This is the accessible text file for GAO report number GAO-14-280R entitled 'Defense Infrastructure: In-Kind Projects Initiated during Fiscal Years 2011 and 2012' which was released on April 9, 2014. This text file was formatted by the U.S. Government Accountability Office (GAO) to be accessible to users with visual impairments, as part of a longer term project to improve GAO products' accessibility. Every attempt has been made to maintain the structural and data integrity of the original printed product. Accessibility features, such as text descriptions of tables, consecutively numbered footnotes placed at the end of the file, and the text of agency comment letters, are provided but may not exactly duplicate the presentation or format of the printed version. The portable document format (PDF) file is an exact electronic replica of the printed version. We welcome your feedback. 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Washington, DC 20548: April 9, 2014: Congressional Committees: Defense Infrastructure: In-Kind Projects Initiated during Fiscal Years 2011 and 2012: The Department of Defense (DOD) has, for over 20 years, accepted from host nations and domestic third parties facilities constructed or renovated either as host-nation support, or in exchange for goods, services, real property, or an interest in real property that the department provides to third parties. DOD uses these in-kind construction or renovation projects as alternatives to using appropriated funds to help manage a global real-property portfolio with more than 555,000 facilities worldwide and with a replacement value of nearly $850 billion. The National Defense Authorization Act for Fiscal Year 2013 mandates GAO to report on the construction or renovation of DOD facilities with in-kind payments, covering in-kind projects begun during the preceding 2 years.[Footnote 1] To respond to this mandate, we examined the processes DOD used to select in-kind construction and renovation projects in Asia (Japan and the Republic of Korea) and domestically, and provided a listing of each facility constructed or renovated in-kind for DOD (including those in Germany), the value in U.S. dollars of that construction or renovation, the source of the in-kind project, the agreement pursuant to which the construction or renovation was performed, and a description of the purpose and need for the construction or renovation. Our review expands upon the preliminary information we provided to you on September 30, 2013, about overseas and domestic in-kind construction and renovation projects initiated during fiscal years 2011 and 2012. For our review, we defined "in-kind construction and renovation projects" as those resulting from certain host-nation support programs or from transactions (whether domestic or overseas) in which DOD provides goods, services, real property, or an interest in real property (including, but not limited to, a leasehold or easement) in exchange for compensation, and in which any part of that compensation is provided in the form of construction or renovation services. This definition of "in-kind construction and renovation projects" is broader than the concept of in-kind "payments" for residual value or received in lieu of cash compensation as part of a domestic agreement with a third party because the definition includes host-nation support for installation facilities overseas. Voluntary contributions made by a host nation for the purpose of defraying costs to station, maintain, and train U.S. military forces in its country do not constitute a payment or obligate a host nation to make payments to the United States. Host-nation support provided in the form of direct construction rather than a cash contribution is viewed by DOD as one of three basic types of in-kind construction.[Footnote 2] We excluded from our definition of "in kind construction or renovation projects" gifts, sustainment projects (e.g., regularly scheduled maintenance and inspections), and cash sales or rent used to finance construction or renovation. We defined "initiated" as that point at which the party responsible for completing the in-kind construction or renovation project received an official notice that allowed it to proceed with the project. For the purposes of this review we confirmed that knowledgeable officials in the Office of the Deputy Under Secretary of Defense for Installations and Environment agreed with our definitions. To examine the processes DOD used to select in-kind projects in Asia and domestically, we identified and reviewed bilateral agreements with host nations and statutory authorities for domestic land use, along with guidance, policies, and relevant documents related to processes in place for selecting in-kind payment projects. We also interviewed officials at the Office of the Secretary of Defense, U.S. Pacific Command, U.S. Forces Korea, U.S. Forces Japan, and the military services. We did not review processes related to residual value payments for the return of facilities provided by the United States to the government of Germany because the processes for such compensation were recently reviewed by the DOD Inspector General and Congress. [Footnote 3] For our second objective we compiled information and requested data on in-kind construction and renovation projects for fiscal years 2011 and 2012, their value in U.S. dollars, the source of the in-kind project, the agreement or statutory authority, and their purpose and need from DOD components--U.S. Pacific Command; U.S. European Command; the Departments of the Army, Navy (Marine Corps), and Air Force; and the TRICARE Management Activity.[Footnote 4] We conducted a data-reliability assessment of the data that each DOD component submitted by requesting that the component certify that the lists of projects provided to us were accurate and complete and that the component include all projects initiated during the specified dates. The Office of the Deputy Under Secretary of Defense for Installations and Environment also reviewed the data submitted by the components for consistency and to ensure that the data were for projects that we considered "in-kind projects." We provided each component with an opportunity for a final review of the data we compiled. We found that the data provided were sufficiently reliable for the purposes of this assessment. We conducted this performance audit from January 2013 to April 2014, in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. Background: Accepting infrastructure improvements through in-kind construction and renovation projects allows DOD to fulfill some of its requirements for infrastructure overseas and domestically without the use of appropriated funds. In Asia, in-kind construction and renovation projects are completed using host-nation resources provided through the host nation's budget process. Depending upon whether projects are initiated overseas or domestically, the selection of in-kind construction and renovation projects are subject to specific bilateral agreements and statutory authorities. Bilateral agreements include efforts to relocate U.S. forces and consolidate infrastructure being used by DOD. There are also other agreements between the United States and host nations to defray some of the costs of stationing U.S. forces overseas, and to support installations that will continue to be used by the United States--known as enduring installations--through the use of host-nation resources. Real property and improvements to infrastructure contributed by host nations in Asia do not result in an obligation on the part of the host nation to provide residual value payments (as it does in Germany), and there is generally no obligation for the United States to return real property or facilities in their original condition. Domestically, the Departments of the Army, Navy, and Air Force have statutory authority to lease or issue an easement on underutilized real property under their control or jurisdiction in exchange for in-kind construction or renovation projects. See enclosure I for more-detailed information about the specific bilateral agreements and statutory authorities related to in-kind overseas and domestic construction and renovation projects. Results in Brief: In summary, DOD's processes for selecting in-kind projects in Asia vary by country and by whether the project is intended to support force-structure initiatives or enduring installations, although these efforts are not mutually exclusive; domestically, DOD's processes for selecting in-kind projects vary by military service and by statutory authority. In Asia, the selection of in-kind projects to support initiatives for the relocation of U.S. troops within Japan and the Republic of Korea generally results from a schedule-driven process based on resources and infrastructure made available by the host nation to fulfill initiatives agreed to in prior years with target dates for completion, and input from affected military bases. The selection of in-kind projects to support enduring installations is characterized by priority-based processes with input from installations and unit commanders. All in-kind projects to support U.S. forces in Asia are the result of host-nation support as agreed to bilaterally, with the exception of facilities provided through the Japan Facilities Improvement Program, which is a voluntary effort on the part of the government of Japan. All DOD facility planning and project selection at enduring locations is based on military and operational requirements, independent of location. When compared with the project-selection processes in Japan, DOD has more ability to prioritize and select projects in the Republic of Korea. Domestically, the services select projects based on military and operational need regardless of location, but the processes followed vary somewhat depending on the authorizing statute for the in-kind projects--for example, the authorities for enhanced-use leases, exchanges, or easements. For more-detailed information on the processes DOD uses to select in-kind projects in Asia and in the continental United States, see enclosure II. During fiscal years 2011 and 2012, DOD initiated 107 in-kind construction and renovation projects overseas (in Japan, the Republic of Korea, and Germany) and in the continental United States (see enclosure III and enclosure IV for listings--for overseas and domestic projects, respectively--of each facility constructed or renovated for DOD as payment in-kind, the value in U.S. dollars of that construction or renovation, the source of the in-kind payment, the agreement pursuant to which the payment was made, and a description of the purpose and need for the construction or renovation). * In Asia, DOD initiated 68 construction and renovation projects, and DOD officials provided estimated values totaling about $1.3 billion for 44 of those projects. DOD initiated 38 in-kind projects in Japan, and DOD independent budget estimates for 14 of the 38 projects indicate that the projects are valued at $257 million; however, at the time of our study, there were no DOD planning estimates available for the remaining 24 projects. Under the bilateral agreements between the United States and Japan, Japan is not obligated to disclose the value of these projects. DOD initiated 30 projects in the Republic of Korea, and DOD officials estimate that these projects were valued at about $1 billion. Most of the in-kind projects initiated in Japan and the Republic of Korea were for operations and training facilities and for housing and community facilities. The remaining projects were for utility and ground improvements and for maintenance and production, supply, administrative, and hospital and medical facilities. * In Germany, DOD initiated 3 in-kind projects and funded them with residual value payments from the government of Germany that DOD officials estimated were valued at about $11.3 million. One project was for operation and training, and the other two projects were for housing and community facilities. * Domestically, the military services--the Army, Navy, and Air Force-- initiated 36 in-kind construction and renovation projects that, on the basis of service estimates, total $421.1 million.[Footnote 5] Of the 36 in-kind projects, 1 project (totaling an estimated value of $334 million) went to the Army's single housing and community project; 3 projects (totaling an estimated value of $73.4 million) went to construction or renovation projects involving operation and training; and 32 projects (totaling an estimated value of $13.7 million) went to real-property capitalization, utility and ground improvements, supply, real-property management, and facility-condition assessment.[Footnote 6] Comparatively, the Air Force had the most in-kind projects for fiscal years 2011 and 2012 (24 projects) compared to the Army (5 projects) and Navy (7 projects). Specifically, 20 of the Air Force's 24 projects were for an easement granted to Florida's Mid-Bay Bridge Authority (a state agency) worth an estimated value of about $7.8 million, in exchange for building a road connector on Air Force property. The 20 in-kind projects resulting from the easement primarily went towards operations and training, and made up about 83 percent of Air Force's in-kind construction and renovation projects initiated during fiscal years 2011 and 2012. Agency Comments and Our Evaluation: We are not making recommendations in this report. In commenting on a draft of this report, DOD stated that the report properly highlights how DOD uses in-kind construction from different sources to improve facilities and conserve appropriated funds. On the other hand, DOD was concerned that we did not clearly distinguish in-kind payments from in- kind construction provided by host nations under binding international agreements focused on cost sharing, and further stated that the vast majority of the projects identified in the draft report as paid for with "payments in-kind" are mischaracterized. As our report states, our definition of "in-kind construction and renovation projects" is broader than that stated in DOD's letter because our definition includes host-nation support for installation facilities overseas. Specifically, any references in our report to "payments in-kind" were restricted to projects in the United States and Germany. Moreover, we confirmed our definition with officials from the Office of the Deputy Under Secretary of Defense for Installations and Environment, who agreed with our use of the definition. Similarly, our report also states that the Office of the Deputy Under Secretary of Defense for Installations and Environment reviewed the data submitted by the military components for consistency and to ensure that the data were for projects that we considered "in-kind projects." Therefore, we believe we have appropriately characterized these projects in our report. DOD's comments are reprinted in enclosure V. DOD also provided technical comments, which we incorporated as appropriate. We are sending copies of this report to appropriate congressional