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GAO-09-500R: 

United States Government Accountability Office: 
Washington, DC 20548: 

April 9, 2009: 

Congressional Committees: 

Subject: High-Level Leadership Needed to Help Guam Address Challenges 
Caused by DOD-Related Growth: 

In an effort to improve the U.S. military's flexibility to address 
conventional and terrorist threats worldwide, the Department of Defense 
(DOD) plans to relocate more than 8,000 Marines and an estimated 9,000 
dependents from Okinawa, Japan, to Guam as well as expand other U.S. 
force capabilities on the island at an estimated cost of more than $13 
billion. Guam is an integral part of DOD's logistical support system 
and serves as an important forward operational hub for a mix of 
military mission requirements. According to DOD, Guam provides 
strategic flexibility, freedom of action, and prompt global action for 
the Global War on Terrorism, peace and wartime engagement, and crisis 
response. DOD plans to begin construction on Guam during fiscal year 
2010 in order to meet the desired buildup deadline of fiscal year 2014 
indicated in the agreement reached by the U.S.-Japan Security 
Consultative Committee on October 29, 2005. As a result of the military 
buildup, Guam's current population of 171,000 will increase by an 
estimated 25,000 active duty military personnel and dependents (or 14.6 
percent), to 196,000. In addition, the realignment will require 
additional workers to move to the island, including non-defense 
personnel, DOD contractors, and transient military personnel. As such, 
the U.S. military realignment and buildup will substantially impact 
Guam's community and infrastructure. 

DOD and representatives for Guam have expressed concern that Guam's 
infrastructure and social services will not be prepared to handle the 
impacts of the buildup by the 2014 completion date because of the 
compressed timeline and the extensive impact of the buildup. Further, 
GAO previously reported that the Government of Guam faces significant 
challenges in addressing the impacts of the buildup and realignment. 
[Footnote 1] For example, construction demands will exceed local 
capacity and the availability of workers on Guam. In addition, Guam's 
infrastructure is inadequate to meet the increased demand because of 
the military buildup. The buildup requires double the existing port 
capacity, and Guam's major highways may not have enough capacity to 
accommodate the increased traffic since the two major highways on Guam, 
which the military will use to transport supplies, need major 
improvements. In addition, Guam's electric grid may be inadequate to 
fully support the buildup. Further, Guam's water and waste-water 
systems are near capacity, and demand may increase by 25 percent. 
Guam's solid-waste facilities also face capacity and environmental 
challenges as they have reached the end of their projected useful life. 
Although DOD plans to fund infrastructure requirements directly related 
to the military buildup and realignment as well as contribute some 
funds toward civilian infrastructure requirements such as utilities and 
roads, the Government of Guam is largely responsible for obtaining 
funding for civilian requirements related to the buildup. In a May 2008 
hearing before the Senate Committee on Energy and Natural Resources, 
the Governor of Guam stated that approximately $6.1 billion would be 
requested for fiscal year 2010 to help fund Guam's needs in support of 
the military buildup.[Footnote 2] GAO has reported that most 
communities affected by such defense actions, with far lower 
requirements than Guam, were likely to incur significant costs for 
infrastructure and were seeking federal assistance.[Footnote 3] Guam is 
similarly seeking extensive federal aid across many federal agencies. 

Both DOD and the Department of the Interior have worked to raise 
awareness across the federal government of the need to address the 
systemic challenges to support both the construction effort and the 
long-term impact of stationing additional forces on Guam as well as to 
coordinate interagency budgets by identifying Guam's core requirements 
and matching up those requirements with potential federal agencies that 
may be able to provide the necessary resources to address Guam's 
critical social services and infrastructure needs. 

Section 2822(b) of the Duncan Hunter National Defense Authorization Act 
for Fiscal Year 2009 required us to report on the status of interagency 
coordination through the Interagency Group on Insular Areas (IGIA) of 
budgetary requests to assist the Government of Guam with its budgetary 
requirements related to the realignment of U.S. military forces on 
Guam.[Footnote 4] Our objective was to determine the status of 
interagency coordination including the status of the IGIA's 
participation in that coordination. 

To determine the status of interagency coordination and to what extent 
and how the IGIA is coordinating interagency budgets, including its 
processes to ensure coordination, we interviewed officials from the 
Department of the Interior's Office of Insular Affairs, the Navy's 
Joint Guam Program Office (JGPO), the Federal Regional Council--Region 
IX, and DOD's Office of Economic Adjustment. In addition, we observed 
interagency meetings, including the 2009 Interagency Group on Insular 
Areas Plenary session and a federal funding strategy meeting on the 
Guam military buildup that discussed efforts to identify funding for 
programs and projects on Guam related to the realignment. We also 
reviewed these organizations' responsibilities and goals and/or mission 
to identify their respective roles with regard to the military buildup. 
Moreover, we reviewed meeting minutes from the Federal Interagency Task 
Force on the Guam Military Buildup (Interagency Task Force). To gain a 
fuller understanding of the interagency coordination process, we also 
reviewed documentation to gain the Government of Guam's perspective and 
opinions on the process used in conjunction with the military buildup. 

