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United States Government Accountability Office: 
GAO: 

Report to Congressional Requesters: 

February 2011: 

Defense Management: 

Additional Cost Information and Stakeholder Input Needed to Assess 
Military Posture in Europe: 

GAO-11-131: 

GAO Highlights: 

Highlights of GAO-11-131, a report to congressional requesters. 

Why GAO Did This Study: 

In 2004, the Department of Defense (DOD) announced sweeping changes to 
restructure U.S. military presence overseas and reduce military 
posture in Europe. In August, 2010, the Secretary of Defense called 
for a review of DOD operations and activities to identify 
opportunities to decrease costs in order to free funds to support 
other DOD priorities. The Senate Appropriations Subcommittee on 
Military Construction and Veterans' Affairs asked GAO to determine the 
extent to which the European Command (EUCOM) (1) estimates and reports 
the total cost of DOD’s installations in Europe and (2) has defined 
methods for evaluating posture alternatives and including the views of 
interagency stakeholders in its posture planning process. To address 
these objectives, GAO assessed DOD plans and guidance, reviewed 
planning efforts in EUCOM, and collected obligations data from the 
military services for the military construction, family housing, and 
operation and maintenance appropriations. 

What GAO Found: 

DOD posture planning guidance does not require EUCOM to include 
comprehensive cost data in its theater posture plan and, as a result, 
DOD lacks critical information that could be used by decision makers 
as they deliberate posture requirements. DOD guidance requires that 
theater posture plans provide specific information on, and estimate 
the military construction costs for, installations in a combatant 
commander’s area of responsibility. However, this guidance does not 
require EUCOM to report the total cost to operate and maintain 
installations in Europe. GAO analysis shows that of the approximately 
$17.2 billion obligated by the services to support installations in 
Europe from 2006 through 2009, approximately $13 billion (78 percent) 
was for operation and maintenance costs. Several factors—such as the 
possibility of keeping four Army brigades in Europe instead of two—
could impact future costs. DOD is drafting guidance to require more 
comprehensive cost estimates for posture initiatives; however, these 
revisions will not require commanders to report costs, unrelated to 
posture initiatives, for DOD installations. GAO’s prior work has 
demonstrated that comprehensive cost information is critical to 
support decisions on funding and affordability. Until DOD requires the 
combatant commands to compile and report comprehensive cost data in 
their posture plans, DOD and Congress will be limited in their 
abilities to make fully informed decisions regarding DOD’s posture in 
Europe. 

EUCOM has developed an approach to compile posture requirements, but 
it does not have clearly defined methods for evaluating posture 
alternatives or routinely incorporating the views of interagency 
stakeholders. EUCOM has taken several steps to assign responsibilities 
for developing its posture plan and established an Executive Council 
to deliberate posture issues and work with the service component 
commands, but the process of developing a theater posture plan is 
relatively new and is not yet clearly defined and codified in command 
guidance. While EUCOM’s steps to date have improved its ability to 
communicate with stakeholders and resolve conflicting views on posture 
issues, it has not been clearly defined and codified in command 
guidance. Furthermore, it does not provide for the analysis of costs 
and benefits, because the combatant commander has not been required to 
include such analysis in developing the theater posture plan. In 
addition, the Interagency Partnering Directorate—which was established 
by the EUCOM commander to improve interagency coordination within the 
command—has been included in the Executive Council, but EUCOM has not 
defined how interagency representatives can regularly participate in 
ongoing posture planning activities. As a result of these weaknesses 
in EUCOM’s posture planning approach, the command is limited in its 
ability to consider and evaluate the cost of posture in conjunction 
with the strategic benefits it provides, and it may not be fully 
leveraging interagency perspectives as it defines future posture 
requirements. 

What GAO Recommends: 

GAO recommends that DOD revise posture planning guidance to require 
comprehensive estimates of posture costs and provide for consistent 
analysis of posture alternatives, and that EUCOM clarify its posture 
planning process and methods to regularly obtain interagency 
perspectives. DOD agreed with GAO’s recommendations and identified 
corrective actions, but additional steps are needed to fully address 
the recommendations. 

View GAO-11-131 or key components. For more information, contact John 
Pendleton at (404) 679-1816 or pendletonj@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

DOD Guidance Does Not Require EUCOM to Estimate or Report the Total 
Cost of Posture: 

EUCOM Lacks a Systematic Process to Evaluate Posture Alternatives and 
Routinely Incorporate Interagency Views in Posture Planning: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Total Cost of DOD's Installations in EUCOM's Area of 
Responsibility: 

Appendix III: Comments from the Department of Defense: 

Appendix IV: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Figures: 

Figure 1: EUCOM Area of Responsibility: 

Figure 2: National and DOD Guidance, Strategies, and Plans Related to 
Global Defense Posture: 

Figure 3: Service Obligations for DOD Installations in EUCOM's Area of 
Responsibility (Fiscal Years 2006-2009): 

Figure 4: Military Construction, Family Housing, and Operation and 
Maintenance Obligations: Fiscal Years 2006-2009 (Then Year Dollars), 
EUCOM Area of Responsibility: 

Figure 5: Army, Navy, and Air Force Obligations: Fiscal Years 2006-
2009 (Then Year Dollars), EUCOM Area of Responsibility: 

Figure 6: Obligations by Appropriation Category: Fiscal Years 2006-
2009 (Then Year Dollars), EUCOM Area of Responsibility: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

February 3, 2011: 

The Honorable Daniel K. Inouye: 
Chairman: 
The Honorable Thad Cochran: 
Vice Chairman: 
Committee on Appropriations: 
United States Senate: 

In 2004, the Department of Defense (DOD) announced sweeping changes to 
restructure U.S. military presence overseas and reduce military 
posture in Europe. As part of this restructuring, DOD planned to 
return up to 70,000 service members and 100,000 family members and 
civilian employees living overseas to the United States. Since that 
time, DOD has adjusted its global posture plans. For example, in 
February, 2010, DOD announced in the Quadrennial Defense Review (QDR) 
that it would halt a planned move of two Army brigades out of Europe 
while the North Atlantic Treaty Organization Strategic Concept is 
being reviewed. 

In addition, the 2010 QDR highlights the importance of periodically 
assessing and tailoring global defense posture in light of continued 
globalization and enduring transnational threats. In it DOD indicates 
that defense posture will continuously adapt to the dynamic world 
environment, and ongoing assessments of national interests, military 
requirements, and the strategic environment should guide U.S. global 
defense posture planning. In addition, in August 2010, amid growing 
budgetary pressures, the Secretary of Defense called on military 
leaders to consider the affordability of programs in developing future 
plans, with particular emphasis on reducing overhead costs. The 
Secretary of Defense seeks a $100 billion reduction in overhead costs 
over the next 5 years and froze the size of combatant commands and 
required zero-based reviews of their staffing and organizations. 

In the 2010 QDR, DOD identified global posture as consisting of (1) 
forces (forward-stationed and rotationally deployed), capabilities, 
and equipment; (2) overseas infrastructure and facilities; and (3) 
international agreements with allies and key partners that may address 
issues such as access, transit, and the framework under which U.S. 
military personnel operate in a foreign country. This report focuses 
on one of these three elements--DOD's network of overseas facilities, 
which can vary widely in size and complexity. 

Given the cost of DOD's efforts to realign its global posture and the 
criticality of the U.S. force structure and infrastructure abroad to 
national security, you asked us to examine the costs associated with 
current and planned changes to DOD's facilities in Europe and U.S. 
European Command's (EUCOM) method for analyzing posture alternatives. 
This report examines the extent to which EUCOM (1) estimates and 
reports the total cost of DOD's installations in Europe and (2) has 
defined methods for evaluating posture alternatives and including the 
views of interagency stakeholders in its posture planning process. 
[Footnote 1] 

This report is one of a series of GAO reports on DOD's global posture. 
Since 2006, we have reported on issues related to DOD's overall 
posture strategy and management practices, the military buildup on 
Guam, the transformation of Army posture in Europe, and the 
establishment of the U.S. Africa Command. Those reports contain a 
number of recommendations to improve DOD's management of these efforts 
and the information that is made available about them to the executive 
branch and congressional committees. In many cases, DOD has agreed 
with our recommendations and has taken actions to implement them. A 
list of these related products is included at the end of this report. 

For each of our objectives, we contacted and interviewed appropriate 
officials at various offices within the Office of the Secretary of 
Defense; Headquarters offices in the Departments of the Army, Navy, 
and Air Force; Headquarters, U.S. European Command; and related Army, 
Navy, and Air Force service component commands. In addition, to 
determine the extent to which EUCOM estimates and reports the total 
cost of posture in Europe, we assessed the information included in the 
2009 DOD Global Defense Posture Report to Congress and the 2009 and 
2010 EUCOM theater posture plans. We requested and obtained data from 
the Departments of the Army, Navy, and Air Force and their EUCOM 
service component commands,[Footnote 2] on posture funding 
requirements and obligations for fiscal years 2006-2015. To assess the 
reliability of the cost data, we reviewed data system documentation 
and obtained information on internal controls for those systems. We 
determined that the cost data we received were reliable for the 
purposes of this report. To determine the extent to which EUCOM has 
clearly defined methods for evaluating posture alternatives and 
included the views of interagency stakeholders, we reviewed management 
practices established by the GAO Cost Estimating and Assessment 
Guide[Footnote 3] and DOD and military service guidance to inform our 
audit. Additionally, we reviewed DOD and service guidance on 
completing economic analyses and analyses of alternatives, and DOD 
guidance on collaborating with other government agencies. We conducted 
this performance audit from September 2009 through December 2010 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. Appendix I 
provides a more detailed description of our scope and methodology. 

