as B- huts—classifying the project costs as construction costs. As the  projects progressed, contingency-related changes resulted in base  officials combining the 28 projects into 6 larger projects. Moreover,  concurrent with the combination of the projects, base officials also  modified the project specifications by re-designating the B-huts as  “relocatable buildings,” the costs for which were then classified as  other-than-construction. These actions significantly reduced costs  designated as construction for each of the 6 larger projects putting  them below the general $750,000 maximum for O&M funded projects  in effect in 2010, after which base officials used O&M funds to finance  their construction. Nonetheless, subsequent to the completion of the  concrete shelters the department reported in September 2015 that it  should have used MILCON funds to construct the shelters and  determined that the obligations incurred for the projects had exceeded  the statutory limit for O&M-funded unspecified minor military  construction projects, thus resulting in a violation of the Antideficiency  Act.
In October 2009, Forward Operating Base Leatherneck officials  identified a requirement for a headquarters building for a Marine Wing  Support Squadron, which they estimated would have a total project  cost of $847,491. Officials classified $740,193 of this amount as  construction and the remainder as non-construction costs. However,  the items classified as non-construction included a $44,600 generator  used to power the building. According to Army Regulation 420-1,  generators affixed as a permanent part of a facility that provide power  to the facility are classified as real property and should be funded with  military construction funds. If the generator for this project had been  properly classified as construction, the project’s construction costs  would have been $784,793, which exceeded the general $750,000  O&M maximum in effect at that time. In this instance, it is unclear why  base officials did not classify the attached generator as part of the  construction cost for the project. However, such circumstances have  the potential for raising concerns about the appropriate use of funds.
In October 2009, anticipating a large surge in personnel beyond  Kandahar Airfield’s capacity, Regional Command South, a component  of the U.S. Forces-Afghanistan, identified an operational requirement  to construct additional housing for these personnel. Instead of  planning, designing, and constructing the housing as a single, large  MILCON project to address the requirement, Regional Command  South programmed six separate, smaller, company-size projects with  $655,685 each in construction costs. Regional Command South then  used O&M funding to finance the construction of each of the smaller  projects. If the additional housing were constructed as a single project  (i.e., the construction costs from all six projects were combined), the  likely total construction cost, $3,900,000, would have exceeded the  general $750,000 O&M maximum in place at the time and would have  required the use of MILCON funds. Although Army documentation  identified each project as a complete and useable facility and noted  advantages to dividing the overall housing requirement at the  company level, the practice of dividing a requirement into separate,  smaller projects could raise concerns about the appropriate use of  funding.
Following are the examples that we identified where commanders had  modified a project’s specifications or commands had developed multiple  projects to address a single requirement and in the process had created  an operational risk—that is, had risked negatively affecting DOD’s ability  to efficiently or effectively achieve operational objectives:  In 2015, officials at a base in Southwest Asia divided a single  requirement for a critical air control facility into four separate projects  for four separate buildings—each of which cost $650,000—instead of  one project for a single building that would have exceeded the $1  million O&M funding maximum. According to base officials, the four- building design does not align with the design of similar air control  facilities elsewhere. Moreover, these officials also stated that housing  the facility in four separate buildings is suboptimal because it does not  fully enable the integration of operations and maintenance functions  and could, therefore, negatively affect the operational capability of the  facility. Nevertheless, given the urgency and importance of the  capability the facility provides, base officials stated that they could not  wait for MILCON funding for a single project and building. In addition  to the operational risk, this practice also has the potential for raising  concerns about the appropriate use of funds.
In June 2015, officials at an air base in Southwest Asia identified a  requirement for and designed an unmanned aerial vehicle shelter at  an estimated cost of $377,000. This amount did not exceed the O&M  maximum but did exceed the air base commander’s approval  authority for O&M-funded construction projects, which was  $100,000. Consequently, in order to complete the project quickly,  according to base officials, they changed the scope of the project to  keep the construction costs within the base commander’s $100,000  approval authority. Specifically, they reduced construction costs by  removing the concrete floor and asphalt taxiway from the project’s  scope, replacing them with temporary flooring. Base officials  estimated that the re-scoped project would cost $97,000. According to  base officials, while reducing the project’s scope in this manner is a  common practice, in this instance the removal of the asphalt taxiway  increases the risk of damage to the unmanned aerial vehicle’s landing  gear and electronic sensors when it is moved in and out of the shelter.  Had base officials been able to design and construct the project as  originally intended, this risk to the unmanned aerial vehicle’s  operational capability would have been mitigated.
In May 2014, the Air Force identified a requirement for a new air  passenger terminal at Ali Al Salem Air Base, Kuwait, because the  harsh environment and heavy passenger traffic had deteriorated its  existing facilities and they were no longer adequate to sustain the  mission. The requirement included space for receiving and processing  6,500 personnel a month, with baggage; briefing and holding areas;  and a U.S. Customs processing area. According to base officials, a  single building housing these three functions would be preferable  because the activities are sequential and are best performed indoors  without having to travel between buildings. However, to do so would  have required MILCON funding because the total would have  exceeded the $750,000 O&M maximum in effect at that time.  According to base officials they divided the requirements into three  projects for (1) an air passenger terminal for $660,000; (2) a baggage  control center for $527,000; and (3) a customs processing facility for  $660,000—totaling about $1.8 million. As a result, according to base  officials, terminal operations will be negatively affected by the  unnecessary movement between three buildings, which will likely  increase processing time for passengers and baggage. Further, this  practice also has the potential for raising concerns about the  appropriate use of funds.
Following are the examples that we identified where commanders had  modified a project’s specifications or commands had developed multiple  projects to address a single requirement, or relied on O&M funding in  other ways, and in the process had created the duplication risk of  unnecessarily providing the same service to the same beneficiaries:
According to Al Udeid Air Base officials, in 2015 base officials decided  to move the base’s North Squadron operational and administrative  facilities to another location on the base because the host nation  (Qatar) wanted to reclaim the space then occupied by the squadron.  Base officials decided to construct eight O&M-funded, semi- permanent facilities (that have a useful life of up to 25 years with  maintenance and upkeep) to temporarily house the squadron at  various locations on the base at a cost of about $650,000 each.  During the same year, base officials also initiated a request for $24  million in MILCON funding through the Air Force to construct a  permanent facility at the new location that would house both North  Squadron personnel and personnel from other Air Force entities. The  use of these two funding sources creates the potential for  unnecessarily duplicative expenditures of up to $5.2 million, which is  the total amount in O&M funding for the eight semi-permanent  facilities that will no longer be needed to house the North Squadron  once the permanent facility for the squadron and other Air Force  entities is complete.