We conducted this performance audit from January 2009 through March 
2009, in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

Summary: 

The IGIA has made some efforts at federal collaboration; however, it 
will be unable to affect interagency budgets to help ensure that the 
realignment of military forces on Guam will be completed by the fiscal 
year 2014 completion date because it does not have the authority to 
direct other federal agencies' budget or other resource decisions. 
However, based on a series of executive orders dating back to 1978, it 
has been long-standing DOD policy that DOD take the leadership role 
within the federal government in helping communities respond to the 
effects of defense-related activities.[Footnote 5] The current version 
of the executive order, Executive Order 12788, establishes an Economic 
Adjustment Committee made up of 22 federal departments and agencies, 
including the Department of the Interior, and requires the committee 
to, among other duties, advise, assist, and support the Defense 
Economic Adjustment Program. This program is to assist substantially 
and seriously affected communities from the effects of major defense 
closures and realignments. Moreover, the program is also to serve as a 
clearinghouse to exchange information among federal, state and 
community officials involved in the resolution of community economic 
adjustment problems, including identifying sources of public and 
private financing to meet identified needs. While DOD, through the 
Economic Adjustment Committee, does not have the authority to direct 
member executive agencies' budget or other resource decisions, 
Executive Order 12788 does specify that all executive agencies are to 
give priority consideration to requests from defense-affected 
communities for financial resources and other assistance. However, as 
we previously reported, the Office of the Secretary of Defense has not 
provided the high-level leadership on the Economic Advisory Committee 
that is necessary to help ensure interagency and intergovernmental 
coordination at levels that can make policy and budgetary decisions to 
better leverage resources through the committee. Although other federal 
assistance has been provided to Guam from organizations such as the 
Navy's Joint Guam Program Office and Interior's Office of Insular 
Affairs, these organizations do not have the authority to direct other 
federal agencies to provide resources to defense-affected communities 
or ensure that Guam's budget requests related to the military buildup 
become a priority across the federal government. Only high-level 
leadership from the Secretary of Defense can marshal the resources of 
the Economic Adjustment Committee's member agencies, and only high- 
level federal officials from these agencies can affect possible policy 
and budget decisions that may be required to better assist the 
communities. Therefore, we are making a recommendation that DOD 
continue to implement our previous recommendation to provide the high- 
level leadership necessary to promote interagency coordination, as well 
as requiring that the Economic Adjustment Committee includes Guam's 
needs in its routine activities supporting defense-affected communities 
for the military buildup on Guam. 

In commenting on a draft of this report, DOD and the Department of the 
Interior agreed with our recommendation. We discuss DOD and the 
Department of the Interior's comments later in this report. DOD also 
provided technical comments on a draft of this report, which we 
incorporated where appropriate. DOD's comments are reprinted in 
enclosure II and the Department of the Interior's comments are 
reprinted in enclosure III. 

Background: 

Although several federal agencies assist the Government of Guam to meet 
civilian needs to support the military buildup, no single federal 
agency or organization is authorized to direct other federal agencies 
to make resource allocation decisions. As a result, the Government of 
Guam has been independently collaborating with various federal agencies 
within DOD, the Department of the Interior, and the Federal Regional 
Council--Region IX. We have reported in the past that fragmentation of 
federal efforts contributes to difficulties in addressing crosscutting 
issues and that interagency coordination is important for ensuring that 
crosscutting efforts are mutually reinforcing and efficiently 
implemented.[Footnote 6] Figure 1 provides a brief overview of the 
different federal agencies and organizations working with the 
Government of Guam to help identify and address buildup requirements. 

Figure 1: Federal Organizations Assisting Guam: 

[Refer to PDF for image: illustration] 

* Federal Regional Council, Region IX: 

* Department of Defense: 
- Office of Economic Adjustment; 
- Joint Guam Program Office. 

* Department of the Interior: 
- Office of Insular Affairs. 

* Interagency Group on Insular Areas: 

* Guam Interagency Task Force: 
Co-chairs:
Joint Guam Program Office (DOD); 
Office of Insular Affairs (DOI). 

Source: Copyright  Corel Corp. All rights reserved (map); GAO analysis 
of information provided by DOD, Department of the Interior, and the 
Federal Regional Council. 

[End of figure] 

The Secretary of the Interior has administrative responsibility for 
coordinating federal policy for the insular areas. The Office of 
Insular Affairs executes these responsibilities over the insular areas 
on behalf of the Secretary of the Interior. The office's involvement in 
the military buildup stems from this responsibility. Executive Order 
13299 established the IGIA within the Department of the Interior to 
provide advice to the President or the Secretary of the Interior 
regarding the establishment or implementation of policies concerning 
the insular areas including Guam, American Samoa, United States Virgin 
Islands, and the Commonwealth of Northern Mariana Islands.[Footnote 7] 
The IGIA is comprised of the heads of the executive departments. The 
Secretary of the Interior or his designee presides over the IGIA, 
determines its agenda, directs its work, and establishes and directs 
subgroups of the IGIA. 

The IGIA established the Interagency Task Force to bring together the 
federal agencies that have a role in supporting Guam. Members of the 
Interagency Task Force include representatives of the departments of 
State, Agriculture, Health and Human Services, Labor, Justice, 
Transportation, Housing and Urban Development, Education, and Veterans 
Affairs as well as the Navy, the Small Business Administration, the 
Office of Management and Budget, and others. In addition, 
representatives from the Government of Guam and several Guam agencies 
also participate in some Interagency Task Force meetings. The 
Interagency Task Force is co-chaired by the Office of Insular Affairs 
and JGPO. The Interagency Task Force consists of five subgroups that 
focus on key issue areas including: 1) the environment, 2) socio- 
economic factors, 3) infrastructure, 4) labor, and 5) health and human 
services. JGPO has thus far provided staffing and oversight of these 
subgroups. 

DOD has tasked JGPO with the primary responsibility for developing and 
implementing the military buildup plans. JGPO is a Navy field office 
directed by DOD to facilitate, manage, and execute requirements 
associated with the rebasing of Marine Corps assets from Okinawa to 
Guam. The office falls under the direct oversight of the Assistant 
Secretary of the Navy for Installations and Environment. JGPO's 
responsibilities include integration of operational support 
requirements; development, program, and budget synchronization; 
oversight of the construction; and coordination of government and 
business activities. Specifically, JGPO was tasked to lead the 
coordinated planning efforts among the DOD components and other 
stakeholders to consolidate, optimize, and integrate the existing DOD 
infrastructure capabilities on Guam. 

