Defense Headquarters: DOD Needs to Reassess Options for Permanent Location of U.S. Africa Command
Published: 2013-09-09T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: A House Armed Services Committee report accompanying a bill for the National Defense Authorization Act for Fiscal Year 2013 mandated GAO to conduct an analysis of options for the permanent placement of AFRICOM headquarters. While GAO's work was ongoing, DOD announced its decision to keep AFRICOM's headquarters at its current location in Stuttgart, Germany. This report addresses the following questions: (1) What courses of action did DOD consider for the permanent placement of AFRICOM headquarters? and (2) To what extent was DOD's decision to keep AFRICOM headquarters in Stuttgart based on a well-documented analysis of the costs and benefits of the options available to DOD? To meet these objectives, GAO analyzed documents provided by and interviewed officials from the Office of the Secretary of Defense; the Joint Staff; and AFRICOM and other combatant commands.
section_title: What GAO Found
paragraphs: The Department of Defense (DOD) has considered several courses of action for the placement of the headquarters for U.S. Africa Command (AFRICOM) but decided in early 2013 to keep it in Germany. When AFRICOM was created in 2007, DOD temporarily located its headquarters in Stuttgart, Germany, with the intent of selecting a permanent location at a later date. DOD's initial goal was to locate the headquarters in Africa, but this was later abandoned in part because of significant projected costs and sensitivities on the part of African countries. Subsequently, in 2008, DOD conducted an analysis that found that several locations in Europe and the United States would be operationally feasible and less expensive than keeping the headquarters in Stuttgart. A final decision, however, was deferred until 2012, when the Cost Assessment and Program Evaluation office completed its analysis. Subsequent to this analysis, in January 2013, the Secretary of Defense decided to keep AFRICOM's headquarters in Stuttgart. In announcing the decision, the Secretary noted that keeping AFRICOM in Germany would cost more than moving it to the United States but the commander had judged it would be more operationally effective from its current location, given shared resources with the U.S. European Command.
GAO's review of DOD's decision to keep AFRICOM headquarters in Germany found that it was not supported by a comprehensive and well-documented analysis that balanced the operational and cost benefits of the options available to DOD. The 2012 study that accompanied the decision does not fully meet key principles for an economic analysis. For example, the study is not well-documented and does not fully explain the decisions that were made. Although details supporting DOD's cost estimates were not well-documented, the analysis indicated that moving the headquarters to the United States would accrue savings of $60 million to $70 million per year. The 2012 study also estimated that relocating the headquarters to the United States could create up to 4,300 additional jobs, with an annual impact on the local economy ranging from $350 million to $450 million, but it is not clear how this factored into DOD's decision. Beyond costs and economic benefits, the study lists several factors to be considered when determining where to place a headquarters. It ranks two of these factors--access to the area of responsibility and to service components--as critical. However, little support exists showing how the factors were weighted relative to each other. Moreover, the study describes how a small, forward-deployed headquarters element such as the ones employed by other U.S.-based combatant commands might mitigate operational concerns, but the study is silent about why this mitigation plan was not deemed a satisfactory option. In discussions with GAO, officials from the Central and Southern Commands stated that they had successfully overcome negative effects of having a headquarters in the United States by maintaining a forward presence in their theaters. In sum, neither the analysis nor the letter announcing the decision to retain AFRICOM headquarters in Stuttgart explains why these operational factors outweighed the cost savings and economic benefits associated with moving the headquarters to the United States. Until the costs and benefits of maintaining AFRICOM in Germany are specified and weighed against the costs and benefits of relocating the command, the department may be missing an opportunity to accomplish its missions successfully at a lower cost.
section_title: What GAO Recommends
paragraphs: To meet operational needs at lower costs, GAO recommends that DOD conduct a more comprehensive and well-documented analysis of options for the permanent placement of the headquarters for AFRICOM, including documentation on whether the operational benefits of each option outweigh the costs. DOD partially concurred with GAOs recommendation, stating that the decision was based primarily on military judgment but that it will perform additional analysis of the location of the headquarters if the Secretary deems it necessary. GAO continues to believe such analysis is needed.

section_title: Letter
paragraphs: The President has established, and the Department of Defense (DOD)  operates, geographic combatant commands to perform military missions  around the world. Each geographic combatant command is assigned an  area of responsibility in which to conduct its missions and activities. On  February 6, 2007, the President announced that he had directed the  Secretary of Defense to establish the newest geographic combatant  command, U.S. Africa Command (AFRICOM), consolidating responsibility  for DOD activities in Africa that had formerly been shared by the U.S.  Central Command, the U.S. Pacific Command, and the U.S. European  Command. AFRICOM began initial operations on October 1, 2007, at  Kelley Barracks, Stuttgart, Germany, which was to be the command’s  temporary home until an appropriate and permanent location for the  headquarters could be found on the African continent. The department  has invested at least $140 million to upgrade the facilities in Stuttgart,  including major renovations of the office areas, family quarters, and an  officers’ club, as well as construction of a child care center and shopping  facility. Moreover, AFRICOM has grown since its creation and, as we  reported in May 2013, contributed to a nearly 50 percent increase in the  overall number of personnel assigned to all geographic combatant  commands since 2001. An early planning document proposed assigning  about 400 personnel, and DOD initially envisioned the command  including large numbers of personnel from other civilian agencies, such  as the State Department and the U.S. Agency for International  Development. By fiscal year 2012, DOD had funding approved for 1,637  positions for the command, of which 805 were to be filled by military  personnel and 832 by DOD civilians (see appendix I for the total numbers  of authorized personnel for AFRICOM). According to AFRICOM officials,  approximately 3,900 dependents also accompany the AFRICOM staff in  Germany.
