The radio frequency spectrum is the resource that makes possible wireless communications and supports a vast array of government and commercial services. DOD uses spectrum to transmit and receive critical voice and data communications involving military tactical radio, air combat training, precision-guided munitions, unmanned aerial systems, and aeronautical telemetry and satellite control, among others. The military employs these systems for training, testing, and combat operations throughout the world. Commercial entities use spectrum to provide a variety of wireless services, including mobile voice and data, paging, broadcast television and radio, and satellite services. In the United States, FCC manages spectrum for nonfederal users under the Communications Act, while NTIA manages spectrum for federal government users and acts for the President with respect to spectrum management issues as governed by the National Telecommunications and Information Administration Organization Act. FCC and NTIA, with direction from Congress and the President, jointly determine the amount of spectrum allocated for federal, nonfederal, and shared use. FCC and NTIA manage the spectrum through a system of frequency allocation and assignment. Allocation involves segmenting the radio spectrum into bands of frequencies that are designated for use by particular types of radio services or classes of users. (Fig. 1 illustrates examples of allocated spectrum uses, including DOD systems using the 1755-1850 MHz band.) In addition, spectrum managers specify service rules, which include the technical and operating characteristics of equipment. Assignment, which occurs after spectrum has been allocated for particular types of services or classes of users, involves providing users, such as commercial entities or government agencies, with a license or authorization to use a specific portion of spectrum. FCC assigns licenses within frequency bands to commercial enterprises, state and local governments, and other entities. Since 1994, FCC has used competitive bidding, or auctions, to assign certain licenses to commercial entities for their use of spectrum. Auctions are a market- based mechanism in which FCC assigns a license to the entity that submits the highest bid for specific bands of spectrum. NTIA authorizes spectrum use through frequency assignments to federal agencies. More than 60 federal agencies and departments combined have over 240,000 frequency assignments, although 9 departments, including DOD, hold 94 percent of all frequency assignments for federal use. Congress has taken a number of steps to facilitate the deployment of innovative, new commercial wireless services to consumers, including requiring more federal spectrum to be reallocated for commercial use. Relocating communications systems entails costs that are affected by many variables related to the systems themselves as well as the relocation plans. Some fixed microwave systems, for example, can use off-the-shelf commercial technology and may just need to be re-tuned to accommodate a change in frequency. However, some systems may require significant modification if the characteristics of the new spectrum frequencies differ sufficiently from the original spectrum. Specialized systems, such as those used for surveillance and law enforcement purposes, may not be compatible with commercial technology, and therefore agencies have to work with vendors to develop equipment that meets mission needs and operational requirements. In 2004, the Commercial Spectrum Enhancement Act (CSEA) established a Spectrum Relocation Fund, funded from auction proceeds, to cover the costs incurred by federal entities that relocate to new frequency assignments or transition to alternative technologies. The auction of spectrum licenses in the 1710-1755 MHz band was the first with relocation costs to take place under CSEA. Twelve agencies previously operated communication systems in this band, including DOD. CSEA designated 1710-1755 MHz as “eligible frequencies” for which federal relocation costs could be paid from the Spectrum Relocation Fund. In September 2006, FCC concluded the auction of licenses in the 1710- 1755 MHz band and, in accordance with CSEA, a portion of the auction proceeds is currently being used to pay spectrum relocation expenses. In response to the President’s 2010 memorandum requiring that additional spectrum be made available for commercial use within 10 years, in January 2011, NTIA selected the 1755-1850 MHz band as the priority band for detailed evaluation and required federal agencies to evaluate the feasibility of relocating systems to alternative spectrum bands. DOD provided NTIA its input in September 2011, and NTIA subsequently issued its assessment of the viability for accommodating commercial wireless broadband in the band in March 2012. Most recently, the President’s Council of Advisors on Science and Technology published a report in July 2012 recommending specific steps to ensure the successful implementation of the President’s 2010 memorandum. The report found, for example, that clearing and vacating federal users from certain bands was not a sustainable basis for spectrum policy largely because of the high cost to relocate federal agencies and disruption to the federal missions. It recommended new policies to promote the sharing of federal spectrum. The sharing approach has been questioned by CTIA—The Wireless Association and its