DOD Installation Services: Use of Intergovernmental Support Agreements Has Had Benefits, but Additional Information Would Inform Expansion
Released: 2018-10-23T00:00:00

Letter

Background

Statutory Provisions for Entering into IGSAs

The IGSA statute (10 U.S.C. § 2679) authorizes such agreements based on a determination that the agreement will serve the best interests of the department by creating efficiencies or economies of scale, including by reducing costs, or by enhancing mission effectiveness. The law also states that IGSAs are not subject to other provisions of law governing the award of federal government contracts for goods and services. In addition, IGSAs may be entered into on a sole source basis with a state or local government and may use wage rates normally paid by that state or local government.

At the same time, there are limitations on the use of IGSAs. Specifically, any installation services obtained through an IGSA must already be provided by the state or local government for its own use, and any contract awarded by the federal government or by a state or local government pursuant to an IGSA must be awarded competitively. In addition, IGSAs cannot be used to circumvent the requirements of Office of Management and Budget Circular A-76, which governs competitions to determine whether commercial activities should be performed by government employees or by private contractors. Finally, IGSAs are statutorily limited to a term of no more than 10 years, but the statute does not preclude their renewal after the initial agreement period ends.

Process for Developing, Approving, and Implementing IGSAs

The military services each have a process for developing, approving, and implementing IGSAs. These processes generally begin with meetings between installation and state or local government officials to discuss services the installation requires that the state or local government could provide. If there is agreement that an IGSA could be beneficial to both parties, installation officials put together an IGSA proposal for obtaining the service from the state or local government.

Proposals are required to include a business case analysis showing the proposed IGSA is expected to provide a financial or nonfinancial benefit. For example, Army Regulation 5-9, Installation Agreements, states that an Army installation must submit a proposal and a cost benefit analysis that demonstrates the IGSA will bring financial benefits. Similarly, a memorandum from the Assistant Secretary of the Navy for Energy, Installations, and Environment requires that Navy and Marine Corps installations include material describing the IGSA’s risks and benefits, including financial benefits and enhanced mission effectiveness. Air Force guidance requires that IGSA proposals include a business case analysis and meet the purpose of 10 U.S.C. § 2679 by either bringing financial benefits or enhancing mission effectiveness.

Once an IGSA proposal is complete, installation commanders either approve it or submit it to a higher command for review and approval, according to certain dollar thresholds. Figure 1 shows the office within each military service that reviews the proposed IGSA for approval, based on the dollar thresholds.

Once a proposed IGSA is approved, installation officials draft the agreement in coordination with state or local government officials. When finalized, representatives of the military service and the state or local government sign the agreement. For Army, Navy, and Marine Corps IGSAs, the installation commander has authority to sign the IGSA, while Air Force IGSAs must be signed by an installation contracting officer. The IGSA is then implemented.

Military Services Have Benefitted from Selected IGSAs but Are Not Fully Monitoring the Benefits of Implemented IGSAs

Military Services Have Realized Financial and Nonfinancial Benefits from Selected IGSAs

Our analysis of a sample of 8 implemented IGSAs, and interviews with officials about these and other IGSAs, found that the military services have realized financial (i.e., cost savings and cost avoidances) and nonfinancial (e.g., enhanced mission effectiveness) benefits from these agreements.

Cost Savings

In 5 of the 8 IGSAs in our sample, we found that the actual cost of each IGSA during its first year of implementation was lower than the expected cost of obtaining the installation service through an alternative contract, as shown in the respective business case analysis for each IGSA. Table 1 provides each installation’s estimated cost for obtaining the installation service through an alternative contract and the estimated cost for obtaining the installation service through an IGSA; the actual cost paid by the installation to the local government for the first year of each IGSA, based on our analysis of monthly invoices; and our calculation of the estimated realized cost savings achieved from using the IGSA, relative to the alternative.

Overall, we found that the estimated cost savings realized by these 5 IGSAs totaled about $2.4 million during the first year of implementation. For example:

Fort Polk realized an estimated $1.9 million in cost savings by implementing an IGSA for waste removal with its local government. Specifically, installation officials estimated that a private contract would have cost the installation about $4.5 million from June 2017 through May 2018, while we found that the implemented IGSA cost about $2.6 million for the same period.