The House Armed Services Committee directed the Secretary of Defense  to conduct an alternative basing review for the placement of AFRICOM  headquarters and to report the conclusions to the congressional defense  committees by April 1, 2012. DOD’s Cost Assessment and Program  Evaluation (CAPE) office led this study. CAPE did not meet the April 1  deadline, and DOD was granted an extension through July 1, 2012, to  present its analysis to the congressional defense committees. In January  2013, DOD issued the directed report. Our report is in response to a  mandate in the House Armed Services Committee report accompanying a  bill for the National Defense Authorization Act for Fiscal Year 2013 to  conduct an analysis of options for the permanent placement of AFRICOM  headquarters. It addresses the following questions: (1) What courses of  action did DOD consider for the permanent placement of the  headquarters for AFRICOM? (2) To what extent was DOD’s decision to  keep AFRICOM headquarters in Stuttgart, Germany, based on a well- documented analysis of the costs and benefits of the options available to  DOD?
To determine the courses of action DOD considered for the permanent  placement of AFRICOM headquarters, we interviewed officials from the  Office of the Under Secretary of Defense for Policy, the Office of the  Deputy Assistant Secretary of Defense for African Affairs, the Joint Staff,  the U.S. European Command, and AFRICOM. We also reviewed  documents written at the time that AFRICOM was established and  compared them with the latest statistics provided by AFRICOM to  determine how the command’s mission, size, and cost have changed  over time. We reviewed briefings and presentations prepared by various  organizations throughout DOD since 2006. These organizations included  CAPE’s predecessor, the Office of Program Analysis and Evaluation, as  well as the Office of the Under Secretary of Defense for Policy; Office of  the Deputy Assistant Secretary of Defense for African Affairs; the U.S.  European Command; and Transition Team Africa Command, a group that  was established to assist in the standup of AFRICOM.
To determine the extent to which DOD’s decision to keep AFRICOM  headquarters in Stuttgart, Germany, was based on a well-documented  analysis of the costs and benefits of the options available to DOD, we  reviewed the CAPE study on this subject, discussed the study with CAPE  officials, and requested and analyzed supporting documentation for the  study’s findings. We also obtained documentation from and interviewed  officials with AFRICOM, the U.S. Central Command, the U.S. European  Command, and the U.S. Southern Command. To obtain an understanding  of how other combatant commands have conducted cost benefit analyses  to inform decisions on headquarters locations, we reviewed the studies  prepared by the U.S. Southern Command before DOD decided where to  locate its headquarters and discussed these studies with a Southern  Command official involved in preparing them. We reviewed criteria for  conducting economic analyses from key principles that we derived from a  variety of cost estimating, economic analysis, and budgeting guidance  documents and compared it with DOD’s efforts on the CAPE study. We  also analyzed documents and interviewed officials from AFRICOM’s  component commands: U.S. Army, Africa, in Vicenza, Italy; U.S. Air  Force, Africa, in Ramstein Air Base, Germany; U.S. Naval Forces, Africa,  in Naples, Italy; U.S. Marine Forces, Africa, in Stuttgart, Germany; U.S.  Special Operations Command, Africa, in Stuttgart, Germany; and  Combined Joint Task Force-Horn of Africa, Djibouti, Africa. As discussed  later, DOD did not provide us with sufficient documentation to enable us  to assess the reliability of the data used to produce the cost figures in the  CAPE report, but these estimates were in line with costs prepared by  DOD in earlier studies.