The Office of Economic Adjustment is a DOD field activity that reports 
to the Deputy Under Secretary of Defense for Installations and 
Environment, under the Under Secretary of Defense for Acquisition, 
Technology, and Logistics. The office is responsible for facilitating 
DOD resources in support of local programs and providing direct 
planning and financial assistance to communities and states seeking 
assistance to address the impacts of DOD's actions. The Office of 
Economic Adjustment's assistance to growth communities is primarily 
focused on assisting these communities with organizing and planning for 
population growth because of DOD activities, commonly referred to as 
"defense-affected" communities. 

The Federal Regional Council--Region IX is a consortium of several 
separate federal departments which oversee federal activities in 
Arizona, California, Hawaii, Nevada, and the Outer Pacific Islands 
including Guam. Membership includes regional representatives from the 
departments of Agriculture, Commerce, Education, Energy, Health and 
Human Services, Homeland Security, Housing and Urban Development, 
Justice, Labor, the Interior, Transportation, and Veteran Affairs. The 
goal of the Federal Regional Council is for federal departments in 
Region IX to work in a coordinated manner in order to make federal 
programs more effective and efficient. 

Executive Order 12788, as amended, requires the Secretary of Defense, 
through the Economic Adjustment Committee, to establish the Defense 
Economic Adjustment Program to, in part, assist substantially and 
seriously affected communities from the effects of major defense base 
closures and realignments and to identify problems of states, regions, 
metropolitan areas or communities that result from major defense base 
closures and realignments. Executive Order 12788 also states that the 
Economic Adjustment Committee shall advise, assist, and support the 
program, among other duties (enclosure I contains a copy of the 
Executive Order).[Footnote 8] The Secretary of Defense, or his 
designee, is the chair of the Economic Adjustment Committee. The 
committee is made up of representatives from 22 federal agencies but 
the Executive Order gives DOD a leadership role in coordinating 
interagency efforts in support of defense-affected communities. The 
committee is to ensure, among other things, that communities that are 
substantially and seriously affected by DOD actions are aware of 
available federal economic adjustment programs; assure coordinated 
interagency and intergovernmental adjustment assistance; and serve as a 
clearinghouse to exchange information among federal, state, regional, 
and community officials involved in the resolution of community 
economic problems. Specifically, this Executive Order requires Economic 
Adjustment Committee member agencies to support, to the extent 
permitted by law, the economic adjustment assistance activities of the 
Secretary of Defense, and to afford priority consideration to requests 
from defense-affected communities for federal technical assistance and 
financial resources. 

Interagency Coordination Is Under Way, but the IGIA Is Not Positioned 
to Effectively Affect Interagency Budgets: 

Although the IGIA has made some efforts at federal collaboration, it is 
not well positioned to affect interagency budgets to help ensure that 
the realignment of military forces on Guam will meet the fiscal year 
2014 completion date because it does not have the authority to direct 
other federal agencies' budget decisions. At the same time, while DOD 
also does not have the authority to direct other federal agencies' 
budget decisions, DOD is positioned to provide high-level leadership on 
an interagency basis by virtue of Executive Order 12788, which provides 
the department with certain interagency leadership coordination 
authorities. For example, under Executive Order 12788, all executive 
agencies are to support the economic adjustment assistance activities 
of the Secretary of Defense to the extent permitted by law. Other 
federal agencies have also provided some assistance to Guam. 

The IGIA Has Made Some Efforts to Coordinate Interagency Budgets to 
Assist Guam with Its Budgetary Requirements but Cannot Compel Other 
Federal Agencies to Act: 

The IGIA has made some efforts to coordinate interagency budget 
requests to assist Guam with its budgetary requirements related to the 
military realignment and buildup through the Interagency Task Force. 
The Interagency Task Force has met formally on three occasions since 
August 2007 in large, general sessions. The purpose of the Interagency 
Task Force is to bring together the federal agencies that have a role 
in assisting Guam with the intent to identify Guam's requirements that 
extend beyond DOD's responsibilities and authorities and to match these 
requirements with appropriate federal resources. JGPO officials stated 
that these Interagency Task Force meetings have raised awareness of 
potential socio-economic issues in the Guam civilian community that pre-
date the military realignment as well as issues stemming from the 
military buildup, and have provided an opportunity for the Government 
of Guam to present its requirements to federal agencies. In addition, 
according to JGPO officials, the Interagency Task Force subgroups have 
met regularly. As a result of this subgroup coordination, JGPO 
indicated that the Maritime Administration, the Government of Guam, and 
the Port Authority of Guam signed a memorandum of understanding to 
solidify a partnership to pursue port improvements critical to enable 
construction and support of Guam's long-term needs. In addition, the 
Department of the Interior announced $6 million in grants for 
improvements to the Guam Community College, the Guam Department of 
Public Health and Human Services, and the Guam Memorial Hospital. 
Further, JGPO, the Department of the Interior, and the Department of 
Labor are working toward a $1 million initiative to build 
infrastructure for an apprenticeship program on Guam. The Guam 
Department of Labor also received $15,000 in funding from Department of 
the Interior to hire a consultant to assist the pursuit of a $250,000 
grant from the Department of Labor to address issues of data 
collection, needs assessment, and regional workforce leadership 
outreach. 

While the IGIA can provide some guidance to promote effective 
interagency support to Guam, Executive Order 13299 does not compel 
executive agency heads to support, to the extent permitted by law, 
economic adjustment assistance activities with their available 
technical expertise and financial resources in order to assist defense- 
affected communities, nor does it direct agencies to afford priority 
consideration to such communities' requests for assistance. Rather, the 
IGIA is a forum where federal agencies come together and listen to 
concerns brought up by the insular areas including Guam. Similarly, an 
official from the Office of Insular Affairs noted that high-level 
leadership should be provided to ensure interagency coordination since 
no single federal organization in the government tracks Guam's needs 
stemming from the buildup. In addition, an official of DOD's Office of 
Economic Adjustment stated that the administration should support 
interagency coordination and whatever mechanism is chosen for such 
coordination, whether it is the Interagency Task Force or some other 
form, to guarantee that interagency coordination is effective. 

