After four BRAC rounds between 1988 and 1995, the Secretary of Defense and the Chairman, Joint Chiefs of Staff, stated that DOD still retained excess facilities infrastructure. Both cited the need for future BRAC authority. Subsequently, the 1997 Quadrennial Defense Review and the 1997 report of the congressionally mandated National Defense Panel addressed the problem of remaining excess infrastructure within DOD and recommended that additional BRAC rounds be conducted. In DOD’s May 19, 1997, report to the Congress on the results of the Quadrennial Defense Review, the Secretary announced that DOD would ask the Congress to authorize two additional BRAC rounds. In considering the Secretary’s request for additional BRAC round authority in 1997, various Members of Congress questioned the need for any future rounds. As a result, the Congress enacted section 2824 of the National Defense Authorization Act for Fiscal Year 1998, which required that the Secretary of Defense provide the Congress with a comprehensive report on a range of BRAC issues and described the manner in which the data were to be presented in the report. That legislation also required the Secretary to submit the report not later than the date on which the President submitted to the Congress the budget for fiscal year 2000 and prohibited DOD from spending funds to plan for subsequent BRAC actions until the report was delivered. DOD submitted its report, The Report of the Department of Defense on Base Realignment and Closure, on April 2, 1998. In submitting DOD’s report to the Congress, the Secretary reemphasized that DOD has substantial excess capacity in its base infrastructure. The Secretary stressed that DOD needs the money that could be saved from closing unneeded infrastructure to sustain high force readiness and a robust weapon systems modernization program. Accordingly, the Secretary requested two additional BRAC rounds in 2001 and 2005. The Secretary also noted DOD’s assistance in facilitating economic growth and development for communities affected by BRAC actions. Section 2824 required DOD to provide information on costs and savings and other aspects of prior BRAC rounds. Likewise, it required an analysis of excess capacity and an assessment of the need for future BRAC rounds and projections of costs and savings that could be expected. It also required a description of the process and methodologies that would be used in future BRAC decision making. Further, the legislation prescribed how DOD’s analysis should be presented, requiring several levels of detail and comparative analyses. DOD’s report provides most, but not all, of the information required in section 2824. Data limitations and other factors prevented DOD from providing some required information. In some instances, there were limitations in the degree of coverage DOD provided in responding to individual reporting requirements. In a few instances, coverage could have been more comprehensive had DOD involved the services, for example, in updating savings estimates from prior BRAC rounds. DOD’s assessment provided only a rough indication of excess capacity. Table 1 details the legislative and presentation requirements for DOD’s report, indicates the pages in DOD’s report where the issues are addressed, and provides our observations on the extent to which DOD provided the information required by each subsection. A more thorough discussion of DOD’s response to the legislative requirements is provided in appendix I. Data from DOD’s most recent budget submission was incorporated in its section 2824 report to indicate that the four previous BRAC rounds will cost about $23 billion to implement from 1988 to 2001. The data also show that BRAC actions will net $14 billion in savings during implementation and are expected to produce recurring savings of about $5.7 billion or more each year thereafter. DOD assessed its costs and savings data from several vantage points to affirm its position that prior BRAC rounds are saving billions of dollars in operating costs. These included (1) analyzing data drawn from DOD’s annual budget submissions to the Congress; (2) completing a new analysis that relied heavily on an analysis of personnel reductions as a basis for estimating savings; (3) summarizing reviews by external groups, such as the DOD Inspector General (IG) and Army Audit Agency audits of selected BRAC rounds and BRAC actions; and (4) citing reports by the Congressional Budget Office (CBO) and GAO. We and CBO have reported that BRAC reductions provide the basis for recurring savings once implementation costs have been offset. Our assessment that substantial savings are expected is based on our reviews of BRAC issues, which have included examining DOD data that showed reductions in spending on base support programs and personnel. Many bases are aging, and base closures offer an opportunity to avoid capital improvement costs in the future. However, our analysis of DOD’s report and its supporting documentation and our previous work on this issue also indicate that DOD’s cost and savings data are not precise. The data exclude some costs and savings, which if included would cause some increase in the time required for savings to exceed implementation costs and for net savings to begin. Reviews by the DOD IG and the Army Audit Agency have also pointed