We conducted this performance audit from June 2012 through September  2013 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: GAO has issued several reports on the establishment of AFRICOM and  its components. In 2008, we testified that DOD had made progress in  transferring activities, staffing the command, and establishing an interim  headquarters for AFRICOM but had not yet fully estimated the additional  costs of establishing and operating the command. We also reported in  2008 that DOD had not reached an agreement with the Department of  State (State) and potential host nations on the structure and location of  the command’s presence in Africa, and that such uncertainty hindered  DOD’s ability to estimate future funding requirements and raised  questions about whether DOD’s concept for developing enduring  relationships on the continent could be achieved. In 2009 we reported  that the total future cost of establishing AFRICOM would be significant but  remained unclear because decisions on the locations of AFRICOM’s  permanent headquarters and its supporting offices in Africa had not been  made. We also stated that it would be difficult to assess the merits of  infrastructure investments in Germany for AFRICOM’s interim  headquarters without knowing how long AFRICOM would use these  facilities or how they would be used after a permanent location was  established. To determine the long-term fiscal investment for AFRICOM’s  infrastructure, we recommended that the Secretary of Defense, in  consultation with the Secretary of State, as appropriate, conduct an  assessment of possible locations for AFRICOM’s permanent  headquarters and any supporting offices in Africa that would be based on  transparent criteria, methodology, and assumptions; include the full cost  and time-frames to construct and support proposed locations; evaluate  how each location would contribute to AFRICOM’s mission consistent  with the criteria of the study; and consider geopolitical and operational  risks and barriers in implementing each alternative. We further  recommended that DOD limit expenditures on temporary AFRICOM  infrastructure until decisions were made on the long-term locations for the  command. DOD partially agreed with the recommendations in our 2009  report, stating that in some cases, actions were already underway that  would address the issues identified in our report.
section_title: DOD Considered Several Possibilities for the Permanent Placement of AFRICOM before Deciding to Retain the Command in Its Current Location
paragraphs: In 2007, the President directed the Secretary of Defense to establish a  new geographic combatant command, consolidating the responsibility for  DOD activities in Africa that had been shared by U.S. Central Command,  U.S. Pacific Command, and U.S. European Command. AFRICOM was  initially established as a subunified command within the European  Command and was thus purposely staffed by European Command  personnel. Because of this link to the European Command, DOD located  AFRICOM’s headquarters at Kelley Barracks in Stuttgart, Germany,  where the European Command headquarters was located, with the intent  that this location would be temporary until a permanent location was  selected. In 2008, AFRICOM became fully operational as a separate,  independent geographic command. Since that time DOD has considered  several courses of action for the permanent placement of the  headquarters. Initially DOD’s goal was to locate AFRICOM headquarters  in Africa, but that goal was later abandoned, in part because of what DOD  described as significant projected costs and sensitivities on the part of  African countries to having such a presence on the continent.  Consequently, in 2008 DOD conducted an analysis of other locations in  Europe and the United States, using cost and operational factors as  criteria against which to evaluate the permanent placement of AFRICOM  headquarters. Although this 2008 analysis contained no recommendation  about where AFRICOM’s headquarters should be permanently located, it  concluded that several locations in Europe and the United States would  be operationally feasible as well as less expensive than Stuttgart. Finally,  in January 2013, the Secretary of Defense decided to keep AFRICOM’s  headquarters in Stuttgart, Germany. This decision was made following  the completion of an analysis directed by the House Armed Services  Committee in 2011 and reiterated in 2012 and conducted by CAPE. The  study, which presented the costs and benefits of maintaining AFRICOM’s  headquarters in Stuttgart and of relocating it to the United States, stated  that the AFRICOM commander had identified certain operational  concerns as critical and that even though the operational risks could be  mitigated, it was the AFRICOM commander’s professional judgment that  the command would be less effective in the United States. In announcing  the decision to keep AFRICOM’s headquarters in Stuttgart, the Secretary  of Defense noted that the commander had judged that the headquarters  would be more operationally effective from its current location, given  shared resources with the U.S. European Command.
subsections: section_title: Original Plans for AFRICOM Called for a Headquarters on the Continent of Africa
paragraphs: The initial plan for AFRICOM was to have a central headquarters located  on the African continent that would be complemented by several regional  offices that would serve as hubs throughout AFRICOM’s area of  responsibility (see figure 1). According to DOD officials, having a  command presence in Africa would provide a better understanding of the  regional environment and African needs; help build relationships with  African partners, regional economic communities, and associated standby  forces; and add a regional dimension to U.S. security assistance.  However, after conducting extensive travel throughout Africa to identify  appropriate locations and meet with key officials in prospective nations,  DOD concluded that it was not feasible to locate AFRICOM’s  headquarters in Africa, for several reasons. First, State officials who were  involved in DOD’s early planning teams for AFRICOM voiced concerns  over the command’s headquarters location and the means by which the  AFRICOM commander and the Department of State would exercise their  respective authorities. Specifically, DOD and State officials said that State  was not comfortable with DOD’s concept of regional offices because  those offices would not be operating under the Ambassador’s Chief of  Mission authority. Second, African nations expressed concerns about the  United States exerting greater influence on the continent, as well as the  potential increase in U.S. military troops in the region. Third, since many  of the African countries that were being considered for headquarters and  regional office locations did not have existing infrastructure or the  resources to support them, DOD officials concluded that locating  AFRICOM headquarters in Africa would require extensive investments  and military construction in order to provide appropriate levels of force  protection and quality of life for assigned personnel. Officials were also  concerned that if the headquarters were located in Africa, assigned  personnel would not be able to have dependents accompany them  because of limited resources and quality-of-life issues.