committees; to the Secretary of Defense; the Secretaries of the Army, Navy, and Air Force; and the Director of the Office of Management and Budget. In addition, this report is available at no charge on the GAO website at [hyperlink, http://www.gao.gov]. If you or your staff have any questions concerning this report, please contact me at (202) 512-4523 or leporeb@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report were Mark Wielgoszynski, Assistant Director; Timothy Burke; Mae F. Jones; Hia Quach; John E. Trubey; Amie Steele; and Michael Willems. Signed by: Brian J. Lepore, Director: Defense Capabilities and Management: Enclosures - 5: [End of section] List of Committees: The Honorable Carl Levin: Chairman: The Honorable James M. Inhofe: Ranking Member: Committee on Armed Services: United States Senate: The Honorable Tim Johnson: Chairman: The Honorable Mark Kirk: Ranking Member: Subcommittee on Military Construction, Veterans Affairs and Related Agencies: Committee on Appropriations: United States Senate: The Honorable Howard P. "Buck" McKeon: Chairman: The Honorable Adam Smith: Ranking Member: Committee on Armed Services: House of Representatives: The Honorable John Culberson: Chairman: The Honorable Sanford D. Bishop, Jr. Ranking Member: Subcommittee on Military Construction, Veterans Affairs and Related Agencies: Committee on Appropriations: House of Representatives: [End of section] Enclosure I: Bilateral Agreements in Asia and Domestic Statutory Authorities Related to In-Kind Construction and Renovation Projects: Accepting infrastructure improvements through in-kind construction and renovation projects allows the Department of Defense (DOD) to fulfill some of its requirements for infrastructure overseas and domestically without the use of appropriated funds. Depending upon whether the projects are initiated overseas or domestically, the selection of in- kind construction and renovation projects are subject to specific bilateral agreements and statutory authorities. In Asia, in-kind construction and renovation projects are completed using host-nation resources provided through the host nation's budget process, but planning and selecting projects at enduring locations overseas can be complicated by international agreements, host-nation budgets, and local politics. Domestically, the Departments of the Army, Navy, and Air Force have statutory authority to, among other things, lease or issue an easement on underutilized real property under their control or jurisdiction in exchange for in-kind construction or renovation projects. In Asia, In-Kind Construction and Renovation Projects Are Subject to Bilateral Agreements: In Asia, DOD has embarked on the largest transformation of U.S. military posture in the Pacific region since the end of World War II, a transformation that requires the construction of hundreds of new facilities and more than 3,500 housing units.[Footnote 7] Billions of dollars in combined investments by host nations and the U.S. government have already been identified as necessary to implement these initiatives. Bilateral agreements include efforts to relocate U.S. forces and consolidate infrastructure being used by DOD and specify the amount to be contributed by the host nation and the United States to implement force-structure initiatives, or state which costs will be borne by the United States and which by the host nation. Much of the construction and renovation necessary for these initiatives is the result of in-kind projects contributed by the host nation. There are also other agreements between the United States and host nations to defray some of the costs of stationing U.S. forces overseas and to support installations that will continue to be used by the United States--known as enduring installations--through the use of host- nation resources. Real property and improvements to infrastructure contributed by host nations in Asia are not the result of an obligation to provide residual value payments in exchange for real property returned to the host nation; rather they are voluntary contributions to the support of the U.S. presence in that host nation. DOD recognizes the unique character of construction programs funded by host nations in the U.S. Pacific Command area of responsibility and addresses their management separately from other military construction programs. Additional guidance has also been provided by the Chairman of the Joint Chiefs of Staff; the Commander, U.S. Pacific Command; and the commanders of U.S. forces in Japan and Korea. U.S. agreements and associated programs with Japan and the Republic of Korea that may result in in-kind construction and renovation projects are presented in table 1. Table 1: Bilateral Agreements That May Result in In-Kind Construction and Renovation Projects: Host nation: Japan[A]; Agreement or program: Special Action Committee on Okinawa[B]; Description: Formed to reduce the effect of the U.S. military presence on the people of Okinawa, Japan, and strengthen the U.S.-Japan alliance. Agreement or program: Defense Posture Review Initiative[C]; Description: Relocates military units to reduce the burden of the U.S. military presence on Japanese communities while maintaining a continuing presence of U.S. forces in the region. Agreement or program: Japan Facilities Improvement Program[D]; Description: A government of Japan initiative, which started in 1979, to ease the financial burden of stationing U.S. Forces in Japan. Host nation: Korea[E]; Agreement or program: Yongsan Relocation Plan[F]; Description: Relocates U.S. Forces Korea Headquarters from current locations in Seoul to locations further south, primarily to the Pyeongtaek region. Agreement or program: Land Partnership Plan[G]; Description: Consolidates and relocates U.S. Forces Korea forces located north of the Han River to locations south of Seoul, primarily to the Pyeongtaek region. Agreement or program: Republic of Korea-Funded Construction[H]; Description: Can be used to provide new or replacement facilities to support the joint defense of the Republic of Korea. Agreement or program: Logistics Cost Sharing[H]; Description: Provides resources that can be used for sustaining facilities or conducting restoration and modernization activities. Source: GAO analysis of DOD information. [A] All projects in Japan are accepted as part of the Agreement between the United States of America and Japan Concerning New Special Measures Relating to Article XXIV of the Agreement Under Article VI of the Treaty of Mutual Cooperation and Security between the United States of America and Japan, Regarding Facilities and Areas and the Status of United States Armed Forces in Japan (Apr. 1, 2011). [B] See Special Action Committee on Okinawa, SACO Final Report (Dec. 2, 1996). The Special Action Committee on Okinawa was established in November 1995 by the Governments of Japan and the United States. [C] See U.S.-Japan Security Consultative Committee Document, United States-Japan Roadmap for Realignment Implementation (May 1, 2006), which finalized key implementation details of the proposed realignment of U.S. Forces in Japan. [D] See U.S.-Japan Security Consultative Committee Document, Host Nation Support (June 21, 2011). This document indicated that Facilities Improvement Program funding in the current Special Measures Agreement period will be no less than 20.6 billion yen per year. [E] Republic of Korea-Funded Construction and Logistics Cost Sharing projects in the Republic of Korea are subject to the Agreement: Between the United States of America and the Republic of Korea Concerning Special Measures Relating to Article V of the Agreement Under Article IV of the Mutual Defense Treaty Between The Republic of Korea and the United States of America Regarding Facilities and Areas and the Status of United States Armed Forces in the Republic of Korea (Jan. 15, 2009). [F] See Memorandum of Agreement between the Government of the Republic of Korea and the Government of the United States of America Regarding the Agreed Recommendation for Implementation of the Agreement between the Republic of Korea and the United States of America on the Relocation of United States Forces from the Seoul Metropolitan Area (Oct. 26, 2004). [G] See Agreement between the United States of America and the Republic of Korea amending the agreement between the United States of America and the Republic of Korea for the Land Partnership Plan of March 29, 2002 (Oct. 26, 2004). [H] See Implementation Arrangement For Special Measures Agreement (Mar. 24, 2009). [End of table] In Japan, the Defense Policy Review Initiative and the Special Action Committee on Okinawa involve construction projects to relocate and consolidate U.S. forces. In 2005 and 2006 the United States-Japan Defense Policy Review Initiative outlined the effort to relocate American military units in Japan to other areas to reduce the burden of the U.S. military presence on Japanese communities while maintaining a continuing presence of U.S. forces in the region. The Defense Policy Review Initiative was preceded by the Special Action Committee on Okinawa. The United States and Japan released the Final Report of the Special Action Committee on Okinawa on December 2, 1996, which made 27 recommendations to reduce the effect of the U.S. military presence on the people of Okinawa, including building a replacement facility for Marine Corps Air Station Futenma elsewhere on Okinawa. In addition, the government of Japan constructs facilities for U.S. forces through the Japan Facilities Improvement Program to defray U.S. construction costs. According to DOD officials, this program is on a voluntary basis, and also minimizes the impacts of base operations on local communities, and has been used to support enduring installations and reduce U.S. sustainment costs. In the Republic of Korea, two DOD posture initiatives, known as the Yongsan Relocation Plan and the Land Partnership Plan, will relocate and consolidate defense infrastructure used by the United States. The Yongsan Relocation Plan agreed to between the governments of the United States and the Republic of Korea in October 2004 primarily involves the relocation the headquarters for the U.S. 8th Army, U.S. Forces-Korea, Combined Forces Command, and the United Nations Command from U.S. Army Garrison Yongsan, an installation located in Seoul, to U.S. Army Garrison Humphreys (Camp Humphreys) in the Pyeongtaek area. The Land Partnership Plan realignment, agreed to by the United States and the Republic of Korea in March 2002, will primarily move U.S. troops currently stationed north of Seoul farther south to Camp Humphreys. The cost of stationing U.S. troops in the Republic of Korea is also defrayed by the Republic of Korea-Funded Construction Program, which provides in-kind construction and renovation projects (but can also be used to support force-structure initiatives such as the Land Partnership Plan) and the Logistics Cost Sharing program, which ordinarily provides maintenance and repairs, but may be used for in- kind renovation projects. Domestic In-Kind Construction and Renovation Projects Are Subject to Title 10 of the U.S. Code: The Departments of the Army, Navy, and Air Force have statutory authority under sections 2667, 2668, and 18240 of Title 10 of the United States Code to lease or issue an easement on underutilized real property under their control or jurisdiction in exchange for in-kind construction or renovation projects. Section 2667 provides authority to the Secretaries of the military departments to lease nonexcess real property under the control of the respective departments, subject to several provisions. Concerning consideration received in exchange for these leases, section 2667 provides that if the consideration is to be cash, then the cash payments must be deposited into a special account in the U.S. Treasury and may only be used in such amounts as provided in appropriations acts, but that at least 50 percent of that consideration will only be available for use at the installation where the leased property is located. If the consideration is in-kind, section 2667 provides examples of acceptable forms of in-kind consideration, which include the restoration of property or facilities and the construction of new facilities. Section 2668 allows the Secretaries of the military departments to grant easements to allow another person or organization to legally use property for a specified purpose provided that doing so would not be against the public interest, which according to officials might include uses that do not unreasonably interfere with the overall operation of the installation or impair the security of the installation. Easements can be granted to, among other things, provide rights-of-way for railroad tracks, gas/water/sewer/oil pipe lines, substations for electric power transmission lines, canals, ditches, flumes, tunnels, roads and streets, and poles and lines for the transmission or distribution of communications signals. Section 18240 of Title 10 allows DOD to acquire a facility, or addition to an existing facility, needed to satisfy military requirements for a reserve component through an exchange. A brief summary of these authorities is provided in table 2. Table 2: Statutory Authorities Governing Domestic Construction and Renovation Projects Using In-Kind Payments: Statutory authority: 10 U.S.C. § 2667; Description of statutory authority: Provides authority to Secretaries of the military departments to lease nonexcess real property under the control of the respective departments, subject to several provisions. Statutory authority: 10 U.S.C. § 2668; Description of statutory authority: Provides authority to Secretaries of the military departments for easements for rights-of way over, in, and upon public lands permanently withdrawn or reserved for the use of that department that will not be against the public interest. Statutory authority: 10 U.S.C. § 18240; Description of statutory authority: Provides authority to Secretaries of the military departments to acquire a facility, or addition to an existing facility, needed to satisfy military requirements for a reserve component by carrying out an exchange of an existing facility through an agreement with an executive agency, the United States Postal Service, or a state, local government, local authority, or private entity. Source: U.S. Code. [End of table] Section 2667 of Title 10 of the United States Code Provides Military Secretaries with Authority to Lease Nonexcess Real Property: Section 2667 of Title 10 provides authority to Secretaries of the military departments to lease nonexcess real property under the control of the respective departments, subject to several provisions. For example, such leases must be considered by the respective Secretary to be advantageous to the United States and be on terms that the respective Secretary considers will promote the national defense or be in the public interest. In addition, each lease, among other things, (1) may not be for more than 5 years, unless the Secretary concerned determines