Defense Infrastructure:

Documentation Lacking to Fully Support How DOD Determined Specifications for the Landstuhl Replacement Medical Center

GAO-12-622: Published: May 25, 2012. Publicly Released: May 25, 2012.

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Brian J. Lepore
(202) 512-4523
leporeb@gao.gov

 

Debra A. Draper
(202) 512-7114
draperd@gao.gov

 

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What GAO Found

Department of Defense (DOD) officials considered current beneficiary population data, contingency operations, and most of the expected changes in troop strength when planning for the replacement medical center. However, recently announced posture changes in January 2012 have yet to be assessed for their impact on the facility. DOD estimates that the replacement medical center will provide health care for nearly 250,000 beneficiaries. A majority of those who are expected to receive health care from the center come from within a 55-mile radius of the facility. DOD officials told us that because the replacement medical center was designed for peacetime operations—with the capacity to expand to meet the needs of contingency operations—reductions in ongoing contingency operations in Afghanistan would not have an impact on facility requirements. At the time of this review, DOD officials said they were in the process of assessing proposed changes in posture to better understand their possible impact on the sizing of the replacement medical center.

DOD officials incorporated patient quality of care standards as well as environmentally friendly design elements in determining facility requirements for the replacement medical center. DOD also determined the size of the facility based on its projected patient workload. Internal control standards require the creation and maintenance of adequate documentation, which should be clear and readily available for examination to inform decision making. However, GAO’s review of the documentation DOD provided in support of its facility requirements showed (1) inconsistencies in how DOD applied projected patient workload data and planning criteria to determine the appropriate size for individual medical departments, (2) some areas where the documentation did not clearly demonstrate how planners applied criteria to generate requirements, and (3) calculation errors throughout. Without clear documentation of key analyses—including information on how adjustments to facility requirements were made—and without correct calculations, stakeholders and decision makers lack reasonable assurances that the replacement medical center will be appropriately sized to meet the needs of the expected beneficiary population in Europe.

DOD’s process for developing the approximately $1.2 billion cost estimate for the replacement medical center was substantially consistent with many cost estimating best practices, such as cross-checking major cost elements to confirm similar results. However, DOD minimally documented the data sources, calculations, and estimating methodologies it used in developing the cost estimate. Additionally, DOD anticipates that the new facility will become the hub of a larger medical-services-related campus, for which neither cost estimates nor time frames have yet been developed. Without a cost estimate for the facility that includes detailed documentation, DOD cannot fully demonstrate that the proposed replacement medical center will provide adequate health care capacity at the current estimated cost. Further, DOD and Congress may not have the information they need to make fully informed decisions about the facility.

Why GAO Did This Study

Landstuhl Regional Medical Center (LRMC) is DOD’s only tertiary medical center in Europe that provides specialized care for servicemembers, retirees, and their dependents. Wounded servicemembers requiring critical care are medically evacuated from overseas operations to the 86th Medical Group clinic at Ramstein Air Base to receive stabilization care before being transported to LRMC for intensive care. According to DOD, both facilities were constructed in the 1950s and are undersized to meet current and projected workload requirements. DOD plans to consolidate both facilities into a single medical center at an estimated cost of $1.2 billion. In this report, GAO (1) describes how DOD considered changes in posture and the beneficiary population when developing facility requirements, (2) assesses DOD’s process for determining facility requirements, and (3) reviews DOD’s process to develop the facility’s cost estimate. GAO examined posture planning documentation, beneficiary demographic data, plans for the replacement medical center, and relevant DOD guidance, as well as interviewed relevant DOD officials.

What GAO Recommends

GAO recommends that DOD provide clear and thorough documentation of how it determined the facility’s size and cost estimate, correct any calculation errors, and update its cost estimate to reflect these corrections and recent posture changes. In commenting on a draft of this report, DOD concurred with GAO’s recommendations and stated that it has conducted a reassessment of the project that will be released once approved by the Secretary of Defense.

