Section 2667 of Title 10 provides authority to secretaries of the military departments to lease nonexcess real property under the control of the respective departments, subject to several provisions. For example, such leases must be considered by the respective secretary to be advantageous to the United States and include terms that the respective secretary considers will promote the national defense or be in the public interest. In addition, each lease may not be for more than 5 years, unless the secretary concerned determines that a lease for a longer period will promote the national defense or be in the public interest; shall permit the secretary to revoke the lease at any time, unless the secretary determines that the omission of such a provision will promote the national defense or be in the public interest; shall provide for the payment (in cash or in kind) by the lessee of consideration in an amount that is not less than the FMV of the lease interest, as determined by the secretary; and shall provide that if and to the extent that the leased property is later made taxable by state or local governments under an act of Congress, the lease shall be renegotiated. Concerning lease consideration, section 2667 provides that if the consideration is to be cash, then the cash payments must be deposited into a special account in the U.S. Treasury and may only be used in such amounts as provided in appropriations acts. Also, once these amounts are appropriated, section 2667 provides that the installation where the leased property is located receive at least 50 percent of that consideration and that the appropriated cash may be used for specific enumerated purposes relating to real property construction, maintenance services, lease of facilities, or payment of utility services. In the event that consideration for the lease is to be in kind, then section 2667 provides a nonexhaustive set of examples of acceptable forms of in-kind consideration that includes the maintenance, protection, alteration, repair, improvement, or restoration of property or facilities; the construction of new facilities; and the provision of facilities, utility services, or real property maintenance services. The military services have long used the authority under section 2667 to enter into short-term leases of military property for such uses as farming, grazing, and cellular towers, and in turn received cash consideration. According to the services, they had about 3,000 such leases, which generated about $20.8 million in cash consideration in fiscal year 2010. The services have also used the authority contained in section 2667 to enter into more complex leases that the services refer to as EULs. Although the authorizing statute, section 2667, does not use “enhanced use lease” to differentiate leases executed pursuant to this authority, the services generally distinguish an EUL from a normal outlease on the basis of scope, process, term, and consideration. For example, according to the services, EULs generally involve larger amounts of property, generally undergo a more detailed evaluation and review before approval and greater oversight after approval, often are executed for longer periods of time (such as 25 to 50 years), and generally focus on in-kind, rather than cash, consideration. Each service has issued policy guidance for implementing EULs using the authority provided by section 2667. In general, EUL program management includes those activities involved with the identification, evaluation, and justification of potential EULs; the solicitation and selection of the EUL developer; lease negotiation; and lease administration to include oversight of in-kind services. The Office of the Secretary of Defense has overall responsibility and oversight of DOD real property and establishes overarching guidance and procedures for the management of DOD real property. However, because section 2667 provides authority to the military service secretaries to lease real or personal property, subject to the provisions contained in the section, the military departments have direct responsibility for implementing leases under section 2667. In the Army, the authority to execute EULs was delegated to the Deputy Assistant Secretary of the Army (Installations and Housing), and certain responsibilities for executing the Army EUL program have been further delegated to the U.S. Army Corps of Engineers. In the Navy, the authority to establish and supervise execution of Navy policies and procedures relating to the use of real property and real estate contracting actions (including EULs) has been delegated to the Deputy Assistant Secretary of the Navy (Energy, Installations, and Environment), and real estate contracting authority for the Navy EUL program has been delegated to the Naval Facilities Engineering Command. In the Air Force, overall responsibility for the execution of initial EUL transaction documents and leases has been delegated to the Assistant Secretary of the Air Force (Installations, Environment and Logistics), and responsibility for executing additional leases pursuant to section 2667 has been delegated to the Air Force Real Property Agency. At the end of fiscal year 2010, the Army, the Navy, and the Air Force reported that a total of 17 EULs were in place and that 37 additional EULs were in various phases of review or negotiation for possible future implementation. Table 1 breaks down this information by service, and appendix II identifies and provides details on each of the 17 EULs. As shown in table 1, the Army reported 7 EULs in place and 14 EULs under consideration at the end of fiscal year 2010. Many of the Army’s EULs were long-term leases that called for the development of leased land, which would be rented to private sector entities for profit. Army officials stated that many of the leases provided for the Army to receive a share of the net rental income as compensation in the form of in-kind services for the maintenance or improvement of installation facilities. The three Army EULs in our case studies, which were composed of several different leases and other legal documents, follow: Fort Sam Houston EUL. In June 2001, the Army entered into three 50- year lease agreements at Fort Sam Houston, Texas. According to the Army, the overall purpose of the EUL was to lease three large, deteriorated, vacant buildings situated on the installation to a private developer who would renovate the buildings as office space and then sublease the space to private sector tenants for profit. As consideration, the Army was to receive a share of the development’s net rental income. Such revenue was to be deposited into an escrow account in order to fund future work projects on installation facilities. Army officials stated that the EUL also benefited the Army by eliminating Army costs associated with maintaining the old buildings. Picatinny Arsenal EUL. In September 2006, the Army entered into a master agreement with a private developer at Picatinny Arsenal, New Jersey. The master agreement does not lease any property but instead is an agreement to later enter into separate leases with the lessee to incrementally develop 13 different parcels of property, which consists of 100,000 square feet of existing facility space in four buildings and about 120 acres of land. The master agreement makes the majority of the parcels available for lease at the lessee’s sole discretion, in any order and at any time of the lessee’s choosing. The Army’s expectation was that the developer would renovate or replace the existing buildings and build and rent laboratory, administrative, educational, and light manufacturing space as part of a research campus on up to 120 acres, which would in turn be leased to private sector tenants for profit. As consideration, the Army would receive certain up-front payments upon the execution of leases for the various parcels, and would also receive a share of the net rental income generated by the developed property. Both the up-front payments and the revenue share were to be deposited into an escrow account, from which funds could be disbursed as cash or to pay for in-kind projects at the installation. At the time of our review, the Army had entered into two separate site lease agreements with the lessee with 50-year terms—one concurrently with the master agreement and the other in August 2007. Aberdeen Proving Ground EUL. In September 2006, the Army entered into a master agreement at Aberdeen Proving Ground, Maryland. The master agreement does not lease any property but instead is an agreement to later enter into separate leases with the lessee to incrementally develop 416 acres of Army land. In turn, the lessee was expected to construct buildings for an office and technology park. As consideration, the EUL called for the lessee to pay the Army rent on completed buildings and the rent would be deposited into an escrow account, from which funds would be disbursed as cash or to pay for in-kind projects at the installation. At the time of our review, the Army had entered into eight separate site lease agreements with 50-year terms. Table 1 also shows that the Navy reported 5 EULs in place and 10 EULs under consideration at the end of fiscal year 2010. Most of the Navy’s EULs involved leases of Navy property that the lessee used without further development, such as the leasing of Navy-owned land to a private company for off-loading and storing automobiles. According to the Navy, the leases typically provided for the Navy to receive rent as consideration for the leased property in the form of in-kind services for the maintenance or improvement of installation facilities. The Navy EULs in our case studies did not provide for consideration to be deposited in an escrow account, from which funds could be disbursed to pay for in-kind services. Rather, upon satisfactory completion of in-kind services, the rental payment value due would be credited by an amount equal to the cost of the in-kind services. The three Navy EULs in our case studies follow: Naval Base Point Loma EUL. In October 2005, the Navy entered into a 5- year lease agreement at Naval Base Point Loma, California.