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GAO-11-459R:
United States Government Accountability Office:
Washington, DC 20548:
June 27, 2011:
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:
Subject: Military Buildup on Guam: Costs and Challenges in Meeting
Construction Timelines:
In 2004, the bilateral U.S. and Japanese Security Consultative
Committee began a series of sustained security consultations to
strengthen the U.S.-Japan security alliance by establishing a
framework for the future of the U.S. force structure in Japan. The
United States and Japan agreed to reduce the U.S. force structure in
Japan while maintaining the U.S. force presence in the Pacific theater
by relocating units to other areas, including Guam. As part of this
effort, called the Defense Policy Review Initiative, about 8,600
Marines and 9,000 dependents were to move from Okinawa, Japan, to Guam
by a projected date of 2014, as described in the bilateral agreement.
[Footnote 1] On June 21, 2011, however, United States and Government
of Japan officials noted that completion of the Marine relocation will
not meet the previously targeted date of 2014, but confirmed their
commitment to complete the relocation at the earliest possible date
after 2014.[Footnote 2] The Department of Defense (DOD) also plans to
move other military forces and equipment to Guam on different
schedules in implementing a new strategic approach in the Pacific as
part of its worldwide Integrated Global Presence and Basing Strategy.
These latter initiatives involve each of the military services and the
Army National Guard working concurrently to complete infrastructure
projects to support Guam-based U.S. forces and their dependents. If
the initiatives are implemented as planned, the Guam-based DOD
population would grow from about 15,000 in 2007 to about 39,000 by
2020. As you requested, we evaluated issues surrounding DOD's military
buildup on Guam. Specifically, we (1) examined the estimated military
construction costs for the buildup and determined whether bid savings
[Footnote 3] existed for military construction projects in fiscal
years 2009 and 2010, and (2) assessed certain challenges that DOD
faces related to the buildup.
To examine the estimated military construction costs for the buildup,
we interviewed and collected data from officials in the Office of the
Under Secretary of Defense (Comptroller), the Office of the Under
Secretary of Defense (Acquisition, Technology and Logistics), the
Director of the Office of the Secretary of Defense Cost Assessment and
Program Evaluation, the Joint Guam Program Office, and the Departments
of the Army, Navy, and Air Force. To determine whether military
construction bid savings existed for military buildup projects in
fiscal years 2009 and 2010, we subtracted the services' planned
obligations from the amounts appropriated or otherwise designated for
a project for all 13 projects awarded during that time frame. We
corroborated the calculations with cognizant military service
officials. We also reviewed the statutory authorizations to transfer
or reprogram bid savings[Footnote 4] to other projects. Through
document reviews and interviews with agency officials knowledgeable
about the services' cost, obligation, and appropriation data, the
systems that produced them, and the internal controls used to maintain
the integrity of the data, we determined that the data were
sufficiently reliable for our purposes. To assess the challenges
related to the buildup, we reviewed the United States and Japan
bilateral agreement on the Marine Corps force relocation from Okinawa
to Guam; drafts of the Navy's Guam Joint Military Master Plan; the
2001, 2006, and 2010 Quadrennial Defense Review reports; the
Interagency Coordination Group of Inspectors General for Guam
Realignment annual reports for 2009 and 2010; and final environmental
impact statements for Navy and Air Force projects and accompanying
records of decision. Additionally, we reviewed our prior reports that
described some challenges of implementing the military buildup on Guam
(see the Related GAO Reports list at the end of this report). We
interviewed officials from the offices of the Under Secretary of
Defense (Policy); the Under Secretary of Defense (Comptroller); the
Under Secretary of Defense (Acquisition, Technology and Logistics);
the Deputy Under Secretary of Defense (Installations and Environment);
the Joint Staff; Army, Navy, Air Force, and Marine Corps headquarters,
command, and installation staff; the Navy's Joint Guam Program Office;
and Joint Region Marianas. We met with officials at U.S. Pacific
Command and its service components and Guam-based DOD officials
planning the buildup. We discussed funding and planning challenges for
off-installation road and other projects with officials from the U.S.
Department of the Interior's Office of Insular Affairs and DOD's
Office of Economic Adjustment.
We conducted this performance audit from May 2010 through June 2011 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.
Summary:
The military buildup on Guam is likely to cost about $7.5 billion in
military construction funding from fiscal years 2009 through 2016,
according to the latest estimates by DOD. However, DOD has yet to
fully identify some costs associated with the buildup. For example,
DOD has not developed cost estimates for the air and missile defense
task force that may be placed on Guam. In addition, construction for
future facilities for the Air Force Guam Strike initiative is expected
to occur over a 16-year period, which extends beyond the current costs
that the Air Force has estimated through fiscal year 2015. Moreover,
DOD's total costs will be higher once life-cycle costs are included in
these estimates. In addition, the Government of Japan is expected to
provide up to an additional $6.09 billion in funding for
infrastructure and facilities to support the Marine Corps relocation,
which includes directly funding up to $2.8 billion in military
construction projects on Guam, including utilities and site
improvements for future facilities. Japan is also expected to fund up
to $3.29 billion in special purpose entity loans and equity
investments for installation support infrastructure for utilities and
for military family housing, and, according to DOD officials, Japan is
expected to recoup most of these funds over time in the form of
repayments from the U.S. government and rents paid by Marine Corps
servicemembers through their housing allowances. The Government of
Guam is largely responsible for obtaining funding for needed off-
installation infrastructure projects, such as off-base roads and
utilities, and it estimated that it needs approximately $3.2 billion
for buildup-related projects and programs. In addition, we found that
DOD, the Government of Japan, and the Government of Guam total cost
estimates for the Guam-based military buildup are almost $23.9 billion
to date, including the $3.29 billion that Japan is expected to recoup
over time. We also found that DOD had bid savings of about $93 million
for 11 of the 13 military construction projects for which it had
awarded contracts in fiscal years 2009 and 2010 to support the Guam
buildup. In these cases, the winning contract bids were lower than the
amounts that Congress had appropriated or the amount that was
otherwise designated for the project. However, bid savings may often
be used to offset cost overruns on other projects or future
requirements for a specific military construction project or for other
projects around the world without further congressional authorization.
In the cases we examined, most of the bid savings were applied to
offset the impact of rescissions of military construction
appropriations or had been transferred or reprogrammed to other
projects as of the time of our report.
DOD continues to update but has not yet finalized its Guam Joint
Military Master Plan (master plan) for the military buildup on Guam
and faces certain unresolved challenges which may delay some
construction projects, although it has taken some steps to address
many of these challenges. The congressional defense committees have
been requesting a master plan for Guam since 2006. Delays in
finalizing the master plan may lead DOD to make budget requests for
military construction projects for the relocation of the Marines from
Okinawa, Japan, to Guam without reasonable assurances that the funds
are needed in the time frame in which they are being requested.
Moreover, certain challenges could delay some construction projects,
making it increasingly difficult to meet the planned deadlines for the
different components of the buildup. These challenges include the
Navy's deferral of decisions on (1) selection of a site for the live-
fire training range complex on Guam to support needed Marine Corps
training, (2) selection of a site for the transient aircraft carrier
berth within Apra Harbor, and (3) the potential deployment of an air
and missile defense task force on Guam and the construction of
associated infrastructure to support the task force. Other challenges
include unresolved decisions with the governments of Japan or Guam,
such as determining when Japan will begin making "tangible progress"
toward constructing a new airbase in Okinawa, which is part of the
bilateral agreement between the United States and Japan to move the
Marine Corps forces to Guam; finalizing the terms and conditions for
the use of special purpose entities for housing and utilities; and
defining the role of a new interagency advisory group, all of which
could delay some projects supporting the buildup. DOD has taken steps
to address many of the challenges associated with the military buildup
on Guam, although many issues remain unresolved. In addition to its
ongoing coordination with the governments of Japan and Guam and other
federal agencies, DOD is also making progress in incorporating new
information into its draft master plan, promoting interagency
coordination among federal agencies, and identifying off-base
infrastructure improvements and socioeconomic needs to help the
Government of Guam prepare for the military buildup.
