For example,  DOD’s approach assigns each installation to only one mission category,  even though most installations support more than one mission. DOD’s Method for Estimating Excess Capacity in 1998 and 2004

DOD based its 1998 and 2004 estimates of 23 percent and 24 percent  excess capacity, respectively, on a method that compared measures of  force structure projected to be in place at the end of the 5-year Future  Years Defense Programs that were current at the time of each estimate,  to associated indicators of capacity. DOD’s 1998 and 2004 technique  consisted of three major steps: (1) categorizing bases according to their  primary missions and defining indicators of capacity, (2) developing ratios  of capacity-to-force structure for DOD’s baseline year of 1989, and (3)  aggregating these various excess capacity indicators that were calculated  at the installation level to the military service level and then department- wide. The Methods DOD Used to Estimate Excess Capacity in 1998 and 2004 Have Limitations

DOD recognized some limitations within its method for estimating excess  capacity, stating in both its 1998 and 2004 reports to Congress that the  analysis it performed provided an indication of the type and amount of  excess capacity within the department, but recognizing that the analyses  lacked the precision to identify specific installations or functional  configurations for realignment or closure. In addition, our current review of  DOD’s method for estimating excess capacity outside of a  congressionally-authorized BRAC process identified a number of  limitations. This approach  effectively excluded significant portions of a base’s infrastructure from the  analysis. Another limitation associated with DOD’s method is that  the services measured capacity for some similar functions differently. These differences make it difficult for DOD to assess excess capacity  across the department. A third limitation is that, in using 1989 as a  baseline, DOD assumed that the bases and facilities as they existed in  1989 were appropriately sized to support missions, and DOD did not  identify any excess capacity or capacity shortfall that may have existed at  that time. It is therefore uncertain to what extent DOD’s estimates of excess  capacity are overstated or understated. Finally, in both the 1998 and 2004  analyses, in instances where DOD’s analysis indicated that projected  capacity was less than needed capacity—indicating a capacity  shortage—within a specific installation category, DOD treated these  cases as having zero or no excess capacity. Despite the data showing  capacity shortages, DOD used this data to aggregate the results of its  analysis across the department. If DOD had treated those installation  categories as having capacity shortages, DOD’s estimates would have  resulted in a lower number of excess bases and consequently a lower  percentage of excess capacity across the department than DOD reported  to Congress. DOD’s Statements about Remaining Excess Capacity in 2012 and 2013 Relied on Two Earlier Calculations

DOD’s testimony in March 2012 and March 2013, that by its estimates  DOD had about 20 percent excess capacity remaining after the end of  BRAC 2005, relied on earlier calculations that the department made in  2004 and 2005. However, because DOD’s pre-BRAC excess  capacity estimate, which is expressed as a percentage of bases, and  plant replacement value, which is expressed in dollars, are not measured  in the same units, they are not comparable measures. In March 2013, the Acting Deputy Under Secretary of Defense  (Installations and Environment) testified that the method upon which  DOD’s current estimate of 20 percent excess capacity is based is helpful  in making a broad assessment in determining whether an additional  BRAC round is justified, but it cannot identify specific installations or  functional configurations for realignment or closure. He further stated that only through  the BRAC process is the Department able to determine excess capacity  by installation and by mission or function in a process that is thorough  and fair. Agency Comments

We provided a draft of this report to DOD for comment. In its written  comments, which are reproduced in appendix I, DOD stated that we  properly highlighted the limitations of its approach used to estimate  excess capacity. Military Bases: Analysis of DOD’s 2005 Selection Process and  Recommendations for Base Closures and Realignments. Military Bases: Review of DOD’s 1998 Report on Base Realignment and  Closure.
Why GAO Did This Study

Due in part to challenges DOD faces in reducing excess infrastructure, DOD's Support Infrastructure Management is on GAO's High Risk List of program areas vulnerable to fraud, waste, abuse, and mismanagement, or are most in need of transformation. Since 1988, DOD has relied on the BRAC process as a primary means of reducing excess infrastructure or capacity and realigning bases to meet changes in the size and structure of its forces. In 1998 and 2004, Congress required DOD to submit reports that, among other things, estimated the amount of DOD's excess capacity at that time. Also, in March 2012, DOD testified that it had about 20 percent excess capacity. The methods used to develop such preliminary excess capacity estimates differ from the data-intensive process--supplemented by military judgment--that DOD has used to formulate specific base closure and realignment recommendations.
A Senate Armed Services Committee report directed GAO to review how DOD identifies bases or facilities excess to needs. The objective of this report is to discuss how DOD has estimated its excess capacity, outside of the BRAC process. To do so, GAO reviewed excess capacity estimates from 1998, 2004, and 2012; analyzed DOD's data; reviewed supporting documentation; assessed assumptions and limitations of DOD's analysis; and interviewed DOD officials.
In commenting on a draft of this report, DOD stated that GAO had properly highlighted the limitations of its approach to estimating excess capacity and contrasted it with the method used to develop BRAC recommendations.

What GAO Found

The Department of Defense's (DOD) methods for estimating excess capacity outside of a congressionally-authorized Base Realignment and Closure (BRAC) process have limitations. DOD used similar processes in its excess capacity analyses conducted in 1998 and 2004. This process included three major steps: (1) categorizing bases according to their primary missions and defining indicators of capacity; (2) developing ratios of capacity-to-force structure for DOD's baseline year of 1989; and (3) aggregating the analysis from the installation level across the military services and department-wide.
In both its 1998 and 2004 reports, DOD recognized some limitations with its methods for estimating excess capacity and stated that its analyses lacked the precision necessary to identify specific installations or functional configurations for realignment or closure. In addition, GAO's review of DOD's methods for estimating excess capacity outside of a congressionally-authorized BRAC process identified a number of limitations. First, DOD's approach assigns each installation to only one mission category, even though most installations support more than one mission. This approach effectively excluded significant portions of some bases' infrastructure from the analysis. Second, the services measured capacity for some similar functions differently such as test and evaluation facilities, which makes it difficult for DOD to evaluate excess capacity across the department. Third, DOD did not attempt to identify any excess capacity or capacity shortfall that existed in 1989; hence it is uncertain to what extent DOD's estimates of excess capacity may be overstated or understated. Finally, in instances where DOD's analysis indicated that projected capacity was less than needed capacity--indicating a capacity shortage--within an installation category, DOD treated these cases as having zero or no excess capacity when aggregating the results of its analysis. If DOD had treated those installation categories as having a capacity shortages, DOD's method would have calculated a lower number of bases and consequently a lower percentage of excess capacity across the department than DOD reported to Congress.
DOD's testimony in March 2012 and again in March 2013, that it had about 20 percent excess capacity remaining after the end of BRAC 2005, relied on earlier calculations that the department made in 2004 and 2005. Specifically, these estimates were reached by subtracting DOD's estimate of the amount of capacity that would be eliminated by the approved recommendations from BRAC 2005--3 to 5 percent of plant replacement value--from DOD's 2004 estimate that it had 24 percent excess capacity. However, pre-BRAC estimates of the percentage of bases that may be excess to needed capacity, which is expressed as a percentage of bases, and plant replacement value, which is measured in dollars, are not comparable measures. In March 2013, the Acting Deputy Under Secretary of Defense (Installations and Environment) testified that the method upon which DOD's current estimate is based is helpful in determining whether an additional BRAC round is justified, but only through the BRAC process is the Department able to determine specifically which installations or facilities are excess.