that a lease for a longer period will promote the national defense or be in the public interest; (2) shall permit the Secretary to revoke the lease at any time, unless the Secretary determines that the omission of such a provision will promote the national defense or be in the public interest; (3) shall provide for the payment (in cash or in-kind) by the lessee of consideration in an amount that is not less than the fair market value of the lease interest, as determined by the Secretary. Concerning lease consideration, section 2667 provides that if the consideration is to be cash, then the cash payments must be deposited into a special account in the U.S. Treasury and may only be used in such amounts as provided in appropriations acts. Also, once these amounts are appropriated, section 2667 provides that at least 50 percent of the lease proceeds are only available for use at the installation where the leased property is located, and that the appropriated funds may be used for specific enumerated purposes relating to real-property construction, maintenance services, lease of facilities, or payment of utility services. In the event that consideration for the lease is to be in-kind, then section 2667 provides a list of acceptable forms of in-kind consideration that includes the maintenance, protection, alteration, repair, improvement, or restoration of property or facilities; the construction of new facilities; and the provision of facilities, utility services, or real- property maintenance services. Although the authorizing statute, section 2667, does not use "enhanced- use lease" to differentiate leases executed pursuant to this authority, the services generally distinguish an enhanced-use lease from a normal out-lease on the basis of scope, process, term, and consideration. For example, an enhanced-use lease might provide for a 50-year lease of military land to a private developer that would be expected to construct office or other commercial buildings on the land and then rent the facilities to private-sector tenants for profit. As consideration, the military might receive cash or in-kind services valued at an amount equal to the fair market value of the lease. Section 2668 of Title 10 of the United States Code Provides Military Secretaries with Authority to Lease Easements for Rights-of-Way: Under section 2668 of Title 10 of the United States Code, the military Secretaries have the authority to receive in-kind consideration in exchange for easements of rights-of-way over, in, and upon public lands that the Secretary determines will not be against the public interest. In the case of this statutory authority, the Secretaries of the military departments may grant other persons or organizations the legal right to use public land for a specified purpose. Uses for which an easement can be granted include, among other things, railroad tracks, gas/water/sewer/oil pipe lines, substations for electric power transmission lines, canals, ditches, flumes, tunnels, roads and streets, and poles and lines for the transmission or distribution of communications signals. Section 18240 of Title 10 of the United States Code Provides Military Secretaries with Authority to Acquire a Facility or Addition to an Existing Facility: Section 18240 of Title 10 of the United States Code indicates that the Secretary of Defense may authorize the Secretary of a military department to acquire a facility, or addition to an existing facility, needed to satisfy military requirements for a reserve component by carrying out an exchange of an existing facility under the control of that Secretary through an agreement with an executive agency, the United States Postal Service, or a state, local government, local authority, or private entity. The acquisition of a facility or an addition to an existing facility may include the acquisition of utilities, equipment, and furnishings for the facility. In any exchange carried out using this authority, the value of the replacement facility, or addition to an existing facility, including any utilities, equipment, and furnishings, that is acquired by the United States shall be at least equal to the fair market value of the facility conveyed by the United States under the agreement. If the values are unequal, the values may not be equalized by any payment of cash consideration by either party to the agreement. Such an unequal exchange can only go forward when the value of the facility received by the government is greater than the fair market value of the facility the government is conveying, because the statute provides that exchanges may only be made when the value of the facility the government receives is at least equal to the fair market value of the facility the government is giving up. [End of section] Enclosure II: DOD's Processes for Selecting In-Kind Projects in Asia and Domestically during Fiscal Years 2011 and 2012. DOD's processes for selecting in-kind projects in Asia vary by country and by whether the project is intended to support force-structure initiatives or enduring installations; domestically, DOD's processes for selecting in-kind projects vary by military service and by statutory authority. In Asia, the selection of in-kind projects to support initiatives for the relocation of U.S. troops within Japan and the Republic of Korea generally results from a schedule-driven process based on resources and infrastructure made available by the host nation to fulfill initiatives agreed to in prior years with target dates for completion, and input from affected military bases. The selection of in-kind projects to support enduring installations in Asia is characterized by priority-based processes with input from installations and unit commanders. All in-kind projects to support U.S. forces in Asia in our scope are the result of host-nation support as agreed to bilaterally, with the exception of facilities provided through the Japan Facilities Improvement Program, which is a voluntary effort on the part of the government of Japan. When compared with the project-selection processes in Japan, DOD has more flexibility to select in-kind projects in the Republic of Korea. Domestically, the services select projects based on military and operational need regardless of location, but the processes followed vary somewhat depending on the authorizing statute for in-kind projects--for example, enhanced-use leases, exchanges, or easements. DOD's Overseas Processes for Selecting In-Kind Projects in Asia Vary by Country and by Whether the Project Is to Support Force-Structure Initiatives or Enduring Installations: Irrespective of whether a project is in Japan or the Republic of Korea, or whether a project is intended to support force-structure initiatives or enduring installations, the process for selecting it ultimately involves a confluence between input from host country and DOD entities. In figures 1 and 2, we provide a general depiction of the processes used in Japan and the Republic of Korea, respectively, to select in-kind projects. Figure 1: General Depiction of Processes Used in Japan to Select In- Kind Projects: [Refer to PDF for image: process illustration] 1. Security Consultative Committee (SCC): * Includes U.S. Secretary of Defense and Secretary of State, as well as Japanese counterparts; * Develops U.S.-Japan strategic-level policy agreements and documents. Bilateral Mini-Security Consultative Committee: * Includes designated representatives of SCC. 2. Bilateral Joint Committee–-Status of Forces Agreement: * Establishes framework to execute agreements; * Establishes subcommittees and panels and assigns tasks to prepare, coordinate, and implement agreements; * Adjudicates bilateral conflicts that cannot be resolved by the subcommittees. 3. U.S. Forces Japan: * Prepares campaign support plan; * Provides program and project guidance; * Prepares, coordinates, and negotiates U.S. position. 4. U.S. installations and service components: * Provides service support plans; * Develops U.S. master plans and project program documentation; * Specifies functional requirements and mission justification. 5. DOD components[A]: * Provides policy guidance for host nation construction program, and reviews and approves projects; * Provides theater campaign support plan. 6. Facilities Subcommittee: * Prepares, negotiates, and approves program master plans, project plans, criteria, design, construction, and transfer of facilities and areas between Japan and the United States; * Establishes execution procedures for bilateral coordination and technical requirements. 7. Government of Japan: * Programs, budgets, executes, and manages design and construction contracts. * Coordinates U.S. design criteria and construction oversight. Japanese contractors * Complete work under joint U.S.–Japan supervision. 8. Finished projects provided to DOD by government of Japan. Source: GAO analysis of DOD information. [A] DOD components include U.S. Pacific Command, U.S. Joint Chiefs of Staff/Engineer, and Deputy Under Secretary of Defense (Installations and Environment). [End of figure] Figure 2: General Depiction of Processes in the Republic of Korea Used to Select In-Kind Projects: [Refer to PDF for image: process illustration] 1. Status of Forces Agreement Joint Committee: * Co-chaired by designated U.S. and Republic of Korea counterparts. 2. Ad-hoc subcommittees: * Yongsan Relocation Plan; * Land Partnership Plan. 3. U.S. Forces–Korea: * Reviews and selects projects with support of U.S. Forces–Korea engineers; * Approves projects under Republic of Korea–Funded Construction and Logistics Cost Sharing. 4. DOD components[A]; * Provides policy guidance for host nation construction program, and reviews and approves projects; * Provides theater campaign support plan. 5. Joint working groups. 6. Joint contracting process: * U.S. and Korean officials use cooperative and transparent design, contracting, and construction process. 7. Korean contractors: * Complete work under joint U.S.–Korean supervision. 8. Finished projects provided to DOD by Republic of Korea. Source: GAO analysis of DOD information. [A] DOD components include U.S. Pacific Command, U.S. Joint Chiefs of Staff/Engineer, and Deputy Under Secretary of Defense (Installations and Environment). [End of figure] Selection of In-Kind Projects to Support Initiatives for the Relocation of U.S. Troops within Japan and the Republic of Korea Generally Results from a Schedule-Driven Process: Force-structure initiatives in Asia include the Defense Posture Review Initiative and the Special Action Committee on Okinawa in Japan, and the Yongsan Relocation Plan and the Land Partnership Plan in the Republic of Korea. To select projects for completing these initiatives the U.S. Pacific Command and Office of the Secretary of Defense review annual project lists to assure a logical progression towards completion. However, differences exist in the way projects related to these initiatives are selected in Japan and the Republic of Korea. For example, the Defense Posture Review Initiative for relocating and consolidating Infrastructure used by U.S. forces in Japan includes projects to replace facilities displaced by new construction. One such project using Defense Posture Review Initiative resources was to relocate an existing aircraft hangar at Marine Corps Air Station Iwakuni to a new location on the base in order to accommodate construction of military housing on the original site. After projects in Japan are selected, the United States provides design criteria and hands off projects to the government of Japan for design and construction with limited U.S. visibility into the cost of projects. There are differences in the way projects to support force-structure initiatives in the Republic of Korea are selected. For example, the United States anticipated expending approximately $3.67 billion as part of the Land Partnership Plan initiative to relocate and consolidate infrastructure used by U.S. forces in the Republic of Korea, but the Republic of Korea-Funded Construction program has been used to offset about $2 billion of that planned expenditure. In addition, the Republic of Korea's Logistics Cost Sharing, which is usually used for maintenance and repairs, included two in-kind renovation projects in fiscal years 2011 and 2012. After projects are selected, U.S. and Korean officials work together in the design and contracting process for in-kind projects, with the United States having full visibility into project costs. Other process differences affect project timelines. Specifically, officials stated that it can take up to 7 years to complete a project in South Korea and up to 14 years to complete a project in Japan after the need for a project is identified. Selection of In-Kind Projects to Support Initiatives for Enduring Installations within Japan and the Republic of Korea Generally Results from Priority-Based Processes: Programs in Japan and the Republic of Korea to support the enduring presence of U.S. forces in those countries include the Japan Facilities Improvement Program and, for the Republic of Korea, the Republic of Korea-Funded Construction Program and the Logistics Cost Sharing Program. To select projects, a prioritized list is consolidated by U.S. forces, reviewed by the U.S. Pacific Command and the Office of the Secretary of Defense, and then returned for contracting and completion by the host nation. In Korea, the list prepared by U.S. forces is generally accepted as presented.