Moody Air Force Base realized an estimated $270,000 in savings in fiscal year 2017 by implementing an IGSA for water and wastewater treatment. In the IGSA’s business case analysis, officials estimated that continuing to obtain this service from their existing contractor would have cost about $642,000, while the implemented IGSA cost was about $372,000, according to our analysis.

Marine Corps Logistics Base Barstow realized an estimated $68,000 in cost savings during the first 9 months of its IGSA for water testing and analysis with the local government. Specifically, installation officials estimated that renewing the previous contract would have cost about $153,000 for 1 year, or about $115,000 for 9 months, while we found that the actual cost under the implemented IGSA was about $47,000 for 9 months.

Cost Avoidances

The other 3 IGSAs in our sample resulted in cost avoidances, according to installation officials. First, officials at Fort Sill, Oklahoma, told us that the Army Medical Command and the Army Public Health Command had previously provided stray animal control without cost to the installation. When this arrangement ended, Fort Sill had to find an alternative. Officials stated that implementing an IGSA with the city of Lawton, Oklahoma, allowed the installation to avoid the higher costs of a private contractor or of renovating facilities and hiring civilians to perform these duties. Second, Fort Bragg, North Carolina, implemented an IGSA for stray animal control with Cumberland County, North Carolina, that, according to its proposal documentation, allowed the installation to avoid the cost of replacing its stray animal control facility, which was inadequate and sub-standard. Finally, after 2 years with no contract in place, Fort Bragg implemented an IGSA with the city of Fayetteville, North Carolina, for maintenance services at the Airborne and Special Operations Museum that allowed the installation to avoid the overhead costs and fee involved in securing the services through a contract with the Army Corps of Engineers.

Nonfinancial Benefits

According to officials from all four services, achieving financial benefits has been a primary purpose for utilizing IGSAs, but IGSAs can also provide nonfinancial benefits—such as enhanced mission effectiveness and readiness, reduced administrative time, and greater flexibility.

Enhanced mission effectiveness and readiness. Military service officials cited examples of IGSAs that led to enhanced mission effectiveness and readiness. For example, according to its IGSA proposal package, Fort Polk was using military personnel to conduct grounds maintenance, which was contrary to the Army’s guidance that military personnel, while at Fort Polk, should be training for their mission. Officials told us that once the IGSA was implemented military personnel were no longer assigned to grounds maintenance duty, thus potentially enhancing mission effectiveness. In addition, an official in the Army Partnerships Office told us that the IGSA at the Presidio of Monterey, California, for various installation services enabled the installation to obtain a work order for flood damage to a satellite component within a matter of minutes. Direct contact between installation officials and the local government, he stated, provides a quicker response time and has a significant impact on installation readiness.

Reduced administrative time and greater flexibility. Installation officials stated that IGSAs had reduced the time personnel spent on managing the services being provided. For example, Marine Corps Logistics Base Barstow officials stated that the installation’s IGSA with the city of Barstow, California, for water testing and analysis had eliminated the time that installation personnel had to use to manage the previous contract. At the time of our review, they were considering further IGSAs, such as one for tree-trimming, that they said would likely not bring cost savings, but that would provide flexibility and ease of managing due to reduced administrative time and regular communication with city officials. Similarly, officials at Fort Polk and Fort Bragg stated that managing their IGSAs is easier than managing other contracts for services, as they can make any needed changes to the IGSA by working directly with the local government.

Other benefits. Installation officials also cited benefits such as improved relations with the local government, better quality of service, and the local community’s stronger commitment to working with the installation, compared with contractors. For example, Moody Air Force Base officials noted that the installation’s IGSA for water and wastewater treatment has been positive because the local government cares about the overall good of the installation, due to its importance to the community.