We are not making any recommendations in this correspondence. After
reviewing a draft of this product, DOD officials said the department
would not provide a formal response. However, DOD provided technical
comments that have been incorporated as appropriate in this
correspondence.
Background:
The Defense Policy Review Initiative and relevant Integrated Global
Presence and Basing Strategy elements together account for five major
components that, if fully implemented, will result in an increase in
the DOD population on Guam from about 15,000 personnel in 2007 to
about 39,000 by 2020. Figure 1 displays the five components.
Figure 1: Five Components of the Military Buildup on Guam:
[Refer to PDF for image: illustration]
Army National Guard response to the Army's "Grow the Force" initiative;
Air Force Guam Strike and regional training center;
Marine Corps relocation from Okinawa;
Proposed air and missile defense task force;
Navy transient nuclear carrier berth.
Source: GAO analysis of DOD data as of April 2011.
[End of figure]
Marine Corps' Relocation from Okinawa to Guam Is the Largest Component
of the Buildup:
The largest component of the buildup is the planned relocation of
elements of the Marine Corps' III Marine Expeditionary Force from
Okinawa to Guam. If implemented as planned, about 8,600 Marines and
their estimated 9,000 dependents will move from Okinawa to Guam under
the Defense Policy Review Initiative agreement between the United
States and Japan.[Footnote 5] The relocation requires significant
facilities and infrastructure construction to support the forces and
their families, including needed training and operations facilities on
Guam or in the Commonwealth of the Northern Mariana Islands. Moreover,
in a subsequent bilateral agreement signed by the U.S. Secretary of
State and Japanese Minister of Foreign Affairs in February 2009, the
United States and Japan agreed that the III Marine Expeditionary Force
relocation to Guam is dependent on "tangible progress" by Japan toward
the completion of a replacement for Marine Corps Air Station Futenma
on Okinawa, which is to close and be replaced by a new base commonly
referred to as the "Futenma Replacement Facility." The replacement
facility is planned to be built in a less densely populated area in
northern Okinawa and will provide a home base for aviation elements of
the BI Marine Expeditionary Force that will remain on Okinawa. If
implemented as planned, this initiative will relocate a Marine
Aviation Group, Logistics Squadron, and several helicopter squadrons
to the Futenma Replacement Facility by the projected date of 2014. The
Futenma Replacement Facility is planned to be constructed in a
location that will require substantial landfill, including portions
that are currently under water, thus requiring significant land
reclamation. While it is difficult to determine at this time what, if
any, impact the March 11, 2011, earthquake, tsunami, and associated
nuclear reactor incident will have on current agreements and
initiative construction plans, DOD officials have said that there is
potential for increases in the cost of materials and labor in Asia.
Furthermore, on June 21, 2011, United States and Government of Japan
officials noted that completion of the Futenma Replacement Facility
and the Marine relocation will not meet the previously targeted date
of 2014, but confirmed their commitment to complete the above projects
at the earliest possible date after 2014.
DOD's Integrated Global Presence and Basing Strategy and Force
Structure Increase Are to Add New Forces to Guam:
The other four major components of the Guam buildup result from
elements of DOD's global basing strategy, prior Quadrennial Defense
Reviews, and the Army's "Grow the Force" initiative:[Footnote 6]
* Two Air Force initiatives comprise the second largest component of
the Guam buildup. These include (1) developing a global hub, known as
"Guam Strike," for intelligence, surveillance, reconnaissance, strike,
and aerial refueling capabilities at Andersen Air Force Base; and (2)
relocating Pacific Air Force's expeditionary training centers from the
Korean peninsula to Guam. Guam Strike is intended as a multifaceted
strike force able to respond quickly when needed. Air Force officials
told us that military construction has begun for Guam Strike and will
continue through at least fiscal year 2022. The Pacific Air Force
Regional Training Center was established to support the movement of
Air Force personnel from the Korean Peninsula to Andersen Air Force
Base to support the U.S. Global Defense Posture Review and the United
States Forces Korea-Republic of Korea Security Policy Initiative
agreement to reduce the number of troops on the Korean Peninsula by
12,500. Air Force officials told us that military construction has
begun for the training center and will be completed in fiscal year
2016.
* The third component of the Guam-based buildup is the Navy's plan to
enhance facilities, infrastructure, and logistic capabilities at Naval
Base Guam to accommodate the berthing of transient nuclear aircraft
carriers and their support vessels. This component supports DOD's
redefinition of the U.S. defense posture in the Pacific, which calls
for increasing the availability of aircraft carrier strike groups in
the region.
* The fourth military buildup component is the Army National Guard's
plan to build additional facilities at an existing installation, Navy
Barrigada, to accommodate the Guard's increase in personnel. This
increase is part of the Army National Guard's contribution to the
Army's "Grow the Force" initiative, with the growth on Guam
anticipated to total about 1,300 staff and family members by fiscal
year 2012.
* The fifth component is the potential stationing of an air and
missile defense task force on Guam. However, a decision to proceed is
pending the results of ongoing regional and global ballistic missile
defense architectural and capability studies to determine whether the
task force could be placed on Guam to protect its citizens and U.S.
and allied forces from ballistic missile attacks and, if so, which
service would perform the mission.[Footnote 7]
DOD has developed estimated timelines for each component of the
military buildup. Figure 2 displays the major milestones and planned
completion dates for each component.
Figure 2: DOD-Estimated Timelines for Each Component of the Military
Buildup on Guam:
[Refer to PDF for image: 5 timelines]
Marine Corps: Relocation from Okinawa:
2002: Defense Policy Review Initiative begins.
October 2005: U.S. and Japan review roles and responsibilities.
May 2006: Roadmap signed.
February 2009: Guam relocation agreement.
May 2010: U.S. and Japan reaffirm agreement.
July 2010: Final Environmental Impact Statement (originally expected
in January 2010).
September 2010:
* Record of Decision;
* First construction contract awarded.
FY 2014: Estimated completion.
Air Force: Guam Strike and Regional Training Center Initiatives:
September 2001: 2001 Quadrennial Defense Review.
June 2006: Finding of No Significant Impact, Beddown of Training and
Support Initiatives at Northwest Field.
November 2006: Final Environmental Impact Statement (Guam Strike).
January 2007: Record of Decision (Guam Strike).
FY 2016: Northwest Field facility construction projects completed.
FY 2022: Estimated completion (Guam Strike).
Navy: Transient Carrier Berth:
September 2001: 2001 Quadrennial Defense Review.
March 2009: Initial DD Form 1391 submitted[A].
July 2010: Final Environmental Impact Statement (originally expected
in January 2010).
September 2010: Record of Decision (originally expected in January
2010).
November 2011: Additional environmental studies to be completed.
September 2014: Estimated completion.
Army National Guard: "Grow the Force" Initiative:
January 2007: Grow the Force initiative announced.
July 2012: Groundbreaking for first project.
FY 2012: Growth completion anticipated.
Air & Missile Defense Task Force:
December 2002: National Security Presidential Directive-23 issued.
July 2010: Final Environmental Impact Statement (originally expected
in January 2010).
September 2010: Record of Decision (originally expected in January
2010).
March 2011: Ballistic missile defense study completed.
FY 2014: Army air and missile defense task force to establish
operational capability.
Source: GAO analysis of DOD data.