out the imprecision in DOD’s estimates of costs and savings, though they reinforced the view that BRAC actions result in net savings. While DOD has required the military services to update costs and savings, the services seldom updated BRAC savings estimates. In addition, DOD’s estimates may not capture all costs and savings—including the avoidance of some costs associated with base closures, such as the costs of long-term capitalization improvements that will not have to be undertaken. Additionally, in making its estimates, DOD assumed that all BRAC recommendations would be implemented and initial savings projections realized. In selected cases, bases recommended for closure or realignment have been scheduled for privatization in place, or operation of the installations will be turned over to private contractors. As we have reported, privatization does not always produce savings or reduce excess capacity. DOD supplemented its estimates of savings with a separate analysis that focused primarily on calculating savings from personnel reductions; it estimated an annual recurring savings of about $7 billion. This analysis is not precise because (1) the personnel costs used in the calculation were estimates and were not tied to the actual salaries of positions eliminated and (2) while BRAC actions have clearly produced significant personnel reductions and savings, we cannot be sure of the extent to which all personnel reductions DOD cited are fully attributable to BRAC actions, as opposed to other force structure reductions during this period of downsizing. See appendix II for a more detailed analysis of DOD’s reporting on cost and savings from prior BRAC rounds. DOD’s report projects that additional BRAC rounds would also save resources that it could use for higher priorities, such as weapon systems modernization. DOD estimated the net recurring savings after implementing two future BRAC rounds to be $3.4 billion annually. DOD arrived at this estimate by averaging estimated costs and savings for the most recent two rounds, in 1993 and 1995, and applying this average to proposed BRAC rounds in 2001 and 2005. DOD did not present estimates of future costs and savings by service in its report, as required. Also, the method of estimating cost and savings for future BRAC rounds is limited, principally because it assumes that savings from future base closures will be the same as savings from the 1993 and 1995 BRAC rounds, adjusted for inflation. While DOD’s estimate may be appropriate for planning purposes, its precision is limited because the costs of future BRAC rounds might not parallel the costs from prior rounds. For example, among facilities rated low in military value, bases closed in prior rounds frequently were among those least costly to implement and requiring the shortest time for savings to offset implementation costs. Generally, those costing more to implement and requiring a longer time to recover savings were not selected for closure. Therefore, DOD’s estimate represents only a rough gauge of future savings. More information on DOD’s methodology for estimating future costs is provided in appendix II. If future BRAC rounds were held as requested, DOD would begin to incur implementation costs in 2002. However, some questions have been raised regarding whether DOD already is incorporating costs and savings from future BRAC rounds into its Future Years Defense Program. DOD has incorporated net estimated costs in the last 2 years (2002 and 2003) of its 1999-2003 Future Years Defense Program. The costs represent a net amount, since DOD anticipates savings from the avoidance of military construction and the cessation of some operations and maintenance activities. These planned costs are presented in the aggregate at the DOD level. The 1998 act required DOD to assess the impact of previous base closures on military capabilities. DOD’s report concludes that previous BRAC rounds had a positive effect on military capabilities. The commanders in chief of the combatant commands, the service chiefs, and the Joint Chiefs of Staff concurred with the conclusion that previous BRAC rounds have not harmed military capabilities and have had a net positive impact on operations. While readiness can be temporarily affected as individual BRAC decisions are being implemented, available data does not provide us with any basis to disagree with DOD’s conclusions concerning any long-term impact. DOD looked to a number of indicators and studies to determine whether any operational and readiness problems could be linked to BRAC actions. DOD officials reviewed operational and readiness records dating from 1991 to the time they completed their report, including the joint monthly readiness reports, the joint uniform lessons learned reports, commanders in chief integrated priority lists, and the combat support agency review.DOD concluded from its review that BRAC actions had not adversely affected military capabilities. This view was supported by the results of monthly senior-level Office of the Secretary of Defense and Joint Chiefs of Staff forums, during which issues affecting military capabilities are considered under varying operational scenarios. These assessments incorporate input from affected combatant commanders in chief, and any BRAC-related problems might surface in these assessments.