Background: 

DOD operates six geographic combatant commands, each with an assigned 
area of responsibility. Each geographic combatant command carries out 
a variety of missions and activities, including humanitarian 
assistance and combat operations, and assigns functions to subordinate 
commanders. Each command is supported by a service component command 
from each of the services, as well as a theater special operations 
command. The Departments of the Army, Navy, and Air Force have key 
roles in making decisions on where to locate their forces when they 
are not otherwise employed or deployed by order of the Secretary of 
Defense or assigned to a combatant command. In addition, the military 
departments allocate budgetary resources to construct, maintain, and 
repair buildings, structures, and utilities and to acquire the real 
property or interests in real property necessary to carry out their 
responsibilities. All of these entities play significant roles in 
preparing the detailed plans and providing the resources that the 
combatant commands need to execute operations in support of their 
missions and goals. 

EUCOM's area of responsibility covers all of Europe, large portions of 
Asia, parts of the Middle East, and the Arctic and Atlantic 
Oceans.[Footnote 4] The command is responsible for U.S. military 
relations with NATO and 51 countries. EUCOM also supports the 
activities of more than 100,000 military and civilian personnel across 
10.7 million square miles of land and 13 million square miles of ocean 
(see figure 1). 

Figure 1: EUCOM Area of Responsibility: 

[Refer to PDF for image: world map] 

EUCOM Area of Responsibility is highlighted on the map. 

Source: DOD, Map Resources (map). 

[End of figure] 

DOD's facilities are located in a variety of sites that vary widely in 
size and complexity; some sites are large complexes containing many 
facilities to support military operations, housing, and other support 
facilities while other sites can be as small as a single radar site. 
DOD also organizes multiple sites under a single installation. For 
example, the Air Force base in Kaiserslautern, Germany is comprised of 
45 sites that vary in terms of the number of personnel, number of 
buildings, and square footage. This base includes large sites like 
Ramstein Air Base and smaller sites like the Breitenbach radar site. 
To develop common terminology for posture planning, DOD has identified 
three types of installations that reflect the large-to-small scale of 
DOD's enduring overseas posture---main operating bases, forward 
operating sites, and cooperative security locations. 

* Main operating bases are defined as overseas installations with 
relatively large numbers of permanently stationed operating forces and 
robust infrastructure that provide enduring family support facilities. 

* DOD defines forward operating sites as scaleable installations 
intended for rotational use by operating forces, rather than 
supporting permanently stationed forces. Because they are scaleable, 
they may have a large capacity that can be adapted to provide support 
for combat operations, and therefore, DOD populations at these 
locations can vary greatly, depending on how they are used at any 
given time. 

* Cooperative security locations are overseas installations with 
little or no permanent U.S. military presence, maintained with 
periodic service, contractor, or host-nation support. As with forward 
operating sites, DOD populations at these locations can vary greatly, 
depending on how they are used at any given time. 

The number of sites located in EUCOM's area of responsibility has 
decreased as the post-Cold War security environment has changed; in 
1990, the Army alone had over 850 sites throughout Europe. In the past 
decade, the total number of sites in EUCOM's area of responsibility 
continued to decline, falling to 350 for all services in 2009. 

A hierarchy of national and defense guidance informs the development 
of DOD's global posture. The National Security Strategy, issued by the 
President at the beginning of each new Administration and annually 
thereafter, describes and discusses the worldwide interests, goals, 
and objectives of the United States that are vital to its national 
security, among other topics. The Secretary of Defense then provides 
corresponding strategic direction through the National Defense 
Strategy. Furthermore, the Chairman of the Joint Chiefs of Staff 
provides guidance to the military through the National Military 
Strategy. On specific matters, such as global defense posture, DOD has 
developed new guidance in numerous documents, principally the 2008 
Guidance for Employment of the Force and the 2008 Joint Strategic 
Capabilities Plan.[Footnote 5] The Guidance for Employment of the 
Force consolidates and integrates planning guidance related to 
operations and other military activities, while the Joint Strategic 
Capabilities Plan implements the strategic policy direction provided 
in the Guidance for the Employment of the Force and tasks combatant 
commanders with developing theater campaign, contingency, and posture 
plans that are consistent with the Guidance for Employment of the 
Force. The theater campaign plan translates strategic objectives to 
facilitate the development of operational and contingency plans, while 
the theater posture plan provides an overview of posture requirements 
to support those plans and identifies major ongoing and new posture 
initiatives, including current and planned military construction 
requirements. Figure 2 illustrates the relationships between these 
national and DOD strategic guidance documents. 

Figure 2: National and DOD Guidance, Strategies, and Plans Related to 
Global Defense Posture: 

[Refer to PDF for image: illustration] 

National strategies and guidance: 

National Security Strategy: 
National Defense Strategy: 
National Military Strategy: 
Guidance for the Employment of the Force: 
Joint Strategic Capabilities Plan: 

Combatant command plans: 

Theater Campaign Plans: 
Theater Posture Plans: 

Source: GAO analysis of National Strategies and Defense guidance. 

[End of figure] 

DOD Guidance Does Not Require EUCOM to Estimate or Report the Total 
Cost of Posture: 

DOD guidance does not require EUCOM to include comprehensive 
information on posture costs in its theater posture plan and, as a 
result, DOD lacks critical information that could be used by decision 
makers and congressional committees as they deliberate posture 
requirements and the associated allocation of resources. DOD guidance 
requires that the theater posture plans prepared by each combatant 
command provide information on the inventory of installations in a 
combatant commander's area of responsibility and estimates of the 
funding required for military construction projects in their theater 
posture plans, such as the $1.2 billion in military construction 
funding projected to build a new hospital in Landstuhl, Germany. 
However, this guidance does not specifically require, and therefore 
EUCOM does not report the total cost to operate and maintain DOD's 
posture in Europe. Our analysis shows that operation and maintenance 
costs are significant. Of the approximately $17.2 billion obligated by 
the services to support DOD's posture in Europe from 2006 through 
2009, approximately $13 billion (78 percent) was for operation and 
maintenance costs.[Footnote 6] The military services project that 
operation and maintenance funding requirements will continue at about 
$3.2 billion annually for fiscal years 2011-2015. However, DOD has 
several efforts underway in areas such as planning for missile defense 
sites and determining the number and composition of Army brigades in 
Europe that could impact estimates of these future costs. DOD is 
drafting guidance to require more comprehensive cost estimates for 
ongoing, current, or planned initiatives and rough order of magnitude 
costs for newly proposed posture initiatives. These proposed 
revisions, however, will not require commanders to report operation 
and maintenance costs unrelated to posture initiatives at existing 
installations in the theater posture plan. Our prior work has 
demonstrated that comprehensive cost information--including accurate 
cost estimates--is a key component that enables decision makers to 
make funding decisions, develop annual budget requests, and to 
evaluate resource requirements at key decision points. Until DOD 
requires the combatant commands to compile and report comprehensive 
cost data DOD and Congress will have limited visibility into the cost 
of posture in Europe, which may impact their ability to make fully 
informed funding and affordability decisions. 

EUCOM's Posture Plan Does Not Report Operation and Maintenance Costs: 

The 2008 Joint Strategic Capabilities Plan requires that theater 
posture plans prepared by each combatant command provide information 
on each installation in a combatant commander's area of 
responsibility, to include identifying the service responsible for 
each installation, the number of military personnel at the 
installation, and estimates of the funding required for military 
construction projects.[Footnote 7] In accordance with these reporting 
requirements, EUCOM's 2009 and 2010 theater posture plans provided 
personnel numbers, identified service responsibilities, and specified 
posture initiatives on installations within EUCOM's area of 
responsibility, and estimated the funding required for proposed 
military construction projects for the current year and projected 
military construction costs over the next 5 years. 

However, the Joint Strategic Capabilities Plan does not specifically 
require the combatant commands to report estimates for other types of 
costs, such as costs associated with the operation and maintenance of 
DOD installations, in the theater posture plan. DOD's operation and 
maintenance funding provides for a large number of expenses. With 
respect to DOD installations it provides for base operations support 
and sustainment, restoration, and modernization of DOD's buildings and 
infrastructure. Base operations support funding can be used to pay for 
expenses such as recurring maintenance and repair, utilities, and 
janitorial expenses. Sustainment, restoration, and modernization 
funding is used to provide resources for maintenance and repair 
activities necessary to keep facilities in good working order. 
According to EUCOM officials, since operation and maintenance costs 
are not required to be reported by the Joint Strategic Capabilities 
Plan, EUCOM's 2009 and 2010 theater posture plans do not contain 
estimates for the funding required to operate and maintain DOD's 
installations or the approximately 310 other sites that comprise the 
services' posture in EUCOM's area of responsibility. 

To obtain a more comprehensive estimate of the cost of DOD's posture 
in Europe we gathered obligations data from the Army, Navy, and Air 
Force related to military construction, family housing, and operation 
and maintenance appropriations for installations in the EUCOM area of 
responsibility and found that military construction and family housing 
obligations accounted for about one-fifth of the services' total 
obligations against those appropriations from fiscal years 2006 
through 2009.[Footnote 8] In total, over the period, the military 
services obligated about $17.2 billion to build, operate, and maintain 
installations in Europe, of which $3.8 billion (22 percent) was for 
military construction and $13.4 billion (78 percent) was for operation 
and maintenance of these installations. Of this $13.4 billion more 
than 50 percent was obligated for base operations support services 
which include hiring security forces to protect Army bases and 
obtaining utilities and janitorial services for installations (for a 
more detailed breakdown of costs at installations in Europe see figure 
6 in appendix II). On average, the services reported they obligated 
approximately $4.3 billion annually for installations in EUCOM's area 
of responsibility (see figure 3). 

