Military Bases: Analysis of DOD's 2005 Selection Process and Recommendations for Base Closures and Realignments
Published: 2005-07-01T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: On May 13, 2005, the Secretary of Defense submitted proposed base realignment and closure (BRAC) actions to an independent commission for its review. The Commission must submit its recommendations to the President by September 8, 2005, for his acceptance or rejection in their entirety. Congress has final action to accept or reject these recommendations in their entirety later this year. The law requires that GAO issue a report on the Department of Defense's (DOD) recommendations and selection process by July 1, 2005. GAO's objectives were to (1) determine the extent to which DOD's proposals achieved its stated BRAC goals, (2) analyze whether the process for developing recommendations was logical and reasoned, and (3) identify issues with the recommendations that may warrant further attention. Time constraints limited GAO's ability to examine implementation details of most of the individual recommended actions.
section_title: What GAO Found
paragraphs: DOD had varying success in achieving its 2005 BRAC goals of (1) reducing excess infrastructure and producing savings, (2) furthering transformation, and (3) fostering jointness. While DOD proposed a record number of closures and realignments, exceeding all prior BRAC rounds combined, many proposals focused on reserve bases and relatively few on closing active bases. Projected savings are almost equally large, but most savings are derived from 10 percent of the recommendations. While GAO believes savings would be achieved, overall up-front investment costs of an estimated $24 billion are required, and there are clear limitations associated with DOD's projection of nearly $50 billion in savings over a 20-year period. Much of the projected net annual recurring savings (47 percent) is associated with eliminating jobs currently held by military personnel. However, rather than reducing end-strength levels, DOD indicates the positions are expected to be reassigned to other areas, which may enhance capabilities but also limit dollar savings available for other uses. Sizeable savings were projected from efficiency measures and other actions, but underlying assumptions have not been validated and could be difficult to track over time. Some proposals represent efforts to foster jointness and transformation, such as initial joint training for the Joint Strike Fighter, but progress in each area varied, with many decisions reflecting consolidations within, and not across, the military services. In addition, transformation was often cited as support for proposals, but it was not well defined, and there was a lack of agreement on various transformation options. DOD's process for conducting its analysis was generally logical, reasoned, and well documented. DOD's process placed strong emphasis on data, tempered by military judgment, as appropriate. The military services and seven joint cross-service groups, which focused on common business-oriented functions, adapted their analytical approaches to the unique aspects of their respective areas. Yet, they were consistent in adhering to the use of military value criteria, including new considerations introduced for this round, such as surge and homeland defense needs. Data accuracy was enhanced by the required use of certified data and by efforts of the DOD Inspector General and service audit agencies in checking the data. Time limitations and complexities introduced by DOD in weaving together an unprecedented 837 closure and realignment actions across the country into 222 individual recommendations caused GAO to focus more on evaluating major cross-cutting issues than on implementation issues of individual recommendations. GAO identified various issues that may warrant further attention by the Commission. Some apply to a broad range of recommendations, such as assumptions and inconsistencies in developing certain cost and savings estimates, lengthy payback periods, or potential impacts on affected communities. GAO also identified certain candidate recommendations, including some that were changed by senior DOD leadership late in the process that may warrant attention.

section_title: Letter
paragraphs: It has been 10 years since the Department of Defense (DOD) last conducted  a base realignment and closure (BRAC) round. As a result of prior BRAC  rounds in 1988, 1991, 1993, and 1995, DOD reports that it has reduced its  domestic infrastructure by about 20 percent in terms of plant replacement  value, transferred hundreds of thousand of acres of unneeded property to  other federal and nonfederal entities, and saved billions of dollars on an  annual recurring basis for application to higher priority defense needs.  Despite these infrastructure reductions, DOD recognized the need for  additional closures and realignments following the 1995 closure round and  made repeated efforts to gain congressional authorization for an additional  closure round.
We too have frequently reported in recent years on the long-term  challenges DOD faces in managing its portfolio of facilities, halting  degradation of facilities, and reducing unneeded infrastructure to free up  funds to better maintain enduring facilities and meet other needs. Because  of these long-standing issues, DOD’s management of its support  infrastructure has been included in our list of high-risk areas since 1997.
Congress authorized an additional BRAC round for 2005 with the passage  of the National Defense Authorization Act for Fiscal Year 2002 (the Act).  The 2002 Act essentially extended the authority of the Defense Base  Closure and Realignment Act of 1990, which had authorized the 1991, 1993,  and 1995 rounds, with some modifications for the 2005 base closure round.  The BRAC legislation provides for an independent Defense Base Closure  and Realignment Commission to review the Secretary of Defense’s  realignment and closure recommendations, which were publicly  announced on May 13, 2005, and present its findings and conclusions on the  Secretary’s recommendations, along with its own recommendations to the  President, by September 8, 2005. The President, in turn, must either  approve or disapprove the Commission’s recommendations in their entirety  by September 23, 2005. If approved, the recommendations are forwarded to  Congress, which has 45 days or until the adjournment of Congress to  disapprove the recommendations on an all-or-none basis; otherwise, they  become binding. If the President disapproves the recommendations, the  Commission must consider the President’s objections and send a revised  report back to the President no later than October 20, 2005. The President  then has until November 7, 2005, to forward his approval of the revised  Commission recommendations to Congress for its review.
Considering changes in the national security environment and emerging  threats, along with ongoing changes in the United States defense strategy  to address these threats and protect our homeland, DOD has come to  realize the need to reshape its base structure to more effectively support its  military forces. In establishing goals for the 2005 BRAC round, the  Secretary of Defense, in a November 15, 2002, memorandum initiating the  round, expressed his interest in (1) reducing excess infrastructure, which  diverts scarce resources from overall defense capability, and producing  savings; (2) transforming DOD by aligning the infrastructure with the  defense strategy; and (3) fostering jointness by examining and  implementing opportunities for greater jointness across DOD.
In the submission of his recommendations to the BRAC Commission on  May 13, 2005, the Secretary reported that his recommendations, if  approved, would accomplish these goals. DOD reported that its 222  recommendations, involving an unprecedented 837 closure and  realignment actions—including 33 major base closures and 30 major  realignments, plus numerous other closures and realignments would  generate annual recurring savings of about $5.5 billion beginning in fiscal  year 2012.
Legislation authorizing the 2005 round maintained the requirement,  applicable to three previous rounds, that we provide a detailed analysis of  the Secretary’s recommendations and the selection process. Our objectives  were to (1) determine the extent to which DOD achieved its stated goals for  BRAC 2005, (2) analyze whether DOD’s selection process in developing  recommended actions was logical and reasoned, and (3) identify issues  regarding the recommendations that may warrant attention by the BRAC  Commission.
To analyze the selection process and the recommendations, we monitored  various aspects of the process as it evolved over time leading up to and  following the public release of the Secretary’s recommendations. We  sought to assure ourselves that DOD followed a logical, reasoned, and well- documented decision-making process leading to the proposed  recommendations. Prior to the release of the recommendations, we abided  by an agreement with DOD not to disclose details of the process due to the  sensitivity of the information while the process evolved. With the approval  of the large number of recommendations occurring in the final weeks of the  process, the broad scope and complexity of the recommendations, and the  limited time available for us to report our results, we generally focused  greater attention following the announcement of the proposed closures and  realignments on those issues affecting more than one recommendation  than on issues pertaining to the implementation of individual  recommendations. However, as time permitted, we visited selected  installations to better gauge the operational and economic impact of the  proposed recommendations. We generally experienced good access to  relevant documentation and to key senior officials and staff involved in the  BRAC process.
We performed our work primarily at the Office of the Secretary of Defense  (OSD), the military services’ base closure offices, and the offices of the  seven joint cross-service groups that were established by the Secretary to  propose cross-service recommendations. While we did not attend  deliberative meetings, we had access to minutes of meetings and relevant  documentation, as well as opportunities to meet periodically with senior  leadership to provide observations or concerns we had as the process was  unfolding. We relied on DOD’s Office of the Inspector General, Army Audit  Agency, Naval Audit Service, and Air Force Audit Agency to validate the  accuracy of the data used by the military services and joint cross-service  groups in their decision-making process. We met with staff members of  these audit agencies periodically to discuss the results of their work as well  as to observe their data validation efforts at selected locations. Based on  these discussions and observations and a review of their reports, we  believe the DOD data are sufficiently reliable for the purposes of this  report. We conducted our work from October 2003, as DOD’s process was  beginning, through June 2005, shortly after the Secretary of Defense  announced his proposed closures and realignments, in accordance with  generally accepted government auditing standards. Further details on the  scope and methodology are described in appendix I.
subsections: section_title: Background
paragraphs: As described at the beginning of this report, DOD recognized the need for  additional base closures and realignments following the 1995 closure round  and made repeated efforts to gain congressional authorization for an  additional closure round. Congress authorized an additional round for 2005  with the passage of the National Defense Authorization Act for Fiscal Year  2002. The 2002 Act essentially extended the authority of the Defense Base  Closure and Realignment Act of 1990, which had authorized the 1991,  1993, and 1995 rounds, with some modifications for the 2005 base closure  round.
In a memorandum dated November 15, 2002, the Secretary of Defense  issued initial guidance outlining goals and a leadership framework for the  2005 BRAC round. In doing so, he noted that “At a minimum, BRAC 2005  must eliminate excess physical capacity; the operation, sustainment and  recapitalization of which diverts scarce resources from defense capability.”  However, specific reduction goals were not established. At the same time,  the Secretary’s guidance for the 2005 round depicted the round as focusing  on more than the reduction of excess capacity. He said that “BRAC 2005  can make an even more profound contribution to transforming the  Department by rationalizing our infrastructure with defense strategy.” He  further noted that “A primary objective of BRAC 2005, in addition to  realigning our base structure to meet our post-Cold War force structure, is  to examine and implement opportunities for greater joint activity.” Toward  that end, the Secretary indicated that organizationally the 2005 BRAC  analysis would be two pronged. Joint cross-service teams would analyze  common business-oriented functions, and the military departments would  analyze service-unique functions.
The Secretary of Defense established two senior groups to oversee and  guide the BRAC 2005 process from a departmental perspective. The first  was the Infrastructure Executive Council (IEC), which was designated the  policy-making and oversight body for the entire process, and the second, a  subordinate group, was the Infrastructure Steering Group (ISG), created to  oversee the joint cross-service analyses and integrate that process with the  military departments’ own service-unique analyses. Each of the military  departments also established BRAC organizations, which had oversight  from senior leaders. Likewise, each of the joint cross-service teams, under  the purview of the ISG, was led by senior military or civilian officials, with  representation from each of the services and relevant defense agencies.  DOD’s BRAC leadership structure is shown in figure 1.
DOD developed a draft set of 77 transformational options that once  approved, were expected to constitute a minimum analytical framework  upon which the military departments and joint cross-service groups would  conduct their respective BRAC analyses. Because of a lack of agreement  among the services and OSD, the draft options were never formally  approved, but they remained available for consideration by analytical  teams and were referenced by some groups in support of various BRAC actions being considered. (See app. XV for a list of the draft  transformational options.) To some extent, the analyses and  recommendations of each of the services and joint cross-service groups  were also influenced by various guiding principles or policy imperatives  developed by the respective service or joint cross-service groups, such as  the need to preserve a particular capability in a particular location.
The legislation authorizing the 2005 BRAC round, enacted as part of the  fiscal year 2002 Defense Authorization Act, required DOD to give priority to  selection criteria dealing with military value and added elements of  specificity to criteria previously used by DOD in prior BRAC rounds.  Subsequently, The Ronald W. Reagan National Defense Authorization Act  for Fiscal Year 2005 codified the entire selection criteria and added the  word “surge” to one previously used criterion related to potential future  contingencies and mobilization efforts. In large measure, the final criteria  closely followed the criteria DOD employed in prior rounds, with greater  specificity added in some areas, as required by Congress. Figure 2 shows  DOD’s selection criteria for 2005, with changes from BRAC 1995 denoted in  bold.
To ensure that the selection criteria were consistently applied, OSD  established a common analytical framework to be used by each military  service and joint cross-service group. Each service and group adapted this  framework, in varying degrees, to its individual activities and functions in  evaluating facilities and functions and identifying closure and realignment  options. Despite the diversity of bases and cross-service functions  analyzed, each of the groups was expected to first analyze capacity and  military value of its respective facilities or functions, and then to identify  and evaluate various closure and realignment scenarios and provide  specific recommendations. Scenarios were derived from data analysis and  transformational options, as well as from goals and objectives each group  established for itself as it began its work. Figure 3 depicts the expected  progression of that process.
An initial part of the process involved an overall capacity analysis of  specific locations or functions and subfunctions at specific locations. The  analysis relied on data calls to obtain certified data to assess such factors  as maximum potential capacity, current capacity, current usage, excess  capacity, and capacity needed to meet surge requirements.
The military value analysis consisted of assessments of operational and  physical characteristics of each installation, or specific functions on an  installation related to a specific joint cross-service group’s area of  responsibility. These would include an installation’s or function’s current  and future mission capabilities, physical condition, ability to accommodate  future needs, and cost of operations. This analysis also relied on data calls  to obtain certified data on the various attributes and metrics used to assess  each of the four military value criteria and permit meaningful comparisons  between like installations/facilities with reference to the collective military  value selection criteria. DOD officials used these data to develop  comparative military value scores for each installation/facility or for  categories of facilities serving like functions.
The scenario development and analysis phase focused on identifying  various realignment and closure scenarios for further analysis. These  scenarios were to be derived from consideration of the department’s 20- year force structure plan, capacity analysis, military value analysis, and  transformational options; applicable guiding principles, objectives, or  policy imperatives identified by individual military services or joint cross- service groups; and military judgment. Each component had available for  its use an optimization or linear programming model that could combine  the results of capacity and military value analyses and other information to  derive scenarios and sets of alternatives. The model could be used to  address varying policy imperatives or objectives, such as minimizing the  number of sites, minimizing the amount of excess capacity, or maximizing  the average military value. A BRAC review group could also direct  variations that would, for example, eliminate as much excess capacity as  possible while maintaining an average military value at least as high as the  original set of sites.
OSD policy guidance has historically specified that priority consideration  be given to military value in making closure and realignment decisions, but  that priority was specifically mandated by the legislation authorizing the  2005 BRAC round. At the same time, historic practice and the 2005  authorizing legislation both required consideration of additional issues  included in selection criteria 5 through 8, detailed below:  Criterion 5—costs and savings: This criterion consists of measures of  costs and savings and the payback periods associated with them. Each  component assessed costs using the Cost of Base Realignment Actions  (COBRA) model that was used in each of the BRAC rounds since 1988.  Appendix XIII summarizes improvements that have been made to the  model over time and more recently for the 2005 round.
Criterion 6—economic impact: This criterion measures the direct and  indirect impacts of a BRAC action on employment in the communities  affected by a closure or realignment. Appendix XIV provides a more  complete description of how economic impact was assessed and the  changes made to improve the assessment for this round.
Criterion 7—community infrastructure: Selection criterion 7  examines “the ability of the infrastructure of both the existing and  potential receiving communities to support forces, missions, and  personnel.” The services and joint cross-service groups considered  information on demographics, childcare, cost of living, employment,  education, housing, medical care, safety and crime, transportation, and  public utilities of the communities impacted by a BRAC action.
Criterion 8—environmental impact: Selection criterion 8 assesses “the  environmental impact, including the impact of costs related to potential  environmental restoration, waste management, and environmental  compliance activities” of closure and realignment recommendations. In  considering this criterion, the services and joint cross-service groups  focused mainly on potential environmental impacts while  acknowledging, when appropriate, known environmental restoration  costs associated with an installation recommended for closure or  realignment. Waste management and environmental compliance costs  were factored into criterion 5. However, under OSD policy guidance,  environmental restoration costs were not considered in the cost and  savings analyses for evaluating individual scenarios under criterion 5.  DOD is obligated to restore contaminated sites on military bases  regardless of whether they are closed, and such costs could be affected  by reuse plans that cannot be known at this time but would be budgeted  for at a later time when those plans and costs are better identified.
Each of the military departments produced reports with closure and  realignment recommendations, as did each of the joint cross-service  groups, the results of which are summarized in appendixes III through XII.  Figures 4 and 5 show, respectively, the 33 major closures and 30 major  realignments that have been recommended by DOD where plant  replacement values exceed $100 million for major base closures and net  losses of 400 or more military and civilian personnel for major base  realignments.
While the 2005 BRAC round, like earlier BRAC rounds, was chartered to  focus on United States domestic bases, DOD separately had under way a  review of overseas basing requirements that had implications for the  domestic BRAC process. In a September 2004 report to Congress, the  Under Secretary of Defense for Policy provided an update on DOD’s “global  defense posture review.” It noted that once completed, the changes  stemming from the review would result in the most profound reordering of  United States military forces overseas as the current posture has been  largely unchanged since the Korean War. The report noted that over the  next 10 years, it is planned that up to 70,000 military personnel would  return to the United States, along with approximately 100,000 family  members and civilian employees. It further noted that a net reduction of  approximately 35 percent of overseas sites—bases, installations, and  facilities—is planned. DOD had indicated that the domestic BRAC process  would be used in making decisions on where to relocate forces returning to  the United States from overseas bases.
Separately, Congress in 2003 mandated the creation of a special  commission to evaluate, among other things, the current and proposed  overseas basing structure of the United States military forces. The  Commission’s observations are included in its May 2005 report. Among  other things, the Commission cited the need for appropriate planning to  ensure the availability of community infrastructure to support returning  troops and to mitigate the impact on communities.
section_title: DOD’s Recommendations Would Have Varying Degrees of Success in Achieving Goals for the 2005 BRAC Round
paragraphs: The recommendations proposed by the Secretary of Defense would have  varying degrees of success in achieving DOD’s BRAC 2005 goals of  reducing infrastructure and achieving savings, furthering transformation  objectives, and fostering joint activity among the military services. While  DOD proposed a record number of closure and realignment actions,  exceeding those in all prior BRAC rounds combined, many proposals focus  on the reserve component bases and relatively few on closing active bases.  Projected savings are almost equally as large, as all prior BRAC rounds  combined, but about 80 percent of the projected 20-year net present value  savings (savings minus up-front investment costs) are derived from only 10  percent of the recommendations. While we believe the recommendations  overall would achieve savings, up-front investment costs of about  $24 billion are required to implement all recommendations to achieve  DOD’s overall expected savings of nearly $50 billion over 20 years. Much of  these saving are related to eliminations of jobs currently held by military  personnel but are not likely to result in end-strength reductions, limiting  savings available for other purposes. Some proposed actions represent  some progress in emphasizing transformation and jointness, but progress  in these efforts varied without clear agreement on transformational options  to be considered, and many recommendations tended to foster jointness by  consolidating functions within rather than across military services.
subsections: section_title: BRAC 2005 Round Differs from Past Rounds
paragraphs: The BRAC 2005 round is different from previous base closure rounds in  terms of number of actions, projected implementation costs, and estimated  annual recurring savings. While the number of major closures and  realignments is just a little greater than individual previous rounds, the  number of minor closure and realignments, as shown in table 1, is  significantly greater than those in all previous rounds combined.
The large increase in minor closures and realignments is attributable partly  to actions involving the Army National Guard, Army Reserve, Air National  Guard, and vacating leased space.
The costs to implement the proposed actions are $24.4 billion compared to  a $22 billion total from the four previous rounds through 2001, the end of  the 6-year implementation period for the 1995 BRAC round. The increase  in costs is due partly to significant military construction and moving costs  associated with Army recommendations to realign its force structure, and  to recommendations to move activities from leased space onto military  installations. For example, the Army projects that it will need about  $2.3 billion in military construction funds to build facilities for the troops  returning from overseas. Likewise, DOD projects that it will need an  additional $1.3 billion to build facilities for recommendations that include  activities being moved from leased space. Time will be required for these  costs to be offset by savings from BRAC actions and this in turn affects the  point at which net annual recurring savings can begin to accrue.
Finally, the projected net annual recurring savings are $5.5 billion  compared to net annual recurring savings of $2.6 billion and $1.7 billion for  the 1993 and 1995 rounds respectively. The increased savings are partly  attributable to significant reductions in the number of military positions  and business process reengineering efforts.
section_title: Infrastructure Would Likely Be Reduced with Some Limitations Noted
paragraphs: DOD projects that the proposed recommendations would reduce excess  infrastructure capacity, indicating that the plant replacement value of  domestic installations would be reduced by about $27 billion, or 5 percent.  However, the projected reductions in plant replacement value did not  account for the $2.2 billion in domestic military construction projects  associated with relocating forces from overseas. On the other hand,  reductions in leased space are not considered in the plant replacement  value analysis, since leased space is not government owned. DOD  estimates that its recommendations will reduce about 12 million square  feet of leased space.
section_title: DOD Projects Recommendations Would Produce Savings, but there are Limitations Associated with the Savings Estimates
paragraphs: DOD projects that its proposed recommendations will produce nearly  $50 billion in 20-year net present value savings, with net annual recurring  savings of about $5.5 billion. There are limitations associated with the  savings claimed from military personnel reductions and we believe there is  uncertainty regarding the magnitude of savings likely to be realized in other  areas given unvalidated assumptions regarding expected efficiency gains  from business process reengineering efforts and projected savings from  sustainment, recapitalization, and base operating support.
Table 2 summarizes the projected one-time cost, the cost or savings  anticipated during the 6-year implementation period for the closure or  realignment, the estimated net annual recurring savings, and the projected  20-year net present value costs or savings of DOD’s recommendations.
Table 2 also shows the Navy, Air Force, and joint cross-service groups all  projecting net savings within the 6-year implementation period, as well as  significant 20-year net savings. In contrast, because of the nature of the  Army’s proposed actions and costs, such as providing infrastructure for  troops returning from overseas and the consolidation and recapitalization  of reserve facilities, the Army does not achieve net savings either during  the implementation period or within 20 years, based on recommendations  included in its BRAC report.
Notwithstanding these projected savings, we identified limitations or  uncertainties about the magnitude of savings likely to be realized. As figure  6 shows, 47 percent of the net annual recurring savings can be attributed to  projected military personnel reductions. About 40 percent ($2.1 billion) of  the projected net annual recurring savings can be attributed to savings  from operation and maintenance activities, which include terminating or  reducing property sustainment and recapitalization, base operating  support, and civilian payroll. Furthermore, about $500 million of the  “other” savings is based on business process reengineering efforts, but  some of the assumptions supporting the expected efficiency gains have not  been validated.
subsections: section_title: Military Personnel Savings
paragraphs: Much of the projected net annual recurring savings (47 percent) are  associated with eliminating positions currently held by military personnel;  but rather than reducing end-strength levels, DOD indicates the positions  are expected to be reassigned to other areas, limiting dollar savings  available for other uses. For example, although the Air Force projects net  annual recurring savings of about $732 million from eliminating about  10,200 military positions, Air Force officials stated the active duty positions  will be reinvested to relieve stress on high demand career fields and the  reserve positions to new missions yet to be identified. Likewise, the Army  is projecting savings from eliminating about 5,800 military positions, but it  has no plans to reduce its end-strength. Finally, the Navy is projecting it will  eliminate about 4,000 active duty military positions, which a Navy official  noted will help it achieve the end-strength reductions already planned. As  we noted during our review of DOD’s process during the 1995 BRAC round,  since these personnel will be assigned elsewhere rather than taken out of  the force structure, they do not represent dollar savings that can be readily  reallocated outside the personnel accounts. Without recognition that  these are not dollar savings that can be readily applied elsewhere, this  could create a false sense of savings available for use in other areas  traditionally cited as a beneficiary of BRAC savings, such as making more  funds available for modernization and better maintenance of remaining  facilities.
section_title: Sustainment, Recapitalization, and Base Operating Support Savings
paragraphs: DOD is also projecting savings from the sustainment and recapitalization of  facilities that are scheduled to be demolished, as well as from facilities that  might remain in DOD’s real property inventory when activities are  realigned from one base to another. For example, the Industrial Joint  Cross-Service Group is claiming about $20 million in annual recurring  savings from the recapitalization of facilities at installations responsible for  destroying chemical weapons at three locations recommended for  closure. However, the Army had already expected to demolish these  chemical destruction facilities upon completing the destruction of the  chemical weapons at each site and the Army has not identified future  missions for these installations. As a result, we do not believe it is  appropriate for the Industrial Joint Cross-Service Group to claim any  recapitalization savings related to these installations.
Likewise, DOD is projecting savings from the recapitalization and  sustainment of facilities in cases where functions or activities would be  realigned from one base to another. However, it is not clear to what extent  the proposed realignments would result in an entire building or portion of a  building being vacated, or if entire buildings are vacated, whether they  would be declared excess and removed from the military services’ real  property inventory. Our analysis shows that the supply and storage group’s  recommendations project about $100 million in sustainment and  recapitalization savings from realigning defense distribution depots. The  group estimates its recommendations will vacate about 27 million square  feet of storage space. Supply and storage officials told us their goal is to  vacate as much space as possible by re-warehousing inventory and by  reducing personnel spaces, but they do not have a specific plan for what  will happen to the space once it is vacated. In addition, until these  recommendations are ultimately approved and implemented, DOD will not  be in a good position to know exactly how much space is available or how  this space will be disposed of or utilized. As a result, it is unclear as to how  much of the estimated $100 million in annual recurring savings will actually  occur.
Collectively, the issues we identified suggest the potential for reduced  savings that are likely to be realized in the short term during the  implementation period, which could further reduce net annual recurring  savings realized in the long term. The short-term impact is that these  reduced savings could adversely affect DOD’s plans for using these BRAC  savings to help offset the up-front investment costs required to implement  the recommendations and could further limit the amount of savings  available for transformation and modernization purposes.
section_title: Savings Based on Business Process Reengineering
paragraphs: DOD projected net annual recurring savings in the “other” category as  shown in figure 6 include about $500 million that is based on business  process reengineering efforts. Our analysis indicates that four  recommendations—one from the Industrial Joint Cross-Service Group and  three from the Supply and Storage Joint Cross-Service Group—involve  primarily business process reengineering efforts. However, the expected  efficiency gains from these recommendations are based on assumptions  that are subject to some uncertainty and have not been validated. For  example, our analysis indicates that $215 million, or 63 percent, of the  estimated annual recurring savings from the Industrial Joint Cross-Service  Group recommendation to create fleet readiness centers within the Navy is  based on business reengineering efforts that would result in overhead  efficiencies. Although the data suggest there is the potential for savings, we  believe the magnitude of the savings is somewhat uncertain because the  estimates are based on assumptions that have undergone only limited  testing. Realizing the full extent of the savings would depend on actual  implementation of the recommended actions and modifications to the  Navy’s supply system. The industrial group and the Navy assumed that  combining depot and intermediate maintenance levels would reduce the  time needed for an item to be repaired at the intermediate level, which in  turn would reduce the number of items needing to be kept in inventory, as  well as the number of items being sent to a depot for repair. These  assumptions, which were the major determinant of the realignment  savings, were reportedly based on historical data and pilot projects and  have not been independently reviewed or verified by the Naval Audit  Service, the DOD Inspector General, or us.
Furthermore, our analysis indicates that $291 million, or about 72 percent,  of the net annual recurring savings expected from the Supply and Storage  Joint Cross-Service Group’s three recommendations are also based on  business process reengineering. In the COBRA model, the savings are  categorized as procurement savings and are based on the expanded use of  performance-based logistics and reductions to duplicate inventory.  Supply and storage group staff said that these savings accrue from reduced  contract prices because the Defense Logistics Agency (DLA) will have  increased buying power since it is responsible for purchasing many more  items that before were purchased by each of the services. In addition,  savings accrue from increased use of performance-based agreements, a  key component of performance-based logistics. The group estimates DLA  can save 2.8 cents on each contract dollar placed on performance-based  agreements. In addition, savings result from reductions in the amount of  stock that must be held in inventory. Supply and storage staff said that  these savings are attributable to reductions in the cost of money, cost of  stock losses due to obsolescence, and cost of storage. Together the group  estimates these factors save about 17 percent of the estimated value of the  acquisition cost of the stock that is no longer required to be held in  inventory. These savings estimates, for the most part, are based on  historical documentation provided by DLA, which time did not allow us to  validate. The extent to which these same savings will be achieved in the  future is uncertain. As noted above, how these actions are implemented  could also affect savings. We are concerned that this is another area that  could lead to a false sense of savings and lead to premature reductions in  affected budgets in advance of actual savings being fully realized, as has  sometimes occurred in past efforts to achieve savings through business  process reengineering efforts. We are also concerned that it could  exacerbate a problem we have previously identified regarding past BRAC  rounds involving the lack of adequate systems in place to track and update  savings resulting from BRAC actions—the focus of our recommendation  for the Secretary of Defense. These concerns are reinforced by limitations  in DOD’s financial management systems that historically have made it  difficult to fully identify the costs of operations and provide a complete  baseline from which to assess savings.
section_title: Transformation Cited as Justification for Many Recommendations Despite Lack of Clear Agreement on Transformational Options
paragraphs: While furthering transformation was one of the BRAC goals, there was no  agreement between DOD and its components on what should be  considered a transformational effort. As part of the BRAC process, the  department developed over 200 transformational options for stationing and  supporting forces as well as for increasing operational efficiency and  effectiveness. The OSD BRAC office narrowed this list to 77 options, but  agreement was not reached within the department on these options, so  none of them were formally approved. Nonetheless, each service and joint  cross-service group was permitted to use the transformational options as  appropriate to support its candidate recommendations. Appendix XV has a  list of these 77 draft options.
Collectively, these draft options did not provide a clear definition of  transformation across the department. The options ranged from those that  seemed to be service specific to those that suggested new ways of doing  business. For example, some transformational options included reducing  the number of Army Reserve regional headquarters; optimizing Air Force  squadrons; and co-locating various functions such as recruiting, military  and civilian personnel training, and research, development and acquisition  and test and evaluation, across the military departments. In contrast, some  options suggested consideration of new ways of doing business, such as  privatizing some functions and establishing a DOD agency to oversee  depot-level reparables.
While the transformational options were never formally approved, our  analysis indicates that many of DOD’s recommendations reference one or  more of the 77 transformational options. For example, 15 of the  headquarters and support activities group recommendations reference the  option to minimize leased space and move organizations in leased space to  DOD-owned space. Likewise, 37 of the Army reserve component  recommendations reference the option to co-locate guard and reserve units  at active bases or consolidate guard and reserve units that are located in  proximity to one another at one location.
Conversely, a number of the scenarios that were initially considered but  not adopted reference transformational options that could have changed  existing business practices. For example, the education and training group  developed a number of scenarios—privatizing graduate education  programs and consolidating undergraduate fixed and rotary wing pilot  training—based on the draft transformational options, but none were  ultimately approved by the department.
section_title: Some Progress Made in Fostering Joint Basing
paragraphs: DOD’s recommendations make some progress toward the goal of fostering  joint activity among the military services, based on a broad definition of  joint activity. We found that for DOD’s recommendations, joint activity  included consolidating some training functions within the same service, co- locating like organizations and functions on the same installation, and  moving some organizations or functions closer to installations in order to  further opportunities for joint training. Although the recommendations  achieve some progress in fostering jointness, we found other instances  where DOD ultimately adopted a service-centric solution even though the  joint cross-service groups proposed a joint scenario. Table 3 shows the  major recommendations that foster joint activity.
While the proposal to create joint bases by consolidating common  installation management functions is projected to create greater  efficiencies, our prior work suggests that implementation of these actions  may prove challenging. The joint-basing recommendation involves one  service being responsible for various installation management support  functions at bases that share a common boundary or are in proximity to  one another. For example, the Army would be the executive agent for Fort  Lewis, Washington, and McChord Air Force Base, Washington, combined as  Joint Base Lewis-McChord. However, as evident from our recent visit to  both installations and discussions with base officials, concerns over  obstacles such as seeking efficiencies at the expense of the mission, could  jeopardize a smooth and successful implementation of the  recommendation.
In some cases, the joint cross-service groups proposed scenarios that  would have merged various support functions among the services, but a  service solution was adopted by DOD. For example, the Headquarters and  Support Activities Joint Cross-Service Group proposed to (1) consolidate  civilian personnel offices under a new defense agency as DOD implements  the national security personnel system, and (2) co-locate all military  personnel centers in San Antonio, Texas, in anticipation of a standard  military personnel system being implemented across the department.  However, in both cases, DOD decided to consolidate military and civilian  personnel centers within each service. Likewise, the Education and  Training Joint Cross-Service Group proposed scenarios to consolidate  undergraduate fixed wing training activities between the Air Force and the  Navy and rotary wing training activities between the Navy and the Army to  eliminate excess capacity. However, the proposals were not adopted  because the Navy and the Air Force expressed concerns that this  recommendation would result in significant permanent change of station  costs for the services, specifically the cost of students traveling to  designated training locations.
section_title: DOD Developed a Generally Logical and Reasoned Process for Making BRAC Decisions
paragraphs: Based on our analytical work, we believe DOD established and generally  followed a logical and reasoned process for formulating its list of BRAC  recommendations. The process was organized in a largely sequential  manner with a strong emphasis on ensuring that accurate data were  obtained and used. OSD established an oversight structure that allowed the  seven individual joint cross-service groups to play a larger, more visible  role in the 2005 BRAC process compared to BRAC 1995. Despite some  overlap in data collection and other phases of the process, these groups  and the military services generally followed the sequential BRAC process  designed to evaluate and subsequently identify recommendations within  their respective areas, with only the Army using a separate but parallel  process to evaluate its reserve components. DOD also incorporated into its  analytical process several key considerations required by the BRAC  legislation, including the use of certified data, basing its analysis on its 20- year force structure plan and emphasizing its military value selection  criteria, which included homeland defense and surge capabilities. In  addition, DOD’s Inspector General and the military service audit agencies  helped to ensure the data used during the BRAC process were accurate and  reliable.
subsections: section_title: BRAC Process Was Logical and Largely Sequentially Structured
paragraphs: DOD provided overall policy guidance for the BRAC process, including a  requirement that its components develop and implement internal control  plans to ensure the accuracy and consistency of their data collection and  analyses. These plans also helped to ensure the overall integrity of the  process and the information upon which OSD considered each group’s  recommendations. The BRAC recommendations, for the most part,  resulted from a data-intensive process that was supplemented by the use of  military judgment as needed. The process began with a set of sequential  steps by assessing capacity and military value, developing and analyzing  scenarios, then identifying candidate recommendations, which led to OSD’s  final list of BRAC recommendations. Figure 7 illustrates the overall  sequential analytical process DOD generally employed to reach BRAC  recommendations.
It must be noted, however, that while the process largely followed the  sequential process established by the department, initial difficulties  associated with obtaining complete and accurate data in a timely manner  added to overlap and varying degrees of concurrency between data  collection efforts and other steps in the process.
During the 2005 BRAC process, the seven individual joint cross-service  groups played a larger, more visible role compared to their role during the  1995 BRAC round. Our analysis indicates that many, although not all,  actions proposed by these groups were accepted by OSD and the military  services. Based on lessons learned, OSD empowered these groups in 2005  to suggest BRAC recommendations directly to a senior-level group that  oversaw the BRAC 2005 analysis. Moreover, we noted a closer coordination  between these groups, the military services, and OSD than existed during  the 1995 round. OSD’s efforts to integrate the process among these seven  joint cross-service groups with the military services’ own efforts led to  increased discussions, greater visibility, and more influence for the cross- service recommendations than in prior BRAC rounds.
To assist in the process for analyzing and developing recommendations, the  military services and joint cross-service groups used various analytical  tools. These tools helped to ensure a more consistent approach to BRAC  analysis and decision making. For example, all of the groups used the DOD- approved COBRA model to calculate costs, savings, and return on  investment for BRAC scenarios and, ultimately for the final 222 BRAC  recommendations. As noted in appendix XIII, the COBRA model was  designed to provide consistency across the military services and the joint  cross-service groups in estimating BRAC costs and savings. DOD has used  the COBRA model in each of the previous BRAC rounds and, over time, has  improved upon its design to provide better estimating capability. In our  past and current reviews of the COBRA model, we found it to be a generally  reasonable estimator for comparing potential costs and savings among  various BRAC options.
Furthermore, the military services and joint cross-service groups generally  used a consistent process to assess and formulate BRAC  recommendations, with one minor exception involving the Army reserve  components. The Army created a separate yet parallel approach in  reviewing its reserve components for several reasons, although it generally  followed the BRAC process. With respect to its reserve components, the  Army did not perform a military value rank-ordering of these various  installations across the country, but instead assessed the relative military  value that could be obtained by consolidating various facilities into a joint  facility in specific geographical locales to support, among other things,  reserve component training, recruiting, and retention efforts. This  approach provided an opportunity for the Army reserve components to  actively participate in the BRAC process along with the voluntary  participation of the states. The Army reported that consulting with the  states was crucial to ensure the support of the state governors and staff  Adjutants General for issues related to recommendations that affected the  National Guard. The Army’s recommendations affected almost 10 percent  of the Army’s 4,000 reserve components’ facilities. More specifically, the  Army recommended 176 Army Reserve closures with the understanding  that the state governors will close 211 Army National Guard facilities with  the intent of relocating their units into 125 new Armed Forces Reserve  Centers. The Army reports that 38 states and Puerto Rico voluntarily  participated in the BRAC process.
The Air Force and the Navy also reviewed their reserve components’  installations but did so within the common analytical structure established  by OSD, yet with some differences in approach in involving affected  stakeholders in the process. For example, the Air Force did not involve  state officials or its State Adjutants General as it analyzed and developed its  BRAC recommendations. However, senior Air National Guard and Reserve  leadership were in attendance as voting members of the Air Force’s Base  Closure Executive Group, a senior deliberative body for the BRAC process.  The Navy also reviewed its reserve components, including the Marine  Corps Reserves, within the BRAC process, and worked closely with  representatives from the Navy and Marine Corps reserve components to  consolidate units within active duty installations or armed forces reserve  centers without affecting recruiting demographics.
section_title: BRAC Process Incorporated Key Legislative Requirements
paragraphs: DOD also incorporated into its analytical process the legal considerations  for formulating its realignment and closure recommendations. As required  by BRAC legislation, DOD based its recommendations on (1) the use of  certified data, (2) its 20-year force structure plan, and (3) military value  criteria as the primary consideration in assessing and formulating its  recommendations.
subsections: section_title: Use of Certified Data
paragraphs: DOD collected capacity and military value data that were certified as to  their accuracy by hundreds of persons in senior leadership positions across  the country. These certified data were obtained from corporate databases  and from hundreds of defense installations. DOD continued to collect  certified data, as needed, to support follow-up questions, cost calculations,  and to develop recommendations. In total, DOD projects that it collected  over 25 million pieces of data as part of the BRAC process. Given the  extensive volume of requested data from the 10 separate groups (3 military  departments and 7 joint cross-service groups), we noted that the data  collection process was quite lengthy and required significant efforts to help  ensure data accuracy, particularly from joint cross-service groups that were  attempting to obtain common data across multiple military components,  which, because of the diverse nature of the functions and activities, do not  always use the same data metrics. In some cases, coordinating data  requests, clarifying questions and answers, controlling database entries,  and other issues led to delays in the data-driven analysis DOD originally  envisioned. As such, some groups had to develop strategy-based proposals.  As time progressed, however, these groups reported that they obtained the  needed data, for the most part, to inform and support their scenarios. The  DOD Inspector General and the service’s audit agencies played an  important role in ensuring that the data used in the BRAC analyses were  accurate and certified by cognizant senior officials.
section_title: Consideration of DOD’s 20-year Force Structure Plan
paragraphs: As congressionally mandated, each of the military services and the seven  joint cross-service groups considered DOD’s 20-year force structure plan in  its analyses. DOD based its force structure plan for BRAC purposes on an  assessment of probable threats to national security during a 20-year period  beginning with fiscal year 2005. DOD provided this plan to Congress in  March 2004, and as authorized by the statute, it subsequently updated it 1  year later in March 2005. Based on our analysis, updates to the force  structure affected some ongoing BRAC analyses. For example, the  Industrial Joint Cross-Service Group reassessed its data pertaining to  overhauling and repairing ships based on the updated force structure  outlook and decided that one of its two smaller shipyards—Naval Shipyard  Pearl Harbor or Naval Shipyard Portsmouth—could close. Ultimately, the  Navy decided to close the Portsmouth shipyard in Maine. In addition, the  Navy told us it recalculated its capacity based on updates to the force  structure plan and determined that there was no significant change to its  orginial analysis. The other groups, such as those examining headquarters  and support activities, education and training, or technical functions,  considered updates to the defense 20-year force structure and determined  the changes would have no impact on their ongoing analyses or the  development of recommendations.
section_title: Primary Consideration of Military Value Criteria, Which Included Homeland Defense and Surge
paragraphs: DOD gave primary consideration to its military value selection criteria in its  process. Specifically, military value refers to the first four selection criteria  in figure 2 and includes an installation’s current and future mission  capabilities, condition, ability to accommodate future needs, and cost of  operations. The manner in which each military service or joint cross- service group approached its analysis of military value varied according to  the unique aspects of the individual service or cross-service function.  These groups typically assessed military value by identifying multiple  attributes or characteristics related to each military value criterion, then  identifying qualitative metrics and measures and associated questions to  collect data to support the overall military value analysis. For example,  figure 8 illustrates how the Technical Joint Cross-Service Group linked  several of its military value attributes, metrics, and data questions to the  mandated military value criteria.
Quantitative scoring plans were developed by each military service or joint  cross-service group assigning relative weights to each of the military value  criteria for use in evaluating and ranking facilities or functions in their  respective areas. Appendixes III through XII highlight the use and linkages  of military value criteria by each service and joint cross-service group.
As noted earlier, based on congressional direction, there was enhanced  emphasis on two aspects of military value—an installation’s ability to serve  as a staging area for homeland defense missions and its ability to meet  unanticipated surge.