DOD Is Positioned to Lead Federal Activities to Assist Defense-Affected 
Communities: 

Based on a series of presidential executive orders dating back to 1978 
and amended as recently as May 2005, it has been long-standing DOD 
policy[Footnote 9] that DOD take the leadership role within the federal 
government in helping communities respond to the effects of defense- 
related activities. The current version of the executive order, 
Executive Order 12788, establishes the Economic Adjustment Committee, 
which includes the Department of the Interior. It also requires the 
Secretary of Defense, through the Economic Adjustment Committee, to 
establish a Defense Economic Adjustment Program to, among other things, 
assist substantially and seriously affected communities from the 
effects of major defense closures and realignments and serve as a 
clearinghouse to exchange information among federal, state, and 
community officials involved in the resolution of community economic 
adjustment problems, including sources of public and private financing. 
The Secretary of Defense, or his designee, chairs the committee. 
Moreover, the Executive Order requires executive agencies to afford 
priority consideration to requests from defense-affected communities 
for financial and other assistance. However, the full committee has met 
only once since November 2006. 

In June 2008, we reported that the Office of the Secretary of Defense 
had not provided the leadership necessary to help ensure interagency 
and intergovernmental coordination at levels that can make policy and 
budgetary decisions to better leverage resources through the Economic 
Adjustment Committee. We also reported that in the absence of high- 
level leadership from the Office of the Secretary of Defense, DOD's 
Office of Economic Adjustment had been proactive in working with 
defense-affected communities.[Footnote 10] However, as with the IGIA, 
the Office of Economic Adjustment also cannot effectively guide 
interagency operations at a high enough level to promote effective 
interagency cooperation. Also, in our June 2008 report, we pointed out 
that only high-level leadership from the Office of the Secretary of 
Defense can marshal the resources of the federal executive departments 
and agencies that are members of the Economic Adjustment Committee and 
only these high-level federal officials can affect possible policy and 
budget decisions that may be required to better assist defense-affected 
communities. As a result of this absence of high-level DOD leadership, 
we recommended that the Secretary of Defense direct the Under Secretary 
of Defense for Acquisition, Technology, and Logistics to implement 
Executive Order 12788 by holding regular committee meetings at the full 
executive level and serving as a clearinghouse of information for 
identifying expected community impacts and problems as well as 
identifying resources for providing economic assistance to defense- 
affected communities. DOD concurred with the recommendation. 

Other Federal Assistance to Address Guam Budgetary Requirements: 

In addition to interagency coordination efforts through the IGIA, other 
federal offices and organizations have been collaborating with the 
Government of Guam to discuss both military and civilian challenges 
stemming from the military buildup. DOD has been working with the 
Government of Guam mainly through two organizations--JGPO and the 
Office of Economic Adjustment. At the same time, the Department of the 
Interior's Office of Insular Affairs provides the Government of Guam 
with technical assistance, such as providing training opportunities on 
how to improve Guam's management of funding as well as some financial 
assistance that has primarily been aimed at expediting the buildup 
planning process. Moreover, the Federal Regional Council--Region IX is 
working with the Government of Guam to identify funding sources in 
order to address civilian needs associated with the military buildup. 

JGPO, as DOD's coordination point for and co-chair of the Interagency 
Task Force, has worked with other federal agencies to identify and 
address issues expected to affect Guam as the result of the military 
buildup. JGPO and the Department of the Interior have established a 
financial stakeholders working group outside of the Interagency Task 
Force to help address needs related to the military buildup, identified 
by the Government of Guam, with loans and grants available from various 
federal agencies. JGPO also held a forum on public safety in Guam in 
June 2008 to address concerns over the impacts of the population 
increase because of the military buildup. JGPO officials noted that DOD 
has attempted to make the Guam buildup a funding priority at the 
Cabinet level and across agencies, but, as with the IGIA and DOD's 
Office of Economic Adjustment, JGPO cannot guide interagency operations 
at a high enough level to promote effective interagency cooperation. 
Only high-level leadership from the Secretary of Defense can marshal 
the resources of the executive federal agency Economic Adjustment 
Committee members and only these high-level federal officials can 
affect possible policy and budget decisions. 

The Office of Economic Adjustment has provided both technical 
assistance and financial assistance to the Government of Guam. Thus 
far, the office has provided about $4.5 million in total financial 
assistance to help the Government of Guam form a sustainable governance 
structure to address the needs arising from the buildup over the next 
10 to12 years. In 2007, the office approved grants totaling almost 
$590,000 to help sustain the progress and modernization of the Port of 
Guam as well as provide logistical support to Government of Guam 
officials. In 2008, the office approved around $4 million in grants to 
enable the Government of Guam to hire an advisory services firm to 
supplement the limited resources within the Office of the Governor, and 
develop a Port Implementation Plan. Further, the Government of Guam has 
worked through the Office of Economic Adjustment to engage the Federal 
Regional Council--Region IX in order to identify other potential 
sources of funding to assist with needs stemming from the military 
buildup. 

As we noted, the Office of Insular Affairs established the Interagency 
Task Force, which it co-chairs with JGPO. At the same time, this office 
provides the Government of Guam with technical assistance, such as 
providing training opportunities on how to improve Guam's management of 
funding as well as some financial assistance that has primarily been 
aimed at expediting the buildup planning process. Officials from this 
office noted that they have assisted the Government of Guam by 
reviewing its fiscal year 2010 budget request in anticipation of the 
military buildup in order to ensure that the included information was 
accurate. In addition, the office also provides financial assistance on 
an annual basis to help Guam with issues outside of the military 
buildup. For instance, in 2008, the office provided the Guam Department 
of Health and Social Services with $500,000 and the Guam Memorial 
Hospital Authority with around $5 million. 

