Key Issues > High Risk > DOD Support Infrastructure Management
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DOD Support Infrastructure Management

This information appears as published in the 2013 High Risk Report.

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The Department of Defense (DOD) manages a global real property portfolio that consists of more than 555,000 facilities—including barracks, commissaries, data centers, office buildings, laboratories, and maintenance depots—located on more than 5,000 sites worldwide and covering more than 28 million acres. With a replacement value of close to $850 billion, this infrastructure is critical to maintaining military readiness, and the cost to build and maintain it represents a significant financial commitment.

Since designating this area as high risk in 1997, GAO has reported on challenges DOD faces in reducing excess and obsolete infrastructure, sustaining facilities, and achieving cost savings and efficiencies in base support by eliminating duplication of support services where bases are in close proximity to one another or adjacent to one another. Because DOD has made significant progress in addressing issues regarding planning and funding to sustain facilities, GAO narrowed the defense infrastructure high-risk area in GAO’s 2011 high risk update to focus on two remaining issues: reducing excess infrastructure and achieving cost savings and efficiencies in base support. Since GAO’s 2011 update, DOD has made near-term progress in reducing excess facilities but progress on its long-term demolition plans beyond fiscal year 2013 are unclear and DOD believes that it continues to have significant excess capacity relative to the planned force structure. DOD has not made significant progress in realizing the anticipated cost savings and efficiencies envisioned to be gained through joint basing since GAO’s last update. Therefore, additional actions by DOD are needed in these two areas, based on GAO’s criteria[1] to warrant removing the high-risk designation for DOD’s defense support infrastructure management. Challenges also persist with the government-wide management of federal real property (see Managing Federal Real Property for an update on this topic).



[1] The criteria for removal from the High Risk List consist of: (1) demonstrated top leadership commitment, (2) capacity to resolve the risk, (3) a corrective action plan, (4) monitoring to validate effectiveness of corrective measures, and (5) demonstrated progress.

While DOD has completed implementation of the 2005 Base Realignment and Closure (BRAC) round and made near-term progress in reducing excess infrastructure, it has not made sufficient progress on developing a long-term disposal plan beyond fiscal year 2013. DOD has stated that two additional BRAC rounds are needed to reduce its significant excess capacity relative to the planned force structure. Additionally, DOD is limited in its ability to identify potentially excess facilities because it does not maintain complete and accurate data concerning the utilization of facilities. In regard to joint basing, DOD has established 12 joint bases. However, DOD has not developed (1) an implementation plan to guide joint bases in achieving anticipated cost savings and efficiencies goals, (2) a reliable method of collecting information on the net costs or estimated savings and efficiencies, (3) a consistent interpretation and reported use of the common standards by the joint bases, (4) a process to prioritize the review and identify potential revision of those standards, (5) a communication strategy to meet the needs of joint base officials, and (6) guidance to the joint bases on developing training materials to be used to inform incoming personnel about the specifics of how installation services are provided on joint bases.

Reducing Excess and Obsolete Infrastructure

DOD disposes of the majority of its excess infrastructure in two ways. First, DOD can demolish, sell, or otherwise dispose of individual facilities on its installations when the facilities are determined to be excess or surplus. Second, DOD can close entire bases under the BRAC process. Additionally, in managing disposal of its excess infrastructure, DOD needs accurate and complete infrastructure inventory records to ensure that the department has an accurate picture of how much infrastructure, and specifically which facilities, is actually excess to its needs.

DOD has made progress in its current 6-year demolition program (2008 through 2013) for reducing its excess infrastructure. Based on GAO’s analysis of DOD’s real property inventory database and DOD’s demolition plans for the remaining 3 years of its demolition program, DOD is on track to meet its overall department-wide target to demolish 62.3 million square feet and its plant replacement value (for facilities that are not measured in square feet) target of $1,179 million by the end of fiscal year 2013. GAO’s analysis of DOD’s real property inventory database showed that, as of September 30, 2010, DOD has demolished about 30.8 million square feet—about 49 percent of its department-wide square-footage target during the first 3 years of its 6-year demolition program. According to DOD, as of June 2011, it had spent about $833 million for demolition in fiscal years 2008 through 2010 and plans to spend about an additional $941 million to demolish about 32.7 million square feet of facilities in fiscal years 2011 through 2013. If DOD follows through with its plan to demolish an additional 32.7 million square feet by the end of fiscal year 2013, GAO projects that DOD will exceed its overall department wide square-footage target by about 1.1 million square feet.