Military Services Are Not Fully Monitoring the Benefits of Implemented IGSAs

As part of the approval process for IGSAs, the military services collect information on IGSAs’ potential expected benefits, which are estimated prior to IGSA implementation. However, once IGSAs are implemented, the services do not fully monitor whether these IGSAs are resulting in actual financial and nonfinancial benefits. Standards for Internal Control in the Federal Government states that management should design processes, and document them in policy, to obtain relevant, accurate information that it can use to evaluate the entity’s performance in achieving key objectives and make informed decisions about any needed changes. The standards also state that management communicates such information throughout the entity to support achieving those key objectives.

Following are descriptions of the status of each military service’s approach and plans for monitoring the benefits of implemented IGSAs.

Army headquarters collects data on the expected financial benefits of IGSAs, based on information provided in the IGSAs’ business case analyses. These data reflect the financial benefits that the installations expect to achieve by using IGSAs, which are estimated prior to IGSA implementation. Army headquarters does not, however, currently monitor whether financial or nonfinancial benefits are actually realized from IGSAs after implementation. Army officials told us in May 2018 that they were drafting guidance that likely will assign responsibility for tracking both the realized financial and nonfinancial benefits of IGSAs, on an annual basis, to the Army’s four land-holding commands. They noted, however, that they have not yet decided what specifically to track or finalized a process for monitoring IGSA benefits and evaluating program performance, but stated that their goal was to have a process in place by the end of 2018.

Navy headquarters collected information on the expected benefits of the IGSAs it has thus far approved. In addition, in May 2018, the Navy Installations Command chose 12 high-priority IGSA opportunities identified by its regional commands to focus on for implementation and monitoring. According to the Navy Installations Command official who oversees the Navy’s IGSA efforts, this effort is in the very early stages. The official also stated that the expected financial benefits for these 12 will likely be tracked by the Navy Installations Command, but any monitoring of realized financial benefits after the IGSAs are implemented would be left to the regional commands. On the other hand, the official stated that nonfinancial benefits are very subjective and the Navy has not yet determined what information will be collected.

Marine Corps headquarters officials stated that they collect information on the expected benefits of IGSAs, but they are not currently monitoring the actual performance of implemented IGSAs because few are in place and existing IGSAs are less than 2 years old. They added that the Marine Corps plans to establish a process to track and analyze the realized financial benefits of IGSAs, but the headquarters official with lead responsibility for IGSAs did not provide a timeline for doing so. He added that the process will likely task the regional installation commands with tracking cost savings, with headquarters officials collecting and maintaining consolidated regional data. In addition, he did not indicate that the Marine Corps plans to monitor whether nonfinancial benefits are realized by implemented IGSAs.

In addition to collecting data on the expected benefits of IGSAs prior to their implementation, Air Force headquarters has taken some steps to monitor the benefits realized by the 8 implemented IGSAs it had in place as of July 2018. Specifically, Air Force Community Partnership Program officials have taken the initiative to request information at the beginning of each fiscal year from Air Force installations on any actual financial benefits realized from their implemented IGSAs, including cost savings and cost avoidance. However, officials stated that submitting information is voluntary for installations, and some installations do not always provide timely information. For example, two installations with IGSAs in place beginning in fiscal year 2015 did not provide information in response to the fiscal years 2016 and 2017 data requests. Officials with the partnerships office also noted that they plan to monitor nonfinancial benefits to use for lessons learned and program talking points, but that information on any nonfinancial benefits from implemented IGSAs was currently being collected anecdotally.

The military services generally are not monitoring whether all of their IGSAs are bringing financial and nonfinancial benefits because they have not established formal processes to obtain this information and documented them in their policies or procedures, as called for in Standards for Internal Control in the Federal Government. Specifically, the Army, Navy, and Marine Corps IGSA policies do not include processes for monitoring the degree to which expected benefits from IGSAs were actually realized after implementation. The military services also differ in regard to the types of benefits they plan to monitor in the future. In addition, the informal process used by the Air Force to collect some data on realized IGSA benefits is not documented in Air Force policy or procedures.

