What We Found
We are removing this high-risk area because the Department of Defense (DOD) has made sufficient progress on the remaining seven actions and outcomes we recommended for improving this critical area. DOD leadership commitment contributed to this successful outcome.
Why High-Risk Area is Being Removed
From 2017 to 2019, we identified 16 actions and outcomes DOD needed to implement for its support infrastructure management to be removed from the High-Risk List. In our 2019 High-Risk Report, we reported that DOD had made progress addressing nine actions and met the criteria of leadership commitment and action plan.
We are removing DOD Support Infrastructure Management from the High-Risk List because DOD has met the remaining three criteria (capacity, monitoring, and demonstrated progress) by addressing the outstanding seven actions and outcomes identified in our 2019 High-Risk Report.
Leadership commitment: met. DOD senior leaders continued to demonstrate commitment to improving the department’s support infrastructure management. In our 2019 High-Risk Report, we reported that DOD had committed to actions such as (1) pursuing efforts to relocate from costly commercial leased space to nearby installations when possible, and (2) requesting Base Realignment and Closure (BRAC) rounds to address excess capacity between 2013 and 2017, which Congress did not authorize.
Additionally, in October 2019, the Assistant Secretary of Defense for Sustainment formally committed to implementing our remaining recommendations related to future BRAC rounds, which they had previously been unwilling to do. Specifically, for any future BRAC rounds authorized by Congress, DOD agreed to fully identify the cost requirements for military construction, information technology, relocating personnel and equipment, and alternatively financed projects, and to limit the practice of bundling multiple stand-alone BRAC realignments or closures into single recommendations.
DOD further agreed to improve the accuracy of its excess capacity estimates by reliably updating the baseline and using reasonable assumptions for estimating excess infrastructure capacity. DOD also agreed to develop guidance to improve its analysis and ensure consistency for future BRAC rounds.
This commitment addresses four of the seven actions from the 2019 High-Risk Report that we recommended to improve implementation of future BRAC rounds when authorized by Congress. It also shows that DOD leadership is dedicated to improving how it conducts the BRAC process—the primary method of disposing of excess infrastructure and aligning infrastructure to the needs of forces.
Capacity: met. DOD has further demonstrated its capacity to align infrastructure with DOD force structure needs and achieve efficiencies in base support services. In our previous two High-Risk Reports, we reported that DOD demonstrated capacity to align infrastructure with DOD force structure needs by disposing of excess infrastructure during past BRAC rounds. Further, we reported that DOD had consolidated some installation services at joint bases, among other efforts.
DOD continues to improve the accuracy and completeness of its real property data, thereby demonstrating increasing capacity. This addresses an additional action we recommended in the 2019 High-Risk Report. Doing so will help DOD better manage its facilities to meet force structure needs, such as by identifying excess space or utilizing space more effectively.
In previous High-Risk Reports, we noted a persistent problem with the accuracy and completeness of DOD’s real property data—in particular key data for identifying excess or underused space, like facility utilization. In November 2018, we reported that DOD and the military services have corrected some but not all identified discrepancies, such as missing entries for utilization in DOD’s Real Property Assets Database (RPAD). We recommended that DOD and the military services require monitoring of recording processes, implement corrective actions to resolve data discrepancies, and develop a strategy to address risks associated with real property data to improve incomplete and inaccurate real property data. DOD concurred with these recommendations and is implementing them.
Further, we reported in September 2020 that independent public accountants found significant control issues related to events that occur during the life cycle of real property, such as adding, disposing, valuing, and performing physical inventory counts. This finding was related to two of 25 material weaknesses found in a broader audit of DOD’s fiscal year 2019 financial statements. DOD Financial Management is a separate area on the High-Risk List reviewing DOD’s accounting and reporting of its spending and assets. These long-standing issues have prevented DOD from having auditable financial statements.
While DOD needs to take additional action to ensure RPAD contains complete and accurate data, the department has prioritized improving the data. This includes issuing new requirements and processes to improve data quality from 2018 that should help them further improve data quality moving forward.
For example, in 2020, DOD required the military services to use the Data Analytics and Integration Support (DAIS) system for reporting real property inventory data. According to DOD, this system will provide a common platform for DOD real property inventory, connecting individual military service real property systems to a web-based interface. DOD intends DAIS to replace the manual, annual data call to populate the Real Property Asset Database, which we have found contains inaccurate and incomplete data.
In addition, DOD has required military services to use its updated Verification and Validation (V&V) Tool, which checks whether the real property data in DAIS follow real property data quality standards and identifies any data anomalies or errors that need correction.