While DOD’s near-term demolition efforts are encouraging, the department has not made sufficient progress on developing future plans for demolishing additional excess facilities beyond fiscal year 2013. DOD’s future plans to eliminate excess facilities after its current demolition program ends are unclear, as are its plans for taking into account external factors that affected the disposal of longstanding excess facilities that were identified before fiscal year 2008 and have consequently prevented DOD from disposing of some of its oldest excess and surplus facilities. Since GAO’s last high risk update, DOD has significantly reduced its estimated demolition plans for fiscal years 2014 through 2016 from 222 million square feet of excess facilities to about 31 million square feet because of erroneous estimates in the initial demolition budget plan. According to DOD officials, many of the demolition projects completed to date have been limited to those projects that are easily accomplished because they do not have many restrictions that would increase their cost or the time needed to complete them. DOD officials acknowledge that the demolition of the remaining long-standing excess facilities may require more time and effort to complete because of several external factors, including management of historic preservation requirements, environmental restrictions, host nation agreements, and consolidation efforts.

Also, DOD officials told us that after the current demolition program ends, they intend to explore a broader effort for future facilities management, including other approaches to eliminating excess, such as consolidation and recapitalization, instead of focusing primarily on demolition. However, it is not clear what strategies and measures DOD plans to establish to manage its disposal of excess facilities as part of this broader effort. In September 2011, GAO recommended that DOD develop the strategies and measures needed to enhance its management of excess facilities after the current near term demolition program ends that take into account the external factors that may affect future disposal efforts. DOD concurred with this recommendation but has not yet completed actions to
implement it.

Moreover, DOD believes that it has significant excess capacity relative to the planned force structure. DOD has demonstrated strong commitment and top leadership support in addressing this situation by requesting authorization for two more BRAC rounds. DOD officials state that the department’s plans to make cuts in force structure to adjust to strategic and fiscal factors will require similar cuts in supporting infrastructure, including military bases. For example, the Army plans to reduce its force levels by 72,000 solders, the Marine Corps is resizing to 182,100 active Marines from 202,100, and the Air Force is eliminating approximately 300 aircraft over 5 years. The Secretary of Defense stated in August 2012 that continuing to maintain and operate infrastructure excess to needs risks diverting scarce resources that should go to maintaining force readiness but instead will be diverted to maintaining unneeded facilities and consequently risks “hollowing out the force.”

However, DOD is limited in its ability to identify potentially excess facilities because it does not maintain complete and accurate data concerning the utilization of its facilities. GAO found that as of September 30, 2010, DOD’s real property inventory database showed utilization data for less than half of DOD’s total inventory of facilities and that much of the data is old and does not reflect the true usage of the structures. DOD acknowledges that its database does not cover its entire inventory but rather just what is needed to be reported to the Federal Real Property Profile, which requires annual reports on only five categories of buildings. However, some problems exist with DOD’s reporting to the Federal Real Property Profile. DOD’s real property inventory as of September 30, 2010, showed that for 32,999 of the 145,239 buildings in the five building categories for which DOD requires utilization rate reporting, no utilization rate was recorded in DOD’s database. Nonetheless, because the Federal Real Property Profile will not accept blank fields, DOD entered a utilization rate into the 32,999 records based on prior reporting or even when there was no data supporting the rate entered into the field. Moreover, even when utilization rate data was recorded in DOD’s database the record entry often did not reflect the true usage of the facilities. For example, data for the Air Force showed a utilization rate of zero percent for 22,563 buildings that were in an active status and were being used.

