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entitled 'Opportunities Exist to Improve Future Comprehensive Master 
Plans for Changing U.S. Defense Infrastructure Overseas' which was 
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June 27, 2005: 

Congressional Committees: 

Subject: Opportunities Exist to Improve Future Comprehensive Master 
Plans for Changing U.S. Defense Infrastructure Overseas: 

After the end of the Cold War and the fall of the Berlin Wall in 1989, 
the U.S. military's overseas presence began to change. Force structure 
was reduced or relocated and the number of overseas military 
installations was decreased, often dramatically. Much of the Department 
of Defense's (DOD) remaining overseas infrastructure--installations and 
facilities used to support U.S. forces overseas--remained organized 
around Cold War strategic concepts, even though new threats, new 
deployment concepts, and new geopolitical realities have emerged. 
Recently, DOD's Quadrennial Defense Review Report[Footnote 1] 
addressed, among other issues, further reorienting the U.S. military 
global posture. The report called for developing a permanent overseas 
basing system that provides U.S. forces greater flexibility in critical 
areas of the world, as well as providing temporary access to facilities 
in foreign countries. In 2004, President Bush announced what was 
described as the most comprehensive restructuring of U.S. military 
forces overseas since the end of the Korean War. Closely thereafter, 
DOD issued a report entitled Strengthening U.S. Global Defense 
Posture,[Footnote 2] also referred to as the integrated global presence 
and basing strategy, that outlined adjustments in the various theaters 
overseas. While the strategy is intended to enhance flexibility and 
achieve efficiencies, new facilities totaling billions of dollars will 
be required according to DOD plans. 

The Senate Appropriations Committee has expressed concern about the use 
of military construction budget authority for projects at overseas 
bases that may soon be obsolete due to changes being considered by DOD 
military services as well as the need for a more complete picture of 
future requirements than is typically available in annual budget 
requests. Accordingly, the conference report[Footnote 3] accompanying 
the fiscal year 2004 military construction appropriation bill directed 
DOD[Footnote 4] to prepare detailed comprehensive master plans for 
changing infrastructure requirements for U.S. military facilities in 
each of the overseas regional commands. In that regard, DOD was 
required to provide a baseline report on these plans with yearly 
updates on the status of those plans and their implementation with 
annual military construction budget submissions through 2009. 
Additionally, the fiscal year 2004 Senate military construction 
appropriation bill report[Footnote 5] required those plans to identify 
precise facility requirements, the status of properties being returned 
to host nations, and the funding requirements as well as the division 
of funding responsibilities between the United States and cognizant 
host nations. The Senate report also directed us to monitor the master 
plans developed and implemented for the overseas regional commands and 
to provide the congressional defense committees with annual assessment 
reports through fiscal year 2008. Our reports are to include an 
assessment of the status of the plans; the associated costs; host 
nation burden-sharing implications; and other relevant information 
involving property returns to host nations, including residual 
value[Footnote 6] and environmental remediation issues. 

This is our second report that responds to the reporting requirements 
contained in the fiscal year 2004 Senate military construction 
appropriation bill report. In our prior work,[Footnote 7] we found that 
the overseas regional commands we visited at that time were awaiting 
decisions on the integrated global presence and basing strategy, as 
well as final guidance from the Office of the Secretary of Defense 
(OSD) before completing their master plans for overseas facilities. OSD 
provided initial guidance in February 2004 to aid the commands in 
developing their plans. However, that guidance did not include 
requirements to address environmental remediation, multiple U.S. 
funding sources available to support infrastructure changes, or 
residual property values--information that others and we would need to 
track the commands' progress in implementing overseas basing changes. 
Accordingly, we recommended in our July 2004 report that OSD include 
these requirements in its final guidance to the overseas regional 
commands. In issuing further guidance in October 2004,[Footnote 8] OSD 
included requirements to identify information on environmental 
remediation in accordance with status-of-forces agreements[Footnote 9] 
and on multiple U.S. funding sources available to support 
infrastructure changes, but not residual property value issues. 

For this report, we completed a more extensive assessment of that 
guidance and its use in developing the overseas master plans DOD 
submitted to Congress on March 2005. This report discusses the extent 
to which (1) OSD has provided sufficient guidance to overseas regional 
commands to meet the reporting requirements contained in congressional 
mandates and as suggested by GAO; and (2) overseas regional commands 
complied with the reporting requirements and in doing so, provided 
information in a complete, clear, and consistent manner, and whether 
improvements in guidance and reporting were needed. 

To address our objectives, we met with OSD officials to discuss the 
level of guidance available to the commands to facilitate consistent 
preparation of overseas master plans and whether those plans meet the 
requirements for information contained in congressional mandates and as 
suggested by GAO. We also visited overseas regional commands--the 
Pacific Command (PACOM), including U.S. Forces Korea and U.S. Forces 
Japan; European Command (EUCOM); and Central Command (CENTCOM)--to see 
firsthand selected installations and military construction projects and 
discuss OSD's guidance and the various factors that can affect U.S. 
infrastructure requirements and costs overseas.[Footnote 10] Once the 
master plans were issued, we reviewed them to determine the extent to 
which they complied with the reporting requirements and provided 
information in a complete, clear, and consistent manner, and discussed 
whether improvements in the guidance and reporting were needed with OSD 
and command officials. 

We conducted our review from October 2004 through May 2005 in 
accordance with generally accepted government auditing standards. (See 
encl. I for more information on our scope and methodology.)

Results in Brief: 

The scope of OSD's guidance issued to date generally exceeded the 
reporting requirements established by Congress for the comprehensive 
master plans and included most additional reporting elements previously 
recommended by us, except for residual value. We believe that where the 
guidance requires overseas regional commands to provide greater 
specificity than identified by the congressional mandates, doing so is 
appropriate and adds value because this provides a more complete 
picture of future infrastructure requirements and associated funding 
levels. However, OSD did not include residual value in its guidance to 
the commands because officials continue to believe that residual value-
-which is based on the reuse of property being turned over to the host 
nation, and often diminished by actual or anticipated environmental 
remediation costs--cannot be readily predicted and therefore should not 
be assumed in the master plans. We believe that, without fully 
explaining the challenges commands experience in obtaining residual 
values for properties being returned to host nations or the 
implications, if any, for U.S. funding requirements, Congress and other 
users of the plans do not have a complete understanding of the 
potential impacts and limitations of residual value on future funding 
levels. 

