Further Analysis Needed to Identify Guam's Public Infrastructure Requirements and Costs for DOD's Realignment Plan
GAO-14-82: Published: Dec 17, 2013. Publicly Released: Dec 17, 2013.
What GAO Found
Some investments have been made to improve Guam's public infrastructure in recent years, but many deficiencies and regulatory compliance issues continue to exist. The reliability, capacity, and age of much of the public infrastructure--especially the island's utilities--indicate a need for additional upgrades to be able to meet current and future demands related to the realignment. Further, some infrastructure sectors, such as water and wastewater, face issues complying with federal regulations. Other sectors, such as the fire and police departments, are experiencing staffing and other shortages that affect their ability to serve Guam's current population.
The majority of the Department of Defense's (DOD) support to defense-affected communities has been historically to provide technical assistance and support community planning and coordination efforts. However, in a few instances DOD has provided public infrastructure funding to communities where proposed basing decisions would generate significant public infrastructure needs that the communities could not support. Generally, DOD's position is that communities should be largely responsible for obtaining funding for public infrastructure requirements related to DOD basing decisions. This funding can come from other federal programs or communities can raise the funds on their own. In the case of Guam, however, some challenges related to limited government revenues and debt capacity has been identified as affecting its ability to do so.
Despite the reduction of Marines and dependents relocating to Guam, DOD has not yet revalidated the public infrastructure requirements based on the revised realignment plan or differentiated between requirements needed to address long-standing conditions and those related to the realignment. This revalidation is not expected to be completed until 2015. Even so, DOD has requested over $400 million for Guam public infrastructure projects in its budget requests since fiscal year 2012. It is unclear if all of these projects are necessary to the same extent given the reduction in forces. For example, if DOD decides to locate the Marines on the naval base that handles all of its own water/wastewater needs, public water/wastewater improvements would not be needed to support the Marines. Congress has placed limitations on the use of funding, in part until certain information is provided related to the realignment. Without revalidating and differentiating between requirements, DOD cannot clearly identify what Guam public infrastructure requirements are needed to directly support the realignment.
The $1.3 billion cost estimate for improvements to Guam's water and wastewater systems that DOD has used to support budget requests for fiscal years 2013 and 2014 is not reliable. GAO assessed that the estimate minimally met the best practice criteria for three of the four key characteristics--comprehensive, well documented, and accurate--for a reliable cost estimate as identified in the GAO Cost Estimating and Assessment Guide and did not satisfy best practice criteria for the fourth characteristic of being credible. GAO determined that officials adhered to some best practices for a reliable estimate but did not, for example,
include all relevant costs,
sufficiently explain why certain assumptions and adjustments were made,
incorporate any actual costs or inflation adjustments, or
adequately address risk and uncertainty.
Why GAO Did This Study
In 2006, the United States and Japan planned to relocate 17,600 U.S. Marines and dependents from Japan to Guam. However, in 2012, representatives from the countries developed a revised plan under which 6,300 Marines and dependents would relocate to Guam.
The Conference Report accompanying the National Defense Authorization Act for Fiscal Year 2013 mandated that GAO evaluate what Guam public infrastructure projects are needed to support DOD's plans. This report (1) describes Guam's public infrastructure; (2) describes the types of assistance DOD generally provides and other funding sources that have been used to fund Guam projects; (3) assesses DOD's efforts to revalidate Guam projects under the revised realignment plan; and (4) assesses the cost estimate for Guam's public water and wastewater infrastructure improvements used to support DOD budget requests. To address these objectives, GAO reviewed policies, technical studies, and budget requests. GAO also interviewed DOD and other relevant federal officials as well as visited Guam and met with Guam officials.
What GAO Recommends
GAO recommends that DOD take actions to revalidate public infrastructure needs on Guam based on the revised realignment size and ensure best practices are used to develop future cost estimates. DOD partially concurred with GAO's recommendations and identified future plans. However, GAO believes further opportunities exist as discussed in the report.
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Recommendations for Executive Action
Status: Closed - Implemented
Comments: DOD partially concurred with our first recommendation to revalidate the need and scope of Guam public infrastructure projects included in DOD budget requests. DOD concurred that the need and scope of additional, realignment-related Guam public infrastructure projects will be revalidated as necessary based on the results of the analysis in the ongoing supplemental Environmental Impact Statement(EIS). A revised EIS was issued in July 2015. It provides revised public infrastructure requirements to support the reduced number of forces relocating to Guam.