Figure 3: Service Obligations for DOD Installations in EUCOM's Area of 
Responsibility (Fiscal Years 2006-2009): 

[Refer to PDF for image: stacked vertical bar graph] 

Fiscal year: 2006; 
Operation and maintenance: $3.64 billion; 
Military construction and family housing: $754 million. 

Fiscal year: 2007; 
Operation and maintenance: $3.31 billion; 
Military construction and family housing: $1.05 billion. 

Fiscal year: 2008; 
Operation and maintenance: $3.16 billion; 
Military construction and family housing: $995 million. 

Fiscal year: 2009; 
Operation and maintenance: $3.34 billion; 
Military construction and family housing: $998 million. 

Source: GAO analysis of Army, Navy, and Air Force obligations data. 

Note: This figure reflects obligations data. We did not include 
supplemental funding provided to support ongoing combat operations or 
the obligations made by tenant organizations, such as the Defense 
Logistics Agency. See appendix II for information about data 
limitations. 

[End of figure] 

Ongoing Efforts May Influence the Cost of DOD's Posture in Europe: 

Our analysis of the data provided by the military services projects 
that operation and maintenance funding requirements will continue at 
about $3.2 billion annually for fiscal years 2011-2015.[Footnote 9] 
However, DOD has several efforts underway--in areas such as reviewing 
posture requirements and reducing overhead costs, planning for missile 
defense sites, and determining the number and composition of Army 
brigades in Europe--that may affect the precision of these projections. 

* Reviewing Posture and Other Initiatives: DOD is reviewing its 
posture worldwide and has begun a series of efficiency initiatives 
focused on reducing overhead costs. These efforts include an 
examination of headquarters like those in Europe. Specifically, the 
Secretary of Defense has questioned why the Army, Navy, and Air Force 
service components in EUCOM are commanded by four-star general or flag 
officers, which can increase costs, given the support generally 
required for a 4-star command. Also, the Army is continuing its 
efforts to consolidate its posture in Europe, including an estimated 
$240 million requested for further upgrades to its facilities in 
Wiesbaden, Germany. Depending on the results of the DOD-wide global 
posture study and efficiency reviews, EUCOM and the services may have 
to revise their posture plans. 

* Planning for European Ballistic Missile Defense: DOD has altered its 
plan to build missile defense sites in Poland and the Czech Republic 
in favor of a phased approach that relies on a combination of land-and 
sea-based defenses. DOD anticipates implementing this approach through 
2020; however, DOD has not estimated the life-cycle cost of the phased 
adaptive approach for Europe. 

* Keeping Army Brigades in Europe: In September 2010, we reported that 
delays in decisions associated with the number and composition of U.S. 
Army forces in Europe will impact posture costs. Prior to the 2010 
Quadrennial Defense Review, the Army had planned to return two of four 
brigade combat teams stationed in Europe to the United States in 
fiscal years 2012 and 2013, which would have saved millions annually 
in overseas stationing costs by allowing the closure of two 
installations in Germany. However, these plans are on hold pending the 
results of ongoing DOD assessments of defense posture. Army analysis 
has concluded that the long-term incremental costs for keeping four 
brigades in Europe (rather than two) will be between $1 billion and $2 
billion for fiscal years 2012 through 2021 depending on the 
assumptions used.[Footnote 10] 

DOD Posture Planning Guidance Does Not Require EUCOM to Estimate and 
Report Total Posture Costs: 

To improve DOD's reporting on global posture costs, we recommended, in 
July 2009, that the Secretary of Defense direct the Under Secretary of 
Defense (Comptroller) to develop a requirement and appropriate 
guidance for constructing an estimate of total global defense posture 
costs that reflects the basic characteristics of a credible cost 
estimate as defined in GAO's Cost Estimating and Assessment Guide. 
[Footnote 11] In response to our recommendation DOD officials told us 
they are revising the Joint Strategic Capabilities Plan to require 
additional cost information in future theater posture plans. According 
to officials in the Office of the Under Secretary of Defense 
(Comptroller) and Joint Staff, the revised guidance would require the 
combatant commands to provide (1) current and projected full posture 
project costs for the next 5 years for planned posture initiatives 
(including construction, furniture, fixtures, equipment, and any 
operation and maintenance costs) and (2) the rough order-of-magnitude 
cost (including one-time and recurring costs, and cost to complete) 
for posture change proposals. As of November 2010, the revisions to 
this guidance had not been completed or approved within DOD. 

Although these proposed revisions would provide more comprehensive 
information on the cost to complete posture initiatives, they do not 
fully address our recommendation to compile total costs because they 
will not require the combatant commands to report, for each 
installation, the operation and maintenance costs unrelated to posture 
initiatives in conjunction with military construction costs by 
installation. These operation and maintenance costs comprise much of 
the financial obligations to support DOD's overseas installations. By 
focusing this new guidance only on posture initiatives, DOD is 
overlooking operation and maintenance costs of installations and does 
not consider them when making posture decisions. However, these costs 
have been substantial, with DOD obligating about $3.4 billion annually 
in EUCOM's area of responsibility, as shown in figure 3. 

Comprehensive Cost Estimates Are Critical to Support Decisions on 
Funding and Affordability: 

Our prior work has demonstrated that comprehensive cost information is 
a key component in enabling decision makers to set funding priorities, 
develop annual budget requests, and evaluate resource requirements at 
key decision points. We have developed a cost estimation process that, 
when followed, should result in reliable and valid cost estimates that 
management can use to make informed decisions.[Footnote 12] 
Furthermore, guidance from the Office of Management and Budget has 
highlighted the importance of developing accurate cost estimates for 
all agencies, including DOD.[Footnote 13] 

DOD and EUCOM officials acknowledge that the provision of more 
comprehensive cost data in the theater posture plans could be 
beneficial; EUCOM officials told us that having more comprehensive 
cost information would provide a better context for evaluating posture 
requirements. However, EUCOM officials said that they would have to 
rely on the service component commands to provide this information for 
inclusion in future theater posture plans. Until DOD requires the 
combatant commands to compile and report on comprehensive costs for 
established locations, DOD and Congress will be limited in their 
ability to weigh the costs and benefits of existing posture and 
posture initiatives and to make fully informed decisions on funding 
DOD's posture in Europe. 

EUCOM Lacks a Systematic Process to Evaluate Posture Alternatives and 
Routinely Incorporate Interagency Views in Posture Planning: 

EUCOM has developed an approach to compile posture requirements and 
prepare annual theater posture plans, but does not have clearly 
defined methods for evaluating posture alternatives or routinely 
incorporating the views of interagency stakeholders. To support 
posture planning, EUCOM assigned primary responsibility for developing 
its theater posture plan to its Strategy Implementation Branch and 
established an Executive Council and supporting Integration Team. The 
council and integration team provide a forum for discussing posture 
issues that may cross service lines, such as issues concerning sites 
that are used by multiple services but supported by funding from a 
single service. In addition, EUCOM has undertaken a series of actions 
to work with the service component commands in developing its theater 
posture plan, such as holding a posture planning conference. Although 
the approach EUCOM has taken to determine posture requirements has 
fostered greater communication between key stakeholders and improved 
its ability to resolve conflicting views on posture issues, it has not 
been clearly defined and codified in command guidance, and it does not 
specifically provide for the comprehensive analysis of costs and 
benefits, because the combatant commander has not been required to 
include such analysis in developing the theater posture plan. In 
addition, the Interagency Partnering Directorate, which was 
established by the EUCOM commander to improve interagency coordination 
for the command, did not fully participate in developing the 2010 
posture plan, because its role in posture planning has not been 
defined. As a result of these weaknesses in EUCOM's posture planning 
approach, the command is limited in its ability to consider and 
evaluate the cost of posture in conjunction with the strategic 
benefits it provides and may not be fully leveraging interagency 
perspectives as it defines future posture requirements. 

EUCOM's Approach to Compile Posture Requirements and Develop Its 
Posture Plan Is Not Formalized: 

In response to planning guidance established in the 2008 Guidance for 
Employment of the Force, EUCOM assigned primary responsibility to its 
Strategy Implementation Branch for developing the command's theater 
posture plan and for coordinating outreach to the service components. 
In January 2009, the command also established the European Posture 
Executive Council--which includes one-star flag officer 
representatives from the command directorates, the service component 
commands, and the services' installation management organizations--to 
focus on posture issues, including assessing strategy, prioritizing 
posture requirements, and determining the feasibility of implementing 
planned posture. According to EUCOM officials, the European Posture 
Executive Council has provided a forum for coordinating input from the 
service component commands and discussing and adjudicating posture 
issues that may cross service lines, such as issues concerning sites 
that are used by multiple services but supported by funding from a 
single service. To support the Executive Council, EUCOM established 
the European Posture Integration Team, a group of action officers that 
functions as a steering group for the council. 