The Federal Regional Council--Region IX has helped to identify funding 
opportunities that may be of assistance to the Government of Guam in 
meeting its domestic needs. Federal Regional Council members told us 
they have met with representatives from the Government of Guam on four 
occasions to discuss issues related to the military buildup. The 
Federal Regional Council has developed an "Action Plan for Guam" that 
outlines an approach for communication and resource identification for 
Guam's funding among member agencies regarding matters related to the 
military buildup. Moreover, the Federal Regional Council annually 
provides information on the amount of grants it has awarded to the 
Government of Guam outside of military buildup requirements. Recently, 
the Federal Regional Council established a Guam-Commonwealth of the 
Northern Mariana Islands Buildup Task Force focused specifically on 
addressing issues related to the military buildup. 

Conclusions: 

Interagency coordination is important to effectively leverage resources 
across agencies and organizations, and our prior work has concluded 
that successful collaboration requires commitment by senior officials 
in their respective federal agencies.[Footnote 11] The IGIA and federal 
departments that make up the Federal Regional Council--Region IX have 
had some success in providing assistance to Guam. However, it is only 
Executive Order 12788 that directs executive agencies to support, to 
the extent permitted by law, the economic adjustment assistance 
activities of the Secretary of Defense with their available technical 
expertise and financial resources, and to afford priority consideration 
to such communities' requests for assistance. Thus, we are not making 
any recommendations to the Department of the Interior at this time. On 
the other hand, implementation of Executive Order 12788 provides an 
interagency approach to coordinating assistance for defense-affected 
communities from across the federal government, but ineffective 
implementation can risk allowing the needs of defense-affected 
communities to go unfulfilled. As a result, quality of life for 
military and civilian residents, along with military readiness, could 
be degraded. Thus, we recommended in June 2008 that the Secretary of 
Defense direct the Under Secretary of Defense for Acquisition, 
Technology, and Logistics to implement Executive Order 12788 by holding 
regular meetings of the full executive-level Economic Adjustment 
Committee, and DOD concurred. 

Recommendation for Executive Action: 

As DOD implements our June 2008 recommendation, we further recommend 
that the Secretary of Defense direct the Under Secretary of Defense for 
Acquisition, Technology, and Logistics to ensure that as the Economic 
Adjustment Committee meets, as mandated by Executive Order 12788, the 
committee should routinely consider Guam's requests for assistance to 
support the challenges arising from the military buildup or other 
requests as appropriate. 

Agency Comments and Our Evaluation: 

In written comments on a draft of this report, the Deputy Under 
Secretary of Defense (Installations and Environment) agreed with our 
recommendation and will ensure Guam's local economic adjustment 
requirements, as they are known at the time, are provided for the 
Economic Adjustment Committee member agencies' consideration at the 
next committee meeting. DOD also provided technical comments, which we 
have incorporated where appropriate. The Deputy Under Secretary of 
Defense's comments are reprinted in enclosure II. 

The Acting Deputy Assistant Secretary for Insular Affairs within the 
Department of the Interior strongly supported the purpose and 
recommendation of this report. The Acting Deputy Assistant Secretary 
also stated that the Department's Office of Insular Affairs does not 
have the authority to direct other federal agencies to provide 
resources to defense-affected communities or ensure that Guam's budget 
requests related to the military buildup become a priority across the 
federal government. The official further indicated that he would ensure 
the Department of the Interior is able to provide useful information if 
called upon by DOD to participate in the Economic Adjustment Committee. 
The Acting Deputy Assistant Secretary's comments are reprinted in 
enclosure III. 

We are sending copies of this report to the appropriate congressional 
committees. We are also sending copies to the Secretaries of Defense, 
the Interior, Army, Navy, and Air Force; the Commandant of the Marine 
Corps; and the Director of the Office of Management and Budget. In 
addition, this report will be available at no charge on our Web site at 
[hyperlink, http://www.gao.gov]. If you or your staff have any 
questions, about this report, please contact me at (202) 512-4523 or 
leporeb@gao.gov. Contact points for our Offices of Congressional 
Affairs may be found on the last page of this report. GAO staff who 
made major contributions to this report are listed in enclosure IV. 

Signed by: 

Brian J. Lepore, Director: 
Defense Capabilities and Management: 

List of Committees: 

The Honorable Carl Levin:
Chairman:
The Honorable John McCain:
Ranking Member:
Armed Services Committee:
United States Senate: 

The Honorable Daniel Inouye:
Chairman:
The Honorable Thad Cochran:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
United States Senate: 

The Honorable Ike Skelton:
Chairman:
The Honorable John McHugh:
Ranking Member:
Armed Services Committee:
House of Representatives: 

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

[End of section] 

Enclosure I: Executive Order 12788 As Amended: 

Defense Economic Adjustment Program: 

By the authority vested in me as President by the Constitution and the 
laws of the United States of America, including 10 U.S.C. 2391 and the 
Defense Economic Adjustment, Diversification, Conversion, and 
Stabilization Act of 1990, enacted as Division D, section 4001 et seq., 
of the National Defense Authorization Act for Fiscal Year 1991, Public 
Law 101-510, and to provide coordinated Federal economic adjustment 
assistance necessitated by changes in Department of Defense activities, 
it is hereby ordered as follows: 

Section 1. Function of the Secretary of Defense. The Secretary of 
Defense shall, through the Economic Adjustment Committee, design and 
establish a Defense Economic Adjustment Program. 

Sec. 2. The Defense Economic Adjustment Program shall (1) assist 
substantially and seriously affected communities, businesses, and 
workers from the effects of major Defense base closures, realignments, 
and Defense contract-related adjustments, and (2) assist State and 
local governments in preventing the encroachment of civilian 
communities from impairing the operational utility of military 
installations. 