Officials from all four services stated that they are still in the early stages of developing their IGSA processes. In addition, officials from the Army and the Air Force told us that they believed that it may be premature to monitor IGSA performance because the authorization to use IGSAs has only been in use for 3 years and only a limited number of IGSAs have been approved. We recognize the use of IGSAs is relatively new, but developing and documenting formal processes to collect and monitor information on the benefits realized through implemented IGSAs now, as the services continue to refine their IGSA programs, could assist the services in at least two ways. First, it would provide the services with information they could use to assess the performance of IGSAs in comparison with the expected benefits outlined in the IGSAs’ business case analyses. An accurate assessment of actual performance would provide decision makers with important context when reviewing individual IGSAs for possible renewal, and could inform the services’ decisions on developing and implementing similar agreements in other locations. Second, developing formal processes to monitor the performance of implemented IGSAs would provide information that the military services could communicate internally to their installations as part of their outreach efforts to increase awareness of and, when beneficial, expand the use of IGSAs as a means of achieving financial benefits or enhancing mission effectiveness.

Military Services Have Supported IGSA Use but Not Fully Monitored Whether Installations Are Evaluating IGSA Opportunities

Military Services Have Developed Approaches for Supporting Installations’ Use of IGSAs

The military services have developed various approaches for supporting their installations’ use of IGSAs. These include issuing policies on the use of IGSAs; issuing procedures and templates for IGSA development and approval; and providing headquarters-level support, such as facilitating meetings between installation and state and local government officials. The following are descriptions of these approaches for supporting installations’ use of IGSAs.

Policies. The services have issued IGSA policies that, among other things, either direct their installations to evaluate opportunities for using IGSAs to obtain installation services or to implement mutually beneficial partnerships that include IGSAs. Army Installation Management Command policy states that installations are to explore opportunities to enter into IGSAs with state or local governments, and it directs installations to review current, soon-to-expire installation support contracts for possible transition to an IGSA. Similarly, Navy Installations Command and Marine Corps Installations Command policies direct regional commands and installations to investigate and identify existing and potential services that could be provided by the state or local governments surrounding their installations. While Air Force policy does not specifically direct its installations to evaluate opportunities for using IGSAs, it does direct Air Force installations to implement mutually beneficial partnerships with their local communities.

Procedures and templates. Each of the military services has issued procedures for its installations to follow in order to develop, obtain approval for, and implement IGSAs. For example, the Marine Corps has issued an IGSA handbook that provides information on the roles and responsibilities of installation and headquarters officials in the IGSA process. The handbook also outlines a process installations can follow to develop an IGSA, which includes identifying a need that an IGSA could address, meeting with potential state and local partners, developing a draft and final IGSA, and signing and implementing the IGSA.

Additionally, the Army and the Air Force have provided templates of required documents to help installations through the IGSA approval process. For example, Army Installation Management Command’s IGSA procedures include templates and examples of documents installations are to develop, such as a memorandum from the installation commander describing the IGSA proposal; a business case analysis that demonstrates the benefits of the proposed IGSA; and the IGSA document to be signed by the installation and the state or local government. Similar to the Army and the Air Force, one of the Navy’s regional commands has included templates along with their region-specific IGSA procedures, and a Navy Installation Command official told us that the Navy may adapt those procedures and templates for Navy-wide use.

Headquarters support. The Army and the Air Force have established partnership offices within their headquarters that serve as resources to support installations interested in using IGSAs. Support includes facilitating meetings between installation and state and local government officials to identify IGSA opportunities. For example, the Army facilitated such meetings at Fort Polk in late 2016, during which officials identified the IGSA opportunity between Fort Polk and Vernon Parish, Louisiana, for waste removal that was implemented in June 2017. The Air Force partnership office also provides periodic training on IGSAs and other topics, as well as a website with various resources for installations to use in developing IGSAs. Marine Corps Installations Command officials stated that they provide headquarters support to installations for developing IGSAs—to include facilitating meetings between installation and local and state officials—but as a collateral duty to other responsibilities. Navy Installation Command officials said that their regions and installations are to take the lead on IGSA development but that they have offered assistance to regions, as needed. Service officials added that representatives from each military service meet quarterly to discuss their IGSA programs, including best practices and lessons learned.