Homeland defense: Each of the three military services considered  homeland defense roles in its BRAC analysis and coordinated with the  U.S. Northern Command—a unified command responsible for homeland  defense and civil support. In October 2004, the U.S. Northern Command  contacted the Chairman of the Joint Chiefs of Staff, requesting to play a  role in ensuring that homeland defense received appropriate attention in  the analytical process. Our analysis shows that all three military  departments factored in homeland defense needs, with the Air Force  recommendations having the most impact. According to Air Force  officials, the U.S. Northern Command identified specific homeland  defense missions assigned to the Air Force, which they incorporated  into its decision-making process. Navy officials likewise discussed the  impact of potential BRAC scenarios on its maritime homeland defense  mission with U.S. Northern Command, U.S. Strategic Command, and the  U.S. Coast Guard. In this regard, the Navy decided to retain Naval Air  Station Point Mugu, California, was influenced, in part, because the U.S.  Coast Guard wanted to consolidate its West Coast aviation assets at this  installation for homeland defense purposes. According to Army  officials, most of the their role in supporting homeland defense is  carried out by the Army National Guard. The U.S. Northern Command  reviewed the recommendations and found no unacceptable risk to the  homeland defense mission and support to civil authorities.
Surge: DOD left it to each military service and joint cross-service group  to determine how surge would be considered in the their analysis.  Generally, all the groups considered surge by retaining a certain  percentage of infrastructure, making more frequent use of existing  infrastructure, or retaining difficult-to-reconstitute assets. For example,  the Technical Joint Cross-Service Group set aside 10 percent of its  facility infrastructure for surge, while the Industrial Joint Cross-Service  Group factored in additional work shifts in its analysis. The military  services retained difficult-to-reconstitute assets as the primary driver to  satisfying the statutory requirement to consider surge capability. Both  the Army and Navy gave strong consideration to infrastructure that  would be difficult to reconstitute, such as large tracts of land for  maneuver training purposes or berthing space for docking ships. For  example, the Navy has a finite number of ships and aircraft and would  likely have to increase operating tempo to meet surge needs. The Air  Force addressed surge by retaining sufficient capacity to absorb  temporary increases in operations, such as responding to emergencies  or natural catastrophic events like hurricane damage, and the capacity  to permanently relocate all of its aircraft stationed overseas in the  United States if needed.
Congress also mandated four other criteria to be considered in the  analytical process: cost and savings of the BRAC recommendations,  economic impact on affected communities, impact on communities’  infrastructure, and environmental impact. The extent these other mandated  considerations influenced recommendations varied. For example, high cost  was the primary reason the Army decided not to develop a  recommendation to restation troops returning from overseas to  installations with large tracts of undeveloped land that could potentially  accommodate these moves, such as Yuma Proving Ground, Arizona, or  Dugway Proving Ground, Utah. Despite these installations having the  capacity to provide large training ranges, they do not have existing  infrastructure to immediately house 3,000 to 5,000 troops required for the  Army’s new modular combat brigades. Initially, the Army assessed the  possibility of building new infrastructure at these locations, but Army  BRAC officials told us it would be too costly given that the Army’s COBRA  analysis showed that at Yuma, for example, it would cost about $2 billion to  build the required infrastructure. As a result, the Army decided to place  units returning from overseas at installations currently used to base other  operational units, notwithstanding limitations in existing training  capacities.
Although there was heavy reliance on data for completing analyses,  military judgment was also a factor throughout the entire process, starting  with an analytical framework to base analysis of the 20-year force structure  plan and ending with the finalized list of 222 recommendations submitted  to the BRAC Commission. Military judgment also played a role in decisions  on how military value selection criteria would be captured as attributes,  with associated values or weights. Military judgment was also applied in  deciding which proposed scenarios or actions should move forward for  additional analysis. Generally, military judgment was exercised at this stage  to delete or modify a potential recommendation for reasons such as  strategic importance, as shown in the following examples:  Naval Shipyard Pearl Harbor, Hawaii, which has a lower military value  than other shipyards, was eliminated from closure consideration  because the shipyard was considered to have more strategic  significance in the Pacific Ocean area compared to other alternatives.
Tripler Army Medical Center, Hawaii, which has a lower military value  than some other bases, was eliminated from closure consideration  because it is the only defense medical center of significant size in the  Pacific Ocean area.
Naval Station Everett, Washington, which has a lower military value  than some other bases, was eliminated from closure consideration  because of strategic reasons regarding the number and the locations of  the Navy’s aircraft carriers on the West Coast and in the Pacific.
Grand Forks Air Force Base, North Dakota, which has a lower military  value than some other bases, was eliminated from closure consideration  because of the belief that a strategic presence was needed in the north  central United States. Even though Grand Forks Air Force Base was  retained for strategic reasons, Minot Air Force Base is also located in  North Dakota and is not affected by any BRAC recommendations.
section_title: DOD Audit Agencies Helped to Improve the Accuracy of Data Used during the BRAC Process
paragraphs: The oversight roles of the DOD Inspector General and the military services’  audit agency staff, given their access to relevant information and officials  as the process evolved, helped to improve the accuracy of the data used in  the BRAC process. The DOD Inspector General and most of the individual  service audit agencies’ reports generally concluded that the extensive  amount of data used as the basis for BRAC decisions was sufficiently valid  and accurate for the purposes intended. In addition, with limited  exceptions, these reports did not identify any material issues that would  impede a BRAC recommendation.
The DOD Inspector General and the services’ audit agencies played an  important role in ensuring that the data used in the BRAC analyses were  accurate and certified by cognizant senior officials. Their frontline roles  and the thousands of staff days devoted to reviewing the massive data  collection efforts associated with the BRAC process added an important  aspect to the quality and integrity of the data used by military services and  joint cross-service groups. Through extensive audits of the capacity,  military value, and scenario data collected from field activities, these audit  agencies notified various BRAC teams of data discrepancies for corrective  action. The audit activities included validation of data, compliance with  data certification requirements employed throughout the chain of  command, and examination of the accuracy of the analytical data. While  the auditors initially encountered problems with regard to data accuracy  and the lack of supporting documentation for certain questions and data  elements, most of these concerns were resolved. In addition, the auditors  worked to ensure certified information was used for BRAC analysis. These  audit agencies also reviewed other facets of the process, including the  various internal control plans, the COBRA model, and other modeling and  analytical tools that were used in the development of recommendations.  Appendix XVI lists these organizations’ audit reports related to BRAC 2005  to the extent they were available at the time this report was completed.  Overall, these organizational audit agencies reported the following:  The Naval Audit Service reported that it visited 214 sites, covering 45  data calls, and audited over 8,300 questions. It concluded that the data  appeared reasonably accurate and complete and the Navy complied  with statutory guidance and DOD policies and procedures.
The Air Force Audit Agency officials told us they visited 104  installations, reviewed over 11,110 data call responses at 126 Air Force  locations, 8 major commands, the Air National Guard, and Headquarters  Air Force, and concluded that data used for Air Force BRAC analysis  were generally reliable.
The Army Audit Agency reported that it visited 32 installations and 3  leased facilities and reviewed for accuracy over 2,342 responses. It  concluded that the data was reasonably accurate and that the Army  BRAC office had a sound process in place to collect certified data.
DOD Inspector General officials told us they visited about 1,550 sites  covering 29 defense agencies and organizations and reviewed over  15,770 responses. We were told that these responses were generally  supported, complete, and reasonable. The DOD Inspector General also  evaluated the validity, integrity, and documentation of data used by the  seven joint cross-service groups and found they generally used certified  data for the BRAC analysis.
We closely coordinated with the DOD Inspector General and the three  service audit agencies to maximize our individual and collective efforts and  avoid duplication. As part of this coordination, we observed their audit  efforts at selected military installations to verify the scope and quality of  coverage they provided throughout the process and to give us insights into  potential issues having broader applicability across the entire process. We  also observed the work of these audit agencies to better familiarize  ourselves with the types of issues being identified and resolved, with a view  toward determining their materiality to the overall process.
section_title: Several Aspects of DOD’s BRAC Recommendations and Rejected Proposals May Warrant Further Attention
paragraphs: We identified issues regarding DOD’s recommendations, and other actions  considered during the selection process that may warrant further attention  by the BRAC Commission. Many of the issues relate to how costs and  savings were estimated while others relate to potential impacts on  communities surrounding bases that stand to gain or lose missions and  personnel as a result of BRAC actions. Further, we are highlighting  candidate recommendations that were presented during the selection  process by either the military services or the joint cross-service groups to  senior DOD leadership within the IEC that were projected as having the  potential to generate significant savings, and which were substantially  revised or deleted from further consideration during the last few weeks or  days of the selection process. Additional discussion of issues targeted more  specifically to the work and recommendations of the military services and  joint cross-service groups is included in appendixes III through XII.
subsections: section_title: Issues with DOD’s BRAC Recommendations
paragraphs: We identified a number of issues, most of which apply to a broad range of  DOD’s recommendations, that may warrant further attention by the BRAC  Commission. In addition to the issue previously discussed regarding  military personnel eliminations being claimed as savings to the department,  other issues include (1) instances of lengthy payback periods (time  required to recoup up-front investment costs), (2) inconsistencies in how  DOD estimated costs for BRAC actions involving military construction  projects, (3) uncertainties in estimating the total costs to the government to  implement DOD’s recommended actions, and (4) potential impacts on  communities surrounding bases that are expected to gain large numbers of  personnel if DOD’s recommendations are implemented.
subsections: section_title: Some Lengthy Payback Periods
paragraphs: Many of the 222 recommendations DOD made in the 2005 round are  associated with lengthy payback periods, which, in some cases, call into  question whether the department would be gaining sufficient monetary  value for the up-front investment cost required to implement its  recommendations and the time required to recover this investment. Our  analysis indicates that 143, or 64 percent, of DOD’s recommendations are  associated with payback periods that are 6 years or less while 79, or 36  percent, of the recommendations are associated with lengthier paybacks  that exceed the 6-year mark or never produce savings. DOD officials  acknowledge that the additional objectives of fostering jointness and  transformation have had some effect on generating recommendations with  longer payback periods. Furthermore, our analysis shows that the number  of recommendations with lengthy payback periods varied across the  military services and the joint cross-service groups, as shown in table 4.
As shown in table 4, the Army has five recommendations and the education  and training group has one recommendation that never payback, as  described below:  Army realignment of a special forces unit from Fort Bragg, North  Carolina, to Eglin Air Force Base, Florida;  Army realignment of a heavy brigade from Fort Hood, Texas, to Fort   Army realignment of a heavy brigade to Fort Bliss, Texas, and infantry  and aviation units to Fort Riley, Kansas;  Army reserve component consolidations in Minnesota;  Army reserve component consolidations in North Dakota; and   Education and Training Joint Cross-Service Group’s establishment of  Joint Strike Fighter aircraft training at Eglin Air Force Base, Florida.
According to Army officials, their five recommendations have no payback  because, in part, they must build additional facilities to accommodate the  return of about 47,000 forces currently stationed overseas to the United  States as part of DOD’s Integrated Global Presence and Basing Strategy  initiative (see app. III for further discussion of the restationing initiative).  According to the education and training group, its one recommendation  with no payback period is due to the high military construction costs  associated with the new mission to consolidate initial training for the Joint  Strike Fighter aircraft for the Navy, the Marine Corps and the Air Force.
Similarly, the Army has nearly 50 percent of the total number of DOD  recommendations with payback periods of 10 years or longer. Our analysis  of Army data shows that these lengthy paybacks are attributable to many of  the recommendations regarding the reserve components. These  recommendations typically have a combination of relatively high military  construction costs and relatively low annual recurring savings, which tend  to lengthen the payback period.
We also identified some portions of DOD’s individual recommendations  that are associated with lengthy payback periods for certain BRAC actions  but are imbedded within larger bundled recommendations. The following  are a few examples:  A proposal initially developed by the Headquarters and Support  Activities Joint Cross-Service Group to move the Army Materiel  Command from Fort Belvoir, Virginia, to Redstone Arsenal, Alabama,  had more than a 100-year payback period with a net cost over a 20-year  period. However, the proposal did not include some expected savings  that, if included, would have reduced the payback period to 32 years.  Concurrently, the group developed a separate proposal to relocate  various Army offices from leased and government-owned office space  onto Fort Sam Houston, Texas, which would have resulted in a 3-year  payback period. The headquarters group decided to combine these two  stand-alone proposals into one recommendation, resulting in an  expected 20-year net present value savings of about $123 million with a  10-year payback.
Many of the individual Air Force proposals involving the Air National  Guard and Air Force Reserve had payback periods ranging from 10 to  more than 100 years. These individual proposals were subsequently  revised by combining them with other related proposals to produce  recommendations that had significant savings, minimized the longer  payback periods, and linked operational realignment actions. We found  that this change occurred in the realignment of Lambert-St. Louis  International Airport Air Guard Station, Missouri, which originally had a  63-year payback period and resulted in a 20-year net present value cost  of about $22 million. However, this realignment is now a part of the  closure of Otis Air National Guard Base, Massachusetts, and the  realignment of Atlantic City Air Guard Station, New Jersey. The  combined recommendation results in a 20-year net present value  savings of $336 million and a 3-year payback period.
section_title: Inconsistencies in DOD’s Estimated Costs for Military Construction Projects
paragraphs: While the military services used the COBRA model to estimate the costs for  military construction projects needed to implement BRAC  recommendations, we found some inconsistencies in how they estimated  some costs associated with these projects. While the impact of these  inconsistencies on savings is likely not as great as others noted in this  report, it nevertheless contributes to the overall imprecision of the cost  estimates of DOD’s recommended actions.
One area of inconsistent accounting involves the relative amounts of  estimated support costs—such as the cost of connecting a new facility to  existing water, sewage, and electrical systems—associated with military  construction projects across the services. In its estimates, the Army  considered these additional support costs as one-time costs whereas the  Navy and the Air Force included them in the cost of the military  construction projects for each project. By including these support costs in  the cost of each project, the Navy and Air Force generally generated higher  relative recurring costs than the Army for the recapitalization of facilities  over time. Specifically, the Army increased its military construction cost  estimates by 18.5 percent to account for the connection of the projected  new facilities’ utilities. The Air Force, on the other hand, increased its  construction costs for support services from 8 to 40 percent, depending on  the type of facility, while the Navy included support costs at only two  locations. According to the Special Assistant to the Secretary of the Navy  for BRAC, the Navy assigned teams to review all proposed military  construction projects by location to determine any support costs necessary  for connection of utilities. Our analysis shows that had the Army used the  same methodology as the Navy and the Air Force, the Army would incur  about $66 million in additional recapitalization costs for all of its proposed  military construction projects.
The services were also inconsistent in considering the costs associated  with meeting DOD’s antiterrorism force protection standards in their  estimated costs for military construction projects. The Air Force  increased the expected costs of its military construction projects by 2.3  percent, or about $18 million, to meet DOD’s standards. Air Force officials  noted that these funds would provide enhancements such as security  barriers and blast proof windows. The Army and the Navy, on the other  hand, did not include additional costs to meet the department’s standards  in their proposed military construction projects. If the Army and the Navy  estimated costs similarly to the Air Force, the cost of their proposed  military construction projects would have increased by about $146 million  and $25 million, respectively.
section_title: Uncertainties in Accounting for All Expected Costs or Savings to the Federal Government
paragraphs: DOD’s cost and savings estimates for implementing its recommendations  do not fully reflect all expected costs or savings that may accrue to the  federal government. The BRAC legislation requires that DOD take into  account the effect of proposed closure or realignment on the costs of any  other activity of the department or any other federal agency that may be  required to assume responsibility for activities at military installations.  While the services and joint cross-service groups were aware of the  potential for these costs, estimated costs were not included in the cost and  savings analysis because it was unclear what actions an agency might take  in response to the BRAC action. One such agency was the U.S. Coast  Guard, which currently maintains some of its ships or various units at  several installations that are slated to close. Navy BRAC officials briefed  the U.S. Coast Guard about its recommendations prior to the list being  published, but the Air Force did not meet with the Coast Guard. The U.S.  Coast Guard was still in the process of evaluating various responses to take  as a result of the proposed BRAC actions and did not complete its analysis  in time for it to be included in this report.
Further, as noted earlier, estimated costs for the environmental restoration  of bases undergoing closure or realignment are not included in DOD’s cost  and savings analyses. Such costs would be difficult to fully project at this  point without planned reuse of the unneeded property being known.  Consistent with the prior BRAC rounds, DOD excluded estimates for base  environment restoration actions from its costs and savings analysis and in  determining payback periods, on the premise that restoration is a liability  that the department must address regardless of whether a base is kept open  or closed and therefore should not be included in the COBRA analysis.  Nevertheless, DOD did give consideration to such costs in addressing  selection criterion 8, and included available information on estimated  restoration costs as part of the data supporting its BRAC  recommendations. DOD estimates that the restoration costs to implement  its major closures would be about $949 million, as shown in table 5. (See  fig. 4 in the Background section for a map of DOD’s major base closures.)
Based on the data provided, the Army would incur the largest share of  estimated restoration costs due to the closure of several ammunition plants  and chemical depots. The largest expected costs for any one location  across DOD, about $383 million, would be for restoration at Hawthorne  Army Depot, Nevada. While the DOD report does not specifically identify  the potential for some additional restoration costs at its installations,  available supporting documentation does identify some additional costs.  For example, the Army estimated the range restoration at Hawthorne Army  Depot could cost from about $27 million to $147 million, which is not  included in the estimates in table 5. Further, the Army recognizes that  additional restoration costs could be incurred at six additional locations  that have ranges and chemical munitions, but these costs have not yet been  determined.
Our prior work has shown that environmental costs can be significant, as  evidenced by the nearly $12 billion in total cost DOD expected to incur  when all restoration actions associated with the prior BRAC rounds are  completed. Service officials told us that the projected cost estimates for  environmental restoration are lower, in general, because the environmental  condition of today’s bases is much better than the condition of bases closed  during the prior BRAC rounds, primarily because of DOD’s ongoing active  base environmental restoration program. Nonetheless, our prior work has  indicated that as closures are implemented, more intensive environmental  investigations occur and additional hazardous conditions may be  uncovered that could result in additional, unanticipated restoration and  higher costs. Finally, the services’ preliminary estimates are based on  restoration standards that are applicable for the current use of the base  property. Because reuse plans developed by communities receiving former  base property sometimes reflect different uses for the property this could  lead to more stringent and thus more expensive restoration in many cases.
Based on experiences from prior BRAC rounds, we believe other costs are  also likely to be incurred, although not required to be included in DOD’s  cost and savings analysis but which could add to the total costs to the  government of implementing the BRAC round. These costs include  transition assistance, planning grants, and other assistance made available  to affected communities by DOD and other agencies. DOD officials told us  that such estimates were not included in the prior rounds’ analyses and that  it was too difficult to project these costs, given the unknown factors  associated with the number of communities affected and the costs that  would be required to assist them. Additionally, as we reported in January  2005, in the prior four BRAC rounds, DOD’s Office of Economic  Adjustment, the Department of Labor, the Economic Development  Administration within the Department of Commerce, and the Federal  Aviation Administration provided nearly $2 billion in assistance through  fiscal year 2004 to communities and individuals, and according to DOD  officials, these agencies are slated to perform similar roles for the 2005  round. However, while the magnitude of this assistance is unknown at this  time, it is important to note that assistance will likely be needed in this  round, as contrasted with prior rounds, for not only those communities that  surround bases losing missions and personnel but also for communities  that face considerable challenges dealing with large influxes of personnel  and military missions. For example, DOD stated in its 2005 BRAC report  that over 100 actions significantly affect local communities, triggering  federal assistance from DOD and other federal agencies. Also, as discussed  more fully later, the number of bases in the 2005 BRAC round that will gain  several thousand personnel from the recommended actions could increase  pressure for federal assistance to mitigate the impact on community  infrastructure, such as schools and roads, with the potential for more costs  than in the prior rounds.
Finally, the BRAC costs and savings estimates do not include any  anticipated revenue from such actions as the sale of unneeded former base  property or the transfer of property to communities through economic development conveyances. The potential for significant revenue may exist  at certain locations. For example, the Navy sold some unneeded property  from prior round actions in California at the former El Toro Marine Corps  Air Station for about $650 million and the former Tustin Marine Corps Air  Station for $208.5 million. The extent to which sales will play a role in the  disposal of unneeded property arising from the 2005 BRAC round remains  to be seen.
section_title: Impact of BRAC Recommended Actions on Communities
paragraphs: The recommended actions for the 2005 BRAC round will have varying  degrees of impact on communities surrounding bases undergoing a closure  or realignment. While some will face economic recovery challenges as a  result of a closure and associated losses of base personnel, others, which  expect large influxes of personnel due to increased base activity, face a  different set of challenges involving community infrastructure necessary to  accommodate growth.
In examining the economic impact of the 222 BRAC recommendations as  measured by the percentage of employment, DOD data indicate that most  economic areas across the country are expected to be affected very little  but a few could face substantial impact. Almost 83 percent of the 244  economic areas affected by BRAC recommendations fall between a  1 percent loss in employment and a 1 percent gain in employment. Slightly  more than 9 percent of the economic areas had a negative economic impact  of greater than 1 percent, but for some of these areas, the projected impact  is fairly significant, ranging up to a potential direct and indirect loss of up  to nearly 21 percent. Almost 8 percent of the economic areas had a positive  economic impact greater than 1 percent. Appendix XIV provides additional  detail on our economic analyses.
Of those communities facing potential negative economic impact, six  communities face the potential for a fairly significant impact. They include  communities surrounding Cannon Air Force Base, New Mexico;  Hawthorne Army Depot, Nevada; Naval Support Activity Crane, Indiana;  Submarine Base New London, Connecticut; Eielson Air Force Base, Alaska;  and Ellsworth Air Force Base, South Dakota, where the negative impact on  employment as a percent of area employment ranges from 8.5 percent to  20.5 percent. Our prior work has shown that a variety of factors will affect  how quickly communities are able to rebound from the negative economic  consequences of closures and realignments. They include such factors as  the trends associated with the national, regional, and local economies;  natural and labor resources; effective planning for reuse of base property;  and federal, state, and local government assistance to facilitate transition  planning and execution. In a series of reports that have assessed the  progress in implementing closures and realignments in prior BRAC rounds,  we reported that most communities surrounding closed bases have been  faring well in relation to key national economic indicators—unemployment  rate and the average annual real per capita income growth rates. In our  January 2005 report for example, we further reported that while some  communities surrounding closed bases were faring better than others,  most have recovered or are continuing to recover from the impact of  BRAC, with more mixed results recently, allowing for some negative  impact from the economic downturn nationwide in recent years.
The 2005 round, however, also has the potential to significantly affect a  number of communities surrounding installations, which are expected to  experience considerable growth in the numbers of military, civilian, and  civilian support personnel. These personnel increases are likely to place  additional demands on community services, such as providing adequate  housing and schools, for which the communities may not have adequate  resources to address in the short term. The total gains can be much more  than just those personnel with the consideration of accompanying families.  Table 6 shows that 20 installations are expected to realize gains of over  2,000 military, civilian, and mission support contractor personnel for an  aggregate increase of more than 106,000 personnel.
As shown in table 6, most of the gaining installations are Army installations  with the gains attributable to a number of actions, including the return of  large numbers of personnel from overseas locations under DOD’s  integrated global presence and basing strategy and the consolidation of  various activities, such as combat-support related activities at Fort Lee,  Virgina. Fort Belvoir, Virginia, has the largest expected growth, due in large  measure to some consolidation of various activities from lease space in the  Washington, D.C. area.
The challenges facing communities surrounding gaining bases can be many,  including increased housing demand, increased demands for roads and  utilities, and adequate schools. These challenges can be formidable as  communities may be faced with inadequate resources to address concerns  in these areas as follows:   Housing: If history is any indication, while some of the personnel  transferring into a base may live on-base, the majority may not, as the  military services are turning more to housing privatization. Installation  officials at Fort Riley, Kansas, told us about concerns about the nearby  availability of housing (within a 20-mile radius) to support the expected  influx of military and civilian personnel and their families transferring to  the base. For those installations where adequate housing is not available  in the surrounding communities existing housing privatization projects  would need to be revised and expedited to provide for additional units.  Fort Bliss, Texas, officials told us that they expect the need to accelerate  their existing housing privatization efforts, but would require additional  funds to do so. Currently, housing privatization has taken place or is in  the process of taking place at several of these installations and similar  efforts may be needed there as well.
Schools: Effects on bases with the greatest gain in personnel resulting  from BRAC vary between whether dependents attend schools operated  on base by DOD (Fort Benning, Fort Bragg, and Marine Corps Base  Quantico as shown in table 6) or schools operated by local educational  agencies. We recently reported on challenges likely to be faced by both  DOD operated schools and those operated by local educational agencies  in the post BRAC environment at these and other locations. Recently,  in visiting selected bases affected by the BRAC recommendations,  installation officials told us that while local educational authorities  should be able to absorb additional students into their school systems,  they are more concerned about the potential shortage of teachers.  Another concern is that make-shift trailers or temporary modular  facilities might be used. For example, while Kings Bay, Georgia, officials  told us that the local school system should be able to accomodate the  increase of students, it may need to resort to the use of portable  classrooms. All installations that are expected to gain more than 2,000  personnel have local community-administrated school systems with the  exceptions of Fort Benning, Fort Bragg, and Marine Corps Base  Quantico which have DOD-administrated school systems. If additional  capacity is required at these three locations, additional military  constructions funds would likely be needed.
Other infrastructure: Installation officials we spoke to also expressed  some concern for the increased demand for various community  services, such as health care, transportation, and utilities to  accommodate personnel increases. Fort Carson, Colorado, officials told  us that with its expected personnel increases, the local community will  need more TRICARE providers to meet the expected demand. In other  cases, such as at Fort Belvoir, Virgina, discussion has ensued regarding  the need for increased mass transit capability, which may involve  requests for millions of dollars in federal grant assistance.
As previously noted, it is likely that these concerns may increase federal  governmental expenditures that are not included in the BRAC cost and  savings analyses.
section_title: Candidate Recommendations That Were Deleted or Revised during the Final Weeks of the Selection Process
paragraphs: We also identified several candidate recommendations that were presented  by the military services or joint cross-service groups to the IEC—DOD’s  senior BRAC leadership group—that were substantially revised or deleted  from further consideration during the last few weeks of the BRAC section  process. In aggregate, based on projected savings, these actions reduced  the overall potential for estimated net annual recurring savings by nearly  $500 million and estimated 20-year net present value savings by over $4.8  billion, as shown in table 7.
Each of the cases highlighted in the table is described in additional detail  below.
The educational and training group proposed to privatize graduate  education, which enabled the Navy to recommend the closure of the  Naval Postgraduate School, Monterey, California. The proposed closure  supported DOD’s draft transformational option to privatize graduate- level education. Navy officials, however, stated that they believed  professional military education was more important than ever given the  world climate. During the IEC deliberations, Navy officials expressed  concern about the loss of such a unique graduate military education  facility and the effect on international students who participate in the  school’s programs. Further, in the IEC meeting the Navy stated its belief  that all education recommendations should be withdrawn because  education is a core competency of the department and relying on the  private sector to fulfill that requirement is too risky. The IEC agreed and  disapproved the recommendation.
The Medical Joint Cross-Service Group recommended that the  Uniformed Services University of the Health Sciences associated with  the National Naval Medical Center in Bethesda, Maryland, be closed,  citing that educating physicians at the site was more costly than  alternative scholarship programs (about triple the cost) and that the  department could rely on civilian universities to educate military  physicians. We also reported previously that the university is a more  costly way to educate military physicians. The IEC, subsequently  disapproved the recommendation, citing that education is a core  competency for the department, and therefore it was considered too  risky to rely on the private sector to provide this function. Also, a DOD  official indicated that, with the recommended action to realign Walter  Reed Army Medical Center to Bethesda, Maryland, it would be highly  desirable to have a military medical college associated with this medical  facility in order for it to be a world-class medical center.
The Technical Joint Cross-Service Group, through the Army, proposed  that the Natick Soldier Systems Center, Massachusetts, be closed and  technical functions relocated to Aberdeen Proving Ground, Maryland, to  create an integrated command, control, communications, and  computers, intelligence, surveillance, and reconnaissance center. In its  presentation to the IEC, the Army noted that the cost for this  recommendation was high, but it would generate greater efficiencies  and faster transition from research and development through the  acquisition and fielding phases of the technology. Although the ISG  initially raised no concerns and approved the recommendation, the IEC  disapproved it in the last week of the BRAC selection process, citing the  high cost of the recommendation.
The closure of the Adelphi Laboratory Center, Maryland, was originally  part of the recommendation to close Fort Monmouth, New Jersey, and,  along with Natick Soldier Systems Center, was part of the Army’s plan  for an integrated command, control, communications, and computers,  intelligence, surveillance, and reconnaissance center. An Army official  told us that, as with the closure of Natick, no concerns were originally  raised and the recommendation was approved by the ISG, but the IEC  later removed it from the recommendation that includes the closure of  Fort Monmouth because of high cost.
The proposed closure of Carlisle Barracks, Pennsylvania—home of the  Army War College—was initiated by the Education and Training Joint  Cross-Service Group and was aimed at creating synergy between the  college and Army’s Command and General Staff College at Fort  Leavenworth, Kansas. The IEC approved the proposed recommendation  when it was initially briefed, but later rejected it, based on the Army’s  argument that among other things, the Army War College’s proximity to  Washington, D.C., provides access to key national and international  policymakers and senior military and civilian leaders within DOD.
The Education and Training Joint Cross-Service Group recommended  the closure of the Air Force Institute of Technology at Wright-Patterson  Air Force Base, Ohio. The group recommended that graduate-level  education be provided by the private sector and that all other functions  of the institute be relocated to Maxwell Air Force Base, Alabama.  However, the IEC disapproved the recommendation based on the risk  involved in relying on the private sector for education requirements,  given that education is a core competency of the department.
The Industrial Joint Cross-Service Group recommended transferring the  workload of the Marine Corps’ depot maintenance facility in Barstow,  California, which enabled the Department of the Navy to recommend  closure of the Marine Corps Logistics Base. The Marine Corps raised  concerns over the impact that the closure would have on Marine Corps  deployments from the West Coast. The IEC decided to downsize the  base and retain the depot, citing the Marine Corps’ concerns.
While the Navy recommended closure of the Naval Air Station  Brunswick, Maine, the IEC revised this to a realignment. Navy officials  stated that the senior Navy leadership had been reluctant to give up the  Navy’s remaining air station in the Northeast region, but found the  potential savings significant enough to recommend closure. Navy  officials stated that the IEC relied on military judgment to retain access  to an airfield in the Northeast. Nonetheless, all aircraft and associated  personnel, equipment, and support as well as the aviation intermediate  maintenance capability will be relocated to another Navy base. The  Navy is maintaining its cold weather-oriented Survival, Evasion,  Resistance and Escape School, a Navy Reserve Center, and other small  units at the air station.
While the Air Force had proposed to close Grand Forks Air Force Base,  North Dakota, the IEC revised this to a realignment a week before OSD  released its recommendations. The Air Force reported in its submission  to the BRAC Commission that over 80 percent of the base’s personnel  are expected to be eliminated or realigned under the revised proposal.  The revision to keep the base open was made based on military  judgment to keep a strategic presence in the north central United States,  with a possible unmanned aerial vehicle mission for the base. Even  though Grand Forks Air Force Base was retained for strategic reasons,  Minot Air Force Base is also located in North Dakota and is not affected  by any BRAC rcommendation.
The closure of Rome Laboratory, New York, was originally part of a  Technical Joint Cross-Service Group recommendation to consolidate  the Defense Research Laboratories. No concerns were originally raised  about the closure, and it was approved by the IEC. However, the IEC  subsequently decided to realign rather than close the laboratory to  address strategic presence and cost concerns. The realignment of Rome  has a higher 20-year net present value savings than the closure proposal  because the closure would have required more military construction  and transfers of military and civilian personnel and equipment.
section_title: Conclusions
paragraphs: While we believe DOD’s overall recommendations, if approved and  implemented would produce savings, there are clear limitations associated  with the projected savings, such as the lack of military end-strength  reductions and uncertainties associated with other savings estimates.  DOD’s recommendations would provide net reductions in space and plant  replacement value, which would reduce infrastructure costs once up-front  investment costs have been recovered but the extent some projected space  reductions will be realized is unclear. Other DOD savings estimates are  based on what might be broadly termed business process reengineering  efforts and other actions, where savings appear likely, but the magnitude of  savings has not been validated and much will depend on how the  recommended actions are implemented. Nevertheless, the savings could  prove difficult to track over time. As a result, DOD’s projections may create  a false sense of the magnitude of the savings, with fewer resources  available for force modernization and other needs than might be  anticipated, and there may be the potential for premature budget  reductions. Given problems in tracking savings from previous BRAC  rounds, and the large volume of BRAC actions this round that are more  oriented to realignments and business process reengineering than closures,  we believe it is of paramount importance that DOD put in place a process  to track and periodically update its savings estimates.
Despite a fundamentally sound overall process, we identified numerous  issues regarding DOD’s list of recommendations that may warrant further  attention by the BRAC Commission, as noted in this report and appendixes  III through XII. These include those recommendations having lengthy  payback periods, some with limited savings relative to investment costs,  and potential implementation difficulties. Given the large number of such  items for the Commission’s consideration, we are not addressing them as  individual recommendations but simply referring our report in its entirety  for the Commission’s consideration.
section_title: Recommendation for Executive Action
paragraphs: We recommend that the Secretary of Defense take appropriate steps to  establish mechanisms for tracking and periodically updating savings  estimates in implementing individual recommendations, with emphasis  both on savings related to the more traditional relignment and closure  actions as well as those related more to business process reengineering.
section_title: Agency Comments
paragraphs: Cognizant officials of the military services and joint cross-service groups  reviewed drafts of the report providing us with informal comments,  permitting us to make technical changes, as appropriate, to enhance the  accuracy and completeness of the report. Subsequently, we similarly  provided complete drafts of the report to cognizant OSD officials, obtaining  and incorporating their comments as appropriate. In providing oral  comments on a draft of this report, the Deputy Under Secretary of Defense  for Installations and Environment concurred with our recommendation.
We are sending copies of this report to Members of Congress; the  Secretaries of Defense, the Army, the Navy, and the Air Force; the  Commandant of the Marine Corps; the Director, Office of Management and  Budget; and the Chairman, Defense Base Closure and Realignment  Commission. We will also make copies available to others upon request. In  addition, the report will be available at no charge on GAO’s Web site at  http://www.gao.gov.
If you or your staff have any questions about this report, please contact me  on (202) 512-5581 or holmanb@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made major contributions to this report are  listed in appendix XVII.
section_title: Scope and Methodology
paragraphs: Prior to the release of the Department of Defense’s (DOD) base  realignment and closure (BRAC) recommendations on May 13, 2005, we  monitored the BRAC process in a real-time environment beginning in  October 2003. We sought to assure ourselves that DOD followed an  objective and consistently applied process in which we could observe  logical decision making leading to defensible and well-documented  proposed closure and realignment recommendations. During this period,  we abided by an agreement with DOD to not disclose details of the process  due to the sensitivity of the information. Following the release of the  recommendations, we continued our analyses of the process and  recommendations. With the unprecedented large number of  recommendations and the finalization of many of these occurring in the  final weeks of the process, along with the limited time available for us to  report our results following DOD’s May 13, 2005, release of the  recommendations, we were not able to review all recommendations in  detail. We focused more of our attention on cross-cutting issues than on  implementation issues of individual recommendations, but did review  individual recommendations as time permitted. Further, because of time  constraints, we had only limited opportunities to gain further insight into  some of the recommendations from officials at bases affected by the  recommendations.
We performed our work primarily at the Office of the Secretary of Defense  (OSD), the military services’ base closure offices, and the offices of seven  joint cross-service groups that were established by OSD to develop cross- service recommendations. While we did not attend deliberative meetings,  we had access to minutes of meetings and relevant documentation and met  periodically with key staff and senior leadership to gain an understanding  of each phase of the process and to provide them with the opportunity to  address our concerns as the process was unfolding. We also visited  selected bases following the public disclosure of the Secretary’s  recommendations to gain further insights into potential issues regarding  specific recommendations. Those bases included the Anniston Army  Depot, Alabama; Fort Bliss, Texas; Fort Carson, Colorado; Fort Sam  Houston, Texas; Fort Lewis, Washington; Fort Riley, Kansas; Lackland Air  Force Base, Texas; McChord Air Force Base, Washington; Marine Corps Air  Station Cherry Point, North Carolina; Naval Shipyard Portsmouth, Maine;  Naval Submarine Base Kings Bay, Georgia; Naval Submarine Base New  London, Connecticut; and Red River Army Depot, Texas. We also met with  officials of the U.S. Coast Guard to discuss the impact of BRAC actions on  their operations since they are tenants on several bases recommended for  closure or realignment. We relied on DOD’s Office of the Inspector General,  Army Audit Agency, Naval Audit Service, and Air Force Audit Agency to  validate the data used by the military services and joint cross-service  groups in their decision-making processes. We met with staff of these audit  agencies periodically to discuss the results of their work as well as to  observe their data validation efforts at selected locations across the  country. The DOD Inspector General and service audit agencies issued  reports that generally concluded that the extensive amount of data used as  the basis for BRAC decisions was sufficiently valid and accurate for the  purposes intended. In addition, with limited exceptions, these reports did  not identify any material issues that would impede a BRAC  recommendation. Where questions existed, we made further assessments  and were able to satisfy ourselves that issues raised would have limited, if  any, impact on the department’s recommendations. Based on the audit  agencies’ extensive validation efforts and our observation of their work, we  believe the data are sufficiently reliable for the purposes of this report.
To determine the extent to which DOD achieved its BRAC goals, we  interviewed key officials and collected and analyzed relevant  documentation generated by OSD, the military departments, and the joint  cross-service groups. We reviewed the Secretary of Defense’s November  2002 memorandum that initiated the 2005 BRAC process and highlighted  DOD’s goals and obtained DOD officials’ views on the degree to which the  goals were accomplished. With respect to DOD’s goal of reducing excess  capacity, we initially reviewed the capacity analysis reports of the services  and joint cross-service groups to gain insight into the relative amounts of  excess capacity within the department. We subsequently reviewed major  recommendations to determine the extent to which these recommended  actions would reduce infrastructure and excess capacity. In this regard, we  also assessed the changes in the overall defense infrastructure’s plant  replacement value—a measure used by the department to determine the  cost to replace an existing facility with a facility of the same size at the  same location, using today’s standards—by reviewing supporting  documentation for the recommendations. We also analyzed the aggregated  estimated costs and savings associated with reducing DOD’s unnecessary  infrastructure, as depicted in the Cost of Base Realignment Actions  (COBRA) analyses for the 222 recommendations proposed by the  department, and compared these estimates with similar data from the prior  BRAC rounds to determine similarities and differences in sources of costs  and savings and thereby identify potential areas for further review. With  respect to DOD’s costs and savings estimates, we examined selected  supporting documentation to determine the basis for the estimates and  identified key elements, such as base operating support, personnel  compensation, or recapitalization of facilities, those estimates comprised.
We also performed a qualitative analysis of DOD’s performance in  addressing its other BRAC goals—transforming the infrastructure and  fostering jointness—by examining DOD’s proposed recommendations and  seeking views from key officials on the relative success of achieving these  initiatives. We also compared the justification narratives supporting  individual recommendations for closures and realignments against draft  transformation options developed by the department, although not  formally adopted, that were nonetheless used by the individual military  services and joint cross-service groups. Our efforts in addressing this and  other objectives were facilitated by remote access to selected automated  databases and tracking systems, which gave us near real-time access to  relevant briefings and other documents, permitting us to broadly track the  evolution of the BRAC process and identify issues for further  consideration.
To address whether DOD’s selection process for developing  recommendations was logical and reasoned, we focused on key aspects of  the BRAC process, including capacity and military value analyses. In doing  so, we sought to determine whether DOD’s selection process was objective  and in compliance with key considerations of BRAC legislation. Our  monitoring of the process from the start permitted us to assess the extent  to which the process followed was logical, sequential, reasoned, and well  documented. Our monitoring permitted us to determine to what extent a  logical and sequential flow existed among all phases of DOD’s selection  process from the point at which data were collected and analyzed through  the compilation of the final recommendations. We reviewed the services’  determinations of which installations to consider in the BRAC process and  analyzed the services’ and joint cross-service groups’ excess capacity  analyses and military value evaluation plans and analyses to determine if  they were developed in a reasoned fashion and supported by appropriate  documentation. In reviewing military value analyses, we reviewed specific  attributes established by the services and joint cross-service groups and  examined the linkage between the groups’ methodologies and the military  value selection criteria (i.e., criteria 1 through 4) to determine if these  mandated selection criteria were addressed. Regarding the development of  recommendations, our focus was to determine whether the  recommendations were developed in a logical and reasoned manner. We  reviewed, among other things, the extent to which the services and joint  cross-service groups (1) considered various alternative proposals for  closure or realignment, (2) assessed proposed recommendations using  military value as the predominant decision-making factor, and  (3) considered the remaining four selection criteria as mandated by law.
To address issues regarding DOD’s recommendations, we focused more of  our attention on cross-cutting issues than on implementation issues of  individual recommendations, but did review individual recommendations  as time permitted. We reviewed recommendation justification packages  that included particulars on the benefits of implementing the  recommendations from an operational perspective, the estimated costs and  savings associated with implementing the recommendations, and their  degree of conformity to the mandated selection criteria. We discussed  perceived benefits with key officials and reviewed appropriate supporting  documentation. We also examined financial aspects of the recommended  actions, including expected up-front investment costs to implement the  actions, length of payback periods, net present value savings or costs over  a 20-year period, and annual recurring savings or costs. In examining the  expected costs and savings as generated by DOD’s COBRA model, we  further examined assumptions and specific calculations regarding specific  recommendations to determine the relative reasonableness of the  estimates, given the data available to the services and the joint cross- service groups using the COBRA model. Further, we examined and  discussed with DOD officials the economic and community impact for  selected closure and realignment actions, including both adverse impacts  associated with closing bases as well as challenges facing bases and  surrounding communities that stand to receive large influxes of military  personnel, civilian personnel, or both. Additionally, we reviewed potential  recommendations that were approved by either the services or joint cross- service groups but ultimately rejected by senior leadership, the  Infrastructure Executive Council, during the last few weeks of the BRAC  process. We examined the merits of these proposals as presented by the  services or joint cross-service groups in terms of addressing DOD’s BRAC  goals. We further reviewed the rationale offered by senior leadership in its  decisions to reject or substantially revise the offered proposals. Because of  time limitations and complexities introduced by DOD in weaving together  the unprecedented 837 closures and realignment actions across the country  into 222 recommendations, we focused more on evaluating major issues  affecting more than one recommendation than on implementation issues of  individual recommendations. However, as time permitted, we did visit  several selected installations, as noted above, to better gauge the  operational and economic impact of the proposed recommendations.  Installations visited were selected on a judgment basis because of our  desire to have additional information on issues of concern, such as those  related to costs and savings, potential operational implications, and  potential economic impact. They included a number of bases with  industrial-type activities because of concerns in prior rounds about how  well the BRAC process and the COBRA model deal with such issues and  other aspects of those facilities that permitted us to address other issues of  concern.