In 2008, the Office of the Secretary of Defense’s Office of Program  Assessment and Evaluation conducted an analysis that considered other  locations in Europe as well as in the United States for the permanent  location of AFRICOM headquarters. It compared economic and  operational factors associated with each of the locations and concluded  that all of the locations considered were operationally feasible. It also  concluded that relocating the headquarters to the United States would  result in significant savings for DOD. However, DOD officials decided to  defer a decision on the permanent location for AFRICOM headquarters  until 2012 in order to provide the combatant command with sufficient time  to stabilize.
In 2011, the Office of the Under Secretary of Defense for Policy and the  Joint Staff conducted a study that considered alternatives to the current  geographic combatant command structure that could enable the  department to realize a goal of $900 million in cost reductions between  fiscal years 2014 and 2017. As part of DOD’s overall effort to reduce  recurring overhead costs associated with maintaining multiple combatant  commands, the study considered merging AFRICOM with either U.S.  European Command (also located in Stuttgart, Germany) or U.S.  Southern Command (located in Miami, Florida). The study concluded that  these two options were neither “strategically prudent” nor “fiscally  advantageous,” stating that combining combatant commands would likely  result in a diluted effort on key mission sets, and that the costs incurred  by creating a single merged headquarters would offset the available cost  reductions. The study additionally found that altering the  contemporaneous geographic combatant command structure would result  in cost reductions well below the targeted $900 million. Subsequently,  DOD determined that it would need to identify other ways to realize its  goal of finding savings from combatant commands, and the department  changed the timeframe to fiscal years 2014 through 2018. According to  Joint Staff officials, DOD would seek to accomplish this goal by reducing  funding in the President’s budget request for fiscal year 2014 across all  the geographic and functional combatant commands by approximately  $881 million for fiscal years 2014 through 2018. To realize these savings,  these officials stated that the department would reduce the number of  civilian positions at the combatant commands and Joint Staff by  approximately 400 through fiscal year 2018, but they provided few  specifics. See figure 2 for a timeline of the courses of action DOD  considered.
In January 2013, the Secretary of Defense decided to keep AFRICOM’s  headquarters in Stuttgart, Germany. This decision was made following  the completion of an analysis directed by the House Armed Services  Committee in 2011 and conducted by the CAPE office. The purpose of  the CAPE study was to present the strategic and operational impacts, as  well as the costs and benefits, associated with moving AFRICOM  headquarters from its current location to the United States. DOD  considered two options for the basing of AFRICOM headquarters: (1)  maintain AFRICOM’s current location in Stuttgart, Germany, or (2)  relocate AFRICOM headquarters to the United States. However, the  CAPE study also included a mitigation plan to address strategic and  operational concerns identified by leadership as factors to consider in the  event that AFRICOM were relocated to the United States. The main  findings of the DOD study were as follows:
The annual recurring cost of maintaining a U.S.-based headquarters  would be $60 million to $70 million less than the cost of operating the  headquarters in Stuttgart. The break-even point to recover one-time  relocation costs to the United States would be reached between 2 and  6 years after relocation, depending on the costs to establish facilities  in the United States.
Relocating AFRICOM to the continental United States could create up  to 4,300 additional jobs, with an annual impact on the local economy  ranging from $350 million to $450 million.
The study stated that the AFRICOM commander had identified access  to the area of responsibility and to the service component commands  as critical operational concerns. The study also presented an option  showing how operational concerns could be mitigated by basing some  personnel forward in the region. However, it stated that the  commander had judged that the command would be less effective if  the headquarters were placed in the United States.
In January 2013, Secretary of Defense Leon Panetta wrote to  congressional leaders notifying them of his decision to retain AFRICOM in  Stuttgart. In the letter, the Secretary cited the judgment of the AFRICOM  commander about operational effectiveness as a rationale for retaining  the command in its current location.
section_title: DOD’s Decision to Keep AFRICOM Headquarters in Stuttgart Is Not Supported by an Analysis That Balances Operational Costs and Benefits for a Full Range of Options
paragraphs: DOD’s decision to keep AFRICOM headquarters in Stuttgart was made  following the issuance of CAPE’s 2012 study, although the extent to  which DOD officials considered the study when making the decision is  unclear. The decision, however, was not supported by a well-documented  economic analysis that balances the operational and cost benefits for the  options open to DOD. Specifically, the CAPE study does not conform with  key principles GAO has derived from a variety of cost estimating,  economic analysis, and budgeting guidance documents, in that (1) it is  not well-documented, and (2) it does not fully explain why the operational  benefits of keeping the headquarters in Stuttgart outweigh the benefit of  potentially saving millions of dollars per year and bringing thousands of  jobs to the United States.
subsections: section_title: Analyses to Support Major Decisions Should Be Well- Documented and Fully Explain Rationale
paragraphs: According to key principles GAO has derived from cost estimating,  economic analysis, and budgeting guidance, a high-quality and reliable  cost estimate or economic analysis is, among other things,  comprehensive and well-documented. Additionally, DOD Instruction  7041.3, Economic Analysis for Decisionmaking, which CAPE officials  acknowledged using to inform their analysis, states that an economic  analysis is a systematic approach to the problem of choosing the best  method of allocating scarce resources to achieve a given objective. The  instruction further states that the results of the economic analysis,  including all calculations and sources of data, must be documented down  to the most basic inputs to provide an auditable and stand-alone  document. The instruction also states that the costs and benefits  associated with each alternative under consideration should be quantified  whenever possible. When this is not possible, the analyst should still  attempt to document significant qualitative costs and benefits and, at a  minimum, discuss these costs and benefits in narrative format. CAPE  officials agreed that DOD Instruction 7041.3 provides reasonable  principles to apply in conducting a cost analysis, but officials stated that,  as the independent analytic organization for the department, CAPE  reserves the right to conduct analysis as it deems appropriate to inform  specific decisions.
