DOD Organizations Involved in the JIAC Consolidation Process and Related Efforts

A number of DOD organizations have been involved in the JIAC  consolidation process. DOD did not agree with our recommendation,  stating that the best practices do not wholly apply to decision-making  processes for military construction projects. Credibility (Minimally Met). Without a  sensitivity analysis that reveals how a cost estimate is affected by a  change in a single assumption, the cost estimator will not fully  understand which variable most affects the cost estimate. DOD Conducted Multiple Reviews of Lajes Field as a Possible JIAC Location

After its 2013 decision to consolidate the JIAC at RAF Croughton, DOD  conducted multiple reviews to provide information on Lajes Field as a  potential alternative location for the JIAC, in response to congressional  interest and inquiries. DOD officials told us that  the reviews of 2015 and 2016 were not conducted with the same level of  rigor as a formal cost estimate, because DOD had already completed its  analysis of alternatives, and the decision to consolidate JIAC at RAF  Croughton had already been made. DOD officials also told us that no  credible new evidence had been produced to indicate the department  should revisit its initial decision. EUCOM developed an analysis  comparing RAF Croughton with Lajes Field as potential locations for  the JIAC. CAPE’s April 2016 cost verification for the JIAC. CAPE conducted an  independent review of the cost estimates presented in EUCOM’s  September 2015 review and those developed by the House  Permanent Select Committee on Intelligence for its July 2015  review. DISA’s May 2016 review on the JIAC communications infrastructure  requirements. In this update to its July 2015 review, DISA assessed  and compared the communications infrastructures at RAF Croughton  and Lajes Field with the intelligence mission support requirements,  including the communications and technical requirements for the  JIAC. DOD’s Multiple Reviews of Lajes Field Produced Different Cost Estimates Because They Were Based on Different Assumptions

DOD’s multiple reviews of Lajes Field as an alternative location for the  JIAC produced different cost estimates, because these reviews relied on  different assumptions in developing the cost estimates for  communications infrastructure and housing. Conclusions

To address costly sustainment challenges and instances of degraded  theater intelligence capabilities associated with the current JIAC facilities  at RAF Molesworth, DOD plans to spend almost $240 million for the Air  Force to consolidate and relocate the JIAC’s facilities at RAF Croughton. Recommendation for Executive Action

To better enable DOD to provide congressional decision makers with  complete and reliable information on the total anticipated costs for the  JIAC consolidation efforts, we recommend that the Office of the Assistant  Secretary of Defense for Energy, Installations, and Environment’s Basing  Office—in coordination with the Office of the Assistant Secretary of the Air  Force Installations, Environment and Energy—update future construction  cost estimates for consolidating the JIAC at RAF Croughton using best  practices for cost estimating as identified in the GAO Cost Estimating and  Assessment Guide. Specifically, cost estimates for the JIAC consolidation  should fully incorporate all four characteristics of a high-quality, reliable  estimate. A cost estimate is considered  comprehensive when it accounts for all possible costs associated with  a project, details all cost-influencing ground rules and assumptions, is  technically reasonable, is structured in sufficient detail to ensure that  costs are neither omitted nor double-counted, and the estimating  teams’ composition is commensurate with the assignment; well documented when supporting documentation for the estimate is  accompanied by a narrative explaining the process, sources, and  methods used to create the estimate and contains the underlying data  used to develop the estimate; accurate when the estimate is neither overly conservative nor too  optimistic and is based on an assessment of the costs most likely to  be incurred; and  credible when the estimate has been cross-checked with independent  cost estimates, the level of confidence associated with the point  estimate—the best guess at the cost estimate given the underlying  data—has been identified, and a sensitivity analysis has been  conducted. Our analysis of the Air Force’s February 2015 cost estimate for the Joint  Intelligence Analysis Complex (JIAC) showed that, when compared with  best practices, it minimally met one and partially met three of the four  characteristics of a reliable cost estimate (see table 1). The September 2015 review by U.S. European Command (EUCOM) also  references standards; however, it did not discuss these standards in  detail.
Why GAO Did This Study

DOD's JIAC, which provides critical intelligence support for the U.S. European and Africa Commands and U.S. allies, is currently located in what DOD has described as inadequate and inefficient facilities at RAF Molesworth in the United Kingdom. To address costly sustainment challenges and instances of degraded theater intelligence capabilities associated with the current JIAC facilities, the Air Force plans to spend almost $240 million to consolidate and relocate the JIAC at RAF Croughton in the United Kingdom.
GAO was asked to review analysis associated with consolidating and relocating the JIAC. This report (1) assesses the extent to which DOD's cost estimate for the JIAC consolidation at RAF Croughton aligns with best practices and (2) describes key reviews DOD has conducted since spring of 2013 related to an alternative location for JIAC consolidation. GAO compared the Air Force's February 2015 JIAC cost estimate with GAO best practices for developing federal cost estimates, reviewed key DOD analysis of Lajes Field as a potential alternative location for the JIAC, and interviewed DOD officials.

What GAO Found

GAO assessed the cost estimate for the military construction project to consolidate and relocate the Joint Intelligence Analysis Complex (JIAC) at Royal Air Force (RAF) base Croughton and found that it partially met three and minimally met one of the four characteristics of a reliable cost estimate defined by GAO best practices, as shown in the table below. For example, it minimally met the credibility standard because it did not contain a sensitivity analysis; such analyses reveal how the cost estimate is affected by a change in a single assumption, without which the estimator will not fully understand which variable most affects the estimate. Unless the Department of Defense's (DOD) methodology incorporates all four characteristics of a high-quality, reliable estimate in preparing future cost estimates for the JIAC construction project, it will not be providing decision makers with reliable information.
After DOD's 2013 decision to consolidate the JIAC at RAF Croughton, DOD organizations conducted multiple reviews in response to congressional interest in Lajes Field, Azores (Portugal) as a potential alternative location for the JIAC, including
U.S. European Command (EUCOM) September 2015 review , a cost comparison and location analysis of RAF Croughton and Lajes Field;
Office of the Secretary of Defense Cost Assessment and Program Evaluation April 2016 cost verification for JIAC , an independent review of EUCOM's September 2015 cost estimates and those developed by the House Permanent Select Committee on Intelligence in July 2015; and
Defense Information Systems Agency May 2016 review on JIAC communications infrastructure requirements , an assessment and comparison of the communications infrastructures at Lajes Field and RAF Croughton with the intelligence mission support requirements, including the communications and technical requirements, for the JIAC.
These reviews produced different cost estimates, in particular for housing and communications infrastructure, because the DOD organizations that developed them relied on different assumptions. DOD officials said that these reviews were not conducted with the same level of rigor as formal cost estimates, because DOD had concluded its analysis of alternatives and no credible new evidence had been produced to indicate the department should revisit its initial decision to consolidate the JIAC at RAF Croughton.

What GAO Recommends

GAO recommends that DOD update its future construction cost estimates for consolidating the JIAC at RAF Croughton to comply with best practices for cost estimating identified by GAO. DOD did not agree, stating it would waste resources to continue to generate cost estimates once DOD transitions to managing the project with actual cost data. GAO continues to believe that its recommendation is valid, as discussed in this report.