According to Army Central Command officials, in 2009, bases in  Kuwait needed additional dining facilities to support a surge in  personnel. To satisfy this requirement, DOD entered into an O&M- funded food service contract, which included the contractor providing  four dining facilities (with an estimated useful life of up to 25 years  with maintenance and upkeep) in Kuwait for government lease. The  contract included provisions providing that:  the U.S. government  cannot purchase or take ownership or title of the dining facilities, the  U.S. government cannot pay all of the direct costs of building them,  and the dining facilities remain the property of the contractor and are  to be removed at the end of the period of performance. According to  DOD figures, the department spent $43.8 million for leasing and  operating these four dining facilities in Kuwait over the 5-year period  of the contract. In 2015, upon the expiration of the old food service  contract, Area Support Group Kuwait officials requested $64 million in  O&M funding to solicit a new food services contract, which according  to officials would have included $27 million to construct five dining  facilities to replace the four scheduled to be removed as a result of the  expiring contract. When the request came to the Army Central  Command Engineer in Kuwait for review, officials expressed concern  that the requested contract would be an inappropriate expenditure of  O&M funds because MILCON appropriations must be used for  construction when project costs exceed the $1 million O&M maximum.  According to a senior Army Central Command official, if the Area  Support Group Kuwait dining facilities in the requested 2015 food  service contract were completed as a construction project, it would  require the use of MILCON funds. As of January 2016, it was still  unclear how the four existing dining facilities will be replaced and the  new ones financed, but according to an Army Central Command  official, the Army will have to expend additional funds in some form to  duplicate the dining facilities, thereby providing the same service  (dining facilities) a second time to the same beneficiaries (bases). If  this were to be the case, the construction of the replacement dining  facilities would create duplicative expenditures of up to $7.1 million,  the appraised cost of the four contractor-owned dining facilities when  new that will be removed after the current food service contract has  expired.
While senior officials in the Office of the Assistant Secretary of Defense  for Energy, Installations, and Environment stated that the existing  additional construction authorities should provide an adequately  expedited process to fund contingency construction projects, none of the  base officials in the CENTCOM area of responsibility we interviewed  agreed. Instead, the base officials we interviewed stated that it is the  absence of an expedited process to fund contingency construction  projects that is the reason they use the approaches we identified (i.e.,  modifying a project’s specifications and using multiple, smaller projects).  Further, according to Army Central Command officials, the length of  commanders’ deployments—typically lasting 1 year or less—adds  urgency to complete projects quickly. As a result, commanders in the  CENTCOM area of responsibility may have routinely opted to use O&M  funds for contingency construction projects to the maximum extent  possible in order to avoid the more lengthy review and approval  processes that may be involved when using MILCON funding, a process  that can take 2 or more years before construction begins.
While the practice of maximizing the use of O&M funds for contingency  construction may help base commanders in the CENTCOM area of  responsibility meet urgent requirements, they acknowledge, as do officials  at the Army Central Command, that the routine use of O&M funds in lieu  of DOD’s other authorities has the potential to create risks regarding the  appropriate use of funding and could lead to negative operational impacts  and unnecessarily duplicative construction expenditures. GAO’s  Standards for Internal Control in the Federal Government states that  management should design and implement control activities—policies,  procedures, techniques, and mechanisms that enforce management’s  directives—to achieve objectives and respond to risks. In the case of  contingency construction projects, these control activities could include  policies and procedures that would allow base commanders to better  support immediate contingency basing and operational needs—including  for projects with construction costs greater than the $1 million O&M  funding maximum that are not suited to the existing lengthy MILCON  review and approval process. These control activities, for example, could  include processes that improve the use of existing authorities while  finding ways to shorten review and approval time frames or seeking  additional authorities as appropriate.
As noted earlier, DOD Directive 3000.10 assigns responsibility to the  Office of the Under Secretary of Defense for Acquisition, Technology, and  Logistics to, among other things, designate a senior official to be  responsible for the oversight of all aspects of contingency basing policy.  The guidance also assigns the Under Secretary responsibility to develop  criteria for facilities, equipment, and services for contingency locations.  According to a senior official in the Office of the Assistant Secretary of  Defense for Energy, Installations, and Environment, this office is working  with the Joint Staff to develop new contingency basing construction policy  and Unified Facilities Criteria for construction projects that support urgent  operational requirements. However, according to an official from this  office, these changes to policy and criteria will not include provisions to  collect and analyze data on the extent to which O&M funding is used for  construction projects as part of these efforts, limiting DOD’s ability to  address the financial, operational, and duplication risks we have  identified. Analyzing the extent to which O&M funding is being used for  construction projects in the contingency environment may better enable  DOD to determine the magnitude of DOD’s risk from using O&M funding  for construction and identify opportunities to encourage the use of other  authorities—including the use of O&M funds under the Contingency  Construction Authority. The information may also enable DOD to  determine whether existing departmental processes implementing those  authorities sufficiently support urgent construction needs or could be  expedited. Finally, it may enable DOD to determine whether additional  authorities are needed.
section_title: DOD Has Guidance Used for Determining the Appropriate Level of Construction for MILCON-Funded Contingency Construction Projects in CENTCOM’s Area of Responsibility, but Has Not Documented the Rationale for All Such Determinations
subsections: section_title: DOD Has Guidance Used for Determining the Appropriate Level of Construction for MILCON- Funded Contingency Construction Projects
paragraphs: DOD has guidance that is used for determining the appropriate level of  construction for MILCON-funded projects. The guidance includes DOD’s  Unified Facilities Criteria, which states, among other things, that cost  engineers must thoroughly understand a project’s scope of work before  rendering a cost estimate. In addition, the guidance indicates that cost  engineers should always remain mindful of the documentation necessary  to support cost estimate submissions, such as project narratives that  highlight any assumptions made during the preparation of the cost  estimate and that describe the project requirements in sufficient detail to  give a clear understanding of the scope of work. According to Army Corps  of Engineers officials, the level of construction needed to meet a project  requestor’s requirements is one of the underlying assumptions that  should be documented.
With respect to construction in the CENTCOM area of responsibility,  CENTCOM Regulation 415-1 notes that service components plan and  program for military construction. According to CENTCOM officials, this  includes developing construction requirements, determining the  appropriate level of construction to meet those requirements, and  communicating that determination to the Army Corps of Engineers, which  is DOD’s lead construction agent in the CENTCOM area of responsibility.  Based on that information, the Army Corps of Engineers will then develop  cost estimates for the construction project. CENTCOM’s regulation also  indicates that at contingency locations, construction projects will be of  austere design, constructed to the minimum military requirement to limit  the demand on available infrastructure and resources. In this vein,  CENTCOM’s regulation provides three levels of construction for  contingency locations, which are generally keyed to a facility’s intended  period of use. These three levels are: “initial,” for facilities intended for  use for up to 6 months; “temporary,” for facilities intended for use for up to  5 years; and “semi-permanent,” for facilities intended for use for up to 10  years.
section_title: The Army Corps of Engineers Documented Level-of-Construction Determinations for Some but Not All of DOD’s Highest-Cost, MILCON- Funded Projects
paragraphs: Although DOD and CENTCOM have guidance used for determining the  appropriate level of construction for MILCON-funded projects, Army  Corps of Engineer officials were not always able to provide  documentation that substantiated how the determination was made.  Specifically, as of July  2015, the Army Corps of Engineers was unable to  provide us with documentation regarding the service components’  rationale for the respective level-of-construction determinations for 11 of  39 MILCON-funded construction projects in its database that cost over  $40 million each during fiscal years 2011 through 2015. All told, the 11  projects totaled about $669 million, or approximately 27 percent of the  $2.4 billion programmed for all 39 projects. Furthermore, for 8 of the 11  projects for which there exists no record of level-of-construction  determinations, Army Corps of Engineer officials could not tell us what  level-of-construction the completed projects represented, including a $55  million theater vehicle maintenance compound at Kandahar Airfield,  Afghanistan, constructed in 2009, and a $47 million special operations  forces complex constructed at Mazar E Sharif, Afghanistan, in 2014.