members, which argue that cleared spectrum and an exclusive-use approach to spectrum management has enabled the U.S. wireless industry to invest hundreds of billions of dollars to deploy mobile broadband networks resulting in economic benefits for consumers and businesses. Actual costs to relocate communications systems for 12 federal agencies from the 1710-1755 MHz band have exceeded original estimates by about $474 million, or 47 percent, as of March 2013. The original transfers from the Spectrum Relocation Fund to agency accounts, totaling over $1 billion, were made in March 2007. Subsequently, some agencies requested additional monies from the Spectrum Relocation Fund to cover relocation expenses. Agencies requesting the largest amounts of subsequent transfers include the Department of Justice ($294 million), the Department of Homeland Security ($192 million), the Department of Energy ($35 million), and the U.S. Postal Service ($6.6 million). OMB and NTIA officials expect the final relocation cost to be about $1.5 billion compared with the original estimate of about $1 billion. Total actual costs exceed estimated costs for many reasons, including unforeseen challenges, unique issues posed by specific equipment location, the transition timeframe, costs associated with achieving comparable capability, and the fact that some agencies may not have properly followed OMB and NTIA guidance to prepare the original cost estimate. NTIA reports that it expects agencies to complete the relocation effort between 2013 and 2017. Although 11 of the 12 agencies plan to spend the same amount or more than they estimated, DOD expects to complete the 1710-1755 MHz transition for about $275 million, or approximately $80 million less than its cost estimate. DOD’s cost estimates, some made as early as 1995, changed over time as officials considered different relocation scenarios with differing key assumptions and their thinking evolved about the systems that would be affected, according to DOD and NTIA officials. Cost estimates to relocate military systems from the late 1990s and early 2000s ranged from a low of $38 million to as much as $1.6 billion, depending on the scenario. DOD’s final cost estimate to relocate from the band was about $355 million. DOD officials told us that the relocation of systems from the 1710-1755 MHz band has been less expensive than originally estimated because many of its systems were simply re-tuned to operate in the 1755-1850 MHz band. The auction of the 1710-1755 MHz band raised almost $6.9 billion in gross winning bids from the sale of licenses to use these frequencies. This revenue minus the expected final relocation costs of approximately $1.5 billion suggests that the auction of the band will raise roughly $5.4 billion for the U.S. Treasury. As mentioned above, NTIA reports that it expects agencies to complete the relocation effort between 2013 and 2017; therefore, the final net revenue amount may change. For example, the Department of the Navy has already initiated a process to return almost $65 million to the Spectrum Relocation Fund. DOD’s Office of Cost Assessment and Program Evaluation (CAPE) led the effort to prepare the department’s preliminary cost estimate portion of its study to determine the feasibility of relocating its 11 major radio systems from the 1755-1850 MHz band. To do so, CAPE worked closely with cost estimators and others at the respective military services regarding the technical and cost data needed to support the estimate and how they should be gathered to maintain consistency across the services. The services’ cost estimators compiled and reviewed the program data, identified the appropriate program content affected by each system’s relocation, developed cost estimates under the given constraints and assumptions, and internally reviewed the estimates consistent with their standard practices before providing them to CAPE. CAPE staff then reviewed the services’ estimates for accuracy and consistency, and obtained DOD management approval on its practices and findings. According to DOD officials, CAPE based this methodology on the cost estimation best practices it customarily employs. We reviewed DOD’s preliminary cost estimation methodology and evaluated it against GAO’s Cost Guide, which also identifies cost estimating best practices that help ensure cost estimates are comprehensive, well-documented, accurate, and credible. These characteristics of cost estimates help minimize the risk of cost overruns, missed deadlines, and unmet performance targets: A comprehensive cost estimate ensures that costs are neither omitted nor double counted. A well-documented estimate is thoroughly documented, including source data and significance, clearly detailed calculations and results, and explanations for choosing a particular method or reference. An accurate cost estimate is unbiased, not overly conservative or overly optimistic, and based on an assessment of most likely costs. A credible estimate discusses any limitations of the analysis from uncertainty or biases surrounding data or assumptions. DOD officials developed the preliminary cost estimate as a less-rigorous, “rough-order-of-magnitude” cost estimate as outlined by NTIA, not a budget-quality cost estimate. Because of this, we performed a high-level analysis, applying GAO’s identified best practices to DOD’s cost estimate and methodology, and did not review all supporting data and analysis.