We conducted our work from October 2003, as DOD’s process was  beginning, through June 2005, shortly after the Secretary of Defense  announced his proposed base closures and realignments, in accordance  with generally accepted government auditing standards.
section_title: Glossary of BRAC-Related Terms
paragraphs: The following terms were used by DOD during the 2005 BRAC process.
Annual recurring savings: Savings that are expected to occur  annually after the costs of implementing a BRAC action have been offset  by savings.
Candidate recommendation: A scenario that a joint cross-service  group or military department has formally analyzed against all eight  selection criteria and which it recommends to the Infrastructure  Steering Group and Infrastructure Executive Council respectively for  approval by the Secretary of Defense. A joint cross-service group  candidate recommendation must be approved by the Infrastructure  Steering Group, the Infrastructure Executive Council, and the Secretary  of Defense before it becomes a DOD recommendation. A military  department candidate recommendation must be approved by the  Infrastructure Executive Council and the Secretary of Defense before it  becomes a DOD recommendation.
Certified data: P.L. 101-510, section 2903 (c)(5) requires specified DOD  personnel to certify to the best of their knowledge and belief that  information provided to the Secretary of Defense or the 2005 Defense  Base Closure and Realignment Commission concerning the realignment  or closure of a military installation is accurate and complete.
Closure: All missions of the installation have ceased or have been  relocated. All personnel positions (military, civilian, and contractor)  have either been eliminated or relocated, except for personnel required  for caretaking, conducting any ongoing environmental restoration, and  disposing of base property.
COBRA: An analytical tool used to calculate the costs, savings, and  return on investment of proposed realignment and closure actions.
Force structure plan: Numbers, size, and composition of the units that  comprise U.S. defense forces, for example, divisions, air wings, aircraft,  tanks, and so forth.
Infrastructure Executive Council (IEC): One of two senior groups  established by the Secretary of Defense to oversee and operate the  BRAC 2005 process. The IEC, chaired by the Deputy Secretary of  Defense, composed of the Secretaries of the military departments and  their chiefs of services, the Chairman of the Joint Chiefs of Staff, and  Under Secretary of Defense (Acquisition, Technology, and Logistics),  was the policy-making and oversight body of the entire BRAC 2005  process.
Infrastructure Steering Group (ISG): The subordinate of two senior  groups established by the Secretary of Defense to oversee the BRAC  2005 process. The ISG, chaired by the Under Secretary of Defense  (Acquisition, Technology, and Logistics), and composed of the Vice  Chairman of the Joint Chiefs of Staff, the Service Vice Chiefs, Deputy  Under Secretary of Defense (Installations and Environment), and the  Military Department Assistant Secretaries of Defense (Installations and  Environment), provided oversight to joint cross-service group analyses  of common business and support functions and ensured the integration  of that process with the military departments’ and defense agencies’  specific analyses of all other functions.
Losing installation: An installation from which missions, units, or  activities would cease or be relocated pursuant to a closure or  realignment recommendation. An installation can be a losing installation  for one recommendation and a receiving installation for a different  recommendation.
Military installation: A base, camp, post, station, yard, center,  homeport facility for any ship, or other activity under the jurisdiction of  the Department of Defense, including any leased facility. The term does  not include any facility used primarily for civil works, river and harbor  projects, flood control, or other projects not under the primary  jurisdiction or control of the Department of Defense.
Military value: Referring to one or more of the first four BRAC  selection criteria, which are collectively referred to as the military value  criteria and are expected to receive priority consideration in the  analytical process that results in recommendations for the closure or  realignment of military installations within the United States.
Net present value: In the context of BRAC, net present value is taking  into account the time value of money in calculating the value of future  cost and savings.
Payback period: The time required for cumulative estimated savings to  exceed the cumulative estimated costs incurred in net present value  terms as a result of implementing BRAC actions.
Realignment: Includes any action that both reduces and relocates  functions and civilian personnel positions, but does not include a  reduction in force resulting from workload adjustments, reduced  personnel or funding levels, or skill imbalances.
Receiving installation: An installation to which missions, units, or  activities would be relocated pursuant to a closure or realignment  recommendation. An installation can be a receiving installation for one  recommendation and a losing installation for a different  recommendation.
Scenario: A proposal that has been declared for formal analysis by a  military department or joint cross-service group deliberative body. The  content of a scenario is the same as the content of a proposal. The only  difference is that it has been declared for analysis by a deliberative body.  Once declared, a scenario was registered at the ISG by inputting it into  the ISG BRAC Scenario Tracking Tool.
Surge: A term incorporated in one of the military value selection  criteria for the 2005 BRAC round: “the ability to accommodate  contingency, mobilization, surge, and future total force requirements.”  The term is not otherwise defined and application of the term can vary  by specific operational or support categories.
Transformation: According to the department’s April 2003  Transformation Planning Guidance document, transformation is “a  process that shapes the changing nature of military competition and  cooperation through new combinations of concepts, capabilities,  people, and organizations that exploit our nation’s advantages and  protect against our asymmetric vulnerabilities to sustain our strategic  position, which helps underpin peace and stability in the world.”
section_title: The Department of the Army Selection Process and Recommendations
paragraphs: The Army generally followed the common analytical framework  established by the Office of the Secretary of Defense (OSD) for reviewing  its active component installations and followed a separate parallel process  for its reserve components installations. Compared to prior rounds, the  Army’s process produced a record number of 56 recommendations, with 44  of them directed to its reserve components and 12 directed to the active  component, recognizing that many of the individual recommendations  contain multiple closure and realignment actions. The 44 reserve  components recommendations involved realignment or closure actions  that could have been approved outside of the BRAC process, but the Army  and DOD decided to include them as part of DOD’s efforts to aid  transformation through the base realignment and closure process. Unlike  the other military services and joint cross-service groups, the Army’s  recommendations, while producing estimated net annual recurring savings  of nearly $500 million after 2011, are not expected to achieve overall net  savings over the 20-year period typically used to measure net savings from  BRAC actions. Over this 20-year period, the Army expects to incur a net  present value cost over $3 billion, which is due primarily to the very large  up-front costs in a few recommendations that are necessary to return  forces to the United States under DOD’s Integrated Global Presence and  Basing Strategy. However, the financial outlook for the Army improves if  joint cross-service recommendations involving Army bases are  considered—these separately reported actions are expected to produce  $10.7 billion in net present value savings over a 20-year period. Payback  periods—the time required for savings to offset closure costs—for the  active component recommendations are projected to average 2.5 years  with a range of immediate to no payback, and average 12.3 years with a  range of immediate to more than 100 years for the reserve components. We  believe some of the Army’s recommendations may warrant additional  attention from the BRAC Commission due to the likelihood of overstated  savings projections associated with military personnel eliminations,  uncertainties regarding overseas restationing of forces to the United States  and other ongoing force structure changes, challenges facing communities  surrounding bases that are gaining large numbers of personnel, the  bundling of various recommendations, various unknowns associated with  implementing the reserve components’ recommendations, and issues  regarding the proposed closure of the Red River Army Depot in Texas. The  Army Audit Agency, which performed audits of the data used in the  process, concluded that the data were sufficiently reliable for use in BRAC.
subsections: section_title: Organization and Focus
paragraphs: The Army established a Senior Review Group, headed by the Vice Chief of  Staff of the Army and the Under Secretary of the Army and comprising  senior Army military and civilian personnel, responsible for assessing  potential recommendations for consideration by the Secretary of the Army,  who in turn was to forward recommended actions to the Infrastructure  Executive Council (IEC) for approval. This group was supported by The  Army Basing Study Group, headed by the Deputy Assistant Secretary of the  Army for Infrastructure Analysis, which was responsible for collecting and  analyzing data and developing recommendations. In addition, subject  matter experts and representatives from the Army’s major commands  provided expertise and input throughout the BRAC process.
The Army’s broadly stated goals for BRAC 2005 were to enhance the  capabilities of a transforming Army while aligning its infrastructure to meet  its post-Cold War force structure and eliminating excess physical capacity  to provide ready combat power to Combatant Commanders. Some key  planning and strategy documents provided guidance in the pursuit of Army  goals. The Army Stationing Strategy, for example, provided an overall  vision, principles, and goals relative to future basing decisions while DOD’s  Strategic Planning Guidance helped to define objectives regarding soldiers’  well-being. In further defining its goals, the Army identified the capabilities  and missions that its installations require to support its forces in the future.  With these needs in mind, the Army set out numerous objectives, such as:  locate Army forces and materiel (at critical installations) to enhance   relocate forces in accordance with the Integrated Global Presence and   reshape installations to support home station mobilization and   reshape reserve components infrastructure to improve efficiency of  mobilization and demobilization; and  provide sufficient area and facilities (with varied terrain, climate, and  airspace) to support institutional training, combat development, and  doctrine development.
section_title: Framework for Analysis
paragraphs: The Army’s BRAC analysis included a review of 87 active component  installations and 10 leased facilities. A separate effort was undertaken to  review over 4,000 Army National Guard and Army Reserve facilities to  explore infrastructure consolidation opportunities that would afford the  reserve components better facilities and enhance, among other things,  training and operations. Army officials indicated that differences in the  objectives and the nature of facilities associated with the active and reserve  components infrastructure made it impractical to use identical review and  decision-making processes. As with previous BRAC rounds, capacity and  military value analyses provided the starting point for the Army’s decision- making process. A key focus in the Army’s efforts was to preserve large  maneuver areas to ensure that future training requirements could be met  and to relocate missions and personnel from small, single-function  installations to larger, multi-function installations. The Army Audit Agency  played an important role in helping to ensure data accuracy through  extensive audits of data gathered at various locations.
The Army’s BRAC process was made more challenging by two ongoing  force structure and basing initiatives—the rebasing of thousands of Army  forces and their families to the United States as a result of the Integrated  Global Presence and Basing Strategy and the restructuring of the Army’s  forces under its modularity program—that were to be integrated into the  BRAC process.
subsections: section_title: Capacity Analysis
paragraphs: The Army initiated its capacity analysis by collecting capacity-related data  for its active duty installations (e.g., buildings, land) based on 28 capacity  metrics, such as buildable acres, maneuver areas, and instructional  facilities. In calculating capacity excesses or shortages through a  comparison of the physical capacity data with requirements, the Army  considered a surge capability to ensure that sufficient capacity existed to  meet unforeseen military contingencies, future threats, and future needs as  outlined in DOD’s 20-year force structure plan. The Army’s surge analysis  also reinforced the importance of preserving assets such as maneuver land  that would be difficult to reconstitute if eliminated. Table 8 shows selected  Army’s capacity results for 7 of 12 mission areas, as presented in the Army’s  BRAC 2005 report.
As shown in table 8, some areas, such as armaments production and  ammunition storage, had excess capacity ranging from about 5 percent to  about 220 percent while other areas had shortages. Further, the Army  reported that it had a service-wide excess of over 1.5 million square feet of  general administrative space even though 35 installations reported  shortages. While the Army’s BRAC report did not indicate the overall  impact the Army’s proposed closure and realignment recommendations  would have on reducing excess capacity, Army officials projected that its  proposed actions would reduce excess general administrative space by  over 1 million square feet while realigning Army units to better match the  remaining capacity.
While the overall capacity excesses and shortages, identified by  installation, provided insights for potential closures or realignments, the  Army subsequently conducted more detailed capacity analyses that  identified the types of facilities and training lands that were required to  support various units (e.g., light and heavy maneuver brigades, small and  large training schools). In this manner, the Army had the ability to  determine which installations could handle additional missions and units  and what infrastructure improvements and additional military construction  might be required to support those units.
The Army did not perform a similar capacity assessment of the reserve  components’ facilities because of the nature of their facilities and differing  objectives, but did collect and assess data related to, for example, the  condition and location of facilities, as well as expected costs such as  construction and force protection upgrades that may be necessary to  provide for viable reserve consolidation opportunities. Prior to the  collection of this data, the Army sought interest from the state Adjutant  Generals of the National Guards for units in each state participating in such  efforts on a voluntary basis.
section_title: Military Value Analysis
paragraphs: The Army’s military value analysis focused on a set of 40 attributes, such as  maneuver land, and housing availability for its soldiers and dependents,  that are characteristics the Army considered desirable for its installations  to meet Army needs. Attributes with less flexibility for change, such as the  availability of maneuver land or direct fire ranges, were among those most  highly valued in developing a scoring plan for evaluating the military value  for each of the Army’s installations. According to Army officials, this  reflected their view of the criticality of possessing adequate acreage to  conduct unit training, particularly in view of the expectation for an  increase in the number of brigades and return of various forces from  overseas locations. The Army’s military value attributes also reflected  consideration of its role in supporting the global war on terrorism,  homeland defense, and transformation. Through a process of weighting  each of the Army’s attributes, the Army derived relative weights for the four  legislatively-mandated military value selection criteria. As shown in  table 9, three of the four criteria had relatively higher weights than the  remaining criterion dealing with cost and manpower implications.  Imbedded within these criteria was a key focus on the need for availability  of existing land and facilities for expansion purposes to address the needs  as cited in those specific criteria. In this regard, the Army placed high value  on these criteria as a hedge against uncertain future requirements and to  ensure that they did not dispose of assets such as large tracts of land,  which would be difficult to reacquire.
In performing its military value assessment, the Army assessed each active  duty installation and ranked each of them across the four military value  selection criteria to more fully evaluate the potential for realignment and  closure actions. This contrasted with the approach the Army used in the  1995 BRAC round when it developed a military value ranking for individual  installations under one of 13 mission categories, which made it more  difficult to assess an installation for use in a different mission area. For this  round, the Army assessed the military value of each of its installations  based on a common framework that linked attributes, metrics, and data  call questions to military value as shown in figure 9.
During its assessment, the Army stressed multi-function capabilities for  installations. To account for the unique capabilities that some Army single- function installations provided, the Army applied military judgment to  modify the initial ranking of its installations to better identify installations  that the Army believed were best suited to meet its current and future  capabilities. For example, the Tripler Army Medical Center in Hawaii,  which initially ranked low in military value, is DOD’s only medical center of  significant size in the Pacific and therefore was retained for strategic  reasons. Ultimately, the Army moved nine installations higher in the list  based on their unique capabilities. Subsequently, those installations with a  lower military value ranking became more vulnerable to closure or  realignment actions.
With respect to its reserve components, the Army did not perform a  military value rank-ordering of these various installations across the  country, but instead assessed the relative military value that could be  obtained by consolidating various facilities into a joint facility in specific  geographical locales to support, among other things, the reserve  components’ training, recruiting, and retention efforts.
section_title: Army Audit Agency’s Role in the Process
paragraphs: Throughout the BRAC process, the Army Audit Agency advised the Army  on the development and implementation of its internal control procedures;  performed audits of the Army’s conduct of the process, including the  validation of data and various models used to assist in decision making.  During the capacity and military value data calls, the Army Audit Agency  performed on-site audits of data collection efforts at various installations  on a sample basis to validate the data being gathered. Instances of  inaccurate data or inadequate source documentation identified during  these audits were generally corrected by the Army. As a result, the auditors  generally found the data to be sufficiently reliable for use in the BRAC  process.
section_title: Identification and Assessment of Alternate Scenarios and Selection of Recommendations
paragraphs: The Army used the results of its capacity and military value analyses, along  with the 20-year force structure plan, as the foundation for the  development of hundreds of potential closure and realignment scenarios.  Scenarios under consideration were refined using various models— primarily an optimization model and the Cost of Base Realignment Actions  (COBRA) model—along with military judgment. The optimization model,  using capacity data, military value scores, and other data, provided the  Army with various competing, plausible alternatives associated with the  restationing of various missions and forces within the infrastructure. The  model provided for alternative scenarios and their impact on overall  military value as functions were moved to higher ranked installations. The  COBRA model, which was used by all military services and joint cross- service groups to address the fifth selection criterion regarding costs and  savings, provided the Army with the relative cost and savings estimates of  these various alternatives.
The Army further assessed the various scenarios in terms of the remaining  selection criteria 6 through 8, regarding the economic impact on  communities affected by BRAC, the ability of the infrastructure within  communities to support military missions, and the environmental impact of  the BRAC actions, respectively. The Army used input from various DOD- generated models in assessing its scenarios against these criteria, which,  while important and mandated by the BRAC legislation, played less of a  role than that of military value. However, the Army considered these  criteria in order to ensure that there were no insurmountable challenges  that would derail the implementation of any particular scenario. In  addition, they were used to differentiate between competing scenarios. For  example, the Army determined its final stationing of modular brigades  based in part on its assessment of the environmental impact these brigades  would have on the receiving installations.
The Army also integrated into the overall process those scenarios that had  been generated for the reserve components in the parallel process referred  to previously. Those scenarios were developed through a series of meetings  with state officials across the country. As with the active component, the  reserve component scenarios were assessed using the COBRA model and  other models.
The Army also worked closely with the joint cross-service groups as they  developed recommendations that affected Army installations. In some  cases, the Army developed scenarios that were provided to the joint cross- service groups for further consideration. For example, the Army developed  initial scenarios proposing to close three chemical demilitarization  facilities, which were subsequently provided to the Industrial Joint Cross- Service Group, which ultimately developed and processed  recommendations for these closures. Alternatively, some scenarios which  ultimately became Army recommendations were developed in conjunction  with the joint cross-service groups. For example, the Industrial Joint Cross- Service Group’s scenario regarding the realignment of the depot  maintenance workload out of the Red River Army Depot in Texas, was  instrumental in leading to an ultimate Army recommendation to close the  depot. Similarly, the Education and Training Joint Cross-Service Group  developed a scenario to realign the Army’s Armor Center and School from  Fort Knox, Kentucky to Fort Benning, Georgia, an action that was later  folded into the Army’s broader realignment of Fort Knox. As the Army and  cross-service group recommendations were being finalized, the Army held  a series of meetings with the joint cross-service groups to ensure that all  recommended actions involving Army installations were properly  integrated and corresponding impacts were considered in their entirety.
section_title: Recommendations Approved by DOD
paragraphs: The Army produced 56 recommendations that were approved by DOD—6  closures of active component installations, 6 realignments of active  component installations, and 44 recommendations consisting of multiple  reserve components closure and realignment actions grouped by state or  region. These recommendations, along with other Army-related  recommendations produced by the joint cross-service groups, align, for the  most part, with the Army’s objectives of reducing the number of primarily  single-function, smaller installations and transforming the infrastructure to  better meet current and expected future Army needs. Table 10 provides the  financial implications of the Army’s recommendations.
As shown in table 10, the Army’s recommendations are expected to  produce nearly $500 million in estimated net annual recurring savings  beginning in 2012, but have a large 20-year net present value cost of about  $3 billion, rather than savings which are typically expected in that  timeframe; this is due primarily to very large up-front costs, nearly  $10 billion in expected one-time costs, that are required to implement the  recommendations. A few of the recommendations, particularly the one  involving the redeployment of Army forces to the United States under  DOD’s Integrated Global Presence and Basing Strategy, are responsible for  the high costs and negative returns.
The recommended closures of 6 active duty installations, which are largely  installations of lower military value within the Army, have the greatest  potential for savings with a combined estimated net present value savings  over the next 20 years of about $3.8 billion and payback periods of 6 years  or less. Most of the expected savings from these recommendations are due  to reductions in personnel costs and overhead (e.g., base operations  support). Expected personnel savings from these 6 recommendations are  driven by the elimination of nearly 3,500 personnel of which nearly 25  percent, or over 800, are military.
While 3 of the remaining 6 active duty base realignment recommendations  as shown in table 10 also produce savings, 3 recommendations account for  more than $9.4 billion in 20-year net present value costs and will never  payback. The largest of these three latter recommendations involves the  rebasing of Army forces to the United States from overseas locations. The  Army projected that this realignment alone has a one-time cost of about $4  billion and annual recurring costs of almost $300 million and will never  produce savings. Army officials note that a contributory factor to these  high costs is the fact that the Army could not claim the estimated savings  that would accrue from the expected closure of the overseas installations  and the departure of Army forces from those locations. The Army estimates  that had these estimated savings been accounted for in BRAC, the  recommended actions would have produced substantial net savings rather  than the costs as indicated. We did not validate the Army’s savings  estimates for the overseas closures, and it is not clear to us that sufficient  information is available at this time to fully assess the total changes in  overseas basing costs since much of the detail regarding these plans has  not been finalized. Further, we agree with DOD that it would not be  appropriate for the Army to include these particular savings in BRAC as  BRAC provisions in existing legislation do not contemplate consideration  of savings from the closure or realignments that take place outside of the  United States.
With regard to the reserve components, the Army adopted 44  recommendations, which taken as a whole, would provide a net present  value savings of over $1.5 billion over the next 20 years but have an average  payback period of over 12 years. Five of the recommendations involve the  realignment of the Army Reserve’s command and control structure within  five regional areas. The remaining recommendations realign reserve  components facilities in 38 states and Puerto Rico by constructing 125 new  armed forces reserve centers while closing 176 Army Reserve centers and  with the understanding that various states would close 211 National Guard  armories and centers. These closures represent about 10 percent of the  over 4,000 existing Army reserve components’ facilities across the country.
While most of the Army’s projected savings associated with the reserve  components’ recommendations result from reductions in personnel costs  by eliminating over 4,000 personnel, about 80 percent of these eliminations  are military personnel.
section_title: Issues Identified with Approved Recommendations
paragraphs: Time did not permit us to assess the operational impact of each  recommendation, particularly recommendations that included multiple  closure and realignment actions across multiple locations. However, we  offer a number of broad-based observations about the proposed  recommendations. Some recommendations may warrant additional  attention from the BRAC Commission based primarily on issues associated  with the projected savings from military personnel reductions,  uncertainties regarding the rebasing of overseas forces and modularity,  potential impact of expected increase in the use of training ranges, the  impact on gaining communities, uncertainties regarding the reserve  component recommendations, the bundling of various recommendations,  and concerns over the transfer of workload from Red River Army Depot,  Texas.
subsections: section_title: Military Personnel Reductions
paragraphs: Our analysis showed that about $450 million of the Army’s projected annual  recurring savings from its recommended closure and realignment actions  are based on claimed savings from eliminating military personnel. Army  officials acknowledged that a large portion of their annual recurring  savings were derived from military personnel eliminations but noted that  the Army’s financial outlook improved if joint cross-service group  recommendations involving Army bases are considered.  Nevertheless, the  Army does not plan to reduce its active or reserve component end-strength  in implementing these recommendations. According to Army officials,  these personnel are being redistributed within the Army. While we believe  that the potential exists for these personnel to provide a benefit to the  Army in their new positions, it represents a savings to the Army in the  sense of potentially avoiding costs that otherwise might be incurred in  increasing authorized end strength levels. They do not represent dollar  savings that might be shifted to other appropriations to meet other priority  needs such as equipment modernization or improving remaining facilities,  areas typically cited as likely beneficiaries of BRAC savings. Further,  because DOD envisions BRAC savings in general to be used to partially  fund up-front investment costs associated with implementing BRAC  actions, the Army may be forced to find other sources of funding as military  personnel savings will not likely be available for this purpose. The  Commission may wish to consider this issue in evaluating the BRAC  recommendations.
section_title: Uncertainties regarding the Rebasing of Army Overseas Forces to the United States and Force Structure Changes due to Modularity
paragraphs: Uncertainties over plans to realign thousands of soldiers and their families  to the United States as a result of the Integrated Global Presence and  Basing Strategy as well as the Army’s modularity efforts to create new  modular brigades have the potential to change the expected costs and  savings associated with the Army’s BRAC recommendations. The Army’s  BRAC recommendations incorporate about 15,000 of the 47,000 Army  personnel currently expected to return as a result of the global basing  study. The Army also incorporated the stationing of five of ten brigades  being created under the Army’s modular restructuring effort. Estimated  BRAC costs and savings are typically calculated based on assumptions for  specific units or missions that are expected to realign to specific  installations in specific years. Changes to these assumptions can alter the  costs and savings associated with the actions being undertaken. Existing  Army plans for the return of overseas forces and modularity were the basis  for the assumptions used to calculate estimated costs and savings and to  determine potential impacts to the environment and communities  surrounding the affected installations. However, our analysis identified  several areas of uncertainty that could affect the assumptions contained in  those recommendations:  Army officials told us that DOD has been and is continuing to modify its  overseas restationing plans, even as the Army BRAC recommendations  were being finalized. Because of BRAC reporting requirements, the  Army had to finalize its recommendations before the overseas rebasing  plans were finalized. Army officials indicated that the major overseas  restationing actions included in the BRAC recommendations are  expected to occur as currently envisioned. However, as plans continue  to evolve, the specific details regarding the rebasing could be adjusted,  with corresponding adjustments in costs and savings being required.
In a May 2005 report produced by the Commission on Review of the  Overseas Military Facility Structure of the United States, the  Commission recommended slowing down the Army’s entire overseas  restationing process. If DOD heeds this recommendation, the timing of  some planned restationing actions could be affected with the potential  risk of not completing BRAC closure or realignment actions within the  6-year implementation period with a 2011 completion date as  established by the BRAC legislation. Further, over half of the Army’s  forces returning from overseas are expected to be folded into the new  modular brigades being formed in the United States. Uncertainties over  the timing of their return could also impact the costs and savings  associated with those brigades.
In a March 2005 congressional testimony, we reported that the design  configuration of the Army’s modular brigades had not been finalized at  that time. In this regard, the Army is considering adding an additional  combat battalion to each of its modular brigades and has not finalized  the design of higher echelon and support units. Any such changes to the  design that was used in deriving the cost and savings estimates and  potential impacts to the environment and communities of the  recommended actions are likely to impact the estimates and may alter  the potential impacts as well.
The Commission may wish to ensure that it has the Army’s latest plans  regarding the overseas rebasing and modularity efforts in reviewing the  Army’s recommendations.
section_title: Potential Impact on Training Ranges
paragraphs: The Army’s BRAC recommendations provide for the stationing of returning  overseas forces and new modular brigades on existing Army installations.  Our review of Army documentation shows these installations are already  facing environmental and encroachment issues that constrain their ability  to meet unit training requirements. These issues raise concerns that  currently constrained installations may face additional challenges and  unexpected costs in meeting the training requirements of the additional  forces the Army plans to station at these installations. As we reported in  June 2005, several of the Army’s training ranges already face challenges  resulting from inadequate maintenance and modernization and may also  require substantial investment for modernization to support the training  requirements of the new brigades. Army officials stated they reviewed  their BRAC recommendations to ensure that there were no insurmountable  environmental or encroachment obstacles. They also noted that their  recommendations included costs for training range upgrades. However, we  have not validated whether these costs will adequately address training  range limitations. Further, we have concerns as to whether the Army will  need to acquire additional training range land at existing bases that are  already experiencing range limitations—a potential cost not identified in  the current BRAC recommendations.
Concerns over the ability of existing training ranges to meet training  requirements are exacerbated by uncertainties over the final number and  composition of the modular brigades as well as the potential for additional  forces returning from overseas. Because of existing constraints on training  ranges, the Army developed scenarios to examine the possibility of  stationing operational Army units on other installations, including  installations belonging to other military services and Army installations  with considerable acreage such as the Yuma Proving Ground in Arizona.  The Army deemed none of these scenarios feasible for various reasons,  such as the configuration of other service installations and their associated  training ranges did not meet Army training requirements. For other  scenarios, such as use of the Yuma Proving Ground, the lack of adequate  infrastructure and the associated high military construction costs that  would be required essentially made them infeasible. However, Army  officials told us that should the Army decide to create an additional five  modular brigades or bring additional forces back from overseas, it may  become necessary to station these units at installations such as the Yuma  Proving Ground, which has large tracts of land, because existing Army  installations might not be able to support these additional units. The  Commission may wish to review the Army’s plan for addressing training  range issues and the potential need to acquire additional land to mitigate  likely challenges the Army faces in the probable increased use of its  training ranges.
section_title: Impact on Gaining Communities
paragraphs: Several of the Army’s recommendations involve relocating significant  numbers of forces and their families to various installations, which raises  concerns about the ability of local communities to adapt to these changes  and absorb these personnel increases. For example, Fort Bliss, Texas is  expected to receive a net gain of over 11,000 military and civilian  personnel. The full impact of such increases on surrounding communities,  particularly on schools, housing, and other community infrastructure, is  unclear at this time. According to Army officials, its analysis for the  selection criterion regarding community impact (criterion seven) provided  an overall assessment of the ability of local communities impacted by a  potential BRAC action to handle additional personnel and their families,  including the identification of potential obstacles that could prevent a  recommendation from being implemented. For example, in assessing the  impact of the return of forces from overseas, the Army’s review of  community infrastructure for Fort Bliss and Fort Riley indicated the  importance of working with these communities to assess and implement  housing and schooling requirements. However, the Army concluded that  these issues did not represent impediments to implementing  recommendations involving these bases.
Addressing the challenges that these communities face may require  significant investments, particularly with regard to available housing and  schools, which would increase pressures for federal assistance from  various agencies to help mitigate these needs. While such costs might be  borne outside the defense budget to some extent, they would nevertheless  represent additional costs to the federal government. These potential costs,  although not required to be captured in DOD’s cost and savings analyses for  the various recommended actions, could be substantial, given the number  of Army installations with expected personnel gains. Army officials stated  that they expect to resolve these issues during implementation and that by  staggering the movement of units being moved to these installations, they  believe they will be able to reduce adverse impacts and enable  communities to better prepare for their arrival. Nevertheless, some  communities may lack the infrastructure to easily absorb these forces. This  could impact the timing of the movement of forces to these communities,  which in turn could alter current BRAC cost and savings estimates from a  governmentwide perspective. The Commission may want to review the  Army’s plans for addressing these issues.
section_title: Uncertainties regarding State Involvement in the Reserve Components’ Recommendations
paragraphs: We identified a number of uncertainties associated with the Army’s reserve  components’ recommendations. Most of these recommendations, as  detailed in the Army’s 2005 BRAC report, are contingent upon certain  actions that have either yet to take place or be decided. For example, the  Army expects to build 125 Armed Forces Reserve Centers, which are  currently expected to be able to accommodate National Guard units as well  as Army Reserve units and some reserve units from the other military  services. However, the decision to relocate these National Guard units lies  with state authorities. While the states with Guard units that are affected by  BRAC recommendations have agreed, on a voluntary basis, to be included  in the process, they can opt out at any time, thereby creating uncertainties  over future state actions and their impact on the precision of current cost  and savings estimates for these recommendations. Should state authorities  decline to relocate some or all of these units, the costs and savings  associated with these armed forces reserve centers could change. Some of  the reserve components’ recommendations have other contingencies as  well. For example, the recommendation for the Texas reserve components  calls, in part, for an Armed Forces Reserve Center to be located in  Amarillo, Texas, if the Army is able to acquire land suitable for the  construction of facilities there. Many others are like this as well. Should the  land not be available, these recommendations will need to be adjusted as  well as the related costs and savings estimates. While the Army’s reserve  components’ recommendations as a whole are projected to generate more  than $1.5 billion in net savings over a 20-year period if implemented, the  uncertainties regarding some of the actions these recommendations are  relying on could result in increases or decreases to this estimate. The  Commission may wish to seek clarifications as to the status of these state- based actions and the potential consequences if some of those actions are  not executed as currently planned.
section_title: Bundling of Various Recommendations Lessens Visibility of Costs
paragraphs: Most of the Army’s recommendations involve the bundling of multiple  closure and realignment actions under one recommendation, which  reduces the visibility of the estimated costs and savings as well as the  payback periods of the individual actions that are embedded within the  recommendation. While the the Army only produced six recommendations  for the realignment of its active component installations, most of these  recommendations have several components to them. For example, one  Army recommendation involves the realignment of the Armor Center and  School from Fort Knox, Kentucky, to Fort Benning, Georgia; the activation  of a new modular brigade at Fort Knox; the relocation of various combat  service support and other units from Europe and Korea to the United  States; and the relocation of a reserve training center from Fort McCoy,  Wisconsin, to Fort Knox. Similarly, the Army packaged all of its proposed  reserve components’ realignments and closures within a state into a single  recommendation for that state. As a result, there may be components  within a recommendation that have relatively high costs or long pay-back  periods (or never produce savings) even though the recommendation taken  as a whole appears to have relatively higher savings or a shorter payback  period. The Commission may therefore wish to request and examine  information on the costs and savings associated with these individual  actions. The following examples highlight these potential issues:  The Army’s maneuver training recommendation would realign Fort  Knox by incorporating several elements of scenarios the Army and the  Education and Training Joint Cross-Service Group developed over time.  The DOD-approved recommendation includes the stationing of a new  modular brigade at Fort Knox. However, the Army’s original scenario for  realigning Fort Knox, which did not include stationing the modular  brigade or realigning the Armor Center and School, would have  generated a 20-year net savings of almost $225 million. The Education  and Training Joint Cross-Service Group’s related scenario involving the  relocation of the Armor Center and School from Fort Knox to Fort  Benning would have generated a 20-year net savings of over $1.3 billion.  The Army’s approved recommendation combined most of the elements  of these two scenarios but generated 20-year savings of about  $950 million, or about $500 million less than one might have expected.  The difference may be largely attributed to the inclusion of the new  modular brigade in the Army’s final recommendation.
The Army’s reserve components’ transformation recommendation in  Arizona is expected to have a payback period of 5 years and generate a  net savings of almost $52 million over a 20-year period. However, one  action contained within this recommendation involves the creation of  an Armed Forces Reserve Center at the Buckeye Training Site, Arizona.  A previous scenario, which focused solely on this action, indicated that  the Army would incur a net cost of almost $9 million over the 20-year  period and that it would take more than 100 years to produce savings.  By bundling this action with others, the net costs of this action are  obscured by the net savings of the recommendation’s other actions.
section_title: Red River Army Depot, Texas
paragraphs: We are raising several issues with the recommended closure of the Red  River depot and the transfer of its functions to other locations that may  warrant further review by the Commission. The issues relate to the transfer  of the Red River combat vehicle workload to the Anniston Army Depot,  Alabama; the transfer of certain munitions to the McAlester Army  Ammunition Plant, Oklahoma; and the replication of Red River’s capability  to remove and replace rubber pads for vehicle track and road wheels.
subsections: section_title: Potential Transformation Opportunity for Depot Maintenance
paragraphs: As discussed in appendix VIII, the Industrial Joint Cross-Service Group,  when developing its maintenance proposals, completed its depot  workloading analysis on the basis of one and a half shifts per workday (60  hour workweek) rather than the one shift per day (40 hour workweek)  under the current system, thus increasing available capacity and allowing it  to consider depot closures. Industrial group officials told us that use of  more than one shift, which is a common private industrial better business  practice, would enhance transformational opportunities in that it would  provide for more efficient use of facilities and equipment. Industrial group  officials stated that the expanded shift concept, although transformational,  was only a “sizing or planning tool” to examine ways to increase depot  capacity and that it would be left up to each depot to decide whether or not  to employ the expanded shift concept. In other words, it was a way to see if  a depot could accommodate the incoming transfer of additional workload.  We were also told that no policy changes were envisioned to actually  implement the expanded shift concept. Available information indicates that  the closure recommendation may not be implemented based on the  concept of a one and a half shift operation at the Anniston Army Depot,  which is to receive the combat vehicle workload from Red River. In our  visit to Anniston Army Depot, officials told us that, with additional  construction to increase capacity as provided for in the supporting  documentation for the recommendation, they would be able to  accommodate this additional workload without much difficulty and  without working under the expanded shift concept. Industrial group  officials acknowledged that, while some one and a half shift operations  may be implemented at other activities, only a one shift operation was  envisioned at Anniston, given the uncertainty associated with future  requirements and the need to minimize risk by providing for additional  capacity if a contingency arises. As such, it appears that there is essentially  no substantive transformational changes occurring with the closure of the  Red River Army Depot.
section_title: Uncertainties on Munitions Storage
paragraphs: The BRAC recommendation to close the Red River Depot also dictates the  transfer of its munitions storage mission to another Army depot--McAlester  Army Ammunition Plant, Oklahoma. However, officials at Red River told us  they were concerned about whether storage capacity at McAlester was  sufficient to handle all of Red River’s munitions. Specifically, Red River  officials told us during a recent visit that available excess storage capacity  at McAlester has decreased since BRAC data were gathered, thus raising  concerns whether all of Red River’s munitions can be stored there. Further,  Red River officials asserted that McAlester did not have sufficient storage  capacity for special types of munitions without constructing new storage  facilities. According to Red River officials, certain munitions (category I  and II) require different storage capacity and that McAlester currently does  not have enough storage capacity for Red River’s entire category I  munitions. However our analysis of the closure recommendation  supporting documentation does not include any provision for military  construction funds. Industrial group officials told us, however, that it  expects that the McAlester plant will demilitarize much of its ammunition  and thus free up space for the munitions stored at Red River. However,  given that some diversion of demilitarization funds for other purposes has  occurred in recent years, it raises questions as to the extent of the  demilitarization that will occur. Nonetheless, in their opinion, this potential  issue is not of concern to them. Time did not permit us to fully resolve the  conflicting information regarding the extent to which the munitions may be  transferred and McAlester’s ability to sufficiently accommodate the storage  of any transferred munitions.
section_title: Transfer of Rubber Production Capabilities
paragraphs: Red River officials also raised concerns about the complexities associated  with replicating its rubber production capability, which consists of  removing and replacing rubber pads for vehicle track and road wheels, at  Anniston Army Depot, Alabama, and that it is currently the only source for  road wheels for the Abrams M1 tank. Specifically, Red River officials told  us this capability is not an easy process to reproduce, including obtaining  the required certification associated with the rubber production capability  and that the processes must be qualified through rigorous testing. The  complexities with replicating the rubber production capability was also  echoed by officials at Anniston Army Depot, Alabama—the installation  which is expected to absorb most of Red River’s combat vehicle workload.  Officials at Anniston told us they expect a long certification process in  order to perform the required rubber repair process and that this  represents the most serious challenge in the workload transfer of Red  River’s work. As to the Abrams Ml tanks road wheels, Red River officials  told us that if the capability to produce road wheels is interrupted, the  ability to sustain the warfighter is diminished and overall readiness could  be degraded. To mitigate this risk, officials at Red River told us that it is  imperative that the Army construct a new rubber production facility at  Anniston, establish its processes and qualify its product before ceasing  rubber production at Red River. Industrial group officials told us that,  should a problem arise in this area, that commercial sources are available  to purchase rather than repair these parts. We did not independently verify  their assertion.
The Commission may want to review the extent to which these concerns  associated with Red River are valid and whether they were adequately  considered by DOD.
section_title: The Department of the Navy Selection Process and Recommendations
paragraphs: The Navy followed the common analytical framework established by the  Office of the Secretary of Defense (OSD) for reviewing its functions and  facilities. The Navy’s process produced 21 base closure and realignment  recommendations, which cover 63 active and reserve installations. The  Navy projects that its recommendations would realize about $7.7 billion in  net present value savings over a 20-year period. Payback periods—the time  required for savings to offset closure costs—range from immediate to 15  years and average 3.5 years. At the same time, there are limitations  associated with the projected savings related to the lack of planned  reductions in military personnel end-strength associated with the savings.  Some of the Navy’s recommendations may warrant additional attention  from the BRAC Commission based on projected force structure changes,  decisions to realign versus close some bases, and extended payback  periods. The Naval Audit Service, which performed audits of the data,  concluded that the data were sufficiently reliable for use during the BRAC  process.
subsections: section_title: Organization and Focus
paragraphs: The Navy established an organization to conduct the closure and  realignment analysis similar to the one it used in the 1995 round. The  Secretary of the Navy established a group of senior military officers and  civilian executives, the Infrastructure Evaluation Group (IEG), chaired by  the Assistant Secretary of the Navy (Installations and Environment) to  conduct the process, and a related team, the Infrastructure Analysis Team,  to support the IEG. The Secretary subsequently established a second  senior-level group, the Department of the Navy Analysis Group, chaired by  the Special Assistant to the Secretary of the Navy for BRAC, that was  subordinate to the IEG, and he directed it to conduct the Navy’s analysis for  Navy-unique functions. Another associated group, the Functional Advisory  Board, consisted of the Navy and Marine Corps principal members of the  seven joint cross-service groups and was responsible for ensuring that the  Navy leadership was informed of matters relevant to those groups and for  articulating the Navy’s position on common business-oriented support  functions for Navy leaders.
The Navy established numerous goals for BRAC, organized around such  considerations as (1) facilitating recruitment and training, (2) providing  quality of life, (3) matching force structure to national defense strategy,  (4) adequately equipping the force, (5) ensuring access to an optimally  integrated logistical and industrial infrastructure, and (6) maintaining  secure and optimally located installations for mission accomplishment  (including homeland defense). With these and other considerations in  mind, the Navy established numerous objectives corresponding to DOD’s  BRAC principles, examples include:   Optimize access to critical maritime training facilities.
Accommodate the 20-year force structure plan.
Facilitate active/reserve integration and synchronization.
Leverage opportunities for joint basing and training.
Enable further installation management regional alignment.
Optimize regional management structure for recruiting districts and  reserve readiness command.
Minimize use of long-term leased administrative space.