The EUCOM Deputy Commander has also requested that the Strategy 
Implementation Branch develop a process to provide the component 
commands with a long-term vision for sites and functional capabilities 
needed to build partner capacity and other operational requirements 
for the next 10-15 years. According to EUCOM officials, the Deputy 
Commander wanted a method to provide the military services and the 
service component commands with a foundation to develop specific 
military construction programs and projects and to assist in the 
service component's long-term plans to gain efficiencies by 
consolidating existing sites. The Strategy Implementation Branch 
identified the development of the theater posture plan as the best 
vehicle through which EUCOM's vision for its posture could be 
communicated and coordinated with the service component commands. 
[Footnote 14] 

According to EUCOM officials, the development of the 2010 Theater 
Posture Plan began with a February 2010 EUCOM Posture Conference, 
which provided a forum for the EUCOM staff, the service components, 
and DOD organizations outside of EUCOM (such as other combatant 
commands, the Office of the Secretary of Defense, and the Joint Staff) 
to discuss EUCOM posture and EUCOM's role in supporting national and 
regional strategic objectives. This conference was followed by a 
meeting of the European Posture Integration Team, discussions with 
other DOD organizations, and small group meetings among EUCOM staff. 
These meetings culminated in a Long Term Theater Posture Strategy 
conference, chaired by the EUCOM Deputy Commander, which included the 
EUCOM staff and service component deputy commanders. This conference 
included discussions of EUCOM's posture planning assumptions--such as 
the status of the defense budget--and posture planning tenets--such as 
the need to develop posture plans in collaboration with other 
Geographic Combatant Commands. Additional steps taken to refine the 
posture plan included discussions with the Executive Council, and 
reviews by various directorates within the command. 

The resulting 2010 EUCOM theater posture plan presents a long-term 
posture view which will facilitate near-term posture discussions 
amongst the EUCOM staff and service components. Specifically, it 
details the force structure and infrastructure capabilities and 
requirements EUCOM needs to accomplish the programs, activities, and 
tasks as outlined within the Theater, Regional, and Functional 
Campaign Plans; Contingency Plans; and EUCOM Directorate, Component, 
and Special Operations Command Europe supporting plans. Included in 
the plan are overarching posture planning assumptions and tenets which 
are to be used as the basis for discussions held by the EUCOM Posture 
Executive Council. The theater posture plan also describes the current 
strategic context and conveys how EUCOM posture is linked to and 
supports strategic objectives. The theater posture plan informs the 
development of military service plans, the budgeting process, and 
DOD's internal global defense posture planning efforts as well as 
external reports on DOD's posture. 

Although EUCOM and the service components have taken these positive 
steps to identify posture requirements and develop the theater posture 
plan, the process being used to develop the plan has been ad hoc, and 
EUCOM officials stated they have not yet codified this process in 
command guidance. In addition, the roles of the Executive Council and 
Integration Team have not been clearly laid out in guidance. To 
provide some clarity regarding the roles of the Executive Council and 
Integration Team, the command is currently drafting an instruction 
that would assign the European Posture Executive Council primary 
responsibility for facilitating consensus on posture issues among 
EUCOM and the service components. We were provided an early draft of 
this instruction, and found it included criteria for selecting posture 
issues that should be deliberated within the Executive Council and 
established a process for service components to submit posture issues 
to the European Posture Executive Council and the European Posture 
Integration Team. 

While these are positive steps, the draft instruction did not provide 
comprehensive guidance on the process or steps involved in developing 
the theater posture plan. During the course of our work, EUCOM 
officials acknowledged that more comprehensive guidance describing the 
planning process, key steps involved, and roles and responsibilities 
of stakeholders would be necessary to institutionalize and ensure 
consistency in annual planning activities. They stated they were 
considering expanding the draft guidance to address these issues. As 
of December 2010, however, the instruction was still in draft and had 
not been approved. 

EUCOM Posture Planning Lacks Steps for Analyzing Alternatives: 

While EUCOM's steps to date have improved its ability to obtain 
service component command input to the theater posture plan and 
provided a forum to consider posture issues, it has not yet developed 
a method to routinely analyze the costs and benefits of posture 
alternatives at the combatant command level as posture requirements 
are developed. As discussed earlier, current DOD guidance on theater 
posture plans does not require EUCOM to collect or report the total 
costs associated with DOD installations in Europe. Furthermore, this 
guidance does not require the combatant commands to analyze the costs 
of alternative courses of action when developing the theater posture 
plan or provide guidance on the types of cost analysis that should be 
completed. As for benefit analysis, the EUCOM theater posture plan 
makes reference to benefits gained from existing posture or those that 
may result from implementing proposed posture requirements. However, 
these benefits are often based on qualitative judgments on how 
requirements may assure allies, build partner capacity, or support 
operations in neighboring commands. The theater posture plan does not 
identify quantitatively comparable benefits or ways to measure those 
benefits, such as logistical improvements or shorter flying distances, 
nor does it apply operational metrics, such as specific measures of 
EUCOM's ability to move forces through the region. Without 
comprehensive cost data and an objective way to measure benefits EUCOM 
does not yet have the data needed to routinely analyze the costs and 
benefits of posture alternatives. 

Since EUCOM has not developed a method to routinely analyze the costs 
and benefits of posture alternatives the Command may be missing 
opportunities to gain efficiencies in DOD's posture. For example, U.S. 
Navy Europe officials told us they had identified excess capacity in 
some of their current posture locations, and were considering 
alternative courses of action to reduce posture costs. However, before 
they took steps to reduce their posture to gain greater efficiencies, 
Navy officials wanted to determine if other military services could 
use that excess Navy capacity to meet another service's posture 
requirements. Only through their specific outreach efforts to other 
services were they able to identify a potential Air Force requirement 
that could be satisfied with the Navy's location. These Navy officials 
commented that evaluations of posture at the combatant command level 
could potentially lead to further opportunities to gain greater 
efficiencies in posture investments made by the military services. 

Our work has shown that decision makers should complete comparative 
analysis of competing options that considers not only the life-cycle 
costs but also quantifiable and unquantifiable benefits. This 
evaluative information helps them make decisions about the programs 
they oversee--information that tells them whether, and in what 
important ways, a program is working or not working, and why.[Footnote 
15] In addition, DOD and Army guidance related to economic analyses to 
support military construction projects or the acquisition of real 
property indicates that reasonable alternatives should be considered 
when contemplating such new projects. For example, DOD Instruction 
7041.3, which applies to decisions about acquisition of real property, 
indicates that such analyses should address alternatives that consider 
the availability of existing facilities and the estimated costs and 
benefits of the alternatives, among other factors.[Footnote 16] 

Officials from EUCOM's Strategy Implementation Branch stated that the 
theater posture planning process is a new and emerging process driven 
by recent changes to the Guidance for Employment of the Force and the 
Joint Strategic Capabilities Plan. While they agreed with our 
assessment that total posture costs should be part of any analysis of 
alternative courses of action, they stated the EUCOM command staff 
would have to rely on the service component commands to complete this 
type of analysis. EUCOM officials stated that, unless the Joint 
Strategic Capabilities Plan were to require this additional cost 
information, EUCOM would have difficulty obtaining it from the 
military services. 

EUCOM Has Not Defined Steps for Obtaining Input from Interagency 
Stakeholders: 

Although the EUCOM Commander has identified building partner capacity 
as his top priority--activities that generally require close 
coordination with other U.S. government agencies--the command has not 
clearly defined specific steps to obtain input from interagency 
stakeholders as posture plans are developed. The 2010 Quadrennial 
Defense Review suggests that building partner capacity with efforts to 
improve the collective capabilities and performance of DOD and its 
partners will be a key mission area to support the objective of 
rebalancing the force. In March 2010, the EUCOM commander, in written 
testimony provided to the House and the Senate Armed Services 
Committees, indicated that building partnership and partner capacity 
is the command's highest priority. DOD recognizes that building 
partner capacities and developing global defense posture require close 
collaboration with allies and partners abroad and with key 
counterparts at home, principally the civilian departments responsible 
for diplomacy and development. In addition, our prior work 
demonstrates that leading organizations involve stakeholders as they 
develop plans and requirements. The inclusion of stakeholders early 
and often can test and provide critical feedback on the validity of 
the assumptions made during a planning process. 

To enhance EUCOM's ability to coordinate with other government 
agencies, the EUCOM commander established the Interagency Partnering 
Directorate in October 2009. As of November 2010, the directorate was 
comprised of approximately 30 staff--6 of whom were representatives 
from the Departments of State, Energy, and Treasury; Immigration and 
Customs Enforcement; Customs and Border Protection; and the Drug 
Enforcement Agency. According to the Deputy Director, discussions are 
underway to add representatives from the Department of Justice and the 
U.S. Agency for International Development. 

Despite the priority given to building partner capacity, and the 
recognized need to closely collaborate with non-DOD agencies and 
organizations to plan for and conduct those missions, the Interagency 
Partnering Directorate was not integral in the development of the 2010 
EUCOM Theater Posture Plan. According to a senior directorate 
official, the directorate was not fully involved in the development of 
the theater posture plan because the organization was relatively new, 
and they are still trying to determine how this directorate can best 
plug into the various planning and other functions within the command. 

Similarly, a Strategy Implementation Branch official involved in the 
development of the theater posture plans commented that although EUCOM 
has been successful in bringing in interagency officials to the 
command, and has included the Interagency Partnering Directorate on 
the Executive Council, it has not defined how the interagency 
representatives can best participate in ongoing posture planning 
activities. According to that Strategy Implementation Branch official, 
EUCOM has not defined how it will routinely coordinate with the 
interagency community or how the interagency representatives can best 
support ongoing posture planning efforts. As a result, EUCOM officials 
involved in posture planning may not have full visibility into the 
activities of non-DOD agencies and organizations that could utilize 
DOD infrastructure and the interagency community may not be fully 
aware of the opportunities to leverage existing DOD facilities. 

Without guidance from the EUCOM Commander that clarifies the roles and 
responsibilities of the Interagency Partnering Directorate related to 
posture planning, and establishes a process through which interagency 
perspectives can be routinely obtained as posture plans are developed, 
EUCOM is limited in its ability to leverage DOD's interagency 
partners' expertise when developing its posture plans and may miss 
opportunities to fully leverage its posture investments to support a 
whole-of-government approach to missions and activities for building 
partner capacities. 