The overseas regional commands generally complied with the reporting 
requirements defined by OSD, and by extension of Congress, but varied 
in the extent to which they provided complete, clear, and consistent 
information in their master plans. This is due, in part, to the 
limitations in information that could be provided because of three key 
factors we identified: ongoing negotiations with host nations, 
continuing evolution of U.S. overseas basing strategy, and differences 
in interpretation of OSD guidance by commands. Opportunities exist to 
improve the completeness, clarity, and consistency of the commands' 
reporting of various items--host nation agreements and funding levels; 
U.S. funding levels and sources; environmental remediation and 
restoration issues; population levels; and facility requirements and 
funding levels for Hawaii, Guam, U.S. territories, and insular areas in 
the Pacific.[Footnote 11] Also, the plans do not yet provide a 
definitive picture of future U.S. funding requirements, particularly 
for new locations. Specifically, the master plans did not provide 
information on U.S. funding sources in addition to military 
construction appropriations that may be used for ongoing and future 
infrastructure changes. An OSD official explained that though some of 
these data were initially collected, they were too voluminous and too 
detailed to be included. Still, master plans that provided a greater 
degree of information encompassing the various sources of U.S. funding 
or, at a minimum, total funding levels by type, would better assist 
users in monitoring changes in U.S. funding levels due to changing 
infrastructure requirements. In several other instances, the lack of 
supplementary narrative to better explain the assumptions used or 
reasons data were omitted diminished the usefulness of the plans. Also, 
examples of better reporting by individual overseas regional commands 
on selected data elements provided insights into how collective 
reporting among all commands could be enhanced to provide more 
complete, clear, and consistent information. Specifically, the detailed 
reporting by EUCOM of individual construction projects according to 
military service, country, and base categor[Footnote 12]y at the 
installation level provided a more complete and consistent basis for 
tracking progress and annual changes in its master plan. Also, CENTCOM 
provided a more concise depiction of the anticipated strategic end 
state in terms of the expected sites and capabilities to support its 
objectives as of 2010. Without more complete, clear, and consistent 
reporting by individual overseas commands in the master plans, Congress 
and other users lack the best available data on which to track 
infrastructure requirements and changes from year to year and between 
commands. 

We are making recommendations to the Secretary of Defense that are 
intended to make future comprehensive master plans more complete, 
clear, and consistent to facilitate annual review and oversight by 
Congress and other users of the plans. In comments on a draft of this 
report, DOD agreed with four of our recommendations and disagreed with 
three. Specifically, it disagreed with our recommendations that (1) 
overseas regional commands briefly explain the status and challenges 
for host nation negotiations and results pertaining to host nation 
funding levels, including those for special bilateral agreements; (2) 
overseas regional commands report voluntary environmental remediation 
and restoration initiatives that support planned infrastructure 
requirements; and (3) PACOM provide information on facility 
requirements and funding levels for Hawaii, Guam, U.S. territories, and 
other insular areas in the Pacific in future comprehensive master plans 
and updates. We continue to believe these latter recommendations have 
merit and have added a matter for congressional consideration regarding 
them. 

Background: 

In recent years, DOD has been undergoing a transformation to develop a 
defense strategy and force structure capable of meeting changing global 
threats. As part of its transformation, DOD has been reexamining 
overseas basing requirements to allow for greater U.S. military 
flexibility to combat the conventional and asymmetric threats 
worldwide. U.S. military presence overseas has been converting from a 
posture established on familiar terrain to counter a known threat to 
one that is intended to be capable of projecting forces from strategic 
locations into relatively unknown areas in an uncertain threat 
environment. In September 2001, DOD issued a Quadrennial Defense Review 
Report, which addressed, among other issues, reorienting the U.S. 
military global posture. The report called for developing a permanent 
basing system that provides greater flexibility for U.S. forces in 
critical areas of the world as well as providing temporary access to 
facilities in foreign countries that enable U.S. forces to train and 
operate in the absence of permanent ranges and bases. 

In August 2004, President Bush announced what was described as the most 
comprehensive restructuring of U.S. military forces overseas since the 
end of the Korean War. The initiative is intended to close bases no 
longer needed to meet Cold War threats, as well as bring home many U.S. 
forces while stationing more flexible, deployable capabilities in 
strategic locations around the world. Closely thereafter, DOD issued a 
report entitled Strengthening U.S. Global Defense Posture, also 
referred to as the integrated global presence and basing strategy. This 
strategy is the culmination of various DOD studies including the 
overseas basing and requirements study, the overseas presence study, 
and the U.S. global posture study. The most recent military 
construction appropriation request for fiscal year 2006 included 
approximately $5.9 billion for military construction and family 
housing, nearly $1 billion (16.9 percent) of which is designated for 
specific overseas locations, mostly comprising enduring installations, 
and not for new and emerging requirements outside existing basing 
structures.[Footnote 13]

For several years, the Senate Appropriations Committee has expressed 
concern regarding the progress DOD has made in updating the overseas 
basing structure to reflect the new realities of an uncertain threat 
environment. The committee also expressed concern about the use of 
military construction budget authority for projects at installations 
that may soon be obsolete due to overseas presence and basing changes 
under consideration, as well as a history of changing requirements that 
sometimes occurred following changes in command leadership. 
Consequently, in the Senate report accompanying the fiscal year 2004 
military construction appropriation bill, the Senate Appropriations 
Committee directed DOD to prepare comprehensive master plans 
identifying the infrastructure requirements for U.S. military 
facilities in each of its overseas regional commands. Subsequently, 
similar action was directed by the conference report accompanying the 
2004 military construction appropriation bill. The conference report 
also required DOD to provide a report on the status and implementation 
of those plans with each yearly military construction budget submission 
through fiscal year 2009. 

