Congress required the Secretary of Defense to develop and submit to  Congress a force structure plan laying out the numbers, size, and  composition of the units that constitute U.S. defense forces—for example,  divisions, ships, and air wings—based on the Secretary’s assessment of  the probable national security threats over the ensuing 20 year period,  and an inventory of global military installations. The BRAC statute directed GAO to  evaluate the need for the 2005 BRAC round. Key Factors and Challenges Affecting DOD and the Commission in BRAC 2005

GAO identified several factors and challenges that contributed to DOD’s  implementation of BRAC 2005 and the results achieved. In contrast to  other BRAC rounds that were primarily focused on achieving savings by  reducing excess infrastructure, the Secretary of Defense identified three  goals for BRAC 2005. Specifically, BRAC 2005 was intended to transform  the military, foster jointness, and reduce excess infrastructure to produce  savings. These goals and the primary selection criteria’s focus on  enhancing military value led DOD to identify numerous recommendations  that were designed to be transformational and enhance jointness, thereby  adding to the complexity the Commission and DOD faced in finalizing and  implementing the BRAC recommendations. However, implementation of these BRAC recommendations led to other  challenges that required significant stakeholder coordination. For the  first time, OSD required the military departments to develop business  plans to better inform OSD of financial and status of implementation  details for each of the BRAC 2005 recommendations and to facilitate  OSD oversight. These business plans included information such as a  listing of all actions needed to implement each recommendation;  schedules for personnel relocations between installations; and updated  cost and savings estimates by DOD based on more accurate and current  information. In cases where interdependent  recommendations required multiple relocations of large numbers of  personnel, delays in completing one BRAC recommendation had a  cascading effect on the implementation of other recommendations. Specifically, DOD had to synchronize the relocations of over 123,000  people with about $24.7 billion in new construction or renovation. Given the complexity of  these interdependent recommendations, OSD required the military  services and defense agencies to periodically brief it on implementation  challenges and progress. The scale of BRAC 2005 posed a number of challenges to the  Commission as it did its independent review. First, the Commission  reported that it assessed closure and realignment recommendations of  unprecedented scope and complexity. For example, the Commission reported that it struggled to fully  understand the net impact on bases that were both gaining and losing  missions at the same time, as in the interdependent BRAC  recommendations discussed above. The effect on communities from installation growth has led to challenges  for the communities to ensure the provision of adequate services to the  installation. As we have previously reported,  communities experiencing growth were hindered in their ability to  effectively plan for off-base support such as adequate roads and schools  due to inconsistent information from DOD around the 2007 time frame. Costs to Implement BRAC 2005 Increased as Estimated Savings Decreased

Our analysis of DOD’s fiscal year 2011 BRAC 2005 budget submission to  Congress and each annual submission throughout the BRAC 2005  implementation period shows that one-time implementation costs grew  from $21 billion originally estimated by the BRAC Commission in 2005 to   In  about $35.1 billion, an increase of about $14.1 billion, or 67 percent.constant 2005 dollars, costs increased to about $32.2 billion, an increase  of 53 percent. 9.5 percent decrease from the Commission’s estimate. The 20-year net  present value savings estimated by the Commission in 2005 for this  BRAC round have decreased by 73 percent to about $9.9 billion. Some  recommendations were acknowledged to be unlikely to produce savings  in the 20-year net present value window. Finally, our analysis of the fiscal year 2011  BRAC budget shows that DOD will not recoup its up-front costs to  implement BRAC recommendations until 2018—5 years later than the  BRAC Commission estimates show it would take to pay back. GAO’s 2011 High-Risk Series: An Update. Defense Infrastructure: DOD Needs to Periodically Review Support  Standards and Costs at Joint Bases and Better Inform Congress of  Facility Sustainment Funding Uses. Defense Infrastructure: Long-term Challenges in Managing the Military  Construction Program. Defense Infrastructure: Changes in Funding Priorities and Management  Processes Needed to Improve Condition and Reduce Costs of Guard and  Reserve Facilities. Military Bases: Analysis of DOD’s Recommendations and Selection  Process for Closures and Realignments.
Why GAO Did This Study