[Footnote 8] In contrast, the government of Japan selects projects begun in the Japan Facility Improvement Program, and, according to DOD officials, projects may be deliberated before the Japanese Diet, which is the national legislature of Japan. DOD Has More Flexibility to Select In-Kind Projects in the Republic of Korea than in Japan: There are notable differences in the degree to which DOD has flexibility to select in-kind projects in Japan and the Republic of Korea. For example, according to DOD officials, the U.S. Forces Korea Commander has the ability to designate how resources provided by the Republic of Korea for in-kind projects will be allocated between Republic of Korea Funded Construction (to include support for the Land Partnership Plan) and Logistics Cost Sharing projects. This has allowed the United States to offset some of its planned expenditures to implement the Land Partnership Plan by using Republic of Korea- Funded Construction resources, which would continue to be available whether the force-structure initiative were being implemented or not. [Footnote 9] However, the government of Japan has final approval authority for projects selected in the Japan Facilities Improvement Program and selects projects from a prioritized list prepared by U.S. officials, but recognizes the need for improved facilities and the concerns of local communities. Under the latest agreements between the United States and Japan, the government of Japan is required to make its "best effort" to meet U.S. priorities, but has final approval authority for projects selected. Only 5 of the top 10 highest-priority projects proposed by U.S. authorities for initiation in 2011 were selected by the government of Japan for initiation during fiscal years 2011 and 2012. Other projects selected were either lower priority, or added by the government of Japan to address local concerns. For example, two projects were selected to erect golf nets to protect local residences adjacent to golf courses on U.S. installations. Processes for Selecting Domestic Projects Vary by the Military Department and the Type of In-Kind Payment: Domestically, the military departments generally use their existing real-estate leasing processes to select in-kind projects. DOD officials state that the military departments select projects based on military and operational need regardless of location, but the processes followed vary somewhat depending on the authorizing statute for the in-kind projects--for example, the authorities vary for enhanced-use leases, exchanges, and easements. The Military Departments Generally Use Their Existing Real-Estate Leasing Processes to Select In-Kind Projects: The military departments generally select in-kind construction and renovation projects as part of the established real-estate leasing processes to provide leases, real-property exchanges, or easements to third parties. For example, the Army, Navy, and Air Force identify potential enhanced-use leases at the installation level, with the installation determining potential in-kind consideration requirements and providing them to the lessee. For all three departments, after the installation identifies the project requirements, the services conduct an economic and market feasibility study which includes, among other things, an analysis of site conditions, economic and demographic area data, and financial feasibility. Following its existing real-estate leasing process, a department puts out a request for qualifications to solicit developer interest in the project, selects a developer (sometimes using a competitive process), negotiates a business and leasing plan, requires environmental documentation (including historical and cultural), executes the lease, and administers the lease. Specifically, during the negotiation process, the service and the offeror work out the lease agreement and assess environmental impact and financial viability. If the lease terms are complex, how long it could take to negotiate the lease and develop the details of the arrangement varies among the departments and on a case-by-case basis. Similar processes are followed for exchanges and easements. For example, when the Army acquires facilities by exchange it is similar to the leasing process, with the valuation of property appraised to assure that fair market value is received by the military. According to Air Force officials, the Air Force's process for granting an easement begins with the installation receiving an easement request from a potential user (e.g., local utility, landowner, or government entity), and the availability of space is approved by the Facilities Utilization Board,[Footnote 10] with the Air Force Civil Engineering Center approving the transaction. There Are Variations among the Military Departments in How In-Kind Projects Are Selected: There are variations in the processes that the military departments use to select the in-kind projects.[Footnote 11] For example, the Navy uses a two-phase approach for enhanced-use leases and negotiates in- kind consideration as part of the process with notification to Congress before entering into the actual lease, including a description of any in-kind consideration that will be accepted. [Footnote 12] The Army's process is similar to the Navy's and begins with an installation identifying a potential enhanced-use lease and preparing a business proposal for the lease including the in-kind consideration, and the affected installation is allowed to select in- kind projects. However, while the Air Force installation does prepare an integrated priority list of unfunded projects to facilitate the selection of projects as in-kind consideration, the actual selection of in-kind projects is approved by the Director of the Air Force Civil Engineering Center rather than at the installation level. Air Force officials also stated that the granting of large easements is a relatively new process and variations may occur in the way in-kind projects are selected. For example, the Air Force's easement with the Mid-Bay Bridge Authority in Florida included 20 negotiated in-kind projects approved by the Facilities Utilization Board, with the exception of one project. That project was a data-recovery project (similar to a survey), which went directly to the Air Base Wing Commander at Eglin Air Force Base because the project had potential cost savings for future projects, and was not part of constructing or renovating facilities for the Air Force in that fiscal year. [End of section] Enclosure III: Overseas In-Kind Construction and Renovation Projects Initiated for the Department of Defense during Fiscal Years 2011 and 2012: Host-nation support in Japan and South Korea resulted in the initiation of 68 in-kind construction and renovation projects valued at over $1.3 billion during fiscal years 2011-2012 (38 projects in Japan and 30 in South Korea). The estimate for Japan (about $257 million) does not include dollar values for 24 of the 38 in-kind projects initiated in Japan during this period since the government of Japan is not obligated to disclose the value of in-kind construction and renovation projects, and often does not disclose such costs. In Germany, residual value payments to the United States totaled about $11.3 million for 3 in-kind projects. In-kind projects initiated in Japan and South Korea during fiscal years 2011 and 2012 supported various purposes of the U.S. military's presence in those nations. [Footnote 13] Most of the in-kind projects initiated in Japan were for operations and training (13 of 38 projects) and for housing and community facilities (12 of 38 projects). The remaining 13 of the 38 projects were for maintenance and production facilities, utility and ground improvements, supply facilities, and administrative facilities. Similarly, in South Korea most of the in-kind projects initiated were for housing and community facilities (10 of 30 projects) and for operations and training facilities (9 of 30 projects). The other 11 projects were for maintenance and production facilities, supply facilities, administrative facilities, and hospital and medical facilities. Among other things, the National Defense Authorization Act for Fiscal Year 2013[Footnote 14] requires that GAO provide a listing of each facility constructed or renovated for the Department of Defense (DOD) as payment in kind, the value in U.S. dollars of that construction or renovation, the source of the in-kind payment, the agreement pursuant to which the payment was made, and a description of the purpose and need for the construction or renovation. Table 3 provides a summary of the intended purposes and value of in-kind projects supporting U.S. forces initiated in Japan and South Korea during fiscal years 2011 and 2012. In tables 4, 5, and 6 we provide the information specified in the act in a listing of in-kind construction and renovation projects initiated in Japan, the Republic of Korea, and Germany, respectively, during fiscal years 2011 and 2012. Table 3: Purposes and Values of In-Kind Construction and Renovation Projects Initiated in Japan and South Korea during Fiscal Years 2011 and 2012: Location: Japan; Number of projects: 2; Approximate value (U.S. dollars in millions): Unavailable[A]; Purpose: Administrative. Number of projects: 0; Approximate value (U.S. dollars in millions): $0.00; Purpose: Hospital and Medical. Number of projects: 12; Approximate value (U.S. dollars in millions): $120.24[B]; Purpose: Housing and Community. Number of projects: 3; Approximate value (U.S. dollars in millions): $10.27[B]; Purpose: Maintenance and Production. Number of projects: 13; Approximate value (U.S. dollars in millions): $103.28[B]; Purpose: Operation and Training. Number of projects: 1; Approximate value (U.S. dollars in millions): Unavailable[A]; Purpose: Supply. Number of projects: 7; Approximate value (U.S. dollars in millions): $22.88[B]; Purpose: Utility and Ground Improvements. Total: Number of projects: 38; Approximate value (U.S. dollars in millions): $256.67[B]. Location: Republic of Korea; Number of projects: 1; Approximate value (U.S. dollars in millions): $43.50[C]; Purpose: Administrative. Number of projects: 2; Approximate value (U.S. dollars in millions): 244.55; Purpose: Hospital and Medical. Number of projects: 10; Approximate value (U.S. dollars in millions): 452.02; Purpose: Housing and Community. Number of projects: 6; Approximate value (U.S. dollars in millions): 183.30; Purpose: Maintenance and Production. Number of projects: 9; Approximate value (U.S. dollars in millions): 93.40; Purpose: Operation and Training. Number of projects: 2; Approximate value (U.S. dollars in millions): 13.12; Purpose: Supply. Number of projects: 0; Approximate value (U.S. dollars in millions): 0.00; Purpose: Utility and Ground Improvements. Total: Number of projects: 30; Approximate value (U.S. dollars in millions): $1,029.89. Source: GAO summary of Department of Defense (DOD) data. [A] The estimates of value, when available, were provided by U.S. officials in then-year U.S. dollars without input from Japanese officials, based on comparable projects. Estimates were not available for 24 of 38 projects in Japan because the specific costs incurred by the government of Japan are not required to be disclosed, according to the provisions of bilateral agreements with the government of Japan. [B] Estimates given with a dollar value do not include costs for all projects in this category, and are therefore minimum values. Actual total values are unknown. [C] Values for projects in Korea are based on estimated costs to be incurred by the Republic of Korea in Korean won and expressed by DOD officials in then-year U.S. dollars. [End of table] Table 4: In-Kind Construction and Renovation Projects Initiated in Japan during Fiscal Years 2011 and 2012: Estimated values in U.S. dollars: Component: Air Force; Location: Yokota; Project title or number, purpose,and description[A]: Project number: AF626; Purpose: Maintenance and Production; Description: Reconstruction of aerospace ground equipment maintenance facility; Agreement: or program[B]: Japan Facilities Improvement Program[D]; Source of in-kind project: Host nation support; Estimated value[C]: $10,270,000. Location: Kadena; Project title or number, purpose,and description[A]: Project number: AF734; Purpose: Operation and Training; Description: Construct aircraft parking apron; Agreement: or program[B]: Special Action Committee on Okinawa[E]; Source of in-kind project: Host nation support; Estimated value[C]: $18,320,000. Location: Kadena; Project title or number, purpose,and description[A]: Project number: AF737; Purpose: Operation and Training; Description: Aircraft taxiway; Agreement: or program[B]: Special Action Committee on Okinawa[E]; Source of in-kind project: Host nation support; Estimated value[C]: $24,990,000. Location: Kadena; Project title or number, purpose,and description[A]: Project number: AF758; Purpose: Operation and Training; Description: Aircraft parking space; Agreement: or program[B]: Special Action Committee on Okinawa[E]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Kadena; Project title or number, purpose,and description[A]: Project number: AF777; Purpose: Administrative; Description: Consolidated parking; Agreement: or program[B]: Special Action Committee on Okinawa[E]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Yokota; Project title or number, purpose,and description[A]: Project Number: AF0012-T; Purpose: Administrative; Description: Air defense command parking structures; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Kadena; Project title or number, purpose,and description[A]: Project number: AF739; Purpose: Utility and Ground Improvements; Description: Utility upgrade; Agreement: or program[B]: Special Action Committee on Okinawa[E]; Source of in-kind project: Host nation support; Estimated value[C]: $10,040,000. Component: Army; Location: Zama; Project title or number, purpose,and description[A]: Project number: AR0001-T; Purpose: Housing and Community; Description: Reconstruction of family housing; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Hiro; Project title or number, purpose,and description[A]: Project Number: AR814; Purpose: Operation and Training; Description: Disaster prevention; Agreement: or program[B]: Japan Facilities Improvement Program[D]; Source of in-kind project: Host nation support; Estimated value[C]: $5,130,000. Location: Zama; Project title or number, purpose,and description[A]: Project number: AR1103; Purpose: Housing and Community; Description: Golf net to protect local community residences adjacent to golf course on Camp Zama; Agreement: or program[B]: Japan Facilities Improvement Program[D]; Source of in-kind project: Host nation support; Estimated value[C]: $2,900,000. Location: Zama; Project title or number, purpose,and description[A]: Project number: AR0003-T; Purpose: Housing and Community; Description: Outdoor skate rink to replace skate rink displaced by relocation of a new morale, welfare, and recreation facility; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Sagamihara; Project title or number, purpose,and description[A]: Project Number: AR0020-T; Purpose: Housing and Community; Description: Outdoor recreation and sports facility, community center; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Sagamihara; Project title or number, purpose,and description[A]: Project Number: AR0024-T; Purpose: Housing and Community; Description: Rental storage sheds; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Sagamihara; Project title or number, purpose,and description[A]: Project Number: AR0027-T; Purpose: Housing and Community; Description: Community support facility; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Sagami; Project title or number, purpose,and descriptiona[A]: Project Number: AR-0018-T; Purpose: Utility and Ground Improvements; Description: Road upgrade; Agreement: or program[B]: Component: Defense Policy Review Initiative[F]; Source of in-kind project: Component: Host nation support; Estimated value[C]: Component: Not available. Location: Sagamihara; Project title or number, purpose,and description[A]: Project Number: AR-0031-T; Purpose: Utility and Ground Improvements; Description: Utility upgrade; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Component: Marine Corps; Location: Iwakuni; Project title or number, purpose,and description[A]: Project Number: MC0404-T; Purpose: Supply; Description: Humidity controlled warehouse; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Iwakuni; Project title or number, purpose,and description[A]: Project Number: MC150-T; Purpose: Maintenance and