Conclusions: 

The nation's long-term fiscal challenges have led DOD to examine the 
cost of its operations, including costs associated with its overseas 
network of infrastructure and facilities. DOD and EUCOM officials are 
taking positive steps to improve their posture planning efforts, but 
actions to date do not fully address posture cost and interagency 
issues. DOD is in the process of revising its Joint Strategic 
Capabilities Plan, but the draft revisions do not require combatant 
commanders to include comprehensive information on the cost to 
maintain existing locations, or to address the need for analyzing the 
cost and benefits of posture alternatives. Without further revisions 
to the Joint Strategic Capabilities Plan to address this lack of focus 
on the total cost of posture and analysis of alternatives, DOD's 
posture planning process and reports will continue to lack complete 
information on the financial commitments and funding liabilities 
associated with DOD's posture, and potential opportunities to obtain 
greater cost efficiencies may not be identified. In addition, since 
EUCOM is taking steps to address posture matters and is developing 
guidance for identifying and resolving posture issues within the 
command, it has an opportunity to use this guidance to clearly define 
and codify a process for how the theater posture plan is to be 
drafted, to establish approaches to collect and analyze comprehensive 
cost information and address affordability issues, and to regularly 
obtain the perspectives of relevant agencies throughout the posture 
planning process. Without such guidance, EUCOM will remain limited in 
its ability to analyze posture alternatives and collaborate with 
interagency partners when developing its posture requirements. Such 
guidance would allow EUCOM to develop a more informed understanding of 
the potential impacts of posture requirements and to set priorities 
among competing investments before asking the department to expend 
resources or Congress to appropriate needed funds. 

Recommendations for Executive Action: 

To provide for more comprehensive information on the cost of posture 
and analysis of posture alternatives as future theater posture plans 
are developed, we recommend that the Secretary of Defense direct the 
Chairman, Joint Chiefs of Staff, to revise the Joint Strategic 
Capabilities Plan to: 

* require the theater posture plan to include the cost of operating 
and maintaining existing installations and estimate the costs 
associated with initiatives that would alter future posture and: 

* provide guidance on how the combatant commands should analyze the 
costs and benefits of alternative courses of action when considering 
proposed changes to posture. 

To ensure that EUCOM clearly defines a process for developing its 
theater posture plan, including compiling posture costs, considering 
affordability, and regularly obtaining the perspectives of relevant 
agencies throughout the posture planning process, we recommend that 
the Secretary of Defense, through the Chairman of the Joint Chiefs of 
Staff, direct the EUCOM Commander to take the following three actions: 

* Define the roles and responsibilities of the European Posture 
Executive Council and Integration Team in the posture planning process 
and development of the theater posture plan. 

* Develop a process through which interagency perspectives can be 
obtained throughout the posture planning process and the development 
of the theater posture plan. 

* Issue guidance to codify the EUCOM posture planning process once the 
above steps have been taken. 

Agency Comments and Our Evaluation: 

In written comments on a draft of this report, DOD generally agreed 
with all of our recommendations. DOD's response appeared to 
acknowledge that understanding the full cost of posture is an 
important consideration as DOD deliberates decisions on current and 
future posture requirements, and the actions it has taken or plans to 
take should provide a greater understanding of DOD posture costs. 
However, we believe some additional steps are warranted to fully 
address our recommendations. Technical comments were provided 
separately and incorporated as appropriate. The department's written 
comments are reprinted in appendix III. 

DOD agreed with our recommendation that the Joint Strategic 
Capabilities Plan be revised to require the combatant commanders to 
include the cost of operating and maintaining existing installations 
and estimate the costs of its initiatives in future theater posture 
plans, but its proposed actions are not fully responsive to our 
recommendation. In its response, the department stated that it 
recognizes that the costs associated with operating and maintaining 
overseas facilities are an important consideration in the decision- 
making process, and that the current draft 2011 Joint Strategic 
Capabilities Plan requires that theater posture plans include 
operation and maintenance costs for current and planned posture 
initiatives. The department also indicated that the combatant command 
should include in the theater posture plan operation and maintenance 
costs when they are known. In instances where operation and 
maintenance costs are not known but required for oversight and 
decision making, DOD stated that it will require the military services 
to provide the needed data. While the proposed actions would be 
positive steps, the department's plan to include operation and 
maintenance costs when they are known--or require additional data only 
when needed for decision making--could result in fragmented cost 
information. Therefore, we continue to believe that DOD should revise 
the Joint Strategic Capabilities Plan to require posture plans to 
include the cost of operating and maintaining existing installations, 
even when those costs are unrelated to a specific posture initiative. 

In response to our recommendation that the Joint Strategic 
Capabilities Plan be revised to provide guidance on how the combatant 
commands should analyze the costs and benefits of alternative courses 
of action when considering proposed changes to posture, DOD agreed, 
stating that the department uses four cost/benefit criteria in 
evaluating posture change proposals and that these four criteria 
should be used by the combatant commanders in analyzing alternative 
courses of action. Identifying the criteria that should be used in 
analyzing alternative courses of action is important, but the absence 
of detailed guidance within the Joint Strategic Capabilities Plan 
itself on how those criteria should be applied by the combatant 
commanders could lead to inconsistent application of the criteria, 
making it difficult for decision makers to evaluate alternatives. 
Therefore, we believe that DOD needs to take the additional step to 
revise the Joint Strategic Capabilities Plan to provide guidance on 
how the combatant commands should apply the criteria to analyze the 
costs and benefits of alternative courses of action. 

Regarding our recommendation that the EUCOM Commander define the roles 
and responsibilities of the European Posture Executive Council and 
European Posture Integration Team in the posture planning process and 
development of the theater posture plan, DOD agreed, stating that 
EUCOM's Theater Posture Plan defines the roles and responsibilities of 
the Posture Executive Council and Posture Integration Team, and 
provided additional specifics, which were consistent with the 
information contained in our report. In addition, in response to our 
fifth recommendation, DOD agreed to incorporate those roles and 
responsibilities in command guidance. Therefore, if fully implemented, 
we believe DOD's actions should meet the intent of our recommendation. 

DOD agreed with our recommendation that the Secretary of Defense, 
through the Chairman of the Joint Chiefs of Staff, direct the EUCOM 
Commander to develop a process to obtain interagency perspectives 
throughout the posture planning process and development of the theater 
posture plan. DOD stated that such a process currently exists and is 
documented in EUCOM's Theater Posture Plan, which states that the 
EUCOM Posture Executive Council coordinates with interagency partners 
through the Interagency Partnering Directorate and the EUCOM Civilian 
Deputy to the Commander. As discussed in this report, we acknowledge 
the EUCOM initiative to establish the Interagency Partnering 
Directorate, and modified the report to clarify that the EUCOM Posture 
Executive Council includes the Interagency Partnering Directorate. 
However, as we also point out in the report, this coordination 
approach was not fully effective in the development of the 2010 
Theater Posture Plan, directorate officials were still trying to 
determine how best to participate in various planning activities, and 
a EUCOM Strategy Implementation Branch official believed the command 
has not defined how the interagency representatives can best support 
ongoing posture planning efforts and routinely coordinate with the 
interagency community. Therefore, we believe that EUCOM needs to take 
the additional steps to establish a process through which interagency 
perspectives can be routinely obtained throughout the posture planning 
process, and institutionalize that approach in the posture planning 
guidance that as of December 2010 was still in draft form. 

DOD also agreed with our recommendation that the Secretary of Defense, 
through the Chairman of the Joint Chiefs of Staff, direct the EUCOM 
Commander to issue guidance to codify the EUCOM posture planning 
process. In its comments, DOD noted that the EUCOM Theater Posture 
Plan and draft command directive provide roles, responsibilities, and 
guidance for posture development while also identifying EUCOM-specific 
procedures that enable EUCOM to complete a variety of tasks. As we 
reported, we reviewed EUCOM's 2010 Theater Posture Plan as well as an 
early draft of EUCOM's Directive 56-24 and found that they included 
criteria for selecting posture issues that should be deliberated 
within the executive council and established a process for service 
components to submit posture issues to the executive council and the 
integration team. However, neither document provided comprehensive 
guidance on the process or steps involved in developing the theater 
posture plan and EUCOM's posture requirements or a process through 
which interagency perspectives can be routinely obtained. 
Consequently, we believe that EUCOM needs to take the additional steps 
to finalize this guidance and modify its contents so that it addresses 
these weaknesses. 

As we agreed with your office, unless you publicly announce the 
contents of this report earlier, we plan no further distribution of it 
until 19 days from the date of this letter. In addition, this report 
will be available at no charge on our Web site at [hyperlink, 
http://www.gao.gov]. 

If you or your staff has any questions about this report, please 
contact me at (404) 679-1816 or pendletonj@gao.gov. Contact points for 
our Offices of Congressional Affairs may be found on the last page of 
this report. GAO staff who made major contributions to this report are 
listed in appendix IV. 