Sec. 3 Functions of the Defense Economic Adjustment Program. The 
Defense Adjustment Program shall: 

(a) Identify problems of States, regions, metropolitan areas, or 
communities that result from major Defense base closures, realignments, 
and Defense contract-related adjustments, and the encroachment of the 
civilian community on the mission of military installations and that 
require Federal assistance; 

(b) Use and maintain a uniform socioeconomic impact analysis to justify 
the use of Federal economic adjustment resources prior to particular 
realignments; 

(c) Apply consistent policies, practices, and procedures in the 
administration of Federal programs that are used to assist Defense- 
affected States, regions, metropolitan areas, communities, and 
businesses; 

(d) Identify and strengthen existing agency mechanisms to coordinate 
employment opportunities for displaced agency personnel; 

(e) Identify and strengthen existing agency mechanisms to improve 
reemployment opportunities for dislocated Defense industry personnel; 

(f) Assure timely consultation and cooperation with Federal, State, 
regional, metropolitan, and community officials concerning Defense- 
related impacts on Defense-affected communities' problems; 

(g) Assure coordinated interagency and intergovernmental adjustment 
assistance concerning Defense impact problems; 

(h) Prepare, facilitate, and implement cost-effective strategies and 
action plans to coordinate interagency and intergovernmental economic 
adjustment efforts; 

(i) Encourage effective Federal, State, regional, metropolitan, and 
community cooperation and concerted involvement of public interest 
groups and private sector organizations in Defense economic adjustment 
activities; 

(j) Serve as a clearinghouse to exchange information among Federal, 
State, regional, metropolitan, and community officials involved in the 
resolution of community economic adjustment problems. Such information 
may include, for example, previous studies, technical information, and 
sources of public and private financing; 

(k) Assist in the diversification of local economies to lessen 
dependence on Defense activities; 

(l) Encourage and facilitate private sector interim use of lands and 
buildings to generate jobs as military activities diminish; 

(m) Develop ways to streamline property disposal procedures to enable 
Defense-impacted communities to acquire base property to generate jobs 
as military activities diminish; and: 

(n) Encourage resolution of regulatory issues that impede encroachment 
prevention and local economic adjustment efforts. 

Sec. 4. Economic Adjustment Committee. 

(a) Membership. The Economic Adjustment Committee ("Committee") shall 
be composed of the following individuals or a designated principal 
deputy of these individuals, and such other individuals from the 
executive branch as the President may designate. Such individuals shall 
include the: 

(1) Secretary of Agriculture; 

(2) Attorney General; 

(3) Secretary of Commerce; 

(4) Secretary of Defense; 

(5) Secretary of Education; 

(6) Secretary of Energy; 

(7) Secretary of Health and Human Services; 

(8) Secretary of Housing and Urban Development; 

(9) Secretary of Interior; 

(10) Secretary of Labor; 

(11) Secretary of State; 

(12) Secretary of Transportation; 

(13) Secretary of Treasury; 

(14) Secretary of Veterans Affairs; 

(15) Secretary of Homeland Security; 

(16) Chairman, Council of Economic Advisers; 

(17) Director of the Office of Management and Budget; 

(18) Director of the Office of Personnel Management; 

(19) Administrator of the Environmental Protection Agency; 

(20) Administrator of General Services; 

(21) Administrator of the Small Business Administration; and: 

(22) Postmaster General. 

(b) The Secretary of Defense, or the Secretary's designee, shall chair 
the Committee. 

(c) The Secretaries of Labor and Commerce shall serve as Vice Chairmen 
of the Committee. The Vice Chairmen shall co-chair the Committee in the 
absence of both the Chairman and the Chairman's designee and may also 
preside over meetings of designated representatives of the concerned 
executive agencies. 

(d) Executive Director. The head of the Department of Defense's Office 
of Economic Adjustment shall provide all necessary policy and 
administrative support for the Committee and shall be responsible for 
coordinating the application of the Defense Economic Adjustment Program 
to Department of Defense activities. 

(e) Duties. The Committee shall: 

(1) Advise, assist, and support the Defense Economic Adjustment 
Programs; 

(2) Develop procedures for ensuring that State, regional, and community 
officials, and representatives of organized labor in those States, 
municipalities, localities, or labor organizations that are 
substantially and seriously affected by changes in Defense 
expenditures, realignments or closures, or cancellation or curtailment 
of major Defense contracts, are notified of available Federal economic 
adjustment programs; and: 

(3) Report annually to the President and then to the Congress on the 
work of the Economic Adjustment Committee during the preceding fiscal 
year. 

Sec. 5. Responsibilities of Executive Agencies. 

(a) The head of each agency represented on the Committee shall 
designate an agency representative to: 

(1) Serve as a liaison with the Secretary of Defense's economic 
adjustment staff; 

(2) Coordinate agency support and participation in economic adjustment 
assistance projects; and: 

(3) Assist in resolving Defense-related impacts on Defense-affected 
communities. 

(b) All executive agencies shall: 

(1) Support, to the extent permitted by law, the economic adjustment 
assistance activities of the Secretary of Defense. Such support may 
include the use and application of personnel, technical expertise, 
legal authorities, and available financial resources. This support may 
be used, to the extent permitted by law, to provide a coordinated 
Federal response to the needs of individual States, regions, 
municipalities, and communities adversely affected by necessary Defense 
changes; and: 

(2) Afford priority consideration to requests from Defense-affected 
communities for Federal technical assistance, financial resources, 
excess or surplus property, or other requirements, that are part of a 
comprehensive plan used by the Committee. 

Sec. 6. Judicial Review. This order shall not be interpreted to create 
any right or benefit, substantive or procedural, enforceable at law by 
a party against the United States, its agencies, its officers, its 
agents, or any person. 

Sec. 7. Construction. (a) Nothing in this order shall be construed as 
subjecting any function vested by law in, or assigned pursuant to law 
to, any agency or head thereof to the authority of any other agency or 
officer or as abrogating or restricting any such function in any 
manner. 

(b) This order shall be effective immediately and shall supersede 
Executive Order No 12049. 

George Bush:
The White House: 

January 15, 1992. 