In April 2013, after the decision had been made to maintain AFRICOM  headquarters in Stuttgart, Secretary of Defense Chuck Hagel called on  DOD to challenge all past assumptions in order to seek cost savings and  efficiencies in “a time of unprecedented shifts in the world order, new  global challenges, and deep global fiscal uncertainty,” to explore the full  range of options for implementing U.S. national security strategy, and to  “put everything on the table.” In particular, the Secretary stated that the  size and shape of the military forces should constantly be reassessed. He  stated that this reassessment should include determining the most  appropriate balance between forward-stationed, rotationally deployed,  and home-based forces.
section_title: CAPE’s Analysis Was Not Well-Documented
paragraphs: CAPE’s 2012 report describes strategic and operational factors that were  considered when determining whether to place AFRICOM headquarters  in the United States or keep it in its present location, and it includes  estimates of annual recurring and one-time costs associated with each  option. However, the analysis does not include enough narrative  explanation to allow an independent third party to fully evaluate its  methodology. Further, in our follow-up discussions, CAPE officials could  not provide us with sufficient documentation for us to determine how they  had developed their list of strategic and operational benefits or calculated  cost savings and other economic benefits. CAPE officials told us that they  did not have documentation to show how raw source data had been  analyzed and compiled for the report.
The CAPE report, entitled “U.S. Africa Command Basing Alternatives,”  dated October 2012, consists of 28 pages of briefing slides. It includes a  discussion of the study’s assumptions and methodology, along with the  one-time and recurring costs of each option. The report presents a table  summarizing the strategic and operational factors that were considered  when determining whether to retain AFRICOM’s headquarters in Stuttgart  or move it to the United States. The table indicates that the most critical  factors for a combatant command headquarters are for it to have access  to its area of responsibility, partners, and organizations, as well as to  have access to service components and forces. Working groups of DOD  officials had compiled a list of factors considered important for a  combatant command and had selected the factors they considered  “critical.” The list included access to the Pentagon, interagency partners,  analytic intelligence capabilities, and European partners, including the  North Atlantic Treaty Organization (NATO); ability to recruit and retain  civilian personnel, embed personnel from other agencies, and leverage  U.S.-based non-governmental organizations; and ability to operate  independently without the need for agreement from a host country.  However, the CAPE report contains limited explanation of how these  factors were developed or why access to Africa and proximity to its  service component commands were judged to be most critical. In follow- up discussions, CAPE officials told us that when they began their study  they formed working groups to compile an authoritative list of strategic  and operational factors critical to the operation of a combatant command  headquarters, and that the groups independently developed similar  factors, thereby verifying the comprehensiveness of the list and its  relevance. However, CAPE officials provided no documentation of the  meetings of these groups, the sources used to develop the factors, or the  process used to arrive at a consensus in ranking the factors in terms of  their criticality. According to CAPE officials, the reason they did not  develop such documentation is that they viewed the study to be a  straightforward analysis intended to be easily digestible for its policy- maker audience. CAPE officials told us that if they had anticipated an  outside review of the study and its analysis, they would have documented  the study differently. We therefore could not evaluate the methodology  used in developing or ranking the operational and strategic factors  presented in the CAPE study. Such an explanation is important, however,  since operational and strategic factors were judged to outweigh cost  savings and other economic benefits. Also, while proximity to Africa and  to service component commands were ranked as the most important  criteria for determining where to place the headquarters, some of the  service components that were created to support the establishment of  AFRICOM were originally located in Europe so that they would be close  to the command headquarters.
For similar reasons, we were not able to determine the  comprehensiveness, accuracy, or credibility of CAPE’s cost estimates.  The report itself does not provide sufficient explanation of how the costs  were calculated or the effect of the various assumptions on the estimated  costs for us to assess the estimates. Specifically, the report does not  provide the sources of the cost estimates or the methodology used in  calculating them. In follow-up discussions, CAPE officials explained that  support for their calculations included e-mails and phone calls.