Production; Description: Marine aviation logistics center, maintenance facility; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Iwakuni; Project title or number, purpose,and description[A]: Project Number: MC157-T; Purpose: Operation and Training; Description: Flight line fire station; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Iwakuni; Project title or number, purpose,and description[A]: Project Number: MC164-T; Purpose: Operation and Training; Description: Airfield pavement; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Iwakuni; Project title or number, purpose,and description[A]: Project Number: MC165-T; Purpose: Operation and Training; Description: Aircraft maintenance hangar; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Iwakuni; Project title or number, purpose,and description[A]: Project Number: MC250-T; Purpose: Maintenance and Production; Description: Aviation intermediate maintenance detachment; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Iwakuni; Project title or number, purpose,and description[A]: Project Number: MC909-T; Purpose: Operation and Training; Description: Aircraft direct fueling systems; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Iwakuni; Project title or number, purpose,and description[A]: Project Number: MC275-T; Purpose: Housing and Community; Description: Armed Forces Network antenna; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Iwakuni; Project title or number, purpose,and description[A]: Project Number: MC160-T; Purpose: Operation and Training; Description: North gate reconstruction; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Iwakuni; Project title or number, purpose,and description[A]: Project Number: MC163-T; Purpose: Housing and Community; Description: Relocation of north side unaccompanied enlisted housing; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Iwakuni; Project title or number, purpose,and description[A]: Project Number: MC0133; Purpose: Utility and Ground Improvements; Description: Sewer system upgrade; Agreement: or program[B]: Japan Facilities Improvement Program[D]; Source of in-kind project: Host nation support; Estimated value[C]: $4,410,000. Location: Northern training area; Project title or number, purpose,and description[A]: Project Number: MC111; Purpose: Utility and Ground Improvements; Description: Utilities upgrade; Agreement: or program[B]: Japan Facilities Improvement Program[D]; Source of in-kind project: Host nation support; Estimated value[C]: $8,430,000. Location: Iwakuni; Project title or number, purpose,and description[A]: Project Number: MC447-T; Purpose: Utility and Ground Improvements; Description: East utility plant; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Iwakuni; Project title or number, purpose,and description[A]: Project Number: MC201-T; Purpose: Operation and Training; Description: Marine Aircraft Group 12 dual squadron aircraft hangar; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Iwakuni; Project title or number, purpose,and description[A]: Project Number: MC0421-T; Purpose: Operation and Training; Description: Marine Aircraft Group 12 dual squadron aircraft hangar; Agreement: or program[B]: Defense Policy Review Initiative[F]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Component: Navy; Location: Ikego; Project title or number, purpose,and description[A]: Project Number: NA218; Purpose: Housing and Community; Description: Elementary school; Agreement: or program[B]: Japan Facilities Improvement Program[D]; Source of in-kind project: Host nation support; Estimated value[C]: $40,900,000. Location: Kadena; Project title or number, purpose,and description[A]: Project Number: NA859; Purpose: Operation and Training; Description: Aircraft maintenance hangar; Agreement: or program[B]: Special Action Committee on Okinawa[E]; Source of in-kind project: Host nation support; Estimated value[C]: $9,220,000. Location: Atsugi; Project title or number, purpose,and description[A]: Project Number: NA939; Purpose: Housing and Community; Description: Golf net to protect local community residences adjacent to golf course at Naval Air Facility Atsugi; Agreement: or program[B]: Japan Facilities Improvement Program[D]; Source of in-kind project: Host nation support; Estimated value[C]: $3,630,000. Location: Yokose; Project title or number, purpose,and description[A]: Project Number: NA894; Purpose: Operation and Training; Description: Fire station and security facility; Agreement: or program[B]: Japan Facilities Improvement Program[D]; Source of in-kind project: Host nation support; Estimated value[C]: $5,620,000. Location: Zukeran; Project title or number, purpose,and description[A]: Project Number: NA842; Purpose: Housing and Community; Description: Unaccompanied enlisted housing; Agreement: or program[B]: Special Action Committee on Okinawa[E]; Source of in-kind project: Host nation support; Estimated value[C]: $21,410,000. Location: Zukeran; Project title or number, purpose,and description[A]: Project Number: NA873; Purpose: Utility and Ground Improvements; Description: Secondary water source and tank; Agreement: or program[B]: Special Action Committee on Okinawa[E]; Source of in-kind project: Host nation support; Estimated value[C]: Not available. Location: Yokosuka; Project title or number, purpose,and description[A]: Project Number: NA908; Purpose: Housing and Community; Description: Japan Facilities Improvement Program[D]; Source of in-kind project: Host nation support; Estimated value[C]: $51,400,000. Source: GAO analysis of DOD information. [A] Purpose categories were assigned by the Office of the Secretary of Defense based on facility classes listed in DOD Instruction 4165.03, DOD Real Property Categorization, (Aug. 24, 2012) with approval of U.S. Pacific Command and U.S. Forces Japan. [B] All projects in Japan are accepted as part of the Agreement between the United States of America and Japan Concerning New Special Measures Relating to Article XXIV of the Agreement Under Article VI of the Treaty of Mutual Cooperation and Security between the United States of America and Japan, Regarding Facilities and Areas and the Status of United States Armed Forces in Japan (Apr. 1, 2011). In-kind projects initiated in fiscal years 2011 and 2012 are begun either as part of the bilaterally agreed-upon force-structure initiatives known as the Defense Posture Review Initiative and the Special Action Committee on Okinawa, or under a program of the government of Japan known as the Facilities Improvement Program. [C] Estimated values were provided by DOD in then-year dollars. These estimates, when available, were developed by U.S. officials in Japan on the basis of comparisons with prior costs of similar projects. [D] See U.S.-Japan Security Consultative Committee Document, Host Nation Support (June 21, 2011). This document indicated that Facilities Improvement Program funding in the current Special Measures Agreement period will be no less than 20.6 billion yen per year. The Japan Facilities Improvement Program is a government of Japan initiative, which started in 1979 to ease the financial burden of stationing U.S. forces in Japan. The program reduces U.S. government cost to improve the quality of life and military posture. [E] See Special Action Committee on Okinawa, SACO Final Report (Dec. 2, 1996). The Special Action Committee on Okinawa was established in November 1995 by the governments of Japan and the United States. The two governments launched the SACO process to reduce the burden on the people of Okinawa and thereby strengthen the Japan-United States alliance. [F] See U.S.-Japan Security Consultative Committee Document, United States-Japan Roadmap for Realignment Implementation (May 1, 2006), which finalized key implementation details of the proposed realignment of U.S. Forces in Japan. [End of table] Table 5: In-Kind Construction and Renovation Projects Initiated in the Republic of Korea during Fiscal Years 2011 and 2012: Estimated values in U.S. dollars: Component: Air Force: Location: Osan Air Base; Project title or number, purpose, and description[A]: Project Title: Construct Hot Cargo Pad; Purpose: Operation and Training; Description: New end-of-runway arm/disarm pad to provide adequate areas for arming and disarming of aircraft to mitigate safety violations; Agreement or program[B]: Land Partnership Plan[D]; Source of in-kind project: Host nation support; Estimated value[C]: $10,200,000. Location: Kunsan Air Base; Project title or number, purpose, and description[A]: Project Title: Maintenance Complex (Phase 2) Accessory Shop; Purpose: Maintenance and Production Description: Aircraft maintenance facilities to repair and maintain F-16 component parts; Agreement or program[B]: Republic of Korea–Funded Construction[E]; Source of in-kind project: Host nation support; Estimated value[C]: $13,000,000. Location: Osan Air Base; Project title or number, purpose, and description[A]: Project Title: Consolidated Radar Approach Control/Airfield Management/Tower Facility; Purpose: Operation and Training; Description: Airfield management facility with control tower, weather, flight planning, dispatch, and lounge; Agreement or program[B]: Land Partnership Plan[D]; Source of in-kind project: Host nation support; Estimated value[C]: $16,600,000. Location: Osan Air Base; Project title or number, purpose, and description[A]: Project Title: Construct 36th Fighter Squadron Operations and Aircraft Maintenance Unit Facility; Purpose: Operation and Training; Description: Construction of semihardened building to house 36th Fighter Squadron Operations and Aircraft Maintenance Unit personnel that includes new chemical-biological collective protection system, work spaces for existing squadron operations personnel, and features to support the upgraded Common Configuration Implementation Program aircraft—to support features required for survivability during contingency and wartime operations; Agreement or program[B]: Republic of Korea–Funded Construction[E]; Source of in-kind project: Host nation support; Estimated value[C]: $25,000,000. Location: Kunsan Air Base; Project title or number, purpose, and description[A]: Project Title: Munitions Storage Igloos (14 each); Purpose: Supply; Description: Construction of 14 munitions storage igloos and demolition of 20 module barricaded storage pads—to increase munitions storage ability and reduce existing explosive hazards; Agreement or program[B]: Republic of Korea–Funded Construction[E]; Source of in-kind project: Host nation support; Estimated value[C]: $12,900,000 Location: Osan Air Base; Project title or number, purpose, and description[A]: Project Title: Construct New End-of Runway Arm/Disarm Pad; Purpose: Operation and Training; Description: End of runway arm/disarm pad and demolition of old ones— to provide adequate areas for arming and disarming of aircraft in order to mitigate safety violations; Agreement or program[B]: Republic of Korea–Funded Construction[E]; Source of in-kind project: Host nation support; Estimated value[C]: $13,200,000. Location: Osan Air Base; Project title or number, purpose, and description[A]: Project Title: Construct Joint Non-Commissioned Officers Dormitory; Purpose: Housing and Community; Description: Construction of multistory, 277-person dormitory for joint noncommissioned officers (with fire protection system, force protection measures, splinter protection measures, communications, and emergency generators; one-bedroom living units, multipurpose activity rooms, public restrooms, bulk storage, and mechanical rooms)—to eliminate the deficiency in unaccompanied personnel housing for senior enlisted personnel currently living off base and better utilize existing dormitory space, grades E-5 to E-6; Agreement or program[B]: Republic of Korea–Funded Construction[E]; Source of in-kind project: Host nation support; Estimated value[C]: $47,000,000. Component: Army: Location: Army Garrison Humphreys; Project title or number, purpose, and description[A]: Project Title: Elementary School; Purpose: Housing and Community; Description: Construction of an 875-student Department of Defense Dependent School Elementary School according to Department of Defense Education Activity specifications (e.g., classrooms, shops, auditorium, multipurpose rooms, and cafeteria with kitchen, gymnasium, information center, and administrative areas)-—to provide elementary school facilities for the dependents of military and DOD civilian workforce relocating to Army Garrison Humphreys; Agreement or program[B]: Yongsan Relocation Plan[F]; Source of in-kind project: Host nation support; Estimated value[C]: $45,638,000. Location: Army Garrison Humphreys; Project title or number, purpose, and description[A]: Project Title: High School; Purpose: Housing and Community; Description: Construction of a 950-student Department of Defense Dependent School High School according to Department of Defense Education Activity specifications (e.g., classrooms, shops, auditorium, multipurpose rooms, and cafeteria with kitchen, gymnasium, information center, and administrative areas)-—to provide high school facilities for dependents of military and DOD civilian workforce relocating to Army Garrison Humphreys; Agreement or program[B]: Yongsan Relocation Plan[F]; Source of in-kind project: Host nation support; Estimated value[C]: $74,091,000. Location: Army Garrison Humphreys; Project title or number, purpose, and description[A]: Project Title: Child Development Center; Purpose: Housing and Community; Description: Large (338 children) standard-design child-development center with adjacent outdoor play area (16,900 square feet) for children between the ages of 6 weeks and 5 years-—to provide required child-care support to military and DOD civilian workforce relocating to Army Garrison Humphreys; Agreement or program[B]: Land Partnership Plan[D]; Source of in-kind project: Host nation support; Estimated value[C]: $12,600,000. Location: Army Garrison Humphreys; Project title or number, purpose, and description[A]: Project Title: Dental Clinic and Medical Brigade Headquarters Building; Purpose: Hospital and Medical; Description: 3,784 square meter dental clinic; Agreement or program[B]: Yongsan Relocation Plan[F]; Source of in-kind project: Host nation support; Estimated value[C]: $25,909,000. Location: Army Garrison Humphreys; Project title or number, purpose, and description[A]: Project Title: Hospital and Ambulatory Care Center; Purpose: Hospital and Medical; Description: 379,752-square-foot hospital with 800-space parking lot— to relocate existing or similar facilities located on Army Garrison Yongsan to Army Garrison Humphreys to provide medical treatment services for servicemembers and their dependents relocating to Army Garrison Humphreys; Agreement or program[B]: Yongsan Relocation Plan[F]; Source of in-kind project: Host nation support; Estimated value[C]: $218,642,000. Location: Rodriguez Live-Fire Complex; Project title or number, purpose, and description[A]: Project Title: Directorate of Public Works Sub-Station; Purpose: Maintenance