[A] DOD Financial Management Regulation 7000.14-R, Volume 2B, Chapter
6 designates that a DD Form 1391, Military Construction Project Data,
is used by DOD to submit requirements and justifications in support of
funding requests to Congress for military construction projects.
[End of figure]
Facility and infrastructure projects supporting the five components
will be located throughout Guam, as shown in figure 3.
Figure 3: Current and Proposed Locations of DOD Facility and
Infrastructure Projects for the Five Components of the Military
Buildup on Guam:
[Refer to PDF for image: illustrated map of Guam]
Depicted on the map:
Naval Base Guam;
Proposed transient aircraft carrier berth;
New Naval hospital;
South Finegayan (Marine Corps housing);
Former FAA parcel (for Marine Corps main cantonment);
Marine Corps main cantonment;
Potential air and missile defense task force;
Northwest Field, Andersen Air Force Base (regional training center);
Marine Marine aviation;
Andersen Air Force Base;
Guam Strike capability;
Naval Computer and Telecommunications Station Finegayan;
Proposed Marine Corps live-fire training range complex;
Andersen South (nonfire training);
Navy Barrigada;
Air Force Barrigada;
Ordnance Annex.
Source. GAO analysis of DOD data; Map Resources (map).
Notes: Dotted lines show the proposed location of the live-fire
training range complex and the preferred alternative for Marine
Corps main cantonment. The Navy is building a new hospital at the same
location as the existing one and construction has begun.
[End of figure]
Estimated Military Construction Costs and Bid Savings to Date:
Near-Term Military Construction Costs Have Been Estimated, but Not All
Buildup Costs Have Been Identified:
In the near-term, during fiscal years 2009 through 2016, the military
buildup on Guam is likely to cost about $7.5 billion for military
construction, according to the latest estimates by DOD. This estimate
does not include up to $3.29 billion that is expected to be recouped
by Japan from its contribution to the buildup. Moreover, DOD has yet
to fully identify some costs for the Guam-based military buildup. For
example, DOD has not yet developed cost estimates for the air and
missile defense task force that may be placed on Guam. Table 1
displays those military construction costs and time frames for
incurring costs which DOD had estimated through fiscal year 2016, as
of the time of our report. In addition to the estimated military
construction costs for the five components, we also include cost
estimates for an additional training range in the Northern Mariana
Islands and the Defense Access Roads program, which will fund off-
installation intersection, bridge, and roadway improvements.[Footnote
8]
Table 1: Estimated DOD Military Construction Costs for the Facilities
and Infrastructure, Including the Defense Access Roads Program, Needed
to Support Each Component of the Buildup (by Estimated Time Frame):
Components and Defense Access Roads program: Marine Corps Relocation
from Okinawa (Defense Policy Review Initiative);
Cost estimates: $4.2[A] billion;
Estimated time frame to incur costs (fiscal years): 2010-2014.
Components and Defense Access Roads program: Training Range in the
Commonwealth of the Northern Mariana Islands;
Cost estimates: $1.9[B] billion;
Estimated time frame to incur costs (fiscal years): 2012-2015.
Components and Defense Access Roads program: Air Force Guam Strike and
Pacific Air Force Regional Training Center;
Cost estimates: $847 million;
Estimated time frame to incur costs (fiscal years): 2009-2015.
Components and Defense Access Roads program: Navy Transient Nuclear
Aircraft Carrier Berth;
Cost estimates: $291 million;
Estimated time frame to incur costs (fiscal years): 2011-2016.
Components and Defense Access Roads program: Army National Guard
Response to the Army's "Grow the Force" initiative;
Cost estimates: $57 million;
Estimated time frame to incur costs (fiscal years): 2010-2014.
Components and Defense Access Roads program: Proposed Air and Missile
Defense Task Force;
Cost estimates: To be determined
Estimated time frame to incur costs (fiscal years): To be determined.
Components and Defense Access Roads program: Defense Access Roads
Program;
Cost estimates: $191 million;
Estimated time frame to incur costs (fiscal years): 2010-2014.
Components and Defense Access Roads program: Total;
Cost estimates: $7.486 billion.
Source: GAO summary of DOD data. Comprehensive Cost
[A] This entry represents military construction cost estimates. In our
report, 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), we stated that U.S. cost
estimates for the Marine Corps relocation from Okinawa to Guam were
about $11.3 billion, which includes an additional $7.1 billion that
the Marine Corps estimated may include the costs to outfit, furnish,
and maintain buildings constructed by Japan and to move personnel and
equipment into consolidated locations.
[B] According to the Navy’s final environmental impact statement, Guam
cannot accommodate all training for the realigned Marine Corps forces;
therefore, DOD has identified locations in the Northern Mariana
Islands that could provide additional land for training. Marine Corps
officials have estimated that building this additional training range
could cost approximately $1.9 billion or more, of which $1 billion
would cover costs such as military construction, planning and
development, environmental compliance, and combat arms training ranges
from fiscal years 2012 through 2015. According to the Marine Corps
officials, the remaining cost for full development of the training
capabilities and capacity in the Northern Mariana Islands was at least
$900 million over an unspecified period of time.
[End of table]
Service officials acknowledged that, as of March 2011, these for the
military construction or infrastructure projects during frames. They
expect to incur additional military construction components beyond the
time frames shown in the table. for Air Force Guam Strike is expected
to occur over a 16-year there will be additional military construction
costs beyond estimates shown above. As we have recently reported, the
estimated that an additional $7.1 billion may be required move from
Okinawa to Guam—-$4.7 billion for additional billion for costs
associated with utilities, labor, and procurement equipment.[Footnote
9] In addition, congressional committees have requested that DOD
provide Congress a plan detailing the total cost estimate for each
facility and infrastructure item required to complete the Marines'
relocation to Guam. Moreover, since the cost estimates for all of the
components of the buildup do not include life-cycle costs, total costs
will be higher over the life of the DOD facilities.[Footnote 10]
The Government of Japan is expected to provide up to $6.09 billion in
funding for infrastructure and facilities to support the Marine Corps
relocation. Of this amount, the bilateral agreement states that Japan
agreed to directly fund up to $2.8 billion in military construction
projects on Guam to develop infrastructure and facilities for the
relocation, including utilities and site improvements for future
facilities, barracks, and health clinics. Japan is also expected to
fund up to $3.29 billion in special purpose entity loans and equity
investments for installation support infrastructure for on-base water
wells and storage; off-installation power, wastewater, and water
systems improvements; and military family housing. According to DOD
officials, most of this $3.29 billion is expected to be recouped by
Japan over time in the form of service charges paid by the United
States and in rents paid by Marine Corps servicemembers using their
DOD provided overseas housing allowance. DOD officials said that
special purpose entities would most likely be limited liability
companies or partnerships formed for the specific purpose of providing
a particular utility service or other services on Guam.[Footnote 11]
The Government of Guam would be largely responsible to obtain funding
for needed off-installation infrastructure projects. These projects
include road, water and sewer, electric power, and potentially other
infrastructure improvements. DOD and some non-DOD agencies could
augment the Government of Guam's revenue sources to fund such projects
by contributing additional funds through existing intergovernmental
grant processes that could add to federal government costs. DOD's
Office of Economic Adjustment has provided technical and financial
assistance to the Government of Guam in preparation for the buildup
since July 2006. We previously reported in November 2009, that the
Government of Guam estimated that it needs approximately $3.2 billion
for buildup-related projects and programs.[Footnote 12]
In table 2, we summarize the DOD, the Government of Japan, and the
Government of Guam cost estimates for the Guam-based military buildup
that so far total almost $23.9 billion, including the $3.29 billion
that Japan is expected to recoup over time. In May 2011, we reported
total cost estimates of $19.3 billion for the initiatives in Guam and
the Northern Mariana Islands that are associated with one of the five
components of the military buildup on Guam—-the Marine Corps
relocation from Okinawa.[Footnote 13] In the table below, we also
include the military construction costs of about $7.5 billion that
have been identified to date for three of the components of the
buildup (for the Air Force, Navy, and Army National Guard), the
training range in the Northern Mariana Islands, and the Defense Access
Roads program. (As noted earlier, DOD has not yet developed cost
estimates for the fifth component of the Guam-based military to
buildup—the air and missile defense task force that may be placed on
Guam.) The table below also identifies the additional Marine Corps
requirements of $7.1 billion complete the move to Guam, Government of
Japan funding of up to $6.1 billion for infrastructure and facilities
projects to support the Marine Corps relocation, and cost estimates of
$3.2 billion for the Government of Guam.