Finally, the study presented estimates of the economic benefits that could  accrue to a local community if the command were relocated to the  continental United States, but it is unclear how these estimates were  factored into the Secretary of Defense’s decision. In discussing the costs  of the alternatives, the CAPE study presents a summary of one-time  costs, including construction and the transfer of personnel and materiel.  The study states that relocating AFRICOM to the continental United  States may create up to 4,300 jobs (in addition to those of AFRICOM  personnel), with a $350 million to $450 million a year impact on the local  economy. However, the study does not explain how these possible  savings were calculated, and CAPE officials could not explain how this  analysis had been factored into the Secretary of Defense’s decision.
section_title: Housing and Cost-of-Living Allowances Are the Main Drivers of Additional Costs Associated with Overseas Headquarters
paragraphs: CAPE’s analysis estimated that the annual cost of providing AFRICOM  personnel with overseas housing and cost-of-living pay was $81 million  per year, as compared with the $19 million to $25 million these would cost  if the personnel were located in the United States. These costs  associated with stationing military and civilian personnel overseas  comprise the bulk of the savings from CAPE’s analysis. Although CAPE  officials did not provide us with documentation for us to assess the  accuracy and completeness of their cost estimates, they are comparable  with those developed in OSD’s 2008 analysis. Moreover, our analysis  confirmed that savings would be likely for both military and civilian  personnel if the headquarters were located in the United States. For  example, our analysis indicates that, conservatively, DOD could save  from $5 million to $15 million per year overall on reduced housing  allowances for military personnel, depending on where in the United  States they were located. In addition, an AFRICOM document states  that the command spent more than $30 million in fiscal year 2011 on  overseas housing benefits for civilian personnel, which they would not  receive if they were stationed in the United States.
section_title: DOD’s Decision Did Not Fully Explain Why Having a Forward Presence Could Not Mitigate the Disadvantages of Having a U.S. Headquarters
paragraphs: In its 2012 study, DOD tasked CAPE with analyzing two options—keeping  AFRICOM’s headquarters in Stuttgart or moving it to a generic location in  one of the four U.S. time zones. CAPE analysts also considered  establishing a forward operating headquarters so as to allay concerns  about a diminished forward presence if AFRICOM headquarters were  located in the United States. In CAPE’s scenario, the forward  headquarters would be staffed with about 25 personnel but would be  rapidly expandable. It would also place an additional 20 personnel in  existing component command headquarters. CAPE officials estimate that  the annual recurring costs for the forward-deployed element would be $13  million, with a one-time cost of $8 million. CAPE added these estimates to  its overall estimate of how much it would cost to move AFRICOM  headquarters to the United States.
In CAPE’s summary of its findings, however, there is no discussion of  how this factored into the commander’s conclusion when he stated his  preference, or of how the CAPE study had factored into the Secretary of  Defense’s final decision. Operating with a U.S. headquarters with forward  locations is the way in which the U.S. Central Command and U.S.  Southern Command operate from their respective headquarters in  Tampa, Florida, and Miami, Florida. The Central Command, for example,  has a forward operating location in Qatar, and the Southern Command  has forward locations in Honduras and El Salvador. AFRICOM already  has a command element at a forward location—Combined Joint Task  Force - Horn of Africa.  According to Task Force officials, there are about  1,800 personnel temporarily assigned to this site at Camp Lemonnier,  Djibouti. In 2012, the Navy submitted a master plan to Congress listing  $1.4 billion in planned improvements to that site.  .
When we asked AFRICOM staff about the specific operational benefits of  having its headquarters located in Stuttgart, they cited the following: (1) it  takes less time to travel to Africa from Stuttgart than it would from the  United States; (2) it is easier to interact with partners in Africa from  Stuttgart because they are in the same or similar time zones; and (3) it is  easier to interact with AFRICOM’s service components because they all  are in Europe, and because the U.S. European Command headquarters  is also in Stuttgart. An AFRICOM briefing, however, indicated that the  strategic risk of relocating the headquarters to the United States would be  “minimal,” and also stated that establishing a forward headquarters could  mitigate strategic and operational risks. CAPE officials also stated that  maintaining AFRICOM’s headquarters in Stuttgart makes it easier for  AFRICOM to share resources at the service component level with the  U.S. European Command, and that AFRICOM’s sharing service  components with the European Command makes it unique among the  combatant commands. During our site visits, however, European  Command officials told us that the two commands do not share  personnel, even though two of the components are dual-hatted.
In its analysis, CAPE calculated the likely increase in hours that would be  spent in traveling from the headquarters location to Africa if the  headquarters were relocated to the United States. CAPE also estimated  that if AFRICOM headquarters were relocated to the United States, the  number of trips to Africa would likely remain the same.  We believe that  the number of trips to the United States would decrease. However, CAPE  did not analyze travel patterns by individual AFRICOM staff. Our interview  with AFRICOM officials and our review of travel patterns of AFRICOM  staff indicate that being closer to Africa may offer few benefits for many  personnel. For example, according to AFRICOM officials, 70 percent of  AFRICOM staff travel infrequently.  As a result, these staff could be  relocated in the United States without negative effects. This is because  the AFRICOM staff includes many support personnel–-accountants,  personnel specialists, information technology experts, and planners,  among other staff—who do their jobs primarily at the headquarters.  (Appendix 1 shows a detailed breakdown of AFRICOM staff by mission  area.) In addition, our independent analysis found that about 60 percent  of AFRICOM headquarters staff’s travel in fiscal years 2010 and 2011  was to locations in the United States or within Europe. In fiscal year 2011,  for example, AFRICOM spent $4.8 million on travel to the United States  and $3.9 million on travel to other locations in Europe, while it spent about  $5.2 million on travel to Africa (see figure 3). AFRICOM officials told us  that travel to other parts of Europe includes trips to Berlin to obtain visas  and passports, as well as to planning meetings with its components and  other partners. If AFRICOM headquarters were to be relocated in the  United States, the costs associated with travel to U.S. locations would  likely be reduced. While some costs for official travel throughout Europe  could increase, the travel that involves administrative tasks such as  obtaining visas would be eliminated. In fiscal year 2011, this travel  consumed almost one-third of all AFRICOM travel expenditures.