The Senate Appropriations Committee also directed GAO to monitor the 
comprehensive master plans being developed and implemented for the 
overseas regional commands and to provide the congressional defense 
committees with a report each year through fiscal year 2008 giving an 
assessment of the status of the plans; associated costs; burden-sharing 
implications; and other relevant information involving property returns 
to host nations, including environmental remediation issues and 
residual values. In July 2004, we reported the overseas regional 
commands were awaiting decisions on the integrated global presence and 
basing strategy and final OSD guidance regarding the development of 
detailed, comprehensive master plans, and that they continued to 
develop and implement plans for installations they believe will have an 
enduring presence in future years.[Footnote 14] Additionally, we 
reported various factors, such as residual property value, 
environmental remediation, and the availability of multiple U.S. 
funding sources, that affect the cost of U.S. infrastructure overseas 
as well as the development of comprehensive master plans. We 
recommended the overseas regional commands address these factors in 
their comprehensive master plans and the extent to which they may 
affect implementation of the plans. 

Within the department, the Under Secretary of Defense for Acquisition, 
Technology and Logistics was tasked with fulfilling the reporting 
requirement of these congressional mandates. In turn, the Under 
Secretary assigned the overseas regional commands responsibility for 
preparing detailed, comprehensive master plans for their area of 
responsibility. The guidance instructed the overseas regional commands 
to draft plans identifying precise facility requirements, status of 
properties being returned to host nations, funding requirements, the 
division of funding responsibilities between the United States and 
cognizant host nations, multiple U.S. funding sources, and 
environmental remediation. 

OSD Guidance Generally Exceeded Congressional Reporting Requirements: 

To its credit, the scope of OSD's guidance generally exceeded the 
reporting requirements mandated by Congress and included most 
additional reporting elements suggested by us, except for residual 
value information. (See table 1.) However, we continue to believe OSD 
should require commands to report on residual value or, at a minimum, 
the issues associated with obtaining residual value returned to the 
control of each host nation, because of the potential implications for 
U.S. funding requirements. 

Table 1: Comparison of OSD's Guidance with the Reporting Requirements 
Contained in Congressional Mandates and as Suggested by GAO: 




Mandated requirements: Report on: Precise facility requirements; OSD 
guidance: Precise facility requirements (on a regional basis)[A]:  
--Broad purpose and planned capability; 
--Equipment and aircraft; 
--Estimated U.S. military population (permanent and rotational 
capacity--specifically surge). 

Mandated requirements: Report on: Status of property returns; OSD 
guidance: Status of property returns. 

Mandated requirements: Report on: Funding requirements; OSD guidance: 
Funding requirements: 
--Projects and costs proposed for fiscal year 2006 military 
construction bill; 
--Projects and costs proposed for fiscal years 2007-2011 (cumulative). 

Mandated requirements: Report on: Division of funding responsibilities 
between U.S. and host nations; OSD guidance: Projects funded by host 
nations. 

Prior GAO recommendations: Report on: Multiple U.S. funding sources 
available; OSD guidance: Funding requirements (breakdown by military 
construction, operation and maintenance, etc.)

Prior GAO recommendations: Report on: Environmental remediation issues; 
OSD guidance: Environmental remediation issues[B]. 

Prior GAO recommendations: Report on: Residual value issues; OSD 
guidance: Not included. 

Source: GAO analysis of OSD's guidance, the fiscal year 2004 Senate 
Military Construction Appropriation Bill Report, and our prior 
recommendations. 

[A] Commands have the flexibility to define regional as installation, 
town, country, and geographic area or in a way that is most effective 
and applicable to communicate their situation. 

[B] To the extent there are any environmental remediation issues in 
accordance with requirements of status-of-forces agreements, they 
should be addressed. 

[End of table]

OSD's guidance generally exceeded the reporting requirements mandated 
by Congress, and we believe that those instances when it requires 
overseas regional commands to provide greater specificity than 
identified by the congressional mandates are appropriate and have the 
potential to provide a more complete picture of changing infrastructure 
requirements overseas. For example, the guidance requires the overseas 
regional commands to provide greater specificity in precise facility 
requirements in terms of reporting details on military capabilities and 
population changes than identified by the mandates. Similarly, the 
guidance requires the commands to provide greater specificity in 
funding requirements for military construction projects proposed for 
the fiscal year 2006 military construction budget submission, than 
identified by the mandates. In addition, the scope of OSD's guidance 
included most reporting elements recommended by us in our prior 
report,[Footnote 15] except for information on residual value issues. 
According to an OSD official, residual value, typically received in the 
form of construction services, was excluded from the guidance because 
it is based on the reuse of property being turned over to the host 
nation, which is limited for most categories of military facilities, 
and is often reduced by actual or anticipated environmental remediation 
costs. Consequently, it cannot be readily predicted and therefore 
should not be assumed in the master plans. However, since these issues 
vary by host nation and may not be clear to all users of the plans, we 
continue to believe OSD should require commands, at a minimum, to 
explain the issues with obtaining residual value in each host nation 
and report the implications for U.S. funding requirements. 

Commands Generally Complied with OSD Guidance and Congressional 
Reporting Requirements, but Varied in Completeness, Clarity, and 
Consistency: 

The overseas regional commands generally complied with the reporting 
requirements defined by OSD, and by extension the congressional 
mandates for reporting, where information was provided.[Footnote 16] 
However, the plans do not yet provide a definitive picture of future 
funding requirements, particularly for new locations, because they 
varied in the extent to which they included complete, clear, and 
consistent information. This is due, in part, to the limitations in 
information that could be provided because of ongoing negotiations with 
host governments, the continuing evolution of U.S. overseas basing 
strategy, and differences commands had in interpreting OSD guidance-- 
which provides the commands flexibility to define regional as 
installation, town, country, geographic area (e.g., southern Europe), 
or in a way that is most effective and applicable to communicate their 
situation. Also, reporting by some commands was better than others for 
selected areas and offered insights into how overall reporting can be 
improved. 