As the Army Corps of Engineers develops project designs and cost  estimates, the level-of-construction determination constitutes a  fundamental assumption because according to Army Corps of Engineers,  it affects the resulting design and cost of a project. As discussed earlier,  DOD guidance notes that cost engineers—including those from the Army  Corps of Engineers—must thoroughly understand a project’s scope of  work and other aspects of a project being estimated. It further indicates  that the cost engineer should always remain mindful of the documentation  necessary to support cost estimate submission requirements for each  phase. For certain estimates, the guidance describes use of a project  narrative, which includes assumptions made during the preparation of the  estimate and describes project requirements that must be performed in  sufficient detail to give a clear understanding of the scope of work.  According to Corps officials, the level of construction needed to meet the  service components’ respective requirements is among these underlying  assumptions that the Army Corps of Engineers should sufficiently detail.
Although Corps officials stated that the level-of-construction determination  from the service components should be included in the documentation  supporting the cost estimate prepared by the Army Corps of Engineers,  they noted that there are other means to communicate level-of- construction determinations, to include design directives, general  construction guidance, or verbal communications from project  stakeholders. Furthermore, Corps officials noted that, for some projects, it  sends multi-discipline teams of engineering and construction experts to  work with customers to review and refine facility construction proposals,  plans, and cost estimates before the final approval and submission of  budget requests. In none of the 11 projects outlined above, however,  were Corps officials able to provide evidence that these other means  were used because the available documentation is silent on level-of- construction determinations and Corps officials were unable to provide  evidence that they and the project requestors had communicated about  levels of construction before the Army Corps of Engineers began  designing the 11 projects.
Due to the absence of documentation, it is unclear whether level-of- construction determinations occurred and were communicated prior to the  projects’ design and cost estimation. According to GAO’s Standards for  Internal Control in the Federal Government, management should use  quality information to achieve the entity’s objective. In the case of  contingency construction in the CENTCOM area of responsibility, DOD’s  objective could mean building to meet the minimum military requirement.  GAO’s standards also state that management should design appropriate  control activities, which may include clearly documenting all transactions  and other significant events in a manner that allows the documentation to  be readily available for examination and ensuring a clear segregation of  incompatible duties. Because DOD does not have a control mechanism to  ensure that the Army Corps of Engineers maintains a documented record  of level-of-construction determinations and communicates with the  service component commands about those determinations before  designing and estimating the cost of contingency construction projects,  DOD risks constructing facilities that exceed minimum military  requirements and expending more resources than required in a resource- constrained environment.
section_title: DOD Has Not Developed a Formal Process for Reevaluating Ongoing Contingency Construction Projects When Missions Change, but Has Conducted Ad Hoc Reviews to Reduce or Cancel Projects
paragraphs: DOD has not developed a formal process for reevaluating ongoing  contingency construction projects when missions change, but has  undertaken ad hoc reviews of planned and ongoing projects. Under DOD  guidance, combatant commanders are responsible for assessing the  operational environment at critical milestones in order to determine  contingency basing requirements within their respective areas of  responsibility. According to CENTCOM and Joint Staff officials,  however, DOD has not established a recurring formal process at their  respective levels for reevaluating planned or ongoing construction  projects based on mission changes. In a 2014 committee report, the  Senate Committee on Appropriations expressed concern over the status  of unfinished military construction projects in Afghanistan and DOD’s  plans for the divestment of these and other military construction facilities  that will no longer be required to support U.S. military operations there.
According to CENTCOM, Joint Staff, and Army Corps of Engineers  officials, in general, DOD is aware of the need to be a careful steward of  resources, including those devoted to construction projects in contingency  environments, especially following major changes in mission  requirements. To this end various DOD entities have reviewed  construction projects on an ad hoc basis when such changes have  occurred. For example, an examination of the limited documentation  available corroborates that beginning in November 2011, U.S. Forces- Afghanistan undertook five separate reviews of planned and ongoing  construction projects in Afghanistan to determine whether to de-scope,  cancel, or continue the construction projects in anticipation of the  transition of operational responsibility to the Government of the Islamic  Republic of Afghanistan, coalition force reductions, and other changes to  mission requirements. The documentation indicates that on the basis of  the first four reviews the U.S. Forces-Afghanistan reduced or cancelled  123 construction projects totaling approximately $1 billion in programmed  funding. For example, during a review conducted in March 2013, the U.S.  Forces-Afghanistan cancelled a $7 million project for an Army aviation  headquarters facility at Bagram Airbase. According to an Army Corps of  Engineers official who was involved in project management in Iraq from  2007 through 2010, similar reviews, reductions, or cancellations of  planned or ongoing projects were also conducted there. For example, the  Army Corps of Engineers official described participation in a September  2008 assistance team that visited Iraq to work out project details for 30  planned projects. Subsequently, however, Army Central Command  officials stopped the design process for these projects and withdrew  funding because the mission upon which the original projects were based  had concluded.
Service supporting documentation for these reviews was not available,  and we could not determine the extent to which construction project  reviews have been conducted in Iraq and Afghanistan, the cost savings  accrued as a result of these reviews, and the rationale behind the  decisions. According to CENTCOM officials, the entities that conducted  the ad hoc reviews cited above were not required to systematically report  the results of their reviews and hence no such documentation is filed with  the Joint Staff, CENTCOM, or the military services. Moreover, CENTCOM  officials point out that cost savings realized as a result of construction  projects being cancelled or reduced in scope does not capture the full  magnitude of their review efforts. For example, these officials pointed out  that in some cases construction projects that were no longer needed  because of changed mission requirements were not cancelled because  doing so would have cost as much if not more than completing the  project. In other cases, projects were reviewed and decisions were made  to continue construction because, despite changed mission requirements,  it was still determined that there was a need for the facility.
Nonetheless, while the ad hoc reviews cited above resulted in positive  outcomes in terms of cost savings or cost avoidance, absent a specific  policy or guidance requiring a fully documented, formal process for review  of construction projects when missions change, DOD risks not  consistently and routinely evaluating whether to continue, reduce in  scope, or discontinue the construction of facilities in support of future  contingencies as missions change. For example, with fully documented  reviews, DOD would retain and could benefit from information regarding  prior decisions, gain efficiency by using an established review process,  and ensure that all construction projects defined by the review process  are consistently and routinely evaluated. Further, absent a specific policy  or guidance requiring a fully documented, formal process for the review of  construction projects when missions change, DOD officials may not have  the information they need to manage contingency construction operations  by assessing the operational environment at critical milestones in order to  determine contingency basing requirements within their respective area of  responsibility.