Military Services Have Not Fully Monitored Whether Installations Are Evaluating Opportunities to Use IGSAs

Officials from all four military services told us that they are not fully monitoring whether all of the services’ installations are complying with their respective service policies to evaluate opportunities to use IGSAs to reduce costs or enhance mission effectiveness.

Army headquarters officials told us that their efforts to date have been focused on raising awareness of IGSAs at installations and removing any obstacles that prevent IGSAs from being approved. However, Army officials stated that they currently do not monitor whether Army installations are evaluating opportunities to use IGSAs, but they said that installations may need greater encouragement from higher headquarters to use IGSAs. Thus, Army officials said they are planning to revise Army IGSA policy to include a process for obtaining information from installation officials on whether they evaluated expiring contracts for transition to IGSAs, as well as any reasons for not doing so, and expect it to be complete by the end of 2018. Additionally, Army officials said they plan to review installation contracts for waste removal services to determine whether IGSAs can be used instead, and that additional installation services will be identified for review in the future.

The Navy Installations Command has, as discussed previously, collected a list of IGSA opportunities from the Navy’s regional commands and plans to focus on implementing 12 of them, according to the Navy Installation Command official who oversees the Navy’s IGSA efforts. However, the official said that the Navy Installations Command does not know how the regions identified these IGSA opportunities, and it has not directed the Navy regions to monitor whether each of their installations are evaluating opportunities to use IGSAs going forward. The Navy official said that asking each installation whether it identified any IGSA opportunities would be a fair question in order to avoid missing any potential IGSA opportunities.

Marine Corps Installation Command officials said they monitor the efforts of installations that are already in the process of developing an IGSA or that have already implemented an IGSA, but they do not monitor the efforts of other installations in the Marine Corps to identify IGSA opportunities. However, a Marine Corps Installation Command official said that such monitoring could help expand the use of IGSAs in the Marine Corps.

Officials in the Air Force partnerships office told us that beginning in fiscal year 2018 they had begun to monitor whether some of their installations are evaluating IGSA opportunities for certain installation services that are needed at all Air Force installations—specifically, waste management, grounds maintenance, and pavement maintenance. Air Force officials stated that they are in the process of contacting installations that have volunteered for the Air Force’s community partnership program—which includes most, but not all, installations for active-duty personnel—to determine whether they have evaluated IGSAs as a means to obtain these services.

As of July 2018, the military services had approved 45 IGSAs at 33 installations (see app. I). Opportunities for more IGSAs—and thus opportunities to achieve more financial and nonfinancial benefits similar to those we found in our analysis of 8 selected IGSAs—may exist at the services’ installations, including their more than 160 active-duty installations. Recognizing this potential, the services have directed their installations to evaluate IGSA opportunities or to implement mutually beneficial partnerships with local communities, which can include IGSAs.

However, the military services do not know the extent to which their installations are evaluating opportunities for IGSAs because service IGSA policies and procedures do not include a process for monitoring whether these evaluations are occurring or for obtaining information on the outcome of any such evaluations. Standards for Internal Control in the Federal Government states that management should design control activities to achieve objectives, such as monitoring actual performance and comparing it with established goals and objectives. Additionally, those standards state that management should implement those control activities by, for example, documenting responsibilities in policies.

Army, Navy, and Marine Corps IGSA policies and procedures do not include a process for monitoring whether installations are complying with service directives to evaluate IGSA opportunities, or for obtaining information on the outcome of those evaluations. Additionally, the process that the Air Force is currently using to monitor whether some of its installations are evaluating opportunities to use IGSAs for specific types of installation services is not documented in Air Force policy or procedures. As a result, it is uncertain whether these and any other monitoring efforts will continue beyond the current leadership of the Air Force partnerships office.

Without establishing, implementing, and documenting a process to monitor whether installations are evaluating opportunities to use IGSAs and obtain information on the outcome of those evaluations, which may also identify challenges that could hamper the ability to use IGSAs, the military services do not fully know whether their installations are conducting these evaluations, and thus may be missing opportunities to reduce costs or enhance mission effectiveness.