Because DOD does not maintain complete and accurate data concerning the utilization of its facilities, it is unable to determine whether all of its facilities are required in order to meet its mission needs, an inability that limits identification of potentially excess facilities. In September 2011, to address these limitations in facility utilization data, GAO recommended that DOD develop and implement a methodology for calculating and recording utilization data for all types of facilities and modify its processes to update and verify the accuracy of reported utilization data to reflect a facility’s true status. DOD partially agreed with GAO’s recommendation but has not yet taken any action to improve its utilization data.

Achieving Cost Savings and Efficiencies in Base Support

Since GAO’s 2011 high risk update, DOD has demonstrated little further progress in realizing the anticipated cost savings and efficiencies envisioned to be gained through consolidation and elimination of duplicate base support where bases are adjacent to or in close proximity to one another. In 2005, DOD recommended to the BRAC Commission combining 26 installations into 12 joint bases to take advantage of opportunities for efficiencies arising from consolidation and elimination of duplicate support services and, in 2010, completed this consolidation. DOD has also established common standards to define the level of service expected to be provided at each joint base and in order to ensure consistent delivery of installation support services. DOD stated that savings in personnel and facilities costs could be realized by, among other things, reducing duplication of efforts, paring unnecessary management personnel, achieving greater efficiencies through economies of scale, consolidating and optimizing existing and future service contract requirements, establishing a single space management authority that could achieve greater utilization of facilities, and reducing the number of base support vehicles and equipment consistent with the size of the combined facilities. DOD’s recommendation to the 2005 BRAC Commission estimated that joint basing would realize a 20-year savings of $2.3 billion, with $601 million in savings by the end of the implementation period in fiscal year 2011. However, the 20-year saving estimate has now decreased by nearly 90 percent, to $249 million.

GAO’s work has shown that a key reason installation support costs at the joint bases are expected to increase is that the Office of the Secretary of Defense required that the joint bases deliver installation support in accordance with the new support standards even though the military services had not previously funded installation support in the amounts needed to meet each of the standards. In addition, the military services’ approach to joint base implementation will result in some additional administrative costs and the loss of some existing installation support efficiencies. GAO’s more recent work has shown that DOD leadership has not provided clear direction to joint basing officials and has not developed an implementation plan to guide joint bases in their efforts to achieve the efficiencies and cost savings goals of joint basing. DOD officials told GAO that the department did not have a plan because joint basing is a relatively new initiative and implementation issues are still being resolved. Additionally, DOD does not have a reliable method of collecting information on the net costs or estimated savings, and efficiencies, specifically resulting from joint basing and excluding other influences on the bases’ budgets. DOD has developed a data collection tool, called the Cost and Performance Visibility Framework, through which the joint bases report installation support performance data, including annually reporting on funds obligated to provide base support services. However, because of inconsistencies in the way the joint bases reported data through the framework to date, and because the data reported through the framework includes costs and savings which are not specific to joint basing, DOD is not yet able to accurately isolate the effects of joint basing on the cost of providing support services.

Moreover, while in fiscal years 2010 and 2011 the joint bases reported meeting the common standards more than 70 percent of the time, the lack of clarity in some standards, the fact that unclear standards are not always reviewed and changed in a timely manner, and the fact that the data collection and reporting on the standards in some cases adhere to individual service standards rather than the common standard hinders the effectiveness of the standards as a common framework for managing installation support services.

Furthermore, DOD also has not established a communication strategy that provides information to meet the needs of joint basing officials on how to achieve the joint basing goals of cost savings and efficiencies. GAO found that the joint bases do not have a formal method of routinely sharing information among the joint bases on identified challenges and potential solutions or guidance on developing and providing training for new joint base personnel on how the joint bases provide installation support services.

GAO previously reported that organizational transformations such as merging components and transforming organizational cultures should be driven by top leadership, have implementation goals and a time line to show progress, and include a communication strategy. Although the joint bases anecdotally reported achieving some savings and efficiencies, without an implementation plan to drive savings and a means to collect reliable information on the specific costs, estimated savings, and efficiencies from joint basing, DOD will not be able to facilitate achievement of the goals of cost savings and efficiencies, track the extent to which these goals have been achieved, or evaluate the continuation or expansion of joint basing.