Signed by: 

John Pendleton, Director: 
Defense Capabilities and Management: 

[End of section] 

Appendix I: Scope and Methodology: 

To determine the extent to which U.S. European Command (EUCOM) 
estimates and reports the total cost of the Department of Defense's 
(DOD) installations in its theater posture plan, we collected 
information by interviewing and communicating with officials in the 
Office of the Under Secretary of Defense for Policy, the Under 
Secretary of Defense (Comptroller), the Deputy Under Secretary of 
Defense (Installations and Environment), and the Joint Staff; 
Department of the Army, Department of the Navy, and Department of the 
Air Force; EUCOM; and the Army, Navy, and Air Force component commands 
and installation management entities for the Army and Navy service 
components within EUCOM. Additionally, we reviewed documentation 
including the 2009 and 2010 DOD Global Defense Posture Reports to 
Congress including the sections addressing posture costs, sections of 
the 2008 EUCOM Theater Campaign Plan; sections of the 2009 and 2010 
EUCOM Theater Posture Plans; and departmental guidance and directives 
on command functions, campaign planning, overseas force structure 
changes, and global defense posture management. We also reviewed 
budget documentation including the military construction 
appropriations component of the President's Budget request for fiscal 
years 2006-2011. Furthermore, we issued three separate data requests 
asking for obligations and requirements data on military construction 
appropriations and operation and maintenance appropriations for fiscal 
years 2006-2015. We submitted the first data request to each of three 
military services (Army, Navy, and Air Force) and the second and third 
data requests to three service component commands in EUCOM's area of 
responsibility asking them to review and validate the data received 
through prior data requests. The first and second data requests were 
transmitted prior to the release of the Fiscal Year 2011 President's 
Budget request and the third was transmitted following the release of 
the Fiscal Year 2011 budget. When we received these data, we 
aggregated and assessed them. To assess the reliability of received 
cost data, we reviewed data system documentation and obtained written 
responses to questions regarding the internal controls on the systems. 
We determined that the cost data we received were sufficiently 
reliable for the purposes of this report. To ensure the accuracy of 
our analysis, we used Statistical Analysis Software (SAS) when 
analyzing the data and had the programming code used to complete those 
analyses verified for logic and accuracy by an independent reviewer. 
Furthermore, we reviewed previous GAO reporting on overseas basing, 
military construction, the uses of cost information when making 
decisions about programs, and guidance on cost estimating and the 
basic characteristics of credible cost estimates. 

To determine the extent to which EUCOM has clearly defined methods for 
evaluating posture alternatives and including the views of interagency 
stakeholders, we reviewed departmental guidance and directives on 
command functions, campaign planning, overseas force structure 
changes, and global defense posture management. Additionally, we 
reviewed the 2008 EUCOM Theater Campaign Plan; the 2009 and 2010 EUCOM 
Theater Posture Plans; and the section of the 2010 Quadrennial Defense 
Review Report that addresses global defense posture matters. We also 
reviewed management practices established by the GAO Cost Estimating 
and Assessment Guide and DOD and military service guidance to inform 
our audit. Furthermore, we collected information by interviewing 
officials in the Office of the Under Secretary of Defense for Policy, 
the Under Secretary of Defense (Comptroller), the Deputy Under 
Secretary of Defense (Installations and Environment), and the Joint 
Staff; Department of the Army, Department of the Navy, and Department 
of the Air Force; EUCOM; the Army, Navy, and Air Force component 
commands and installation management entities for the Army and Navy 
service components within EUCOM; and Department of State. We reviewed 
DOD and service guidance on completing economic analyses and analyses 
of alternatives, and DOD guidance on collaborating with other 
government agencies. We also reviewed previous GAO reporting related 
to performance measurement and evaluation and challenges to 
interagency collaboration. 

We conducted this performance audit from October 2009 through December 
2010 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. 

[End of section] 

Appendix II: Total Cost of DOD's Installations in EUCOM's Area of 
Responsibility: 

To obtain a more comprehensive estimate of the cost of the Department 
of Defense's (DOD) posture in Europe, we requested information from 
the Army, Navy, and Air Force[Footnote 17] on military construction, 
family housing, and operation and maintenance appropriations for 
installations under their responsibility. The three service components 
responded with obligation figures for the three appropriation 
categories for the period fiscal year 2006 through fiscal year 2009. 
Additionally, the three service components provided estimated 
requirements for the three appropriation categories for the period 
fiscal year 2011 through fiscal year 2015.[Footnote 18] There are 
limitations associated with our data call including (1) the omission 
of supplementary funding provided to support ongoing operations; (2) 
the omission of costs reimbursed by tenant organizations, such as the 
Defense Logistics Agency, at installations in EUCOM's area of 
responsibility; (3) the omission of personnel costs for troops 
stationed at installations in EUCOM's area of responsibility; and (4) 
the omission of costs stemming from the presence of U.S. Africa 
Command. However, we discussed these limitations with officials in the 
Office of the Under Secretary of Defense for Policy, the Office of the 
Under Secretary of Defense (Comptroller), and the Office of the Under 
Secretary of Defense (Installations and Environment) and EUCOM 
officials and determined that the cost data we received were 
sufficiently reliable for the purposes of this report. 

Our analysis of obligations data indicates the Army constituted 52.2 
percent of all obligations for the period fiscal year 2006 through 
fiscal year 2009, the largest proportion of the three service 
components. However, the Army has been faced with a significant 
challenge to meet the facility needs associated with several recent 
initiatives, such as the transformation of the Army's force structure, 
the permanent relocation of thousands of overseas military personnel 
back to the United States, the implementation of base realignment and 
closure actions, and the planned increase in the Army's active-duty 
end strength. Taken together, the Army estimated that these 
initiatives would result in a threefold increase in the Army's 
military construction program for fiscal years 2006 through 2009. 
[Footnote 19] The Air Force and Navy comprised 38.1 percent and 9.8 
percent of obligations, respectively. (See figure 4.) 

Figure 4: Military Construction, Family Housing, and Operation and 
Maintenance Obligations: Fiscal Years 2006-2009 (Then Year Dollars), 
EUCOM Area of Responsibility: 

[Refer to PDF for image: stacked vertical bar graph] 

Fiscal year: 2006; 
Army: $2.08 billion; 
Air Force: $1.84 billion; 
Navy: $477 million. 

Fiscal year: 2007; 
Army: $2.26 billion; 
Air Force: $1.67 billion; 
Navy: $425 million. 

Fiscal year: 2008; 
Army: $2.31 billion; 
Air Force: $1.47 billion; 
Navy: $371 million. 

Fiscal year: 2009; 
Army: $2.35 billion; 
Air Force: $1.58 billion; 
Navy: $411 million. 

Source: GAO analysis of Army, Navy, and Air Force obligations data. 

[End of figure] 

Furthermore, our analysis shows that Army operation and maintenance 
obligations for the same period totaled $6.5 billion, or 48.1 percent, 
of the approximately $13.4 billion in total operation and maintenance 
obligations. The Air Force and Navy comprised 42.3 percent and 9.6 
percent of obligations, respectively. (See figure 5.) 

Figure 5: Army, Navy, and Air Force Obligations: Fiscal Years 2006-
2009 (Then Year Dollars), EUCOM Area of Responsibility: 

[Refer to PDF for image: stacked vertical bar graph] 

Military service: Army; 
Operation and maintenance: $6.47 billion; 
Military construction and family housing: $2.53 billion. 

Military service: Air Force; 
Operation and maintenance: $5.69 billion; 
Military construction and family housing: $869 million. 

Military service: Navy; 
Operation and maintenance: $1.29 billion; 
Military construction and family housing: $396 million. 

Source: GAO analysis of Army, Navy, and Air Force obligations data. 

[End of figure] 

Figure 6 provides a more detailed breakout of military construction, 
family housing, and operation and maintenance appropriation 
obligations data provided to us by the military services for the 
period fiscal year 2006 through fiscal year 2009. Based on 
conversations with the military services regarding the data we 
requested, we divided the operation and maintenance appropriation 
category into three obligations categories including (1) base 
operations support obligations, which include recurring maintenance 
and repair, utilities, and janitorial and roads/grounds expenses; (2) 
sustainment, restoration, and modernization obligations, which include 
the maintenance and repair activities necessary to keep facilities in 
good working order; and (3) other expenditures, which include 
obligations from the operation and maintenance appropriation that do 
not fall into either of the preceding categories. Figure 6 shows that 
the three services combined obligated the most money for base 
operations support in each fiscal year. 

Figure 6: Obligations by Appropriation Category: Fiscal Years 2006-
2009 (Then Year Dollars), EUCOM Area of Responsibility: 

[Refer to PDF for image: table] 

Appropriation category: Military Construction; 
Service: Air Force; 
FY 2006: $65,831; 
FY 2007: $52,216; 
FY 2008: $479,468; 
FY 2009: [Empty]; 
Total: $217,257. 

Appropriation category: Military Construction; 
Service: Army; 
FY 2006: $103,031; 
FY 2007: $395,532; 
FY 2008: $307,565; 
FY 2009: $299,081; 
Total: $1,105,209. 

Appropriation category: Military Construction; 
Service: Navy; 
FY 2006: $796; 
FY 2007: $31,720; 
FY 2008: $1,680; 
FY 2009: $9,210; 
Total: $43,406. 

Appropriation category: Military Construction; 
Service: Total; 
FY 2006: $169,658; 
FY 2007: $479,468; 
FY 2008: $408,456; 
FY 2009: $308,291; 
Total: $1,365,872. 

Appropriation category: Family Housing; 
Service: Air Force; 
FY 2006: $157,085; 
FY 2007: $162,101; 
FY 2008: $166,515; 
FY 2009: $166,344; 
Total: $652,044. 

Appropriation category: Family Housing; 
Service: Army; 
FY 2006: $327,388; 
FY 2007: $316,952; 
FY 2008: $339,090; 
FY 2009: $441,713; 
Total: $1,425,142. 

Appropriation category: Family Housing; 
Service: Navy; 
FY 2006: $99,764; 
FY 2007: $89,636; 
FY 2008: $81,433; 
FY 2009: $82,103; 
Total: $352,936. 

