Defense Infrastructure:

Changes in Funding Priorities and Management Processes Needed to Improve Condition and Reduce Costs of Guard and Reserve Facilities

GAO-03-516: Published: May 15, 2003. Publicly Released: May 15, 2003.

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GAO prepared this report under its basic legislative responsibilities. Its objectives are threefold: (1) to examine the reserve forces' trends for facility maintenance and construction funding and the condition of their facilities, (2) to assess the likelihood that they will meet the Department of Defense's (DOD) objectives for improving facilities, and (3) to discuss the challenges in implementing two potential cost saving initiatives--joint construction projects and real property exchanges.

Funding for maintaining and constructing reserve component facilities has increased. Obligations for facility maintenance rose by about 70 percent from fiscal year 1998 to fiscal year 2002 and annual appropriations for military construction rose 49 percent from fiscal year 1998 to fiscal year 2003. Despite the increases, reserve components rated the condition of 64 percent of their facilities as inadequate, and GAO's visits to installations document the deteriorated condition of facilities. While GAO did not see any facilities that were not in use, the upcoming base realignment and closure round is expected to include an evaluation of reserve component facilities. The reserve components are unlikely to meet all of DOD's three objectives for improving facilities: achieve 100 percent sustainment funding starting in fiscal year 2004; reach a 67-year average recapitalization rate by fiscal year 2007; and improve the condition of facilities so that deficiencies have only a limited effect on mission performance by fiscal year 2010. Furthermore, some officials acknowledged that even when their components have expressed intent to meet DOD's objectives, their funding plans might include unrealistically high rates of increases during the out-years when compared to previous funding trends and against other defense priorities. The reserve components face challenges in implementing two potential cost saving initiatives--joint construction projects and real property exchanges. Reserve component officials said that funding joint construction projects--where two or more components share space requirements and build one facility--is difficult to coordinate. In addition, while Congress has provided the components with authority to exchange real property with other public or private entities in return for the construction of new facilities of equal or greater value--the Office of the Secretary of Defense has not provided overall direction for the program, thus risking the exchange of property that may be needed by other DOD components.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: On the basis of a particular concern, Congress has directed DOD to fund joint use military construction projects. For example, in the Fiscal Year 2007 National Defense Authorization Act, Congress concluded that a joint facility to support both the National Museum of the Marine Corps and the National Museum of the United States Army could yield significant efficiencies over separate facilities given the close proximity of Fort Belvoir to Quantico Marine Corps Base, Virginia. As such, Congress urged the Secretary of the Navy and the Secretary of the Army to consider joint construction of a single museum support facility in a future year. Also, the Senate Report accompanying the Fiscal Year 2007 Military Construction Bill identified several joint construction projects for the BRAC program.

    Matter: To further encourage the use and funding of joint construction projects, Congress may want to consider designating a portion of its military construction appropriations for DOD's newly established budget structure to fund joint use military construction projects.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In January 2003 DOD completed the fiscal year (FY) 2004 program-budget review. At that time, OSD directed the services and Defense agencies to provide adequate funding to achieve a sustainment rate of 93 percent in FY 2004, with a plan to achieve 100 percent sustainment in FY 2006. In addition, the department plans on funding that achieves a 67-year recapitalization rate DOD-wide by FY 2008. To achieve 67-year recapitalization for the reserve components, the department has programmed significant funding in the out years to buy back their facility deficit and to improve the quality of their existing facilities.

    Recommendation: The Secretary of Defense should direct the secretaries of the military departments, in consultation with the respective reserve components, to periodically review and reevaluate the priorities given to sustaining and improving the condition of reserve components' facilities if the reserve components are expected to meet DOD's objectives for improving facilities.

    Agency Affected: Department of Defense: Department of the Air Force

  2. Status: Closed - Implemented

    Comments: In January 2003 DOD completed the fiscal year (FY) 2004 program-budget review. At that time, OSD directed the services and Defense agencies to provide adequate funding to achieve a sustainment rate of 93 percent in FY 2004, with a plan to achieve 100 percent sustainment in FY 2006. In addition, the department plans on funding that achieves a 67-year recapitalization rate DOD-wide by FY 2008. To achieve 67-year recapitalization for the reserve components, according to DOD officials, the department has programmed funding in the out years to buy back their facility deficit and to improve the quality of their existing facilities.

    Recommendation: The Secretary of Defense should direct the secretaries of the military departments, in consultation with the respective reserve components, to periodically review and reevaluate the priorities given to sustaining and improving the condition of reserve components' facilities if the reserve components are expected to meet DOD's objectives for improving facilities.