Table 2: DOD, Government of Japan, and Government of Guam:
DOD, Government of Japan, and Government of Guam: DOD-—Military
Construction Projects (total from table 1)
Cost estimates: $7.486 billion.
DOD, Government of Japan, and Government of Guam: DOD—-Additional
Marine Corps Requirements[A];
Cost estimates: $7.100 billion.
DOD, Government of Japan, and Government of Guam: Government of Japan-—
Direct funding
Cost estimates: $2.800 billion.
DOD, Government of Japan, and Government of Guam: Government of Japan—-
loans and equity investments
Cost estimates: $3.290 billion.
DOD, Government of Japan, and Government of Guam: Government of Guam
or non-DOD federal agency grants-in-aid[B];
Cost estimates: $3.179 billion.
DOD, Government of Japan, and Government of Guam: Total;
Cost estimates: $23.855 billion.
Source: GAO summary of DOD data.
[A] The Marine Corps has estimated these additional costs to complete
the relocation of Marines from Okinawa to Guam; however, they have not
been validated by DOD.
[B] The Government of Guam figures represent estimated funding
required as of September 2009, the latest available. We reported these
figures in GAO-10-90R, November 13, 2009.
[End of table]
Bid Savings Identified for 11 of 13 Military Construction Contracts:
In our analysis of the 13 military construction projects for which DOD
had awarded contracts in fiscal years 2009 and 2010 to support the
Guam buildup, we identified about $93 million in bid savings—-
differences between the appropriated or otherwise designated amounts
and the obligated amounts-—for 11 of the projects. Specifically, the
winning contract bid was lower than the amount that Congress had
appropriated or had otherwise been designated for the project in all
but two cases. However, Congress has provided DOD authority, subject
to limitations, to transfer and reprogram funds among military
construction projects.[Footnote 14] Thus, bid savings may be used to
offset cost overruns or future requirements for a specific military
construction project or for other projects around the world. As a
result, as of the time of our report, DOD and military service
officials had already applied most of these bid savings to certain
congressional rescissions of military construction appropriations
or had reprogrammed leftover funds to other uses, as shown in table 3.
Table 3: GAO's Assessment of Bid Savings for 13 Military Construction
Projects (Fiscal Years 2009 and 2010):
Project: Air Force Combat Community Maintenance Facility;
Appropriated or designated amount: $5,200,000;
Obligated amount: $4,346,364;
Difference: $853,636;
Use identified for savings: Use identified for savings: $698,000 for
Eielson Air Force Base repair project, leaving $155,636 not
reprogrammed.
Project: Realign Arc Light Boulevard;
Appropriated or designated amount: $5,400,000;
Obligated amount: $6,287,404;
Difference: ($887,404);
No savings; winning bid was higher than appropriated or designated
amount.
Project: Naval Base Guam Wastewater Upgrade;
Appropriated or designated amount: $26,070,000;
Obligated amount: $15,492,000;
Difference: $10,578,000;
Use identified for savings: Navy applied to $51,468,000 rescission in
Pub. L. No. 111-117 (2009).
Project: Central Utility Plant, Naval Hospital;
Appropriated or designated amount: $30,000,000;
Obligated amount: $15,574,134;
Difference: $14,425,866;
Use identified for savings: Applied to $93,268,000 rescission in Pub.
L. No. 111-117 (2009).
Project: F-22 Electrical Support;
Appropriated or designated amount: $1,800,000;
Obligated amount: $1,737,055;
Difference: $62,945;
Use identified for savings: Unspecified minor construction project;
savings not applicable.
Project: Commando Warrior Operations Facility;
Appropriated or designated amount: $4,200,000;
Obligated amount: $3,931,699;
Difference: $268,301;
Use identified for savings: Air Force applied to $64,091,000
rescission in Pub. L. No. 111-117 (2009).
Project: Northwest Field;
Appropriated or designated amount: $4,752,000;
Obligated amount: $4,337,661;
Difference: $414,339;
Air Force applied to $64,091,000 Perimeter Fence and Road
rescission in Pub. L. No. 111-117 (2009).
Project: Army National Guard Readiness Center;
Appropriated or designated amount: $30,000,000;
Obligated amount: $20,500,000;
Difference: $9,500,000;
Use identified for savings: Army identified this amount will be
applied to offset one or more rescissions, but could not immediately
identify which rescissions it would be applied to.
Project: Strike Forward Operating Location Electrical Infrastructure;
Appropriated or designated amount: $33,750,000;
Obligated amount: $29,807,430;
Difference: $3,942,570;
Use identified for savings: Air Force applied to $64,091,000
rescission in Pub. L. No. 111-117 (2009).
Project: Combat Support Vehicle Maintenance Facility;
Appropriated or designated amount: $15,500,000;
Obligated amount: $14,496,360;
Difference: $1,003,640;
Use identified for savings: Air Force applied $578,000 to cost overrun
on postal facility, and $426,000 to $64,091,000 rescission in Pub. L.
No. 111-117 (2009).
Project: Military Working Dog Relocation;
Appropriated or designated amount: $14,000,000;
Obligated amount: $12,504,656;
Difference: $1,495,344;
Use identified for savings: Naval Facilities Engineering Command
Project Manager explained that obligated amount increased to about
$12.5 million with $1,495,344 use not identified.
Project: New Naval Hospital;
Appropriated or designated amount: $259,156,000;
Obligated amount: $208,000,000;
Difference: $51,156,000;
Use identified for savings: Applied to $125,500,000 rescission in Pub.
L. No. 112-10 (2011).
Project: Apra Harbor Wharf Improvements;
Appropriated or designated amount: $127,033,000;
Obligated amount: $127,033,000;
Difference: $0;
Use identified for savings: No savings realized.
Project: Total;
Appropriated or designated amount: $556,861,000;
Obligated amount: $464,047,763;
Difference: $92,813,237.
Source: GAO analysis of DOD or military service data.
[End of table]
DOD attributes the savings to favorable construction market
conditions, which may not persist over the course of the buildup
period.
DOD Has Not Finalized Its Master Plan and Faces Certain Unresolved
Challenges That May Delay Some Construction Projects:
DOD is updating its Guam Joint Military Master Plan but has not
finalized it. The congressional defense committees have been
requesting a master plan for Guam since 2006. Delays in finalizing the
plan may lead DOD to seek budget requests for military construction
projects for the relocation of the Marines from Okinawa, Japan, to
Guam without reasonable assurances that the funds are needed in the
time frame in which they are being requested. Moreover, certain
challenges could delay some construction projects, making it
increasingly difficult to meet the components' planned deadlines.
DOD Continues to Update but Has Not Finalized Its Master Plan:
As of May 2011, DOD had not finalized its draft Guam Joint Military
Master Plan and provided it to Congress. In 2008, the Navy's Joint
Guam Program Office estimated that it could complete a comprehensive
master plan within 90 days of finalizing the record of decision.