Moreover, the view that AFRICOM could perform its mission from the  United States is supportable, in part, because other combatant  commands have operated successfully with a U.S.-based headquarters.  During our review, we met with U.S Central Command and U.S. Southern  Command officials to understand the extent to which their headquarters  location in the United States affects them operationally. Officials  expressed various opinions regarding the benefits of forward stationing  personnel, and added that they are able to address time-zone and travel  challenges. Central Command officials also explained that they manage  partner relationships (including with NATO partners), overcome time-zone  challenges, and travel to remote locations in their area of responsibility  from their headquarters location in Tampa, Florida. They also stated that  although they can quickly relocate personnel to a forward location in  Qatar when needed, most of the headquarters staff does not need to be  physically located in their area of responsibility in order to carry out their  functions. A U.S. Southern Command official told us that they use video  teleconferences with the components when they need to communicate  with them. He also told us that the command has a forward presence in  Honduras and in El Salvador.
section_title: Other DOD Studies Provide Examples of a More Transparent Approach for Comparing Cost and Operational Factors Associated with Basing Decisions
paragraphs: Neither the CAPE study nor the letter accompanying it when it was  transmitted to Congress in January 2013 provides a complete explanation  of why DOD decided that the operational benefits associated with  remaining in Stuttgart outweigh the associated costs. Past studies  conducted or commissioned by DOD, however, suggest that a more  thorough approach to analyzing costs and benefits is possible. For  example, unlike the 2012 analysis, DOD’s 2008 analysis of potential  AFRICOM locations ranked each location according to how it fared  against cost and operational factors. While the analysis made no  recommendation and stated that Germany was superior to all of the  considered U.S. locations based on factors other than cost, it concluded  that any of the examined locations would be an operationally feasible  choice, and that U.S. locations were routinely and significantly cheaper to  maintain than overseas bases.
Moreover, a 1994 study was initiated by the U.S. Southern Command and  validated by a committee appointed by the Deputy Secretary of Defense  to review and refine the analysis. The committee included the Assistant  Secretary of Defense for Strategy and Requirements, the Principal  Deputy Comptroller, and the Director for Strategic Plans and Policy, Joint  Staff. The Committee’s final report quantified and prioritized operational  benefits to determine where in the United States to place the U.S.  Southern Command headquarters when it was required to move from  Panama. Although this study did not consider overseas locations and  assumed that remaining in Panama was not an option, it nevertheless  stands as an example of a more transparent approach to weighing costs  and operational concerns. This study examined 126 sites in the United  States and then narrowed the possibilities based on criteria that  addressed the mission and quality of life for assigned personnel. The  names of the locations under consideration were “masked” to ensure that  the criteria were applied objectively. As a result, six locations were  chosen as most desirable: Tampa, Atlanta, New Orleans, Miami, Puerto  Rico, and Washington, D.C. Visits were made to each of the locations  and the final tallying of scores, including consideration of costs, showed  that Miami was the preferred choice. The committee expanded the  analysis through additional evaluation of Southern Command’s mission  requirements and quality of life issues. Once its analysis was complete,  the committee briefed the Deputy Secretary of Defense on its findings  and conclusions based on three criteria: mission effectiveness, quality of  life, and cost. In summary, the committee stated that if mission  effectiveness was the most important of the three criteria, then Miami was  clearly the superior location. If quality of life was the most important, then  Washington was the leading candidate. If cost was the most important  consideration, then New Orleans was the leading candidate. The  committee’s recommendation was for the Secretary of Defense and the  Deputy Secretary of Defense to select the final Southern Command  relocation site from among those three candidate cities.