and Production; Description: 1,083-square-meter facility housing electrical, heating ventilation and air conditioning, carpentry, paint, sheet metal, and masonry shops; administrative offices; and warehouse storage space to support Directorate of Public Works operations at Rodriguez Live Fire Complex—to provide engineering services and maintenance to buildings, facilities, utilities, and grounds at the Rodriguez Live Fire Complex; Agreement or program[B]: Land Partnership Plan[D]; Source of in-kind project: Host nation support; Estimated value[C]: $4,600,000. Location: Camp Carroll; Project title or number, purpose, and description[A]: Project Title: Multipurpose Training Facility; Purpose: Operation and Training; Description: Training facility and auditorium for approximately 1,830 military personnel; Agreement or program[B]: Republic of Korea–Funded Construction[E]; Source of in-kind project: Host nation support; Estimated value[C]: $3,500,000. Location: Army Garrison Humphreys; Project title or number, purpose, and description[A]: Project Title: Consolidated Heavy Brigade Combat Team Headquarters; Purpose: Administrative; Description: Consolidated Heavy Brigade Combat Team headquarters building; Agreement or program[B]: Land Partnership Plan[D]; Source of in-kind project: Host nation support; Estimated value[C]: $43,500,000. Location: Rodriguez Live-Fire Complex; Project title or number, purpose, and description[A]: Project Title: Vehicle Maintenance Facility; Purpose: Maintenance and Production; Description: 530-square-meter, two-bay vehicle maintenance facility to support tanks, armored vehicles, and other heavy tactical equipment; Agreement or program[B]: Land Partnership Plan[D]; Source of in-kind project: Host nation support; Estimated value[C]: $2,600,000. Location: Army Garrison Humphreys; Project title or number, purpose, and description[A]: Project Title: Type II Aircraft Parking; Purpose: Operation and Training; Description: 294-square-foot concrete masonry block transmitter building with 525,000 square feet of Type II rotary-wing aircraft parking apron (capacity for 16 rotary-wing aircraft)—to upgrade and expand existing rotary-wing aircraft parking, which had been displaced due to other projects associated with relocation of units to Army Garrison Humphreys; Agreement or program[B]: Land Partnership Plan[D]; Source of in-kind project: Host nation support; Estimated value[C]: $6,700,000. Location: Army Garrison Humphreys; Project title or number, purpose, and description[A]: Project Title: Warrior Support Area Distribution Node; Purpose: Operation and Training; Description: 599-square-meter Communications Node building (Signal Complex) with supporting privately owned and government-owned vehicle parking areas; Agreement or program[B]: Land Partnership Plan[D]; Source of in-kind project: Host nation support; Estimated value[C]: $3,700,000. Location: Army Garrison Humphreys; Project title or number, purpose, and description[A]: Project Title: Heavy Brigade Combat Team Vehicle Maintenance Facilities I; Purpose: Maintenance and Production; Description: Two standard-design medium tactical equipment maintenance facility complexes, each with a five-company operations facility, supporting storage facilities, and tracked vehicle parking; Agreement or program[B]: Land Partnership Plan[D]; Source of in-kind project: Host nation support; Estimated value[C]: $60,000,000. Location: Army Garrison Humphreys; Project title or number, purpose, and description[A]: Project Title: Fires Support Vehicle Maintenance Facilities II; Purpose: Maintenance and Production; Description: Standard-design, 35,290-square-foot medium tactical equipment-maintenance facility, three company operations facilities, supporting storage facilities, and tracked vehicle parking; Agreement or program[B]: Land Partnership Plan[D]; Source of in-kind project: Host nation support; Estimated value[C]: $62,100,000. Location: Army Garrison Humphreys; Project title or number, purpose, and description[A]: Project Title: Heavy Brigade Combat Team Vehicle Maintenance Facilities II; Purpose: Maintenance and Production; Description: Standard medium tactical equipment-maintenance facility with a five-company operations facility, storage facilities, and organizational vehicle parking; Agreement or program[B]: Land Partnership Plan[D]; Source of in-kind project: Host nation support; Estimated value[C]: $41,000,000. Location: K-16 (Seoul); Project title or number, purpose, and description[A]: Project Title: Commissary; Purpose: Housing and Community; Description: 752.5-square-meter commissary with areas for sales, electronic checkout, receiving, food preparation, cold and freeze storage and loading dock—to provide commissary support for 1,200 soldiers and family members residing in vicinity of K-16 Airfield, which will be the northernmost enduring installation and only Seoul Metropolitan Area installation after Yongsan Relocation and Land Partnership Plans are executed; Agreement or program[B]: Republic of Korea–Funded Construction[E]; Source of in-kind project: Host nation support; Estimated value[C]: $3,800,000. Location: Army Garrison Humphreys; Project title or number, purpose, and description[A]: Project Title: Heavy Brigade Combat Team Barracks and Dining Facility; Purpose: Housing and Community; Description: Heavy Brigade Combat Team barracks and dining facility; Agreement or program[B]: Land Partnership Plan[D]; Source of in-kind project: Host nation support; Estimated value[C]: $92,000,000. Location: Army Garrison Humphreys; Project title or number, purpose, and description[A]: Project Title: Enlisted Barracks and Dining Facilities; Purpose: Housing and Community; Description: Standard-design 302-person eight-story unaccompanied enlisted personnel housing (1+1E standard) and two standard-design 1,300-person dining facilities—to provide sufficient enlisted personnel barracks and dining facilities on Army Garrison Humphreys capable of meeting requirements generated by units relocating to Army Garrison Humphreys; Agreement or program[B]: Land Partnership Plan[D]; Source of in-kind project: Host nation support; Estimated value[C]: $51,000,000. Location: Army Garrison Humphreys; Project title or number, purpose, and description[A]: Project Title: Heavy Brigade Combat Team Barracks Part 1 of 2; Purpose: Housing and Community; Description: Four standard-design, 302-person eight-story unaccompanied enlisted personnel housing (1+1E standard) and one standard design physical fitness center—to provide sufficient enlisted personnel barracks and physical fitness facilities on Army Garrison Humphreys capable of meeting requirements generated by units relocating to Army Garrison Humphreys; Agreement or program[B]: Land Partnership Plan[D]; Source of in-kind project: Host nation support; Estimated value[C]: $120,300,000. Component: Marine Corps: Location: Pohang; Project title or number, purpose, and description[A]: Project Title: Replace Aircraft Revetments; Purpose: Operation and Training; Description: Removal and replacement of deteriorated metal bin revetments (explosive containment structures) to provide splinter protection for fighter aircraft; Agreement or program[B]: Republic of Korea–Funded Construction[E]; Source of in-kind project: Host nation support; Estimated value[C]: $4,900,000. Location: Yechon; Project title or number, purpose, and description[A]: Project Title: Replace Aircraft Revetments; Purpose: Operation and Training; Description: Removal and replacement of deteriorated metal bin revetments (explosive containment structures) to provide splinter protection for fighter aircraft; Agreement or program[B]: Republic of Korea–Funded Construction[E]; Source of in-kind project: Host nation support; Estimated value[C]: $9,600,000. Component: Navy: Location: Fleet Activities Chinhae; Project title or number, purpose, and description[A]: Project Title: Supply/Logistics Office Renovation; Purpose: Supply; Description: Renovation and extension of existing supply/logistics building (i.e., office spaces for Human Resource Office personnel and supply logistics personnel to support relocation of Human Resource Office from Building 606); Agreement or program[B]: Logistics Cost Sharing[G]; Source of in-kind project: Host nation support; Estimated value[C]: $218,000. Location: Fleet Activities Chinhae; Project title or number, purpose, and description[A]: Project Title: Fire Station Renovation; Purpose: Housing and Community; Description: Renovation of existing fire station facility (Building 776) to support relocation of security department administrative offices from building 612 (i.e., renovation of men's and women's toilets and accessories and mechanical and electrical spaces and replacement of existing interior floors, bases, walls, ceilings, doors, windows, mechanical/electrical/fire suppression/communication and information systems; Agreement or program[B]: Logistics Cost Sharing[G]; Source of in-kind project: Host nation support; Estimated value[C]: $1,099,000. Location: Camp Mujuk; Project title or number, purpose, and description[A]: Project Title: Personnel Barracks for Helicopter Mine Countermeasures Squadron 14 Detachment; Purpose: Housing and Community; Description: Construction of a 13,000-square-foot, two-story bachelor quarters with reinforced concrete exterior bearing walls, concrete floor slabs and foundations, and metal roofing—required to provide adequate bachelor quarters for personnel at the Tri-Service Hangar and detachment compound; Agreement or program[B]: Republic of Korea–Funded Construction[E]; Source of in-kind project: Host nation support; Estimated value[C]: $4,500,000. Source: GAO analysis of DOD information. [A] Purpose categories were assigned by the Office of the Secretary of Defense based on facility classes listed in DOD Instruction 4165.03, DOD Real Property Categorization, (Aug. 24, 2012) with approval of categories assigned by U.S. Pacific Command and U.S. Forces Korea. [B] Republic of Korea-Funded Construction and Logistics Cost Sharing projects in the Republic of Korea are subject to the Agreement Between the United States of America and the Republic of Korea Concerning Special Measures Relating to Article V of the Agreement Under Article IV of the Mutual Defense Treaty Between The Republic of Korea and the United States of America Regarding Facilities and Areas and the Status of United States Armed Forces in the Republic of Korea (Jan. 15, 2009), and implementation arrangements for the Special Measures Agreement related to Republic of Korea-funded construction of In-Kind Projects under the Calendar Year 2009-2013 Implementation Arrangement. [C] Estimated values were provided by DOD in then-year dollars. These estimates were provided by U.S. officials in Korea after converting figures provided by Republic of Korea officials for each project to U.S. dollars. [D] See Agreement between the United States of America and the Republic of Korea amending the agreement between the United States of America and the Republic of Korea for the Land Partnership Plan of March 29, 2002 (Oct. 26, 2004). [E] See Article I of the Special Measures Agreement stating that the Republic of Korea shall bear, for the duration of this agreement a part of the expenditures associated with the stationing of the United Stated Armed Forces in Korea. This contribution of the Republic of Korea includes Republic of Korea-Funded Construction. [F] See Memorandum of Agreement between the Government of the Republic of Korea and the Government of the United States of America Regarding the Agreed Recommendation for Implementation of the Agreement between the Republic of Korea and the United States of America on the Relocation of United States Forces from the Seoul Metropolitan Area (Oct. 26, 2004) (known as the Yongsan Relocation Plan). [G] See Articles I and II of the Special Measures Agreement related to Republic of Korea-funded construction of In-Kind Projects under the Calendar Year 2009-2013 Implementation Arrangement stating that the Republic of Korea shall bear, for the duration of this agreement a part of the expenditures associated with the stationing of the United Stated Armed Forces in Korea. This contribution of the Republic of Korea includes Logistics Cost Sharing. [End of table] Table 6: In-Kind Construction and Renovation Projects Initiated in Germany during Fiscal Years 2011 and 2012: Estimated values in U.S. dollars: Component: Air Force: Location: Spangdahlem Air Base; Project title or number, purpose, and description[A]: Project Title: Base Expansion; Purpose: Operation and Training; Description: Development of approximately 85 acres of existing farmland and forest area by constructing common area infrastructure-- the first step required to develop an expansion area so the 52nd Fighter Wing can smoothly enhance its mission at Spangdahlem Air Base as part of the Spangdahlem enhancement plan and to support the Spangdahlem consolidation plan; Agreement or program[B]: Agreement between U.S. contracting officer and German Construction Administration; Source of in-kind project[C]: Residual value payment; Estimated value [D]: $7,700,000. Component: Army: Location: Hainerberg Housing and Shopping Center; Project title or number, purpose, and description[A]: Project Title: Site Preparation; Purpose: Housing and Community; Description: Site preparation including road demolition, tree cutting, removal-relocation of infrastructure to prepare the site for follow- on, nonappropriated funds construction of a post exchange and commissary for work that contributes to the overall installation development; Agreement or program[B]: Agreement between U.S. contracting officer and German Construction Administration; Source of in-kind project[C]: Residual value payment; Estimated value [D]: $3,296,000. Location: Moehringen Family Housing; Project title or number, purpose, and description[A]: Project Title: Family Housing Additions; Purpose: Housing and Community; Description: Construction of building additions to three single houses (approximately 215 square feet per unit) to increase size of single houses to meet the benchmark size standards outlined in U.S. Department of Defense, Unified Facilities Criteria 4-711-7, Family Housing (July 13, 2006)[E]; Agreement or program[B]: Agreement between U.S. contracting officer and German Construction Administration; Source of in-kind project[C]: Residual value payment; Estimated value [D]: $263,000. Source: GAO analysis of Department of Defense (DOD) information. [A] Purpose categories were assigned by the Office of the Secretary of Defense based on facility classes listed in DOD Instruction 4165.03, DOD Real Property Categorization, (Aug. 24, 2012) and confirmed with the U.S. European Command. [B] See the National Defense Authorization Act for Fiscal Year 1991, Pub. L. No. 101-510, § 2921, as amended (10 U.S.C § 2687 note), which indicates that it is the sense of Congress that the Secretary of Defense should take steps to ensure that the United States receive consideration equal to the fair market value of the improvements it made to facilities that will be returned to host countries. This provision includes the option for DOD to recover nonmonetary payment in kind in lieu of monetary compensation. DOD officials indicated that all agreements listed in this table were undertaken with this authority. [C] "Residual value" is the negotiated monetary or nonmonetary compensation host nations provide to DOD following the return of DOD- funded facilities or other capital improvements to a host nation. [D] Estimated values were provided by DOD in then-year dollars. These estimates were provided by U.S. officials in Germany after converting figures provided by German officials for each project to U.S. dollars. [E] We did not evaluate the validity of the need or description expressed by DOD. For more information related to projects in Germany, see Committee on Armed Services, U.S. Senate, Inquiry Into U.S. Costs and Allied Contributions to Support the U.S. Military Presence Overseas, S. Rep. No. 113-12 (2013); and DOD Department of Defense Inspector General, DOD Can Improve Its Accounting for Residual Value From the Sale of U.S. Facilities in Europe, DODIG-2012-082 (Alexandria, Va.: May 4, 2012). [End of table] [End of section] Enclosure IV: Domestic In-Kind Construction and Renovation Projects Initiated for the Department of Defense during Fiscal Years 2011 and 2012: Domestically, the military services--the Army, Navy, and Air Force-- initiated 36 in-kind construction and renovation projects that, on the basis of service estimates, total $421.1 million. Of the 36 in-kind projects, 1 project (totaling an estimated value of $334 million) went to the Army's single housing and community project; 3 projects (one from each military department) totaling an estimated value of $73.4 million went to construction or renovation projects involving operation and training,[Footnote 15] and the balance of 32 (from all three military departments) totaling an estimated value of $13.7 million were for purposes such as real-property capitalization, utility and ground improvements, supply, real-property management, and facility condition assessment.