Military Services Have Identified Statutory, Review Time, and Financial Incentive Challenges to Using IGSAs

Statutory-Related Challenges to Using IGSAs

Air Force and Army officials identified instances in which they did not implement an IGSA because of provisions in the IGSA statute on the term limit for IGSAs—which was originally 5 years and is currently 10 years— and on the prohibition against contracting for services that are designated for federal civilians to provide.

Term limits. Buckley Air Force Base, Colorado, and Fairchild Air Force Base, Washington, did not use IGSAs to obtain firing range services because of the IGSA term limit, according to Air Force headquarters and installation officials. In both cases, the installations were considering using IGSAs in which local governments would construct new firing ranges that would be shared by the installation and those local governments. Air Force officials told us that in each case the local governments planned to fund the new construction costs with municipal bonds; however, the repayment periods for those bonds would have been longer than the IGSA term limit, and thus the Air Force would not have been able to sign an IGSA that would have covered the entire term of the repayment periods. For example, an official at Fairchild Air Force Base told us that the local government would not sign an IGSA with a term limit of fewer than 20 years because the local government wants to ensure they receive sufficient funding to repay their bond.

As a result, that official from Fairchild Air Force Base told us that the Air Force has continued to use its existing firing range for training, but it needs to be replaced because of ventilation problems and limitations on the types of weapons that can be fired at the range. At Buckley Air Force Base, an official told us that the installation received military construction appropriation funding in fiscal year 2017 to build a new firing range at a cost of $10.5 million—approximately $2 million more than the estimated cost of the IGSA. Air Force officials added that they had discussed increasing the IGSA term limit with Members of Congress.

Prohibition against contracting for services designated for federal civilians. According to Army officials, two Army installations— Aberdeen Proving Ground, Maryland, and Fort Leonard Wood, Missouri—decided not to use IGSAs for grounds maintenance because of legal concerns regarding the IGSA statute’s prohibition on using IGSAs to circumvent the requirements of Office of Management and Budget Circular A-76 regarding public-private competitions. According to those requirements, public-private competitions must be performed to determine if government personnel should perform commercial activities that are required by an agency. Further, 10 U.S.C. § 2461 states that no function of DOD that is performed by civilian employees may be converted to performance by a contractor unless based on a public-private competition that follows a detailed list of requirements under that statute. Currently, however, DOD is prohibited from conducting such competitions.

Army officials told us that Aberdeen Proving Ground submitted an IGSA proposal in 2016 for grounds maintenance that they expected to result in a cost savings of approximately $1 million annually. However, those services had previously been provided by temporary Army civilian employees. Because of this and based on the Army’s interpretation of the IGSA statute, Army officials said the IGSA proposal was not approved. Additionally, Army officials told us that Fort Leonard Wood also considered using an IGSA for grounds maintenance services in 2017 because it had unfilled civilian positions and was using military personnel instead, which took those personnel away from their primary mission. However, officials said that the installation did not submit an IGSA proposal because officials did not think it would be approved, due to the existing civilian positions.

Army officials told us they worked with the Office of the Secretary Defense to try to address some of the legal concerns within the Army regarding these types of IGSA proposals. Specifically, language was included in a May 2018 memorandum from the Assistant Secretary of Defense for Manpower and Reserve Affairs stating that even though DOD is prohibited from conducting Circular A-76 public-private competitions, this does not preclude the use of an IGSA as long as the IGSA is not used to circumvent Circular A-76 requirements. Although the memorandum does not provide any further details, an official with the Army Partnerships Office stated that the memorandum may provide more support for the use of IGSAs during internal legal reviews of IGSA proposals and could result in additional IGSAs being approved. If not, Army officials plan to communicate to Congress the effects of the current language in the IGSA statute and make any appropriate recommendations to address those effects.