[Amended 2/28/03 by President George W. Bush, E.O. 13286] 

[Amended 5/12/05 by President George W. Bush, E.O. 13378] 

[End of section] 

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: 

April 8, 2009: 

Mr. Brian J. Lepore: 
Director, Defense Capabilities and Management: 
U.S. Government Accountability Office: 
441 G Street, N.W. 
Washington, DC 20548: 

Dear Mr. Lepore: 

This is the Department of Defense (DoD) response to the GAO draft 
report, GAO-09-500R, "Defense Infrastructure: High-Level Leadership 
Needed to Help Guam Address Challenges Caused by DoD-Related Growth," 
dated March 31, 2009 (GAO Code 351301). Detailed comments on the report 
recommendations are enclosed. 

The Department appreciates the opportunity to comment on this draft 
report and concurs with the GAO's recommendations concerning the 
Economic Adjustment Committee (EAC), specifically at the next EAC 
meeting, the Department will ensure Guam's local economic adjustment 
requirements, as they are known at the time, are provided for the EAC 
member agencies' consideration. 

The Interagency Group on Insular Areas (IGIA) is responsible for 
coordination of budgetary requests to assist the Government of Guam. 
Additionally, the Federal Interagency Task Force on the Guam Military 
Buildup which is co-chaired by the Joint Guam Program Office (JGPO) and 
the Office of Insular Affairs has been established to address these 
issues and will continue to be the focal point for the Department. 

We continue to appreciate audit work performed by the GAO but note the 
compressed time it provided for the Department's review of this report. 

Sincerely, 

Signed by: 

Wayne Arny: 
Deputy Under Secretary	of Defense (Installations and Environment): 

Enclosure: As stated: 

GAO Draft Report - Dated March 31, 2009: 
GAO Code 351301/GAO-09-500R: 

"Defense Infrastructure: High-Level Leadership Needed to Help Guam 
Address Challenges Caused by DoD-Related Growth" 

Department Of Defense Comments To The Recommendation: 

Recommendation 1: The GAO recommends that the Secretary of Defense 
direct the Under Secretary for Acquisition, Technology, and Logistics 
to ensure that as the Economic Adjustment Committee meets, as mandated 
by Executive Order 12788, the committee should routinely consider 
Guam's requests for assistance to support the challenges arising from 
the military buildup or other requests as appropriate. 

DOD Response: Concur. At the next EAC meeting, the Department will 
ensure Guam's local economic adjustment requirements, as they are known 
at the time, are provided for the EAC member agencies' considerations. 

[End of section] 

Enclosure III: Comments from the Department of the Interior: 

United States Department of the Interior: 
Office Of The Secretary: 
Washington, DC 20240: 

April 2, 2009: 

Brian J. Lepore: 
Director, Defense Capabilities and Management: 
U.S. Government Accountability Office: 
Washington, DC 20548: 

Dear Mr. Lepore: 

Thank you for the opportunity to respond to the U.S. Government 
Accountability Office (GAO) draft report entitled Defense 
Infrastructure: High-Level Leadership Needed to Help Guam Address 
Challenges Caused by DOD-Related Growth" (GAO-09-500R) (Report). 

I strongly support the purpose and recommendation of this Report, and 
look forward to receiving it in its final form. Your acknowledgment of 
the assistance that the Department of the Interior has provided is 
appreciated, and I concur that the Department's Office of Insular 
Affairs does not have the authority to direct other federal agencies to 
provide resources to defense-affected communities or ensure that Guam's 
budget requests related to the military buildup become a priority 
across the federal government. 

I will help ensure that, if called upon by the Department of Defense to 
participate in the Economic Adjustment Committee, the Department of the 
Interior is able to provide useful information. 

If you wish to discuss the Report, please communicate with me at (202) 
208-6816. Or you may wish to have your staff communicate with Joseph 
McDermott, OIA's Director of Policy, at 202-208-4736. 

Sincerely, 

Signed by: 

Nikolao I. Pula, Jr.
Acting Deputy Assistant Secretary for Insular Affairs: 

[End of section] 

Enclosure IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Brian Lepore, (202) 512-4523 or leporeb@gao.gov: 

Acknowledgments: 

In addition to the person named above, Harold Reich, Assistant 
Director; Jerome Brown; Amy Frazier; Katherine Lenane; Josh Margraf; 
and Richard Meeks made key contributions to this report. 

[End of section] 

Related GAO Products: 

Defense Infrastructure: Opportunity to Improve the Timeliness of Future 
Overseas Planning Reports and Factors Affecting the Master Planning 
Effort for the Military Buildup on Guam. [hyperlink, 
http://www.gao.gov/products/GAO-08-1005]. Washington, D.C.: September 
17, 2008. 

Defense Infrastructure: High-Level Leadership Needed to Help 
Communities Address Challenges Caused by DOD-Related Growth. 
[hyperlink, http://www.gao.gov/products/GAO-08-665]. Washington, D.C.: 
June 17, 2008. 

Defense Logistics: Navy Needs to Develop and Implement a Plan to Ensure 
that Voyage Repairs are Available to Ships Operating Near Guam When 
Needed. [hyperlink, http://www.gao.gov/products/GAO-08-427]. 
Washington, D.C.: May 12, 2008. 

Defense Infrastructure: Planning Efforts for the Proposed Military 
Buildup on Guam Are in Their Initial Stages, with Many Challenges Yet 
to Be Addressed. [hyperlink, http://www.gao.gov/products/GAO-08-722T]. 
Washington, D.C.: May 1, 2008. 

Defense Infrastructure: Challenges Increase Risks for Providing Timely 
Infrastructure Support for Army Installations Expecting Substantial 
Personnel Growth. [hyperlink, http://www.gao.gov/products/GAO-07-1007]. 
Washington, D.C.: September 13, 2007. 

Defense Infrastructure: Overseas Master Plans Are Improving, but DOD 
Needs to Provide Congress Additional Information about the Military 
Buildup on Guam. [hyperlink, http://www.gao.gov/products/GAO-07-1015]. 
Washington, D.C.: September 12, 2007. 