Provide flexible research, development, test, and evaluation  infrastructure to adapt to Navy transformational mission changes and  joint operations.
Consolidate aircraft basing to minimize sites while maintaining ability to  meet operational requirements.
Rely on private-sector support services where cost-effective and  feasible.
Retain sufficient organic capability to effectively support maritime- unique operation concepts.
Align Navy infrastructure to efficiently and effectively support Fleet  Response Plan and Sea-basing concepts.
Realign assets to maximize use of capacity in fleet concentration areas  while maintaining fleet dispersal and viable antiterrorism/force  protection capability.
section_title: Framework for Analysis
paragraphs: In executing its BRAC process, the Navy sought to eliminate excess  capacity and reconfigure its current infrastructure so that operational  capacity maximized warfighting capability and efficiency. The IEG  approved four major areas for analyses: operations, education and training,  headquarters and support activities, and other activities. These major areas  were then further divided into functions to ensure that installations  performing comparable functions were compared with one another and to  allow identification of total capacity and military value for an entire  category of installations.
The Navy’s BRAC process included a review of 889 reporting activities— 765 Navy and 124 Marine Corps—of which 673 were active component and  216 reserve component activities (reserve centers, reserve forces  headquarters, reserve recruiting areas, and reserve personnel centers). As  with previous BRAC rounds, capacity and military value analysis provided  the starting point for the Navy’s BRAC process. The Naval Audit Service  served an important role in ensuring the accuracy of data used in these  analyses through extensive audits of data gathered at various locations.
subsections: section_title: Capacity Analysis
paragraphs: For its capacity analysis, the Navy universe was defined at the activity or  function level, and a capacity data call was distributed to the 889 reporting  activities. Capacity analysis for each activity consisted of comparing the  current Department of the Navy base structure to the future force structure  requirements to determine whether excess base structure capacity existed  within the Department of the Navy. Current force requirements were based  on the existing force structure, and future force requirements were derived  from the 20-year force structure plan.
All Navy and Marine Corps bases were placed into one of four categories  for capacity analysis: operations, headquarters and support activities,  education and training, and other activities. Each category used a different  metric to analyze capacity. Almost all of the Navy’s bases were contained in  the operations function category. In evaluating air operations activities the  Navy used hangar modules, while in evaluating surface/subsurface  operations activities it used a cruiser-equivalent concept, the same  measures that were used in BRAC 1995. In evaluating ground operations  activities, the Navy used a battalion-equivalent concept that considered the  amount of administrative space, covered storage space, and maintenance  space required to support a generic Marine Corps battalion. In evaluating  munitions storage and distribution, the Navy used throughput (loading and  unloading) and short-term storage functions to conduct its analysis. The  Navy identified excess capacity in all four categories, as shown in table 11.
In completing its capacity analysis, the Navy assumed that it would be  necessary to home base all aircraft and ships at the same time. The Navy  did not include additional infrastructure requirements to accommodate  surge capability. According to Navy BRAC officials, the force structure— number of ships and aircraft—is finite in number, and additional ships or  aircraft could not be quickly produced in the event of a contingency. The  officials stated that their analysis also ensured that sufficient flexibility was  retained to handle surge represented by operational tempo changes or  unanticipated operational requirements. For example, for  surface/subsurface operations, the Navy concluded that there was  sufficient berthing space available in nonoperational bases (shipyards and  weapon stations) to meet surge or other unanticipated operational  requirements.
Navy officials projected that their closure recommendations, if approved,  would reduce excess capacity in aviation operations from 19 percent to 16  percent, in surface/subsurface operations from 25 percent to 17 percent,  and in munitions storage and distribution operations from 24 percent to 16  percent, but they would not reduce excess ground operations capacity. The  Navy did not recommend closing any ground operations facilities, citing  cost considerations and noting that planned force structure changes would  further increase its requirements.
section_title: Military Value Analysis
paragraphs: In completing its military value analysis, the Navy targeted military value  questions to specific activities in order to rank installations in the four  operational subgroups from highest to lowest in military value. Each of the  four operational subgroups had overarching concepts by which military  value scoring plans were then developed to measure and rank each  installation. Military values were assigned to 35 Navy and Marine Corps  installations under air operations, 29 surface/subsurface installations, and  11 ground operations installations. Table 12 shows how the Navy weighted  military value criteria in its analyses of operational functions.
Key factors considered in evaluating the military value of aviation  operations activities included size and versatility of the facilities, proximity  to training opportunities, and the strategic location of airfields. In  considering surface/subsurface activities, key factors were the size and  versatility of ship berthing, maintenance and support capabilities, and  proximity to naval shipyards. Additional value was given for strategic  nuclear submarine homeport capability and Nimitz-class nuclear powered  berthing capability. Also considered was the proximity to training facilities,  ranges, and operations areas as well as strategic location. Likewise, in  considering ground operations activities, key factors were facilities and  services, operational staff buildings, ordnance storage depots, and organic  maintenance shops. Additional value was given for capability to receive  and stage onward movement and integration of forces. Also considered  was proximity to ranges, maneuver areas and training areas as well as  proximity to aerial and seaports of debarkation. Key factors in the  munitions storage and distribution operations activities were storage  capability, throughput capability, strategic factors, environment and  encroachment, and personnel support. Figure 10 illustrates how the Navy  linked its analysis to the military value criteria for the naval aviation  function.
The same process was used to analyze military value with the other  operational and functional areas.
section_title: Naval Audit Service’s Role in the Process
paragraphs: The Naval Audit Service played an important role in ensuring that the data  used in the Navy’s analyses were certified. Through extensive audits of the  capacity, military value, and scenario data collected from field activities,  the audit service notified the Navy of any data discrepancies for the  purpose of follow-on corrective action. While the process of validating  data was quite lengthy and challenging, the Naval Audit Service deemed the  Navy data was sufficiently reliable for use in the BRAC process.
section_title: Identification and Assessment of Alternative Scenarios and Selection of Recommendations
paragraphs: The Navy used results from the capacity and military value analyses as the  inputs to its optimization model to help identify initial scenarios for  realignment and closure. In some circumstances, such as closure of naval  reserve centers, military judgment and transformation provided the basis  for scenarios and later decisions. For example, Navy officials said it was  necessary to retain naval reserve centers for naval air reservists near major  airline hubs and activities in order to retain the demographic profile  necessary to recruit and retain personnel for these units. The Navy  identified 187 scenarios for consideration; 82 involved Navy and Marine  Corps reserve centers. The scenarios were then further assessed through  more detailed scenario analyses, cost and savings considerations, risk  assessments, and the Navy’s IEG deliberations, which resulted in 53  candidate recommendations being forwarded to DOD’s IEC. After some  consolidation and bundling, DOD approved 21 Department of the Navy  recommendations and forwarded them to the BRAC Commission.
The Navy eliminated scenarios for strategic reasons, to maintain  operational flexibility, and for cost considerations. For example, various  scenarios proposing to close Submarine Base San Diego, California, were  dropped because a closure would have eliminated the sole capability for  berthing attack submarines on the West Coast. Likewise, scenarios  proposing to close Naval Station Everett, Washington, were dropped  because of the strategic importance of this seaport. Various proposals to  close active naval air stations were dropped because of operational  concerns. For example, the Navy analyzed the potential to close Marine  Corps Air Station Beaufort, South Carolina, and relocate its squadrons to  Marine Corps Air Station Cherry Point, North Carolina. However, the Navy  leadership concluded that Marine Corps Air Station Beaufort should be  retained for future tactical aviation basing flexibility, especially in light of  concerns about the continued viability of basing aviation units at Naval Air  Station Oceana, Virginia. Due to increasing environmental and  encroachment issues surrounding Naval Air Station Oceana, the Navy also  analyzed various scenarios to close it. However, the analyses indicated a  long payback period for achieving return on investment, high one-time  costs, and operational issues at receiving sites. Therefore, the Navy  determined that the closure of Naval Air Station Oceana was not feasible.  Another complicating factor for basing of East Coast tactical aircraft is the  Navy’s attempt to purchase approximately 33,000 acres in eastern North  Carolina to build a new outlying landing field to provide simulated aircraft  carrier landings for aircraft stationed at Naval Air Station Oceana and  Marine Corps Air Station Cherry Point. The purchase is currently being  challenged in federal court over environmental concerns.
The Navy also did not pursue some scenarios because of cost  considerations and extended payback periods. For example, Navy data  showed a one-time cost of $838 million to close Construction Battalion  Center Gulfport, Mississippi, and relocate it to Camp Lejeune, North  Carolina, and a one-time cost of $643 million to close Marine Corps Recruit  Depot San Diego, California, and relocate all recruit training to Parris  Island, South Carolina. The Navy leadership determined that these costs  did not justify closing either the Construction Battalion Center Gulfport or  the Marine Corps Recruit Depot San Diego.
The Navy also considered alternatives to homeport an additional carrier  strike group forward in the Pacific theater through the BRAC process to  accommodate Integrated Global Presence and Basing Strategy decisions.  The Navy analyzed moving a carrier to Pearl Harbor, Hawaii, and Guam,  and found that other than cost, there was no clear BRAC preference for  either the losing or the gaining base. The Navy leadership postponed any  decision until the ongoing Quadrennial Defense Review is completed.
The Navy worked closely with the joint cross-service groups as they  developed recommendations that affected Navy installations. In some  cases, a joint cross-service group recommendation or series of  recommendations relocated a majority of the functions, workload,  equipment, or personnel from a Department of the Navy installation,  thereby enabling closure of the entire installation. Where the DAG  determined that the aggregate of joint cross-service group actions were of  such magnitude that it affected the “critical mass” of the installation, e.g.,  impact on the major mission, a substantial number of personnel, and/or a  substantial amount of acreage, a Navy closure scenario was developed. The  closure of Portsmouth Naval Shipyard, Maine is an example of such a  closure. The ISG and IEC approved an industrial joint cross-service group  recommendation to relocate the ship overhaul and repair function at  Portsmouth Naval Shipyard to Norfolk Naval Shipyard, Puget Sound Naval  Shipyard, and Pearl Harbor Naval Shipyard, and to relocate the Submarine  Maintenance Engineering, Planning and Procurement Activity at  Portsmouth Naval Shipyard to the Norfolk Naval Shipyard. This  recommendation eliminated Portsmouth Naval Shipyard’s primary mission  and moved or eliminated approximately 90 percent of its workforce. After  conducting criteria 5-8 analyses, the Navy recommended closing  Portsmouth Naval Shipyard in its entirety.
section_title: Recommendations Approved by DOD
paragraphs: The Navy projects that its 21 recommendations will produce about  $754 million in net annual recurring savings and, after savings have offset  implementation costs, a 20-year net present value savings of $7.7 billion.  Table 13 provides a summary of the financial aspects of the Navy’s  recommendations.
The Navy’s recommendations include 16 closures and 5 realignment  actions, affecting 63 installations. Much of the projected annual recurring  savings are based on military and civilian personnel reductions. The Navy  has two recommendations with payback periods greater than 10 years—the  realignment of Naval Station Newport, Rhode Island, and the closure of the  Naval Support Activity Corona, California.
section_title: Issues Identified with Approved Recommendations
paragraphs: Time did not permit us to assess the operational impact of each  recommendation, particularly individual recommendations that include  multiple closure and realignment actions at multiple locations outside of a  single geographic area. Nonetheless, we offer a number of broad-based  observations about the proposed recommendations. These  recommendations may warrant additional attention from the BRAC  Commission based on issues associated with projected savings from  military personnel reductions, force structure changes, decisions to realign  versus close some bases, extended payback periods, and potential impact  on the U.S. Coast Guard.
There remains uncertainty as to what the Navy’s future force structure will  actually look like, particularly with battle force ships. While the Navy’s  force structure plan that accompanies its BRAC report gives a range of 341  to 370 ships in the fleet in 2024, the Navy’s 30-year shipbuilding plan  identifies a possible lower limit of 314 ships in 2024 (including all type  surface ships and submarines). Additionally, the shipbuilding plan provides  a fleet profile in the decade afterward (to the year 2035) with as few as 260  to 325 ships. This includes a decrease in aircraft carriers from the current  12 to 10 in 2035, as projected in the Navy’s shipbuilding plan.
subsections: section_title: Military Personnel Reductions
paragraphs: Our analysis showed that about $386 million, or about 51 percent, of the  projected $753.5 million in net annual recurring savings are based on  savings from eliminating almost 4,000 active duty military personnel  positions. A Navy official indicated that these reductions will help the Navy  achieve the projected 21,000 active military personnel reductions already  programmed between fiscal year 2006 and 2011. However, the Navy has  already reduced the military personnel account to reflect the savings  associated with the projected 21,000 end-strength reduction. While the  projected almost 4,000 reductions associated with BRAC actions might  help the Navy achieve their overall programmed end strength reductions, it  will not generate any additional dollar savings that could be reallocated for  other higher priority needs.
section_title: Projected Changes in Navy Force Structure
paragraphs: While the recommendations to close Submarine Base New London,  Connecticut, and Portsmouth Naval Shipyard, Maine, project significant  savings, both are based on projected decreases in the number of  submarines in the future force structure. However, as mentioned earlier,  there is uncertainty over the number of submarines and surface ships  required for the future force.
subsections: section_title: Submarine Base New London
paragraphs: The proposed closure of Submarine Base New London is based on reducing  existing excess capacity in the surface/subsurface category and planned  reductions in the submarine force. Both the 25 percent excess capacity  identified in the surface/subsurface infrastructure and the projected 21  percent reduction in the submarine force led the Navy to analyze various  proposals to close submarine bases. As previously noted, the Navy’s BRAC  scenario analysis focused on East Coast submarine bases because attack  submarines are single-sited on the West Coast. The Navy considered three  alternatives: (1) moving all submarines at Naval Station Norfolk, Virginia,  to New London, Connecticut; (2) moving all submarines at Submarine Base  New London and the Submarine School New London to Naval Station  Norfolk; and (3) moving submarines at Submarine Base New London to  both Naval Station Norfolk and Submarine Base Kings Bay, Georgia, and  moving the submarine school to Kings Bay or Naval Station Newport,  Rhode Island. The Navy analysis showed that only the option to relocate  submarines from New London to Norfolk and Kings Bay achieved a  reduction in capacity and savings resulting from a base closure. Navy  officials noted that Submarine Base New London had a lower military value  than both Norfolk and Kings Bay. As we also discuss in appendix XIV, this  recommendation has the largest economic impact on any community in  terms of the number of job losses (8,457 direct jobs and 7,351 indirect  jobs). These direct and indirect job losses would result in a negative change  of 9.4 percent in unemployment for the economic area around Submarine  Base New London.
The majority of the projected savings would result from the elimination of  about 80 percent of the civilian personnel positions at New London.  Officials at New London we met with concurred with the projected number  of civilian positions that could be eliminated based on coordination with  both receiving locations—Kings Bay, Georgia, and Norfolk, Virginia, and on  the number of personnel that would be needed to support the missions  being relocated. However, a separate issue of concern relates to the  proposed move of the Navy’s submarine school from New London to Kings  Bay. In our discussions with officials at New London, we found while the  Navy’s BRAC cost and savings analysis includes one-time costs to move the  specialized equipment associated with the submarine school, the Navy  analysis does not appear to have included an assessment of the time it  would take to pack, move, and unpack the equipment, and the potential  impact on the training pipeline and the certification of crews for  submarines. In subsequent discussions with Navy headquarters officials,  we were told that the submarine school would be the last activity to move  from New London to ensure that facilities at Kings Bay are ready to start  training. Furthermore, they noted that the implementation plan will ensure  that the Navy will be able to perform crew certification and maintain the  training pipeline. The BRAC Commission may want to assure itself that the  Navy has developed a transition plan to satisfy the training and certification  requirements until the receiving sites are able to perform this training,  without unduly interrupting the training pipeline.
section_title: Portsmouth Naval Shipyard
paragraphs: The proposed closure of the Portsmouth Naval Shipyard assumes that the  remaining three shipyards could perform all of the projected depot level  maintenance workload based on planned reductions in the number of  attack submarines and the Navy’s proposal to decommission an aircraft carrier. The Navy, with agreement from the Industrial Joint Cross-Service  group, which initially had assessed depot functions, selected the  Portsmouth Naval Shipyard for closure, despite Pearl Harbor Shipyard’s  having a slightly lower military value score, because it determined that  Portsmouth was the only closure that would both eliminate excess capacity  and satisfy the Combatant Commander’s and Navy’s strategic objective to  place ship maintenance capabilities close to the fleet.
The Navy BRAC and Industrial Joint Cross-Service Groups analyzed  scenarios closing each of the four shipyards, and determined that only the  potential closure of Portsmouth or Pearl Harbor was feasible due to cost  and capacity considerations. Initially, based on capacity data and the 20- year force structure plan submitted in March 2004, the Industrial Joint  Cross-Service Group determined that there was sufficient excess capacity  in the aggregate across the four shipyards to close either Pearl Harbor or  Portsmouth. However, the group determined that there was insufficient  excess capacity in certain commodities in the remaining three shipyards  to accept all the workload from the closing shipyard. As such, the group  initially determined that no shipyard should be closed. However, based on  changes in the DOD’s 20-year force structure plan it submitted to Congress  in March 2005—reductions in the number of submarines and the  decommissioning of an aircraft carrier—the industrial group’s analysis  indicated that workload for all commodities at Portsmouth or Pearl Harbor  could be accommodated by the remaining three shipyards. A Naval Sea  Systems Command analysis of dry dock availability indicates that the three  remaining Navy shipyards could handle the projected ship repair and  overhauls in the future. However, the analysis indicates that within the next  three years there would not be much, if any, room for unanticipated ship  repairs. According to Navy officials, any unanticipated requirements would  be addressed by a combination of delaying and re-prioritizing scheduled  overhaul work, and authorizing additional overtime, which they noted is no  different than how they manage these requirements in the current  operating environment.
In selecting Portsmouth over Pearl Harbor for closure, the Navy noted that  Pearl Harbor is in a fleet concentration area in the Pacific theater and is the  homeport for many ships, while Portsmouth is not in a fleet concentration  area or a homeport for any ships. In addition, closing Pearl Harbor would  require the ships that are homeported there to transit back to the east  coast, in some cases, for maintenance, which the Navy would essentially  view as a deployment and, for quality of life reasons, would want to avoid if  possible. Another strategic objective was to maintain dry docks for aircraft  carriers on both coasts and in the central Pacific. Pearl Harbor has aircraft  carrier dry-docking capability, but Portsmouth does not.
In our meeting with employees at the Portsmouth Naval Shipyard in June  2005, they raised questions about several issues regarding the cost and  savings analysis developed to support the proposed action. First, they  objected to the industrial group and the Navy disallowing about  $281 million in costs ($205 million one-time and $76 million recurring) that  they believed would be incurred if the shipyard were to close. About  $52 million of the recurring costs are associated with sustainment of  facilities and power plant from fiscal year 2008, when the base is projected  to close, until 2011. While some of these costs are likely valid, overall they  appear high in relation to the Navy’s projected savings of about $120 million  over the same period from reduced base operating support and  sustainment of facilities. The majority of the one-time costs are associated  with closure of the buildings, historical preservation of buildings, and  write-off of undepreciated assets of the working capital fund. While it is  questionable whether all of these costs should be included, our analysis  shows that if they are all included, the projected 20-year savings would  decrease by $192 million, or 15 percent.
Portsmouth employees were also concerned that the cost and savings  analysis did not adequately capture the widely recognized efficiencies of  their shipyard, which, if adopted, could translate into additional costs that  the Navy would incur by shifting its workload to the remaining three Navy  shipyards. The employees estimated that they perform submarine overhaul  and depot maintenance work at about $54 million per year less than the  average of the other three shipyards, an efficiency which was not included  in the Navy’s analysis. Department of Navy officials recognized that the  Portsmouth Naval shipyard is presently more efficient than the Puget  Sound and Pearl Harbor shipyards, but noted that it is very difficult to  quantify the impact of this efficiency. Navy officials noted that the scope of  work performed is not always the same, depending on the condition of  each submarine, and wages, especially in Pearl Harbor, are higher than in  Portsmouth. Navy officials told us they were reviewing the efficiency  analysis developed by the Portsmouth Naval Shipyard; however, their  analysis was not completed in time to be included in this report. The  Commission may wish to consider the views of the shipyard employees and  the results of the Navy’s review in their analysis of this recommendation.
section_title: Decisions to Realign Rather Than Close Some Bases
paragraphs: The Navy initially recommended the closure of Naval Air Station  Brunswick, Maine, and Marine Corps Logistics Base Barstow, California.  However, based on direction from the IEC, these closure recommendations  were changed to realignments. As a result, the 20-year savings decreased by  almost $2 billion, as shown in table 14.
According to Navy BRAC officials, the senior Navy leadership was  reluctant to give up the Navy’s remaining air station in the Northeast but  found the potential savings significant enough to recommend closure of  Brunswick. However, the judgment of the IEC changed the closure to a  realignment to retain access to the strategic airfield in the Northeast. As a  result, the base will become a naval air facility with an operational runway,  but all aircraft and associated personnel, equipment, and support will be  relocated to Naval Air Station Jacksonville, Florida, and the Aviation  Intermediate Maintenance will be consolidated with Fleet Readiness  Center Southeast Jacksonville, Florida. The Navy is maintaining its cold  weather–oriented Survival, Evasion, Resistance, and Escape School, a  Navy Reserve Center, and other small units at Brunswick. Navy officials  also stated that Brunswick would provide a base from which to carry out  potential homeland defense missions should those missions not be able to  be carried out from other military or civilian airfields in the Northeast.
The Industrial Joint Cross-Service Group had proposed to close the depot  maintenance functions at Barstow because of its low military value and to  increase opportunities for joint maintenance at Army depots doing similar  work. However, the Marine Corps objected to the closure because that  would eliminate its only West Coast ground vehicle depot maintenance  presence and would increase repair cycle times for the Marine’s West Coast  equipment by increasing rail transit and customer turnaround time by 10 to  30 days. In response to the Marine Corps’ concerns, the IEC directed the  Industrial Joint Cross-Service Group to develop several alternative  recommendations that would have closed Barstow but still realigned its  workload to other West Coast activities. The Industrial Joint Cross -Service  Group estimated that all of these options would result in higher net annual  recurring and 20-year net present savings than would the realignment  option. The Commission may want to assess DOD’s rationale for changing  the recommendation from a closure to realignment in light of the projected  reductions in savings.
section_title: Extended Payback Periods
paragraphs: The Navy has two recommendations for which the payback period is  greater than 10 years, much longer than typically associated with  recommendations in the 1995 BRAC round, and the one-time costs are  significantly greater than the projected 20-year savings by which BRAC  rounds are typically measured. The Navy’s proposal to realign Naval  Station Newport by relocating the Navy Warfare Development Command to  Naval Station Norfolk has a 13-year payback period and a projected one- time cost of about $12 million, primarily to rehabilitate existing structures  and move 111 personnel. According to Navy officials, this recommendation  places the Navy Warfare Development Command closer to Fleet Forces  Command and the Second Fleet Battle Lab it supports. Likewise, the Navy  recommendation to close Naval Support Activity Corona has a payback  period of 15 years, one-time cost of about $80 million, and 20-year savings  of about $400,000. Navy data shows that the one-time cost is primarily to  rehabilitate existing facilities and relocate personnel from Corona to Naval  Air Station Point Mugu, California. Navy officials stated the closure had  merit because the Corona facility was a single-function facility whose  mission could be performed at other multifunction bases.
section_title: Potential Impact on the U.S. Coast Guard
paragraphs: Several Navy recommendations to close bases could affect the U.S. Coast  Guard. However, the Navy’s cost and savings analysis did not consider any  costs that could be incurred by the Coast Guard if the bases are closed.  Navy officials recognized that the Coast Guard would be affected by  several of its recommendations and considered the impact in its  deliberations. However, they determined that it was unreasonable to  include any cost estimates for the Coast Guard because the Navy could not  assume the final disposition of the facility and how much, if any, of the  facility the Coast Guard would opt to retain. Coast Guard officials stated  that the Navy briefed them on their potential recommendations several  months prior to the public announcement of the recommendations. The  Coast Guard is in the process of developing potential basing alternatives, to  include cost impacts, for each affected location. However, the Coast Guard  had not completed these estimates in time for us to include them in our  report.
section_title: The Department of the Air Force Selection Process and Recommendations
paragraphs: The Air Force followed the common analytical framework established by  the Office of the Secretary of Defense (OSD) for reviewing its functions and  facilities. The Air Force’s process produced 42 recommendations. Most of  the recommendations are devoted to reserve component bases, including  several realignment actions reallocating aviation assets to multiple  locations. In comparison with the other services, its recommendations  contain the smallest number of closures (three) of active component bases.  It had two major realignments, however, that left the bases in a reduced  active duty status, and another where the base was transferred to the Army,  with the Air Force retaining a limited presence as a tenant. The Air Force  recommendations project the greatest savings of any of the services— $14.6 billion in 20-year net present value savings. Payback periods—the  time required for savings to offset closure and realignment costs—for  active component bases range from immediate to 14 years, and average  3 years, and for reserve component bases they range from immediate to  18 years, and average 6 years. However, our analysis indicates that these  projected savings in each of their categories could have some limitations,  primarily due to the lack of personnel end-strength reductions associated  with claimed savings. In addition, some Air Force recommendations may  warrant additional attention by the BRAC Commission because of  uncertainty regarding future mission requirements for adversely affected  reserve component personnel, and because of lengthy payback periods  associated with some recommendations having been merged with other  recommendations that have shorter payback periods, thus making the  former appear more acceptable. The Air Force Audit Agency, which  performed audits of the data, concluded that the data were sufficiently  reliable for use during the BRAC process.
subsections: section_title: Organization and Focus
paragraphs: The Secretary of the Air Force established a group of senior Air Force  military and civilian personnel to form an executive deliberative body  responsible for conducting the Air Force base closure and realignment  analyses. The Base Closure Executive Group was led by a Deputy Assistant  Secretary and a General Officer from Plans and Programs, who served as  co-chairs. This group’s working-level staff made up the Base Closure  Working Group, which provided direct support for data collection,  validation, and analysis in the development of base closure and  realignment recommendations.
The Air Force 2005 BRAC goals were to transform by maximizing  warfighting capability of each squadron and realigning infrastructure with  future defense strategy, maximizing operational capability by eliminating  excess physical capacity, and to capitalize on opportunities for joint  activity. To guide the BRAC process, the Air Force developed the following  principles, to be applied to both active and reserve components:  Maintain squadrons within operationally efficient proximity to DOD- controlled airspace, ranges, military operations areas, and low-level  routes.
Optimize the size of Air Force squadrons in terms of aircraft models,  aircraft assigned, and crew ratios applied.
Retain enough domestic capacity to base the Air Force entirely within  the United States and its territories.
Retain aerial refueling bases in optimal proximity to their missions.
Better meet the needs of the Air Force by maintaining or placing Air  Reserve Component (Air National Guard or Air Force Reserve  Command) units in locations that best meet the demographic and  mission requirements unique to the Air Reserve Component.
Ensure joint basing realignment actions (in comparison with the status  quo)  either increased the military value of a function or decreased the  cost for the same military value of that function.
Ensure that long-range strike bases provide flexible strategic response  and strategic force protection.
Support the Air Expeditionary Forces framework by keeping two  geographically separate munitions sites.
Retain enough surge capacity to support deployments, evacuations, and  base repairs.
Consolidate or co-locate legacy fleets (such as A-10, B-1, B-52, F-15, and  F-16 aircraft).
Ensure global mobility by retaining two air mobility bases and one  additional wide-body-capable base on each coast.
Several of the above principles were included in an Expeditionary Air  Force Principles White Paper, which outlined principles to shape future  force development and basing. This document, discussed the increased  effectiveness and efficiency of consolidating smaller squadrons into larger  units.  The significant reduction in aircraft based on the future force  structure plan of 2025 will reduce the Air Force infrastructure, including  that of the Air Reserve and the Air National Guard to select the best  combination of bases, while accomadating use of reserve components for  emerging missions, such as homeland defense and unmanned aerial  systems.
section_title: Framework for Analysis
paragraphs: The Air Force BRAC process included a review of 154 installations—70  active and 84 reserve. As with previous BRAC rounds, capacity and military  value analyses provided the starting point for analysis. However, in this  BRAC round the Air Force concentrated its analysis on operational aircraft  and space missions, since joint cross-service groups developed capacity  and military value analyses and recommendations for various commonly  held business-oriented categories, such as education and training,  headquarters, and technical functions. The Air Force Audit Agency  performed an important role in ensuring the accuracy of data used in these  analyses through extensive audits of data gathered at various locations.
subsections: section_title: Capacity Analysis
paragraphs: The Air Force collected information on key capacity areas, such as physical  capacity (buildings and utilities), environmental issues (air emissions and  water resources), encroachment (constraints and noise safety), airfields,  airspace and ranges (operational capacity of runways, ramp space, and fuel  storage), communications (telecommunications), and personnel. The  capacity data call was designed to provide information to assess bases for  current and future missions in the following mission areas: (1) airlift;  (2) space operations; (3) bombers; (4) tankers; (5) command and control  and intelligence, surveillance and reconnaissance; (6) unmanned aerial  vehicles; (7) fighter aircraft; and (8) Special Operation Forces and Combat,  Search, and Rescue. The Air Force also considered surge requirements in  its capacity analysis. According to Air Force officials, surge was defined as  the ability to domestically “bed down” all aircraft, including those currently  stationed overseas, as well as the ability to respond to natural disasters,  emergencies, and runway repairs.
Following the collection of the capacity data call, the Air Force requested  that its eight major commands and the Air National Guard estimate each  installation’s capacity to acquire additional squadrons, taking into  consideration existing conditions, facilities, additional construction  requirements, and operational and environmental infrastructure.
The capacity analysis incorporated information from the 20-year force  structure plan to serve as a baseline and to further define requirements in  the future. Although this analysis indicated the ability of bases to bed down  additional aircraft, according to Air Force officials, it did not provide a  specific excess capacity percentage by installation or major command.  Accordingly, an overall capacity analysis report was not made available to  us, comparable to that provided by the other military departments.  However Air Force officials said they considered capacity information in  their assessment of installations. Air Force officials did provide limited   capacity information in their final BRAC report. Table 15 provides excess  capacity percentages that were calculated for two areas.
According to Air Force officials, their recommendations if implemented are  projected to reduce excess capacity by 37 percent for flight line and ramp  space and 75 percent in buildings and facilities.
section_title: Military Value Analysis
paragraphs: In completing its military value data calls, the Air Force evaluated each of  its bases in each of the eight mission categories, regardless of the base’s  current use. Military value data analysis was directly linked to the four  DOD military value selection criteria required by the BRAC process and  legislation. As shown in table 16, the Air Force developed a weighting  system for the military value criteria with the first two criteria having larger  weights, or importance, than the remaining two criteria.
The Air Force used various military value attributes (characteristics,  factors, etc), metrics (measures), and questions related to each of the four  military value criteria. Key military value attributes included operating  environment, geographic-location factors, key mission infrastructure,  operating areas, mobility/surge, growth potential, and cost. Other  installation-specific attributes included such factors as electromagnetic  spectrum and bandwidth, munitions storage and handling, runway  dimensions, ramp area, space launch, proximity to (and quality of) airspace  and ranges, and geographical factors.
Figure 11 shows how the attributes, metrics, and military value data  questions were linked to the military criteria for the fighter aircraft mission  category.
The Air Force followed a similar process for all eight mission categories.  Likewise, each base was evaluated against metrics associated with each of  the eight mission categories, which resulted in multiple military values for  each base. Air Force officials stated that the resulting military value scores  enabled them to determine which bases were best to retain and which were  less desirable. This enabled them to produce mission compatibility indexes  for their bases related to each of the four military value criteria. However,  the Air Force did not develop one composite score for each base across all  eight mission areas, which might have allowed for a clearer distinction  between lower and higher military value rankings. Instead of developing  one composite score, the Air Force established an overall mission  compatibility index score within each of the eight mission areas, which  provided each installation with eight entirely different scores for the  various mission areas. According to Air Force officials, this approach was  used to apply military judgment to select the best combination of bases to  retain.
section_title: Air Force Audit Agency’s Role in the Process
paragraphs: During both the capacity and the military value data collection and analysis  processes, the Air Force Audit Agency provided the Air Force with real- time evaluations of BRAC 2005 policies, procedural controls, systems, and  data to ensure accurate data and analyses support for BRAC  recommendations. One of its primary efforts involved three audits to verify  the Air Force data call responses submitted during the BRAC process.  Although the auditors found errors or inadequate source documentation,  they reported that most discrepancies were subsequently corrected. In  addition to these nationwide audits, the Air Force Audit Agency produced  audit reports on other facets of the BRAC process, including the Air Force  Internal Control Plan, COBRA data, and various modeling and analysis  tools that were used in development of recommendations. The final Air  Force Audit Agency reports on BRAC data concluded that overall the Air  Force data were reliable for the purpose of developing recommendations.
section_title: Identification and Assessment of Alternate Scenarios and Selection of Recommendations
paragraphs: The Air Force identified over 100 scenarios, which were later reduced to 42  recommendations. The Air Force scenario teams identified potential  scenario groups of like weapons systems, and then the Base Closure  Executive Group selected scenarios for analysis. While the Air Force relied  on certified data to identify proposed closure and realignment  recommendations, other factors were instrumental in guiding decisions for  closures and realignments, including changes in unit sizing, a decreased  force structure, the active and reserve mix and future total force initiatives  such as those discussed in the Expeditionary Air Force White Paper.  Toward the end of the BRAC process, the Air Force eliminated and scaled  back several recommendations because they did not actually result in net  savings. In addition, the Air Force combined several interrelated  recommendations (some that provide savings and some that do not) to  present a consolidated recommendation with savings and a shorter  payback period than would otherwise appear had some recommendations.
The military value data were analyzed by a computer-generated  optimization model called the Air Force cueing tool. This model used the  military value data and the 20-year force structure plan to create a starting  point for Base Closure Executive Group deliberations by allocating aircraft  to the fewest bases while conserving the greatest military value. This model  also included Air Force imperatives. For example, to ensure unimpeded  access to polar and equatorial earth orbits for U.S. satellites, the Air Force  decided that Vandenberg Air Force Base, California, and Patrick Air Force  Base, Florida, must be retained. Likewise, the Air Force retained Andrews  Air Force Base, Maryland, to provide support to the President of the United  States. According to Air Force officials, the cueing tool results were the  starting point for analysis in allocating its inventory of aircraft. The model  had various limitations, such as its inability to factor the active/reserve  force mix for specific types of aircraft or the different types of aircraft at an  installation. Furthermore, it assumes that all aircraft are bedded down at  bases ranked highest in military value, which generally were active bases.  To address these limitations, the Base Closure Executive Group relied on  military judgment in some cases to overrule the results of the model to  preserve the existing active/reserve force mix, a ratio expectation to be  maintained through 2011.
In reviewing alternatives for BRAC recommendations, the Air Force went  through various iterations of the BRAC recommendations (called second  look, third look, and so forth) in order to provide force structure  alignments that conformed to the Air Force principles and improved  military capability and efficiency, consistent with sound military judgment.  Air Force scenario teams analyzed the results of the analytical tools,  including information to be considered with each recommendation—for  example, force structure reductions from the future year force structure  plan, new missions, military construction requirements, homeland defense  missions, and other areas. Furthermore, the scenario teams were  responsible for identifying any “showstoppers,” in terms of capacity or  environmental characteristics that would make a recommendation difficult  to implement.  These consisted of running a potential recommendation  through the COBRA model and developing the information for selection  criteria 6 (economic impact), 7 (community infrastructure), and 8  (environmental impact) to help identify or evaluate possible closure and  realignment actions.
The majority of the candidate recommendations had various components  derived from using the optimization model; however, a few of the  recommendations did not. For example, a few of the candidate  recommendations involved realigning aircraft from an active base to an Air  National Guard station with a lower military value score in order to achieve  the appropriate mix between active and reserve forces and to increase the  standard squadron size. Further, in some recommendations Air National  Guard aircraft were realigned to other Air National Guard stations with a  lower military value to align common versions of weapon system types,  and for strategic interests.
Four other recommendations were not derived from an optimization model  because the model primarily focused on the bedding down of aircraft  rather than specific functional areas, such as repair facilities. These  recommendations involved logistics support centers, standard air  munitions packages (munitions storage), and avionics intermediate repair  and maintenance facilities. Air Force officials told us they had requested  that the Industrial Joint Cross-Service Group consider the above candidate  recommendations in its process, but the group declined and deferred to the  Air Force because it was considering scenarios at a joint operational level  rather than at the installation level. As a result, Air Force officials told us  that they applied either a Mission Compatibility Index approach to these  scenarios in deliberative session to assess installations for future missions  or they recommended certain functions to follow the placement of aircraft  in other Air Force recommendations.
section_title: Recommendations Approved by DOD
paragraphs: The Air Force recommended closing 10 installations (3 active, 3 Air  Reserve, and 4 Air National Guard bases) and realigning 62 other  installations. In total, the Air Force projected its BRAC recommendations  to result in 20-year net present value savings of over $14 billion—the largest  projected savings of any service or Joint Cross-Service Group—and net  annual recurring savings of $1.2 billion. Table 17 shows the financial aspect  of the Air Force recommendations.
Over 80 percent of the projected 20-year savings are based on the first 5  recommendations shown in table 17, which involve closing two and  realigning three active bases and have payback periods of 1 year or less.  Conversely, the one-time costs of over $1.8 billion to implement all  recommendations are primarily comprised of new military construction to  implement the recommendations. Most of the Air Force’s  recommendations involve realignment of Air Guard facilities with limited  savings. For example, the Air Force is proposing to realign five Air National  Guard stations, with payback periods greater than 10 years and $12 million  in 20-year savings, with onetime costs of about $71 million. According to  Air Force officials, these proposals were necessary because the Air Force  recommendations are interwoven, depending on realignment actions from  other recommendations. For example, 72 realignment and closure  recommendations involving active and reserve installations were combined  to create 42 candidate recommendations. At least one segment of all but 3 of the 42 Air Force recommendations that were combined  affects the Air Force Reserve Command or Air National Guard.
Based on our analysis we noted that the majority of the net annual  recurring savings (60 percent) are cost avoidances from military personnel  eliminations. However, eliminations are not expected to result in  reductions to active duty, Air Reserve and Air National Guard end  strengths, limiting savings available for other purposes.
None of the recommendations included in the Air Force’s report involve  consolidation or integration of activities or functions with those of another  military service. However, the Air Force believes that its  recommendations to realign Pope Air Force Base, North Carolina, and  Eielson Air Force Base, Alaska, and to move A-10 aircraft to Moody Air  Force Base, Georgia, will provide an opportunity for joint close air support  training with Army units stationed at Forts Benning and Stewart, Georgia.  Furthermore, the Air Force’s recommendations support transformation  efforts by optimizing (increasing) squadron size for most fighter and  mobility aircraft. According to the Air Force BRAC report, the  recommendations maximize warfighting capability by fundamentally  reshaping the service, effectively consolidating older weapons systems into  fewer but larger squadrons, thus reducing excess infrastructure and  improving the operational effectiveness of major weapons systems. We  have previously reported that the Air Force’s could not only reduce  infrastructure by increasing the number of aircraft per fighter squadron but  could also save millions of dollars annually.
section_title: Issues Identified with Approved Recommendations
paragraphs: Time did not permit us to assess the operational impact of each  recommendation, particularly where recommendations involve multiple  locations. Nonetheless, we offer a number of broad-based observations  about the proposed recommendations and selected observations on some  individual recommendations. Our analysis of the Air Force  recommendations identified some issues that the BRAC Commission may  wish to consider, such as the projected savings from military personnel  reductions; impact on the Air National Guard, impact on other federal  agencies; and other issues related to the realignments of Pope Air Force  Base, North Carolina; Eielson Air Force Base, Alaska; and Grand Forks Air  Force Base, North Dakota and the closure of Ellsworth Air Force Base,  South Dakota.
subsections: section_title: Military Personnel Savings
paragraphs: Our analysis showed that about $732 million, or about 60 percent, of the  projected $1.2 billion net annual recurring savings are based on savings  from eliminating military personnel positions. Initially, the Air Force  counted only military personnel savings that resulted in a decrease in end  strength. However, at the direction of OSD, the Air Force included savings  for all military personnel positions that were made available through  realignment or closure recommendations. The Air Force was unable to  provide us documentation showing at the present time to what extent each  of these positions will be required to support future missions.  According to  Air Force officials, they envision that most active slots will be needed for  formal training, and all the Air Reserve and Air National Guard personnel  will be assigned to stressed career fields and emerging missions.  Furthermore, Air Force officials said that positions will also be reviewed  during the Quadrennial Defense Review, which could decrease end  strength. Either way, claiming such personnel as BRAC savings without  reducing end strength does not provide dollar savings that can be reapplied  outside personnel accounts and could result in the Air Force having to find  other sources of funding for up-front investment costs needed to  implement its BRAC recommendations.
section_title: Impact on the Air National Guard and Reserve Components
paragraphs: At least one segment of all but 3 of the 42 Air Force recommendations that  were combined affects the Air Force Reserve Command or Air National  Guard. The Air Force BRAC report lists 7 closures and 35 Air Reserve and  Air National Guard realignments. Overall, 68 Reserve Command (12) and  Air National Guard (56) installations were affected by a closure or  realignment, or they received aircraft or missions from these actions.  According to Air Force officials, its BRAC recommendations have resulted  in a reduction of 29 installations with flying missions. Of these reduced  installations with flying missions, over 75 percent, or 22, are from the Air  National Guard. If implemented the BRAC recommendations will affect  over 30 percent of the 70 Air National Guard and 13 Air Reserve  installations with air flying units, respectively. Table 18 shows the  reduction of flying units in the BRAC process by active force, Air Force  Reserve Command, and the Air National Guard.
