Military Base Closures: Estimates of Costs and Savings
Released: 2001-06-07T00:00:00

Introduction

This report provides information on the current status of U.S. military base closures andrealignments. It includes data on domestic bases, including U.S. territories. The report also provides information on the costs and savings associated with implementation of domestic base closings andrealignments. (1)

From 1976 to 1988, virtually no U.S. domestic bases were closed as a result of congressionally imposed restrictions. (2) This situation changedradically in 1988, when the U.S. Congress passedlegislation establishing the first of four independent base realignment and closure commissions(BRAC). The four commissions (activated in 1988, 1991, 1993, and 1995) generated 499recommendations for closing and realigning bases. Only 451 of these ultimately required action,primarily because 48 were changed in some manner by recommendations of a later commission. (3)

Closures and Realignments

Problem of Defining Terms

The term "base closure" is frequently used loosely and imprecisely. A BRAC action may not involve a base, as one might commonly envision it to be, but rather a "facility," "mission," or"function." It also may not involve a closure, or even a realignment, but rather a "disestablishment,""relocation," or "redirection." In a 1995 report on the BRAC process, the General Accounting Office(GAO) noted that:

the term base closure often conjures up the image of a larger facility being closed than may actually be the case. Military installations are rather diversifiedand can include a base, camp, post, station, yard, center, home-port, or leased facility. Further, morethan one mission or function may be housed on a given installation.

The report noted, additionally, that:

an individual (BRAC) recommendation may actuallyaffect a variety of activities and functions without fully closing an installation. Full closures, to theextent they occur, may involve relatively small facilities, rather than the stereotypically large militarybase. (4)

Thus, "base closure" is a highly amorphous, imprecise term that may serve to facilitate communication, but often fails, at the same time, to provide an exact understanding of the actiontaken.

Scale of the Base Structure

The military base structure of the Department of Defense includes approximately 5,000 properties, worldwide. These properties range widely in personnel assigned and amount of propertycontrolled -- from unmanned navigational aid stations to major military bases with thousands ofpersonnel and, in the case of Nellis air force base, more than a million acres.

The Department of Defense, currently, maintains a web-site list of 588 installations, worldwide. (5) This list is a subset of "properties,"excluding numerous minor activities and smallerproperties. The 588 installations are divided into the following three groups:

The 527 U.S. installations comprising those within the 50 states and its territories are grouped according to three categories: major, minor, and "other." Each major service determines for itselfthe method of defining its categories. For example, the Army defines a major installation as onewith 5,000 or more U.S. service members, DOD civilian employees, and/or other authorized tenants. It defines a minor installation as one with personnel numbering between 1,000 and 5,000. In its"other" category, it includes sites and facilities with personnel levels between 300 and 1,000. TheAir Force, on the other hand, has classified major and minor installations on the basis of wing orsquadron size. The Navy determines its categories on the basis of battlegroup homeport locations,air or land-based squadrons, RDT&E activities, and so on.

Base Closure Actions

Number of Military Bases Closed. Four base closure and realignment (BRAC) commissions, on the basis of their individual reports,recommended a total of 534 actions to close, realign, or otherwise affect specific bases, facilities,and activities. The breakdown for each of the commissions' reports is as follows:

The 1995 BRAC commission report, however, stated that the number of BRAC actions from all four rounds totaled 505 -- not 534. Most recently, in December 1998, the General AccountingOffice (GAO) reported that the four BRAC commissions generated 499 recommendations, but thatin its final tally "only 451 of these ultimately required action, primarily because 48 were changed insome manner by recommendations of a later commission." (6)

These discrepancies make it difficult to pin down the precise number of BRAC actions. As the GAO report explained, the BRAC commissions have been "somewhat arbitrary in the way theyenumerate recommendations." The recommendations have included closures, realignments,disestablishments, relocations, and redirections. (7)

The closing of all 451 BRAC installations (major, minor, and "other") from the four rounds isexpected to be completed by the end of FY2001, as originally scheduled. The disposing of alltheclosed property, however, is expected to take many more years. According to GAO, about 464,000acres of BRAC real property were determined to be excess, but, as of March 1998, only about 31%of property designated for non-federal users had been formally transferred. (8) The main delayingfactor in the process has been the need to meet strict environmental clean-up standards. In order tomove things along more swiftly, DOD has adopted the use of interim leases until such time as formaldeeds can be issued.