More complete, clear, and consistent reporting by individual overseas 
commands on selected data elements could further enhance future 
comprehensive master plans and their implementation. For example: 

* While several of the planned infrastructure requirements reported are 
not based on finalized, negotiated agreements with host nations, none 
of the commands fully explained the status of negotiations or 
challenges for finalizing these agreements, or provided complete data 
for host nation funding levels presented in the plans. These agreements 
depend largely on the political environment and economic conditions in 
host nations. Such arrangements can impact the extent of host nation 
support--access or funding levels--to U.S. forces, and accordingly, may 
increase or decrease U.S.-funded costs for future infrastructure 
changes. This year, the EUCOM master plan referenced locations that 
have not been fully negotiated with host nations. While this type of 
information was useful in presenting a picture of potential 
infrastructure sites in the future, EUCOM did not provide explanatory 
information regarding the status of negotiations or challenges for 
finalizing these host nation agreements. Another command referenced a 
multilateral project, but did not identify any host nation funding in 
its plan or fully explain the reasons for this omission. Also, the 
magnitude of expected host nation funding identified in another 
command's plan appeared questionable, absent any narrative explanation 
regarding status of negotiations given the historically low host nation 
funding levels in the region compared with the projected funding 
requirements identified in the plan. Lastly, PACOM's schedule of host 
nation funding did not fully incorporate projects and funding levels 
initiated through special bilateral agreements negotiated with host 
nations, such as those that established the Special Action Committee on 
Okinawa and Yongsan relocation plan, or fully explain the reasons for 
these omissions. Without explaining the status of negotiations and 
challenges for obtaining host nation agreements and fully reporting 
host nation funding levels using common time frames, it is difficult 
for users to determine the extent to which reported infrastructure 
changes and associated costs are likely to occur and whether reported 
host nation funding levels are realistic or complete where funding 
amounts were provided. Until all planned infrastructure requirements 
are agreed to by the affected host nation or nations, overseas regional 
commands will remain uncertain of total future infrastructure 
requirements and associated costs. 

* Although required by OSD guidance, the regional commands did not 
provide information on U.S. funding sources in addition to military 
construction appropriations that may be used to finance current and 
future infrastructure requirements. An OSD official explained that some 
of these data were initially collected and judged to be too voluminous 
and detailed to include in the master plans. Still, inclusion of these 
types of funding data in future master plans or, at a minimum, 
reporting totals by funding type, would provide users a more complete 
baseline to better monitor all U.S. funding sources that may be used to 
finance current and future infrastructure requirements. 

* Although required by OSD guidance, none of the regional commands 
identified environmental remediation and restoration issues in their 
master plans. While we recognize OSD guidance limited the reporting 
requirement to those matters in accordance with the requirements of the 
status-of-forces agreements, command officials told us during 
subsequent discussions about a number of voluntary environmental 
remediation and restoration initiatives that will entail substantial 
funding--some may total more than $1 million--in support of planned 
infrastructure requirements outlined in the master plans. Without their 
inclusion or an explanation for their exclusion, it is difficult for 
users to compare and comprehend how environmental remediation and 
restoration activities and costs have varied by location and from year 
to year, and how these costs may impact planned U.S. funding levels. 

* Several of the reported actual or projected population levels at 
specific locations appear questionable when compared to the applicable 
base categories and funding requirements identified in the plans. 
Specifically, CENTCOM's plan did not provide an explanation of how its 
seemingly smaller bases could accommodate large numbers of people 
without a corresponding increase in facilities. During subsequent 
discussions, CENTCOM officials were able to explain that many of its 
reported population and funding requirements are based on real-time 
conditions at the installations and on the seeming different 
interpretations of identified base categories, such as forward 
operating sites and cooperative security locations. Still, without an 
adequate explanation of these conditions, users are unable to determine 
whether facilities and facility funding can adequately support the 
reported population--stationed or surge. Given the seemingly 
differences in interpretation and usage of terminology related to 
forward operating sites and cooperative security locations, additional 
narrative information regarding how each command is interpreting and 
applying these basing concepts would provide users a clearer picture of 
the infrastructure requirements at these sites. 

* In compliance with OSD's guidance defining overseas locations, the 
commands reported on requirements and funding for U.S. facilities in 
foreign countries and, thus, excluded the 50 states and U.S. 
territories. Based on the guidance, PACOM included Japan, South Korea, 
Diego Garcia, and several other countries located in its area of 
responsibility and excluded any detailed discussion of facility 
requirements and funding levels for Hawaii, Guam, U.S. territories, and 
other insular areas in the Pacific--strategic basing locations in the 
theater. Officials explained that Hawaii and Guam were excluded in part 
because they were included in DOD's ongoing base closure and 
realignment process. However, the omission of these locations does not 
provide users full representation of U.S. military presence, 
infrastructure requirements, and associated U.S. funding levels in the 
Pacific. Given that they are increasingly integral to achieving PACOM's 
strategic objectives and that the base closure and realignment 
decisions will be finalized later this year, their inclusion in future 
PACOM master plans would provide users more complete information so 
they can comprehend the full magnitude of facility requirements and 
associated costs in the Pacific. 

Further, instances of better reporting by individual overseas commands 
on selected data elements provided insights into how collective 
reporting among all commands could be enhanced to provide more 
complete, clear, and consistent information. For example: 

* The detailed reporting by EUCOM of precise facility requirements 
regarding planned construction projects provided a clearer and more 
complete basis for identifying requirements for fiscal years 2006 
through 2011 and tracking progress and changes from year to year than 
did the other commands. Specifically, EUCOM listed projects by military 
service and base category[Footnote 17] at the installation level, while 
PACOM rolled up projects into three broad regions--Japan, South Korea, 
and Diego Garcia--or by base category. As a result, we could readily 
identify estimated costs for EUCOM's construction projects at specific 
localities, to the extent information was available and provided, but 
could not complete a similar analysis for PACOM's projects. 