    Agency Affected: Department of Defense: Department of the Navy

  3. Status: Closed - Implemented

    Comments: In January 2003 DOD completed the fiscal year (FY) 2004 program-budget review. At that time, OSD directed the services and Defense agencies to provide adequate funding to achieve a sustainment rate of 93 percent in FY 2004, with a plan to achieve 100 percent sustainment in FY 2006. In addition, the department plans on funding that achieves a 67-year recapitalization rate DOD-wide by FY 2008. To achieve 67-year recapitalization for the reserve components, according to DOD officials, the department has programmed significant funding in the out years to buy back their facility deficit and to improve the quality of their existing facilities.

    Recommendation: The Secretary of Defense should direct the secretaries of the military departments, in consultation with the respective reserve components, to periodically review and reevaluate the priorities given to sustaining and improving the condition of reserve components' facilities if the reserve components are expected to meet DOD's objectives for improving facilities.

    Agency Affected: Department of Defense: Department of the Army

  4. Status: Closed - Implemented

    Comments: DOD concurred with this recommendation and stated that it would continue to develop and improve its processes to better identify, coordinate, and fund joint construction projects. A key element of these processes is DOD's Joint Service Reserve Component Facility Board (JSRCFB), whose mission is to maximize usage of Reserve Component land, facilities, and installations by promulgating joint use and construction. One of the Board's stated goals is to review and validate all military construction requirements and identify "potential" joint construction projects. In addition, the Army and Navy issued revised guidance in 2006 and 2005, respectively, to facilitate joint construction of new facilities by two or more reserve and active service components.

    Recommendation: The Secretary of Defense should direct the Deputy Under Secretary of Defense for Installations and Environment, in consultation with the reserve components and the active services, to facilitate the coordination among the reserve components and their service counterparts for programming identified military joint construction projects in their future budgets.

    Agency Affected: Department of Defense: Department of the Army

  5. Status: Closed - Implemented

    Comments: In comments on our report, DOD stated that it would continue to develop and improve its processes to better identify, coordinate, and fund joint construction projects. A key element of these processes is DOD's Joint Service Reserve Component Facility Board, whose mission is to maximize usage of military land, facilities, and installations by promulgating joint use and construction. One of the board's stated goals is to identify "potential" joint construction projects. In addition, the Army and Navy issued revised guidance in 2006 and 2005, respectively, to facilitate joint construction of new facilities by two or more reserve and active service components.

    Recommendation: The Secretary of Defense should direct the Deputy Under Secretary of Defense for Installations and Environment, in consultation with the reserve components and the active services, to examine ways to employ the budget structure DOD established for funding high priority joint construction projects.

    Agency Affected: Department of Defense: Department of the Navy

  6. Status: Closed - Implemented

    Comments: In comments on a draft of this report DOD concurred with this recommendation and stated that it would continue to develop and improve its processes for real property exchanges. In April 2003, the Assistant Secretary of Defense for Reserve Affairs (ASD/RA) issued a policy memorandum requiring the military services to coordinate real property exchanges.

    Recommendation: The Secretary of Defense should direct the Deputy Under Secretary of Defense for Installations and Environment, in consultation with the reserve components and the active services, to establish a method to ensure that real property to be exchanged is not needed by the other reserve components or the active services or for future missions.

    Agency Affected: Department of Defense

  7. Status: Closed - Implemented

    Comments: Both DOD Instruction 1225.8 and the Secretary of Defense's policy provide for the "purchase or annual lease price exceeds $1 million." The Secretary of Defense's policy guidance "Land Acquisition and Leasing of Office Space in the United States," dated November 17, 2002, provides the review process on real estate acquisition, concerning real property that exceed $1 million and/or 1,000 acres. This guidance is also reinforced in DOD Instruction 4165.71, dated January 6, 2005, which states that such proposals must be approved by the Under Secretary of Defense for Acquisition, Technology, and Logistics prior to any public announcement and request for legislation.

    Recommendation: The Secretary of Defense should direct the Deputy Under Secretary of Defense for Installations and Environment, in consultation with the reserve components and the active services, to clarify DOD's guidance requiring approval of exchanges when the real property is valued at more than $1 million.

    Agency Affected: Department of Defense

  8. Status: Closed - Implemented

    Comments: In comments on our report, DOD stated that it would continue to develop and improve its processes to better identify, coordinate, and fund joint construction projects. A key element of these processes is DOD's Joint Service Reserve Component Facility Board, whose mission is to maximize usage of military land, facilities, and installations by promulgating joint use and construction. One of the board's stated goals is to identify "potential" joint construction projects. In addition, the Army and Navy issued revised guidance in 2006 and 2005, respectively, to facilitate joint construction of new facilities by two or more reserve and active service components.

    Recommendation: The Secretary of Defense should direct the Office of the Assistant Secretary of Defense for Reserve Affairs to monitor the Army Reserve's experience with implementing the authority to conduct real property exchanges and assist it in capturing lessons learned for the benefit of other reserve components, especially as the Army Reserve expands its use of a more competitive process.

    Agency Affected: Department of Defense

 

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