The Department of Defense (DOD) has faced long-term challenges in managing and halting degradation of its portfolio of facilities and reducing unneeded infrastructure to free up funds to better maintain the facilities it still uses and to meet other needs. Costs to build and maintain the defense infrastructure represent a significant financial commitment. DODs management of its support infrastructure is on GAOs high-risk list, in part because of the challenges DOD faces in reducing its unneeded excess and obsolete infrastructure. DOD plans to reduce force structure and the President will request that Congress authorize the base realignment and closure (BRAC) process for 2013 and 2015. The Secretary of Defense stated that the BRAC process is the only effective way to achieve needed infrastructure savings.
This testimony discusses (1) key factors and challenges that contributed to BRAC 2005 implementation and results and (2) the most recent estimated costs and savings attributable to BRAC 2005. To do this work, GAO reviewed its previous work and selected documents related to BRAC 2005 such as BRAC business plans that laid out the requisite actions, timing of those actions, and DODs estimated costs and savings associated with implementing each recommendation, briefings on BRAC implementation status prepared by the military services, and budget justification materials submitted to Congress. GAO also interviewed current and former officials from DOD and the BRAC Commission involved in the development, review, and implementation of BRAC recommendations.

What GAO Found

GAO identified several factors and challenges that contributed to the Department of Defenses (DOD) implementation of Base Realignment and Closure (BRAC) 2005 and the results achieved. In contrast to other BRAC rounds that were primarily focused on achieving savings by reducing excess infrastructure, the Secretary of Defense identified three goals for BRAC 2005. Specifically, BRAC 2005 was intended to (1) transform the military, (2) foster jointness, and (3) reduce excess infrastructure to produce savings. These goals and the primary selection criterias focus on enhancing military value led DOD to identify numerous recommendations that were designed to be transformational and enhance jointness, thereby adding to the complexity the BRAC Commission and DOD faced in finalizing and implementing the recommendations. Some transformational-type recommendations needed sustained attention by DOD and significant coordination and planning among multiple stakeholders. To improve oversight of implementation of the recommendations, the Office of the Secretary of Defense (OSD) required business plans for each BRAC 2005 recommendation to better manage implementation. In addition, DOD developed recommendations that were interdependent on each other. However, this led to challenges across multiple recommendations when delays in completing one recommendation led to delays in completing others. Specifically, DOD had to synchronize the relocations of over 123,000 people with about $24.7 billion in new construction or renovation at installations. Given the complexity of some BRAC recommendations, OSD directed the services to periodically brief it on implementation challenges. Furthermore, the scale of BRAC 2005 posed a number of challenges to the Commission as it conducted its independent review. For example, it reported that DODs recommendations were of unprecedented scope and complexity, compounding the difficulty of its review. Moreover, the interdependent nature of some recommendations made it difficult for the Commission to evaluate the effect on installations that were both gaining and losing units simultaneously. Finally, the effect on communities from installation growth has led to challenges. For example, communities experiencing growth were hindered in their ability to effectively plan for off-base support such as adequate roads and schools due to inconsistent information from DOD around the 2007 time frame.
DODs fiscal year 2011 BRAC 2005 budget submission to Congress shows that costs to implement the BRAC recommendations grew from $21 billion originally estimated by the BRAC Commission in 2005 dollars to about $35.1 billion in current dollars, an increase of about $14.1 billion, or 67 percent. In constant 2005 dollars, costs increased to $32.2 billion, an increase of 53 percent. Costs increased mostly due to military construction as DOD identified the need for new and renovated facilities to enhance capabilities. In 2005, the Commission estimated net annual recurring savings of $4.2 billion and a 20-year net present value savings by 2025 of $36 billion. GAOs analysis shows annual recurring savings are now about $3.8 billion, a decrease of 9.5 percent, while the 20-year net present value savings are now about $9.9 billion, a decrease of 73 percent. As such, DOD will not recoup its up-front costs until 2018.