Based on our analysis of COBRA data, we estimate that more than 1,419  positions in the Air Reserve and 5,700 positions in the Air National Guard  will be affected by the proposed recommendations, in terms of military  personnel and civilians eliminated and realigned. In recommendations  affecting active installations, over 26,000 positions are affected (eliminated  and realigned); however, since the Air Force has combined active and  reserve component actions in some recommendations those positions also  include additional Air National Guard and Air Reserve personnel. Also the  Air Force recognizes that in moving Air National Guard and Air Reserve  units, part-time military (commonly referred to as drill) personnel will also  be affected since they will not be moved. A significant portion of the  personnel associated with these units must be replaced at the gaining  installation and will require training. At Air National Guard installations  with flying units, over 30 percent have been recommended for realignment  or retirement; many of the personnel positions associated with the units do  not have missions. Air Force officials said they plan to use these positions  for emerging missions in such areas as homeland security, unmanned aerial  vehicles, and intelligence, which they expect to further refine as part of the  ongoing Quadrennial Defense Review.
Initially, many of the Air Force proposals involving the Air National Guard  and Air Force Reserve with payback periods ranging from 10 to more than  100 years were stand-alone recommendations. Those recommendations  linked by related operational realignment actions were grouped together to  produce recommendations that had significant savings and minimized the  longer payback periods. We found that this occurred in the realignment of  Lambert-St. Louis International Airport Air Guard Station, Missouri, which  originally had a 63-year payback period and resulted in a 20-year net  present value cost of $22 million. However, this realignment is now a part  of the closure of Otis Air National Guard Base, Massachusetts, and the  realignment of Atlantic City Air Guard Station, New Jersey because of  related operational realignment actions. The current combined  recommendation results in a 20-year net present value savings of $336  million and a 3-year payback period.  Figure 12 shows the various BRAC  actions in this recommendation. For example, 18 F-15 fighter aircraft are  realigned from Otis Air National Guard Base and Lambert-St. Louis Air  Guard Station to Atlantic City Air Guard Station. Furthermore, all three Air  Guard Stations also realign other aircraft to three separate installations,  Nellis Air Force Base, Nevada; Burlington Air Guard Station, Vermont; and  Jacksonville Air Guard Station, Florida.
Finally, questions have been raised by various state officials whether the  Secretary of Defense is authorized to close or realign Air National Guard  bases without the consent of the state governor. DOD’s Office of General  Counsel has not issued a legal opinion on this issue. According to an Air  Force official, as of the date of this report, there have been no legal  challenges brought against DOD regarding this issue.
section_title: Impact on the Coast Guard
paragraphs: The Air Force recommendation to close Otis Air National Guard Base could  impact the U.S. Coast Guard. While the Air Force officials recognized the  Coast Guard could be affected if the base was closed, their cost and savings  analysis did not consider any costs that could be incurred by the Coast  Guard. Air Force officials stated they didn’t have access to credible cost  data during the BRAC process since cost estimates would have been  speculative; the Air Force could not assume the final disposition of the  facility and how much, if any, of the facility the Coast Guard would opt to  retain. The Coast Guard is in the process of developing potential basing  alternatives, to include costs impacts, for each affected location.  Subsequent to the recommendations being made public, the Coast Guard  estimated that they would incur about $17 million in additional annual  operating costs to remain at Otis Air National Guard Base.
section_title: Realignment of Selected Active Bases
paragraphs: The realignment of Pope Air Force Base involves the transfer of 100  percent of the acres and facilities to the Army to become part of Fort  Bragg, with a C-130 active/reserve associate unit remaining to support the  Army.  Our analysis indicates that there is a significant difference between  the savings claimed by the Air Force and the costs projected by the Army  regarding base operations support, recapitalization, and sustainment for  facilities on Pope Air Force Base.  For example, the Air Force claimed total  net annual recurring savings of about $36 million for not providing base  operations support and recapitalization and sustainment of facilities on  Pope Air Force Base. However, the Army estimated total annual recurring  costs for these areas to be about $19.5 million.  This estimated cost  comprises over $13 million from the Army as well as over $5.5 million from  the Air Force to remain as tenant at Fort Bragg.  According to Army  officials, their estimated costs included taking ownership for all facilities  on Pope Air Force Base.
The Air Force is also proposing to realign Eielson Air Force Base by  moving all active duty units, leaving the Air National Guard units, and  hiring contractors to provide base operating support and maintenance and  repair of the facilities. The Air Force projects this action would produce a  20-year net present value savings of $2.8 billion, the most of any Air Force  recommendation. Air Force officials said the decision to realign Eielson  was made because of the high cost of operating the base and its value as  major training site.  The officials noted that the realignment will enable the  Air Force to expand an annual training exercise as well as provide  opportunities for increase use of the training area by other Air Force units.  However, we have some question about the facilities that need to be  retained to support the training mission and Air National Guard units.  While the Air Force plans to give up the base family housing, it appears that  all other base facilities would be retained.  For example, Air Force COBRA  data indicates that there will be no reduction in the square feet of facilities.  The data also indicates that 64 percent of the facilities will be sustained at  current funding.
The Air Force proposed to close Grand Forks Air Force Base but this was  changed to a realignment by the Infrastructure Executive Council a week  before the recommendations were finalized within the department. As a  result, the projected savings were significantly reduced, as shown in table  19.
The decision to realign rather than close the base did not  affect the need to  move current aircraft and associated personnel to other bases to achieve  the active and reserve mix. According to the Air Force BRAC report, this  change to a realignment was based on military judgment to keep a strategic  presence in the north central United States and on the fact that Grand  Forks Air Force Base ranked high for acquiring a possible unmanned aerial  vehicle mission. Even though Grand Forks Air Force Base was retained  for strategic reasons, Minot Air Force Base is also located in North Dakota  and is not affected by any BRAC recommendation.  Furthermore, Minot Air  Force Base scored only 3.4 points less than Grand Forks Air Force Base in  the unmanned aerial vehicle mission area.
section_title: Closure of Ellsworth Air Force Base
paragraphs: The Air Force is proposing to close Ellsworth Air Force Base, South  Dakota, and move its 24 B-1 bomber aircraft to Dyess Air Force Base, Texas  to achieve operational efficiencies at one location. Ellsworth Air Force  Base ranked lower in the military value than Dyess Air Force Base. In the  1995 BRAC round, the Air Force considered but chose not to close  Ellsworth Air Force Base out of concern over placing all B-1 aircraft at a  single location. In contrast, one of the Air Force principles which guided  the BRAC 2005 process emphasized consolidating or co-locating legacy  fleets such as the B-1 aircraft. Air Force officials stated that they no longer  had concerns about consolidating the B-1 fleet in one location because it  does not have the same operational mission requirements it had 10 years  ago.
section_title: Education and Training Joint Cross-Service Group Selection Process and Recommendations
paragraphs: The Education and Training Joint Cross-Service Group followed the  common analytical framework established by the Office of the Secretary of  Defense (OSD) for reviewing its functions and facilities. The group  produced a relatively small number of recommendations (nine) compared  with the amount of excess capacity it identified. The group reported that  the Infrastructure Steering Group (ISG) or the Infrastructure Executive  Council (IEC) had each disapproved two recommendations for various  reasons, and four recommendations were rolled into military department  recommendations and are discussed in appendixes related to these groups.  The group’s recommendations are projected to produce $1.3 billion in net  present value savings over a 20-year period. For these recommendations,  the length of time required for the savings to offset closure costs varied  widely, with two recommendations expected to take just 1 year, two other  recommendations requiring 13 and 16 years, respectively, and one never  having any payback. We identified issues regarding the projected savings  and extended payback periods with some recommendations that may  warrant further attention by the BRAC Commission. The DOD Inspector  General and service audit agencies, which performed audits of the data  used in the process, concluded that the data were sufficiently reliable for  use during the BRAC process.
subsections: section_title: Organization and Focus
paragraphs: The overarching goal of the Education and Training Joint Cross-Service  Group was to pursue those educational and training economies and  efficiencies that enhance readiness and promote academic synergies for  more joint or interservice education. The group was chaired by the  Principal Deputy Under Secretary of Defense (Personnel and Readiness),  with senior-level members from Air Force Manpower and Reserve Affairs,  Marine Corp Training and Education Command, Army and Naval  Personnel, and the Joint Staff. This cross-service group was organized into  four subgroups, focusing on (1) flight training, (2) specialized skill  training, (3) professional development education, and (4) ranges.
The group identified five principles that were used to provide focus to its  work:  Advance jointness: Declare jointness paramount for specific functions.
Establish Joint National Training Capability.
Achieve synergy: Jointly construct, co-locate or put in close proximity  multiple functions that are mutually supportive. Increase cross- functional use of training and testing ranges.
Capitalize on technology: Leverage distance learning capability to  significantly reduce residential requirements.
Exploit best practices: Establish centers of excellence. Outsource to  alternative providers.
Minimize redundancy: Identify common functional areas and eliminate  duplication, reduce or avoid costs, standardize instruction, and increase  efficiency.
The organizational structure and the above guiding principles provided a  framework to evaluate the potential of a broad series of transformational  options to improve DOD education and training.
section_title: Framework for Analysis
paragraphs: Capacity and military value analysis became the starting point for the  group’s analyses. The DOD Inspector General and service audit agencies  performed an important role in ensuring the accuracy of data used in these  analyses through selective audits of data gathered at various locations.
subsections: section_title: Capacity Analysis
paragraphs: To form the basis for its analyses, the group developed metrics in each of  the functional areas to measure capacity and subsequently collected  certified data linked to these metrics from various defense activities whose  missions resided within these categories. Each subgroup developed  metrics to analyze capacity and to compare the various functions. The  major standards used by each subgroup are described below:   For undergraduate fixed and rotary flight training, runway and airspace  capacity were the primary metrics used to analyze capacity. Runway  capacity for fixed wing aircraft was calculated using Federal Aviation  Administration standards to define the number of runway operations  that could be conducted during daylight hours for 244 training days, at  12 hours per day. This approach accounted for weather conditions, the  number and configuration of runways, the mix of aircraft, and the  percentage of touchdown/takeoff operations. Other metrics included  the amount of ramp (apron) space and ground-training facilities, such as  classrooms and simulators.
For professional development education, capacity was based on  classroom equivalent hours available on a 6-hour training day basis for  244 days a year. Classroom equivalent hours represent the number of 1- hour classes (15 students per class) that can be held in designated  facilities, and they are based on available classroom space and  instructor office space.
For specialized skill training, capacity was measured by the student  population that can be sustained by the number of available dormitory  rooms, dining facilities, and classrooms. This figure was based on an 8- hour training day for 244 days per year.
For ranges, capacity was based on the volume and time for training and  open air testing at ground, air, and sea levels.
Each subgroup focused its capacity analysis on the existing capability to  perform specific functions. Surge requirements, where applicable, were  determined by military judgment. Excess capacity was defined as current  capacity less current usage plus surge capacity. As seen in table 20,  significant excess capacity was identified across all education and training  functions except for the ranges subgroup.
The percentage of excess capacity includes consideration of surge  requirements for all functions except professional development education.
According to service officials, in the event of a mobilization, postgraduate  educational institutions and facilities would cease to operate and the  students would revert back to their warfighting duties. The surge  requirements for the remaining functions were based on military judgment.  For example, the flight and specialized skill training subgroups used a 20  percent surge factor based on a review of current planning documents and  military judgment. Likewise, a 25 percent surge factor was used for training  ranges and a 10 percent factor for test and evaluation ranges, based on  military judgment. According to service officials, a higher surge factor was  used for training ranges to meet anticipated training needs for  contingencies and mobilization, while test and evaluation are more  measured and predictable and less likely to generate large surge loads on  test and evaluation missions.
The group did not analyze the extent to which its proposed  recommendations would reduce excess capacity across all education and  training functions. Nonetheless, the Air Force estimated that the  recommendation to consolidate undergraduate pilot training would reduce  excess capacity by 2 percent. At the same time, the excess capacity  identified will remain in undergraduate rotary wing training because the  Navy could not agree on a scenario to consolidate training. Since there  were no recommendations involving training ranges, there was no  reduction in excess capacity in the sea and open air testing areas.
section_title: Military Value Analysis
paragraphs: Each subgroup developed military value scoring plans to analyze and rank  each training facility using DOD’s four military value selection criteria. The  subgroups assigned weighted values to each of the four criteria based on  relative importance in assessing the military value of a site under each  subgroup and related functions. Table 21 shows the weights for each  subgroup.
Some key assumptions used by the subgroups in developing scoring plans  for military value include the following:  Installations with larger capacities are of comparatively greater military  value for flight training and specialized skill training.
Managed training areas (particularly airspace) would be extremely hard  to reconstitute if lost due to the BRAC process.
Existing service qualitative training requirements must be maintained.
Retain unique, one-of-a-kind assets or capabilities.
Attributes varied by subgroup. For example, the flight training subgroup  identified six attributes that included airfield capacity, weather,  environmental constraints (air quality, noise abatement, and  encroachment), quality of life, managed training areas, and ground training  facilities. The professional development subgroup applied location (access  to senior political and military decision makers), educational output,  facilities, educational staff, and quality of life. The specialized skill training  subgroup attributes included location, quality of life issues, training  facilities/resources (number of classrooms and available housing), support  for other missions, training mission/throughput, and environmental  constraints/expansion potential. Finally, the attributes for the ranges  subgroup included personnel (experience and education), workload,  physical plant (available space and range features), synergy with other  ranges, and encroachment. Figure 13 gives an example of how the flight  training subgroup was linked to the military value criteria.
The specialized skill training, professional development education, and  ranges subgroups used similar approaches of attributes, metrics, and data  call questions to link analysis back to the military value criteria.
section_title: DOD Inspector General’s and Service Audit Agencies’ Roles in the Process
paragraphs: The DOD Inspector General and service audit agencies reviewed the data  and processes used by each subgroup to develop their recommendations.  The overall objective was to evaluate the validity, integrity, and  documentation of the data used by the subgroups. The DOD Inspector  General and service audit agencies used real-time audit coverage of data  collection and analyses processes to ensure that the data used in the  Education and Training Joint Cross-Service Group capacity analysis and  military value analysis were reliable and certified. Through extensive  audits of the data collected by each subgroup from field activities during  the process, the Inspector General and service audit agencies notified the  group about identified data discrepancies for the purpose of follow-on  corrective action. While the process for validating data was quite lengthy  and challenging, the Inspector General and the service audit agencies  ultimately determined the education and training–related data to be  sufficiently reliable for use in the BRAC process once the subgroups made  corrections to all the discrepancies.
section_title: Identification and Assessment of Alternate Scenarios and Selection of Recommendations
paragraphs: Although corrections were later made, the group did not have accurate and  complete capacity and military value data when it started developing  potential closure and realignment scenarios, and therefore, it had to rely on  incomplete data, military judgment, and transformation options in  developing initial scenarios for consideration. However, certified capacity  and military value data and results of COBRA analyses were subsequently  used to support the group’s final candidate recommendations. The group  initially identified 64 scenarios and selected 17 candidate  recommendations that were forwarded to the ISG. Four of the  recommendations were rejected by the ISG and IEC and 4 of the group’s  recommendations were integrated into military service recommendations.  Ultimately, 9 recommendations were approved by the IEC.
Generally, scenarios were eliminated because they were alternatives to a  recommendation that was selected or because the services objected to the  scenario and the group leadership decided to delete it. For example, the  professional development education subgroup developed three scenarios  to streamline graduate education courses—two to consolidate these  functions at existing military facilities and another to obtain graduate-level  education at civilian colleges and universities. The group selected the  privatization option because of the significant savings; however, it was  rejected by the IEC, as discussed later. The professional development  education subgroup also developed nine scenarios to realign the senior- level education courses provided by the service war colleges. The group  elected to relocate the service war colleges under the National Defense  University as the “best choice” option because it establishes a joint  strategic center of excellence in the National Capitol Region. However, the  IEC rejected this option, as discussed later. Finally, the flight subgroup  developed eight alternatives to consolidate undergraduate pilot training.  However, the Navy and the Air Force objected to these scenarios because  they believed they would result in too much disruption to the pilot  production pipeline.
The flight training subgroup was the only subgroup that used an  optimization model in its scenario analysis. The subgroup used it to identify  potential locations to consolidate undergraduate fixed wing pilot training  functions among 11 installations. According to flight subgroup officials, the  model was not used for rotary wing pilot training because there are only  two locations where this training is conducted. Likewise, they noted that it  was not used to select sites for the Joint Strike Fighter and Unmanned  Aerial Vehicle training because there were limited sites selected for this  training. Officials from the other three subgroups stated they did not use  the model because of the limited number of facilities or functions  reviewed. For example, the professional development education subgroup  compared from two to six locations within each scenario, so the team  manually developed scenarios by maximizing military value and  capitalizing on excess capacity.
section_title: Recommendations Approved by DOD
paragraphs: The group estimated that its recommendations will produce $1.3 billion in  20-year savings and $236 million in net annual recurring savings. Table 22  provides a summary of the financial aspects of the group’s  recommendations, all of which are realignment actions.
Our analysis indicates that $1.3 billion, or over 95 percent, of the group’s  projected 20-year savings results from two recommendations that involve  only the Army—the combat service support center and the air defense  artillery center. The greater part of the projected savings from these two  recommendations is based on military personnel reductions.
While five of the nine recommendations would foster jointness, they have  limited projected savings. For example, the three recommendations that  would establish joint centers of excellence for training (culinary,  transportation management, and religious studies) are projected to  produce only $45.6 million, or less than 1 percent, of the projected 20-year  savings. Furthermore, the recommendation to consolidate the Joint Strike  Fighter training has a payback period of never and a 20-year net present  value cost of $226 million.
section_title: Issues Identified with Approved Recommendations
paragraphs: Time did not permit us to assess the operational impact of each of the  Education and Training Joint Cross-Service group’s recommendations,  particularly where operations proposed for consolidation extend across  multiple locations outside of a single geographic area. While available data  supporting the recommendations suggest that their implementation should  provide for more efficient operations within DOD, the BRAC Commission  may wish to consider the basis for the group’s assumptions about military  personnel reductions, because these have a significant impact on the  recommendations’ annual recurring savings and the potential benefits in  relation to the investment costs for recommendations with longer payback  periods.
subsections: section_title: Military Personnel Reductions
paragraphs: Significant portions of the savings in three recommendations—combat  service support, air defense, and aviation logistics—are related to military  personnel reductions. These recommendations represent $217 million, or  92 percent of the Education and Training Joint Cross-Service Group’s  projected net annual recurring savings. Our analysis indicates that about  $174 million of the net annual recurring savings is based on eliminating  over 2,000 military positions within the Army. However, the Army does not  plan to reduce its end strength by 2,000 in implementing these actions.  These projected revenues do not represent dollar savings that can be  readily reallocated to other accounts and applied to other priorities such as  modernization, an area typically cited as a potential beneficiary of BRAC  savings. Our analysis shows that without the savings from the military  personnel reductions, the payback for the combat service support  recommendation increases to 35 years, and for both the air defense and  aviation logistics recommendations there would be no payback.
section_title: Extended Payback Periods
paragraphs: The group has proposed one recommendation that has no expected  payback period and two others that have payback periods that exceed 10  years, far longer than the average payback typically associated with  recommendations in the 1995 BRAC round. The recommendation to  establish an integrated training center for the Joint Strike Fighter at Eglin  Air Force Base, Florida, has no expected payback period, one-time cost of  $199 million ($168 million is for military construction), and annual  recurring cost of $3.3 million. This recommendation calls for the  realignment of nearly 800 military positions—675 maintenance and 115  pilot—from five military installations to Eglin Air Force Base to train entry- level aviators and maintenance technicians from the Navy, Marine Corps,  and Air Force in how to operate and maintain the new Joint Strike Fighter  aircraft when produced and deployed. According to the chairman of the  flight training subgroup, the recommendation does not provide the  opportunity to generate savings through the consolidation and alignment of  similar personnel because it is a new mission. However, this  recommendation would establish a baseline program in a  consolidated/joint school with a curriculum that brings a joint perspective  to the learning process.
The two recommendations with payback periods greater than 10 years  affect the Army. For example, the recommendation to relocate the Army  Prime Power School from Fort Belvoir, Virginia to Fort Leonard Wood,  Missouri, has a 16-year payback period, onetime cost of $6 million, and a  20-year net present value savings of less than $1 million. According to the  DOD BRAC report, implementation of this recommendation consolidates  engineer courses at Fort Leonard Wood, since the common-core phase of  engineer courses are already taught at Fort Leonard Wood. Likewise, the  recommendation to realign Fort Eustis, Virginia by relocating the Aviation  Logistics School and consolidating it with the Aviation Center and School  at Fort Rucker, Alabama has a 13-year payback period, one-time cost of  $492.3 million, and a 20-year net present value savings of only $77.4 million.  According to the DOD BRAC report, consolidating aviation logistics  training with the Aviation Center and School fosters consistency,  standardization, and training proficiency.
section_title: Proposals Eliminated from Consideration
paragraphs: The proposed recommendations do little to reduce the significant excess  capacity (see table 20) that was identified in undergraduate pilot training  for both fixed and rotary wing aircraft. The Education and Training Joint  Cross-Service group identified several scenarios to consolidate  undergraduate pilot training that could have enabled some base closures,  but the group was unable to get the military services to agree to a joint  solution. As a result, the Air Force made a proposal to realign its  undergraduate pilot training and consolidate its navigator training with the  Navy, which DOD adopted. However, the approved recommendation did  not include rotary wing flight training. According to the chairman of the  flight training subgroup, the capacity and military value analysis clearly  showed that sufficient space is available at Fort Rucker for the Navy  undergraduate rotary wing program to relocate from Naval Air Station  Whiting Field, Florida, to Fort Rucker with limited renovation or military  construction. However, the chairman noted that his group could not get the  Navy to agree to the consolidation because of the Navy’s concerns over  how such actions would affect other training schedules, so it was not  pursued.
The Education and Training Joint Cross-Service group also developed a  proposal to privatize graduate education that was conducted at the Naval  Postgraduate School at Monterey, California, and the Air Force Institute of  Technology at Wright-Patterson Air Force Base, Ohio. The group estimated  that the proposal would produce $14 million in 20-year savings, with  payback in 13 years, and enable the closure of the Monterey location.  However, the IEC removed this recommendation late in the process  because they believed that relying on the private sector to fulfill this  requirement is too risky. According to the Navy’s Special Assistant for  BRAC, the Chief of Naval Operations did not want to lose the synergy and  interaction between U.S. and foreign students who attended the  postgraduate school, and there were questions over whether all graduate- level courses would be available at civilian institutions.
The group also developed a recommendation to consolidate all the military  services’ senior war colleges at Fort McNair, Washington, D.C., making  them one college of the National Defense University. The group estimated  that the proposal would produce $213 million in 20-year savings, with  payback in 2 years. All of the military services voiced concerns about this  recommendation. The Air Force believed that this recommendation would  significantly degrade its Center of Excellence for Professional Military  Education that includes extensive curriculum for air centric studies located  at Maxwell Air Force Base, Alabama. The Navy believed that the existing  system already has joint educational forums to address executive-level  interchange, and it is unclear what would be gained by creating a single  senior war college. Finally, the Army opposed the recommendation  because it would move senior leaders and their families to the National  Capital Region for 10 months. Based on the services’ concerns, the IEC  rejected the proposal. However, the group, with the Army’s concurrence,  developed a recommendation to move the Army War College,  Pennsylvania, to Fort Leavenworth, Kansas, and consolidate it with the  Army Command and General Staff College at a single location. This  proposal would have enabled the closure of Carlisle Barracks in  Pennsylvania, with projected 20-year savings of $555 million and a 2-year  payback period. However, the IEC rejected this proposal because it wanted  to maintain the proximity to Washington, D.C. that provides access to key  national and international policy makers as well as senior military and  civilian leaders.
Finally, the group developed eight scenarios to promote joint management  of the military services’ training ranges. These options included utilizing a  joint national urban operations training center and establishing three joint  regional range coordination centers. The group ultimately proposed one  recommendation to establish three regional joint range coordination  centers, which it projected would have a 20-year cost of $138 million and  no payback. The ISG rejected this recommendation because it deals with a  program action as opposed to a BRAC-related issue.
section_title: Headquarters and Support Activities Joint Cross-Service Group Selection Process and Recommendations
paragraphs: The Headquarters and Support Activities Joint Cross-Service Group  followed the common analytical framework established by the Office of the  Secretary of Defense (OSD) for reviewing its functions and facilities. The  group produced 21 recommendations, each of which resulted in multiple  closures or realignments of activities, mostly from leased space onto  military bases intended to consolidate commands, reduce costs, and  enhance force protection. Nine other recommendations were referred to  other joint cross-service groups or military services for inclusion in their  reports. The group’s 21 recommendations are projected to realize $9.5  billion in net present value savings over 20 years. The payback period, or  length of time required for the savings to offset closure costs for the  recommendations discussed here, varied widely, from immediate to up to  16 years. We have identified some issues that suggest uncertainty about the  level of savings likely to be realized, which the BRAC Commission may  want to consider in its analysis of the proposed recommendations. The  DOD Inspector General and service audit agencies, which performed audits  of the data, concluded that the data were sufficiently reliable for use during  the BRAC process, but did raise issues of concern impacting some  recommendations.
subsections: section_title: Organization and Focus
paragraphs: The Headquarters and Support Activities Joint Cross-Service Group  comprised six senior-level principal members, representing each service,  the Office of the Secretary of Defense, and the Joint Chiefs of Staff. The  group was chaired by the Army Assistant Deputy Chief of Staff for  Programs, and principal members included the Commandant, Naval  District Washington; the Marine Corps Assistant Deputy Commandant for  Manpower and Reserve Affairs; the Administrative Assistant to the  Secretary of the Air Force; the Office of the Secretary of Defense Deputy  Director for Administration and Management; and the Chief of the Forces  Division, Joint Staff. The group analyzed common headquarters-,  administration-, and business-related functions across DOD, covering the  military services, and defense agencies and activities. The group’s  objectives were to   eliminate redundancy, duplication, and excess capacity;   utilize best business practices;   increase effectiveness, efficiency, and interoperability; and  reduce costs.
section_title: Framework for Analysis
paragraphs: The group organized itself into three subgroups: (1) major administrative  and headquarters activities, (2) geographic clusters and functional, and  (3) mobilization. The major administrative and headquarters activities  subgroup focus included headquarters activities in leased and DOD-owned  space within and outside a 100-mile radius of the Pentagon, combatant,  service component, and supporting commands, and reserve and recruiting  headquarters. The geographic clusters and functional subgroup examined  installation management within geographic clusters, Defense Finance and  Accounting Services headquarters and field offices, correctional facilities,  and civilian and military personnel centers. The mobilization subgroup  looked at the potential for joint mobilization sites. Capacity analysis  identified the current inventory of administrative space, while the military  value analysis became the starting point for developing recommendations  as they applied to the four military value selection criteria. The DOD  Inspector General and service audit agencies performed an important role  in ensuring the accuracy of data used in these analyses through extensive  audits of data gathered at various locations.
subsections: section_title: Capacity Analysis
paragraphs: To form the basis for its analyses, the group developed metrics in each of  the functional areas to measure capacity and subsequently collected  certified data from the military services and defense agencies and  activities. In most cases, the group used a single metric, a standard factor  of 200 gross square feet per person in analyzing existing administrative  space requirements. The group also used fiscal year 2003 inmate  population and current and maximum operational capacities for  correctional facilities, and it used fiscal year 2004 personnel processing  numbers and peak processing capacities at military installations serving as  reserve component mobilization sites to estimate mobilization excess  capacity figures.
The capacity analysis identified excess capacity across all functions  analyzed—even when surge requirements were considered. As shown in  table 23, excess capacity ranged from 14 percent to 87 percent across  various capacity metrics in functional categories after applying a surge  factor to figures for major administrative and headquarters installations  and facilities and correctional facilities. The table provides the amount of  the aggregate excess capacity for each of the functional categories;  however, the amount of excess capacity varies by individual installation  and activity.
In calculating excess capacity estimates for each of the eight categories,  the group analyzed the data call responses pertaining to current capacity,  maximum potential capacity, current usage, and space required for surge,  using a standard factor of 200 gross square feet per employee. Subtracting  current usage and surge space requirements from maximum potential  capacity resulted in the excess capacity estimates. The group used a variety  of approaches to consider surge requirements. For example, the major  administrative and headquarters activities subgroup determined surge  requirements through specific data call questions and then used these  requirements in the capacity analysis in terms of requirement and space  evaluations. The correctional facilities function within the geographic  clusters and functional subgroup considered surge as a function of demand  against maximum potential capacity. At the same time, the geographic  clusters and functional subgroup determined that military personnel  centers had been operating in a surge mode for the past several years and  did not require additional surge capacity to be retained. The group did not  determine the aggregate impact its recommendations had on reducing  excess capacity.
section_title: Military Value Analysis
paragraphs: The group’s military value analysis was directly linked to the four military  value selection criteria, as required by the BRAC legislation. The group  assigned military values to 25 civilian personnel offices, 10 military  personnel centers, 17 correctional facilities, 26 Defense Finance and  Accounting Service sites, 65 installation management sites, 334 major  administrative and headquarters installations and activities, and 66  mobilization sites. Each functional group developed weighted values for  each selected criteria by first asking each group member to assess weights  across the military value selection criterion, ranking them from highest to  lowest in importance to military value. Once the rankings were determined,  the weights generated for each group member were compared and, if they  were close, the weights were adopted. If not, the group discussed the  differences and reached agreement. Table 24 shows the various weights  assigned to each of the four military value selection criteria.
The group’s assessment of military value included development of  attributes (characteristics, facts, etc.), metrics or measures, and data call  questions for each of the three subgroups. Figure 14 demonstrates an  example of how attributes, metrics, and data call questions were linked  back to the BRAC military value selection criteria for the major  administrative and headquarters activities subgroup.
The geographic clusters and functional subgroup and the mobilization  subgroup used similar approaches of attributes, metrics, and data call  questions to link the analysis back to the military value selection criteria.  For example, the geographic clusters and functional, and major administive  and headquarters subgroups developed metrics and data call questions  addressing force protection issues.
Using mostly certified data, the headquarters group examined the  capabilities of each function from questions developed to rank activities  from most valued to least valued. Exceptions occurred where military  value responses were slow in arriving, contained obvious errors, or were  incomplete, and in these cases judgment-based data were used. For  example, in about 30 cases, activities in leased space did not respond to  particular data call questions addressed to the leased space building  manager nor did they identify what entity managed the building. After  numerous follow-ups with the activities and meetings with representatives  of the Washington Headquarters Service and Army Corps of Engineers— property agents for DOD—the group decided to use judgment-based data  derived from functional subject matter experts, in consultation with the  military departments and defense agencies. In an October 2004  memorandum to the Infrastructure Steering Group describing military  value scoring plan changes, the Headquarters and Support Activities Joint  Cross-Service Group concluded that based on an analysis of the effect of  the missing, wrong, and incomplete data on proposals, there were some  data issues that could affect the generation and comparison of proposals by  the group members. However, improvements to the data occurred over  time, and as of May 2005, when the military value analysis was completed,  the group reported that a vast majority of its data were certified. We were  told by a group operations research analyst that 99 percent of the analysis  was determined by certified data and less than 1 percent by judgment- based data.
section_title: DOD Inspector General’s and Service Audit Agencies’ Role in the Process
paragraphs: The DOD Inspector General and service audit agencies reviewed the data  and processes used by each subgroup to develop their recommendations;  the military service audit agencies reviewed data inputs from the services,  and the Inspector General reviewed data inputs from defense agencies and  activities. Their objectives were to validate the data and the adequacy of  the supporting documentation. The process for detecting and correcting  data errors was quite lengthy and challenging. Through their audits of the  data collected from field activities during the process, audit agencies  notified the group as data discrepancies were discovered so that follow-on  corrective actions could be initiated. The military service audit agencies  concluded that the information was sufficiently reliable for its intended  purpose. Assessments by the DOD Inspector General’s office of the data it  reviewed were more mixed. In its June 10, 2005 draft report on the  Headquarters and Support Activities Joint Cross-Service Group’s data  integrity and internal control process for BRAC, the DOD Inspector  General’s office concluded that after corrections were made, the group  generally used certified data and created an adequate audit trail for its  capacity, military value, and cost of base realignment actions. However, the  Inspector General’s office raised issues involving estimated one-time  savings associated with vacating leased space and consistency in rounding  to estimate personnel savings. According to group officials, the Inspector  General’s issues were discussed with group leadership, and they decided in  deliberative session that the approaches taken by the group were the most  fair and accurate approaches available and should be retained.
Our analysis indicates that the two issues identified by the Inspector  General would reduce projected savings. Our analysis shows that if the  one-time cost savings associated with antiterrorism and force protection  are excluded, the 20-year net present value savings would be reduced by  $268.4 million, the payback periods for 7 of the 15 affected  recommendations would be extended by 1 year, and 3 years for one  recommendation. Also, for the two recommendations identified by the  Inspector General as using abnormal rounding techniques to estimate  personnel reductions, the projected 20-year net present value savings in  one case would be reduced from $13.5 million to a $749,000 cost, and for  the other recommendation, the 20-year net present value savings drops  from approximately $4.9 million to $ 2.6 million.
section_title: Identification and Assessment of Alternate Proposals and Selection of Recommendations
paragraphs: The Headquarters and Support Activities Joint Cross-Service Group  developed proposals without receiving all the data they had requested from  numerous activities. As such, the group relied on transformational goals  and military judgment to develop its initial proposals. The group also used  certified data to support or reject its proposals, data which the DOD  Inspector General audited for accuracy. The group used the optimization  model on a limited basis for a few functional areas because potential for  those functional realignment possibilities was generally slight.
The following transformation options helped guide the group in developing  initial proposals:  Consolidate management at installations with shared boundaries and in  geographic clusters.
Consolidate or co-locate civilian and military personnel offices.
Consolidate Defense Finance and Accounting Service central and field  offices.
Establish and consolidate mobilization sites and establish joint  deployment processing sites.
Justify locations for headquarters, commands, and activities within 100  miles of the Pentagon.
Eliminate leased space.
Consolidate multi-location headquarters at single locations, and  eliminate stand-alone headquarters.
Consolidate corrections facilities.
Co-locate reserve and active component recruiting headquarters, and  eliminate reserve force management organizations.
Regionalize common headquarters, administrative, and business-related  common support activities.
The group initially developed 117 proposals, based on these  transformational options and military judgment, to include alternative  proposals being requested by the Infrastructure Steering Group (ISG). The  group settled on 50 recommendations that were initially forwarded to the  ISG. Seventeen of them were subsequently consolidated with other  recommendations; 2 were rejected by the ISG and one by the Infrastructure  Executive Council. Also, 9 recommendations were transferred to other  cross-service groups or military departments for inclusion in their reports.  That left 21 recommendations that the group addressed in its report and  accordingly are addressed in this appendix.
section_title: Recommendations Approved by DOD
paragraphs: The Headquarters and Support Activities Joint Cross-Service Group  projects that its 21 recommendations will produce a 20-year net present  value savings of $9.5 billion, net annual recurring savings of about $914  million, and payback, or length of time required for the savings to offset  closure costs for the recommendations, that varies widely from immediate  to up to 16 years. Table 25 provides a summary of the financial aspects of  the group’s recommendations.
In total, the group estimates that its recommendations will require a total  investment of $2.5 billion, primarily for new military construction and  moving personnel from leased space onto military bases, and will  ultimately result in net annual recurring savings of $914.2 million. Our  analysis indicates that about 92 percent of the annual recurring savings  results from reductions in military and civilian employment levels (about  $270 million, and about $267 million respectively) and the elimination of  future lease payments for administrative office space ($300 million).  Eighteen of the group’s recommendations are expected to realize savings  within 10 years of completing the BRAC realignment and closure actions,  while 3 have a payback period greater than 10 years.
section_title: Issues Identified with Approved Recommendations
paragraphs: Time did not permit us to assess the operational impact of each  recommendation, particularly where operations are proposed for  consolidation across multiple locations outside a single geographic area.  However, we offer a number of broad-based observations about the  proposed recommendations. While available data supporting the  recommendations suggest that their implementation should provide for  more efficient operations within DOD, the BRAC Commission may wish to  consider the basis of the group’s assumptions for personnel reductions  because they have a significant impact on the recommendations’ savings;  the assumptions regarding vacating leased facilities because including  antiterrorism and force protection savings also has an impact on the  recommendations’ savings; challenges to implementing joint basing; cases  where realignment actions with long payback periods were combined with  actions with shorter durations; stand-alone actions where the payback  period exceeded 10 years; and proposals eliminated prior to release of the  final recommendations.
subsections: section_title: Personnel Reductions
paragraphs: Approximately $537 million, or about 59 percent, of the group’s projected  net annual recurring savings are based on reductions in the number of  military and civilian personnel eliminated as a result of the BRAC actions.  The process used raises questions about the projected savings. The group  initially used generic savings factors to estimate the number of personnel  positions that could be eliminated when organizations were co-located or  consolidated. These factors were developed on the basis of comments from  subject matter experts and research of various databases available through  the Pentagon library or the Internet. The group found that personnel  reductions from 14 percent to 30 percent resulted from consolidation of  organizations and 7 percent to 15 percent when they were co-located. The  group adopted these personnel savings factors because the information it  did collect on the number of personnel performing common support  functions within the affected organizations could not be used and believed  it did not have sufficient time to perform more precise manpower studies.  The group used these savings factors consistently as starting points in  negotiating the number of personnel reductions with the military  departments and defense agencies and activities. In most cases the  negotiated estimates were accepted, but in some cases the group imposed  a personnel reduction percentage when negotiations failed. For example, in  analyzing the costs and savings associated with relocating the Army  Materiel Command from temporary lease space on Fort Belvoir, Virginia, to  Redstone Arsenal, Alabama, the group leadership decided to impose a 7  percent personnel elimination based on expected economies of scale from  co-locating the command with one of its major subordinate activities. Our  analysis showed that the percentage factor used to estimate personnel  reductions for all recommendations ranged from zero percent to about 42  percent.
A separate area of concern involves savings reported for military  personnel. Our analysis indicates that the group’s recommendations  propose to eliminate 2,479 military positions, which would result in about  $270 million in net annual recurring savings. However, service officials  indicate that they do not plan to reduce their end-strength based on these  proposed eliminations but rather reallocate these positions elsewhere  within the force structure. Since these military personnel will be assigned  elsewhere rather than removed from the force structure, the projected  savings do not represent dollars that can be readily allocated outside the  personnel accounts to other purposes.
section_title: Leased Space
paragraphs: Fifteen of the group’s recommendations include a one-time savings of over  $300 million from moving activities from leased space onto military  installations. For example, these recommendations, if approved, would  reduce total DOD leased space within the National Capital Region from 8.3  million square feet to about 1.7 million square feet, or by 80 percent. While  our prior work generally supports the premise that leased property is more  expensive than government owned property, the recommendations related  to vacating leased space also raises questions about a limitation in  projected savings and impact on local communities.
The one-time cost savings represents costs expected to be avoided in the  future by moving from leased facilities onto government owned and  protected facilities rather than upgrading existing leased space to meet  DOD’s antiterrorism and force protection standards. According to a DOD  official, the department put together a task force after the June 1996  Khobar Tower bombing incident in Dhahran, Saudi Arabia, of mostly  engineers to develop minimum force protection standards for all DOD- occupied locations. The official also stated that application of the  standards in BRAC was not the result of a threat or vulnerability  assessment of the affected facilities. The Pentagon Force Protection  Agency will shortly begin a 10-month antiterrorism and force protection  vulnerability assessment of about 60 DOD-occupied leased buildings in the  National Capital Region. This assessment will provide DOD with  information to estimate the costs and feasibility of upgrading leased  facilities to the antiterrorism and force protection standards. The force  protection standards for leased buildings apply only where DOD personnel  occupy at least 25 percent of the net interior usable area; only to the  portion of the building occupied by DOD personnel; and to all new leases  executed on or after October 1, 2005, and to leases renewed or extended on  or after October 1, 2009. Initially, the group prepared military value data  call questions that could determine whether a leased location met the force  protection requirements. However, group officals stated that most of these  questions were discarded because of inconsistencies in how the questions  were answered except for the percentage of DOD personnel occupying  buildings.
The group applied the cost avoidance factor consistently to all leased  locations but did not collect data that would indicate whether existing  leases met the standards, which could possibly result in application of the  factor at locations meeting the force protection requirements. For example,  the group applied over $2 million in one-time force protection cost  avoidance to relocate a Navy human resources service center from the  Stennis Space Center, Mississippi, to the Naval Support Activity,  Pennsylvania, even though the Stennis Space Center may be as secure as  any military installation. If these one-time savings, as shown in the final  recommendations forwarded to the BRAC Commission, are not considered  in the cost and savings analysis, our analysis shows that the projected 20- year net present value savings decrease by 3 percent  ($268.4 million), the payback period increases by 1 year for 7 of 15  recommendations, and by 3 years for one recommendation as shown in  table 26. After the final recommendations were released to the BRAC  Commission, the group found errors in some recommendations, affecting  one-time estimated savings and other costs and savings, which were still in  the process of being corrected at the time of this report.
Furthermore, four of the Headquarters and Support Activities Joint Cross- Service Group’s recommendations involve moving personnel from leased  space to Fort Belvoir, Virginia, mostly at the engineering proving ground,  increasing Fort Belvoir’s population by about 10,700. The  recommendations include military construction projects to build facilities  for these personnel on Fort Belvoir. In addition, the recommendations  include a $55 million Army estimate to improve roads and other  infrastructure in the area surrounding the fort. However, it is uncertain at  this time whether this will be sufficient to fully support the impact on the  surrounding community’s infrastructure, or the likelihood that federal  assistance is likely to be sought by local governments to help communities  reduce the impact—costs that will have the effect of increasing one-time  costs and offsetting short-term savings from the recommendations.