* The detailed reporting by CENTCOM of an anticipated strategic end 
state of its overseas basing infrastructure as of 2010, although not 
specifically required by OSD guidance, provided a clearer and more 
complete basis for tracking progress in meeting its infrastructure 
objectives for the region than did the other commands. Specifically, 
CENTCOM provided a concise depiction of expected locations and 
capabilities to support its objectives as of 2010, while EUCOM 
highlighted infrastructure consolidations and troop movements and PACOM 
limited this type of analysis to South Korea. Such information would 
have been useful from each command, but would require additional 
guidance on this issue from DOD to ensure consistency in reporting. 

Conclusions: 

To its credit, DOD's completion of this year's overseas master plans 
provides a more complete picture of future facility and funding 
requirements for changing U.S. defense infrastructure overseas than is 
available in other DOD reports, documents, and annual budget requests. 
It is obvious that the preparation of the master plans required 
significant effort on the part of OSD and the overseas regional 
commands. Still, opportunities exist to improve the guidance and term 
definitions to help overseas regional commands provide more complete, 
clear, and consistent information and present a more definitive picture 
of infrastructure and funding requirements, particularly for new 
locations, in the future. The less than definitive picture in this 
year's plans was due, in part, to the limitations in information that 
could be provided because of three key factors we identified: ongoing 
negotiations with host nations, continuing evolution of U.S. overseas 
basing strategy, and differences commands had in interpretation of OSD 
guidance. Since we have previously recommended that overseas regional 
commands address the extent to which residual value issues could affect 
U.S. funding requirements in our prior report, we are not including it 
again in this report. However, since residual value issues vary by host 
nation and may not be clear to all users of the plans, we consider it 
an open and continuing recommendation from our prior report. 
Additionally, without more complete, clear, and consistent reporting of 
various items--host nation agreements and funding levels, including 
special bilateral agreements; U.S. funding levels and sources in 
addition to military construction funds; environmental remediation and 
restoration issues; population levels; and facility requirements and 
funding levels for Hawaii, Guam, U.S. territories, and other insular 
areas in the Pacific--across future master plans, users do not have the 
best data available to facilitate their annual review and oversight. 
Also, individual master plans provide examples of how selected data 
elements could be reported to enhance future plans and their 
implementation. Specifically, without the detailed reporting of 
individual construction projects as EUCOM did in its plan and the 
anticipated strategic end state of the command's overseas basing 
infrastructure as of 2010 as CENTCOM did in its plan, Congress and 
other users do not have the best available and consistent data on which 
to track progress and changes from year to year and between commands. 
In many of these instances, providing supplementary narrative 
explanation of the assumptions used or reasons data were omitted could 
improve the usefulness of the comprehensive master plans. 

Recommendations for Executive Action: 

To improve reporting of and make future comprehensive master plans and 
updates more complete, clear, and consistent to facilitate annual 
review and oversight by Congress and other users, we recommend that the 
Secretary of Defense direct the Under Secretary of Defense for 
Acquisition, Technology and Logistics to revise OSD's guidance to 
require that: 

* overseas regional commands (1) briefly explain the status of 
negotiations and challenges for reported host nation agreements and (2) 
fully report host nation funding levels, including those for special 
bilateral agreements;

* overseas regional commands report information on U.S. funding sources 
in addition to military construction appropriations that may be used to 
finance current and future infrastructure requirements or, at a 
minimum, the totals for these other U.S. funding sources;

* overseas regional commands report environmental remediation and 
restoration initiatives that support planned infrastructure 
requirements outlined in the master plans;

* overseas regional commands briefly explain any significant variances 
in population levels and usage of terminology related to the three base 
categories--main operating bases, forward operating sites, and 
cooperative security locations;

* PACOM provide information on facility requirements and funding levels 
for Hawaii, Guam, U.S. territories, and other insular areas in the 
Pacific;

* overseas regional commands follow the presentation of individual 
construction projects as EUCOM did in its plan; and: 

* overseas regional commands follow the presentation of the strategic 
end state of their overseas basing infrastructure using a common date 
as CENTCOM did in its plan. 

Matters for Congressional Consideration: 

On the basis of DOD's comments on our recommendations, as discussed 
below, Congress may wish to consider requiring DOD in future 
comprehensive master plans and updates to (1) briefly explain the 
status of negotiations and challenges for reported host nation 
agreements and fully report host nation funding levels, including those 
for special bilateral agreements; (2) report environmental remediation 
and restoration initiatives that support planned infrastructure 
requirements outlined in the master plans; and (3) provide information 
on facility requirements and funding levels for Hawaii, Guam, U.S. 
territories, and other insular areas in the Pacific. 

Agency Comments and Our Evaluation: 

In commenting on a draft of this report, the Deputy Under Secretary of 
Defense for Installations and Environment concurred with four of our 
recommendations dealing with the presentation of U.S. funding levels 
and sources in addition to military construction funds; population 
levels and usage of terminology related to the three base categories; 
individual construction projects; and strategic end state using a 
common date. The Deputy Under Secretary of Defense did not concur with 
three of our recommendations that (1) overseas regional commands 
briefly explain the status and challenges for host nation negotiations 
and results pertaining to host nation funding levels, including those 
for special bilateral agreements; (2) overseas regional commands report 
voluntary environmental remediation and restoration initiatives that 
support planned infrastructure requirements outlined in the master 
plans; and (3) PACOM provide information on facility requirements and 
funding levels for Hawaii, Guam, U.S. territories, and other insular 
areas in the Pacific. We disagree and believe implementation of our 
recommendations would improve the reporting of and make future 
comprehensive master plans and updates more complete, clear, and 
consistent to facilitate annual review and oversight by Congress and 
other users. 