DOD has taken steps to rectify some of the concerns highlighted above.  According to DOD Comptroller officials, in September 2015, the Under  Secretary of Defense (Comptroller) updated the DOD Financial  Management Regulation in response to a May 2015 Special Inspector  General for Afghanistan Reconstruction report on an unused command  and control facility in Afghanistan, to require additional training and  establish policy that would improve the stewardship over resources,  including those used for contingency construction projects for which the  underlying mission changes. As revised, the regulation requires the  heads of DOD components to include course materials in Antideficiency  Act training that clearly state that taxpayer funds should not be spent  when a requirement is no longer needed. Additionally, under the updated  regulation, DOD commanders, supervisors, and managers must provide  fiscal law training to educate DOD personnel with regard to their fiduciary  and legal responsibilities to prevent the wasteful spending of appropriated  funds. The regulation also provides that key fund-control personnel must  review and verify on a continuous basis that goods and services are still  needed, and must not spend taxpayer funds when goods and services  are no longer needed. While these new requirements could improve  contingency basing determinations, they provide broad guidance covering  goods and services generally and are not focused on contingency basing  and construction. Therefore, implementing guidance specific to  contingency basing and construction would help clarify expectations and  establish a review process. Based on our analysis of the U.S. Forces- Afghanistan’s documentation regarding its reviews of planned and  ongoing construction projects, this implementing guidance could include  mechanisms for establishing (1) the frequency of construction project  reviews or what event or impetus might trigger a review; (2) the criteria  that should be used to select construction projects for a review; and (3)  the documentation required for the construction projects selected for  review, including the process and rationale for each decision to cancel,  de-scope, or continue a project. Without such implementing guidance, the  department risks continuing or completing military construction projects  that are no longer needed to support U.S. military operations.
section_title: DOD Has Established the Joint Lessons Learned Information System, but Has Not Used It to Share Lessons Learned from Contingency Construction Projects in Iraq and Afghanistan
paragraphs: DOD has established an approach for recording and sharing lessons  learned through its Joint Lessons Learned Information System, but  CENTCOM and its components have not used this system for  contingency construction projects in Iraq and Afghanistan. In 2000, DOD  developed and implemented its Joint Lessons Learned Information  System, which is its system of record for recording and sharing lessons  learned in DOD’s Joint Lessons Learned Program, including those  identified during operations. The Joint Lessons Learned Program  process consists of five phases—discovery, validation, resolution,  evaluation, and dissemination—through which observations are identified,  assessed, and as appropriate, shared through lessons learned. New  observations can be derived from experiences occurring during  contingency operations, including lessons related to construction.  However, as of September 2015, the Joint Lessons Learned Information  System had no lessons learned recorded for contingency construction.  The system did contain 14 contingency construction-related notes or  comments, but these were from the perspective of individuals who had  experienced them first-hand and had not been validated by the  department. While it is unclear whether lessons were identified and  learned but not recorded in the system, the absence of validated lessons  learned recorded in the Joint Lessons Learned Information System for  this area indicates that this could potentially be the case.
In March 2015, we reported that the Joint Lessons Learned Information  System is also not being fully utilized for another key area—operational  contract support. Specifically, we reported that DOD was generally not  sharing operational contract support lessons learned in the Joint Lessons  Learned Information System because the system is not functional for  users searching operational contract support issues due to, among other  reasons, not having a label for this area and not having a designated  location, or “community of practice,” in the system for sharing relevant  lessons learned. We recommended in that report that DOD implement a  label and designate a single community of practice for operational  contract support in the Joint Lessons Learned Information System. DOD  concurred and established a community of practice for operational  contract support in November 2015.
Although DOD has developed and made available its Joint Lessons  Learned Information System, deployed U.S. forces in the CENTCOM  area of responsibility rely on mechanisms outside of the joint system for  sharing lessons learned related to contingency construction projects in  support of operations in Iraq and Afghanistan. Specifically, according to  Army Central Command and Air Force Central Command officials,  deployed U.S. forces rely on unit rotation overlap, experienced personnel  outside of the contingency area, expert organizations, and contingency- related DOD boards to share up-to-date lessons important to contingency  construction in the CENTCOM area of responsibility.
Unit rotation overlap. When one military unit arrives at its deployed  location to replace another, the outgoing unit remains at the deployed  location for a period overlapping the incoming unit’s arrival. During  this overlapping period, the outgoing unit shares the latest information  and relevant lessons learned with the incoming unit. In the case of  construction-related units, they can provide construction-related  lessons learned specific to the contingency location or more broadly  applicable to contingency construction in general.
Experienced personnel outside of the contingency area.
Deployed U.S. forces undertaking contingency construction projects  interact with DOD personnel outside of contingency areas—for  example, at the Army Central Command and the Air Force Central  Command Headquarters—with years of construction experience,  including with projects undertaken in support of contingency  operations. These experienced personnel are available to answer  questions, relay experiences, provide perspectives, and share  important lessons learned related to contingency construction.
Expert organizations. Deployed U.S. forces also have access to  specialized DOD organizations with construction project expertise,  including those in support of contingency operations, such as the  Army Corps of Engineers. These organizations advise and guide  deployed U.S. forces on the design and construction of contingency- related projects, sharing important lessons learned in the process.
Contingency-related DOD boards. Proposed contingency-related  projects in the CENTCOM area of responsibility may be subject to  review and approval by multi-discipline boards in theater, such as the  Joint Facilities Utilization Board. In the process of reviewing and  approving contingency construction projects, board members raise  questions based on their experience and share important lessons  learned from reviewing other construction projects in support of  contingency operations.
Although deployed U.S. forces may rely on these mechanisms to share  contingency construction lessons learned, it can be an ad hoc or  incomplete approach. By contrast, as described by Chairman of the Joint  Chiefs of Staff Manual 3150.25A, the Joint Lessons Learned Program  provides both a vehicle for facilitating awareness of observations, issues,  best practices, and lessons learned across DOD and a forum for  institutionalizing lessons learned across the joint force. The guidance  notes that recording, analyzing, and developing improved processes,  procedures, and methods based on lessons learned are primary tools in  developing improvements in joint force readiness, capabilities, and overall  performance. In addition, Chairman of the Joint Chiefs of Staff Instruction  3150.25F notes that program stakeholders—including the Joint Staff, the  services, the combatant commands, and combat support agencies— when appropriate, will contribute information, data, and lessons learned  that are germane to improving joint capabilities and readiness. The  guidance further indicates that combatant commands will provide and  maintain Joint Lessons Learned Program support for theater- and  function-specific joint and interoperability lessons learned activities. It  notes that lessons are derived from the full range of joint activities and  operations, which could include construction during contingency  operations.
However, CENTCOM guidance does not reinforce the DOD guidance  regarding the Joint Lessons Learned Program. Specifically, the  CENTCOM regulation governing construction, including contingency  construction, does not discuss lessons learned or establish who within  the command and its service component commands should be  responsible for recording and sharing construction-related lessons  learned in the CENTCOM area of responsibility through the Joint Lessons  Learned Program. Further, the regulation does not contain the terms  “lesson” or “learned” in combination or separately, illustrating that  recording and sharing lessons learned is not a focal point of the guidance  and may not carry adequate leadership emphasis on the importance of  recording and sharing lessons learned. Another factor affecting the  recording and sharing of lessons learned is leadership emphasis.  According to DOD’s Joint Lessons Learned Program officials, increasing  the recording and sharing of lessons learned in the DOD Joint Lesson  Learned Information System can be improved with leadership emphasis  at a combatant command. For example, according to these officials, in  fiscal year 2015, leadership emphasis at another combatant command  (Special Operations Command) on collecting lessons learned generally  resulted in an over tenfold increase in the number of recorded lessons  compared with those that CENTCOM recorded during the same fiscal  year. According to Joint Lesson Learned Program officials, improved  recording of contingency construction lessons learned could result if  CENTCOM leadership increased its emphasis on the importance of  discovering, validating, and disseminating relevant contingency- construction-related observations.