Implementation Challenges While the proposal to create joint bases by consolidating common  installation management functions is projected to create greater  efficiencies, our prior work suggests that implementation of these actions  may prove challenging. The joint-basing recommendation involves one  service being responsible for various installation management support  functions at bases that share a common boundary or are in proximity to  one another. For example, the Army would be the executive agent for Fort  Lewis, Washington, and McChord Air Force Base, Washington, combined as  Joint Base Lewis-McChord. However, as evident from our recent visit to  both installations and discussions with base officials, concerns over  obstacles such as seeking efficiencies at the expense of the mission, could  jeopardize a smooth and successful implementation of the  recommendation. Further, Air Force officials stated that most military  personnel at McChord are mission critical and deployable, increasing the  difficulty to identify possible Air Force military personnel reductions. The  group projects 20-year net present value savings of about $2.3 billion, with  net annual recurring savings of about $184 million. More than 90 percent of  the recurring savings reported represent military (54 percent) and civilian  (37 percent) personnel reductions. The group applied personnel reductions  ranging from 1 to 10 percent for each of the 12 locations included in the  joint basing recommendation. The actual percentage used for each location  was negotiated between the group and the military departments based on  the size of base populations and the kind of services provided.
In our June 2005 report we noted that DOD and the military services’  ability to forecast base operations support requirements and funding needs  has been hindered by the lack of a common terminology for defining base  support functions, as well as by the lack of a mature analytic process for  developing base support requirements. We also reported challenges in  maintaining adequate funding to meet base operating support requirements  and facility upkeep. We concluded that until such problems are resolved,  DOD will not have in place the management and oversight framework  needed for identifying total base support requirements and ensuring  adequate delivery of services, particularly in a joint environment. In its  comments to a draft of our June report, DOD indicated that it expects to  release a new facilities operation model by December 1, 2005, and use it to  develop the fiscal year 2008 program and budget. DOD stated that it is also  conducting a cross-department initiative to develop definitions for the  common delivery of installation services and expects to complete this  effort by December 2005. However, regarding modeling efforts, a Senior  Joint Basing Group official expressed doubt during our review whether  there would be a single funding model because base operating support, as  it currently exists, has too many diverse activities to model. He indicated  that it is more likely that a suite of tools will evolve over time.
section_title: Bundling Lessens Visibility of Costs
paragraphs: The headquarters group consolidated some recommendations with more  than 10-year payback periods, far longer than typical payback periods in  the 1995 BRAC round, with other proposals having shorter returns on  investment. In total, 8 of the 21 final recommendations were actually  packages that consolidated two or more recommendations approved by the  joint cross-service group as stand-alone candidate recommendations. We  found that in 7 instances, the more than 10-year payback periods of initially  stand-alone proposals tended to be masked after they were combined in  such packages. For example, the group developed a proposal to move the  Army Materiel Command from Fort Belvoir, Virginia, to Redstone Arsenal,  Alabama, which showed a 20-year net present cost and a 100-year payback  period by not having to spend about $71 million to construct a permanent  facility for the headquarters at Fort Belvoir. Had the construction savings  been included in the recommendation, the payback period would have  been 32 years. Concurrently, the group developed a separate proposal to  relocate various Army offices from leased and government-owned office  space mostly onto Fort Sam Houston, Texas, which would result in a 20- year net present value savings of about $277.4 million and a 3-year payback  period. The group decided to combine these two stand-alone proposals so  that all Army headquarters related activities were addressed in one  recommendation with an estimated 20-year net present value savings of  about $123 million with a 10-year payback.
section_title: Extended Payback Periods
paragraphs: The group proposed three recommendations that have an estimated  payback period exceeding 10 years and one-time costs for implementation  that greatly exceeds the expected 20-year net present value savings. The  cost, savings, and expected benefits for these recommendations are  described below:   The recommendation to co-locate military department and DOD  security clearance adjudication and appeals activities to Fort Meade,  Maryland, has an estimated payback of 13 years, one-time cost  exceeding $67 million, and 20-year net present value savings of only  $11.3 million. According to the DOD final BRAC report, implementation  of this recommendation would co-locate adjudication activities, reduce  lease costs, and enhance security.
The recommendation to consolidate the Defense Commissary Agency  Eastern and Midwestern regions and a leased site in Hopewell, Virginia,  to Fort Lee, Virginia, has an estimated 14-year payback period, one-time  cost exceeding $47 million, and 20-year net present value savings of only  $4.9 million. According to the DOD BRAC report, implementation of this  recommendation would consolidate headquarters operations at single  locations, enhance security, and reduce lease costs.
The recommendation to establish joint regional correctional facilities  has an estimated 16-year payback period, one-time cost of almost  $179 million, and 20-year net present value savings of only $2.3 million.  For example, the recommendation would establish the Midwest Joint  Regional Correctional Facility by relocating correctional functions  currently located at Lackland Air Force Base, Texas; Fort Knox,  Kentucky; and Fort Sill, Oklahoma, to Fort Leavenworth, Kansas.  According to the DOD BRAC report, implementation of this  recommendation would improve jointness, centralize corrections  training, and eliminate or significantly reduce old inefficient facilities.
section_title: Proposals Eliminated from Consideration
paragraphs: Three recommendations were initially approved by the group; two were  later rejected by the ISG and another by the IEC. The ISG rejected the  recommendation to relocate U.S. Southern Command, Miami, Florida, from  its leased space to a state-owned leased space also in Miami with no  explanation. Group officials stated the ISG rejected the U.S. Southern  Command recommendation because costs associated with the relocation  were too high. The ISG also rejected the relocation of U.S. Army Pacific  Headquarters from Fort Shafter, Hawaii, to Pearl Harbor, Hawaii, because  of Pacific Command Combatant Commander and the Army concerns  regarding future requirements of U.S. Army Pacific Headquarters. The  recommendation rejected by the IEC to co-locate military department and  DOD medical activities to the National Medical Center, Bethesda, Maryland  was discarded because of cost and long payback issues.
In other cases, Headquarters and Support Activities Joint Cross-Service  Group members considered proposals that could have fostered jointly  operated support activities, but they were later dropped on the basis of  cost considerations and perceived operational risks. For example, the  group considered co-locating all military personnel offices at one location.  However, in analyzing this proposal, the group determined that  implementing the joint proposal would be very costly, while also citing  concerns about the uncertain availability of skilled employees at a single  location to operate the joint facility. Therefore, the group concluded that it  was better to co-locate or consolidate personnel centers within the  individual military departments. Similarly, for civilian personnel centers the  group developed a proposal to consolidate 25 offices that are currently  operated by the military departments and defense agencies into 10 DOD  “joint” offices. However, the proposal was dropped after concerns were  raised by one military department that the risks associated with  implementing joint personnel offices concurrently with processing  paperwork supporting other BRAC-related personnel moves and  implementing a new standardized personnel data system were too high.  Consequently, the IEC directed the group to revise its proposal. The group  revised its proposal to provide for consolidating the 25 current offices into  12 offices—4 to be operated by the Army, 4 by the Navy, 1 by the Air Force,  and 3 by a single agency providing support to the defense agencies. While  DOD did not recommend the creation of joint military personnel offices or  joint civilian personnel offices, it is important to note that each of the initial  proposals included justifications citing ongoing efforts within the  department to establish standardized personnel processes and systems.
The recommendation to co-locate components of the U.S. Transportation  Command does not include the Navy Military Sealift Command, one of the  service component organizations. The group developed a proposal to move  the Army and Navy component of the Transportation Command to Scott  Air Force Base, Illinois. While the Army agreed to the proposal, the Navy  did not believe that the group should be proposing to move the Military  Sealift Command because it was considered an operational headquarters  and not an administrative function under the purview of the Headquarters  and Support Activities Joint Cross-Service Group. The ISG agreed with the  Navy and deleted the Military Sealift Command from the recommendation,  which reduced projected 20-year net present value savings from $1.30  billion to $1.28 billion.
section_title: Industrial Joint Cross-Service Group Selection Process and Recommendations
paragraphs: The Industrial Joint Cross-Service Group followed the common analytical  framework established by the Office of the Secretary of Defense (OSD) for  completing its review. The group initially produced 34 candidate  recommendations; 3 were disapproved by the Infrastructure Executive  Council (IEC); and several were subsequently integrated into larger  military service recommendations. As a result, the group had 17 remaining  recommendations that are addressed in this appendix. These 17  recommendations represent a mixture of closures and realignments with  the realignments often encompassing the consolidation of various types of  industrial workloads at fewer locations. Although some of the  recommendations may be considered transformational, limited progress  was made in recommending major actions to foster greater interservicing  among the services. Industrial group officials said this was due to  economic and military value considerations as well as the downsizing of  maintenance facilities in prior BRAC rounds. Altogether, DOD projects  these recommendations to produce about $7.6 billion in net present value  savings over a 20-year period; nearly all are projected to have short  payback periods (time required to recoup up-front investment costs) with  expected savings offsetting expected implementation costs either  immediately or within a few years. One recommendation has a payback  period exceeding 10 years. However, uncertainty exists about the precision  of the savings estimates because many estimates are based on efficiency  gains that are yet to be validated and other factors. Further scrutiny by the  BRAC Commission of this and other recommendations may be warranted  to assess the impact of reductions against future force structure needs or  capacity constraints. The DOD Inspector General and the military service  audit agencies, which performed audits of the data, concluded that the data  were sufficiently reliable for use during the BRAC process.
subsections: section_title: Organization and Focus
paragraphs: The industrial group was composed of senior-level principal members from  the installations directorates for each service, the Defense Logistics  Agency (DLA), and the Joint Chiefs of Staff and was supported by staff  from these organizations. The Under Secretary of Defense (Acquisition,  Technology and Logistics) chaired the group, which in turn forwarded its  proposed recommendations to the Infrastructure Steering Group (ISG) for  its review and approval. The group organized its BRAC analyses around  three subgroups: (1) maintenance, (2) ship overhaul and repair, and  (3) munitions and armaments. All of the subgroups focused their work  similarly on identifying opportunities for reducing excess capacity.
section_title: Framework for Analysis
paragraphs: The industrial group’s analytical process included a review of nine distinct  industrial areas across each of the military services. They included:  (1) ground vehicles, aircraft, and other depot maintenance; (2) ground  vehicles, aircraft, and other intermediate maintenance; (3) ship depot  maintenance; (4) ship intermediate maintenance; (5) munitions production;  (6) munitions storage; (7) munitions demilitarization; (8) munitions  maintenance; and (9) armaments production. As per the BRAC process  outlined by OSD, capacity analysis and military value analysis provided the  starting point for the cross-service group’s work. The DOD Inspector  General and service audit agencies performed an important role in ensuring  the accuracy of data used in these analyses through extensive audits of  data gathered at various locations.
subsections: section_title: Capacity Analysis
paragraphs: To form the basis for its analysis, the group developed metrics in each of  the nine industrial areas to measure current capacity and subsequently  collected certified data linked to these metrics from various defense  activities across the country whose missions resided within these  categories. While the most predominate metric was direct labor hours— used by both the maintenance and ship overhaul and repair subgroups  exclusively and by the munitions and armaments subgroup in some  instances—the munitions and armaments subgroup also used other metrics  for measuring capacity. For example, for measuring munitions production,  the subgroup used pounds and units, and for measuring munitions storage,  the subgroup used square feet and short tons. The disparate nature of the  functions analyzed by the group did not lend itself to a “one size fits all”  analytical approach and each of the three subgroups conducted its own  capacity analysis.
The munitions and armaments and ship overhaul and repair subgroups  defined excess capacity as the difference between current capacity and  current usage. For depot maintenance, the maintenance subgroup defined  excess capacity as the difference between current capacity and the larger  of current usage or core requirements. Core requirements are those  workload needs that must be performed in organic rather than contractor  facilities. For intermediate maintenance, the maintenance subgroup  defined excess capacity as the difference between current capacity and  current usage. The cross-service group’s capacity analysis showed that  excess capacity existed within many of functional areas it examined,  especially in those of munitions and armaments functions. As shown in  table 27, the estimates of excess capacity ranged from 7 percent to 91  percent among individual functional categories.
The three subgroups addressed surge requirements in their capacity  analyses to varying degrees. For the maintenance subgroup, the excess  percentages represent excess capacity above surge requirements, because  the collected core requirements data included surge requirements and the  excess capacity calculations were based on the larger of current usage or  core requirements. For the munitions and armaments subgroup, the excess  capacity percentages represent the capacity available to meet surge  requirements. According to munitions and armaments subgroup officials,  there are no over-arching, quantified, DOD-wide surge requirements for  munitions and armaments. Instead, surge becomes a factor of how much  excess capacity is available and can be addressed through multiple work  shifts. Conversely, the percentages for ship repair and overhaul do not  address surge requirements. According to ship overhaul and repair  subgroup officials, because the Navy’s surge requirements are dictated by  emergent deployments or ship repair requirements and because shipyards  are normally workloaded to their workforce capacity, surge capability is  limited to the use of overtime and delaying previously planned work.
As table 27 shows, the data indicate that there was not much excess  capacity in the ground vehicles, aircraft, and other depot maintenance area.  Therefore, in that area the group focused much of its attention on  minimizing sites by redistributing and consolidating workload. On the  other hand, while many of the group’s ship overhaul and repair and  munitions and armaments recommendations were directed toward  reducing excess capacity, group officials did not calculate a percentage for  the reduction in excess capacity made possible by implementing the  recommendations.
section_title: Military Value Analysis
paragraphs: The military value of activities within the group played a predominant role  in formulating recommendations. In completing its military value  assessment, the industrial group assessed each activity across the four  established military value criteria to more fully evaluate the potential for  realignment and closure actions. As was the case with capacity analysis,  the disparate nature of the industrial areas analyzed by the group precluded  a uniform analytical approach among the three subgroups. As a result, the  subgroups differed in the methodology they used to develop relative  weights for the military value criteria for each of their functions. Table 28  shows the various weights assigned to each of the four military value  criteria by the subgroups for their functions.
The group’s military value analysis also included the development of  attributes, metrics, and data call questions for each of the nine functional  areas represented in the categories in the chart above which were linked  back to the four military criteria. Figure 15 provides examples of these  attributes, metrics, and data questions and shows how each of these was  linked back to the criteria.
Because of the disparate nature of the industrial areas analyzed by the  industrial group, the subgroups also differed in the way they assigned  military value scores to their respective activities. For instance, the  maintenance subgroup determined military value by commodity only and  did not develop an overall military value score for activities in the depot  and intermediate maintenance functions. Because military value scores  were only determined for activities by commodity, activities were only  ranked within their respective commodities. For example, Rock Island  Arsenal, Illinois, received a military value score for its combat vehicle  maintenance workload and was ranked accordingly against all the other  depot level activities that perform combat vehicle maintenance. In  addition, because most activities involve multiple commodities, such as  major maintenance functions like aircraft engines, electronics, etc., many  of the activities received multiple military value scores. In the case of Rock  Island Arsenal, it not only received a military value score for its combat  vehicle maintenance work but also for its tactical vehicle maintenance  work and its other equipment maintenance work. These military value  scores were then used in an optimization model to determine the best  locations to consolidate various like commodities among the three  services. In all cases, the subgroup examined redistributing the workload  to activities with a higher military value score for that commodity.  According to the maintenance subgroup, determining military value by  commodity allowed for more opportunities to create interservicing and  consolidations of workload among the services. The maintenance  subgroup’s process was focused on military value and available capacity  without regard to service. The final recommendations were tempered by  financial and operational considerations. However, as we discuss later, our  analysis shows that while some interservicing may be achieved, most of the  group’s recommendations remained relatively service-centric. The ship  overhaul and repair and munitions and armaments subgroups, on the other  hand, developed overall military value scores for activities within their  respective functions and ranked their activities within those functions  accordingly. For example, all shipyards were ranked together under the  depot maintenance function, and all industrial activities that perform  munitions production were ranked together under the munitions  production function.
section_title: DOD Inspector General’s and Service Audit Agencies’ Role in the Process
paragraphs: The DOD Inspector General and the service audit agencies played  important roles in ensuring that the data used in the industrial group’s data  analyses were certified and properly supported. Through extensive audits  of the data collected from field activities during the process, these audit  agencies notified the group regarding any identified data discrepancies for  the purpose of follow-on corrective action. While the process for detecting  and correcting data errors was quite lengthy, the audit agencies ultimately  deemed the industrial data to be sufficiently accurate for use in the BRAC  process.
section_title: Identification and Assessment of Alternate Scenarios and Selection of Recommendations
paragraphs: The industrial group did not have complete capacity or military value data  when it initiated the development of potential closure and realignment  scenarios. Therefore, it had to rely on incomplete data as well as military  judgment to determine which industrial areas had excess capacity and  which could receive new workloads. As time progressed, however, the  group obtained the needed data to inform and support its scenarios. The  DOD Inspector General validated the data.
The maintenance and munitions and armaments subgroups used an  optimization model to help facilitate scenario development, while the ship  overhaul and repair subgroup, which had similar data problems, also relied  on incomplete data as well as military judgment to help formulate  scenarios for consideration. This subgroup did not rely on the optimization  model as extensively as the other subgroups due to the relatively small  number of activities analyzed. Collectively, the subgroups initially  developed 120 proposals and scenarios and with the maturation of the data,  completion of Cost of Base Realignment Actions (COBRA) analyses, and  elimination of alternative scenarios, the industrial group settled on 34  recommendations that were forwarded to the ISG with all but 3 being  ultimately approved by the IEC.
Despite having incomplete data, the maintenance subgroup began its  scenario development by generating several ideas as potential scenarios. In  testing the feasibility of these ideas, the maintenance subgroup found it  useful to use an optimization model, because the subgroup was dealing  with a universe of 57 commodities across 28 depot level activities and 11  commodities across over 200 intermediate level activities which made it  extremely difficult to determine where workload could be consolidated or  redistributed. For realignment considerations, officials told us the  preferred method was to consolidate workload at the highest military value  sites that remained open in the optimization results, but military judgment  also played a role in finalizing the sites. In some instances, military  judgment was used to override the results of the optimization model. For  example, the subgroup chose not to realign the rotary aircraft workload  from the Naval Air Depot at Cherry Point, North Carolina, to the Corpus  Christi Army Depot, Texas, even though it was proposed for realignment  under the optimization model because of concerns about establishing a  single point of failure or vulnerability for DOD’s rotary aircraft workload.
One issue that the maintenance subgroup dealt with during its scenario  development was that the current DOD capacity baseline for its  maintenance work was based on a single shift 40 hours per week workload.  According to the subgroup, when using the optimization model, it found  that existing capacity as measured on this basis would constrain its ability  to identify options for achieving more economical operations. Further,  recognizing that such a baseline was inconsistent with industry practice,  the subgroup modified the capacity baseline to one and a half shifts with a  60 hours weekly workload, thus increasing available capacity at its  industrial activities and the potential for consolidating work at fewer  locations. As we reported after the 1995 BRAC round, a capacity baseline of  a single shift 40 hours per week workload is a conservative projection of  capacity because the private sector frequently uses a capacity baseline of  two or two and a half shifts. In addition, based on more current  information of private sector capacity utilization, we still believe that a  single shift is a conservative projection of capacity, since many firms today  work multiple shifts.
Like the maintenance subgroup, the munitions and armaments subgroup  also used the optimization model to test the feasibility of its ideas and to  facilitate its scenario development and analysis. Its emphasis was on  increasing multi-functional activities, (i.e., those activities that have the  capability to do more than one munitions and armaments function). During  scenario development, the subgroup’s preference was to eliminate excess  capacity through closure versus realignment.
The ship overhaul and repair subgroup, on the other hand, used mostly  capacity and military value data in combination with military judgment in  developing and analyzing its scenarios. Due to the small number of  activities analyzed—22 depot and intermediate level ship overhaul and  repair activities—the subgroup did not have to rely on the optimization  model to determine where workload could be potentially consolidated or  redistributed. While it did use the model primarily to check the feasibility  and rationalization of scenarios, military judgment was required because  most of the subgroup’s scenarios were influenced by Navy force structure  changes and planned changes in the homeports of ships. According to  industrial group officials, expected out-year changes in Navy force  structure—specifically expected reductions in the number of ships— allowed them to recommend the closure of a shipyard. Expected changes  in the homeports of ships also influenced the subgroup’s intermediate level  scenarios because the Navy’s intermediate level maintenance is generally  performed where ships are homeported.
section_title: Recommendations Approved by DOD
paragraphs: The industrial group’s 17 recommendations are estimated to produce an  estimated $7.6 billion in 20-year net present value savings. Table 29  provides a summary of the financial aspects of the group’s  recommendations.
Most of the projected savings from the group’s recommendations are  concentrated in relatively few recommendations and nearly all have an  immediate or moderately short payback period where projected savings  are anticipated to offset the implementation costs either immediately or  within a few years. The recommendation regarding the establishment of  Navy fleet readiness centers is by far the largest in terms of overall savings,  accounting for about $341 million, or about 56 percent, of the total  estimated net annual recurring savings. As discussed later, only one  recommendation—the realignment of the Watervliet Arsenal, New York,  has a lengthy payback period exceeding 10 years.
Of the industrial joint cross-service group’s 17 recommendations, 8 are  closures and 9 are realignments. However, contained within these  recommendations are 40 smaller, individual realignment actions and  several recommendations involve installations with less than 300 personnel  that could be but were not required to be proposed under BRAC. The  following summarizes some of our overall observations about the group’s  recommendations.
Interservicing: Despite setting up its military value scoring for  maintenance by commodity to foster opportunities for interservicing,  the industrial group actually developed few recommendations that  proposed greater interservicing. Of the 9 realignment recommendations,  we consider only three to involve interservicing—(1) realigning the Air  Force’s depot maintenance workload at Lackland Air Force Base, Texas,  to Tobyhanna Army Depot, Pennsylvania, (2) realigning the Navy’s depot  maintenance at Naval Weapons Station Seal Beach, California to several  other service depots, and (3) realigning Lima Army Tank Plant, Ohio, to  support, in part, the future manufacturing of the Marine Corps  expeditionary force vehicle. DOD has stated recently that there is some  interservicing of ground maintenance work already being performed at  the major depots. However, while there is significant interservicing of  electronics work at Tobyhanna Army Depot, Pennsylvania and of rotary  work at Corpus Christi Army Depot, Texas, our analysis shows that  interservicing at the major ground vehicle maintenance depots is very  limited. For example, in fiscal year 2003, only 3 percent of Anniston  Army Depot’s total workload was for the Marine Corps and only 3  percent of Marine Corps Logistics Base Barstow’s and Marine Corps  Logistics Base Albany’s workloads was for the Army. Moreover, out of  17 major maintenance depots across the services, the group only  proposed the closure of three—Portsmouth Naval Shipyard, Maine, Red  River Army Depot, Texas and Marine Corps Logistics Base Barstow,  California—with Barstow ultimately becoming a realignment. No  recommendations were developed regarding the Air Force’s three  relatively large air logistics centers and only Navy-centric  recommendations were developed regarding the Navy’s three naval air  depots, despite that the industrial group had registered scenarios  consolidating similar types of work from a naval air depot into air  logistics centers. According to group officials, they decided not to  propose these as recommendations because of the Navy’s desire to  combine its aircraft depot and intermediate work into fleet readiness  centers and because this recommendation offered greater financial  benefits. As a result, this essentially removed the naval air depots from  the BRAC analysis in considering opportunities for more interservicing.  While not considered an industrial group recommendation or otherwise  addressed in this appendix, the industrial group’s work also helped the  Navy develop a recommendation realigning some of the workload at  Marine Corps Logistics Base Barstow to Army depots. This  recommendation is discussed in appendix IV.
Closures: Regarding eight closures, four involve underutilized Army  ammunition facilities, and three are chemical demilitarization facilities  where the primary mission is slated to disappear in the coming years.
Savings: Essentially all of the projected savings from the group’s  recommendations are based on reducing overhead and eliminating  civilian and military personnel as installations are closed and functions  are realigned between installations. For example, 63 percent of the  group’s total projected net annual recurring savings is from reductions  in overhead and 37 percent is from personnel eliminations with civilians  making up 21 percent of total net annual recurring savings and military  personnel 16 percent.
Taken individually, the recommendation that the industrial group expects  will generate the greatest amount of savings is the establishment of the  Navy’s fleet readiness centers, which is estimated to produce net annual  recurring savings of $341 million or 56 percent of the group’s total net  annual recurring savings and an estimated 20-year net present value  savings of $4.7 billion or 62 percent of the group’s estimated total net  present value savings. This realignment recommendation differs from the  other realignments in that it proposes a significant business process  reengineering effort to integrate the Navy’s non-deployable, intermediate  and depot level aircraft maintenance rather than a consolidation or  realignment of workload. While the changes proposed would appear to  have the potential for significant savings, as explained below, some  uncertainty exists about the full magnitude of the savings estimate for this  recommendation because most of the group’s projected savings are based  on efficiency gains that have yet to be validated. For example, based on our  analysis, over 63 percent of the estimated net annual recurring savings for  this recommendation are miscellaneous recurring savings projected to  accrue from overhead efficiencies, such as reduced repair time and  charges, while 12 percent of the annual recurring savings is produced from  reductions in military personnel and 24 percent of the savings is derived  from reductions in civilian personnel. These efficiencies are expected to be  gained from integrating intermediate and depot levels of maintenance and  not having to ship as many items to faraway depots for repair. In addition,  34 percent of the group’s net implementation savings for this  recommendation is derived from other one-time unique savings accrued  from one-time reductions in spare parts inventories.
section_title: Issues Identified with Approved Recommendations
paragraphs: Time did not permit us to assess the operational impact of each of the  industrial group’s recommendations that was approved by DOD,  particularly those with minimal financial impact and where minimal  realignment and consolidation of workload was proposed. At the same  time, however, we offer a number of broad-based observations about  selected proposed recommendations regarding high payback periods and  uncertain savings that the BRAC Commission may want to consider in its  review.
subsections: section_title: Navy’s Fleet Readiness Centers
paragraphs: The recommendation on fleet readiness centers is essentially a Navy  business process reengineering effort to transform the way the Navy  conducts aircraft maintenance by integrating existing, non-deployable,  intermediate and depot maintenance levels into a single, seamless  maintenance level. The fleet readiness center construct focuses on the  philosophy that some depot level maintenance actions are best  accomplished at or near the operational fleet. Although the data suggests  the potential for savings, we believe there is some uncertainty regarding  the magnitude of the industrial group’s expected savings for these  readiness centers because its estimates are based on assumptions that have  undergone limited testing, and full savings realization depends upon the  transformation of the Navy’s supply system. In determining the amount of  savings resulting from the establishment of the fleet readiness centers, the  industrial group and the Navy made a series of assumptions that focused on  combining depot and intermediate maintenance in a way that would reduce  the time an item is being repaired at the intermediate level, which in turn,  would simultaneously reduce the number of items needed to be kept in  inventory and the number of items sent to a depot for repair. These  assumptions, which were the major determinant of realignment savings,  were based on historical data and pilot projects and have not been  independently reviewed or verified by the Naval Audit Service, DOD  Inspector General, or us. Moreover, how well these actions, if approved,  are implemented will be key to determining the amount of savings realized.
According to the group, two types of savings account for the majority of the  projected savings from the fleet readiness center recommendation. First,  one-time savings are projected to accrue from reductions in inventory  maintained at several Navy shore locations because item repair cycle time  for components is reduced with more depot level maintenance being  performed at or near the fleet, generally at an intermediate facility.  According to group officials, this reduction is accomplished by stationing  several depot level repair personnel at an intermediate facility to assist in  repairing an item on site rather that spending time re-packing and shipping  the item to a depot for repair. By reducing the turnaround time for an  item—that is, time spent in transit to and from a depot level repair facility,  group officials estimate that the average time an item is in the repair  pipeline will decrease from 28 hours to 9 hours, with nearly all that time  spent on the actual repair. The industrial group maintains this reduction in  turnaround time will allow for savings since fewer items will need to be  kept in the shore based aviation consolidated inventory because items will be getting repaired quicker and returned to the inventory faster.  The second type of savings is recurring overhead savings that are projected  to accrue from fewer items being sent to depots for repair. According to  group officials, establishing fleet readiness centers will result in fewer  items being sent to a depot to be repaired, thus reducing per item  maintenance costs. These savings are captured in the COBRA model under  overhead as miscellaneous recurring savings. As explained by group  officials, when an item is sent to a depot, two charges are applied to the  cost to repair the item—a component unit price and a cost recovery rate.  So, if fewer items are sent to a depot, then fewer repair charges are  incurred and less overhead costs are incurred.
However, according to an industrial group official, since the depots will  have fewer items to repair, they will have fewer opportunities to generate  revenue to support their working capital fund operations. This situation, in  turn, could create an incentive for the depot to increase its cost recovery  rate for items it does repair to make up for reduced revenues. If this were  to occur, then the projected savings would not materialize because most of  the fleet readiness center savings are based on a reduction in the number of  items sent to depots and are contingent on the supply system not  drastically raising the cost recovery rate. According to industrial group  officials, it will be important to overall transformation efforts that DOD  follow through on eliminating management structures and duplicate layers  of inventory in the supply system. Also, according to these officials, some  of this supply-side transformation is already underway at the retail level in  the form of a partnership between fleet industrial supply centers and the  naval air depots where material management for the depots was handed  over to the supply centers to standardize supply chain processes, improve  material availability, and reduce the material excesses that have been a  difficult problem for the naval air depots. In addition, group officials stated  that the supply and storage joint cross-service group’s recommendation to  realign supply, storage, and distribution management should also further  this transformation by eliminating unnecessary redundancies and  duplication and by streamlining supply and storage processes, which will  reduce costs and help prevent a large increase in the cost recovery rate.
In addition, we believe there is some potential risk in properly accounting  for depot level work to meet legislatively mandated reporting requirements  on the percentage of depot workload performed in government and  contractor facilities, absent efforts to ensure adequate differentiation of  work completed for intermediate and depot level maintenance. We  previously reported on similar difficulties in 2001 involving a consolidation  of intermediate and depot level work at Pearl Harbor Naval Shipyard,  Hawaii. We noted that, prior to consolidation, the Navy’s determination of  depot and intermediate maintenance work was based on which facility  performed it—the former Pearl Harbor shipyard performed depot work,  and the former intermediate maintenance facility performed intermediate  work. However, because Pacific Fleet and Pearl Harbor officials asserted  that all work was considered and classified the same at the consolidated  facility, the management and financial systems did not differentiate  between depot and intermediate categories of work. As a result, the lines  between what was considered intermediate and depot maintenance  became blurred, making it harder to report what was intermediate and  depot maintenance. The industrial group maintains that during the first few  years of implementing the fleet readiness center recommendation, the  Navy will continue to operate depot maintenance within the working  capital fund (setting up a separate holding account) and perform  intermediate maintenance with mission funding. During this period, depot  maintenance will be reported as depot maintenance and intermediate  maintenance will be reported as intermediate maintenance. While this  should mitigate the accounting issue in the short-term, it is unclear to what  extent longer term measures will be needed to ensure proper reporting of  depot work to meet statutory requirements.
section_title: Savings for Chemical Depots after Implementation
paragraphs: The net annual recurring savings may be overstated for the three chemical  depots recommended for closure—Newport, Umatilla, and Deseret—and it  is unclear whether such facilities are appropriately included in the BRAC  process. The industrial group estimated net annual recurring savings of  $127 million for the three chemical demilitarization facilities, $20 million of  which is from anticipated savings by not recapitalizing these closed BRAC  installations. However, the current missions of each of these installations  are focused on the destruction of existing chemical weapons stockpiles,  and after the stockpiles are destroyed, the destruction facilities themselves  are scheduled to be dismantled and disposed of in accordance with  applicable laws and agreements with the governors of the states in which  they are located. With the exception of the recommended transfer of  storage igloos and magazines from Deseret to Tooele Army Depot, Utah,  Army officials have not identified any existing plans for future missions at  these depots once the chemical destruction mission is complete.  Consequently, it is unclear how the closure of the depots will result in  recapitalization savings. Additionally, given the general delays in the Army’s  chemical weapons destruction program it is uncertain that it will be able  to complete the chemical weapons destruction mission and close these  depots within the 6-year BRAC statutory implementation period.
section_title: Hawthorne Army Depot
paragraphs: There is uncertainty surrounding the Army’s ability to close the Hawthorne  Army Depot, Nevada, by 2011, the final year as prescribed by the BRAC  legislation for implementing BRAC actions. The Army may be unable to  demilitarize all the unserviceable munitions stored at the depot by 2011,  thereby placing the Army at risk for closing the depot by that date. Army  officials told us that demilitarization funds have not been fully used for  demilitarization purposes in recent years, but for other purposes. As a  result, the stockpile of unserviceable munitions is growing. The funding  situation is of such concern that an Army official told us they intend to  request the DOD Comptroller issue a memorandum that would  administratively “fence” funding in the demilitarization account to better  ensure that the funds will be used for reducing the stockpiles of  unserviceable munitions. This official also told us that this funding  situation could be further exacerbated with the potential for the return to  the United States of additional unserviceable munition stockpiles that are  currently stored in Korea, even though the group considered these stocks  in its analysis. This official stated that if these unserviceable munitions are  returned for demilitarization to Hawthorne, there will be added pressure to  finish the demilitarization process in time to close the facility by 2011.
section_title: Closure of Ammunition Plants
paragraphs: Currently, the Army leases some property at its ammunition plants through  the Army’s program called the Armament Retooling and Manufacturing  Support Initiative. DOD has recommended for closure four ammunition  plants that are part of this initiative—Mississippi, Kansas, Lone Star, and  Riverbank. We previously reported that, while this initiative has offset  some of the Army’s maintenance costs, maintaining ammunition plants in  an inactive status still represents a significant cost to the federal  government. Through this initiative, the Army contracts with an operating  contractor that conducts maintenance, repair, restoration, and remediation  in return for use of the inactive part of the facility. The operating  contractor, in turn, locates and negotiates with tenants regarding lease  rates, facility improvements, and contract terms. However, the effect on  these tenants of closing the four ammunition plants involved with the  initiative is currently unknown. Army officials responsible for the initiative  told us that past transfers of such property outside of the BRAC process  have been handled poorly in that the General Services Administration or  Army Corps of Engineers, the agencies responsible for transferring excess  property, evicted the tenants and then sold the property separately, as was  the case in past closures such as the Indiana Army Ammunition Plant.  Army officials said that property transfers conducted in this manner could  be costly because the government must incur some costs that were paid by  the tenants, such as for security and maintenance. For example, an Army  analysis showed that retaining the ARMS tenants on Indiana Army  Ammunition plant rather than evicting them would have saved about  $41 million. Additionally, DOD may incur some costs if leases are  terminated early. An industrial group official told us that the group  included termination costs for leases that extended past the proposed  closure date but only for tenants performing DOD work, not for other  tenants. We believe that lease termination costs should have been included  for any tenant’s lease that extends past the proposed closure date, since  there may be a cost incurred for breaking the lease early. However Army  officials said that it would be difficult to estimate such potential costs at  this time.
section_title: Watervliet Arsenal, New York
paragraphs: Despite having a payback period of 18 years, the industrial group proposed  the realignment of Watervliet Arsenal, New York, because it has  considerable excess capacity and DOD will no longer require some of its  capabilities. The group had originally considered either moving the entire  workload of the arsenal to Rock Island Arsenal, Illinois, or moving the  entire workload of Rock Island Arsenal to Watervliet Arsenal. However,  according to industrial group officials environmental issues regarding  potential chromium discharges into the Mississippi River and costs  associated with moving heavy industrial equipment precluded a cost- effective realignment of moving the work at Watervliet Arsenal to Rock  Island Arsenal. Similarly, air quality issues regarding sulfur dioxide  emissions along with the costs to move equipment precluded a cost- effective realignment of moving the work at Rock Island Arsenal work to  Watervliet Arsenal, since the Northeast region already exceeds allowable  limits for sulfur dioxide emissions. As shown in the table 29, the Watervliet  recommendation has a payback period of 18 years, with about $63.7 million  in one time unique costs and only $5.2 million in net annual recurring  savings. According to industrial group officials, these one-time costs reflect  the costs of “shrinking the footprint,” (i.e., moving out of buildings and  eliminating and moving excess equipment at both the arsenal and the  accompanying research laboratories also located at the arsenal).
section_title: Intelligence Joint Cross-Service Group Selection Process and Recommendations
paragraphs: The Intelligence Joint Cross-Service Group followed the common  analytical framework established by the Office of the Secretary of Defense  (OSD) in reviewing its functions and facilities. The Intelligence Joint Cross- Service Group produced two recommendations that it projects will yield  about $588 million in 20-year net present value savings, with a payback  period of 8 years for each recommendation. The majority of savings in the  two recommendations result from lease terminations. Unlike the services  or other groups, there is little savings projected from personnel reductions  because, according to officials, almost all of the personnel will relocate and  end strength is projected to increase as a result of program growth. The  DOD Inspector General and service audit agencies, which performed audits  of the data, concluded that the data were sufficiently reliable for use during  the BRAC process.
subsections: section_title: Organization and Focus
paragraphs: The intelligence group was responsible for reviewing intelligence functions  throughout DOD. Previous BRAC rounds did not involve the participation  of any joint cross-service group dedicated to analyzing intelligence  functions. The intelligence group was chaired by the Deputy Under  Secretary of Defense (Counterintelligence & Security). The Group’s  principals included senior members from the Defense Intelligence Agency,  National Geospatial-Intelligence Agency, National Reconnaissance Office,  National Security Agency, each military department, and the Joint Staff  Directorate for Intelligence, along with representation from the offices of  the Director, Central Intelligence Community Management Staff, and the  Department of Defense Inspector General.
The intelligence group formed four functional subgroups: Sources and  Methods; Correlation, Collaboration, Analysis, and Access; Management  Activities; and National Decisionmaking and Warfighting Capabilities. The  first three subgroups each created an analytical construct for measuring  defense intelligence capacity that resulted in a capacity data call. These  subgroups were eventually replaced by a single Core Team that included  membership from each organization represented in the Intelligence Joint  Cross-Service Group. This team created a single, consolidated analytical  construct for measuring the military value of defense intelligence facilities.  The team also performed detailed capacity and military value analysis,  evaluated scenario ideas, executed scenario data calls, and prepared  Intelligence Joint Cross-Service Group candidate recommendations for  deliberation.
The overarching intelligence principle the group worked to support was  that DOD needs intelligence capabilities to support the National Military  Strategy by delivering predictive analyses, warning of impending crises,  providing persistent surveillance of our most critical targets, and achieving  “horizontal” (that is, interagency) integration of networks and databases.  To do so, the group focused on four key objectives:  Locating and upgrading facilities on protected installations as  appropriate.
Reducing vulnerable commercial leased space.
Realigning selected intelligence functions/activities and establishing  facilities to support continuity of operations and mission assurance  requirements.
Providing infrastructure to facilitate robust information flow between  analysts, collectors, and operators at all echelons and achieve mission  synergy.
The group conducted an assessment of defense intelligence for buildings,  facilities, and personnel performing the intelligence function. The objective  was to project an alignment of present capabilities, with current  organizational compositions and business processes, to desired future  operational capabilities, using DOD’s transformational concepts and  preferred organizational construct.
section_title: Framework for Analysis
paragraphs: The intelligence group initially identified five broad functions to analyze in  defense intelligence: Sources and Methods (Acquisition and Collection);  Analysis; Dissemination; Management Activities; and Sustainability. Based  on subsequent Infrastructure Steering Group guidance, these five broad  functions were consolidated into a single function—defense intelligence— in the final military value scoring plan. Capacity analysis and then military  value analysis were the starting points for the BRAC analytical process.  The DOD Inspector General and service audit agencies performed an  important role in ensuring the accuracy of data used in these analyses  through extensive audits of data gathered at various locations.
subsections: section_title: Capacity Analysis
paragraphs: To assess capacity, the intelligence group identified buildings and facilities  performing the intelligence function and developed related attributes,  metrics, and questions for analysis. Data calls were issued to the defense  intelligence community to gather certified data on intelligence buildings  and facilities. The capacity analysis identified limited excess capacity in  some organizations, but no overall excess capacity, as shown in table 30.
The negative excess capacity shown in table 30 differs from the group’s  initial capacity data results, which showed an overall excess capacity of  18 percent. However, after reviewing the initial data, the intelligence group  made two adjustments. First, the group removed buildings with no direct  intelligence mission, such as barracks, pump houses, tunnels, or  warehouses. Then the group increased its estimate of the area of square  feet required for personnel temporarily working at another intelligence entity and for contractor personnel by 50 percent. The group did not  identify any known documented requirements for the defense intelligence  community to set aside space or facilities for surge. The intelligence  community has historically handled surge operations by reassigning and  reallocating existing resources within the current square footage.
section_title: Military Value Analysis
paragraphs: All BRAC 2005 selection criteria were applied by the intelligence group  across the defense intelligence functional support area and used with the  force structure plan and infrastructure inventory to perform analyses.  Priority consideration was given to military value by evaluating and scoring  activities based on the first four selection criteria. Table 31 below shows  the weighted value the intelligence group gave to the criteria, based on a  100-point scale.
The intelligence group assessed the military value of its facilities based on  those facilities’ capabilities to support the intelligence function. A single  scoring plan measured the value of both the infrastructure and the  personnel performing the defense intelligence function at a given facility.  Attributes and weighted metrics were used to compute the military value of  a building by assessing the facility’s physical infrastructure and locations as  they related to selection criteria 1 through 4. After computing military value  scores, a rank-ordered listing of the 267 intelligence facilities was  developed for the defense intelligence function. Subsequently, strategy- driven scenarios were validated by analyses of military value data and  military judgment. Figure 16 illustrates how the military value attributes,  metrics, and data questions were linked to the military value criteria using  selected attributes, metrics, and questions.