DOD stated that the master plans are not the appropriate vehicle to 
report the status of negotiations and the results of agreements 
pertaining to host nation funding, including those for special 
bilateral agreements, and noted that these types of data are maintained 
at the Departments of State and Defense levels. We disagree. Since the 
status of negotiations and the results of agreements pertaining to host 
nation funding, including those for special bilateral agreements, 
directly affect overseas regional commands and their plans for changing 
their infrastructure, we believe the master plans are an appropriate 
vehicle to report these types of data. In addition, the master plans 
are classified documents whose distribution is limited to U.S. 
officials with a need to know the status of ongoing negotiations and 
the results of agreements pertaining to host nation funding. Also, 
while this information may be maintained at the Departments of State 
and Defense levels, in practice overseas regional commands monitor the 
status of these negotiations as indicated by several of the planned 
infrastructure changes being reported in the current master plans--some 
of which are not based on finalized, negotiated agreements with host 
nations. Since none of the commands fully explained the status or 
challenges for finalizing these agreements, or provided complete data 
for host nation funding levels, these omissions make it difficult, if 
not impossible, for Congress and other users of the plans to determine 
the extent to which reported infrastructure changes and associated 
costs are likely to occur and whether reported host nation funding 
levels are realistic or complete. 

DOD disagreed with our recommendation that the Under Secretary of 
Defense for Acquisition, Technology and Logistics revise OSD's guidance 
to require overseas regional commands report voluntary environmental 
remediation and restoration initiatives that support planned 
infrastructure requirements outlined in their master plans. DOD stated 
that its environmental policy overseas allows for remediation efforts 
only to eliminate known, imminent, and substantial endangerment to 
human health or the environment and does not authorize voluntary 
remediation initiatives. However, as recognized in our draft report, 
what actually occurs overseas is not reflected by DOD's comments. In 
reality, command officials told us about a number of voluntary 
environmental remediation and restoration initiatives they plan to 
implement that will entail substantial funding in support of planned 
infrastructure requirements. Indeed, DOD policy grants overseas 
regional commanders discretion to perform additional remediation to 
protect human health and safety. In any event, since these actions 
affect overall costs in these rebasing efforts, we continue to believe 
it is important to reflect these costs in the master plans. In 
addition, as we previously noted in this report, OSD guidance requested 
overseas regional commands to report information on environmental 
remediation and restoration activities taken in accordance with the 
status-of-forces agreements. Because none of the regional commands 
identified environmental remediation and restoration initiatives or 
costs in their master plans, it may lead Congress and other users of 
the plans to conclude incorrectly that regional commands do not incur 
any environmental-related costs even though they have voluntarily 
undertaken such initiatives in the past and may plan do so again in the 
future. Accordingly, we believe that a narrative explanation of these 
initiatives and associated costs would provide a more complete picture 
of all activities associated with the U.S. defense infrastructure 
overseas. Therefore, we are amending our recommendation to state that 
the Under Secretary of Defense for Acquisition, Technology and 
Logistics should revise OSD guidance to require overseas regional 
commands to report all environmental remediation and restoration 
initiatives that support planned infrastructure requirements outlined 
in their master plans whether they are required by DOD policy, 
international agreement, or are performed under the authority granted 
to overseas regional commanders under DOD policy. 

DOD disagreed with our recommendation to require that PACOM provide 
information on facility requirements and funding levels for Hawaii, 
Guam, U.S. territories, and other insular areas in the Pacific. It 
stated that Hawaii and U.S. territories in the Pacific were no 
different from other U.S. facilities within the continental United 
States and that it was inappropriate to include them in overseas master 
plans. We continue to believe it is important to include this 
information, as the omission of these locations from PACOM's master 
plan provides Congress and other users an incomplete picture of the 
changing U.S. military presence in the Pacific and only a portion of 
the infrastructure and funding requirements associated with these 
changes. For example, in September 2004, the Commander, PACOM, 
testified before the Senate Armed Services Committee that the command 
was collocating the Stryker with high-speed vessels and airlift in 
Hawaii, deploying rotational bomber elements to Guam, stationing 
submarines in Guam, and had proposed moving an additional carrier 
strike group forward somewhere in the Pacific. Both Hawaii and Guam 
have been discussed as the potential site for this additional carrier 
strike group. In light of this, and because these locations are 
increasingly integral to achieving U.S. security objectives in the 
region, we believe that the inclusion of Hawaii, Guam, and other 
insular areas will provide a more complete picture of PACOM's 
infrastructure requirements and associated costs in the Pacific. 

The Deputy Under Secretary's comments are included in enclosure II of 
this report. 

We are sending copies of this report to interested congressional 
committees and members; the Secretary of Defense; the Secretaries of 
the Army, Navy, and Air Force; the Commandant of the Marine Corps; and 
Unified Combatant Commanders. The report is also available at no charge 
on GAO's Web Site at http://www.gao.gov. 

If you or your staff have any questions on the matters discussed in 
this report, please contact me at (202) 512-5581 or holmanb@gao.gov. 
Contact points for our Offices of Congressional Relations and Public 
Affairs may be found on the last page of this report. Alissa Czyz, Mark 
Little, Ricardo Marquez, Donna Rogers, and Nelson Torres were major 
contributors to this report. 

Signed by: 

Barry W. Holman, Director: 
Defense Capabilities and Management: 

List of Congressional Addressees: 

The Honorable John Warner: 
Chairman: 
The Honorable Carl Levin: 
Ranking Minority Member: 
Committee on Armed Services: 
United States Senate: 

The Honorable Ted Stevens: 
Chairman: 
The Honorable Daniel K. Inouye: 
Ranking Minority Member: 
Subcommittee on Defense: 
Committee on Appropriations: 
United States Senate: 

The Honorable Kay Bailey Hutchison: 
Chair: 
The Honorable Dianne Feinstein: 
Ranking Minority Member: 
Subcommittee on Military Construction and Veterans' Affairs: Committee 
on Appropriations: 
United States Senate: 

The Honorable Duncan L. Hunter: 
Chairman: 
The Honorable Ike Skelton: 
Ranking Minority Member: 
Committee on Armed Services: 
House of Representatives: 