In the absence of specific CENTCOM guidance and leadership emphasis  to record and share contingency construction lessons learned in DOD’s  Joint Lessons Learned Information System, CENTCOM and its service  component commands are likely to continue to rely on mechanisms  outside this system to share lessons learned related to construction  projects in support of contingency operations in Iraq and Afghanistan. As  a result, commanders may repeat errors in the planning and design of  contingency construction projects that CENTCOM and service component  commands have identified. For example, an important potential lesson  relating to the CENTCOM area of responsibility occurred in fiscal year  2011 when concrete housing units were constructed at Bagram Air Base,  Afghanistan, that later developed toxic mold due to poor engineering and  construction shortcuts. Specifically, the heating, ventilation, and air  conditioning system did not provide adequate ventilation and the concrete  was not properly sealed, which in combination created an environment  where the toxic mold could form and accumulate. As a result, personnel  were evacuated until the housing units could be remediated, denying  critically needed hardened shelters to help protect service members at  Bagram, Afghanistan, from indirect fire attacks. According to an Army  Central Command engineering official, this experience may contain a  lesson for construction project managers in the CENTCOM area of  responsibility regarding the need to involve adequate engineering  expertise regarding the health and safety aspects of a project’s design.  Officials at Al Udeid Air Base identified another important potential lesson,  which was related to ammunition storage facilities. Specifically, after  construction of aboveground munitions storage facilities at the air base,  officials determined that the facilities’ lightning protection system was not  adequate, putting high-dollar munitions stored in the facilities at risk of  damage or destruction and creating a safety risk. For example, the  officials stated that during lightning storms all personnel have to evacuate  due to the lighting-strike risk and operations halt as a result. According to  Al Udeid Air Base officials, they learned from this experience that a more  robust lightning mitigation system was needed to provide adequate  protection for facilities of this type. While those persons involved in these  examples can share their observations as long as they continue working  at CENTCOM, because the experiences were not recorded and shared in  DOD’s system of record—the Joint Lessons Learned Information  System—there is a risk that different people at other locations, or during  other contingencies, could repeat these or similar errors.
section_title: Conclusions
paragraphs: DOD has spent billions of dollars on construction in support of  contingency operations since 2001, but has some weaknesses in the  management and oversight of the contingency construction program.  While DOD has taken some steps to improve its management of  construction projects, such as conducting ad hoc reviews of projects in  Iraq and Afghanistan to identify potential reductions or cancellations,  DOD faces challenges developing full oversight of contingency  construction. Actions to improve the quality of information and  documentation of O&M-funded contingency construction projects could  help DOD oversee funds for construction and improve awareness of how  much funding the department uses for construction projects. Additionally,  the urgency of contingency construction requirements coupled with the  absence of a review and approval process to support quickly funding  contingency construction projects needed in fewer than 2 years that are  expected to cost more than $1 million may result in DOD’s continued use  of questionable approaches when constructing facilities—potentially  leading to unintended results. Moreover, until DOD improves control  mechanisms for documenting and communicating level-of-construction  determinations, DOD risks constructing facilities that exceed minimum  military requirements, expending more resources than required in a  resource-constrained environment. Additionally, absent a requirement for  a formal process to reevaluate contingency construction projects when  missions change, DOD risks constructing facilities that may not be  essential to support existing missions or may not be sufficient for revised  missions in the CENTCOM area of responsibility and in future  contingencies worldwide. Lastly, without specific guidance and leadership  emphasis to record and share contingency construction lessons learned  in DOD’s Joint Lessons Learned Information System, CENTCOM and its  service component commands may repeat errors in the planning and  design of contingency construction projects in future contingencies.
section_title: Recommendations for Executive Action
paragraphs: We are making the following five recommendations to improve DOD’s  management and oversight of contingency construction in the CENTCOM  area of responsibility and in other geographic combatant commands  where applicable:
To improve DOD’s awareness of how much O&M funding the  department uses for construction projects to support contingency  operations, we recommend that the Secretary of Defense direct the  Secretaries of the military departments, in coordination with the Under  Secretary of Defense (Comptroller), to track the universe and cost of  ongoing and future contingency construction projects that are funded  from O&M appropriations under section 2805 of Title 10, U.S. Code  (unspecified minor military construction authority).
To improve DOD’s ability to quickly fund contingency construction  projects that are not ideally suited to the current standard MILCON  and O&M processes and time frames and reduce reliance on funding  approaches that pose risks regarding the appropriate use of funding,  negative operational impacts, and unnecessary duplication, we  recommend that DOD evaluate and improve the use of existing  processes and authorities to the extent possible; determine whether  additional authorities are needed to support urgent construction  needs; and revise existing departmental processes or seek additional  authorities, as appropriate.
To help ensure that DOD limits demands on available resources to  those necessary to meet contingency construction project  requirements and communicates those requirements effectively, we  recommend that the Secretary of Defense, in coordination with the  Secretary of the Army, direct the Army Corps of Engineers to develop  a control activity for documenting level-of-construction determinations  before the Army Corps of Engineers designs the projects and  estimates their costs.
To ensure that DOD avoids constructing facilities that may be  unneeded to support U.S. forces and to comprehensively document  the results of its reviews of ongoing construction projects when  changes in mission requirements occur, we recommend that the  Secretary of Defense, in coordination with the Chairman of the Joint  Chiefs of Staff, direct the Secretaries of the military departments and  the Commander of CENTCOM to develop implementing guidance for  the review and verification of ongoing contingency construction  projects when mission changes occur.
To improve the awareness of the combatant and service component  commands’ responsibilities to record and share lessons learned and  to ensure that important contingency-construction-related lessons are  recorded, we recommend that the Secretary of Defense, in  coordination with the Chairman of the Joint Chiefs of Staff, direct the  Commander of CENTCOM to revise Central Command Regulation  415-1 or issue other guidance as appropriate to specifically detail the  role of the combatant command and service component commands in  recording contingency construction lessons learned from the  CENTCOM area of responsibility in the Joint Lessons Learned  Information System.
Additionally, in light of potential concerns regarding the appropriate use of  funding raised by several of the examples identified in this report, we  recommend that the Secretary of Defense direct the Secretaries of the  Army and the Air Force to review these and, as appropriate, other  construction projects in the contingency environment presenting similar  circumstances to ensure that funds were properly used.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to DOD for review and comment. In its  written comments, DOD concurred with one of our recommendations,  partially concurred with three recommendations, and non-concurred with  the remaining two recommendations. DOD’s comments are summarized  below and reprinted in their entirety in appendix III.