A similar process was followed for all of the 267 intelligence facilities.
section_title: DOD Inspector General’s and Service Audit Agencies’ Role in the Process
paragraphs: The DOD Inspector General and service audit agencies reviewed the data  and processes used by the Intelligence Joint Cross-Service Group to  develop its recommendations. The overall objective was to evaluate the  validity, integrity, and documentation of data used by the subgroups. The  DOD Inspector General and service audit agencies used real-time audit  coverage of data collection and analysis processes to ensure that the data  used in the groups’ capacity analysis, military value analysis, and use of  optimization models was certified and was used as intended. Through  extensive audits of the data collected from field activities during the  process, the DOD Inspector General notified the group of data  discrepancies for the purpose of follow-on corrective action. The DOD  Inspector General ultimately determined, once the corrections to all the  discrepancies were noted, the intelligence data to be sufficiently reliable  for use in the BRAC process.
section_title: Identification and Assessment of Alternate Scenarios and Selection of Recommendations
paragraphs: The Intelligence Joint Cross-Service Group developed 13 scenarios, which  after further analysis led to 6 candidate recommendations being presented  to the Infrastructure Steering Group and the Infrastructure Executive  Council, the latter of which approved 3 candidate recommendations. One  of these 3 approved candidate recommendations was subsequently  incorporated into a recommendation proposed by the headquarters group.
Some scenarios were eliminated because they were alternatives to a  proposed recommendation. Other scenarios were eliminated because of  concerns over high implementation costs and long payback periods—that  is, the length of time required for the savings to offset closure costs. For  example, the group developed a scenario to establish selected continuity of  operations and mission assurance functions at White Sands Missile Range,  New Mexico, but it was disapproved by the Infrastructure Executive  Council because it had a one-time cost of $1.8 billion and a projected  payback period of never.
section_title: Recommendations Approved by DOD
paragraphs: The Intelligence Joint Cross-Service Group projects that its two  recommendations will produce almost $588 million in 20-year net present  value savings, and almost $138 million in net annual recurring savings.  Table 32 below provides a summary of the financial aspects of the group’s  recommendations.
The majority of the net annual recurring savings in the two  recommendations is from the avoidance of future leased cost when  activities move from leased space to military installations. Intelligence  Joint Cross-Service Group officials noted that about one-half of the  estimated $1.1 billion one-time costs for the National Geospatial- Intelligence Agency move will be paid from National Intelligence Program  funds.
section_title: Issue Identified with Approved Recommendations
paragraphs: The recommendation to move the National Geospatial-Intelligence Agency  from various leased sites to Fort Belvoir, Virginia, will have a significant  impact on the local community when added to other proposals to move  activities to Fort Belvoir. This one proposal would move about 8,500  personnel to Fort Belvoir from Bethesda, Maryland, Washington, DC and  the northern Virginia area. The BRAC Commission may wish to consider  the impact on the local community infrastructure, such as roads and public  transportation, when evaluating this and other proposals affecting Fort  Belvoir.
section_title: Medical Joint Cross-Service Group Selection Process and Recommendations
paragraphs: The Medical Joint Cross-Service Group followed the common analytical  framework established by the Office of the Secretary of Defense (OSD) for  reviewing the military health care system. It produced 22 candidate  recommendations; one was disapproved late in the process by the  Infrastructure Executive Council (IEC), and one was integrated with a  service recommendation. The remaining 20 recommendations were  combined into 6 recommendations that were ultimately approved by DOD.  These 6 recommendations are projected to produce about $2.7 billion in  estimated net present value savings over a 20-year period. The expected  payback period, or length of time for the savings to offset costs associated  with the recommendations, varies from immediately to 10 years. We have  identified various issues regarding the recommendations that may warrant  further attention by the BRAC Commission. These include the likelihood  that some estimated savings could be less than projected, lengthy or no  payback periods for certain proposed actions imbedded within the more  complex recommendations, and uncertainties about future requirements  and their impact on the viability of the recommendations. While the group  encountered some challenges in obtaining accurate and consistent certified  data on a cross-service basis, the DOD Inspector General and the military  service audit agencies ultimately concluded that the data used by the  medical group were sufficiently reliable for use in the BRAC process.
subsections: section_title: Organization and Focus
paragraphs: maintain and improve access to care for all beneficiaries, including   identify and maximize synergies from co-location or consolidation, and   examine outsourcing opportunities, such as increasing the use of  civilian care providers, to allow DOD to leverage its efforts across the  overall United States health care system.
section_title: Framework for Analysis
paragraphs: The medical group organized and conducted its BRAC analyses of DOD’s  military health care system focusing on three broad functions: (1) health  care services; (2) health care education and training; and (3) medical and  dental research, development, and acquisition. As with other military  services and joint cross-service groups, capacity and military value  analyses were the starting points for the group’s analyses. The DOD  Inspector General and service audit agencies performed an important role  in ensuring the accuracy of data used in these analyses through extensive  audits of data gathered at various locations.
subsections: section_title: Capacity Analysis
paragraphs: In establishing the analytical framework for developing its  recommendations, the medical group analyzed the military health system’s  capacity in terms of services, workloads, and facilities. The group  developed specific functional area metrics for measuring capacity and  collected certified data associated with these metrics from military  installations across the country. It used a range of metrics, depending on  the functional area being assessed, such as military health care population  and workloads, number of hospital beds, available and currently used  building space, length and frequency of education and training programs,  personnel requirements, and equipment usage, to measure capacity. group’s capacity analysis report acknowledged that even though  adjustments have been made to the health care system since the BRAC  1995 round, the medical system infrastructure is still generally based on a  Cold War strategy with minimal reliance on civilian health care providers.
TRICARE network, civilian medical education and training programs, and  extended operations.
According to DOD medical officials, the Department of Health and Human  Services, rather than DOD, is responsible for domestic homeland medical  support, but defense medical personnel and infrastructure could be used to  assist in handling domestic medical emergency situations. According to  DOD officials, since this support is not part of DOD’s defined mission, it  was not included in the medical group’s analysis. However, DOD officials  also told us that the Joint Chiefs of Staff and the OSD had coordinated the  BRAC analysis with major commands that would be impacted by BRAC  proposals, including the U.S. Northern Command, which is responsible for  the homeland defense mission.
DOD is in the process of reviewing the military health care system’s ability  to meet future medical readiness requirements, including an evaluation of  medical infrastructure at various levels of operations from contingencies to  full operational surges. DOD intends to include Department of Homeland  Security policies in this review. According to DOD officials, the results of  this ongoing assessment were not included in the medical group’s capacity  analysis because the assessment is not expected to be completed until after  the BRAC recommendations are finalized, following reviews by the BRAC  Commission, the President, and Congress. Nevertheless, the medical group  made a determination that the current medical force size was adequate to  meet the requirements of various war plans, and after reviewing the fiscal  year 2006 program objective memorandum and the 20-year force structure  plan, it decided to use the current force structure for its analysis. Further,  the group concluded that deployment force sizing, a readiness issue, did  not have direct influence on determining excess facility capacity.
The medical group estimates that its recommendations, if adopted, would  result in a 12 percent reduction in excess inpatient medical capacity and an  approximately 7.4 million square feet net reduction in overall facility space.
section_title: Military Value Analysis
paragraphs: The medical group’s assessment of military value, like its excess capacity  assessment, focused on the same three functional areas: (1) health care  services; (2) health care education and training; and (3) medical and dental  research, development, and acquisition.
The military value analysis helped to establish the basis for realigning  medical functions across the various installations or closing specific  activities within the medical infrastructure. It also helped to gauge the  impact of the group’s proposed scenarios on the overall DOD health care  system. The military value methodology for this BRAC round was similar,  in many respects, to the one used in the 1995 round, especially for medical  functions. For example, both rounds identified affected populations and  local civilian providers within catchment areas. In both rounds, military  value played a predominant role in formulating recommendations.  Moreover, during the 2005 round, the medical group considered the impact  on local beneficiaries, such as military retirees, from downsizing or  eliminating medical facilities, which included input from a DOD-chartered  military health benefit working group. This working group included  independent members who represented TRICARE regions throughout the  United States.
The medical group’s functional military value analysis assessed the relative  capabilities of various activities and facilities supporting the military health  care system’s mission and operational needs. Its military value analysis was  directly linked to the four military value criteria required by the BRAC  legislation. For example, the military value analysis gave greater weight to  services supporting active duty members in order to emphasize force  readiness. Table 34 shows the relative weights that the group developed for  each of the four selection criteria that relate to military value.
Medical and dental research, development, and acquisition weight 1. The current and future mission  capabilities and the impact on  operational readiness of the total force of  the Department of Defense, including the  impact on joint warfighting, training, and  readiness. 2. The availability and condition of land,  facilities, and associated airspace  (including training areas suitable for  maneuver by ground, naval, or air forces  throughout a diversity of climate and  terrain areas and staging areas for the  use of the Armed Forces in homeland  defense missions) at both existing and  potential receiving locations. 3. The ability to accommodate  contingency, mobilization, surge, and  future total force requirements at both  existing and potential receiving locations  to support operations and training. 4. The cost of operations and the  manpower implications.
In developing its analysis in accordance with the criteria above, the group  developed specific functional area attributes, metrics, and data call  questions to assist in assessing military value. Figure 17 provides an  example of such analysis for the health care services functional area and its  linkage to the BRAC legislation.
Population—active duty, dependents,  and other beneficiaries—eligible to  receive medical care from the military  health system.
Age and condition of medical treatment  facilities.
Hospital potential capabilities for  providing inpatient care to casualties.
Total costs for inpatient and outpatient  services.
The BRAC military value criteria are the first four BRAC selection criteria.
subsections: section_title: DOD Inspector General’s and Service Audit Agencies’ Roles in the Process
paragraphs: The DOD Inspector General and the service audit agencies played  important roles in ensuring that the data used in the medical group’s  analyses were certified and properly supported. The involvement of these  audit groups included validation of data submitted by the military services,  compliance with data certification requirements, the integrity of the  group’s databases, accuracy of the analytical process in terms of  calculations, and the adequacy of supporting documentation. These audit  groups conducted extensive audits of the data collected from the military  installations, and in some instances data discrepancies were identified for  follow-on corrective actions. While the process for detecting and  correcting data errors was quite lengthy, the DOD Inspector General and  audit agencies determined that the medical-related data were sufficiently  reliable for use in the BRAC process.
section_title: Identification and Assessment of Alternate Scenarios and Selection of Recommendations
paragraphs: The medical group’s study objectives, military judgment, and capacity and  military value analyses helped to identify closure and realignment  scenarios for consideration. Identification and evaluation of scenarios was  also facilitated by use of an optimization model to identify  recommendations that could aid in optimizing medical health care  workloads and infrastructure. The group also developed scenarios that  included establishing a minimum level of average daily patient workload  for inpatient facilities and by reducing excess capacity in multiservice  markets to achieve efficiencies. It also used the Cost of Base Realignment  Actions (COBRA) model to estimate the potential net costs or savings for  its scenario proposals. The group also considered the scenarios’ impact on  the local economy, the DOD medical beneficiary population and graduate  medical education requirements, and the environment.
The medical group submitted 22 recommendations to the IEC, which  disapproved one of the recommendations—the proposal to close the  Uniformed Services University of the Health Sciences at Bethesda,  Maryland. This matter is discussed further in the next section of this  appendix. Further, another recommendation was integrated with a service  realignment and closure action. The remaining 20 recommendations were  combined into 6 recommendations that were ultimately approved by DOD.
section_title: Recommendations Approved by DOD
paragraphs: The group produced 6 recommendations which they reported will yield an  estimated $2.7 billion in 20-year net present value savings and $412 million  in net annual recurring savings. Table 35 below provides a summary of the  financial aspects of the group’s recommendations. However, the group  acknowledges that it incorrectly reported certain financial data for its  recommendation involving the Walter Reed Army Medical Center. Based on  our analysis, the revised estimates are shown as a note to table 35.
Appendix X Medical Joint Cross-Service Group Selection  Process and Recommendations One-time (costs)
Payback period (years)
Close Brooks City-Base, San Antonio, TX, by  relocating functions to Randolph Air Force Base,  Wright-Patterson Air Force Base, Lackland Air  Force Base, Fort Sam Houston, and Aberdeen  Proving Ground ($325.3) ($45.9)
Realign various activities by converting inpatient  services to clinics at Marine Corps Air Station  Cherry Point, Fort Eustis, U.S. Air Force Academy,  Andrews Air Force Base, MacDill Air Force Base,  Keesler Air Force Base, Scott Air Force Base,  Naval Station Great Lakes, and Fort Knox (12.9)
Establish San Antonio Regional Medical Center at  Fort Sam Houston, Brooke Army Medical Center;  and realign basic and specialty enlisted medical  training to Fort Sam Houston (1,040.9) (826.7)
Realign Walter Reed Army Medical Center (all  tertiary care to Bethesda National Naval Medical  Center and primary and specialty care to Fort  Belvoir) (988.8) (724.2)
Realign McChord Air Force Base by relocating all  medical functions to Fort Lewis (1.1)
Realign various activities to create joint centers of  excellence for chemical, biological, and medical  research, development, and acquisition (at Fort  Sam Houston, Walter Reed Army Medical Center— Forrest Glen Annex, Wright-Patterson Air Force  Base, Fort Detrick, and Aberdeen Proving Ground) (73.9) (45.9) ($2,442.9) ($1,336.7) result in nearly all of the expected savings—over 90 percent of the total  estimated 20-year net present value savings of about $2.7 billion, and of the  net annual recurring savings of about $411.7 million. Two of the six  recommendations have high one-time upfront costs—about $2 billion, or  over 80 percent of the total one-time costs for the six recommendations.
Two multiservice market area recommendations—the establishment of the  San Antonio Regional Medical Center in Texas and realignment of the  Walter Reed Army Medical Center in Washington, D.C.—are ultimately  expected to (1) produce over 50 percent of the net annual recurring savings    and (2) incur most of the up-front costs for the recommendations as a  whole. The group’s primary motivation for these recommendations was to  transform the existing medical infrastructure into premier modernized  joint operational medical centers. In the case of the Walter Reed Medical  Center recommendation, the group also justified the recommendation  based on a shift in the beneficiary population from the northern tier of the  Washington, D.C., area to the southern tier near Fort Belvoir, Virginia.
Another recommendation with substantial estimated net annual recurring  savings is the closure of the Brooks City-Base in Texas, which is projected  to achieve efficiencies in research, development, and acquisition by  relocating similar functions to a single location. However, as discussed  below, a significant portion of the savings from this as well as other  recommendations involve claimed military personnel savings, which are  somewhat uncertain. The recommendation that involves the downsizing of  inpatient facilities at nine locations is expected to achieve efficiencies and  reduce personnel as well as provide enhanced training opportunities for  medical personnel transferring to other locations. base will help foster jointness in the long term. Based on our analysis, it is  not obvious whether some of these proposed realignments will truly result  in joint military operations.
section_title: Issues Identified with Recommendations
paragraphs: Time did not permit us to assess the operational impact of each of the  medical group’s recommendations, particularly where operations proposed  for consolidations or realignments extend across functional areas,  geographical areas, or both. At the same time, we offer a number of broad- based observations about some of the proposed recommendations as they  relate to military medical personnel savings, payback periods, jointness,  and medical wartime requirements that may warrant further review by the  BRAC Commission.
subsections: section_title: Military Medical Personnel Savings
paragraphs: Our analysis shows that military personnel savings account for about $201  million or nearly 50 percent of the group’s estimated net annual recurring  savings. However, the amount of projected dollar savings is uncertain  because the medical group indicated that reductions in end strength are not  planned. Indirectly, some savings could occur based on the group’s  expectation that medical personnel would be reassigned on an individual  basis to specific and varied locations, depending on where the need exists  for military medical specialists. In some cases, the group noted that these  military personnel reassignments could displace civilian and/or contractor  medical providers. When or to what extent these reallocations would occur  has not yet been determined. At the time of the group’s analysis, these  specific moves had not been identified and thus the group did not estimate  costs related to such potential moves in its cost and savings analysis.
section_title: Bundling of Recommendations
paragraphs: period was determined to be 10 years. The common linkage of the two  recommendations is location, with the expectation that the enlisted medics  will benefit from the location of the Brooke Army Medical Center in Texas,  which has a trauma center suited for combat casualty training. Another  example is the initial realignment of medical research, development, and  acquisition functions at Brooks City-Base, which had no payback before  DOD combined this recommendation with other related recommendations  to close the base.
section_title: Future Wartime Medical Requirements
paragraphs: DOD’s ongoing assessment of its future wartime medical requirements, as  mentioned earlier, will not be completed until after BRAC decisions are  finalized, following reviews by the BRAC Commission, the President, and  Congress; therefore, this assessment was not included in the medical  group’s analysis. Without having such requirements available during the  BRAC process, it is difficult for DOD to identify the appropriate medical  infrastructure changes that are needed or to determine the appropriate size  of the military health care system. Also, the group recognized that medical  operations are changing with casualties rapidly moved to medical facilities  outside the theater of operations and that these changes may affect the  future sizing of medical forces.
Nevertheless, the group expressed belief that the current medical force size  was adequate to meet the requirements of the various war plans despite the  group’s recommendations that will reduce system-wide excess inpatient  capacity by 622 beds.
section_title: Use of Veterans’ Hospitals
paragraphs: existing medical facilities. While the official told us that VA involvement  had the potential for providing services and benefiting the department,  another official added that the group’s analysis indicated that sufficient  capacity exists, without VA support, within the private sector to  accommodate military beneficiaries in those locations where inpatient care  at the military facilities is being eliminated. However, we were unable to  verify the results of this analysis because the group did not fully document  its analysis.
section_title: Closure of the Uniformed Services University of the Health Sciences Rejected by IEC
paragraphs: The medical group had initially developed a candidate recommendation to  close DOD’s medical school, known as the Uniformed Services University  of the Health Sciences, which is located on the grounds of the National  Naval Medical Center in Bethesda, Maryland. The group had concluded  that it was more costly than alternative scholarship programs, and that the  department could rely on civilian universities to educate military  physicians. The group projected the closure will yield net annual recurring  savings of about $58 million, and 20-year net present value savings of  approximately $575 million. In a series of reports from 1995 through 2000,  we also concluded at the time that the university was a more costly way to  educate military physicians. associated with this medical facility in order for it to be a world-class  medical center. According to another official, DOD will need to make  investments in the university in order to elevate its status and attract  leading medical scholars who could make the university more competitive.
section_title: Supply and Storage Joint Cross-Service Group Selection Process and Recommendations
paragraphs: The Supply and Storage Joint Cross-Service Group followed the common  analytical framework established by the Office of the Secretary of Defense  (OSD) for reviewing the supply, storage, and distribution system within  DOD. The group initially produced five recommendations that were  presented to the Infrastructure Steering Group (ISG) and the Infrastructure  Executive Council (IEC). Three of the five recommendations were merged  into one recommendation by the IEC. If adopted, the three approved  recommendations are projected to generate about $5.6 billion in estimated  20-year net present value savings and $406 million in net annual recurring  savings for the department with an immediate payback (i.e., time required  to recoup up-front investment costs) on the cost of implementing these  recommendations. While the number of recommendations is small, each  encompasses multiple realignment actions of workloads affecting many  locations. Our analysis shows that the anticipated savings would result  primarily from business process reengineering—expanded use of  performance-based logistics—, infrastructure and inventory reductions,  and reduced civilian personnel costs. We identified a number of issues  associated with several recommendations that may warrant additional  attention by the BRAC Commission. The group encountered some  challenges in obtaining accurate and consistent certified data, but the DOD  Inspector General and the military service audit agencies, which performed  audits of the data, ultimately concluded that the data were sufficiently  reliable for use during the BRAC process.
subsections: section_title: Organization and Focus
paragraphs: The supply and storage group consisted of six senior-level principal  members from the logistics directorates for each service, the Defense  Logistics Agency (DLA), and the Joint Chiefs of Staff, and was supported by  staff from these organizations. The Director, DLA, chaired the group,  following the retirement of the original chairman from the Joint Staff. The  group’s overarching goal was to identify potential closures, realignments,  or both that would enhance economies and efficiencies in operations as  traditional military forces and logistics processes become more joint and  increasingly take on expeditionary characteristics.
section_title: Framework for Analysis
paragraphs: The group organized its BRAC efforts around the three core logistics  functions of supply, storage, and distribution. These functions are inherent  in the military services’ operations as well as for DLA, whose mission is to  provide wholesale-level support in these functions for the services in  common supply classes. In collecting and analyzing data to formulate its  recommendations, the group sought to assess the supply and storage  infrastructure in the following four distinct activity areas: (1) military  service and DLA inventory control points (2) defense distribution depots,  (3) defense reutilization and marketing offices and (4) other activities such  as installation-level supply operations. As with other military services and  joint cross-service groups, capacity and military value analyses served as  starting points for the group’s analyses. While the group initially tried to  analyze both the wholesale and retail supply and storage activities, it later  terminated most retail-level efforts because of difficulties in collecting  reliable data and a desire by the group’s principals to not impact the retail  support to operational and other deploying units. The DOD Inspector  General and service audit agencies performed an important role in ensuring  the accuracy of data used in these analyses through extensive audits of  data gathered at various locations.
subsections: section_title: Capacity Analysis
paragraphs: exception, from further consideration in the succeeding analyses leading  to recommended actions.
The group’s capacity analysis showed that excess capacity exists, even  when surge factors were considered, within three of the four supply and  storage activity areas it examined. As shown in table 36, the excesses  ranged from 20 percent to 75 percent under normal demand conditions  across various capacity metrics in the functional areas, with the excesses  somewhat less under surge conditions.
According to the group’s staff, its recommendation regarding restructuring  of defense distribution depots, if approved and implemented, is expected to  reduce current covered storage of about 51 million square feet (both  regular and special) by over 50 percent, or about 27 million square feet. In  addition, the recommendation regarding inventory control points is  expected to increase infrastructure by about 4,700 square feet because the  inventory control points would be absorbing more space than they would  be vacating. The group has no recommendations that would affect the  capacity of DLA’s defense marketing and reutilization offices.
section_title: Military Value Analysis
paragraphs: The supply and storage group’s assessment of military value, like its excess  capacity assessment, focused on the same three core logistics functions of  supply, storage, and distribution. By linking its military analysis directly to  OSD’s four military selection criteria required by the BRAC legislation, the  group established a sound basis for developing its recommendations. As  shown in table 37, the group developed a weighting system for the military  value criteria with the first and third criteria having relatively larger  weights, or importance, than the remaining two criteria.
As with the capacity analysis, the group’s assessment of military value  included development of attributes and metrics in each of the core  functional areas to measure military value, and it subsequently sought to  collect certified data linked to these metrics from various defense activities  whose missions resided within these categories. The group developed 55  individual metrics within the three functional areas, addressing  information such as the percentage of demand for stocked items and cost  of operations per person. The attributes and metrics were linked back to  the military value selection criteria, as illustrated in figure 18. retail level to complete a military value analysis at that level. In many  respects, the military value methodology for this round was comparable to  that used in the 1995 BRAC round, particularly for DLA activities. In both  BRAC rounds, the military value ranking of an activity played a  predominant role in formulating recommendations.
section_title: DOD Inspector General’s and Service Audit Agencies’ Roles in the Process
paragraphs: The DOD Inspector General and the service audit agencies played  important roles in helping to ensure that the data used in the group’s data  analyses were certified and properly supported and that decision-making  models (e.g., military value and optimization) were logically designed and  operating as intended. Through extensive audits of the data collected from  field activities during the process, these audit agencies notified the group  when they identified data discrepancies for follow-on corrective action.  While the process for detecting and correcting data errors was quite  lengthy and challenging, the audit agencies ultimately deemed the supply  and storage-related data to be sufficiently reliable for use in the BRAC  process.
section_title: Identification and Assessment of Alternate Scenarios and Selection of Recommendations
paragraphs: The Supply and Storage Joint Cross-Service Group did not have accurate  and complete capacity and military value data when it initially started  developing potential closure and realignment scenarios and, therefore, had  to rely on incomplete data, as well as military judgment based on the  group’s collective knowledge of the supply and storage area, to formulate  its initial closure and realignment scenarios for evaluation. Although the  data improved as additional information was requested and received from  field locations, the lack of useable data initially limited the use of an  optimization model to help identify and analyze scenarios. As time  progressed, however, the group obtained the needed data, for the most  part, to inform and support its scenarios. The DOD Inspector General  validated the data. The group also focused on a number of OSD supplied  transformational options, as outlined below, to guide its efforts in the  recommendation development process:   Establishing a consolidated multi-service supply, storage, and  distribution system focused on creating joint activities in areas with  heavy DOD concentration.
Privatizing the wholesale storage and distribution processes.
Migrating oversight and management of all service depot-level  reparables to a single DOD agency/activity.
Establishing a single inventory control point within each service or  consolidate into a joint activity.
Examining the effect of reducing functions by 20, 30, and 40 percent  from the existing baseline, or reducing excess capacity by an additional  5 percent beyond the analyzed excess capacity.
The group developed a total of 51 scenarios based on these  transformational options. With the maturation of the data and the  application of the COBRA model to estimate costs and savings, along with  military judgment, the group was able to narrow its proposals to five  candidate recommendations that were forwarded to the ISG and ultimately  approved by the IEC. Further integration of three of these  recommendations into a single recommendation left the group with three  approved recommendations.
section_title: Recommendations Approved by DOD
paragraphs: The group’s recommendations are projected to produce substantial  savings—about $406 million in estimated net annual recurring savings and  about $5.6 billion in estimated net present value savings for DOD over the  next 20 years. All are realignment actions, even though one of the  recommended actions will close two defense distribution depots at  Columbus, Ohio, and Texarkana, Texas and another one will close four  inventory control points at Fort Huachuca, Arizona; Fort Monmouth, New  Jersey; Rock Island, Illinois; and Lackland Air Force Base, Texas, while, at  the same time, opening a new one at Aberdeen Proving Ground, Maryland.  The group’s recommendations also helped facilitate the closures of Fort  Monmouth, New Jersey, and Red River Army Depot, Texas, both of which  are reported in the Army’s BRAC report. Table 38 provides a summary of  the financial aspects of the group’s three DOD-approved recommendations. industrial customers, such as maintenance depots, shipyards, and air  logistics centers. The strategic distribution sites are located at  Susquehanna, Pennsylvania; Warner Robins, Georgia; Oklahoma City,  Oklahoma; and San Joaquin, California. It is also designed to realign service  retail supply and storage functions along with personnel and infrastructure  for these industrial customers in an “in-place, no-cost transfer” to DLA.  This recommendation supports the closures of the defense distribution  depots at Columbus, Ohio, and Texarkana, Texas, and realigns each of the  remaining 17 defense distribution depots.
The recommendation regarding the realignment of the inventory control  points transfers certain inventory control point functions, such as  contracting, budgeting and inventory management, to DLA and allows  further consolidation of service and DLA inventory control points by the  supply chains they manage. In addition, it supports the movement of the  management of essentially all service consumable items and the  procurement management and related support functions for the  procurement of essentially all depot level reparables from the military  services to DLA. This recommendation realigns all 16 of the current DLA  and service inventory control points and closes 4 through consolidation— Fort Huachuca, Arizona; Fort Monmouth, New Jersey; Rock Island, Illinois;  and Lackland Air Force Base, Texas—while opening a new inventory  control point at Aberdeen Proving Ground, Maryland. The recommendation  also supports the Army’s closure of Fort Monmouth by moving supply and  storage functions to other locations.
The recommendation regarding the realignment of commodity  management disestablishes the wholesale supply, storage, and distribution  functions within the department for all tires; packaged petroleum, oils, and  lubricants; and compressed gases used by DOD. As a result, these  commodities will be supplied directly by private industry, which will free  up space and personnel used to manage these items. It realigns all of the  remaining defense distribution depots by disestablishing all storage and  distribution for the commodities.
section_title: Issues Identified with Approved Recommendations
paragraphs: Although time did not permit us to fully assess the operational impact of  each recommendation, particularly where operations proposed  consolidation across multiple and varied locations, available information  suggests these recommendations have the potential for more efficient  operations within DOD. At the same time, there are some issues we  identified that we believe the BRAC Commission may wish to consider  during its review process because of potentially overstated savings  estimates. In this regard, the supply and storage group claimed savings for  future cost avoidances for sustainment and facilities’ recapitalization  related to the facilities’ space that is expected to be vacated under the  recommended actions. However, as discussed below, it is uncertain  whether these savings will actually materialize if these facilities are not  closed and remain open—even with reduced usage of the space.  Additionally, the group did not develop recommendations for several areas  within the scope of its responsibility that may have further contributed to  the accomplishment of DOD’s BRAC objectives, such as additional  consolidations in DLA and service inventory control points.
subsections: section_title: Estimated Savings Related to Business Process Improvements Are Uncertain
paragraphs: required to be held in inventory. Although the group had some supporting  documentation for its assumptions, time did not allow us to fully evaluate  the documentation. Nevertheless, the full magnitude of savings likely to be  realized will depend on how well the actions, if approved, are implemented  in line with the assumptions made.
section_title: Estimated Savings Related to Vacated Facility Space May Be Overstated
paragraphs: All of the supply and storage group’s recommendations taken together  show significant projected savings from expected reductions to excess or  unnecessary infrastructure. According to the group’s estimates, it is  claiming BRAC savings on about 27 million square feet of vacated space— an estimated savings of about $100 million annually or about 25 percent of  the group’s total net annual recurring savings. In developing its costs and  savings estimates, the group assumed that all of the excess infrastructure  that was made possible by the recommendations would generate BRAC  savings because it was further assumed that the infrastructure would no  longer be used and therefore would not require sustainment and  recapitalization funding. However, we believe these assumptions are not  necessarily valid because it is not clear that the freed-up infrastructure will  be eliminated and could potentially be occupied by other users following  the BRAC process. At present the group does not have plans for this space.  Under the BRAC process, if these vacated facilities or portions thereof are  reoccupied by other defense organizations, there is a corresponding cost  for this reoccupation. Likewise, additional BRAC costs are required for  facilities that remain empty to minimally maintain them, and costs are  incurred if buildings are demolished. Supply and storage officials told us  they were aware of this issue and said that their goal is to vacate as much  space as possible by re-warehousing inventory and by reducing personnel  spaces, but they do not have a specific plan for what will happen to the  space once it is vacated. In addition, until these recommendations are  ultimately approved and implemented, it will not be known exactly how  much space is available or how this space will be disposed of or utilized. As  a result, it is unclear as to how much of the estimated $100 million net  annual recurring savings will actually occur.
section_title: Potential for Additional Savings Exists
paragraphs: 6,500 service staff to DLA and was estimated by the group to save  $2.9 billion over the same 20-year period. The latter scenario would leave  nearly 3,900 service technical and engineering support personnel of the  more than 10,300 service staff at existing service inventory control points.  Senior-level principal members of the supply and storage group consider  the technical and engineering support personnel positions to be more  closely related to weapon system readiness and support to the warfighter  than other inventory control point functions, such as contracting,  budgeting, and inventory management, which are being transferred to DLA.  These officials were not willing to suggest transferring the technical  positions to DLA because of the perceived additional risk involved of not  being able to supply the critical parts to the warfighter when needed.  Therefore, they approved the recommendation that generated less savings,  but also less risk to weapon system readiness and moved fewer inventory  control point functions and fewer service staff to DLA. The Commission  may wish to further examine the potential for greater savings regarding the  transfer of more inventory control point functions versus the potential risk  of not being able to supply critical parts when needed.
The group also did not pursue the development of recommendations  regarding the defense reutilization and marketing office activities, even  though considerable excess capacity exists, as shown in table 36, in that  area. Group officials told us that these activities, which are managed by  DLA, are considered follower organizations that are currently undergoing  an extensive A-76 initiative outside the BRAC process that is expected to  either close or consolidate several activities and reduce staff levels at  others. DLA data indicate that 61 of the 67 reutilization and marketing  office activities analyzed by the supply and storage group are involved in  the effort and that the agency expects to save about $36 million through  2011 with the A-76 effort.
section_title: Technical Joint Cross-Service Group Selection Process and Recommendations
paragraphs: The Technical Joint Cross-Service Group followed the common analytical  framework established by the Office of the Secretary of Defense (OSD) in  reviewing its functions and facilities. The group included in its report 13  recommendations that it projects would generate about $2.2 billion in 20- year net present value savings for DOD. These 13 recommendations  incorporate a total of 6 closures, 62 realignments, and 1 disestablishment  action. Additionally, the technical group transferred parts of nine  recommendations to other joint cross-service groups or military services,  which combined with other actions resulting in three additional closures.  The majority of the projected annual recurring savings result from  eliminating civilian and contractor personnel and vacating leased space.  The recommendations have payback periods—the time required for  savings to offset closure and realignment costs—ranging from 1 to 26  years. Limited progress was made to foster greater jointness and  transformation. The DOD Inspector General and the military service audit  agencies, which performed audits of the data used in the process,  concluded that the data were sufficiently reliable for use during the BRAC  process. While available data supporting the recommendations suggest  their implementation should provide for more efficient operations within  the department, we believe there are some issues that the BRAC  Commission may wish to examine more closely during its review process.
subsections: section_title: Organization and Focus
paragraphs: The technical group was chaired by the Director, Defense Research and  Engineering; it consisted of senior members from each military department  and the Joint Chiefs of Staff. The group created five subgroups to evaluate  the technical facilities: (1) Command, Control, Communications, and  Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR);  (2) Air, Land, Sea, and Space Systems; (3) Weapons and Armaments;  (4) Innovative Systems; and (5) Enabling Technologies. In addition, the  group also created a Capabilities Integration Team and an Analytical Team  to support the efforts of the subgroups.
section_title: Framework for Analysis
paragraphs: The technical group established two principles to guide its analysis and  recommendation development: (1) provide efficiency of operations by  consolidating technical facilities to enhance synergy and reduce excess  capacity and (2) maintain competition of ideas by retaining at least two  geographically separated sites. The group analyzed three functional areas  within DOD: research, development and acquisition, and test and  evaluation. It focused its analysis of the 3 functions across 13 technical  capability areas—air platforms; battlespace environments; biomedical;  chemical and biological defense; ground vehicles; human systems;  information systems; materials and processes; nuclear technology; sea  vehicles; sensors, electronics, and electronic warfare; space platforms; and  weapons and armaments. Each of the military services and some defense  agencies perform work in the functions and technical capability areas. The  group developed a strategic framework based on its two principles that  focused on establishing multifunctional and multidisciplinary centers of  excellence, which served as the starting point for developing scenarios.  These strategy-driven scenarios were later confirmed by capacity and  military value data and military judgment. The DOD Inspector General and  service audit agencies performed an important role in ensuring the  accuracy of data used in these analyses through extensive audits of data  gathered at various locations.
subsections: section_title: Capacity Analysis
paragraphs: and subsequently collected certified data on these measures from the  technical facilities performing work in each of the technical facility  categories. Excess capacity was defined as the difference between current  usage plus a surge factor and peak capacity. Current usage was defined as  the average usage for fiscal years 2001 through 2003, and peak capacity was  defined as the maximum capacity for the measure. The group set the surge  factor at 10 percent of current capacity, based on military judgment of how  the technical community has approached surge in the past.
The group calculated excess capacity for each of the 39 technical facility  categories; however, the aggregated data provide more insight into the  amount of excess capacity. Table 39 shows the excess capacity that the  technical group found through its analysis.
The group reported that the current required capacity, including surge,  across all technical capability areas and functions is 169,596 work years.  The group found the equivalent of 13,368 work years, or 7.9 percent, excess  capacity across the three functions. The group reports that its  recommendations eliminate approximately 3,000 work years. Based on  these calculations, approximately 6 percent excess capacity would remain  if all of the group’s recommended actions are implemented. The work year  reductions include the reductions made through the technical group’s 13  recommendations. The work year reductions do not include reductions in  technical excess capacity through the closure of Fort Monmouth, New  Jersey, and Brooks City-Base, Texas, for example, which are included in the  Army and Medical Joint Cross-Service Group recommendations,  respectively.
section_title: Military Value Analysis
paragraphs: As with capacity analysis, the technical group’s assessment of military  value included an assessment of the technical infrastructure across the 39  technical facility categories. The group weighted each of the four military  value criteria based on the importance of the criterion to the technical  function. The group used the same weights for the research and  development and acquisition functions, but different weights for the test  and evaluation function due to differences in the type of work conducted at  these facilities. Table 40 shows the weights for the three functions. people, which measures intellectual capital;   physical environment, which measures special features of technical   physical structures and equipment, which measure the presence of  physical structures unique within DOD and the value, condition, and use  of these structures;   operational impact, which measures the output of the three functional  areas (research, development and acquisition, and test and evaluation);  and  synergy, which measures working on multiple technical capability areas  and functions and jointness.
The technical group developed weights for the 5 attributes that were  applied to each of the criteria and 30 metrics divided among the 5  attributes. While the group allowed the evaluative weights for the metrics  to vary across its subgroups, it used the same weights for the five  attributes. The evaluative weight assigned to attributes varied among the  three functions because a particular attribute could have greater  importance for one function than another. For example, the technical  group weighted the people attribute for criterion 1 at 17 percent of the total  military value score for research, 13 percent for development and  acquisition, and 16 percent for test and evaluation. While the attribute  weights were the same for activities across subgroups, the metric weights  varied by subgroup. For example, the Air, Land, Sea, and Space Systems  subgroup weighted the patents, publications, and awards metric of  criterion 1 for the research function at 30 percent of the total for the people  attribute, while the Weapons and Armaments subgroup weighted the same  metric at 18 percent.
Figure 19 provides an example of the technical group’s military value  attributes, metrics, data sources, and their link to the four BRAC military  value criteria.
Highest education level for  professional/technical workforce.
Number and funding for other services’  programs executed at the facility.
The BRAC military value criteria are the first four BRAC selection criteria.
All technical facilities were analyzed using the technical group’s military  value approach, regardless of whether the recommendation ended up with  the technical group’s 13 recommendations or in another services’ or joint  cross-service groups’ recommendations. For example, part of the Army’s  recommendation to close Fort Monmouth relocates the information  systems research and development and acquisition to Aberdeen Proving  Ground, Maryland. The technical group followed the same process in  gathering data and calculating a military value score for these functions as  they did all other technical functions.
section_title: DOD Inspector General’s and Service Audit Agencies’ Role in the Process
paragraphs: Inspector General found that certified data were used for the group’s  capacity and military value analyses, and there was an adequate audit trail  for the capacity and military value analyses, and COBRA input data.  Through extensive audits of the data collected from technical facilities  during the process, the service audit agencies notified the technical facility  of identified data discrepancies and the technical facility was to take  corrective action. While the process for detecting and correcting data  errors was quite lengthy and challenging, the DOD Inspector General and  service audit agencies deemed the technical data to be sufficiently reliable  for use in the BRAC process.
section_title: Identification and Assessment of Alternate Scenarios and Selection of Recommendations
paragraphs: their implementation should provide for more efficient operations within  the department, we believe there are some issues that the BRAC  Commission may wish to examine more closely during its review process.
section_title: Recommendations Approved by DOD
paragraphs: The technical group’s proposed recommendations result in a total  projected net savings of $2.2 billion over 20 years, with net annual recurring  savings of $265.5 million per year. Table 41 provides a summary of the  financial aspects of the group’s recommendations, most of which are  realignment actions.
The majority of the projected net annual recurring savings are based on  eliminating civilian and contractor personnel ($167.7 million) as functions  are realigned between installations and vacating leased space  ($51.8 million). On the other hand, the majority of the projected costs are  for constructing new facilities ($644.6 million) and moving personnel and  equipment ($326.7 million) to the gaining installations. The group’s 13  recommendations include 6 closures, 62 realignments, and 1  disestablishment for a total of 69 actions. For example, the group’s  recommendation to consolidate maritime C4ISR research, development  and acquisition, and test and evaluation includes 16 realignment actions  and 1 disestablishment action.
The technical group’s recommendations support, to a limited extent, the  goals of maximizing jointness and furthering transformation efforts within  the department. Eight of the group’s 13 recommendations move functions  from one service or defense agency’s installation to another service’s  installation. For example, the recommendation to create an integrated  weapons and armaments specialty site for guns and ammunition moves  seven Navy functions to an Army installation. While the chairman of the  group’s Capabilities Integration Team told us that all of the group’s  recommendations were transformational, the supporting information often  suggested the recommendations were more focused on combining like  work at a single location without a clear indication of how it provided for  transformation. Two of the group’s recommendations specifically mention  transformation in their justification statements, but the transformational  effects are not clear in the documentation. For example, the  recommendation to create an air integrated weapons and armaments  research, development and acquisition, and test and evaluation center  states that it supports transformation because it moves and consolidates  smaller weapons and armaments efforts into high military value integrated  centers and leverages synergy among the three functions; however, the  documentation does not discuss how these actions are transformational.
section_title: Issues Identified with Approved Recommendations
paragraphs: Time did not permit us to assess the operational impact of each of the  technical group’s recommendations, particularly where operations  proposed for consolidation extend across multiple locations outside of a  single geographic area. At the same time, we offer a number of broad-based  observations about the proposed recommendations. there are some issues that the BRAC Commission may wish to consider  during its review process. Specifically, the Commission may want to  consider whether the level of personnel reductions is attainable, issues  related to projected savings from vacating leased space, the long payback  period and relatively small savings for some recommendations, and the  economic impact of one recommendation.
subsections: section_title: Personnel Reductions
paragraphs: The technical group developed a standard assumption to eliminate 15  percent of military and civilian personnel affected by the recommendation  for consolidation and joint actions based on personnel eliminations at  technical facilities in previous BRAC rounds. The group used a different  assumption (5.5 percent reduction in affected military and civilian  personnel) for co-location actions because it is believed that there are  likely to be fewer efficiency gains for co-locations than consolidations or  joint actions. A technical group official told us that in some cases the group  used higher personnel reduction estimates than the standard because the  military department provided for higher estimated personnel reductions in  the certified data, and the military services agreed with all personnel  eliminations in the group’s recommendations. We believe there is some  uncertainty regarding the magnitude of the group’s expected savings for  these personnel reductions because its estimates are based on assumptions  that have undergone limited testing and full savings realization depends  upon the attainment of these personnel reductions. Eight of the group’s 13  recommendations eliminate at least 15 percent of military and civilian  personnel positions affected by the recommendation. Personnel savings  account for at least 40 percent, and as much as 100 percent, of the group’s  projected annual recurring savings for each of these 8 recommendations.  Almost three-quarters of all personnel savings come from civilian  personnel eliminations.