In November 2012, to improve DOD’s management of joint basing, GAO recommended that DOD (1) develop and implement a plan that provides measurable goals linked to achieving savings and efficiencies at the joint bases and to provide guidance to the joint bases directing them to identify opportunities for cost savings and efficiencies; (2) continue to develop and refine the Cost and Performance Visibility Framework through which the joint bases report installation support performance data; (3 and 4) compile a comprehensive list of common standards needing clarification and prioritize the review and potential revision of those standards; (5) develop a common strategy that facilitates routine communication between the joint bases, and between the joint bases and the Office of the Secretary of Defense, to encourage joint resolution of common challenges and sharing of best practices and lessons learned; and (6) develop guidance to ensure that all joint bases develop and provide training materials to incoming joint base personnel. DOD stated that it does not agree with the report’s principal recommendation regarding the establishment of savings goals because the recommendation reflects a fundamental difference in the way GAO and DOD view prudent management of the joint bases at this point in their development. DOD further stated that the creation of the 12 joint bases from 26 separate installations is equivalent to the mergers of corporations, in which the cultural differences are often the hardest to bridge. While savings targets may be appropriate in the future, DOD stated that it decided to allow an extended transition period and to defer near-term savings to increase the odds that each joint base will succeed over the long run. DOD added that its patient approach should continue. GAO acknowledges that establishing joint basing is a complex undertaking but DOD’s current position of taking a patient approach and deliberately deferring near term savings contradicts the position it took when requesting the BRAC Commission approve its joint basing recommendation. Specifically, in its recommendation to the BRAC Commission, DOD stated that joint basing would produce savings immediately with 20 year net present value savings of over $2.3 billion; 20 year savings have now declined by 90 percent to about $249 million. DOD partially concurred with GAO’s other recommendations although it did not specify what actions it planned to take to implement most of them.

To demonstrate sustained progress in defense support infrastructure management, DOD needs to develop strategies and measures to better focus and manage its future disposal efforts after the current demolition program ends in 2013, including taking into account external factors, such as historic preservation requirements, environmental restrictions, host nation agreements, and consolidation efforts, that may affect future disposal efforts. To ensure continued progress after 2013, DOD will need a new corrective action plan, monitoring for performance against the new plan, and a demonstration of progress in implementing the new plan. DOD also needs to continue to focus on other means, such as consolidation and recapitalization, to dispose of facilities that are excess to needs. Additionally, DOD needs to develop and implement a methodology for calculating and recording utilization data for all types of facilities and modify its processes to update and verify the accuracy of reported utilization data to reflect a facility’s true status as a first step to identifying property excess to needs and thus being in position to execute the disposal plan.

DOD also needs to develop and implement a plan that provides measurable goals linked to achieving savings and efficiencies at the joint bases and provide guidance to the joint bases that directs them to identify opportunities for cost savings and efficiencies. At a minimum, DOD should consider the items identified in its recommendation to the 2005 BRAC Commission as areas for possible savings and efficiencies, including (1) paring unnecessary management personnel, (2) consolidating and optimizing contract requirements, (3) establishing a single space management authority to achieve greater utilization of facilities, and (4) reducing the number of base support vehicles and equipment. DOD needs to demonstrate top leadership commitment to achieving the savings and efficiencies that were its justification for doing joint basing in the first place. Further, DOD needs to develop and implement a corrective action plan that provides measurable goals linked to achieving savings and efficiencies at the joint bases and monitor performance to ensure achievement of the goals. DOD needs to provide guidance to the joint bases directing them to identify opportunities for savings and efficiencies and demonstrate progress in achieving the savings and efficiencies envisioned in adopting joint basing.

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  • portrait of Brian J. Lepore
    • Brian J. Lepore
    • Director, Defense Capabilities and Management
    • leporeb@gao.gov
    • (202) 512-4523