[Footnote 15] The record of decision, which was completed in September
2010, represents the decisions of the Navy and the Army regarding
proposed actions on three components of the military buildup on Guam.
However, during our review, DOD officials told us that they had
updated the draft master plan again in November 2010, after finalizing
the record of decision, but the revised plan was still under review
within DOD in May 2011. Since 2006, the congressional defense
committees have been requesting a master plan for Guam. In that year,
the Senate Armed Services Committee first directed the Secretary of
Defense to submit such a plan for Guam, noting that the buildup would
require a well-developed master plan to efficiently use the available
land and infrastructure. More recently, in the conference report
accompanying the Ike Skelton National Defense Authorization Act for
Fiscal Year 2011, the conferees recommended that authorizations for
future construction projects to support the movement of Marine Corps
forces to Guam be deferred until DOD provides Congress with an updated
master plan for Guam and other information.[Footnote 16] We have
previously reported on the need for DOD to provide congressional
defense committees with annual updates of the Guam working-level plan
until a comprehensive master plan is finalized and submitted to
Congress. [Footnote 17] However, Congress' ability to oversee the
entire Guam military buildup and make appropriately timed funding
decisions is likely to be hampered until DOD completes the plan and
provides it to Congress.
Deferred Decisions Related to Three Components May Delay Construction
Project Completion:
As noted in the record of decision, DOD deferred decisions related to
three components of the buildup, which may delay the timelines for the
military construction projects on Guam. First, in its July 2010 final
environmental impact statement, the Navy identified two alternative
locations for a live-fire training range complex off Route 15 on Guam,
explaining that every Marine on Guam would require annual training
with individual weapons to maintain combat readiness, and that high-
volume training of this kind could only be met with ranges located in
close proximity to the Marine installation. Additionally, the
environmental impact statement indicated that the Navy estimated that
the facility would typically be used 5 days a week, 45 weeks a year.
Subsequently, in the September 2010 record of decision, the Navy
disclosed that it had deferred selection of the range's specific site,
pending completion of the consultation process under the National
Historic Preservation Act. Additionally, the recently signed
programmatic agreement that documents consultations under the National
Historic Preservation Act states that DOD will consult with the
various parties to the agreement and the public to address range
location, orientation, and design within any area that may be selected
in the Navy's record of decision for the live-fire training range
complex, in order to avoid, minimize, and mitigate potential direct
and indirect effects on historic properties. Therefore, once a site
for the Marine Corps training range complex is selected, there are
likely to be additional consultations that may have an impact on
associated construction projects and the overall timeline for the
Marine Corps relocation. Moreover, ongoing litigation related to this
project could further delay site selection and construction. DOD
considers completion of the live-fire training range as a necessary
prerequisite for the Marine Corps relocation to proceed, so further
delays make it increasingly difficult to meet the original projected
Marine Corps relocation timeline.
Second, in its record of decision, the Navy deferred final site
selection for the aircraft carrier wharf at Apra Harbor, although the
final environmental impact statement identified a preferred site. The
Navy plans to make the final site selection after completing its
collection of additional environmental data on marine resources that
could be affected by port dredging, wharf operations, and the turning
basin to be located in front of the wharf. DOD officials told us that
these studies were expected to be completed in November 2011 and would
be incorporated into a supplemental environmental impact analysis
before final site selection. This project is not part of the bilateral
agreement for the Marine Corps relocation from Okinawa, although the
Navy had separately planned to complete the project in September 2014.
DOD officials subsequently told us that the carrier wharf construction
budget request was now projected to be in the Navy's fiscal year 2014
military construction program budget. As a result, since the project
is expected to take 3 years to complete, it would be unlikely to be
completed before 2017 (assuming it is requested and funded in fiscal
year 2014)--3 years after the Navy's original 2014 estimated
completion date.
Third, DOD has not decided whether to place an air and missile defense
task force on Guam and which service would have the mission. DOD is
awaiting the results of ongoing regional and global ballistic missile
defense architectural and capability studies to determine whether to
assign this mission to the Army.[Footnote 18] However, the Army
included its deliberations on the environmental impact of the proposed
task force in the Navy's environmental impact statement since the Army
could be assigned the mission. Inclusion in the environmental impact
statement process helps avoid the additional time and cost of
completing a separate environmental assessment later. Army officials
said that the Terminal High-Altitude Area Defense system was expected
to be integral to the task force but was in production and not
expected to be available before fiscal year 2015.[Footnote 19] The
ballistic missile defense initiative is a separate component which is
not part of the Marine Corps relocation described in the bilateral
agreement, although the draft Guam Joint Military Master Plan
specified that the task force was to be operational around 2014.
However, if DOD assigned the mission to the Army, the task force is
unlikely to be operational by 2014. Army officials stated that the
Army is not committing funding for any buildup activities on
Guam related to the task force until a ballistic missile defense task
force is approved for Guam and DOD assigns the mission to the Army. If
the Army is assigned the mission, officials estimated that it would
then take another 2 years of planning and design before the Army could
even begin to program any military construction funds for the task
force into its budget, which may delay the estimated 2014 operational
date.
Unresolved Decisions with the Governments of Japan or Guam May Also Slow
Construction Progress:
The bilateral agreement between the United States and Japan specifies
that the relocation of elements of the III Marine Expeditionary Force
is dependent on "tangible progress" toward completion of the Futenma
Replacement Facility on Okinawa. The location for the replacement
facility will require substantial landfill, which will include
reclaiming land from the sea for the needed new airfield. However, the
Governor of Okinawa had not signed the landfill permit at the time of
our report, and DOD officials did not know when the permit would be
signed and thus when the Marine Corps forces would actually move to
Guam. Furthermore, as noted earlier, the United States and the
Government of Japan officials recently acknowledged that completion of
the Futenma Replacement Facility and the Marine relocation will not
meet the previously targeted date of 2014, but confirmed their
commitment to complete these actions at the earliest possible date
after 2014.
Decisions surrounding the use of special purpose entities for housing
and utilities were still being negotiated between DOD and the
governments of Japan and Guam at the time of our report. First, Joint
Guam Program Office officials told us that DOD and Government of Japan
representatives continue to meet to refine the structure for the
housing special purpose entities, stating that the deadline for
issuing the housing requests for proposal is directly related to when
the Marine Corps will require housing for the families on Guam.
However, if military family housing is not available when needed, then
the relocation of Marine Corps forces from Okinawa will likely be
delayed. Second, Joint Guam Program Office officials stated that
utility agreements for power and wastewater are to be executed between
the governments of Japan and Guam, and DOD's only role would be as a
rate-paying customer. However, these officials told us that
negotiations for the utility special purpose entities were ongoing. As
we have previously reported, there are a number of actions that need
to be taken to create the special purpose entities for utilities,
including development and approval of a business model for the special
purpose entities, the evaluation of qualifications and service
proposals, the selection and creation of the entities, and
construction,[Footnote 20] which would need to be completed in time to
handle the added requirements for an estimated peak in fiscal year
2013 of about 20,000 construction laborers.
Unresolved Decisions on the Role of a New Interagency Advisory Group
May Limit Opportunity to Resolve Challenges That Could Otherwise Delay
Some Projects:
The record of decision stated that DOD established a Civil-Military
Coordination Council to implement a new approach for the military
buildup on Guam. Unresolved decisions on the role of the new Civil-
Military Coordination Council advisory group in implementing a new
approach to flexibly sequencing military construction and public
utilities infrastructure projects could lead to some project delays.
However, if effectively implemented, the council could help to avoid,
for example, public utilities' capacity problems. Specifically, the
Navy has developed an approach to sequencing and timing military
construction projects known as "adaptive program management" in order
to avoid significant environmental impacts or exceeding Guam's
infrastructure capabilities, particularly with the increased number of
workforce personnel needed to support the proposed construction.
