	Background

Since 1997, we have identified management of DOD support infrastructure  as a high-risk area because infrastructure costs have affected the  department’s ability to devote funds to other more critical programs and  needs. During fiscal year 2008, DOD plans to spend around              $55 billion to support its facilities and installations. Reliability of the Facilities Sustainment Model’s Estimates Can Be Improved

Although the facilities sustainment model provides a consistent and  reasonable framework for preparing estimates of DOD’s annual facility  sustainment funding requirements, accuracy and supportability issues with  two of the model’s key inputs—the inventory quantity and the sustainment  cost factor associated with each of DOD’s 448 facility categories—have  affected the reliability of the model’s estimates. Regarding the sustainment cost factor input, we identified issues  concerning the accuracy and supportability of some cost factors used by  the model. The study, completed in February 2006, reported that only 13 of 45  factors evaluated were deemed to be reasonably accurate and adequately  supported. Military Services Have Not Met All Funding Goals for Facility Sustainment and Recapitalization

The military services have not met all of DOD’s goals for funding facility  sustainment and recapitalization at levels to prevent deterioration and  ensure that facilities are restored and modernized in accordance with  established benchmarks. Service officials stated that they generally did not meet the sustainment  funding goals because resources were limited and some programs, such as  force modernization, often had higher funding priority. Air Force officials stated that  restoration and modernization requirements had not been adequately  funded and that the Air Force had a restoration and modernization  backlog of about $9.3 billion at the end of fiscal year 2007. DOD Has Not Provided Adequate Guidance on Deferred Sustainment Requirements

The military services do not have consistent estimates of their deferred  sustainment requirements or plans to deal with these needs because DOD  has not provided adequate guidance on deferred sustainment  requirements. As shown in table 4, the military services did  not fund over $3.5 billion of their annual sustainment requirements in  fiscal years 2005 through 2007. Thus, in order to reach a common definition and service  standard for the chaplain program, this difference among the military  services must be resolved. Until DOD takes additional steps to improve the accuracy and  supportability of its inventory quantity and sustainment cost factor inputs  to the facilities sustainment model, the model’s estimates of annual facility  sustainment funding requirements will not be as reliable as possible,  which could jeopardize DOD’s ability to adequately provide for its facility  sustainment needs. Until DOD provides guidance that clearly defines  deferred sustainment requirements, directs the services to consistently  measure and track deferred sustainment needs, establishes a goal to  address these needs, and ensures that the military services’ financial  reporting of deferred facility maintenance is consistent with financial  reporting requirements, the services will not have consistent estimates of  their total facility sustainment requirements, will be unable to develop  plans to address these needs, and may continue to report deferred  maintenance information that is inconsistent with financial reporting  requirements. DOD has a goal to establish common standards and metrics for  installation services by the end of 2008. Recommendations for Executive Action

To improve the support provided for DOD’s facilities and installation  services, we recommend that the Secretary of Defense direct the Deputy  Under Secretary of Defense (Installations and Environment) to take the  following five actions in order to increase the reliability of the facilities  sustainment model, address deferred facility sustainment funding  requirements, and advance progress towards implementing the installation  services model:    Monitor and ensure compliance with guidance requiring verification of  real property inventory records. To determine DOD's progress in meeting funding goals for facility  sustainment and recapitalization, we reviewed DOD’s installation strategic  plans to identify DOD’s goals for facility sustainment and recapitalization. To determine the status of DOD's efforts to develop a funding  requirements model for installation services, we obtained and reviewed  documentation on the history of the model’s development and interviewed  DOD officials concerning past progress on the model, the model’s status at  the end of calendar year 2007, and future plans for completing and  implementing the model.
Why GAO Did This Study

The Department of Defense (DOD) manages and operates about 577,000 structures worldwide, valued at about $712 billion. DOD has worked for several years to develop models that can reliably estimate the installation support funds needed to sustain these facilities, and plans to spend over $55 billion to support these facilities and operate its bases in fiscal year 2008. Because GAO has identified support infrastructure as a high-risk area that affects DOD's ability to devote funds to other more critical needs, GAO initiated this review under the Comptroller General's authority. This report discusses (1) the reliability of the annual funding estimates produced by the facilities sustainment model, (2) DOD's progress in meeting funding goals for facility sustainment and recapitalization, (3) the extent to which DOD has addressed deferred facility sustainment funding needs, and (4) the status of DOD's efforts to develop a new installation services model. To address these objectives, GAO reviewed the accuracy and support for the model's key inputs, analyzed pertinent documents, and visited eight judgmentally selected installations.

What GAO Found

Although the facilities sustainment model, implemented in 2003, provides a consistent and reasonable framework for preparing estimates of DOD's annual facility sustainment funding requirements, accuracy and supportability issues with two of the model's key inputs have affected the reliability of the model's estimates. First, regarding the inventory quantity input, GAO found that the services had not complied with DOD regulations requiring verification of each real property inventory record. Without the verifications, DOD lacked assurance that the model used accurate inventory quantities, and GAO's analysis identified inaccuracies in some quantities used by the model. Second, regarding the sustainment cost factor input, GAO identified issues concerning some cost factors used by the model. For example, an independent study reported that only 13 of 45 cost factors evaluated were deemed to be reasonably accurate and adequately supported. Until DOD improves the accuracy of these two inputs, the model's estimates of facility sustainment funding requirements will not be as reliable as possible. The military services have not met all of DOD's goals for funding facility sustainment and recapitalization at levels to prevent deterioration and ensure that facilities are restored and modernized. Service officials stated that they generally did not meet the sustainment funding goals because resources were limited and programs such as force modernization often had higher funding priority. Although the services achieved more success in meeting DOD's goal to fund recapitalization, funding remains an issue with the Army, the Navy, and the Air Force reporting recapitalization backlogs of over $50 billion at the end of fiscal year 2007. DOD has not taken actions to estimate and address its deferred facility sustainment requirements. In fiscal years 2005 through 2007, the services did not fund over $3.5 billion of their estimated annual facility sustainment requirements. The services do not have consistent estimates of their deferred sustainment requirements or plans to deal with these needs because DOD has not provided adequate guidance to clearly define deferred sustainment requirements, or direct the services to measure, track, and address these needs. As a result, DOD's plans to address facility sustainment requirements do not include all deferred sustainment requirements, which could result in continued facility deterioration and increased future recapitalization costs. DOD's progress in developing a new model to estimate funding requirements for installation services, such as airfield and port operations, has been slow. Although DOD's goal is to establish common standards and metrics for installation services by the end of 2008, the services had agreed on common definitions and standards for only 2 of 29 areas by the end of 2007. DOD officials stated that reaching agreement has been difficult for several reasons, such as differences among the services in how tasks for installation services are performed and managed. Without a reliable model, DOD cannot provide the Congress with a clear basis for making funding decisions.