U.S. Insular Areas: Economic, Fiscal, and Financial Accountability 
Challenges. [hyperlink, http://www.gao.gov/products/GAO-07-119]. 
Washington, D.C.: December 12, 2006. 

DOD's Overseas Infrastructure Master Plans Continue to Evolve. 
[hyperlink, http://www.gao.gov/products/GAO-06-913R]. Washington, D.C.: 
August 22, 2006. 

U.S. Insular Areas: Multiple Factors Affect Federal Health Care 
Funding. [hyperlink, http://www.gao.gov/products/GAO-06-75]. 
Washington, D.C.: October 14, 2005. 

Results-Oriented Government: Practices That Can Help Enhance and 
Sustain Collaboration among Federal Agencies. [hyperlink, 
http://www.gao.gov/products/GAO-06-15]. Washington, D.C.: Oct. 21, 
2005. 

Opportunities Exist to Improve Future Comprehensive Master Plans for 
Changing U.S. Defense Infrastructure Overseas. [hyperlink, 
http://www.gao.gov/products/GAO-05-680R]. Washington, D.C.: June 27, 
2005. 

Results-Oriented Government: GPRA Has Established a Solid Foundation 
for Achieving Greater Results. [hyperlink, 
http://www.gao.gov/products/GAO-04-38]. Washington, D.C.: March 10, 
2004. 

Environmental Cleanup: Better Communication Needed for Dealing with 
Formerly Used Defense Sites in Guam. [hyperlink, 
http://www.gao.gov/products/GAO-02-423]. Washington, D.C.: April 11, 
2002. 

Compact of Free Association: Negotiations Should Address Aid 
Effectiveness and Accountability and Migrants' Impact on U.S. Areas. 
[hyperlink, http://www.gao.gov/products/GAO-02-270T]. Washington, D.C.: 
December 6, 2001. 

Foreign Relations: Migration From Micronesian Nations Has Had 
Significant Impact on Guam, Hawaii, and the Commonwealth of the 
Northern Mariana Islands. [hyperlink, 
http://www.gao.gov/products/GAO-02-40]. Washington, D.C.: October 5, 
2001. 

Overseas Presence: Issues Involved in Reducing the Impact of the U.S. 
Military Presence on Okinawa. [hyperlink, 
http://www.gao.gov/products/GAO/NSIAD-98-66]. Washington, D.C.: March 
2, 1998. 

U.S Insular Areas: Development Strategy and Better Coordination Among 
U.S. Agencies Are Needed. [hyperlink, 
http://www.gao.gov/products/GAO/NSIAD-94-62]. Washington, D.C.: 
February 7, 1994. 

[End of section] 

Footnotes: 

[1] GAO, Defense Infrastructure: Planning Efforts for the Proposed 
Military Buildup on Guam Are in Their Initial Stages, with Many 
Challenges Yet to Be Addressed, [hyperlink, 
http://www.gao.gov/products/GAO-08-722T] (Washington, D.C.: May 1, 
2008). 

[2] Military Buildup on Guam: Hearing before the Senate Committee on 
Energy and Natural Resources, 110th Congress, 2nd Session (2008) 
(Statement of Felix P. Camacho, Governor of Guam). 

[3] [hyperlink, http://www.gao.gov/products/GAO-08-722T]. 

[4] Pub. L. No. 110-417,  2822(b) (2008). Specifically, section 
2822(b) requires our report to address the extent to which and how the 
IGIA will be able to coordinate interagency budgets so the realignment 
of military forces on Guam will meet the fiscal year 2014 completion 
date. 

[5] Exec. Order No. 12049, 43 Fed. Reg. 13363 (Mar. 27, 1978), as 
superseded by Exec. Order No. 12788, 57 Fed. Reg. 2213 (Jan. 21, 1992), 
as amended. 

[6] GAO, Results-Oriented Government: GPRA Has Established a Solid 
Foundation for Achieving Greater Results, [hyperlink, 
http://www.gao.gov/products/GAO-04-38] (Washington, D.C.: Mar. 10, 
2004). 

[7] Other responsibilities of the IGIA include obtaining information 
and advice from governors of the insular areas, other elected officials 
in the insular areas, and other entities in a manner that seeks their 
individual advice and does not involve collective judgment or consensus 
advice or deliberation, and holding meetings at least once each year of 
the governors of the insular areas who may wish to attend. 

[8] Exec. Order No. 12049, 43 Fed. Reg. 13363 (Mar. 27, 1978), as 
superseded by Exec. Order No. 12788, 57 Fed. Reg. 2213 (Jan. 21, 1992), 
as amended. 

[9] With the issuance of Executive Order 12049 in March 1978, the 
President recognized that changes in DOD activities necessitated a 
coordinated approach for federal economic assistance. The order 
specified that DOD, working with the Economic Adjustment Committee 
(EAC), had the lead role in conducting various efforts designed to 
assist in the alleviation of serious economic adjustment impacts that 
result from major defense realignments. Executive Order 12788, issued 
in January 1992, subsequently superseded the prior order but continued 
the intent for the federal government to play a role through the EAC in 
providing assistance to defense-impacted communities. Executive Order 
13286 was issued in February 2003 to update the membership while 
Executive Order 13378 was issued in May 2005 to change the EAC chair 
from rotating among DOD, Labor, and Commerce to only be chaired by DOD. 

[10] GAO, Defense Infrastructure: High-Level Leadership Needed to Help 
Communities Address Challenges Caused by DOD-Related Growth, 
[hyperlink, http://www.gao.gov/products/GAO-08-665] (Washington, D.C.: 
June 17, 2008). 

[11] GAO, Results-Oriented Government: Practices That Can Help Enhance 
and Sustain Collaboration among Federal Agencies, [hyperlink, 
http://www.gao.gov/products/GAO-06-15] (Washington, D.C.: Oct. 21, 
2005). 

[End of section] 

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