The Honorable C.W. Bill Young: 
Chairman: 
The Honorable John P. Murtha: 
Ranking Minority Member: 
Subcommittee on Defense: 
Committee on Appropriations: 
House of Representatives: 

The Honorable James T. Walsh: 
Chairman: 
The Honorable Chet Edwards: 
Ranking Minority Member: 
Subcommittee on Military Quality of Life and Veterans Affairs, and 
Related Agencies: Committee on Appropriations: 
House of Representatives: 

Scope and Methodology: 

To determine the extent to which OSD provided sufficient guidance to 
overseas regional commands to meet the reporting requirements contained 
in congressional mandates and suggested by GAO, we compared and 
contrasted OSD guidance to the reporting requirements provided in the 
congressional mandates and suggested previously by GAO. We also met 
with officials from OSD and each of the following commands and 
agencies: PACOM; EUCOM; CENTCOM; U.S. Army, Pacific; U.S. Pacific 
Fleet; U.S. Marine Corps Forces, Pacific; U.S. Pacific Air Force; U.S. 
Forces Korea; Eighth Army, South Korea; Seventh Air Force, South Korea; 
Army Installation Management Agency, South Korea Regional Office; Army 
Corps of Engineers, South Korea; U.S. Forces Japan; U.S. Army, Japan; 
U.S. Marine Corps Forces, Japan; U.S. Army, Europe; Commander, Naval 
Region Europe; U.S. Air Force, Europe; Army Installation Management 
Agency, Europe Regional Office; and Special Operations Command. In 
general, we discussed the reporting requirements contained in OSD's 
guidance, host nation agreements and associated issues, host nation 
funding levels, U.S. funding levels and sources, environmental 
remediation and restoration issues, property returns to host nations, 
and residual values likely to be obtained by the United States as a 
result of these property returns. We also analyzed available reports, 
documents, policies, directives, international agreements, and 
information and guidance pertaining to these factors. In South Korea, 
we also met with an official from the office of the Political Military 
Unit at the U.S. Embassy South Korea to discuss the U.S. diplomatic 
perspective on potential basing changes in South Korea, burden-sharing 
implications, and environmental remediation and restoration issues. We 
also met with an official from the Republic of South Korea Ministry of 
National Defense to obtain a host nation perspective on the status of 
implementation of master plans and burden-sharing implications for 
relocation of U.S. facilities in South Korea and to discuss funding and 
time frames for decisions by the Republic of South Korea. To see 
firsthand the condition of facilities and status of selected 
construction projects, we visited and toured the facilities at Camp 
Butler, Camp Foster, Marine Corps Air Station Futenma, and Yokota Air 
Base, Japan; Camp Humphreys, Osan Air Base, and Kunsan Air Base, South 
Korea; Army Garrison Grafenwoehr, Germany; and Caserna Ederle 
(including Dal Molin airfield, property of the Italian government), 
Naval Air Station Sigonella, Naval Support Activity Capodichino, and 
Navy Support Site Gricignano, Italy. 

To determine the extent to which overseas regional commands complied 
with OSD's reporting requirements and provided information in a 
complete, clear, and consistent manner, we compared the comprehensive 
master plans with the reporting requirements provided in OSD guidance 
and suggested previously by us, and compared and contrasted the plans 
to each other. To determine whether improvements in guidance and 
reporting were needed, we assessed the plans to identify those elements 
and properties that provided information in the most complete, clear, 
and consistent manner. Also, we assessed the quantity and quality of 
one plan's responses for each of the data elements and compared them to 
equivalent responses in other plans; formed conclusions as to the 
completeness, clarity and consistency of one plan's responses; and 
generated observations and recommendations for improving other plans' 
responses. We also discussed our observations and recommendations, 
specific reporting requirements, and whether improvements in the 
guidance and reporting were needed with DOD officials. 

While we met with Special Operations Command officials, its planning 
efforts were not specifically included in the master plans provided in 
response to the congressional mandates and detailed data were not 
available for inclusion in this report. In addition, we did not include 
Southern Command in our analysis because this command has significantly 
fewer facilities overseas than the other regional commands in the 
Pacific, Europe, and Central Asia. 

We conducted our review from October 2004 through May 2005 in 
accordance with generally accepted government auditing standards. 

Enclosure II: Comments from the Department of Defense: 

OFFICE OF THE UNDER SECRETARY OF DEFENSE: ACQUISITION, TECHNOLOGY AND 
LOGISTICS:
3000 DEFENSE PENTAGON: 
WASHINGTON, DC 20301-3000: 

JUN 20 2005: 

Mr. Barry W. Holman:
Director, Defense Capabilities and Management: United States Government 
Accountability Office: Washington, DC 20548: 

Dear Mr. Holman: 

This is the Department of Defense (DoD) response to the GAO draft 
report, "DEFENSE INFRASTRUCTURE: Opportunities Exist to Improve Future 
Comprehensive Master Plans for Changing U.S. Defense Infrastructure 
Overseas," May 13, 2005 (GAO Code 350585/GAO-05-680R). 

Enclosed is the Department's specific response to the recommendations 
of the draft GAO report. Thank you for the opportunity to provide 
comments. My point of contact for this action is Sherry Holliman, who 
can be reached at (703) 571-9069. 

Sincerely,

Signed by: 

Philip W. Grone: 
Deputy Undersecretary of Defense (Installations & Environment): 

Enclosure: As stated: 

GAO CODE 350585/GAO-05-680R: 

"DEFENSE INFRASTRUCTURE: Opportunities Exist to Improve Future 
Comprehensive Master Plans for Changing U.S. Defense Infrastructure 
Overseas" (Code 350585/GAO-05-680R): 

DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATIONS: 

RECOMMENDATION 1: The GAO recommended that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology and 
Logistics to revise OSD's guidance to require that overseas regional 
commands (1) briefly explain the status of negotiations and challenges 
for reported host nation agreements and (2) fully report host nation 
funding levels, including those for special bilateral agreements. (Page 
14/Draft Report): 

DoD RESPONSE: Nonconcur. The master plans are not the appropriate 
vehicle to report the status of negotiations and the results of 
agreements pertaining to host-nation funding levels. The status of 
current arrangements and plans for future negotiations is maintained at 
the State/DoD level. 