According to DOD officials, adaptive program management is to be
implemented through the Civil-Military Coordination Council comprised
of officials from the Government of Guam, DOD, and other federal
agencies. According to DOD officials, the council's working groups are
to monitor construction tempo, construction sequencing, or other
actions and make recommendations on project sequencing and timing to
the council in light of utilities' capacity at the location of the
military construction, environmental concerns, and impacts on social
services. In the case of utilities, the council would in turn make
recommendations to DOD or other agencies to try to ensure that the
capacity of public utilities is adequate to meet the needs of the
construction crews and newly constructed military facilities at the
time that the added capacity is needed. Using adaptive program
management and based on recommendations from the council, DOD could
change the timing and execution of construction contract awards if the
capacity of the public utilities infrastructure is known to be
inadequate in the location of a given military construction project
and redirect construction to occur in locations with adequate
capacity. For its part, the Government of Guam is responsible for
public utilities and other infrastructure off the installations.
[Footnote 21] The Government of Guam would be positioned to try to
expand its utility capacity in sequence with DOD to ensure that
adequate capacity existed at military construction sites and newly
constructed military facilities when needed.
However, the council's current operating charter had not been
finalized as of May 2011, and only one additional meeting has been
held since the initial meeting in October 2010. DOD officials told us
that the second meeting of the Civil-Military Coordination Council,
originally planned for February 2011, was postponed to allow time for
the new governor of Guam to fill his positions on the council and for
participants to agree upon the structure of the council. The second
meeting was subsequently held in May 2011, and officials told us they
plan to finalize the current operating charter by August 2011. DOD
officials said that the absence of a final charter would not prevent
buildup-related construction activities from beginning and the current
operating charter may be followed until it is finalized. However, if
the council's role is not well defined, it is not clear how
effectively DOD will be able to implement adaptive program management
in order to help monitor the buildup and its impact on the environment
and infrastructure on Guam.
DOD Has Begun to Address Buildup Challenges:
DOD has taken some steps to address many of the challenges to the
military buildup on Guam. In addition to its ongoing coordination with
the governments of Japan and Guam and other federal agencies, DOD is
also making progress in incorporating new information into its draft
master plan, promoting interagency coordination among federal
agencies, and identifying off-base infrastructure improvements and
socioeconomic needs to help the Government of Guam prepare for the
military buildup.
* Although DOD has not finalized its Guam Joint Military Master Plan,
the
Navy's Joint Guam Program Office and the Naval Facilities Engineering
Command have continued to update the draft plan. In 2009, for example,
we recommended that DOD develop a comprehensive utility plan for
inclusion in the final Guam Joint Military Master Plan.[Footnote 22]
In July 2010, DOD updated the draft master plan to include basic
information about utilities requirements. For example, DOD has
included a proposed schedule for wastewater, water, and power
infrastructure improvements, which should also assist in implementing
adaptive program management. DOD officials told us that the draft
master plan will continue to be updated as more information, such as
special purpose entities operating procedures, becomes available.
* Additionally, DOD exhibited high-level leadership in coordinating
with other federal agencies and with the Government of Guam to address
off-installation challenges related to the military buildup.
Specifically, we had recommended that the Economic Adjustment
Committee consider Guam's requests for assistance to address the
challenges.[Footnote 23] DOD officials told us that the Economic
Adjustment Committee met four times in fiscal year 2010 to address the
military buildup and ordered certain actions. For example, as a result
of the February 2010 committee meeting, DOD's Office of Economic
Adjustment led an interagency effort to validate necessary off-
installation facilities and services critical for Guam to absorb the
population growth resulting from the buildup. This planning is being
incorporated into budget requests to support the military buildup. For
example, in addition to the $33 million requested by DOD for
Government of Guam requirements, the President's fiscal year 2012
budget also requests approximately $33.7 million in non-DOD
commitments to Guam, including $18 million for the U.S. Department of
Transportation for road and highway requirements not addressed by the
Defense Access Roads program, $3.1 million for the U.S. Department of
Interior for technical assistance to improve tax collection and grant
writing, a Sub-Office of Insular Affairs on Guam, and ambulances and
fire equipment; $3 million for the U.S. Department of Housing and Urban
Development for mental health and substance abuse; and $9.6 million
for the U.S. Environmental Protection Agency for clean water and
drinking water grants.
We are not malting any recommendations in this correspondence. After
reviewing a draft of this product, DOD officials said the department
would not provide a formal response. However, DOD provided technical
comments that have been incorporated as appropriate in this
correspondence.
We are sending copies of this report to the appropriate congressional
committees. We are also sending copies to the Secretary of Defense;
the Secretaries of the Army, the Navy, and the Air Force; the
Commandant of the Marine Corps; the Secretary of the Interior; and the
Director of the Office of Management and Budget. In addition, the
report will be available at no charge on GAO's Web site 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. Key contributors to this report are
listed in enclosure III.
Signed by:
Brian J. Lepore, Director:
Defense Capabilities and Management:
[End of section]
Enclosure I: Agreement Between The Government Of The United States Of
America And The Government Of Japan Concerning The Implementation Of
The Relocation Of III Marine Expeditionary Force Personnel And Their
Dependents From Okinawa To Guam:
The Government of the United States of America and the Government of
Japan,
Affirming that the United States-Japan security arrangements, based on
the Treaty of Mutual Cooperation and Security between the United
States of America and Japan signed at Washington on January 19, 1960,
are the cornerstone for achieving common security objectives,
Recalling that, at the meeting of the United States-Japan Security
Consultative Committee on May 1, 2006, the Ministers recognized that
the implementation of the realignment initiatives described in the
Security Consultative Committee Document, "United States-Japan Roadmap
for Realignment Implementation" (hereinafter referred to as "the
Roadmap") will lead to a new phase in alliance cooperation, and
reduce the burden on local communities, including those on Okinawa,
thereby providing the basis for enhanced public support for the
security alliance,
Emphasizing their recognition of the importance of Guam for forward
presence of United States Marine Corps forces, which provides
assurance of the United States' commitment to security and strengthens
deterrent capabilities in the Asia-Pacific region,
Reaffirming that the Roadmap emphasizes the importance of force
reductions and relocation to Guam in relation to the realignment on
Okinawa and stipulates that approximately 8,000 III Marine
Expeditionary Force (hereinafter referred to as "III MEF") personnel
and their approximately 9,000 dependents will relocate from Okinawa to
Guam by 2014, in a manner that maintains unit integrity, and recognizing
that such relocation will realize consolidation and land returns south
of Kadena,
Recalling that the Roadmap stipulates that United States Marine Corps
CH-53D helicopters will be relocated from Marine Corps Air Station
Iwakuni to Guam when the III MEF personnel relocate from Okinawa to
Guam, the KC-130 squadron will be based at Marine Corps Air Station
Iwakuni with its headquarters, maintenance support facilities, and
family support facilities, and the aircraft will regularly deploy on a
rotational basis for training and operations to Maritime Self-Defense
Forces Kanoya Base and Guam,
Reaffirming that the Roadmap stipulates that, of the estimated ten
billion, two hundred seventy million United States dollar
($10,270,000,000) cost of the facilities and infrastructure
development costs for the III MEF relocation to Guam, Japan will
provide six billion, ninety million United States dollars
($6,090,000,000) (in U.S. Fiscal Year 2008 dollars), including two
billion, eight hundred million United States dollars ($2,800,000,000)
in direct cash contributions, to develop facilities and infrastructure
on Guam to enable the III MEF relocation, recognizing the strong
desire of Okinawa residents that such force relocation be realized
rapidly,
Reaffirming further that the Roadmap stipulates that the United States
will fund the remainder of the facilities and infrastructure
development costs for the relocation to Guam-estimated in U.S. Fiscal
Year 2008 dollars at three billion, one hundred eighty million United
States dollars ($3,180,000,000) in fiscal spending plus approximately
one billion United States dollars ($1,000,000,000) for a road,
Recalling that the Roadmap stipulates that, within the overall
package, the Okinawa-related realignment initiatives are
interconnected, specifically, consolidation and land returns south of
Kadena depend on completing the relocation of III MEF personnel and
dependents from Okinawa to Guam, and the BI MEF relocation from
Okinawa to Guam is dependent on: (1) tangible progress toward
completion of the Futenma Replacement Facility, and (2) Japan's
financial contributions to fund development of required facilities and
infrastructure on Guam,
Have agreed as follows:
Article 1:
1. The Government of Japan shall make cash contributions up to the
amount of two billion, eight hundred million United States dollars
($2,800,000,000) (in U.S. Fiscal Year 2008 dollars) to the Government
of the United States of America as a part of expenditures for the
relocation of approximately 8,000 III MEF personnel and their
approximately 9,000 dependents from Okinawa to Guam (hereinafter
referred to as "the Relocation") subject to paragraph 1. of Article 9
of this Agreement.