DOD did not concur with our recommendation that the department track  the universe and cost of ongoing and future contingency construction  projects that are funded from O&M appropriations under section 2805 of  Title 10, U.S. Code (unspecified minor military construction authority),  stating that it does not have data systems that can track these projects, it  would not be cost effective to develop and implement such a system, and  tracking the universe and cost of ongoing and future contingency  construction projects would not improve its decision making. Further,  DOD stated that expanding section 2805 oversight and tracking  responsibilities beyond its current practices would limit the benefit of that  authority and that it is unaware of any systemic abuses of the section  2805 authority that would warrant collecting these data.
With regard to DOD’s statement that the department does not have a  data system that can track these projects and that it would not be cost  effective to develop and implement such a system, we are not suggesting  that DOD develop and implement a new system, but instead that DOD  adapt an existing system or mechanism for recording and capturing these  data in an automated form. For example, the Army’s existing Element of  Resource code is a four-digit code that the Army uses to record and  classify funds transactions and the nature of the funds’ use in its  accounting and finance system. The Army could also use this mechanism  to create a specific code to track contingency construction projects that  are funded using O&M appropriations under section 2805. In this way  data on the universe and cost of contingency construction projects would  be readily available in the Army’s existing accounting and finance system.  In addition, we disagree with DOD’s statement that tracking the universe  and cost of ongoing and future contingency construction projects would  not improve the department’s decision making given that DOD was not  aware of the magnitude of its use of O&M funds for construction projects  under section 2805. As noted in our report, we found that these projects  constituted a substantial segment of overall contingency construction, and  that, according to Army Central Command officials, it is likely that the  majority of contingency construction projects are funded under this  authority. Therefore, we continue to believe that knowing the universe  and cost of all O&M-funded construction projects supporting contingency  operations is important for decision making, particularly as that  knowledge would improve decision makers’ administration and oversight  of O&M funds, as well as aid in determining and projecting the funding  needed to support ongoing and future contingency operations. Finally, the  primary purpose of our recommendation for tracking construction funded  from O&M appropriations under section 2805 is not to identify abuses of  that authority, but rather to understand to what extent DOD uses O&M  funds for construction during contingency operations. That information  could assist the department in planning for current and future contingency  operations, by determining the portion of O&M spent on construction  activities that is therefore unavailable for other purposes. As we reported,  that portion may be substantial. This information could also assist the  department in evaluating the necessary actions to implement our second  recommendation. Finally, during our review we found several instances  where commanders had developed multiple construction projects, each  below the O&M maximum for unspecified minor military construction  under section 2805, to meet what may have been an overarching  construction requirement. We noted that these instances have the  potential to raise concerns regarding the appropriate use of funding.  Although not the primary purpose of our recommendation, to the extent  that reliance upon O&M-funding in the contingency environment  increases this risk, tracking the universe and cost of O&M-funded  construction projects in the contingency environment may aid the  department in identifying circumstances posing an increased risk.
DOD partially concurred with our recommendation that the department  evaluate and improve the use of existing processes and authorities to the  extent possible; determine whether additional authorities are needed to  support urgent construction needs; and revise existing departmental  processes or seek additional authorities, as appropriate. In its comments,  DOD stated that it already conducts periodic reviews of the available  military construction authorities to determine if changes are needed to  improve or enhance speed and flexibility in providing urgent or emerging  facility requirements. However, during our review, several officials we  interviewed who were responsible for making construction decisions at  contingency bases confirmed that the current process for funding  contingency construction projects is not sufficient to provide for the  needed speed and flexibility. Therefore, we continue to believe that DOD  should evaluate its use of existing processes and authorities. To the  extent that DOD uses the processes that it described in its response to  our recommendation to address the issues we raised, DOD’s actions will  meet the intent of our recommendation.
DOD partially concurred with our recommendation that the Army Corps of  Engineers develop a control activity for documenting level-of-construction  determinations before designing projects and estimating their costs,  stating that the appropriate level of construction is determined by the  facility user rather than the construction agent. DOD also noted that the  department has other construction agents in addition to the Army Corps  of Engineers. We are not recommending that the construction agent  determine the level of construction for a facility, but rather that the  construction agent develop a control activity for documenting the level-of- construction determination obtained from the facility user. During this  engagement, we reviewed projects managed by the Army Corps of  Engineers in the CENTCOM area of responsibility and therefore made  specific reference to the Army Corps of Engineers in our  recommendation. However, should the department determine that  another construction agent, such as the Naval Facilities Engineering  Command or the Air Force Civil Engineer Center, is in need of a similar  control activity, the department should apply the recommendation  accordingly.
DOD partially concurred with our recommendation that the military  departments and the Commander of CENTCOM, develop implementing  guidance for the review and verification of ongoing contingency  construction projects when mission changes occur, stating that the  department believes all combatant commanders involved in contingency  operations should conduct periodic reviews of new or ongoing  construction projects to ensure they still meet operational needs. Because  our review was focused on CENTCOM, we cited that combatant  command in our recommendation. However, we agree that all combatant  commanders involved in contingency operations should conduct periodic  reviews of new or ongoing construction projects to ensure they still meet  operational needs. Therefore, DOD would meet the intent of the  recommendation by expanding its planned action to ensure that it applies  to all combatant commands, not only to CENTCOM.
DOD concurred with our recommendation that the Commander of  CENTCOM, revise Central Command Regulation 415-1 or issue other  guidance as appropriate to specifically detail the role of the combatant  command and service component commands in recording contingency  construction lessons learned from the CENTCOM area of responsibility in  the Joint Lessons Learned Information System.
Finally, DOD did not concur with our recommendation that the Secretaries  of the Army and the Air Force review the examples presented in our  report and, as appropriate, other construction projects in the contingency  environment presenting similar circumstances, to ensure that funds were  properly used, in light of potential concerns raised by these examples  regarding the appropriate use of funding. The department stated that the  recommendation is redundant of current practice and referenced  department processes to conduct periodic reviews to ensure compliance,  among other processes, guidance, and training. Our recommendation is  not that DOD create new processes but instead that DOD use the  periodic review processes it referenced to evaluate the examples in our  report and ensure that funds were appropriately used. These examples  present instances where the department had developed multiple  construction projects, each below the O&M maximum for unspecified  minor military construction, to meet what may have been an overarching  construction requirement. We noted a similar instance where the  department had used its review process and found that an Antidefiency  Act violation had occurred. In light of the concerns raised by the examples  in our report, we continue to believe that DOD should use its existing  processes to review the facts and circumstances presented by these  examples and determine whether funds were appropriately used.
We are sending copies of this report to the appropriate congressional  committees. We are also sending copies to the Secretary of Defense, the  Chairman of the Joint Chiefs of Staff, and the Secretaries of the military  departments. The report is also available at no charge on GAO’s website  at http://www.gao.gov.