It is difficult to find consistently determined figures on overall BRAC actions. However, the Department of Defense does provide one such set of statistics, smaller in number, that identifies 97major closures and realignments. The overall baseline figure for DOD's major bases (non-BRACas well as BRAC) is 495. As of September 30, 1999, the following information on BRAC majorclosures and realignments was as follows:

The two remaining BRAC major bases are scheduled to be closed during fiscal year 2001. They are McClellan AFB, CA and Roslyn Air Guard Station, NY.

Percent of Base Structure Closed. In its report to the 1993 Base Closure Commission, the Department of Defense estimated that, under the first tworounds (1988 and 1991), domestic base structure was reduced by only 9%, measured by plantreplacement value. (9) It stated that adding the 1993closures (recommended by DOD) to the previousones would reduce the domestic base structure by about 15%.

In its recommendations to the 1995 Base Closure Commission, the Department of Defense estimated that adding the 1995 closures (recommended by DOD) to the previous ones would reducethe domestic base structure by approximately 21%. The Pentagon's current (1999) estimate of thepercentage reduction in base structure remains essentially the same -- 21% (see Figure 1 forcomparison with other indicators of defense drawdown).

For several years, the Department of Defense has been urging Congress to authorize additional base closure rounds. It has stressed that base structure reductions lag significantly behind thereductions in the defense budget and in the force structure (military units and personnel). Additionalbase closures, according to DOD, would free up funds urgently needed for the development of newweapon systems as well as providing for increased training and readiness of the armed forces.

Many, if not most, authorities on defense policy agree with DOD's assessment. A few havesuggested, however, that the underlying premise of relative parity may be false. For a start, someargue that the "defense budget" and "military personnel" columns below represent worldwide figures, while the "domestic base structure" column represents the fifty United States and itsterritories. If the U.S. overseas bases closed are added to those of the domestic base structure,thecomparable figure would be an overall reduction of about 26%.

A second concern has to do with the issue of "reconstitution" -- a potential need to increase military capability when the United States is confronted, at some future point, by a hostile andpowerful enemy state. The argument is that, while the defense budget can be increased in a matterof weeks, the same is not true of the force structure or the base structure. Some believe the problemof reconstitution is potentially most hazardous with regard to the base structure. Once property isconverted to civilian use, it is for all practical purposes permanently lost as a military asset.

Prospects for Future Base Closures (10)

In mid-1997, Secretary of Defense William Cohen called for two new rounds of base closures and realignments. He explained that, while four previous rounds had achieved significant savings,it was important to continue the process of closing underutilized facilities. Despite DOD pressure,most Members of Congress were reluctant to support authorization of new base closure legislation,at that time. The reasons given included, among others, grass-roots opposition from communitieslikely to be affected and President Clinton's "intervention" in the 1995 base closure commission'srecommendations regarding McClellan and Kelly air force bases. (11) Of the two chambers, the Houseof Representatives expressed the stronger and more united opposition. In the Senate, proponents ofnew base closure rounds attempted to attach an amendment to the FY1999 defense authorization bill,but failed.

Source: U.S. Department of Defense. Defense Reform Initiative Report . November 1997. p. 37.

The base closing issue, however, was revived at the outset of the 106th Congress. Proponents believed that their cause would be helped by the fact that it was not an election year. On January 20,1999, Senator John McCain, along with Senators Carl Levin and Charles Robb, introducedlegislation ( S. 258 ) that would authorize two new rounds of base closures in 2001 and2003. On February 1, the Clinton Administration submitted to Congress its budget for FY2000which included provision for two more rounds in 2001 and 2005. On May 12 and 13, however, theSenate Armed Services Committee, in its mark-up of the FY2000 defense authorization bill( S. 1059 ), rejected proposals by Senators McCain and Levin to include authority fornew base closings. The two Senators attempted to revive the base closure proposal during floordebate on S. 1059 , but met with defeat by a vote of 60 to 40.