DOD has demonstrated that it has increasing capacity to put into place systems and processes that, over time, will improve the real property data needed to identify options to align its infrastructure to meet its force structure needs. However, as noted earlier, continued improvements are needed. Thus, while we are removing DOD support infrastructure from the High-Risk series, we will continue to closely monitor DOD’s efforts in this area—in particular as part of the Managing Federal Real Property high-risk area. This high-risk area looks at the efforts of both the Office of Management and Budget (OMB) and the General Services Administration to improve the reliability of information on federal real property government-wide. We will also monitor DOD’s efforts related to improving the accuracy and completeness of its real property data as part of the DOD Financial Management high-risk area mentioned above, which reviews issues with the accounting and reporting of DOD’s spending and assets.
Action plan: met. We reported in 2017 and 2019 that DOD had developed plans, such as its Real Property Efficiency Plan, to better identify excess infrastructure and thus be positioned to dispose of it. DOD issued its most recent version of the Real Property Efficiency Plan in September 2019. In addition to serving as DOD’s real property management plan, it also set the department’s targets for, among other things, reducing the amount of office and warehouse space it uses and the number of buildings it owns in fiscal years 2020 through 2024.
DOD also directed its joint bases in 2017 to stop using higher cost joint base common standards for installation services, and instead use the standards of the military service in charge of providing services at any given joint base. This would decrease the likelihood of increased base support costs.
DOD has also implemented recommendations we made in October 2018 to improve its use of intergovernmental support agreements. These are agreements between military installations and local governments to obtain installation services such as waste removal, grounds maintenance, and stray animal control. These improvements to its use of intergovernmental support agreements address another one of the actions we recommended in the 2019 High-Risk Report.
In October 2018, we reported that a sample of these agreements had resulted in cost savings and cost avoidances for the department. Since then, DOD has implemented our recommendations to monitor the benefits from intergovernmental support agreements and whether installations are evaluating opportunities to use those agreements to reduce costs. With these efforts in place, DOD will be better positioned to reduce base support costs, to identify and dispose of excess space, and to better use underutilized space.
Monitoring: met. Since the 2019 High-Risk Report, DOD has demonstrated improvements in monitoring its processes and systems to align its infrastructure to support its force structure needs and achieve efficiencies. In October 2019, DOD senior leaders committed to implementing our prior recommendations for any future BRAC rounds authorized by Congress.
For example, DOD has agreed to limit the practice of bundling multiple stand-alone realignments or closures into single BRAC recommendations. We reported in 2013 that such bundling did not itemize the costs and savings associated with each separate major action within the bundle. This limited visibility into the estimated costs and savings for individual closures and realignments.
The other recommendations DOD has agreed to implement in future BRAC rounds include fully identifying cost requirements for military construction, information technology, relocating personnel and equipment, and alternatively financed projects.
Additionally, DOD has committed to implementing recommendations we made from May 2018 to improve the accuracy of its excess capacity estimates for future BRAC rounds authorized by Congress. Specifically, the department has committed to (1) reliably update the baseline for estimating excess infrastructure capacity, (2) use reasonable assumptions in estimating excess capacity, and (3) develop guidance to improve its analysis and ensure consistency.
One of the actions recommended in our in 2019 High-Risk Report to improve monitoring was that DOD and the military services should better monitor their processes for recording real property information, develop corrective actions for data discrepancies, and develop a strategy to address risks associated with data. While DOD must continue to work to improve the accuracy and completeness of its real property data, its development of DAIS is expected to improve the monitoring of DOD’s real property, including better financial accounting, reporting, and estimation of infrastructure needs moving forward. Monitoring has also been supported in part by efforts to obtain data to improve DOD’s financial statements.
Further, the military services have since taken steps to implement the recommended action. For example, the Army developed a 5-year plan in 2019 to improve data quality and accountability, including directing physical inspections and record updates continuing through fiscal year 2023. As of September 2019, the Navy checked for existence of facilities—whether facilities listed in its records are in place—and checked for completeness of the data—whether facilities that are in place are listed in records. The Navy is continuing to correct any errors identified through its review and the Financial Improvement and Audit Remediation audit. While the most recent audit did not result in a clean opinion, the Navy’s continuing efforts to use the audit to correct and identify any errors demonstrates an improvement in its monitoring efforts. The Air Force began a data quality program in 2018 to improve its real property, with a goal of 100 percent accuracy by September 2023.
These efforts are ongoing and show that DOD is monitoring systems and processes to improve real property data and ultimately provide better visibility for aligning its infrastructure to support mission needs.
Demonstrated progress: met. In the last few years, DOD has demonstrated progress in aligning its infrastructure to its force structure needs by implementing actions to reduce excess infrastructure and achieve efficiencies in base support. In doing so, DOD has addressed all seven actions we recommended in 2019 to improve management of its support infrastructure.