Appropriation category: Family Housing; 
Service: Total; 
FY 2006: $584,237; 
FY 2007: $568,688; 
FY 2008: $587,037; 
FY 2009: $690,160; 
Total: $2,430,122. 

Appropriation category: Operation and Maintenance; 
Obligations: Base Operations Support; 
Service: Air Force; 
FY 2006: $594,168; 
FY 2007: $591,552; 
FY 2008: $618,077; 
FY 2009: $679,264; 
Total: $2,483,061. 

Appropriation category: Operation and Maintenance; 
Obligations: Base Operations Support; 
Service: Army; 
FY 2006: $984,452; 
FY 2007: $885,835; 
FY 2008: $868,771; 
FY 2009: $813,755; 
Total: $3,552,813. 

Appropriation category: Operation and Maintenance; 
Obligations: Base Operations Support; 
Service: Navy; 
FY 2006: $318,699; 
FY 2007: $249,575; 
FY 2008: $260,879; 
FY 2009: $277,452; 
Total: $1,106,605. 

Appropriation category: Operation and Maintenance; 
Obligations: Base Operations Support; 
Service: Total; 
FY 2006: $1,897,319; 
FY 2007: $1,726,962; 
FY 2008: $1,747,727; 
FY 2009: $1,770,471; 
Total: $7,142,479. 

Appropriation category: Operation and Maintenance; 
Obligations: Sustainment, Restoration,and Modernization; 
Service: Air Force; 
FY 2006: $187,992; 
FY 2007: $256,270; 
FY 2008: $259,479; 
FY 2009: $329,439; 
Total: $1,033,180. 

Appropriation category: Operation and Maintenance; 
Obligations: Sustainment, Restoration,and Modernization; 
Service: Army; 
FY 2006: $308,042; 
FY 2007: $297,688; 
FY 2008: $434,898; 
FY 2009: $427,493; 
Total: $1,468,121. 

Appropriation category: Operation and Maintenance; 
Obligations: Sustainment, Restoration,and Modernization; 
Service: Navy; 
FY 2006: $58,071; 
FY 2007: $54,307; 
FY 2008: $26,388; 
FY 2009: $41,498; 
Total: $180,264. 

Appropriation category: Operation and Maintenance; 
Obligations: Sustainment, Restoration,and Modernization; 
Service: Total; 
FY 2006: $554,105; 
FY 2007: $608,265; 
FY 2008: $720,765; 
FY 2009: $798,430; 
Total: $2,681,565. 

Appropriation category: Operation and Maintenance; 
Obligations: Other; 
Service: Air Force; 
FY 2006: $834,526; 
FY 2007: $607,699; 
FY 2008: $328,418; 
FY 2009: $403,483; 
Total: $2,174,126. 

Appropriation category: Operation and Maintenance; 
Obligations: Other; 
Service: Army; 
FY 2006: $354,344; 
FY 2007: $362,453; 
FY 2008: $362,100; 
FY 2009: $364,857; 
Total: $1,443,75. 

Appropriation category: Operation and Maintenance; 
Obligations: Other; 
Service: Navy; 
FY 2006: [Empty]; 
FY 2007: [Empty]; 
FY 2008: $225; 
FY 2009: $789; 
Total: $1,014. 

Appropriation category: Operation and Maintenance; 
Obligations: Other; 
Service: Total; 
FY 2006: $1,188,871; 
FY 2007: $970,152; 
FY 2008: $690,743; 
FY 2009: $769,129; 
Total: $3,618,894. 

Appropriation category: Total; 
FY 2006: $4,394,189; 
FY 2007: $4,353,535; 
FY 2008: $4,154,727; 
FY 2009: $4,336,481; 
Total: $17,238,932. 

Source: GAO analysis of Army, Navy, and Air Force obligations data. 

[End of figure] 

[End of section] 

Appendix III: Comments from the Department of Defense: 

Under Secretary Of Defense: 
Policy: 
2000 Defense Pentagon: 
Washington, DC 20301-2000: 

January 26, 2011: 
		
Mr. John Pendleton: 
Director, Defense Capabilities and Management: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Pendleton: 

This is the Department of Defense's (DoD) response to the Government 
Accountability Office's (GAO) draft report, "Defense Management: 
Additional Cost Information and Stakeholder Input Needed to Assess 
Military Posture in Europe," dated December 10, 2010 (GAO code 
351396/GA0-11-131). 

The Department concurs with all five of GAO's recommendations. 
Clarification and further information are included for each 
recommendation on the accompanying pages. 

We will work with DoD components to implement these recommendations 
and look forward to further dialogue with GAO on costing posture 
initiatives. 

Sincerely, 

Signed by: 

Michele A. Flournoy: 

[End of letter] 

GAO Draft Report Dated December 10, 2010: 
GAO-11-131 (GAO Code 351396): 

"Defense Management: Additional Cost Information And Stakeholder Input 
Needed To Assess Military Posture In Europe" 

Department Of Defense Comments To The GAO Recommendations: 

Recommendation 1: The GAO recommends that the Secretary of Defense 
direct the Chairman. Joint Chiefs of Staff to revise the Joint 
Strategic Capabilities Plan to require the theater Posture Plan to 
include the cost of operating and maintaining existing installations 
and estimate the costs associated with initiatives that would alter 
future posture. 

DoD Response: Concur. The Department recognizes that the costs 
associated with operating and maintaining overseas facilities (O&M 
costs) are an important consideration in the posture decision-making 
process. The current draft 2011 JSCP requires that Theater Posture 
Plans include O&M costs for current and planned posture initiatives. 
DoD notes that there are limits to combatant commands' abilities to 
include this information, as these costing efforts are inherently a 
Service function. Where O&M costs are known, combatant commands should 
include them in their Theater Posture Plans. When O&M costs are not 
known, but required for the purposes of posture oversight and decision-
making, the Department will require the Services to provide 
appropriate O&M cost detail. 

Recommendation 2: The GAO recommends that the Secretary of Defense 
direct the Chairman, Joint Chiefs of Staff to revise the Joint 
Strategic Capabilities Plan (JSCP) to provide guidance on how the 
combatant commands should analyze the costs and benefits of 
alternative courses of action when considering proposed changes to 
posture. 

DoD Response: Concur. The Department uses four cost/benefit criteria 
in evaluating posture change proposals: political-military; 
operational; force structure/force management; and cost. These same 
criteria should be used by the combatant commanders in analyzing 
alternative courses of action. 

Recommendation 3: The GAO recommends that the Secretary of Defense, 
through the Chairman, Joint Chiefs of Staff, direct the European 
Command (EUCOM) Commander to define the roles and responsibilities of 
the European Posture Executive Council (EPEC) and Implementation Team 
(EPIT) in the posture planning process and development of the theater 
posture plan. 

DoD Response: Concur. EUCOM's current Theater Posture Plan now defines 
the roles and responsibilities of EUCOM's Posture Executive Council 
(EPEC) and its Posture Integration Team (EPIT). The EPEC is EUCOM's 
principal outreach and integration tool for posture development. This 
General Officer/Flag Officer level body is comprised of a cross 
section of EUCOM Directorate leadership as well as key posture 
stakeholders from EUCOM Service Components. The EPEC focuses on the 
strategic assessment, implementation feasibility, and theater 
prioritization of force posture issues for the Commander, USEUCOM. Its 
continuing charter is to synchronize near-term force posture decisions 
within the 5-year Strategy of Active Security window, in addition to 
maintaining a long-range vision for posture within the EUCOM theater. 
The EPIT is an 0-6/action officer staff-level forum that provides 
direct support to the EPEC. 

Recommendation 4: The GAO recommends that the Secretary of Defense 
through the Chairman, Joint Chiefs of Staff, direct the EUCOM 
Commander to develop a process through which interagency perspectives 
can be obtained throughout the posture planning process and the 
development of the theater posture plan. 

DoD Response: Concur. This process currently exists. As described in 
EUCOM's Theater Posture Plan, the Interagency Directorate is a member 
of both EUCOM's Posture Executive Council (EPEC) and its Posture 
Integration Team (EPIT). The EPEC coordinates with the interagency 
through the EUCOM J9 Interagency Partnering Directorate and the EUCOM 
Civilian Deputy to the Commander. Organizations that could offer 
coordination or strategic analysis for posture issues are invited as 
appropriate for participation in EPEC review. These organizations may 
include Other Government Agencies (OGAs), Supreme Headquarters Allied 
Powers Europe (SEIAPE)/NATO, FCCs, the other GCCs, and Defense 
Agencies (e.g. Missile Defense Agency (MDA)). 

Recommendation 5: The GAO recommends that the Secretary of Defense 
through the Chairman, Joint Chiefs of Staff, direct the EUCOM 
Commander to issue guidance to codify the EUCOM posture planning 
process once the above steps have been taken. 

DoD Response: Concur. The EUCOM Theater Posture Plan, along with EUCOM 
Directive 56-24, Theater Basing Planning, provides the roles, 
responsibilities, and guidance for posture development. This directive 
identifies HQ USEUCOM-specific procedures that enable EUCOM to 
accomplish the following: ensure comprehensive coordination of 
component basing plans; define the interface between basing, 
operational planning, and execution; and assess the theater 
environment to determine/validate long-term basing requirements.
As stated in the accompanying GAO report, EUCOM is updating its 
Directive 56-24 to a Command Instruction (ECI) to incorporate both 
EUCOM and DoD's Posture Integration Team (EPIT and GPIT) and Posture 
Executive Council (EPEC and GPEC) roles, responsibilities, and also 
include DoD's Global Posture Steering Group (GPSSG), along with its 
accompanying business rules proposal. 