Review Time-Related Challenges to Using IGSAs

Officials from each of the 6 installations we met with during our review told us that the length of time to review and approve IGSAs was a challenge, in part due to the multiple levels of review required before an IGSA is approved. For example:

Marine Corps Logistics Base Barstow officials told us that their IGSA proposal for water testing and analysis took approximately 1 year to be reviewed and approved—first at the installation level, then at Marine Corps Installation Command-West (a regional command), and finally at Marine Corps Installation Command headquarters. As a result, officials said they had to continue to pay their contractor for an additional year to perform those services, which they estimate cost them approximately $80,000 more than if the IGSA had been approved and in place. The officials added that IGSAs are a new way to obtain installation services within the Marine Corps, and this IGSA was the Marine Corps’ first, which likely contributed to the long review time.

In July 2017, Fort Polk submitted an IGSA proposal for both facility maintenance and repair services and also grounds maintenance services, which would be provided by a local government. However, Fort Polk officials said that approval of the proposal was delayed at Army headquarters because there was concern by those headquarters officials about replacing the existing AbilityOne contractor at Fort Polk, which was providing facility maintenance and repair services for the installation. As a result, Fort Polk re-submitted an IGSA proposal only for the grounds maintenance services, and this narrower IGSA was approved in March 2018—8 months after the original IGSA proposal was submitted.

The military services have delegated responsibility to approve IGSAs to lower levels, which could decrease the review and approval time for IGSAs. For example, in January 2018 the Air Force delegated approval authority to installation commanders for IGSAs that cost less than $15 million over a 10-year time frame—with the exception of any IGSAs that obtain installation services currently obtained from an AbilityOne contractor.

Financial Incentive- Related Challenges to Using IGSAs

An installation may lack a financial incentive to use IGSAs because that installation’s military service may choose to use any realized cost savings for service-level priorities elsewhere. As discussed earlier, we found that 5 installations in our sample realized cost savings from their implemented IGSAs. Three of those installations—Fort Polk, Luke Air Force Base, and Marine Corps Logistics Base Barstow—were able to retain those savings to apply to other installation needs that were not funded, according to installation officials. For example, Fort Polk officials stated that they were able to reallocate savings from the waste removal IGSA to repair landing strips at the installation, and Luke Air Force Base officials told us that the ability to retain IGSA cost savings was an incentive for them to put in the effort to implement an IGSA. Officials at the other 2 installations with IGSA cost savings—Moody Air Force Base and Fort Bragg—told us that those savings were retained by the installations’ higher headquarters.

The military services are at various stages in deciding how IGSA cost savings are to be used, according to service officials. Air Force officials said they are considering letting their installations retain IGSA cost savings to incentivize the use of IGSAs. Army officials stated that they do not yet have a policy on using IGSA savings, but their commands are responsible for contributing resources to supporting readiness, which may include the use of IGSA cost savings. Marine Corps officials similarly told us that they have not yet developed a policy, but added that IGSA cost savings will be retained within Marine Corps Installation Command. Finally, Navy officials told us that they have not yet considered a policy that would allow installations to retain any cost savings, although they added that Navy Installations Command does not intend to recoup any IGSA cost savings achieved by an installation or a region.

Conclusions

DOD budgets about $25 billion annually to operate and support its installations, and our analysis shows that IGSAs have provided opportunities for the military services to reduce some of those costs. However, the services could improve the visibility they have over the performance of IGSAs after implementation. Specifically, developing processes to monitor any benefits being realized from implemented IGSAs and documenting these processes in policies or procedures would enhance the military services’ ability to evaluate the performance of these agreements and provide lessons learned that could inform their efforts to encourage greater use of IGSAs. In addition, the military services have already taken steps to direct and facilitate the use of IGSAs. However, without a process to monitor whether their installations are evaluating opportunities to use IGSAs and obtain explanations of the outcomes of such evaluations, the military services do not have visibility over whether their installations are considering the use of IGSAs, as directed in guidance. Consequently, the services may be missing opportunities to reduce costs or enhance mission effectiveness. Furthermore, by documenting their processes in policies or procedures, the military services will increase the likelihood that such oversight will endure beyond the initiatives of current leadership and officials. Taking these actions would support the military services’ oversight of IGSAs and could potentially expand interest in and the use of IGSAs.

