Defense Infrastructure:

Long-term Challenges in Managing the Military Construction Program

GAO-04-288: Published: Feb 24, 2004. Publicly Released: Feb 24, 2004.

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The Department of Defense's (DOD) military construction program provides funding for construction projects in the United States and overseas, and funds most base realignment and closure costs. Recent Office of the Secretary of Defense (OSD) estimates indicate that it would cost as much as $164 billion to improve facilities to a level that would meet the department's goals. GAO was asked to report on the (1) steps OSD has taken to enhance program management, (2) process of prioritizing and resourcing military construction projects, and (3) advantages and disadvantages of increasing the current funding thresholds for constructing and repairing facilities.

Recognizing the need to halt the degradation of defense facilities, OSD took a number of steps to enhance the management of the military construction program by providing guidance through a facilities strategic plan and by standardizing practices through selected management tools. However, some of these tools are not completed, and others have weaknesses that further hinder efforts to improve facilities. OSD's strategic plan outlines long-term goals but lacks comprehensive information on the actions, time frames, responsibilities, and resources that are needed to meet DOD's vision for facilities. OSD has also established key financial objectives for the services to improve the condition of their facilities. Given competing funding pressures and that the process of realigning and closing bases to reduce excess infrastructure will take several years to accomplish, improvements in facilities will likely require much longer than suggested by OSD's objectives. DOD's process of prioritizing and resourcing military construction projects provides an important means of improving whole categories of facilities but can repeatedly postpone addressing important projects outside of those categories. If left unchecked without periodic reassessments, the process can continually defer projects important to installations' ability to accomplish their mission and improve servicemembers' quality of life. As much as 77 percent of military construction funds appropriated in any one year are distributed among specific areas of emphasis, such as housing, leaving a significantly smaller portion that is insufficient to repair the remaining categories of facilities. Some projects are not submitted for funding consideration because they do not fall within the specific areas of emphasis and thus are perceived as being highly unlikely to receive funding. Also, some high-cost priority projects are postponed for future years' funding because their addition would exceed the services' funding level established for that year. Congress may add projects during the appropriations process, addressing what it has considered as inadequate requests for funding. These projects may require adjustments in DOD's plans since they may not always align with DOD's short-term priorities. Increasing current funding thresholds for unspecified minor military construction projects would give DOD installations more flexibility, but might need to be balanced against reducing congressional oversight. Construction costs have increased as much as 41 percent since the thresholds were last adjusted upward. As a result, fewer projects that are smaller in scope can now be completed using these types of funds. Additionally, installation officials often scale back the scope of a project in order to meet the current thresholds, compromising design characteristics in the process. However, if the thresholds were increased, Congress could lose oversight of the additional projects funded under these thresholds because such construction projects are not specifically identified in the President's budget submissions. Yet, there are alternatives, such as coupling the increased thresholds with periodic reports on the usage of those funds.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: In its report accompanying the National Defense Authorization Act of Fiscal Year 2007 (S. Rep. No. 109-254), the Senate Committee on Armed Services recommended a provision that would raise the threshold for unspecified minor military construction projects from $1.5 million to $2.5 million. It also recommended raising the threshold for unspecified minor military construction projects intended solely to correct a deficiency that is life-threatening, health-threatening, or safety-threatening from $3 million to $4 million.

    Matter: Congress may wish to consider the advantages and disadvantages of increasing the military construction funding thresholds and operation and maintenance funding thresholds for unspecified minor military construction projects.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In comments on a draft of this report, DOD partially concurred and indicated that actions were being taken to address elements of our recommendation. Since the report, the military services have periodically reassessed and revised their military construction priorities to ensure that proposed military construction projects address both potential operational and quality-of-life impacts.

    Recommendation: To help strengthen OSD's management and improve the condition of DOD facilities, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology, and Logistics to develop a mechanism for periodically reassessing military construction priorities for facility categories that fall outside the department's specific areas of emphasis to ensure that the risk of delaying proposed military construction projects with potential operational and quality of life impacts are being given appropriate consideration.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: In comments on a draft of this report, DOD partially concurred with GAO's recommendation and indicated that some actions were being taken to address the recommendation. Recently, DOD issued it new Defense Installations Strategic Plan which extended the timeframes for meeting its facilities investment goals.

    Recommendation: To help strengthen OSD's management and improve the condition of DOD facilities, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology, and Logistics to reevaluate the time frames for completing the three key objectives to reflect that there are competing funding priorities and that the process of realigning and closing domestic bases to reduce DOD's excess infrastructure and realigning overseas facilities will take several years to accomplish and could affect meeting facilities' investment goals.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: Since our report, the Office of the Under Secretary of Defense for Installations and Environment has completed several models to manage and fund DOD facilities and installations and plan construction projects and costs. For example, the office implemented its Facilities Sustainment Model (FSM) to provide a more consistent approach to project annual costs for maintenance and repair activities necessary to keep a typical inventory of facilities in good working order over a 50-year service life. In addition in 2006, the office started using its Facilities Modernization Model (FMM), which provides a uniform mechanism for tracking investments in DOD's recapitalization programs that are financed primarily with the military services' and larger defense agencies' military construction funds. In addition, the office issued an update of its Defense Facilities Strategic Plan in 2005.

    Recommendation: To help strengthen OSD's management and improve the condition of DOD facilities, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology, and Logistics to complete the department's management tools, including the revision of defense facilities strategic plan, to provide a more consistent approach to managing facilities and planning construction projects and costs.

    Agency Affected: Department of Defense

 

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