The  legislation also required that DOD provide Congress in 2004, as part of its  budget justification documents, a 20-year force structure plan, a  worldwide infrastructure inventory, a description of the infrastructure  necessary to support the force structure plan, a discussion of categories of  excess infrastructure and infrastructure capacity, an economic analysis of  the effect of BRAC on reducing excess infrastructure, and a certification  that there is a need for BRAC in 2005 and that annual net savings will be  realized by each military department not later than fiscal year 2011. The 2002 legislation also required the Secretary of Defense to publish in  the Federal Register the selection criteria proposed for use in the BRAC  2005 round and to provide an opportunity for public comment. With this legislation, a base realignment and closure round was initiated in  1988. Our work in examining lessons learned from prior BRAC rounds found  general agreement that the prior legislation and the framework it outlined  served the process well, and general agreement that it should provide a  useful framework for a future round. GAO Has Had a Long- standing Role in the BRAC Process

GAO has played a long-standing role in the BRAC process. To make informed and  timely assessments, we have consistently operated in a real-time setting  since the 1991 BRAC round and have had access to significant portions of  the process as it has evolved, thus affording the department an  opportunity to address any concerns we raised on a timely basis. By  mandate, our role in the BRAC 2005 round remains the same, and we have  been observing the process since DOD began work on the 2005 round. This has greatly facilitated our ability to  monitor the process as it was unfolding and has provided us with  opportunities to address issues and potential problem areas during the  process. Observations on Key Issues DOD Is Required to Report on in Preparation for the 2005 Round

The legislation authorizing a BRAC round in 2005 also requires that DOD  provide information on a number of BRAC-related issues in 2004, and that  GAO report to Congress not later than 60 days after the department  submits this information to Congress. Since DOD has published its  selection criteria for the 2005 round, I can provide you with some  observations in that area. Additionally, the National Defense Authorization  Act for Fiscal Year 2004 required DOD to consider surge requirements in  the 2005 BRAC process. DOD decided to address our concerns  through clarifying guidance. DOD officials indicated that they would build on the approach they used in  their 1998 report to estimate excess base capacity and address other  BRAC issues. That methodology, while providing an indication of excess capacity, has a  number of limitations that make it difficult to be precise when trying to  project a total amount of excess capacity across DOD. A complete assessment of capacity and  opportunities to reduce it must await the completion of DOD’s ongoing  official analyses under BRAC 2005. DOD financial data suggest that, assuming conditions similar to those of  the 1993 and 1995 rounds, annual net savings for each of the military  departments for the 2005 round could be achieved by 2011—that is, by  2011 savings could exceed closure-related costs for that year. While we  believe that the potential exists for significant savings to result from the  2005 BRAC round, we are not in a position to say conclusively at this point  to what extent DOD will realize annual net savings by 2011. In addition to  the imprecision of DOD’s data, there simply are too many unknowns at  this time, such as the specific timing of individual closure or realignment  actions that affect savings estimates and the implementation costs that  may be required.
Why GAO Did This Study

The National Defense Authorization Act for Fiscal Year 2002 authorized an additional Base Realignment and Closure (BRAC) round in 2005. The legislation requires the Department of Defense (DOD) to provide Congress in early 2004 with a report that addresses excess infrastructure and certifies that an additional BRAC round is needed and that annual net savings will be realized by each military department not later than fiscal year 2011. GAO is required to assess this information as well as the selection criteria for the 2005 round and report to Congress within 60 days of DOD's submission. The legislation also retains the requirement for GAO to assess the BRAC 2005 decisionmaking process and resulting recommendations. This testimony addresses (1) the BRAC process from a historical perspective, (2) GAO's role in the process, and (3) GAO's initial observations on key issues DOD is required to address in preparation for the 2005 round. Because DOD had not submitted its required 2004 report at the time we completed this statement, this testimony relies on our prior work that addressed issues associated with excess capacity and BRAC savings.

What GAO Found

GAO's work in examining lessons learned from prior BRAC rounds found that the prior legislation and the framework it outlined served the process well, and that it should provide a useful framework for a future round. Furthermore, the legislation and its implementation provided for checks and balances to ensure the integrity of the process. GAO has played a long-standing role as an independent and objective observer of the BRAC process. GAO has operated in a real-time setting and has had access to significant portions of the process as it has evolved, thus affording DOD an early opportunity to address any concerns GAO might identify. GAO's role in the 2005 round remains the same, and GAO has been observing the process since DOD began work on the 2005 round. Timely access to DOD data is key to fulfilling GAO's role. GAO's initial observations on key issues DOD is required to address in its 2004 report are as follows. The selection criteria for the 2005 round are basically sound and provide a good framework for assessing alternatives. Nevertheless, GAO provided DOD with comments on the draft criteria that focused on the need for clarification of how DOD intends to consider total costs to DOD and other federal agencies and environmental costs in its analyses. The department has indicated that it would be issuing clarifying guidance. DOD plans to estimate its excess capacity using a methodology that it used in 1998 for similar purposes. While this methodology provides a rough indication of excess capacity for selected functional areas, it has a number of limitations that create imprecision when trying to project a total amount of excess capacity across DOD. A more complete assessment of capacity and the potential to reduce it must await the results of the current BRAC analyses being conducted by DOD during the 2005 round. DOD financial data suggest that, assuming conditions similar to those in the 1993 and 1995 BRAC rounds, each military department could achieve annual net savings by 2011. While we believe that the potential exists for significant savings to result from the 2005 round, there are simply too many unknowns at this time to say conclusively to what extent annual net savings will be realized by 2011. For example, in 2005 DOD is placing increased emphasis on jointness and transformation and is likely to use BRAC to incorporate any force redeployments from overseas locations that may result from ongoing overseas basing reassessments. This suggests a need for caution in projecting the timing and amount of savings from a new BRAC round.