2. The amount of Japanese cash contributions to be budgeted in each
Japanese fiscal year shall be determined by the Government of Japan
through consultation between the two Governments and reflected in
further arrangements that the two Governments shall conclude in each
Japanese fiscal year (hereinafter referred to as "the further
arrangements").
Article 2:
The Government of the United States of America shall take necessary
measures for the Relocation, including funding for projects of the
Government of the United States of America to develop facilities and
infrastructure on Guam subject to paragraph 2. of Article 9 of this
Agreement.
Article 3:
The Relocation shall be dependent on tangible progress made by the
Government of Japan toward the completion of the Futenma Replacement
Facility as stipulated in the Roadmap. The Government of Japan intends
to complete the Futenma Replacement Facility as stipulated in the
Roadmap in close cooperation with the Government of the United States
of America.
Article 4:
The Government of the United States of America shall use Japanese cash
contributions and their accrued interest only for projects to develop
facilities and infrastructure on Guam for the Relocation.
Article 5:
The Government of the United States of America shall ensure that all
participants in the process of acquisition for projects to be funded
by Japanese cash contributions for the Relocation shall be treated
fairly, impartially and equitably.
Article 6:
The Government of the United States of America shall designate the
Department of Defense of the United States of America as its
implementing authority, and the Government of Japan shall designate
the Ministry of Defense of Japan as its implementing authority. The
two Governments shall hold consultations at the technical level on
implementation guidance to be followed by the implementing
authorities, and on the specific projects referred to in paragraph
1.(a) of Article 7 of this Agreement. Through such consultations, the
Government of the United States of America shall ensure that the
Government of Japan shall be involved, in an appropriate manner, in
the implementation of the said specific projects.
Article 7:
1. (a) Specific projects to be funded in each Japanese fiscal year
shall be agreed upon between the two Governments and reflected in the
further arrangements.
(b) The Government of the United States of America shall maintain a
United States Treasury account to which the Government of Japan shall
provide cash contributions. The Government of the United States of
America shall open and maintain, under the said account, a sub-account
for Japanese cash contributions in each Japanese fiscal year.
2. Japanese cash contributions and their accrued interest that is
contractually committed to pay for specific projects shall be
credited, based on the method of calculation using an index to be
agreed upon between the implementing authorities referred to in
Article 6 of this Agreement, to the total amount of Japanese cash
contributions, which is up to the amount of two billion, eight hundred
million United States dollars ($2,800,000,000) (in U.S. Fiscal Year
2008 dollars).
3. (a) In case there remains an unused balance of Japanese cash
contributions after the completion of all contracts, as evidenced by
receipt of documents releasing the Government of the United States of
America from any further financial and contractual liability, for all
specific projects funded in the same Japanese fiscal year, the
Government of the United States of America shall return the said
unused balance to the Government of Japan, except as provided in
paragraph 3.(b) of this Article.
(b) The Government of the United States of America may use, with the
consent of the implementing authority of the Government of Japan, the
unused balance for other specific projects funded in the same Japanese
fiscal year.
4. (a) The Government of the United States of America shall return
interest accrued from Japanese cash contributions to the Government of
Japan, except as provided in paragraph 4.(b) of this Article, after
the completion of all contracts, as evidenced by receipt of documents
releasing the Government of the United States of America from any
further financial and contractual liability, for the last specific
projects funded by Japanese cash contributions.
(b) The Government of the United States of America may use, with the
consent of the implementing authority of the Government of Japan,
interest accrued from Japanese cash contributions for projects funded
by Japanese cash contributions.
5. The Government of the United States of America shall provide the
Government of Japan with a report, every month, on transactions in the
United States Treasury account, including all the sub-accounts related
to Japanese cash contributions.
Article 8:
The Government of the United States of America shall consult with the
Government of Japan in the event that the Government of the United
States of America considers changes that may significantly affect
facilities and infrastructure funded by Japanese cash contributions,
and shall take appropriate actions, taking Japanese concerns into full
consideration.
Article 9:
1. Japanese cash contributions referred to in paragraph 1. of Article
1 of this Agreement shall be subject to funding by the Government of
the United States of America of measures referred to in Article 2 of
this Agreement.
2. United States' measures referred to in Article 2 of this Agreement
shall be subject to: (1) the availability of funds for the Relocation,
(2) tangible progress made by the Government of Japan toward the
completion of the Futenma Replacement Facility as stipulated in the
Roadmap, and (3) Japan's financial contributions as stipulated in the
Roadmap.
Article 10:
The two Governments shall consult with each other regarding the
implementation of this Agreement.
Article 11:
This Agreement shall be approved by the United States of America and
Japan in accordance with their respective internal legal procedures.
This Agreement shall enter into force on the date when diplomatic
notes indicating such approval are exchanged.
In Witness Whereof the undersigned, duly authorized for the purpose,
have signed the present Agreement.
Done in duplicate, at Tokyo, in the English and Japanese languages,
both equally authentic, this seventeenth day of February, 2009.
For The Government The United States of America:
Hillary Rodham Clinton:
For The Government of Japan:
[Name written in Japanese characters]
[End of section]
Enclosure II: GAO Contact and Staff Acknowledgments:
GAO Contact:
Brian Lepore, (202) 512-4523 or leporeb@gao.gov.
Acknowledgments:
In addition to the contact named above, Harold Reich, Assistant
Director; Karyn Angulo; Pat Bohan; R. Bruce Brown; Wil Holloway; Mae
Jones; Josh Margraf; John Van Schaik; Amie Steele; and Michael
Willems made key contributions to this report.
[End of section]
Related GAO Reports:
Defense Management: Comprehensive Cost Information and Analysis of
Alternatives Needed to Assess Military Posture in Asia. [hyperlink,
http://www.gao.gov/products/GAO-11-316]. Washington, D.C.: May 25,
2011.
Defense Infrastructure: The Navy Needs Better Documentation to Support
Its Proposed Military Treatment Facilities on Guam. [hyperlink,
http://www.gao.gov/products/GAO-11-206]. Washington, D.C.: April 5,
2011.
Defense Infrastructure: Impact of Purchasing from Local Distributors
All Alcoholic Beverages for Resale on Military Installations on Guam.
[hyperlink, http://www.gao.gov/products/GAO-10-563R]. Washington,
D.C.: May 28, 2010.
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.
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.
High-Level Leadership Needed to Help Guam Address Challenges Caused by
DOD-Related Growth. [hyperlink,
http://www.gao.gov/products/GAO-09-500R]. Washington, D.C.: April 9,
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.