For more information, contact James R. McTigue, Jr. at (202) 512-7968 or mctiguej@gao.gov or Debra A. Draper at (202) 512-7114 or draperd@gao.gov.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To ensure that the replacement medical center is appropriately sized to meet the health care needs of beneficiaries in a cost-effective manner, as part of the facility's recertification process, the Secretary of Defense should direct the Assistant Secretary of Defense (Health Affairs) to provide sufficient and clear documentation on how medical planners applied DOD criteria to determine the facility's requirements, including how and why medical planners made adjustments to the criteria.

    Agency Affected: Department of Defense

    Status: Open

    Comments: DoD acknowledged that there were some deficiencies in the documentation of the HCRA, including deviations from published criteria. While the planning team may have had legitimate reasons for making adjustments, assumptions and data used to draw conclusions about facility sizing were not always clearly documented. DoD stated that it had recently conducted a reassessment of the original $1.2 billion project submitted in the FY12 President's Budget request. This new analysis was conducted in a manner separate and independent of the analysis reviewed by GAO. The Department believes this new analysis responds to GAO's recommendations by utilizing the most current data including recently announced force structure changes and by providing a documented audit trail of how the scope, size, and costs were developed. Specifically DOD stated that the assumptions that serve as the basis for sizing three courses of action (COA) are clearly stated. Data trails are explicit and when there are deviations from existing criteria, a rationale is provided. At the time of our review DOD had not yet made the new analyses available for our review. Until this analyis and supporting documents are provided this recommendation remains open. 7/19/12: Analysis still in coordination and not available.

    Recommendation: To ensure that the replacement medical center is appropriately sized to meet the health care needs of beneficiaries in a cost-effective manner, as part of the facility's recertification process, the Secretary of Defense should direct the Assistant Secretary of Defense (Health Affairs) to correct any calculation errors and show what impact, if any, these errors had on the sizing of the facility.

    Agency Affected: Department of Defense

    Status: Open

    Comments: DoD acknowledges that the HCRA contained some calculation errors. DOD stated in its Agency comments that all calculations Had since been re-computed as part of the recently completed re-assessment and efforts had been made to ensure their accuracy and consistency. DoD stated that it had recently conducted a reassessment of the original $1.2 billion project submitted in the FY12 President's Budget request. This new analysis was conducted in a manner separate and independent of the analysis reviewed by GAO. The Department believes this new analysis responds to GAO's recommendations by utilizing the most current data including recently announced force structure changes and by providing a documented audit trail of how the scope, size, and costs were developed. Accordingly, DOD believed that the likelihood of similar calculation errors in the re-assessment is extremely low. Sizing of the COAs in the re-assessment are based on a series of calculations that can be readily duplicated and confirmed. At the time of our review DOD had not yet made the new analyses available for our review. Until this analyis and supporting documents are provided this recommendation remains open. 7/19/12: Analysis still in coordination and not available.

    Recommendation: In light of recently announced posture changes and potential adjustments that may need to be made in facility requirements based on correcting identified calculation errors in the original documentation, the Secretary of Defense should direct the Assistant Secretary of Defense (Health Affairs) to revise the cost estimate for the center, incorporating the best practices outlined in the GAO Cost Estimating and Assessment Guide to (1) reflect these potential posture changes, (2) update it with the revised calculations as part of the recertification process, and (3) more thoroughly document the data, assumptions, calculations, and methodology used to develop specific cost elements.

    Agency Affected: Department of Defense

    Status: Open

    Comments: The facility acquisition and life cycle costs have been revised to reflect force structure changes known as of 1 May 2012. Sizing is based on revised calculations that accurately reflect projected population and workload. The impact of these changes on space requirements have been addressed and reflected in the COAs. Data assumptions, calculations, and methodology have been documented in a manner more consistent with the GAO Cost Estimating and Assessment Guide. These changes are reflected DOD's reassessment of the original $1.2 billion project submitted in the FY12 President's Budget request. This new analysis was conducted in a manner separate and independent of the analysis reviewed by GAO. The Department believes this new analysis responds to GAO's recommendations by utilizing the most current data including recently announced force structure changes and by providing a documented audit trail of how the scope, size, and costs were developed. At the time of our review DOD had not yet made the new analyses available for our review. Until this analyis and supporting documents are provided this recommendation remains open. 7/19/12: Analysis still in coordination and not available.

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