On January 18, 2000, just prior to the opening of the new session of Congress, the Department of Defense announced that the Clinton Administration would once again seek congressionalauthority to close more military bases, starting in 2003. Its spokesman said that "this is a particularlyopportune time to make such transitions, since the national economy is so strong." Additionally, hereassured critics and sceptics alike that politics would not be allowed to intrude on any future roundsof base closings.

In its statements urging new rounds of closures, the Pentagon added its stamp of approval to the BRAC process, stating that it was "a proven, effective tool to make difficult decisions that impactboth national security and local communities." It proposed that future BRAC rounds adopt the sameprocedures that were used in the 1995 BRAC round. However, most Members of Congress werenot inclined to act on an issue fraught with potential controversy, especially during a presidentialelection year.

Nevertheless, Senator John McCain and Senator Carl Levin sponsored an amendment (No. 3197) that sought two additional rounds of base closures and realignments beginning in 2003 and2005. In floor debate (June 7, 2000), Senator McCain stressed the importance of removing thearmed services' burden of managing and paying for an estimated 23% excess infrastructure costingat least $3.6 billion a year. The McCain-Levin initiative, however, was solidly rejected by a vote of35 to 63.

At the outset of the 107th Congress, Senators McCain and Levin have once again introduced a bill ( S. 397 ) to authorize two new rounds of base closures in 2003 and 2005. In itsFebruary 27, 2001 press release, the Taxpayers for Common Sense (TCS), a national budgetwatchdog organization, immediately applauded the initiative and said that "it would save billionsfor other important defense priorities." It estimated the cost of maintaining excess military bases atabout $3.6 billion each year and said that projected Pentagon savings could amount to as much as$21 billion through 2015 if the military were allowed to close bases in 2003 and 2005.

Costs and Savings

Two important aspects of analyzing costs and savings are associated with BRAC closings. Thefirst has to do with the element of chronological timing. In the early years, base closure costs greatlyexceeded savings. At a later point in time (1998), costs and savings became about equal (see wherethe two lines in Figure 2 cross). Presently, with the implementation of four BRAC rounds nearingcompletion (the deadline is end of FY2001), savings are projected to be significantly greater thancosts. The second, and more fundamentally problematic, aspect has to do with determining theaccuracy of data -- especially data involving savings. The inability of DOD to locate some of itsdata, including the original cost and savings estimates it gave to the BRAC commissions, hascomplicated matters. These difficulties have been addressed at some length by DOD as well as bythe Congressional Budget Office and the General Accounting Office (see below).

Source: GAO's analysis of DOD data. (12)

DOD and Agency Findings

Department of Defense. At the request of Congress, the Department of Defense submitted a report in April 1998 on the status of baserealignments and closures. (13) In its report, DODprovided data on the estimated costs and savings forthe first four rounds (1988, 1991, 1993, and 1995). The report stated that, overall, the resultantsavings from the shutdown of bases and facilities during BRAC's rounds would exceed initialestimates. It also said that the dramatic level of savings would permit the Department to increasespending on the modernization and transformation of its forces, while sustaining high levels ofreadiness.

The DOD report stressed that "all organizations must estimate savings produced by management reforms, consolidations, and reorganizations. Accounting systems can keep accuraterecords of costs; but no parallel systems exist to track savings." To determine BRAC savings, thereport explained, requires either (1) estimating what the composition of the DOD budget would havebeen without BRAC, or (2) distinguishing the effects of BRAC from the effects of other myriadfactors that affect DOD installations and budgets over more than a decade.

With this caveat, the DOD report proceeded to estimate net total savings from the four BRAC rounds of about $14 billion through 2001 (see Table 1). It projected that annual savings, thereafter,would be in the vicinity of $5.6 to $5.7 billion.

Table 1. BRAC Estimated Costs and Savings, 1988 - 2001 (dollars in billions)

Source: DOD fiscal year 1999 BRAC budget submission.