Recommendations for Executive Action

We are making the following eight recommendations to DOD: The Secretary of the Army should (a) finalize and implement a process to collect and monitor information on the extent to which all implemented IGSAs have resulted in financial and nonfinancial benefits and (b) complete documentation of that process in Army IGSA policy or procedures. (Recommendation 1)

The Secretary of the Navy should (a) establish and implement a process to collect and monitor information on the extent to which all implemented IGSAs have resulted in financial and nonfinancial benefits and (b) document that process in Navy IGSA policy or procedures. (Recommendation 2)

The Commandant of the Marine Corps should (a) establish and implement a process to collect and monitor information on the extent to which all implemented IGSAs have resulted in financial and nonfinancial benefits and (b) document that process in Marine Corps IGSA policy or procedures. (Recommendation 3)

The Secretary of the Air Force should (a) establish and implement a formal process to collect and monitor information on the extent to which all implemented IGSAs have resulted in financial and nonfinancial benefits and (b) document that process in Air Force IGSA policy or procedures. (Recommendation 4)

The Secretary of the Army should (a) finalize and implement a process to monitor whether Army installations are evaluating opportunities for using IGSAs and to obtain explanations from installations on the outcome of their evaluations and (b) complete documentation of that process in Army IGSA policy or procedures. (Recommendation 5)

The Secretary of the Navy should (a) establish and implement a process to monitor whether Navy installations are evaluating opportunities for using IGSAs and to obtain explanations from installations on the outcome of their evaluations and (b) document that process in Navy IGSA policy or procedures. (Recommendation 6)

The Commandant of the Marine Corps should (a) establish and implement a process to monitor whether Marine Corps installations are evaluating opportunities for using IGSAs and to obtain explanations from installations on the outcome of their evaluations and (b) document that process in Marine Corps IGSA policy or procedures. (Recommendation 7)

The Secretary of the Air Force should document in Air Force IGSA policy or procedures its process for monitoring whether Air Force installations are evaluating opportunities for using IGSAs. (Recommendation 8)

Agency Comments and Our Evaluation

We provided a draft of this report to DOD for comment. DOD provided written comments, which are reproduced in appendix III.

DOD concurred with six recommendations and non-concurred with two recommendations, but DOD’s response indicates that the department plans to implement all of the actions we recommend.

DOD concurred with our six recommendations to the Army, the Navy, and the Air Force. DOD did not concur with our two recommendations to the Marine Corps, stating that the Marine Corps is one of two military services within the Department of the Navy and that the recommendations are unnecessary. While we understand that the Marine Corps is within the Department of the Navy, we made recommendations to the Marine Corps because we learned during the course of our review that the Marine Corps had developed service-specific IGSA processes. For our two recommendations to the Navy, DOD stated that the Deputy Assistant Secretary of the Navy (Installations and Facilities) will issue policy by November 30, 2018, directing the Chief of Naval Operations and the Commandant of the Marine Corps to implement our recommendations. We believe that implementing these actions will meet the intent of our recommendations to the Marine Corps.

We are sending copies of this report to the appropriate congressional committees; the Secretary of Defense; the Secretaries of the Army, the Navy, and the Air Force; and the Commandant of the Marine Corps. In addition, the report is available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at (202) 512-4523 or leporeb@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Key contributors to this report are listed in appendix IV.

Appendix I: Military Services’ Intergovernmental Support Agreements Approved as of July 2018

Table 2 shows the military service, installation, state or local government, and type of installation service for each of the 45 intergovernmental support agreements that have been approved within the military services as of July 25, 2018.

Appendix II: Organizations We Met with During This Review

We met with officials from the following offices, installations, and local governments during this review. Unless otherwise specified, these organizations are located in or near Washington, D.C.

Appendix III: Comments from the Department of Defense

Appendix IV: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, individuals who made key contributions to this report include Maria Storts (Assistant Director), Whitney Allen, Vincent Buquicchio, Michele Fejfar, Mae Jones, Amie Lesser, Geoffrey Peck, Ophelia Robinson, Jack Wang, and Erik Wilkins- McKee.