[End of section] 

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

John Pendleton, (404) 679-1816 or pendletonj@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, Robert L. Repasky, Assistant 
Director; Brian Hackney; Joanne Landesman; Ying Long; Greg Marchand; 
Charles Perdue; Terry Richardson; Ophelia Robinson; Michael 
Shaughnessy; Amie Steele; Alex Winograd; and Ricardo Marquez made key 
contributions to this report. 

[End of section] 

Related GAO Products: 

Defense Management: Improved Planning, Training, and Interagency 
Collaboration Could Strengthen DOD's Efforts in Africa. [hyperlink, 
http://www.gao.gov/products/GAO-10-794]. Washington, D.C.: July 28, 
2010. 

Defense Management: U.S Southern Command Demonstrates Interagency 
Collaboration, but Its Haiti Disaster Response Revealed Challenges 
Conducting a Large Military Operation. [hyperlink, 
http://www.gao.gov/products/GAO-10-801]. Washington, D.C.: July 28, 
2010. 

Defense Planning: DOD Needs to Review the Costs and Benefits of Basing 
Alternatives for Army Forces in Europe. [hyperlink, 
http://www.gao.gov/products/GAO-10-745R]. Washington, D.C.: September 
13, 2010. 

National Security: Interagency Collaboration Practices and Challenges 
at DOD's Southern and Africa Commands. [hyperlink, 
http://www.gao.gov/products/GAO-10-962T]. Washington, D.C.: July 28, 
2010. 

Defense Infrastructure: Planning Challenges Could Increase Risks for 
DOD in Providing Utility Services When Needed to Support the Military 
Buildup on Guam. [hyperlink, http://www.gao.gov/products/GAO-09-653]. 
Washington, D.C.: June 30, 2009. 

Force Structure: Actions Needed to Improve DOD's Ability to Manage, 
Assess, and Report on Global Defense Posture Initiatives. [hyperlink, 
http://www.gao.gov/products/GAO-09-706R], July 2, 2009. 

Military Operations: Actions Needed to Improve DOD's Stability 
Operations Approach and Enhance Interagency Planning. [hyperlink, 
http://www.gao.gov/products/GAO-07-549]. Washington, D.C.: May 31, 
2007. 

Defense Management: Comprehensive Strategy and Annual Reporting Are 
Needed to Measure Progress and Costs of DOD's Global Posture 
Restructuring. [hyperlink, http://www.gao.gov/products/GAO-06-852]. 
Washington, D.C.: September 13, 2006. 

Defense Infrastructure: Guam Needs Timely Information from DOD to Meet 
Challenges in Planning and Financing Off-Base Projects and Programs to 
Support a Larger Military Presence. [hyperlink, 
http://www.gao.gov/products/GAO-10-90R]. Washington, D.C.: November 
13, 2009. 

Defense Infrastructure: DOD Needs to Provide Updated Labor 
Requirements to Help Guam Adequately Develop Its Labor Force for the 
Military Buildup. [hyperlink, http://www.gao.gov/products/GAO-10-72]. 
Washington, D.C.: October 14, 2009. 

Ballistic Missile Defense: Actions Needed to Improve Planning and 
Information on Construction and Support Costs for Proposed European 
Sites. [hyperlink, http://www.gao.gov/products/GAO-09-771]. 
Washington, D.C.: August 6, 2009. 

Defense Management: Actions Needed to Address Stakeholder Concerns, 
Improve Interagency Collaboration, and Determine Full Costs Associated 
with the U.S. Africa Command. [hyperlink, 
http://www.gao.gov/products/GAO-09-181]. Washington, D.C.: February 
20, 2009. 

Defense Infrastructure: Opportunity to Improve the Timeliness of 
Future Overseas Planning Reports and Factors Affecting the Master 
Planning Effort for the Military Buildup on Guam. [hyperlink, 
http://www.gao.gov/products/GAO-08-1005]. Washington, D.C.: September 
17, 2008. 

Force Structure: Preliminary Observations on the Progress and 
Challenges Associated with Establishing the U.S. Africa Command. 
[hyperlink, http://www.gao.gov/products/GAO-08-947T]. Washington, 
D.C.: July 15, 2008. 

Defense Infrastructure: Planning Efforts for the Proposed Military 
Buildup on Guam Are in Their Initial Stages, with Many Challenges Yet 
to Be Addressed. [hyperlink, http://www.gao.gov/products/GAO-08-722T]. 
Washington, D.C.: May 1, 2008. 

Defense Infrastructure: Overseas Master Plans Are Improving, but DOD 
Needs to Provide Congress Additional Information about the Military 
Buildup on Guam. [hyperlink, http://www.gao.gov/products/GAO-07-1015]. 
Washington, D.C.: September 12, 2007. 

[End of section] 

Footnotes: 

[1] In 2011 we plan to report separately on DOD's global posture 
initiatives in the U.S. Pacific Command area of responsibility. 

[2] We did not request data from U.S. Marine Corps Europe as this 
service component is not identified as the lead sponsor for any 
approved posture initiatives in the European Command area of 
responsibility. 

[3] GAO, Cost Estimating and Assessment Guide: Best Practices for 
Developing and Managing Capital Program Costs, [hyperlink, 
http://www.gao.gov/products/GAO-09-3SP] (Washington, D.C.: March 2009). 

[4] On February 6, 2007, the President directed the Secretary of 
Defense to establish a new geographic combatant command to consolidate 
the responsibility for DOD activities in Africa that had been shared 
by U.S. Central Command, U.S. Pacific Command, and U.S. European 
Command. The U.S. Africa Command was established as a subunified 
command subordinate to the European Command in October 2007, and 
designated fully operational as a separate, independent geographic 
combatant command on October 1, 2008. 

[5] As we discuss later in this report, the 2008 Joint Strategic 
Capabilities Plan is currently under revision. 

[6] The estimated $17.2 billion obligated by the services to build, 
operate, and maintain military installations in Europe does not 
include funds obligated by tenant organizations--such as Air Mobility 
Command at Ramstein Air Force Base--at those locations that can 
contribute significant funding to operate and maintain infrastructure. 
See appendix I for more details on our scope and methodology to 
collect and analyze posture costs. 

[7] The Joint Strategic Capabilities Plan defined an installation as 
any one of three types of locations: main operating base, forward 
operating site, or cooperative security location. 

[8] These data do not include (1) supplementary funding provided to 
support ongoing operations; (2) costs reimbursed by tenant 
organizations, such as the Defense Logistics Agency, at installations 
in EUCOM's area of responsibility; (3) personnel costs for troops 
stationed at installations in EUCOM's area of responsibility; and (4) 
costs stemming from the presence of U.S. Africa Command. See appendix 
II for more details on EUCOM posture obligations and estimated 
requirements. 

[9] Our data call was for requirements data included in individual 
military services budget submissions for fiscal year 2010. These data 
are currently the best available as the requirements data underlying 
the military requirements put forward in EUCOM's 2010 Theater Posture 
Plan are derived from the Program of Record as of the fiscal year 2011 
President's budget request. 

[10] GAO, Defense Planning: DOD Needs to Review the Costs and Benefits 
of Basing Alternatives for Army Forces in Europe, [hyperlink, 
http://www.gao.gov/products/GAO-10-745R] (Washington, D.C.: September 
2010). 

[11] GAO, Force Structure: Actions Needed to Improve DOD's Ability to 
Manage, Assess, and Report on Global Defense Posture Initiatives, 
[hyperlink, http://www.gao.gov/products/GAO-09-706R] (Washington, 
D.C.: July 2009). 

[12] In March 2009 GAO published its Cost Estimating and Assessment 
Guide that identifies best practices for developing and managing 
capital program costs. Agencies can follow the 12-step process which 
addresses best practices, including defining the program's purpose, 
developing the estimating plan, defining the program's 
characteristics, determining the estimating approach, identifying 
ground rules and assumptions, obtaining data, developing the point 
estimate, conducting sensitivity analysis, performing a risk or 
uncertainty analysis, documenting the estimate, presenting it to 
management for approval, and updating it to reflect actual costs and 
changes. Following these steps ensures that realistic cost estimates 
are developed and presented to management, enabling them to make 
informed decisions about whether the program is affordable within the 
portfolio plan. GAO, Cost Estimating and Assessment Guide: Best 
Practices for Developing and Managing Capital Program Costs, 
[hyperlink, http://www.gao.gov/products/GAO-09-3SP] (Washington, D.C.: 
March 2009). 

[13] Office of Management and Budget, Capital Programming Guide V2.0, 
Supplement to OMB Circular A-11, Part 7 (Washington, D.C.: June 2006). 

[14] EUCOM prepared its first posture plan in 2008, and its most 
recent plan was signed by the Combatant Commander in October 2010. 

[15] GAO, Performance Measurement and Evaluation: Definitions and 
Relationships, [hyperlink, http://www.gao.gov/products/GAO-05-739SP] 
(Washington, D.C.: May 2005). 

[16] Department of Defense Instruction 7041.3, Economic Analysis for 
Decisionmaking (Nov. 7, 1995). 

[17] We did not request data from U.S. Marine Corps Europe as this 
service component is not identified as the lead sponsor for any 
approved posture initiatives in the European Command area of 
responsibility. 

[18] Officials explained information on future years appropriations 
should be characterized as estimated requirements as the data have not 
been reviewed and endorsed by DOD and may change. 

[19] GAO, Defense Infrastructure: DOD Needs to Determine and Use the 
Most Economical Building Materials and Methods When Acquiring New 
Permanent Facilities, [hyperlink, 
http://www.gao.gov/products/GAO-10-436] (Washington, D.C.: April 2010). 

[End of section] 

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