Unaccompanied personnel who are not assigned to government-owned housing, or are above certain pay grades, are authorized to receive the BAH, and the amount of the allowance is based on factors that include a servicemember’s pay grade, dependency status, and geographic location. Additionally, each service determines pay grades at which personnel are no longer assigned to government-owned housing. Junior unaccompanied personnel are generally required to live in government- owned unaccompanied housing on their installation, commonly referred to as barracks (Army and Navy), dormitories (Air Force), or bachelor enlisted quarters (Marine Corps), and may be eligible for the housing allowance only if on-installation, government-owned housing is not available. In table 1, we list the pay-grade thresholds each military service has established for junior unaccompanied personnel permanently assigned to installations in the United States and required to live in government- owned housing. In 1995, DOD adopted a new construction standard that called for more space and increased privacy in new government-owned housing for servicemembers permanently assigned to an installation. The new standard, which was modified in 2007, provided each junior unaccompanied servicemember with a private sleeping room and a kitchenette and bath shared by one other member. DOD justified the adoption of the new standard primarily as an investment in quality of life aimed at improving military readiness and retention. All the military services except the Marine Corps accepted the new standard, and developed various initiatives to implement it, as discussed below. The Marine Corps believed that the new standard did not allow for the unit cohesion and team building needed to reinforce Marine Corps values and develop a stronger bond among junior Marines. Therefore, the Marine Corps obtained a permanent waiver from the Secretary of the Navy to use a different design standard—one sleeping room and bath shared by two junior Marines. According to a February 2013 DOD report to Congress on government-owned housing for unaccompanied personnel, from fiscal years 1996 through 2012, DOD spent over $20 billion of military construction funds to build and modernize on-installation housing for unaccompanied personnel. Army: Between fiscal years 1996 and 2012, the Army spent over $12 billion of military construction funds on its barracks modernization program to modernize housing for all Army unaccompanied personnel permanently assigned to an installation. The renovated facilities meet the current DOD standard configuration, and each module includes two bedrooms, one bathroom, a cooking area, and appliances. The housing complex also includes laundry facilities. Navy: The Navy spent about $2.5 billion of military construction funds between fiscal years 1996 and 2012 on improving the condition of its housing for unaccompanied personnel. A key component of the Navy’s modernization program for unaccompanied housing is the Homeport Ashore program, which was created to improve the quality of life among ship-based junior sailors by moving them off ships and into unaccompanied housing on shore while their ships were docked in their homeport. The Navy expects to complete this initiative by fiscal year 2016 utilizing both privatization and military construction authorities. However, the BAH statute (37 U.S.C. § 403(f)) prohibits E- 1 to E-3’s without dependents on sea duty from receiving the BAH, and privatized housing projects are not generally feasible unless military members are receiving a housing allowance. Congress, in the Bob Stump National Defense Authorization Act for Fiscal Year 2003, amended the housing privatization authorities by adding a new section (10 U.S.C. § 2881a) that authorized the Navy to carry out up to three pilot unaccompanied housing privatization projects in which junior enlisted members without dependents could be authorized higher rates of partial BAH to pay their rent. Per 37 U.S.C § 403(n), partial BAH is a payment at a rate determined by the Secretary of Defense based on a specified historical rate (typically around $8 per month, as of 2011) paid to members not authorized to receive BAH, such as those assigned to live aboard ships or in government quarters. The 10 U.S.C. §2881a authority expired on September 30, 2009, and the Navy executed two of the three authorized projects prior to the expiration of the authority. Air Force: The Air Force spent almost $3 billion of military construction funds from fiscal years 1996 to 2012 on modernizing its dormitories for unaccompanied personnel. Air Force housing officials told us that the service has adequate housing for all its airmen. The Air Force also implemented a policy in 1996 whereby each unaccompanied airman permanently assigned to an installation is assigned to a private bedroom. In 2006, the Air Force started requiring that its dorms be built or renovated according to a four-bedroom module design, called Dorms-4-Airmen, specifically for unaccompanied personnel in the pay grades from E-1 to E-3 and E-4 with less than 3 years of service. The design was based on Air Force criteria, detailed analysis of square- footage requirements and