Similar to military and civilian personnel, the technical group developed a  standard assumption that the subgroups could eliminate 15 percent of  contractor personnel and could take $200,000 in recurring savings for each  contractor position eliminated. It is unclear from the data what percentage  of contractor positions were eliminated because the total number of  contractor personnel is not included in the COBRA data. Seven of the  group’s recommendations include savings from eliminating contractor  personnel, for a total of $53.9 million in net annual recurring savings. In  contrast, the data on economic impact (criterion 6 of the BRAC selection  criteria) show a net loss of 508 contractor personnel in 10  recommendations, which would have totaled $101.6 million in net annual  recurring savings. Technical group officials told us that both sets of  numbers are based on certified data from the services; however, they added  that the contractor data were difficult to collect because they were  provided by the services through the scenario data calls, rather than as  standard data in the COBRA model.
It is unclear to what extent the personnel reductions assumed in the  group’s recommendations will be attained, largely because of uncertainties  associated with the group’s assumptions. For example, the group’s  recommendation to create a naval integrated weapons and armaments  research, development and acquisition, and test and evaluation center  includes the reduction of 15 percent of military and civilian personnel. As  mentioned above, the technical group assumed a standard 15 percent  reduction in military and civilian personnel for consolidation and joint  actions and a 5.5 percent reduction in military and civilian personnel for co- location actions. Because we are uncertain whether the 15 percent  reduction in military and civilian personnel for consolidations and joint  actions is attainable, we determined the costs and savings of the  recommendation with the 5.5 percent personnel reduction for co-locations.  Table 42 shows the financial aspects of DOD’s original recommendation  with a 15 percent reduction in military and civilian personnel, our analysis  of the recommendation with a 5.5 percent reduction in military and civilian  personnel, and the difference between the two recommendations.
Payback period (years)
20-year net present value savings (cost)
GAO’s analysis (5.5  percent military and civilian  personnel reduction) (3)
section_title: Leased Space
paragraphs: Our analysis identified some inconsistencies in projecting annual recurring  savings and one-time savings in three recommendations to move activities  from leased space. The technical group used two different methodologies  to project annual recurring savings from vacating leased space. In one  recommendation, the group projected annual recurring savings based on  future leased costs while in the other two, the group used actual lease  costs data provided by the military services and defense agencies.  Furthermore, the recommendation to co-locate the extramural research  program managers also includes $2.7 million in annual recurring savings  for the Defense Threat Reduction Agency vacating leased space; however,  the agency is already scheduled to move to Fort Belvoir, Virginia, in  January 2006.
The technical group also included $14.5 million in one-time savings for  seven of the eight activities vacating leased space for the cost of  upgrading existing leased space to meet DOD’s antiterrorism and force  protection standards. The group did not collect data that would indicate  whether existing leases met the antiterrorism and force protection  standards. Our analysis indicates that excluding these one-time savings  would have minimal impact on the overall projected savings of the  technical group’s recommendations.
section_title: Limited Savings during Implementation Period
paragraphs: Only 3 of the 13 recommendations achieve savings during the 6-year  implementation period, and 3 of the group’s recommendations take longer  than 10 years to achieve savings, far longer than typically occurred in the  1995 BRAC round. According to a technical group official, the  recommendation to establish a center for rotary wing air platform  research, development and acquisition, and test and evaluation, which has  a 26-year payback, was retained because it realigns the technical-related  work away from a test range at Fort Rucker, Alabama, which will provide  for expanded training space. An Army official agreed that a potential  benefit of realigning the test range at Fort Rucker is that it would make  available hangars, facilities, and airspace for trainers. For example, the  Army said that the vacated hangar space could potentially be used to  accommodate the Aviation Logistic School’s proposed move to Fort Rucker  and the reduced demand for airspace will make additional airspace  available to meet the current and future needs for manned and unmanned  aviation training.
The group’s recommendation to create an integrated weapons and  armaments specialty site for guns and ammunition, which has one-time  costs of $116.3 million and a 20-year net present value savings of  $32.6 million, has a payback of 13 years. Technical group officials told us  that this recommendation was determined to be worth the costs and longer  payback period because it provides synergy and jointness, as well as  eliminating some duplication, in research and development and acquisition  of guns and ammunition for the Army and Navy.
According to a group official, the group’s recommendation regarding Navy  sensors, electronic warfare, and electronics research, development and  acquisition, and test and evaluation, which has a 12-year payback period, is  beneficial because it consolidates similar work currently performed at  locations that are in proximity to each other and clears out laboratory  space at Naval Air Station Point Mugu, California, that is needed for  personnel moving in from Naval Support Activity Corona, California,  through a Navy recommendation. The official added that while the payback  for this recommendation is long, it should be put into perspective with the  savings from closing Naval Support Activity Corona because the savings  from closing that facility (net annual recurring savings of $6.0 million and a  20-year net present value of $0.4 million) would be smaller had the  laboratory space not been available at Point Mugu.
section_title: Economic Impact
paragraphs: One of DOD’s BRAC selection criteria, criterion 6, required the department  to consider the economic impact on existing communities in the vicinity of  military installations when determining realignments and closures. In most  cases, the group’s recommendations had a cumulative impact on  communities of less than 1 percent as measured by direct and indirect job  loss as a percentage of employment for the economic area of the military  installation. However, the exception is the recommendations that realign  activities from Naval Surface Warfare Center Crane, Indiana, which would  result in an economic impact of 9.3 percent. A technical group official  stated that realigning the technical infrastructure to respond to defense  needs over the next 20 years took priority over the economic impact of the  proposed recommendation. Two of the group’s recommendations realign or  eliminate approximately 460 military and civilian personnel and 80  contractor personnel from Naval Surface Warfare Center Crane, for a  cumulative reduction of 9.3 percent of employment in Martin County,  Indiana, when direct and indirect jobs are considered.
section_title: Personnel Realignments from Point Mugu
paragraphs: There is some uncertainty on the number of civilian personnel that would  be realigned in the technical group’s recommendation to create a naval  integrated weapons and armaments research, development and acquisition,  and test and evaluation center. The recommendation proposes to realign  about 1,400 civilian employees from Naval Air Station Point Mugu,  California, to Naval Air Weapons Station China Lake, California. However,  in its data call submission, Naval Air Station Point Mugu identified 505  civilian employees that operate or support an outdoor range that it believes  should remain at Point Mugu; however the technical group’s  recommendation proposes to move these personnel to China Lake. A  Navy official said that if the recommendation is approved the Navy will  decide the best way to manage the range, including the appropriate number  of employees to retain at Point Mugu, during implementation. Our analysis  indicates that if the 505 civilian employees remain at Point Mugu, the 20- year net present value savings decreases by about $87.4 million but the  payback period remains at 7 years.
section_title: Scenario Eliminated from Consideration
paragraphs: The technical group developed a scenario that would have allowed the Air  Force to close Los Angeles Air Force Base, California, which may have  further contributed to the accomplishment of BRAC objectives; however,  the Air Force Base Closure Executive Group did not approve this scenario  due to the base’s relatively high military value and perceived operational  risk due to a potential for schedule and performance disruption. Table 43  provides a summary of the financial aspects of this scenario.
Payback period (years)
20-year net present value (costs) or savings($305.1) ($161.1) development and acquisition—its military value in space development and  acquisition is four times higher than that of Peterson—and (2) the closure  has a near-term operational risk due to a potential for schedule and  performance disruption to development and acquisition programs and  activities, intellectual capital, and synergy with industry based in Los  Angeles and surrounding areas.
Technical group officials told us that there are several reasons to close Los  Angeles Air Force Base in addition to the net recurring savings ($52.9  million) and relatively high 20-year net present value savings ($358.5  million). Los Angeles Air Force Base is a single-service installation that  primarily performs one function in one technical capability area— development and acquisition of space platforms. The technical group  sought to identify opportunities to consolidate smaller single-function  locations to larger multifunction facilities, so closing Los Angeles Air Force  Base would meet this goal. The group proposed to move the functions at  Los Angeles Air Force Base to Peterson Air Force Base to co-locate the  development and acquisition function with the operational user. Other  alternatives could achieve other goals. For example, moving the space  development and acquisition function from Los Angeles Air Force Base to  Kirtland Air Force Base, New Mexico, which performs research on space  platforms, could expedite the transition of technology from the research  phase to development and acquisition. Alternatively, there could be  increased jointness among the services if the functions at Los Angeles Air  Force Base were moved to Redstone Arsenal, Alabama, where much of the  Army’s space platform development and acquisition work is done.
section_title: Cost of Base Realignment Actions Model
paragraphs: DOD used a quantitative model, known as the Cost of Base Realignment  Actions (COBRA) model, to provide consistency across the military  services and the joint cross-service groups in estimating the costs and  savings associated with BRAC recommendations. DOD has used the  COBRA model in all previous BRAC rounds and over time has made  improvements designed to provide better estimating capability. Similarly,  DOD has continued to improve the model for its use in the 2005 BRAC  round. We have examined COBRA in the past and during this review and  have found it to be a generally reasonable estimator for comparing  potential costs and savings among candidate alternatives. As with any  model, the quality of the output is a direct function of the input data. Also,  as in previous rounds, the COBRA model, which relies to a large extent on  standard factors and averages, does not represent budget quality estimates  that will be developed once BRAC decisions are made and detailed  implementation plans are developed. The COBRA model also does not  include estimated costs of environmental restoration as DOD considers  these costs a liability that must be addressed whether or not an installation  is closed.
subsections: section_title: COBRA Used as Tool to Estimate Costs and Savings Associated with BRAC Recommendations
paragraphs: costs for the actions; (4) annual recurring savings; and (5) the net present  value of BRAC actions, calculated over a 20-year time frame. Collectively,  this financial information provides important input into the selection  process as decision makers weigh the financial implications for various  BRAC actions along with military value and other factors (for example,  military judgment) in arriving at final decisions regarding the suitability of  BRAC recommendations.
The COBRA model uses a set of formulas, or algorithms, that rely on  standardized data as well as base- and scenario-dependent data to perform  its calculations. Standard factors are common to a class of bases and are  applicable for all recommendations that involve those bases. Some  standard factors apply only to one DOD component or a subset of a  component’s bases, while others are applicable to all bases DOD-wide.  Typical standard factors include, for example, average personnel salaries  and costs per mile and per ton for moving personnel and equipment. Base-  and recommendation-specific data, which were to be certified in  accordance with the BRAC statute, include, for example, the number of  authorized personnel on a base, the size of the base, and annual  sustainment costs. As with any model, the quality of the output is a direct  function of the quality of the input data. For this reason, the data used in  COBRA were to be certified, in a manner similar to that employed for the  capacity and military value data, as to their accuracy.
section_title: COBRA Improvements over Time
paragraphs: The COBRA model has been used in the base closure process since 1988,  and in the intervening years it has been consistently revised to address the  problems we and others have identified after each round. DOD has once  again made improvements to the model, as shown in table 44, that are  designed to further refine its estimating capability. enclaves created during the prior BRAC rounds, thereby having the effect  of overstating the savings for those particular BRAC actions. Consequently,  the Joint Process Action Team provided for the inclusion of these costs in  the COBRA model. In another case, the Joint Process Action Team  developed an approach to incorporate longer term estimated facility  recapitalization costs in COBRA, thus overcoming a COBRA shortcoming  that we identified in our 1997 report on lessons learned from the prior  BRAC rounds.
As was done in the 1995 BRAC round, the Army Audit Agency examined the  improved COBRA model to determine whether the model accurately  calculated cost and savings estimates as described in the user’s manual.  The Army Audit Agency assumed this responsibility at the request of The  Army Basing Study Group since the Army serves as the executive agent for  the COBRA model. The Army Audit Agency tested all 340 algorithms in the  model as presented in the user’s manual and reported in September 2004  that COBRA accurately calculated costs and savings as prescribed in the  manual. Following the audit, however, multiple revisions were made to the  model to include changes to the TRICARE and privatization algorithms  because of programming errors in the model. The Army Audit Agency  subsequently reexamined the revisions where these algorithms were  modified and concluded in a similar fashion that the model accurately  calculated the estimates. In addition, the Army Audit Agency validated the  certified data and documentation supporting the standard factors used in  the model.
section_title: Application of COBRA in the 2005 BRAC Round
paragraphs: accuracy of the input data, and the flexibility provided to users of the  model to consider additional input data that can affect cost and savings  estimates. The following are examples of cases where the specific  application of the model can have an effect on the estimates:   The COBRA model generates a dollar amount attributable to the  reduction or elimination of military personnel at realigning or closing  bases. While it has been DOD’s practice to classify these reductions or  eliminations as recurring savings, we have consistently taken the view  that these actions should not be counted as savings that can be used  outside the military services’ personnel accounts unless commensurate  reductions are made in the affected military services’ end strengths. We  acknowledge that these actions may afford DOD the opportunity to  redirect these personnel to serve in other roles that would benefit DOD.  Our analysis of DOD data indicate that about 47 percent—about  $2.6 billion—of the expected net annual recurring savings of nearly  $5.5 billion for the 2005 round are attributable to these military  personnel actions, for which reductions in the military personnel end- strength levels are not planned.
The COBRA model provides users with considerable flexibility in  estimating one-time and miscellaneous recurring costs or savings of  various recommendations by allowing them to consider what actions  might constitute a cost or savings and what the expected dollar amounts  should be. Validating the level of projected savings is less clear-cut for  recommendations that, instead of closing facilities, realign workloads  from one location to another, or that estimate savings in overhead or  other consolidation efficiencies. The dollar amounts could be based on  specific assumptions as well as certified data but nonetheless be subject  to greater degrees of uncertainty pending implementation than would be  actions resulting in facility closures where expected reductions are  more clear-cut. Our analysis of the BRAC recommendations showed  inconsistencies across some of the services and joint cross-service  groups in applying COBRA in this area. would be either understated or overstated. Time did not permit us to  determine the extent to which this might be the case in the proposed  recommendations.
section_title: Comparability of COBRA Estimates and Actual Costs and Savings
paragraphs: Although COBRA has provided DOD with a standard quantitative approach  enabling it to compare the estimated costs and savings associated with  various proposed BRAC recommendations, it should be noted that it does  not necessarily reflect with a high degree of precision the actual costs or  savings that are ultimately associated with the implementation of a  particular BRAC action. COBRA is not intended to produce budget-quality  data and is not used to develop the budgets for implementing BRAC  actions, which are formulated following the BRAC decision-making  process. COBRA estimates may vary from the actual costs and savings of  BRAC actions for a variety of reasons, including the following:  COBRA estimates, particularly those based on standard cost factors, are  imprecise and are later refined during implementation planning for  budget purposes. The use of averages has an effect on precision. For  example, as noted previously, COBRA uses authorized, rather than  actual, base civilian personnel figures in its calculations. Our work has  shown that the actual number of personnel may be lower or higher than  that which is authorized. The authorized personnel levels are  documented estimates, which can be readily audited. COBRA also uses  a median national civilian personnel salary figure (adjusted by locality  pay), rather than average pay at a particular base, in its calculations.  Further, COBRA estimates are expressed in constant-year dollars,  whereas budgets are expressed in then-year dollars.
36 percent, or $8.3 million, of the $23.3 million in costs incurred through  fiscal year 2003 for implementing BRAC actions for the previous four  BRAC rounds. Further, COBRA does not include estimates for some  other costs to the federal government, particularly those related to other  federal agencies or DOD providing assistance to BRAC-affected  communities. That is because assistance costs depend on specific  implementation plans that are unknown at the time COBRA estimates  are developed. In our January 2005 report on the previous BRAC rounds,  we noted that about $1.9 billion in such costs had been incurred through  fiscal year 2004.
Some savings are not fully captured in COBRA as well. COBRA does not  include estimates, for example, for anticipated sales of BRAC surplus  property or other revenue that may be collected in the future through  property leasing arrangements with BRAC-affected entities. These  revenues can help offset some of the costs incurred in implementing  BRAC actions. While such estimates had been included in COBRA in the  previous rounds, the Joint Process Action Team decided not to include  any such estimates for the 2005 round because of the difficulty in  estimating the amount of these revenues.
Nonetheless, while COBRA estimates do not necessarily reflect the actual  costs and savings ultimately attributable to BRAC, we have recognized in  the past and continue to believe that COBRA is a reasonably effective tool  for the purpose for which it was designed: to aid in BRAC decision making.  It provides a means for comparing cost and savings estimates across  alternative closure and realignment recommendations.
section_title: Economic Impact Assessments
paragraphs: One of the eight selection criteria used to make BRAC decisions was the  economic impact on existing communities in the vicinity of military  installations coming from BRAC recommendations. DOD measured the  economic impact of BRAC recommendations on the affected community’s  economy in terms of total potential job change—measured both in absolute  terms (estimated total job changes) and relative terms (total job changes as  a percentage of the economic area’s total employment). This approach to  measuring economic impact is essentially the same approach DOD used in  the 1995 BRAC round. In a series of reports, that examine the progress in  implementing closures and realignments in prior BRAC rounds, we  examined how the communities surrounding closed bases were faring in  relation to key national indicators. In our last status report, we observed  that most communities surrounding closed bases were faring well  economically in relation to key national economic indicators. While some  communities surrounding closed bases were faring better than others,  most have recovered or are continuing to recover from the impact of  BRAC, with more mixed results recently, allowing for some negative  impact from the 2001 recession.
While there will be other economic impacts from 2005 BRAC actions that  DOD did not consider, such as changes in the value of real estate or  changes in the value of businesses in the economic area, we believe that  the magnitude of job changes would be correlated with the changes in  these other dimensions of economic impact. Although not a precise  predictor of the economic impact, we and an independent panel of experts  assembled by DOD agree that the methodology used by DOD makes a  reasonable attempt to measure economic impact of BRAC actions, both in  terms of communities losing and gaining jobs as a result of BRAC actions.
subsections: section_title: Economic Impact Methodology
paragraphs: DOD assessed the economic impact of realignments and closures using a  methodology that sought to estimate the total direct and indirect job  changes. To perform its assessment, DOD established the Economic  Impact Joint Process Action Team with members of the services and the  Office of the Secretary of Defense (OSD) to develop an economic impact  model for the services and joint cross-service groups to use as they  considered potential recommendations. The team met many times to  develop the economic methodology. We attended and observed those  meetings as the methodology was developed. DOD also retained a private  firm, Booz Allen Hamilton, to provide technical assistance in developing  the methodology and computer database used by the military services and  joint cross-service groups in calculating economic impacts in communities  for which they were considering closure or realignment actions. which the base’s primary county or counties lie. For bases in counties not  in a MSA, Micropolitan Statistical Area, or a Metropolitan Division the  economic area was defined as the county itself.
The economic impact of a potential action on an area was measured in  terms of direct and indirect job changes estimated from 2006 through 2011  as shown below.
Estimated Total Job Changes = Direct Job Changes x (1 + indirect  multiplier + induced multiplier).
Direct job changes are the estimated net addition or loss of jobs for military  personnel, military students, civilian employees, and contractor mission  support employees. The indirect job changes are the estimated net  addition or loss of jobs in each economic area that could potentially occur  as a result of the direct job changes. DOD considered two types of indirect  job changes: (1) indirect job changes that are associated with the  production of goods or the provision of services that are direct inputs to a  product, such as a subcontractor producing components for a weapon  system and (2) induced job changes that are affected as a result of local  spending by direct and indirect workers, such as retail sales. base was located. Indirect multipliers were estimated by mapping Military  Occupational Specialties (MOSes) to economically similar civilian sectors.  Each of these similar economic sectors multipliers were weighted by the  number of military personnel mapped to each sector divided by the total  number of employees in the sector. Examples of these economically similar  sectors are educational services, administration and support services,  scientific research and development services, aerospace product and parts  manufacturing, and electronic repair and maintenance. Judgment was used  to place all MOSes into one of the industrial sectors. A weighted average of  the indirect multipliers, based on the weights discussed above, for each  base was used to estimate the indirect job changes from military personnel.  This weighted average of indirect multipliers used to estimate the military  indirect multiplier for each base was used to estimate the indirect job  changes from civilian personnel job changes, as well as the indirect job  changes for mission-support contractors for each base.
Estimating the induced job changes from military and civilian job changes  was more straightforward. For each economic area, MIG used one induced  multiplier for military personnel job changes and one for nonmilitary  government jobs changes. These multipliers were used to estimate the  induced job changes for each base in that economic area. Summing the  products of the weights for each of the civilian industries calculated for the  military indirect multipliers, and the induced multipliers for each of the  industries from MIG, produced the induced multiplier used for mission  support contractor job changes.
Because of a concern about the lower spending of military trainees at  recruit training facilities, an adjustment was made to reduce the values of  the induced multipliers used for job changes of military trainees at recruit  training bases. The Economic Impact Joint Process Action Team was also  concerned about overestimating induced job changes for military trainees  at recruit training bases and thought that military trainees at such bases  have a smaller economic impact than civilian employees and regular  military personnel, including those military personnel who receive more  advanced training. The team thought this because such students receive a  relatively smaller income and are generally transient. Student multipliers  for bases with recruit training programs were estimated by multiplying the  military induced multiplier for an economic area by the ratio of basic  training wages to average military wages (slightly more than a third).  Student induced multipliers for bases without basic training programs were  set equal to the military induced multiplier for the base’s economic area.  The team thought that these more advanced students were likely to have  incomes and spending habits similar to the average military in the  economic area.
Some of the joint cross-service groups subsequently considered a small  number of bases (leased spaces or Reserve/Guard centers) that were not  included in the initial set of defined economic areas. For these economic  areas, a generic set of multipliers was developed by averaging each of the  multipliers of the five categories (military, civilian, contractor, student, and  recruit training student) over the existing economic areas. by economic area (net result of all actions for the economic area).
The total potential job change and the total potential job changes as a  percentage of total in an economic area were to be considered in the  context of historical economic data. For historical context, the services  and the joint cross-service groups considered the following for each  economic area:  total employment: 1988 to 2002,  annual unemployment rates: 1990 to 2003, and  real per capita income: 1988 to 2002.
In addition, the latest available numbers on population would be provided. These dates were chosen to reflect the latest available data from federal  sources.
In the 1995 BRAC round, DOD developed a separate method of assessing  cumulative economic impact because some of the closures and  realignments from the prior rounds had not been fully implemented, so  special consideration was given to the economic impacts that were yet to  occur. However in 2005, given the passage of time since all four of the  previous BRAC rounds, which extended from 1988 to 1995, and other  factors contributing to changing economic conditions in the interim period,  DOD decided not to consider the cumulative economic impact of the prior  BRAC rounds in assessing the impact of the current round. We believe  DOD’s decision not to assess a cumulative economic impact for the 2005  round has merit.
DOD had extensive documentation controls to protect how documents for  economic impact were prepared, handled, and processed. Procedures were  used to ensure that the inputs, such as the values of the multipliers, used to  make calculations on job changes were correct. A review by qualified  analysts who did not participate in the initial calculations was also  conducted.
section_title: Methodology Has Limitations but Is Reasonable for BRAC Purposes
paragraphs: DOD’s approach to measuring economic impact did not measure all the  dimensions of the economic impact coming from a BRAC action. There will  be other economic impacts on the economic area, such as changes in the  value of real estate or the value of businesses in the area. The DOD  approach did not estimate these effects, but it is reasonable to assume that  the magnitude of job losses would be correlated with the changes in these  values.
DOD’s methodology does have some limitations. Specifically, it tended to  overstate the employment impact for economic areas. One of DOD’s goals  for the methodology was to produce credible estimates but to err on the  side of overstating the actual impacts in order to prevent others from  arguing that DOD was underestimating economic impact. The Joint  Process Action Team was aware that the methodology had factors that  might offset the estimated job losses. For example, the methodology  assumed that that jobs are lost all at once and does not recognize that  employees may be released over the 6-year implementation period and be  reemployed in other local businesses or outside the economic area, which  would reduce the estimated job loss. The methodology does not recognize  the possible civilian reuse of the affected base and the resulting  reemployment of workers, which would reduce the estimated job losses.
In examining the construction of the indirect multipliers, it is possible to  question how they were created. The indirect multiplier being used to  estimate job changes from military job changes for a base is constructed as  a weighted average multiplier where the weights are the fraction of total  base personnel being judged to be similar to a particular civilian industry.  Questions could be raised about judgments made to map particular Military  Occupation Specialties to activities in civilian industries. In some cases, the  mapping from military jobs to industries was easier, such as military jobs in  the medical area being mapped to the medical industry. However, in other  areas where the jobs are uniquely military, such as infantry, the mapping  would be more problematic. If a mistake was made in mapping a job that is  uniquely military to a civilian sector, the result would depend on the  relative size of the multiplier of the correct civilian sector versus the  civilian sector used. It could lead to overestimation or underestimation of  the indirect job change. Time did not permit us to examine this mapping.  Nonetheless, we believe the overall approach seemed to be a sound  attempt to produce a credible multiplier.
Finally, in using the ratio of estimated job losses from 2006 through 2011 to  total employment as of 2002 (the latest figure for total employment) as a  measure of economic impact, the economic impact was likely overstated.  This occurs because total employment is likely to grow for many economic  areas over the 2006-2011 implementation period as local economies grow,  which would reduce the overall percentage of job losses.
DOD’s methodology for assessing economic impact was reviewed by an  independent panel of four economists and policy analysts from the private  and academic sectors in August 2004. DOD formed the panel of four  members to review the methodology and to determine if it conformed to  accepted economic practices. Three of the panel members were Ph.D.  economists and the other was a policy analyst. All four were experienced in  conducting local economic impact studies and were not otherwise  associated with the BRAC process. The panel found the methodology to be  reasonable. The experts agreed that the use of direct and indirect job  changes was a logical method to characterize the impact of proposed  closures and realignments. The reviewers also concluded that DOD’s  methodology represents a “worst-case” estimate of economic impact. We  contacted each member of the panel to discuss their review of the  methodology to ensure that DOD had adequately summarized the results of  the panel meeting and that they agreed that the methodology was sound.  We and the experts agreed that DOD had adequately summarized the  review meeting and agreed that the methodology was reasonable to use.
subsections: section_title: Economic Areas Most Impacted and Least Impacted by BRAC Recommendations
paragraphs: greatest negative employment change and the greatest positive  employment change.
As noted in prior reports, we examined how the communities surrounding  closed bases were faring in relation to two key national economic  indicators—the national unemployment rate and the average annual real  per capita income growth rate. In our last status report, we observed that  most communities surrounding closed bases were faring well economically  in relation to these key national economic indicators. While some  communities surrounding closed bases were faring better than others,  most have recovered or are continuing to recover from the impact of  BRAC, with more mixed results recently, allowing for some negative  impact from the 2001 recession.
section_title: Draft DOD Transformational Options Recommended for Approval
paragraphs: Appendix XV Draft DOD Transformational Options  Recommended for Approval 1.
Consolidate Management at Installations with Shared Boundaries.  Create a single  manager for installations that share boundaries. Source & Application: H&SA 2.
Regionalize Installation Support.  Regionalize management of the provision of  installation support activities across Military Departments within areas of  significant Department of Defense (DoD) concentration, identified as Geographic  Clusters.  Option will evaluate designating organizations to provide a range of  services, regionally, as well as aligning regional efforts to specific functions.  For  example, a possible outcome might be designation of a single organization with the  responsibility to provide installation management services to DoD installations within the statutory National Capital Region (NCR).  Source and Application: H&SA 3.
Consolidate or collocate Regional Civilian Personnel Offices to create joint civilian  personnel centers. Source and Application: H&SA 4.
Consolidate active and Reserve Military Personnel Centers of the same service.  Source and Application: H&SA 5.
Collocate active and/or Reserve Military Personnel Centers across Military  Departments. Source and Application: H&SA 6.
Consolidate same service active and Reserve local Military Personnel Offices  within Geographic Clusters.  Source and Application: H&SA 7.
Collocate active and/or Reserve local Military Personnel Offices across Military  Departments located within Geographic Clusters. Source and Application: H&SA 8.
Consolidate Defense Finance and Accounting Service (DFAS) Central and Field  Sites.  Consolidate DFAS business line workload and administrative/staff functions  and locations. Source and Application: H&SA 9.
Consolidate Local DFAS Finance & Accounting (F&A).  Merge/consolidate local  DFAS F&A within Geographic Clusters.  Source and Application: H&SA 10. Consolidate remaining mainframe processing and high capacity data storage  operations to existing Defense Mega Centers (Defense Enterprise Computing  Centers).  Source and Application: H&SA Appendix XV Draft DOD Transformational Options  Recommended for Approval 11. Establish and consolidate mobilization sites at installations able to adequately  prepare, train and deploy service members.  Source and Application: H&SA 12. Establish joint pre-deployment/re-deployment processing sites.  Source and  Application: H&SA 13. Rationalize Presence in the DC Area.  Assess the need for headquarters, commands  and activities to be located within 100 miles of the Pentagon.  Evaluation will  include analysis of realignment of those organizations found to be eligible to move  to DoD-owned space outside of a 100-miles radius.  Source and Application: H&SA 14. Minimize leased space across the US and movement of organizations residing in  leased space to DoD-owned space. Source and Application: H&SA 15. Consolidate HQs at Single Locations.  Consolidate multi-location headquarters at  single locations.  Source and Application: H&SA 16. Eliminate locations of stand-alone headquarters.  Source and Application:  H&SA 17. Consolidate correctional facilities into fewer locations across Military Departments.
Source and Application: H&SA 18. Collocate Reserve Component (RC) Headquarters.  Determine alternative facility  19. Collocate Recruiting Headquarters.  Analyze alternative Recruiting Headquarters  alignments. Consider co-location of RC and Active Component (AC) Recruiting  headquarters.  Source and Application: H&SA 20. Establish a consolidated multi-service supply, storage and distribution system that  21. Privatize the wholesale storage and distribution processes from DoD activities that  perform these functions.  Source and Application: Supply & Storage  Appendix XV Draft DOD Transformational Options  Recommended for Approval 22. Migrate oversight and management of all service depot level reparables to a single  DoD agency/activity.  Source and Application: Supply & Storage 23. Decentralize Depot level maintenance by reclassifying work from depot-level to I- level.  Source and Application:  Industrial 24. Centralize I-level maintenance and decentralize depot-level maintenance to the  existing (or remaining) depots.
Eliminate over-redundancy in functions.
Consolidate Intermediate and Depot-level regional activities  Source and Application: Industrial 25. Regionalize severable and similar work at the intermediate level.  Source and  26. Partnerships Expansions.  Under a partnership, have government personnel work in contractor owned/leased facilities and realign or close facilities where personnel are  currently working.  Source and Application: Industrial 27. Collocate depots:  Two Services use the same facility(s).  Separate command  structures but shared common operations. Source and Application: Industrial 28. Consolidate similar commodities under Centers of Technical Excellence.  Source  29.
Implement concept of Vertical Integration by putting entire life cycle at same site to  increase synergies, e.g. production of raw materials to the manufacture of finished  parts, co-locating storage, maintenance and demil.  Source and Application:  Industrial 30.
Implement concept of Horizontal Integration by taking some of the most costly  elements of the M&A processes and put them at the same site to increase efficiencies, e.g. put Load, Assemble and Pack (LAP) of all related munitions at  same site.  Source and Application: Industrial 31. Maintain a multi-service distribution and deployment network consolidating on  regional joint service nodes. Source and Application: Industrial 32. Evaluate Joint Centers for classes and types of weapons systems and/or  technologies used by more than one Military Department:
Within a Defense Technology Area Plan (DTAP) Capability Area
Across multiple functions (Research; Development & Acquisition; Test &  Evaluation)
Appendix XV Draft DOD Transformational Options  Recommended for Approval
Across multiple DTAP capability areas.  Source and Application:  Technical 33. Evaluate Service-Centric concentration, i.e. consolidate within each Service:
Within a Defense Technology Area Plan (DTAP) capability area
Across multiple functions (Research; Development & Acquisition; Test &  Evaluation)
Across multiple DTAP capability areas.  Source and Application:  Technical 34. Privatize graduate-level education.  Source and Application: Education & Training 35.
Integrate military and DoD civilian full-time professional development education  programs.  Source and Application: Education & Training 36. 36. Establish Centers of Excellence for Joint or Inter-service education and  training by  combining or co-locating like schools (e.g., form a “DoD University”  with satellite training sites provided by Service-lead or civilian institutions).  Source  and Application: Education & Training 37. Establish “joint” officer and enlisted specialized skill training (initial skill, skill  progression & functional training). Source and Application: Education & Training 38. Establish a single "Center of Excellence" to provide Unmanned Aerial Vehicle  initial (a.k.a. undergraduate) training. Source and Application: Education & Training 39. Establish regional Cross-Service and Cross-Functional ranges that will support  Service collective, interoperability and joint training as well as test and evaluation  of weapon systems.  Source and Application: Education & Training 40.
Integrate selected range capabilities across Services to enhance Service collective,  interoperability and joint training, such as Urban Operations, Littoral, training in  unique settings (arctic, mountain, desert, and tropical).  Source and Application:  Education & Training 41. Combine Services' T&E Open Air Range (OAR) management into one joint  management office.  Although organizational/managerial, this option could  engender further transformation.  Joint management of OAR resources could encourage a healthy competition among OARs to increase efficiency and maximum  utility DoD-wide. Source and Application: Education & Training 42. Consolidate or collocate at a single installation all services' primary phase of pilot  training that uses the same aircraft (T-6). Source and Application:  Education &  Training Appendix XV Draft DOD Transformational Options  Recommended for Approval 43. Locate (division/corps) UEx and (corps/Army) UEy on Joint bases where practical  to leverage capabilities of other services (e.g., strategic lift to enhance strategic  responsiveness). Source and Application: Army 44. Locate (brigades) Units of Action at installations DoD-wide, capable of training  modular formations, both mounted and dismounted, at home station with sufficient  land and facilities to test, simulate, or fire all organic weapons. Source and  Application: Army 45. Collocate Army War College and Command and General Staff College at a single  46. Locate Special Operations Forces (SOF) in locations that best support specialized  training needs, training with conventional forces and other service SOF units and  wartime alignment deployment requirements.  Source and Application: Army 47. Collocate or consolidate multiple branch schools and centers on single locations  (preferably with MTOE units and RDTE facilities) based on warfighting  requirements, training strategy, and doctrine, to gain efficiencies from reducing  overhead and sharing of program-of-instruction resources.  Source and Application:  Army 48. Reshape installations, RC facilities and RC major training centers to support home  station mobilization and demobilization and implement the Train/Alert/Deploy  model. Source and Application: Army 49.
Increase the number of multi-functional training areas able to simultaneously serve  multiple purposes and minimize the number of single focus training areas for the  Reserve Components where possible.  Source and Application: Army 50. Collocate institutional training, MTOE units, RDTE organizations and other TDA  units in large numbers on single installations to support force stabilization and  enhance training. Army 51. Locate units/activities to enhance home station operations and force protection.
Source and Application: Army 52. Consolidate aviation training with sister services for like-type aircraft to gain Appendix XV Draft DOD Transformational Options  Recommended for Approval 54. Consolidate Army RDT&E organizations to capitalize on technical synergy across  55. Reduce the number of USAR regional headquarters to reflect Federal Reserve  Restructuring Initiative (FRRI).  Source and Application: Army 56. Consolidate RDT&E functions on fewer installations through inter-service support  57. Establish a single inventory control point (ICP) within each Service or consolidating  into joint ICPs.  Application: Supply and Storage 58. Expand Guard and Reserve force integration with the Active force. Examples: (1) Blended organizations. (2) Reserve Associate, Guard Associate, and Active Associate (3) Sponsored Reserve.  (4) Blending of Guard units across state lines to unify mission areas, reduce  infrastructure, and improve readiness. Application:  MilDeps 59. Consolidate National Capital Region (NCR) intelligence community activities now  occupying small government facilities and privately owned leased space to fewer, secure DoD-owned locations in the region.  Application:  Intel 60. Collocate Guard and Reserve units at active bases or consolidate the Guard and  Reserve units that are located in close proximity to one another at one location if  practical, i.e., joint use facilities.  Application: MilDeps 61. Consolidate the Army’s five separate Active Component recruit training sites and  BENS;  Application:  Supply and Storage, MilDeps 63. Privatize long-haul communications in the Defense Information Systems Agency  64. Collocate Joint Strike Fighter graduate flight training and maintenance training. 65. Collocate Joint Strike Fighter graduate flight training.
section_title: Key GAO and Other Defense Audit Agency Products Related to DOD’s 2005 Base Realignments and Closures
subsections: section_title: Government Accountability Office
paragraphs: Military Base Closures: Observations on Prior and Current BRAC  Rounds. GAO-05-614. Washington, D.C.: May 3, 2005.
Military Base Closures: Updated Status of Prior Base Realignments and  Closures. GAO-05-138. Washington, D.C.: January 13, 2005.
Military Base Closures: Assessment of DOD’s 2004 Report on the Need for  a Base Realignment and Closure Round. GAO-04-760. Washington, D.C.:  May 17, 2004.
Military Base Closures: Observations on Preparations for the Upcoming  Base Realignment and Closure Round. GAO-04-558T. Washington, D.C.:  March 25, 2004.
Military Base Closures: DOD’s Updated Net Savings Estimate Remains  Substantial. GAO-01-971. Washington, D.C.: July 31, 2001.
Military Bases: Lessons Learned from Prior Base Closure Rounds.  GAO/NSIAD-97-151. Washington, D.C.: July 25, 1997.
Military Bases: Analysis of DOD’s 1995 Process and Recommendations  for Closure and Realignment. GAO/NSIAD-95-133. Washington, D.C.:  April 14, 1995.
section_title: Department of Defense Office of Inspector General
paragraphs: Infrastructure and Environment: Technical Joint Cross-Service Group  Data Integrity and Internal Control Processes for Base Realignment and  Closure 2005. D-2005-086. Washington, D.C.: June 17, 2005.
Defense Infrastructure: Education and Training Joint Cross-Service  Group Data Integrity and Internal Control Processes for Base  Realignment and Closure 2005. D-2005-084. Arlington, Va.: June 10, 2005.
Defense Infrastructure: Industrial Joint Cross-Service Group Data  Integrity and Internal Control Processes for Base Realignment and  Closure 2005. D-2005-082. Arlington, Va.: June 9, 2005.
Infrastructure and Environment: Washington Headquarters Services  Data Call Submissions and Internal Control Processes for Base  Realignment and Closure 2005. D-2005-079. Arlington, Va.: June 8, 2005.
Defense Infrastructure: Supply and Storage Joint Cross-Service Group  Data Integrity and Internal Control Processes for Base Realignment and  Closure 2005. D-2005-081. Arlington, Va.: June 6, 2005.
Infrastructure and Environment: Defense Finance and Accounting  Service Data Call Submissions and Internal Control Processes for Base  Realignment and Closure 2005. D-2005-075. Arlington, Va.: May 27, 2005.
DOD Inspector General plans to issue reports on the Defense Logistics  Agency, the Headquarters and Support Activities Joint Cross-Service  Group, and the Medical Joint Cross-Service Group.
section_title: Department of the Army U.S. Army Audit Agency
paragraphs: Reserve Component Process Action Team, The Army Basing Study 2005.  A-2005-0165-ALT. Alexandria, Va.: April 29, 2005.
The Army Basing Study 2005 Process. A-2005-0164-ALT. Alexandria, Va.:  April 22, 2005.
Validation of Army Responses for Joint Cross-Service Group Questions.  A-2005-0169-ALT. Alexandria, Va.: April 22, 2005.
Army Military Value Data, The Army Basing Study 2005. A-2005-0083- ALT. Alexandria, Va.: December 21, 2004.
Army Capacity Data, The Army Basing Study 2005. A-2005-0056-ALT.  Alexandria, Va.: November 30, 2004.
Cost of Base Realignment Actions (COBRA) Model. A-2004-0544-IMT.  Alexandria, Va.: September 30, 2004.
section_title: Department of the Navy Naval Audit Service
paragraphs: The Department of the Navy’s Implementation of the FY 2005 Base  Realignment and Closure Process. N2005-0046. Washington, D.C.: June 10,  2005.
Risk Assessment of the Department of the Navy Base Realignment and  Closure 2005 Information Transfer System. N2005-0042. Washington,  D.C.: April 25, 2005.
Base Realignment and Closure Optimization Methodology. N2004-0058.  Washington, D.C.: June 16, 2004.
section_title: Department of the Air Force Air Force Audit Agency
paragraphs: BRAC Cueing and Analysis Tools. F2005-0007-FB2000. Washington, D.C.:  June 22, 2005. 2005 Base Realignment and Closure-Installation Visualization Tool Data  Reliability. F2005-0004-FB4000. Washington, D.C.: June 16, 2005.
Base Realignment and Closure Data Collection System. F2004-0008- FB40000. Washington, D.C.: September 27, 2004. 2005 Base Realignment and Closure: Installation Capacity Analysis  Questionnaire. F2004-0007-FB4000. Washington, D.C.: August 24, 2004. 2005 Base Realignment and Closure: Installations Inventory. F2004-0005- FB4000. Washington, D.C.: April 12, 2004. 2005 Base Realignment and Closure: Air Force Internal Control Plan.  F2004-0001-FB4000. Washington, D.C.: December 29, 2003.
The Air Force Audit Agency plans to release 7 additional reports on the Air  Force and joint cross-service group data collection, the Air Force analysis,  and the use of various BRAC tools.
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: In addition to the individual named above, Mike Kennedy, Jim Reifsnyder,  Nelsie Alcoser, Shawn Arbogast, Raymond Bickert, Alissa Czyz, Andrew  Edelson, Glenn Knoepfle, Nancy Lively, Warren Lowman, Tom Mahalek,  David Mayfield, Richard Meeks, Hilary Murrish, Charles Perdue, Robert  Poetta, James Reynolds, Laura Talbott, and Cheryl Weissman made key  contributions to this report.
Other individuals also contributing to this report included, Tommy Baril,  Carl Barden, Angela Bourciquot, Steve Boyles, Delaney Branch, Joel  Christenson, Kenneth Cooper, Paul Gvoth, Larry Junek, Mark Little, Philip  Longee, Ricardo Marquez, Gary Phillips, Greg Pugnetti, Sharon Reid, John  Strong, Roger Tomlinson, and Kimberly Young.