Recommendation: To provide DOD and Congress with sufficient information regarding the requirements and costs associated with DOD's current Guam realignment plans and the public infrastructure necessary to support that realignment, the Secretary of Defense should direct the Department of the Navy's Joint Guam Program Office (JGPO) in concert with the Office of Economic Adjustment (OEA) revalidate the need and scope of Guam public infrastructure projects included in DOD budget requests based on the reduced number of Marines and dependents DOD intends to relocate to Guam.
Agency Affected: Department of Defense
Comments: DOD stated that it partially concurred with our second recommendation to conduct a comprehensive analysis across all applicable public infrastructure sectors to determine what infrastructure requirements and costs are needed to address long-standing deficiencies in Guam's infrastructure and which are needed to directly support the realignment. DOD noted that a determination of realignment-related infrastructure requirements and costs is an anticipated outcome of the supplemental EIS. DOD's comments, however, do not address whether it plans to clearly differentiate between those infrastructure requirements and costs needed to address existing deficiencies in Guam's infrastructure and those needed to directly support the additional capacity associated with the realignment, as we specifically recommended. As of July 15, 2014 no further action has yet been taken by DOD. 12/14: OEA and JGPO are collaborating to revalidate the need and scope of all Guam public infrastructure projects and to analyze public infrastructure sectors for requirements and additional capacity necessary to support the realignment. This revalidation is occurring as a part of the Economic Adjustment Committee's (EAC) response to Section 2822 of the FY 2014 National Defense Authorization Act that required the EAC to (among other things) convene, "... to consider assistance, including assistance to support public infrastructure requirements, necessary to support the preferred alternative for the relocation of Marine Corps forces to Guam." A report is required to be completed by the EAC and submitted to the congressional defense committees, describing "...the results of the Economic Adjustment Committee deliberations ..." and containing "... an implementation plan to support the preferred alternative for the relocation of Marine Corps forces to Guam."
Recommendation: To provide DOD and Congress with sufficient information regarding the requirements and costs associated with DOD's current Guam realignment plans and the public infrastructure necessary to support that realignment, the Secretary of Defense should direct the Department of the Navy's JGPO in concert with the OEA to conduct a comprehensive analysis across all applicable public infrastructure sectors to determine what infrastructure requirements and costs are needed to address existing deficiencies in Guam's infrastructure and what requirements and costs are needed to directly support the additional capacity needed to support the realignment.
Agency Affected: Department of Defense
Comments: DOD partially concurred with our third recommendation to fully incorporate the best practices identified by GAO for developing high quality cost estimates, as future cost estimates for Guam public infrastructure projects are developed. In response to this recommendation, DOD stated that future realignment-related cost estimates and budget submissions will be developed in accordance with DOD's Financial Management Regulation and that final engineering cost estimates for specific projects will be developed in the normal course of executing the fiscal year 2014 program. As of July 15, 2014, no further action has yet been taken by DOD. 12/14: OEA and JGPO are collaborating with EAC support to develop refined cost estimates for all Guam public infrastructure projects.These updated and refined cost estimates are attempting to incorporate GAO best practices for the development of high quality cost estimates. Due to restrictions on the use of monies appropriated for Guam infrastructure, the Department's ability to produce final engineering cost estimates is limited. Further detailed and final engineering cost estimates for specific projects will be completed following submission of the required report and lifting of Congressional restrictions. The "implementation plan" referenced in the NDAA language is synchronized with the content and schedule for the release of the SEIS and will be finalized prior to the release of the SEIS Record of Decision in Spring 2015.
Recommendation: To provide DOD and Congress with sufficient information regarding the requirements and costs associated with DOD's current Guam realignment plans and the public infrastructure necessary to support that realignment, the Secretary of Defense should direct the Department of the Navy's JGPO in concert with the OEA to, as future cost estimates for Guam public infrastructure projects are developed, fully incorporate the best practices identified by GAO for developing high quality cost estimates.
Agency Affected: Department of Defense