constraints, and prototype development. It was designed to achieve the goal of providing privacy while boosting social interaction. Marine Corps: The Commandant of the Marine Corps approved the Bachelor Enlisted Quarters campaign plan in 2006. The goals of the plan were to eliminate existing space deficiencies, demolish inadequate housing, and achieve the new standard of one sleeping room and bath shared by two junior Marines by fiscal year 2014. From fiscal years 1996 to 2012, the Marine Corps spent about $3.5 billion of military construction funds to replace and renovate its housing for unaccompanied personnel. In June 1997, DOD and the Office of Management and Budget (OMB) agreed to a set of guidelines that would be used as a frame of reference for scoring privatization projects. The implications of scoring depend on which MHPI authority will be used. For example, the guidelines state that if a project provides an occupancy guarantee, then funds for the project must be available and obligated “up front” at the time the government makes the commitment of resources. In other words, if a project provides an occupancy guarantee, then the net present value of the guarantee— the cumulative value of the rents to be paid for the housing over the entire contract term—must be obligated at the beginning of the project. According to Army and Navy officials, none of the privatized projects for housing unaccompanied personnel discussed in this report include an occupancy guarantee. From 1997 to 2011, the services conducted several analyses of the costs and suitability of privatization as a financing method for their housing needs for unaccompanied personnel. Using different methods, such as business-case and life-cycle cost analyses, and using different assumptions about how repairs and upkeep for housing would be funded, the services reached different conclusions about the potential for cost savings from using either privatization or the traditional government- funded military construction approach. The Army concluded that privatization is feasible but more costly in most cases, while the Navy found that privatization is feasible in certain locations. The Air Force and Marine Corps concluded that privatization was not desirable for housing their unaccompanied personnel. The Army conducted three sets of analyses to determine whether to privatize housing for unaccompanied personnel. These analyses used different scenarios and data gathered from multiple locations. The Army documented the analytical processes used, and communicated its conclusions to service leadership. In 2004, the Army formed a task force to assess the feasibility and desirability of privatization of unaccompanied personnel housing. Task-force members conducted the study over 6 months, visiting six sites, including Fort Detrick, Maryland; Fort Leonard Wood, Missouri; Fort Lewis, Washington; Fort Stewart, Georgia; Fort Hood, Texas; and the Presidio of Monterey, California. There appeared to be no consistent criteria applied for site selection in the task-force study in that the reasons for selection differed in each case. For example, Fort Lewis was selected in part because of command interest, and Fort Leonard Wood was selected because it is a training installation that represents the consolidation of training missions at a larger site. Study authors also considered 18 scenarios, 5 of which were Army-wide. These scenarios involved different assumptions about the number and pay grades of unaccompanied personnel housed on and off installations, as well as the amount of money spent by the Army to construct and sustain new facilities. The study concluded that privatization of housing for unaccompanied personnel was financially feasible at selected installations, such as Fort Stewart and Fort Hood, in part because a majority of senior enlisted personnel there were already receiving the BAH and living off the installation; however, all members of the leadership task force responsible for the study could not reach consensus on the study’s findings. For example, the study authors suggested that soldiers should not be mandatorily assigned to privatized housing. OMB scoring rules require that mandatory assignment be treated as an occupancy guarantee, which would have the effect of committing the government to a large long-term expenditure. However, other members of the task force questioned whether mandatory assignment might be necessary to support the building of cohesive units, which is fostered by working and living together as a team. The Army completed an additional analysis of privatization in response to a 2009 congressional inquiry. The Army prepared a report that focused on the privatization of housing for junior unaccompanied personnel. The analysis included a review of privatization’s effect on costs, soldiers’ quality of life, and the Army’s traditions and culture. The study was conducted over a 3-month period and included modeling scenarios at Fort Polk, Louisiana; Fort Irwin, California; and Fort Meade, Maryland, and one U.S.-wide extrapolation. The three locations were chosen because their barracks needed renovations and local commanders and private- sector developers supported privatization.