Note: Amounts presented are current-year dollars consistent with DOD's budget submissions;totalsmay not add due to rounding.

a. Implementation period estimates are the one-time BRAC costs and savings for the 6-year period authorized to complete a BRAC action. The cost estimates are less any revenues from the saleof unneeded base property.

b. Net annual recurring savings start the year after completion of the round and are usually basedon estimated savings during the last implementation year for each round.

c. Total savings through 2001 consist of 6-year implementation period savings plus recurringsavings for each year after the end of a round through 2001. For example, BRAC 1991 totalsavings of $12.4 billion through 2001 consist of $6.4 billion in savings during theimplementation period and $6 billion in recurring savings for the years 1998 through 2001 ($1.5billion for 4 years).

d. Net savings through 2001 consist of total savings through 2001, less the costs incurred through2001.

Congressional Budget Office. As required by a provision of law, the Congressional Budget Office (CBO) and the General Accounting Office (GAO)reviewed DOD's 1998 report following its release. CBO found DOD's estimates of savings fromprevious closure rounds, as fully implemented, consistent with its own estimates -- $5.6 billion ascompared to $5.0 billion. CBO also acknowledged that firm measures of BRAC savings requestedby Congress "do not -- and cannot exist." It elaborated, as follows:

BRAC savings are really avoided costs -- costs that DOD would have incurred if BRAC actions had not taken place. Because those avoided costs arenot actual expenditures, DOD cannot observe them and record them in its financial records. As aresult, DOD can only estimate savings rather than actually measurethem. (14)

In its review, CBO made a number of other interesting observations. It stated that DOD was unable to locate some of the data requested by CBO, including the original cost and savingsestimates that DOD gave to the BRAC commissions. Also, CBO noted that estimates of BRACcosts and savings would be more accurate if they included DOD's environmental and caretaker costsfor some bases after the six-year implementation period is completed.

General Accounting Office. The General Accounting Office submitted its review of DOD's report on November 13, 1998. (15) It was longer andprovided more supporting detail than the CBO review. GAO asserted that the four previous BRACclosure rounds would result in substantial net saving. It noted, also, that "DOD's report should beviewed as providing a rough approximation of costs and savings rather than precise accounting." It said that "DOD's data systems do not capture all savings associated with BRAC actions, nor hasDOD established a separate system to track BRAC savings."

A pair of consistent messages are present in the three reports reviewed above. First, there is no practicable way to determine, with precision, the actual costs and savings from the BRAC rounds;one has to be satisfied with estimates. Second, regardless of substantial initial costs, much greatersavings will be achieved in the long run as a result of the four rounds of military base closures.

Prospects for Future Savings

The Department of Defense, during the last several years, has repeatedly stated its need to close more military bases, citing studies that confirm an excess base capacity in the range of 23%. It hassought authority from Congress, so far to no avail, for two new base closure and realignment roundsin 2003 and 2005. According to DOD's estimates, two new rounds, each roughly the size of the lasttwo rounds initiated in 1993 and 1995, would generate annual savings of about $3 billion after theyare implemented. (16) Failure to close unneededbases, DOD has warned, could seriously impede itsefforts to allocate resources in the most efficient and effective manner. It has stated, also, that suchfailure could cost the Pentagon, in the future, $20 billion that would be better spent on ships, jetaircraft, and other crucial military

equipment. (17) The prospects for achievingfuture savings depend greatly on Congress' actions in thecourse of the next two sessions, during which conditions for establishing a new, independent baseclosure commission will be most advantageous.

Conclusion

The Pentagon insists that the high cost of maintaining a base structure far in excess of itscurrent, and most likely future, requirements imposes a very significant financial burden on thedepartment. The removal of this burden remains a major Department of Defense objective. It is anespecially important item on DOD's agenda this year, as it presents and defends its annual budgetin hearings before the committees of the new 107th Congress.

With the conclusion of the year 2000 presidential election, Members of Congress may be more inclined now than before to undertake the necessary steps to authorize new base realignment andclosure (BRAC) rounds. The long-standing argument of many Members of Congress against anynew rounds as long as the Clinton Administration remained in place (because of perceived abuse inthe handling of McClellan and Kelly air force bases) has now become largely moot. A majorimpediment to further closures and realignments, thus, appears to have been removed.

It is generally agreed, however, that Congress has only a brief "window of opportunity" to muster the support needed to establish a new, independent base closure commission -- the previousone having expired more than 5 years ago. Any extended delay by Congress that moves a BRACdecision closer to the next election in 2004, it is widely acknowledged, will likely result in dwindlingsupport and possible rejection.