If you or your staff have questions about this report, please contact me at  (202) 512-5431 or russellc@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: Objectives, Scope, and Methodology
paragraphs: To determine the extent to which the Department of Defense (DOD) has  tracked the universe and cost of all contingency construction projects in  the U.S. Central Command (CENTCOM) area of responsibility that  support operations in Iraq and Afghanistan separately from all other  construction projects undertaken by DOD, we reviewed and analyzed  available DOD contingency construction project data from fiscal year  2001 through fiscal year 2016 maintained by the Office of Under  Secretary of Defense (Comptroller), the Army, the Air Force, and the  Army Corps of Engineers to determine the extent to which DOD identifies  and records construction projects undertaken in support of contingency  operations in Iraq and Afghanistan. We reviewed these data based on  suggestions from DOD officials in responding to our request for sources  that would contain the universe and cost of contingency construction  projects. Specifically, we reviewed project data from the:
Office of the Under Secretary of Defense Comptroller’s Program  Resources Collection Process database;
Office of the Under Secretary of Defense Comptroller’s military  construction C1 budget exhibits;
Office of the Under Secretary of Defense for Acquisition, Technology,  and Logistics’ Secretary of Defense’s Real Property Asset Database;
Army’s General Fund Enterprise Business Systems database;
Army Corps of Engineers’ Program and Project Management System
Air Force’s General Accounting and Finance System.
We determined that these sources did not contain data for (1) all Military  Construction (MILCON)-funded projects undertaken in support of  contingency construction for fiscal years 2001-16 or (2) projects funded  using Operation and Maintenance (O&M) funds under section 2805 of  Title 10, U.S. Code, (unspecified minor military construction authority).  Therefore, we concluded that they were not sufficiently reliable for the  purposes of identifying the universe of contingency construction projects.  To determine whether projects funded using O&M appropriations under  section 2805 of Title 10, U.S. Code, represented a substantial segment of  contingency construction, we reviewed readily available data on  construction projects that consisted of those reviewed by the U.S. Forces- Afghanistan’s Joint Facilities Utilization Board for fiscal years 2009-12.  We determined the data from U.S. Forces-Afghanistan to be sufficiently  reliable for the purposes of this report by interviewing knowledgeable  agency officials, tracing a selection to source documents, and manually  testing data for outliers and obvious errors. We reviewed Office of  Management and Budget guidance that is used by the department when  deciding whether funding—including for construction—properly belongs in  either the base or overseas contingency operations portion of the  budget.  We also reviewed DOD Directive 3000.10, Contingency Basing  Outside the United States, and CENTCOM Regulation 415-1 to  understand contingency basing responsibilities. Further, we compared  existing DOD and CENTCOM contingency construction project review  and approval processes  and the availability of DOD information on  contingency construction projects funded with O&M appropriations with  GAO’s Standards for Internal Control in the Federal Government, which  state among other things that management should use quality information  to achieve the entity’s objectives and design control activities to achieve  objectives and respond to risks by, for example, clearly documenting all  transactions and other significant events in a manner that allows the  documentation to be readily available for examination. We also analyzed  and discussed the use of available statutory authorities for funding  contingency construction projects and the potential risks to individual  projects with officials at service component commands and bases in the  CENTCOM area of responsibility to understand mechanisms  commanders used to manage projects that relied on O&M funding for  contingency construction. The projects discussed included (1) those we  identified in reviewing U.S. Forces-Afghanistan data on construction  projects for fiscal years 2009-12 that contained similar or identical dollar  amounts, dates, and project narratives and (2) those identified by base  officials, during site visits, that illustrated the potential risks of relying on  O&M funding for contingency construction projects. We discussed the  advantages and disadvantages associated with available alternatives for  funding contingency construction projects. We also reviewed DOD  Directive 4270.5 and DOD Directive 3000.10 to understand the roles and  responsibilities of various DOD entities involved in the management,  execution, and oversight of contingency construction in the CENTCOM  area of responsibility.  We interviewed senior officials from the Under  Secretary of Defense (Comptroller), CENTCOM, the Army Central  Command, the Air Force Central Command, the U.S. Forces-Afghanistan,  the Army Corps of Engineers, and the Air Force Civil Engineer Center  and conducted site visits at Camp Arifjan, Kuwait; Camp Buering, Kuwait;  Ali Al Salem Air Base, Kuwait; Al Udeid Air Base, Qatar; Camp As  Sayliyah, Qatar; and Al Dhafra Air Base, United Arab Emirates in the  CENTCOM area of responsibility. We selected bases for site visits that  (1) had the highest number of MILCON projects at the base, (2) had  projects in close proximity to bases with the highest number of MILCON  projects and reachable without extensive additional travel, and (3) were  identified by DOD officials as containing projects illustrating contingency  construction using O&M appropriations. We excluded Iraq and  Afghanistan due to the closure of our audit offices there and the  difficulties and risks associated with travel in these countries.
To determine the extent to which DOD has developed a process for  determining the appropriate level of construction for MILCON-funded  contingency construction projects, we focused on processes that apply to  contingency construction projects in the CENTCOM area of responsibility  and compared CENTCOM Regulation 415-1 and DOD’s Unified Facilities  Criteria 3-740-05 with GAO’s Standards for Internal Control in the Federal  Government, which states among other things that management should  establish an organizational structure, assign responsibility, and delegate  authority to achieve the entity’s objectives. In addition, we reviewed data  available as of February 2015 from the Army Corps of Engineers Program  and Project Management System database for MILCON-funded  contingency projects in the CENTCOM area of responsibility in fiscal  years 2004-15. Out of these data we analyzed all projects with  programmed amounts equal to or over $40 million, accounting for the top  one third of programmed amounts for projects, to determine the extent to  which DOD had documented level-of-construction determinations for the  projects with the highest programmed amounts. The results of this  analysis are not generalizable to projects with programmed amounts  below $40 million. We determined the data to be sufficiently reliable for  the purposes of this report by reviewing related documentation,  interviewing knowledgeable agency officials, and reviewing related  internal controls.
To determine the extent to which DOD has developed a process for  reevaluating ongoing  contingency construction projects when missions  change, we collected and reviewed supporting documentation for reviews  that the U.S. Forces-Afghanistan conducted beginning in November 2011  of planned or ongoing contingency construction projects in Afghanistan— including CENTCOM data on construction project reevaluation reviews for  fiscal years 2011-15. We compared this documentation with DOD  Directive 3000.10, which states that the combatant commanders are  responsible for assessing the operational environment at critical  milestones to determine contingency basing requirements within their  respective area of responsibility.  We also interviewed officials from the  Joint Staff, CENTCOM, the Army Central Command, and the Army Corps  of Engineers regarding their roles in construction project reviews when  mission changes occur in Iraq and Afghanistan. We discussed the May  2015 Special Inspector General for Afghanistan Reconstruction report on  an unused command and control facility in Afghanistan with the staff who  had conducted the underlying work. Further, during site visits to the  CENTCOM area of responsibility, we interviewed base officials regarding  the impact of mission requirement changes on planned or ongoing  construction projects.
To determine the extent to which DOD has established an approach for  sharing lessons learned from contingency construction projects in support  of contingency operations in Iraq and Afghanistan, we reviewed relevant  guidance, including Chairman of the Joint Chiefs of Staff Instruction  3150.25F, which specifies that Joint Lessons Learned Program  stakeholders, when appropriate, will contribute information, data, and  lessons learned that are germane to improving joint capabilities and  readiness, to determine what processes the department has in place to  develop contingency construction lessons learned. Additionally, we  reviewed all 14 observations recorded in the Joint Lessons Learned  Information System for the CENTCOM area of responsibility. We also  interviewed DOD officials regarding the mechanisms they used for  communicating contingency construction lessons learned.