RECOMMENDATION 2: The GAO recommended that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology and 
Logistics to revise OSD's guidance to require that overseas regional 
commands report information on U.S. funding sources in addition to 
military construction appropriations that may be used to finance 
current and future infrastructure requirements or, at a minimum, the 
totals for these other U.S. funding sources. (Page 14-15, Draft 
Report): 

DoD RESPONSE: Concur. DoD will examine guidance to Combatant Commands 
for preparation of overseas master plans, address requirements to 
support facility Sustainment, Restoration and Modernization, and apply 
such models as necessary to arrive at estimated infrastructure 
requirements. 

RECOMMENDATION 3: The GAO recommended that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology and 
Logistics to revise OSD's guidance to require that overseas regional 
commands report voluntary environmental remediation and restoration 
initiatives that support planned infrastructure requirements outlined 
in the master plans. (Page 15/Draft Report): 

DoD RESPONSE: Nonconcur. DoD environmental policy overseas allows for 
remediation efforts only to eliminate known, imminent and substantial 
endangerment to human health or the environment (or to maintain mission 
operations). "Voluntary" remediation initiatives are not authorized 
under DoD policy (DoD Instruction 4715.8). 

RECOMMENDATION 4: The GAO recommended that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology and 
Logistics to revise OSD's guidance to require that overseas regional 
commands briefly explain any significant variances in population levels 
and usage of terminology related to the three base categories - main 
operating bases, forward operating sites, and cooperative security 
locations. (Page 15/Draft Report): 

DoD RESPONSE: Concur. DoD will provide information except where the 
information may compromise national security or host-nation 
sensitivities. 

RECOMMENDATION 5: The GAO recommended that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology and 
Logistics to revise OSD's guidance to require that Commander, U.S. 
Pacific Command provide information on facility requirements and 
funding levels for Hawaii, Guam, U.S. territories, and other insular 
areas in the Pacific. (Page 15/Draft Report): 

DoD RESPONSE: Nonconcur. Hawaii and U.S. territories in the Pacific are 
no different from other U.S. facilities within the Continental United 
States (CONUS) and Alaska. It is inappropriate to include them in 
"overseas" master plan requirements. 

RECOMMENDATION 6: The GAO recommended that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology and 
Logistics to revise OSD's guidance to require that overseas regional 
commands follow the presentation of individual construction projects as 
the European Command did in its plan. (Page 15/Draft Report): 

DoD RESPONSE: Concur with comment. In the update of guidance for 
preparing overseas master plans, we will strive for consistency across 
the Department for common business practices, subject to unique 
Combatant Command needs. 

RECOMMENDATION 7: The GAO recommended that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology and 
Logistics to revise OSD's guidance to require that overseas regional 
commands follow the presentation of the strategic end state of their 
overseas basing infrastructure using a common date as the Central 
Command did in its plan (Page 15/Draft Report). 

DoD RESPONSE: Concur. In the update of guidance for preparing overseas 
master plans, the Department will establish a common date for a 
strategic end state. 

[End of section]

(350585): 

FOOTNOTES

[1] DOD, Quadrennial Defense Review Report (Washington, D.C.: Sept. 30, 
2001). 

[2] DOD, Strengthening U.S. Global Defense Posture (Washington, D.C.: 
Sept. 17, 2004). 

[3] H.R. Conf. Rep. No. 108-342, at 17 (2003). 

[4] Although not specifically requested in the conference report, the 
Office of the Secretary of Defense asked the overseas regional commands 
to prepare comprehensive master plans for their areas of 
responsibility. 

[5] S. Rep. No. 108-82, at 13-14 (2003). 

[6] Residual value is the negotiated dollar value of U.S.-constructed 
or improved facilities that are turned over to host nations. DOD policy 
is to obtain the maximum residual value permissible. 

[7] GAO, Defense Infrastructure: Factors Affecting U.S. Infrastructure 
Costs Overseas and the Development of Comprehensive Master Plans, GAO- 
04-609 (Washington, D.C.: July 15, 2004). 

[8] DOD, Under Secretary of Defense for Acquisition, Technology and 
Logistics, Overseas Master Plans (Washington, D.C.: Oct. 8, 2004). 

[9] Status-of-forces agreements determine the legal status of U.S. 
armed forces stationed abroad, often including some provisions for 
environmental remediation of U.S.-generated requirements. 

[10] For the purposes of this report, we did not include Southern 
Command in our analysis because this command has significantly fewer 
facilities overseas than the other regional commands in the Pacific, 
Europe, and Central Asia. 

[11] Although Hawaii, Guam, U.S. territories, and other insular areas 
technically were not considered overseas locations for this year's 
master plans, in this case several of these locations nevertheless are 
important components and factor significantly into future strategic 
considerations within PACOM's area of responsibility. 

[12] DOD's Strengthening U.S. Global Defense Posture provided new base 
category definitions--main operating bases, forward operating sites, 
and cooperative security locations. Main operating bases, with 
permanently stationed combat forces and robust infrastructure, are 
characterized by command and control structures and family support 
facilities. Forward operating sites are expandable "warm facilities" 
maintained with a limited rotational U.S. military support presence and 
possibly prepositioned equipment. Cooperative security locations are 
facilities with little or no permanent U.S. presence and will provide 
contingency access while being a focal point for security cooperation 
activities. 

[13] These figures exclude the amounts requested by DOD for the base 
realignment and closure process and unspecified sites, which include 
funding for minor construction, planning and design, operating 
expenses, and other construction-related activities. 

[14] GAO-04-609. 

[15] GAO-04-609. 

[16] While CENTCOM generally complied with the reporting requirements 
defined by OSD guidance, it excluded any discussion of Iraq. 

[17] See note 12.