	Background

To enable the Department of Defense (DOD) to close unneeded bases and realign others, the Congress enacted base realignment and closure (BRAC) legislation that instituted base closure rounds in 1988, 1991, 1993, and 1995. As a result of these actions, DOD estimates that it has reduced its domestic infrastructure by about 20 percent and saved billions of dollars in the process. BRAC Net Savings Are Substantial but Imprecise

Through fiscal year 2001, financial data show that DOD generated an estimated $16.7 billion in net BRAC savings from the four rounds, an increase of $2.5 billion from its fiscal year 1999 estimate, and expects additional annual recurring savings of $6.6 billion beginning in fiscal year 2002, an increase of $1 billion. Transfer of Unneeded BRAC Property Is Less Than Half Completed

Although DOD has plans to transfer nearly all of its unneeded BRAC property, as of September 30, 2001, it had actually transferred less than half of the 518,500 acres designated for federal or nonfederal reuse. A primary advantage of using the early transfer authority is that it makes property available to the future user as soon as possible, thus allowing environmental cleanup and redevelopment activities to proceed concurrently. Most Communities Are Continuing to Recover from the Economic Impact of BRAC

While some communities surrounding closed bases are faring better than others, our analyses of key economic indicators and visits to select communities show that most are continuing to recover over time from the initial economic impact of base closures. Although optimistic about the continued economic recovery of their communities, some local officials were concerned that the recent downturn in the national economy could hinder continued economic recovery. Appendix VI provides additional detail on the average annual real per capita income growth rates for the 62 communities. We also recommend that the secretary of defense encourage the secretaries of the military services to work with communities impacted by the base closure process to expand the use of the early transfer authority in those cases where the department can accelerate the transfer of unneeded former base property and/or save money. The other eight locations had unemployment rates greater than the U.S. rate.
What GAO Found

Through military base realignment and closures rounds in 1988, 1991, 1993, and 1995, the Pentagon significantly reduced its domestic infrastructure and freed up needed dollars for high-priority programs. By the end of last round in fiscal year 2001, the Department of Defense (DOD) had closed or realigned hundreds of bases, generated savings, and transferred unneeded property to other users. The communities surrounding the former bases continue to recover economically from the closures. Congress recently authorized another round of base realignments and closures beginning in 2005. DOD has saved $16.7 billion through fiscal year 2001, and expects to save $6.6 billion in annually in future years. Although DOD plans to transfer nearly all of the 518,500 acres of unneeded base property to federal and nonfederal users, it has completed only some of the transfers. Environmental cleanup is the primary impediment to conveying the remaining property titles. The military services are using early transfer authority and leasing to make property available for reuse sooner. Although successful redevelopment of base property plays a key role in the economic recovery of neighboring communities, broader regional economic growth also is important to the process. Two economic indicators--the unemployment rate and average annual real capita income growth rate--show that most communities are doing well compared with average U.S. rates, despite delays in the transfer or reuse of former base property. But questions remain about some communities' ability to sustain their economic recovery over time, particularly in light of the recent downturn in the national economy.