We visited or contacted officials from the following organizations during  our review:  Joint Staff J-4 (Logistics) Directorate, Washington, D.C.
Joint Staff J-5 (Strategic Plans and Policy) Directorate,  Washington, D.C.
Joint Staff J-7 (Joint Force Development) Directorate,  Washington, D.C.
Office of the Under Secretary of Defense (Comptroller)
Office of the Under Secretary of Defense for Acquisition, Technology
Office of the Assistant Secretary of Defense for Energy,  Installations, and Environment; Washington, D.C.
Office of the Director, Defense Procurement and Acquisition  Policy, Washington, D.C.
U.S. Central Command, Tampa, Florida
U.S. Army Central Command, Shaw Air Force Base, South Carolina
U.S. Army Central Command; Engineers, Facilities, and  Construction; Camp Arifjan, Kuwait
Area Support Group-Qatar, Camp As Sayliyah, Qatar
Area Support Group-Kuwait, Camp Buehring, Kuwait
U.S. Air Force Central Command, Shaw Air Force Base, South
380th Air Expeditionary Wing, Al Dhafra Air Base, United Arab
379th Expeditionary Civil Engineer Squadron, Al Udeid Air Base,
386th Air Expeditionary Wing, Ali Al Salem Air Base, Kuwait
U.S. Army Corps of Engineers, Transatlantic Division, Winchester,
U.S. Air Force Civil Engineer Center, Joint Base San Antonio-
U.S. Forces-Afghanistan, Kabul, Afghanistan  We conducted this performance audit from November 2014 to September  2016 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
section_title: Appendix II: Statutory Authorities for Carrying Out Military Construction Projects
paragraphs: This appendix provides additional detail on the statutory authorities  available to the Department of Defense (DOD) for carrying out military  construction projects. DOD operates under these statutory authorities to  fund military construction projects through either the Military Construction  (MILCON) or Operation and Maintenance (O&M) appropriations.
DOD may use general statutory authorities for construction projects.  Specifically,
The Secretary of Defense and the Secretaries of the military  departments may carry out military construction projects that are  authorized by law. Specified military construction projects are listed  in the annual National Defense Authorization Act and the explanatory  statement accompanying the annual appropriations act. These  projects are funded through the MILCON appropriation.
Section 2805 of Title 10, U.S. Code, authorizes the Secretaries of the  military departments to carry out unspecified minor military  construction projects not specifically authorized by law, using  MILCON or O&M funds. As of 2015, unspecified minor military  construction projects must have an approved cost equal to or less  than $3 million, or $4 million if intended solely to correct a life-, health- , or safety-threatening deficiency. From January 2008 until December  2014, the maximums were $2 million and $3 million, respectively, and  $1.5 million and $3 million prior to January 2008. DOD may use O&M  funds to carry out projects costing $1 million or less, and must use  MILCON funds above that level. The O&M maximum was $750,000  prior to fiscal year 2015. In the case of projects above the O&M  maximum, the military department Secretary must approve the project  in advance; submit a notification to the appropriate congressional  committees; and wait 21 days, or 14 days if the notification is  submitted electronically.
In addition to the general construction authorities, there are several other  statutory authorities that DOD may use for construction projects in  emergency and contingency circumstances. Specifically,
Section 2803 of Title 10, U.S. Code, authorizes the Secretaries of the  military departments to carry out emergency construction projects not  otherwise authorized by law. The Secretary must determine that the  project is vital to national security or the protection of health, safety, or  the quality of the environment, and so urgent that it cannot be delayed  until the next authorization act. The Secretary must submit a  justification to the appropriate congressional committees and wait 7  days before carrying out the project. Projects using this authority must  be carried out using unobligated military construction funds, up to a  maximum of $50 million in any fiscal year.
Section 2804 of Title 10, U.S. Code, authorizes the Secretary of  Defense to carry out contingency construction projects not otherwise  authorized by law or to authorize a military department Secretary to  do so, if the Secretary determines that delay until the next  authorization act would be inconsistent with national security or  national interest. The Secretary of Defense must submit a justification  to the appropriate congressional committees and wait 14 days, or 7  days if notification is provided electronically. DOD guidance notes  that the Secretary of Defense has retained this authority and that the  Under Secretary of Defense for Acquisition, Technology, and Logistics  is responsible for coordinating requests for its use. Combatant  commanders are to verify the need for project requests and forward  them through the Chairman of the Joint Chiefs of Staff, who is  responsible for assigning priority among competing requests and  forwarding them to the Under Secretary of Defense for Acquisition,  Technology, and Logistics. The military departments are also  responsible for forwarding requests through the Under Secretary of  Defense for Acquisition, Technology, and Logistics along with  specified information. Projects must be carried out using amounts  specifically appropriated for this authority. However, in recent years,  there have been no specific appropriations for contingency  construction under section 2804.
Section 2808 of Title 10, U.S. Code, authorizes the Secretary of  Defense to undertake and to authorize the military department  Secretaries to undertake military construction projects not otherwise  authorized by law that are necessary to support the armed forces in  the event of a declaration of war or national emergency. DOD must  notify congressional committees when using this authority. Similar to  use of the authority under section 2804, DOD guidance provides that  combatant commanders and the Chairman of the Joint Chiefs of Staff  are to assign priority among competing requests and forward them to  the Under Secretary of Defense for Acquisition, Technology, and  Logistics. The Secretaries of the military departments also forward  requests along with specified information through the Under Secretary  of Defense for Acquisition, Technology, and Logistics to the Secretary  of Defense, who has retained authority for use of the provision.
Finally, since November 2003, legislation has authorized DOD to use  O&M funds to carry out construction projects in specified areas  outside the United States, including in the U.S. Central Command  (CENTCOM) area of responsibility, that meet certain conditions.  DOD refers to the authority, which is annually authorized and  updated, as the Contingency Construction Authority. The construction  must be necessary to meet urgent military operational requirements of  a temporary nature in support of a declaration of war, a declaration of  a national emergency, or a contingency operation. With the exception  of Afghanistan, the construction must not be at a military installation  where the United States is reasonably expected to have a long-term  presence. Finally, the level of construction must be the minimum  necessary to meet temporary operational requirements, and the  United States must have no intention of using the construction after  operational requirements have been satisfied. DOD must provide a  notice with specified information to congressional committees before  using funds for a project in excess of the general O&M construction  maximum (currently $1 million) and wait for 10 days or 7 days,  depending on the form of the notice, before carrying out the project.  The legislation also previously required DOD to submit a quarterly  report on the use of the authority, although the requirement was  eliminated for fiscal year 2016. There is an annual limit on the total  cost of construction projects carried out using this authority, presently  $100 million. The Secretary of Defense has delegated approval  authority for the use of the Contingency Construction Authority to the  Under Secretary of Defense Comptroller, who issues updated  guidance on requirements and processes for proposed projects.
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, individuals who made key  contributions to this report include Guy LoFaro, Assistant Director; Adam  Anguiano; Mae Jones; Michael Shaughnessy; Michael Silver; and John  Strong.