As mentioned above, DOD addressed four of the seven actions by committing to improve its implementation of future BRAC rounds. Specifically, for future BRAC rounds authorized by Congress, DOD formally committed to fully identifying the cost requirements for military construction, information technology, relocating personnel and equipment, and alternatively financed projects, and limiting the practice of bundling multiple stand-alone BRAC realignments or closures into single recommendations.
DOD further agreed to improve the accuracy of its excess capacity estimates by reliably updating the baseline and using reasonable assumptions for estimating excess infrastructure capacity, as well as developing guidance to improve its analysis and ensure consistency.
DOD has further been working to more efficiently use underutilized installation space through reduction of leases. In its Real Property Efficiency Plan for fiscal years 2020 to 2024, DOD noted that the Army had been focusing on reducing its leases in the National Capital Region, which were among the Army’s most expensive leased inventory. Specifically, DOD reported that the Army reduced its leased footprint in the National Capital Region from a peak of 3.9 million square feet in 2011 to roughly 1 million square feet as of September 2019. The department also implemented recommendations we made to increase the use of intergovernmental support agreements to reduce the cost of installation support services. These actions address the fifth of seven actions we recommended in 2019 to improve support infrastructure management.
As stated above, DOD has also taken steps to improve its real property data to improve oversight and better inform decision-making about aligning infrastructure to mission needs. DOD has required the use of the DAIS platform and the V&V tool to better capture real property data and correct discrepancies. The military services have implemented plans and actions to prioritize and put into place efforts that will lead to a more complete and accurate set of information. While DOD needs to continue to improve the accuracy and completeness of its real property data, we believe that these address the sixth of the actions we had in the 2019 High-Risk Report.
The last remaining action we recommended in the 2019 High-Risk Report was for DOD to continue to assess its infrastructure needs in light of ongoing changes in force structure and work with Congress, as needed, to reduce any excess infrastructure.
DOD continues to be committed to reducing its excess and underutilized space and has addressed this last recommended action. Since 2013, for example, DOD has been reducing excess space as part of the European Infrastructure Consolidation program and continues to assess more reductions as DOD relocates servicemembers in Europe to align with current mission needs.
Further, when OMB began the Freeze the Footprint and the Reduce the Footprint programs (which restrict the growth of excess property by requiring disposal of existing property for each newly acquired property), DOD made significant contributions to overall footprint reduction results as the federal government’s largest property holder.
For example, in fiscal year 2016, DOD’s facility square footage reductions were 68 percent of the total government-wide office and warehouse reductions and 75 percent of other government-wide property reductions. DOD continues to update its Real Property Efficiency Plan to set targets for reducing the amount of office and warehouse space it uses and the number of buildings it owns in fiscal years 2020 through 2024.
The military services have continued to focus on aligning their infrastructure to meet mission needs. For example, the Army is using (1) the Facility Reduction Program to eliminate excess square footage through demolition; (2) the Enhanced Use Lease Authority to leverage underutilized property; and (3) the Return to Host Nation initiative to reduce excess at overseas locations. In January of 2019, the Air Force formalized its Infrastructure Investment Strategy to incentivize installation master planning, including directing a 5 percent reduction in the total Air Force facility footprint to better match its infrastructure to support its mission.
DOD manages a portfolio of real property assets that, as of November 2019, reportedly included about 573,000 facilities—including barracks, maintenance depots, commissaries, and office buildings. According to DOD estimates, the combined replacement value of this portfolio is about $1.3 trillion and includes about 26 million acres of land at more than 4,500 sites worldwide. This infrastructure is critical to maintaining military readiness. The cost to build and maintain this infrastructure represents a significant financial commitment.
DOD Support Infrastructure Management has been on our High- Risk List since 1997 because of challenges DOD faced in reducing excess infrastructure, more efficiently using underutilized facilities, and reducing base support costs.
DOD has used the BRAC process primarily to reduce excess infrastructure, readjust bases to accommodate changes in the size and structure of DOD’s forces, and produce cost savings. Since 1988, Congress has authorized five BRAC rounds, most recently in 2005. Based on our analysis of the 2005 BRAC round, we found that opportunities existed for DOD and Congress to improve future BRAC rounds.
Monitoring after Removal from the High Risk List
DOD demonstrated commendable, sustained progress improving its support infrastructure management. However, this does not mean DOD has addressed all risk within this area. Most notably, DOD faces considerable challenges in ensuring it has accurate and complete real property data. We will continue to monitor DOD’s efforts as part of the Federal Real Property and DOD Financial Management high-risk areas. Moreover, it remains important that senior leaders continue their efforts to implement corrective actions to improve real property data, to continue to dispose of excess infrastructure, and to align infrastructure with the needs of the forces.
We will continue to conduct oversight of these and other support infrastructure management efforts at DOD.