Finally, a 2013 RAND study conducted in response to a congressional  requirement for DOD to commission an independent assessment of the  overseas basing presence of U.S. forces provides several examples of  principles that can be used to determine where to geographically place  personnel so that they can most effectively be employed. For example,  the study states that, because basing personnel in overseas locations is  generally more expensive than basing them in the United States, DOD  could consider configuring its forward-based forces overseas so that they  can provide the initial response to a conflict, while placing in the United  States the forces that will provide follow-up support. To inform the  assessment of overseas forces, RAND examined how overseas posture  translates to benefits, the risks that it poses, the cost of maintaining it,  and how these costs would likely change if the U.S. overseas presence  were to be modified in different ways—for example, by changing from a  permanent to a rotational presence.
section_title: Conclusions
paragraphs: DOD’s letter describing the January 2013 decision to maintain the  command in Stuttgart was based on operational benefits that are not  clearly laid out, and it is unclear how cost savings and economic benefits  were considered in the decision. DOD’s analysis stated that significant  savings and economic benefits would result if the command were  relocated to the United States, and our independent analyses confirmed  that significant savings are possible. Moreover, the decision does not  explain why using a small contingent of personnel stationed forward  would not mitigate operational concerns. Our analysis of travel patterns  and staff composition raises questions about why the AFRICOM staff  needs to be located overseas, because not all staff would benefit from  being closer to Africa—especially when other combatant commands  operate with their headquarters in the United States. Key principles that  GAO has derived for economic analysis and cost estimating, as well as a  DOD instruction containing principles for certain types of economic  analysis, suggest that the department’s rationale should be detailed and  the study underpinning it should be comprehensive and well-documented.  Since making the decision to keep AFRICOM’s headquarters in Stuttgart,  the Department of Defense has sought to fundamentally rethink how the  department does business in an era of increasingly constrained fiscal  resources. Until the costs and benefits of maintaining AFRICOM in  Germany are specified and weighed against the costs and economic  benefits of moving the command, the department may be missing an  opportunity to accomplish its missions successfully at a significantly lower  cost.
section_title: Recommendation for Executive Action
paragraphs: To enable the department to meet its Africa-related missions at the least  cost, GAO recommends that the Secretary of Defense conduct a more  comprehensive and well-documented analysis of options for the  permanent placement of the headquarters for AFRICOM, including  documentation as to whether the operational benefits of each option  outweigh the costs. These options should include placing some  AFRICOM headquarters personnel in forward locations, while moving  others to the United States. In conducting this assessment, the Secretary  should follow key principles GAO has derived for such studies, as well as  principles found in DOD Instruction 7041.3, to help ensure that the results  are comprehensive, well-documented, accurate, and credible. Should  DOD determine that maintaining a location in Stuttgart is the best course  of action, the Secretary of Defense should provide a detailed description  of why the operational or other benefits outweigh the costs and benefits of  relocating the command.
section_title: Agency Comments and Our Evaluation
paragraphs: In written comments on a draft of this report, DOD stated that the 2012  CAPE study met the requirements of the House Armed Services  Committee report accompanying the National Defense Authorization Act  for Fiscal Year 2012.  DOD stated that the CAPE study was not intended  to be a comprehensive analysis to determine the optimal location for  AFRICOM’s headquarters.  Rather, DOD believed that the study provided  sufficient detail to support the specific questions posed in the National  Defense Authorization Act.  While the CAPE office did present the  estimated costs of relocating AFRICOM’s headquarters, the National  Defense Authorization Act directing DOD to conduct this study specifically  urged DOD to conduct this basing review “in an open and transparent  manner consistent with the processes established for such a major  review.”  As we state in the body of our report, the CAPE study did not  provide sufficient detail to support its methodology and cost estimates for  a third party to validate the study’s findings. Moreover, DOD’s own  guidance on conducting an economic analysis states that such an  analysis should be transparent and serve as a stand-alone document.
DOD also stated that Secretary Panetta’s decision not to relocate the  AFRICOM headquarters to the United States was based largely on the  combatant commanders’ military judgment, which is not easily  quantifiable.  We recognize that military judgment is not easily  quantifiable.  However, we continue to believe that an accurate and  reliable analysis should provide a more complete explanation of how  operational benefits and costs were weighed, especially in light of the  potential cost savings that DOD is deciding to forego.
DOD partially concurred with our recommendation. DOD stated that to  meet the requirements of the Budget Control Act, the Department of  Defense will consider a wide range of options.  If any of these options  require additional analysis of the location of AFRICOM headquarters,  DOD said that it will conduct a comprehensive and well-documented  analysis. We continue to believe that such an analysis is needed.  Because of the current tight fiscal climate and the Secretary of Defense’s  continual urging that DOD identify additional opportunities for achieving  efficiencies and cost savings, DOD should reassess the option of  relocating AFRICOM’s headquarters to the United States.
The department’s written comments are reprinted in appendix II.
We are sending copies of this report to the Secretary of Defense and the  Secretary of State. The report will also be available at no charge on the  GAO Web site at http://www.gao.gov.
If you or your staff have questions about this report, please contact me at  (202) 512-3489 or at pendletonj@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 III.
section_title: Appendix I: Authorized Personnel at AFRICOM
section_title: Appendix II: Comments from the Department of Defense
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Guy LoFaro, Assistant Director;  Nicole Harris; Charles Perdue; Carol Petersen; Beverly Schladt; Mike  Shaughnessy; Amie Steele; Grant Sutton; and Cheryl Weissman made  major contributions to this report.