Defense Infrastructure: High-Level Leadership Needed to Help Communities
Address Challenges Caused by DOD-Related Growth. [hyperlink,
http://www.gao.gov/products/GAO-08-665]. Washington, D.C.: June 17,
2008.
Defense Logistics: Navy Needs to Develop and Implement a Plan to
Ensure That Voyage Repairs Are Available to Ships Operating near Guam
when Needed. [hyperlink, http://www.gao.gov/products/GAO-08-427].
Washington, D.C.: May 12, 2008.
Page 28 GAO-11-459R Military Buildup on Guam 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: Challenges Increase Risks for Providing Timely
Infrastructure Support for Army Installations Expecting Substantial
Personnel Growth. [hyperlink, http://www.gao.gov/products/GAO-07-
1007]. Washington, D.C.: September 13, 2007.
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.
U.S. Insular Areas: Economic, Fiscal, and Financial Accountability
Challenges. [hyperlink, http://www.gao.gov/products/GAO-07-119].
Washington, D.C.: December 12, 2006.
DOD's Overseas Infrastructure Master Plans Continue to Evolve.
[hyperlink, http://www.gao.gov/products/GAO-06-913R]. Washington,
D.C.: August 22, 2006.
Results-Oriented Government: Practices That Can Help Enhance and Sustain
Collaboration among Federal Agencies. [hyperlink,
http://www.gao.gov/products/GAO-06-15]. Washington, D.C.: October 21,
2005.
Overseas Presence: Issues Involved in Reducing the Impact of the U.S.
Military Presence on Okinawa. [hyperlink,
http://www.gao.gov/products/GAO-98-66]. Washington, D.C.: March 2,
1998.
[End of section]
Footnotes:
[1] Agreement Between The Government Of The United States Of America
And The Government Of Japan Concerning The Implementation Of The
Relocation Of III Marine Expeditionary Force Personnel And Their
Dependents From Okinawa To Guam (Feb. 17, 2009). We refer to this
agreement as "the bilateral agreement," and enclosure I contains the
signed agreement in its entirety.
[2] Security Consultative Committee Document Progress on the
Realignment of U.S. Forces in Japan (June 21, 2011). The Security
Consultative Committee Document is a joint document issued at the
conclusion of the most recent United States-Japan Security
Consultative Committee meeting, attended by Secretary of State Hillary
Rodham Clinton, Secretary of Defense Robert M. Gates, Minister for
Foreign Affairs Matsumoto, and Minister of Defense Kitazawa.
[3] DOD and Congress consider bid savings to be the difference between
the appropriated or otherwise designated amount for a military
construction project and the obligated amount for that project.
[4] For example, Section 128 of Division E of the Consolidated
Appropriations Act, 2010 Pub. L. No. 111-117 (2009).
[5] The Defense Policy Review Initiative was preceded by the Special
Action Committee on Okinawa. United States and Japan released the
Final Report of the Special Action Committee on Okinawa on December 2,
1996. The report made 27 recommendations to reduce the impact of the
U.S. military presence on the Okinawan people, including building a
replacement facility for Marine Corps Air Station Futenma elsewhere on
Okinawa. We reported on the plans at the time. See GAO, Overseas
Presence: Issues Involved in Reducing the Impact of the U.S. Military
Presence on Okinawa, [hyperlink,
http://www.gao.gov/products/GAO/NSIAD-98-66] (Washington, D.C.: Mar.
2, 1998).
[6] In January 2007, the Secretary of Defense announced an initiative
to expand the Army to a total of 1,112,000 active and reserve soldiers
by fiscal year 2013-—an increase of 74,200 military personnel—-in
order to meet increasing strategic demands and to help reduce stress
on the force.
[7] National Security Presidential Directive-23, dated December 16,
2002, directed DOD to establish a capability, beginning in 2004, to
protect the United States, deployed forces, and allies from ballistic
missile attacks.
[8] The Defense Access Roads program is co-administered by DOD and the
Department of Transportation and is a means for DOD to pay its "fair
share" of public road improvements needed in response to sudden and
unusual defense-generated traffic impacts to help ensure adequate
transportation capacity is in place when needed.
[9] GAO, Defense Management: Comprehensive Cost Information and to
Assess Military Posture in Asia, [hyperlink,
http://www.gao.gov/products/GA0-11-316] (Washington, D.C.: May 25,
2011).
[10] Life-cycle cost estimates include all direct and indirect costs
for planning, procurement, operations and maintenance, and disposal.
[11] Pub. L. No. 111-84 § 2832(a) defines special purpose entities as
any private person, corporation, firm, partnership, company, State or
local government, or authority or instrumentality of a State or local
government that the Secretary of Defense determines is capable of
producing military family housing or providing utilities to support
the realignment of military installations and the relocation of
military personnel on Guam.
[12] GA0, 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.: Nov. 13,
2009).
[13] In GAO-11-316, we reported that this amount comprises U.S.
funding of $4.2 billion for military construction projects and $7.1
billion for additional Marine Corps requirements for the relocation,
U.S. funding of $1.9 billion for the Northern Mariana Islands training
range, and Government of Japan funding of up to $6.1 billion.
[14] For example, Section 128 of Division E of the Consolidated
Appropriations Act, 2010 provided DOD with authority to transfer funds
among fiscal year 2010 military construction projects and activities,
subject to certain rules and exceptions. DOD's transfer and
reprogramming authorities for Military Construction are primarily
implemented in the DOD Financial Management Regulation 7000.14-R,
Volume 3, Chapter 7: Reprogramming Of Military Construction And Family
Housing Appropriated Funds (March 2011).
[15] Department of the Navy and Department of the Army, Record of
Decision for Guam and Commonwealth of the Northern Mariana Islands
Military Relocation including Relocating Marines from Okinawa,
Transient Nuclear Aircraft Carrier Berth, Air and Missile Defense Task
Force (Sept. 2010).
[16] Committee Print of the House of Representatives Committee on
Armed Services No.5, Legislative Text and Joint Explanatory Statement
to Accompany H.R. 6523, Public Law 111-383 (Dec. 22, 2010).
[17] GA0, 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.: Sept. 17, 2008).
[18] DOD officials told us that, although one study was completed in
March 2011, they are still analyzing the baseline results. They expect
the analysis of this study to be completed around the end of July 2011.
[19] The Terminal High-Altitude Area Defense system is being developed
as a rapidly deployable, ground-based missile defense system with the
capability to defend against short- and medium-range ballistic
missiles during their late midcourse and terminal phases. A Terminal
High-Altitude Area Defense battery includes interceptor missiles,
three to six launchers, an X-band radar, and a fire control and
communications system.
[20] GAO, 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).
[21] As noted previously, the Government of Japan is expected to fund
up to $3.29 billion in special purpose entity loans and equity
investments for off-installation power, wastewater, and water systems
improvements.
[22] [hyperlink, http://www.gao.gov/products/GA0-09-653].
[23] The Secretary of Defense, or his designee, is the chair of the
Economic Adjustment Committee. The committee is made up of
representatives from 22 federal agencies but the Executive Order gives
DOD a leadership role in coordinating interagency efforts in support
of defense-affected communities. The committee is to ensure, among
other things, that communities that are substantially and seriously
affected by DOD actions are aware of available federal economic
adjustment programs; assure coordinated interagency and
intergovernmental adjustment assistance; and serve as a clearinghouse
to exchange information among federal, state, regional, and community
officials involved in the resolution of community economic problems.
See GAO, Defense Infrastructure: High-Level Leadership Needed to Help
Guam Address Challenges Caused by DOD-Related Growth, [hyperlink,
http://www.gao.gov/products/GAO-09-500R] (Washington, D.C.: Apr. 9,
2009).
[End of section]
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