[Footnote 16] Comparatively, the Air Force had the most in-kind projects for fiscal years 2011-2012 (24 projects) compared to the Army (5 projects) and Navy (7 projects). Specifically, within its 24 projects, the Air Force granted an easement with a state agency, Florida's Mid-Bay Bridge Authority, with an estimated value of about $8 million, in exchange for building a road connector on Air Force property. Eglin Air Force Base negotiated 20 in-kind projects primarily going towards mission/operations support under its easement with the Mid-Bay Bridge Authority. The 20 in-kind projects under the easement alone constituted almost 83 percent of all the Air Force's in-kind construction and renovation projects in fiscal years 2011-2012. Among other things, the National Defense Authorization Act for Fiscal Year 2013 mandates that GAO provide a listing of each facility constructed or renovated for the Department of Defense (DOD) as payment in kind, the value in U.S. dollars of that construction or renovation, the source of the in-kind payment, the agreement pursuant to which the payment was made, and a description of the purpose and need for the construction or renovation. Table 7 summarizes the domestic construction and renovation projects that used in-kind payments initiated in fiscal years 2011 and 2012. In table 8, we provide the information specified in the act in a listing of in- kind construction and renovation projects initiated within the continental United States for DOD during fiscal years 2011 and 2012. Table 4: Domestic Construction and Renovation Projects That Used In- Kind Payments Initiated by the Military Departments in Fiscal Years 2011 and 2012: Military department: Army; Number of projects: 1; Approximate value (U.S. dollars): $334,000,000; Purpose: Housing and Community. Number of projects: 2; Approximate value (U.S. dollars): $66,000,000[A]; Purpose: Operation and Training. Number of projects: 1; Approximate value (U.S. dollars): $270,005; Purpose: Real Property Capitalization. Number of projects: 1; Approximate value (U.S. dollars): $1,020,000; Purpose: Supply. Army Total: Number of projects: 5; Approximate value (U.S. dollars): $401,290,005. Military department: Navy[B]: Number of projects: 4; Approximate value (U.S. dollars): $1,176,323; Purpose: Utility and Ground Improvements. Number of projects: 1; Approximate value (U.S. dollars): $320,256; Purpose: Operation and Training. Number of projects: 2; Approximate value (U.S. dollars): $3,086,099; Purpose: Housing and Community. Navy Total: Number of projects: 5; Approximate value (U.S. dollars): $4,582,678. Military department: Air Force: Number of projects: 1; Approximate value (U.S. dollars): $7,091,641; Purpose: Operation and Training. Number of projects: 1; Approximate value (U.S. dollars): $40,406; Purpose: Real Property Management. Number of projects: 4; Approximate value (U.S. dollars): $1,338,934; Purpose: Utility and Ground Improvements. Number of projects: 14; Approximate value (U.S. dollars): $5,445,593; Purpose: Real Property Capitalization. Number of projects: 1; Approximate value (U.S. dollars): $103,650; Purpose: Facility Condition Assessment. Number of projects: 2; Approximate value (U.S. dollars): $605,392; Purpose: Housing and Community. Number of projects: 1; Approximate value (U.S. dollars): $621,245; Purpose: Supply. Total: Number of projects: 24; Approximate value (U.S. dollars): $15,246,861. Air Force Total; Number of projects: 36; Approximate value (U.S. dollars): $421,119,544. Source: GAO summary of Department of Defense (DOD) data. [A] Cost data were not available for one of the two mission/operations support projects. [B] The Marine Corps reported no domestic construction or renovation projects using in-kind payments in fiscal years 2011-2012. [End of table] Table 8: In-Kind Construction and Renovation Projects Initiated within the Continental United States for the Department of Defense (DOD) during Fiscal Years 2011 and 2012: Estimated values in U.S. dollars: Component: Navy: Location: Virginia; Project Title: Solar Speed Warning Sign; Project title or number, purpose, and description[A]: Purpose: Utility and Ground Improvements; Description: Solar speed warning sign; Agreement or program: Sprintcom, Inc. (Telecom: antennas on tower); Agreement #: N62470-00-RP-00165; Source of in-kind project: Outlease[C]; Estimated value[B]: $19,962. Location: Virginia; Project title or number, purpose, and description[A]: Project Title: Illuminated Crosswalk System; Purpose: Utility and Ground Improvements; Description: Illuminated crosswalk system; Agreement or program: Global Signal Acquisitions II, LLC (Telecom: cell tower); Agreement #: N62470-12-RP-00002; Source of in-kind project: Outlease[C]; Estimated value[B]: $96,905. Location: Florida; Project title or number, purpose, and description[A]: Project Title: Lighting/Security Monitors; Purpose: Utility and Ground Improvements; Description: Lighting/security monitors to provide security/lighting for six locations at Port Ops and along the Mole Pier in Key West; Agreement or program: City of Key West; Agreement #: N69467-03-RP-00077; Source of in-kind project: Enhanced-use lease[C]; Estimated value[B]: $377,755. Location: California; Project title or number, purpose, and description[A]: Project title: Military Working Dog Facility; Purpose: Operation and Training; Description: Design and installation of military working dog facility at Point Mugu and Port Hueneme--to design and construct two fenced exercise areas including grass covering, irrigation, waste cleanup system and animal watering equipment; Agreement or program: Global Auto Processing Services, Inc. (Land: 78 acres); Agreement #: N62473-07-RP-00046; Source of in-kind project: Enhanced-use lease[C]; Estimated value[B]: $320,256. Location: California; Project title or number, purpose, and description[A]: Project title: Repairs to Ship Stores and Theater (San Nicolas Island); Purpose: Housing and Community; Description: Repairs to Ship Store and Station Theater, San Nicolas Island, Building SNI-151--to improve quality of life at remote island location, sustain morale, welfare, and recreation and ship store operations and comply with National Fire Protection Association requirements; Agreement or program: Global Auto Processing Services, Inc. (Land: 78 acres); Agreement #: N62473-07-RP-00046; Source of in-kind project: Enhanced-use lease[C]; Estimated value[B]: $2,293,000. Location: California; Project title or number, purpose, and description[A]: Project title: Repairs to SurfNet Club and Building PM-20; Purpose: Housing and Community; Description: Repairs to SurfNet Club, Point Mugu Building PM-20--to improve quality of life for enlisted troops at Point Mugu. Facility primarily serves as Internet café and social gathering place for off- duty sailors; Agreement or program: Global Auto Processing Services, Inc. (Land: 78 acres); Agreement #: N62473-07-RP-00046; Source of in-kind project: Enhanced-use lease[C]; Estimated value[B]: $793,099. Location: California; Project title or number, purpose, and description[A]: Project title: Lighted Crosswalks/Street Lighting; Purpose: Utility and Ground Improvements; Description: Lighted crosswalks/street lighting for base beautification; Agreement or program: National Steel and Shipbuilding Company; Agreement #: N62473-07-RP-00084; Source of in-kind project: Enhanced-use lease[C]; Estimated value[B]: $681,701. Component: Air Force: Location: Texas; Project title or number, purpose, and description[A]: Project title: Real Property Boundary Survey; Purpose: Real Property Management; Description: Metes and Bounds survey of enhanced-use lease property at Joint Base San Antonio Fort Sam Houston; Agreement or program: Old Brook Army Medical Center II Enhanced-Use Lease; Agreement #: DACA63-1-07-0554; Source of in-kind project: Enhanced-use lease[C]; Estimated value[B]: $40,406[C]. Location: Texas; Project title or number, purpose, and description[A]: Project title: Design/Build Storm Water Detention Structure; Purpose: Utility and Ground Improvement; Description: Detention pond drainage--to design and construct detention pond outflow for property at Joint Base San Antonio Fort Sam Houston; Agreement or program: Old Brook Army Medical Center II Enhanced-Use Lease; Agreement #: DACA63-1-07-0554; Source of in-kind project: Enhanced-use lease[C]; Estimated value[B]: $239,469[C]. Location: Utah; Project title or number, purpose, and description[A]: Project title: Construct Security Building; Purpose: Operation and Training; Description: Building 408--to provide new facility to meet mission requirements and replace substandard facility for Security Forces/ Office of Special Investigations; Agreement or program: Master Lease; Agreement #: AFMC-HL-1-08-666; Source of in-kind project: Enhanced-use lease[C]; Estimated value[B]: $7,091,641. Location: Florida; Project title or number, purpose, and description[A]: Project title: Site Preparation; Purpose: Utility and Ground Improvements; Description: Data recovery at Federal Prison Camp to prepare site for construction project; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $868,766. Location: Florida; Project title or number, purpose, and description[A]: Project title: Solar Pool Water Heater; Purpose: Housing and Community; Description: Solar water heater for base pool; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $158,392. Location: Florida; Project title or number, purpose, and description[A]: Project title: Locker Room Renovation; Purpose: Housing and Community; Description: Renovation of locker room at Oak Hill building; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $447,000. Location: Florida; Project title or number, purpose, and description[A]: Project title: Munitions Storage Building; Purpose: Supply; Description: Munitions storage building; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $621,245. Location: Florida; Project title or number, purpose, and description[A]: Project title: Roof Replacement; Purpose: Real Property Recapitalization; Description: Replacement of roof for Building 18C; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $224,540. Location: Florida; Project title or number, purpose, and description[A]: Project title: Roof Replacement; Purpose: Real Property Recapitalization; Description: Replacement of roof for Buildings 1759 and 1762; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $149,178. Location: Florida; Project title or number, purpose, and description[A]: Project title: Roof Replacement; Purpose: Real Property Recapitalization; Description: Replacement of roof for Building 253; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $174,651. Location: Florida; Project title or number, purpose, and description[A]: Project title: Bridge Inspection Services; Purpose: Facility Condition Assessment; Description: Inspect installation bridges for repairs; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $103,650. Location: Florida; Project title or number, purpose, and description[A]: Project title: Roof Replacement; Purpose: Real Property Recapitalization; Description: Replacement of roof for Buildings 95 and 101; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $215,181. Location: Florida; Project title or number, purpose, and description[A]: Project title: Roof Replacement; Purpose: Real Property Recapitalization; Description: Replacement of roof for Building 134; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $843,000. Location: Florida; Project title or number, purpose, and description[A]: Project title: Roof Replacement; Purpose: Real Property Recapitalization; Description: Replacements of roof for Buildings 102 and 102A; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $736,279. Location: Florida; Project title or number, purpose, and description[A]: Project title: Roof Replacement/Lightning Protection; Purpose: Real Property Recapitalization; Description: Replacement of roof on Building 100 and construction of lightning protection system; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $810,000. Location: Florida; Project title or number, purpose, and description[A]: Project title: Engineering Design Services; Purpose: Real Property Recapitalization; Description: Design of heating, ventilation, and air conditioning (HVAC) system for Building 129; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $129,650. Location: Florida; Project title or number, purpose, and description[A]: Project title: Engineering Design Services; Purpose: Real Property Recapitalization; Description: Design of fire protection system for Buildings 746-751; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $5,965. Location: Florida; Project title or number, purpose, and description[A]: Project title: Engineering Design Services; Purpose: Real Property Recapitalization; Description: Design of fire protection system for Building 350; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $81,690. Location: Florida; Project title or number, purpose, and description[A]: Project title: Install Lightning Protection System; Purpose: Real Property Recapitalization; Description: Installation of lightning protection system on various buildings; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $675,202. Location: Florida; Project title or number, purpose, and description[A]: Project title: Solar Domestic Hot Water System; Purpose: Real Property Recapitalization; Description: Solar water heater to install solar water heating on Building 862; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $144,753. Location: Florida; Project title or number, purpose, and description[A]: Project title: Airfield Restriping; Purpose: Real Property Recapitalization; Description: Airfield stripping to remove rubber and restripe runway; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $1,172,424. Location: Florida; Project title or number, purpose, and description[A]: Project title: Traffic Signal; Purpose: Utility and Ground Improvements; Description: Mast arm traffic signal installed at 8th Avenue; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $194,999. Location: Florida; Project title or number, purpose, and description[A]: Project title: Hurricane Upgrade; Purpose: Real Property Recapitalization; Description: Hurricane upgrade to Building 380; Agreement or program: Mid-Bay Bridge Easement; Agreement #: AFMC-EG-2-09-001; Source of in-kind project: Easement[C]; Estimated value[B]: $83,080. Location: Florida; Project title or number, purpose, and description[A]: Project title: Engineering Design Services; Purpose: Utility and Ground Improvements; Description: Design for cathodic protection for water tanks; Agreement or program: Okaloosa County Enhanced-use lease; Source of in-kind project: Enhanced-use lease[C]; Estimated value[B]: $35,700. Component: Army: Location: Various locations within continental United States[D]; Project title or number, purpose, and description[A]: Project title: Privatization of Army Lodge Group B; Purpose: Housing and Community; Description: Privatization of Army lodging to renovate, replace, or construct lodging to Intercontinental Hotels Group brand standard and provide lodging services at 11 installations[E]; Agreement or program: Department of the Army Second Amended and Restated Lease and Conveyance of Improvements for Privatization of Army Lodging; Agreement #: DACA65-1-09-47; Source of in-kind project: Private funding; Estimated value[B]: $334,000,000. Location: Ohio; Project title or number, purpose, and description[A]: Project title: Joint Systems Manufacturing Center Lease Improvements; Purpose: Real Property Recapitalization; Description: Joint Systems Manufacturing Center to renovate the leased facilities; Agreement or program: Joint Systems Manufacturing Center-Lima Allen County; Agreement #: DACA27-1-12-016; Source of in-kind project: Enhanced-use lease[C]; Estimated value[B]: $270,005. Location: Kentucky; Project title or number, purpose, and description[A]: Project title: Fuel Service Operations Facility; Purpose: Operation and Training; Description: Government Owned/Contractor Operated--Contractor Owned/ Contractor Operated (GOCO/COCO) Fuel services operations and maintenance; Agreement or program: Fort Campbell Military Installation; Agreement #: DACA27-1-11-397; Source of in-kind project: Enhanced-use lease[C]; Estimated value[B]: $Not available. Location: California; Project title or number, purpose, and description[A]: Project title: Facility Construction; Purpose: Operation and Training; Description: Real-property exchange to build six new facilities/projects; Agreement or program: Exchange Agreement per 10 U.S.C. § 18240; Source of in-kind project: Exchange[C]; Estimated value[B]: $66,000,000. Location: Maryland; Project title or number, purpose, and description[A]: Project title: Warehouse Facility Purpose: Supply; Description: Real-property exchange to build new heated warehouse for storage of unit equipment and renovate warehouse to store marine equipment used in boat operations; Agreement or program: Exchange Agreement per 10 U.S.C. § 18240; Source of in-kind project: Exchange[C]; Estimated value[B]: $1,020,000. Source: GAO analysis of DOD information. [A] Purpose categories were assigned by the Office of the Secretary of Defense based on facility classes listed in DOD Instruction 4165.03 , DOD Real Property Categorization, (Aug. 24, 2012). [B] Estimated values were provided by DOD in then-year dollars. [C] Statutory authorities for these agreements include, among others: 10 U.S.C. § 2667 (leases and enhanced-use leases); 10 U.S.C. § 2668 (easements); and 10 U.S.C. § 18240 (real property exchange). [D] The installations include: Fort Belvoir; Fort Bliss; Fort Buchanan; Fort Campbell; Fort Hamilton; Fort Huachuca; Fort Gordon; Fort Knox; Fort Leonard Wood; Fort Wainwright; and White Sands Missile Range. [E] Privatization of Army Lodging is included for the purpose of completeness, but, according to DOD officials, this program differs in significant ways from the other in-kind projects listed here. While the lodging and housing privatization programs result in private in- kind construction or renovation of facilities that, in some cases, continue to be owned by DOD and will be returned to DOD at the conclusion of the relevant lease term, according to DOD officials, the purpose of these programs is to construct or renovate facilities to rent to servicemembers, not to obtain construction or renovation services of DOD facilities as payment in kind. These officials also note that due to the length of the leases in question (a typical lease term is 50-75 years) the facilities in question will not return to the department until late in their useful lives, which underscores the fact that these agreements are not intended to be arrangements for obtaining construction or renovation as payment in kind. [End of table] [End of section] Enclosure V: Comments from the Department of Defense: Office Of The Under Secretary of Defense: Acquisition, Technology and Logistics: 3000 Defense Pentagon: Washington, DC 20301-3010: March 27, 2014: Mr. Brian Lepore: Director, Defense Capabilities and Management: U.S. Government Accountability Office: 441 G Street, NW: Washington DC 20548: Dear Mr. Lepore: This is the Department of Defense (DoD) response to the GAO Draft Report GAO-14-280R, "Defense Infrastructure: In-Kind Projects Initiated during Fiscal Years 2011 and 2012," dated February 25,2014 (GAO Code 351796). We thank you and your staff for your efforts in producing a comprehensive look into the complex topic of DoD use of in-kind construction and renovation projects. The report properly highlights how the Department uses in-kind construction from different outside sources to help offset and conserve the appropriated funds needed to build and improve facilities in support of military needs in the United States and overseas. However, as we previously indicated in our review of GAO's Draft Statement of Fact, the Department is concerned that GAO's report fails to clearly distinguish in-kind payments from in-kind construction provided by the United States' strategic host nation partners under binding international agreements focused on cost sharing. While GAO included a footnote summarizing the DoD's concern about host nation costsharing contributions being identified in the report as payment in-kind projects, the Department believes the vast majority of the projects - all those based on international agreements between the U.S. Government and the Governments of Japan or Korea - identified in the draft GAO report as paid for with "payments in-kind" are in fact mischaracterized. The Department has provided technical corrections under separate cover. We continue to appreciate the good working relationship that exists between our staffs and look forward to continuing this into the future as GAO finalizes this report and completes future examinations of Defense infrastructure. Sincerely, Signed by: John Conger: Acting, Deputy Under Secretary of Defense: (Installations and Environment): [End of section] Footnotes: [1] Pub. L. No. 112-239, § 2805 (2013). [2] DOD officials describe three basic types of in-kind construction: (1) host-nation support provided in the form of direct construction rather than a cash contribution (e.g., in Japan and the Republic of Korea), (2) construction provided by a host nation as compensation for the residual value of U.S.-funded improvements returned to that host nation (e.g., PIK in Germany), and (3) fair market value consideration for U.S. property leased to a person/entity provided in the form of direct construction rather than cash (as authorized by 10 U.S.C. § 2667) (e.g., domestic in-kind). Given these three types, DOD believes only the last two fit the accepted definition of in-kind payments. A payment is something one party provides to another party in response to receiving something. Therefore in DOD's view, any international agreements in which a host nation agrees to voluntarily offset U.S. stationing costs should not be misconstrued as a "payment" because there is no quid pro quo exchange of like goods or services. [3] Committee on Armed Services, U.S. Senate, Inquiry Into U.S. Costs and Allied Contributions to Support the U.S. Military Presence Overseas, S. Rep. No. 113-12 (2013); and Department of Defense Inspector General, DOD Can Improve Its Accounting for Residual Value From the Sale of U.S. Facilities in Europe, DODIG-2012-082 (Alexandria, Va.: May 4, 2012). "Residual value" is the negotiated monetary or nonmonetary compensation that host nations provide to DOD following the return of DOD-funded facilities or other capital improvements to the host nation. [4] During this period all in-kind projects overseas were located in Japan, the Republic of Korea, and Germany. [5] The Marine Corps did not initiate any in-kind projects during fiscal years 2011 and 2012. [6] Army Lodging Privatization is included in our sample for the purpose of completeness, but according to DOD officials, this program differs in significant ways from the other in-kind projects listed here. While the lodging and housing privatization programs result in private in-kind construction or renovation of facilities that, in some cases, continue to be owned by DOD and will be returned to DOD at the conclusion of the relevant lease term. According to DOD officials, the purpose of these programs is to construct or renovate facilities to rent to servicemembers, not to obtain construction or renovation services of DOD facilities in-kind. These officials also note that due to the length of the leases in question (a typical lease term is 50-75 years) the facilities in question will not return to the department until late in their useful lives, which underscores the fact that these agreements are not intended to obtain construction or renovation in-kind. [7] For more information, see GAO, Defense Management: Comprehensive Cost Information and Analysis of Alternatives Needed to Assess Military Posture in Asia, GAO-11-316 (Washington, D.C.: May 25, 2011); and Defense Management: More Reliable Cost Estimates and Further Planning Needed to Inform the Marine Corps Realignment Initiatives in the Pacific, GAO-13-360 (Washington, D.C.: June 11, 2013). [8] The Republic of Korea has some prohibitions against specific project types, such as recreation facilities, and these are not presented for contracting and completion. [9] The Republic of Korea supports force-structure initiatives through separate bilateral agreements, but the Special Measures Agreement defines an annual amount that the Republic of Korea will provide either in cash or in-kind. The contribution of the Republic of Korea for 2009 was 760 billion Korean won, and the 2010, 2011, 2012, and 2013 contributions were determined by increasing the contribution of the previous year by the inflation rate (consumer price index). Expressed in dollars, the amount that the Republic of Korea provides is about $800 million for 2012. [10] According to Air Force officials, the Facilities Utilization Board prioritizes every project in the civil engineering arena, to include in-kind payment projects, with the Wing Commander chairing the meeting. Officials stated that the board comprises members from the Air Base Wing, Air Armament Center, Special Forces Group, Test Wing, Civil Engineer Group, Special Operations Wing, Air Armament Center, Air Forces Research Lab, Ranger Training Brigade, Space Control Squadron, and Naval School Explosive Ordnance Disposal. [11] The Army was the only service that reported acquiring facilities by exchange within fiscal years 2011-2012 and the Air Force was the only service that reported granting an easement within the same years [12] For certain leases entered into under 10 U.S.C. § 2667, a two- step notification process is required under section 2662 of Title 10 of the United States Code. [13] Purpose categories were assigned by the Office of the Secretary of Defense based on facility classes listed in Department of Defense, DOD Real Property Categorization, DOD Instruction 4165.03 (Aug. 24, 2012), and assignment of categories was confirmed with Pacific Command. [14] Pub. L. No. 112-239, § 2805 (2013). [15] Although there were four projects, cost data was not available for one Army mission/operations support project. [16] Army Lodging Privatization is included in our sample for the purpose of completeness, but, according to DOD officials, this program differs in significant ways from the other in-kind projects listed here. While the lodging and housing privatization programs result in private in-kind construction or renovation of facilities that, in some cases, continue to be owned by DOD and will be returned to DOD at the conclusion of the relevant lease term, according to DOD officials, the purpose of these programs is to construct or renovate facilities to rent to servicemembers, not to obtain construction or renovation services of DOD facilities in-kind. These officials also note that due to the length of the leases in question (a typical lease term is 50-75 years) the facilities in question will not return to the department until late in their useful lives, which underscores the fact that these agreements are not intended to obtain construction or renovation in-kind. [End of section] GAO's Mission: The Government Accountability Office, the audit, evaluation, and investigative arm of Congress, exists to support Congress in meeting its constitutional responsibilities and to help improve the performance and accountability of the federal government for the American people. GAO examines the use of public funds; evaluates federal programs and policies; and provides analyses, recommendations, and other assistance to help Congress make informed oversight, policy, and funding decisions. GAO's commitment to good government is reflected in its core values of accountability, integrity, and reliability. 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