Military Housing: Opportunity for Reducing Planned Military Construction Costs for Barracks

In January 2003, GAO reported that the rationale for the military's requirement that more experienced unmarried junior service members live in barracks appears to be a matter of military judgment and preference with less emphasis on systematic, objective analyses. The report noted that: (1) requiring more personnel (more pay grades) to live in barracks obviously resulted in increased barracks requirements; and (2) with the services planning extensive barracks improvement programs and with barracks construction costing as much as $80,000 to $100,000 per sleeping space, increased requirements translated into higher barracks program costs. GAO specifically noted that the Air Force, which planned to spend over $420 million during the next several years to construct new barracks to house all unmarried personnel in paygrades E1 through E4 on base, could reduce barracks requirements and construction costs by allowing more experienced junior service members to live off base. In December 2003, the Air Force announced that it was changing its barracks occupancy policy effective January 1, 2004. The new policy permits unmarried junior service members in pay grade E4 with three or more years of service to live off base with a housing allowance. According to an Air Force official, this change reduced the Air Force's barracks requirements, thereby reducing planned barracks construction costs by $335 million between fiscal years 2005 and 2009. The Air Force did not estimate net savings from its policy change after considering other costs associated with the two housing options. For example, by not building the dormitories, the Air Force will pay members housing allowances to help cover the cost of off base housing. On the other hand, if the Air Force built the additional dormitories, it would pay annual costs for operations, maintenance, and utilities in addition to costs of dormitory construction. On the basis of a limited cost comparison of the two housing options using information obtained during GAO's DOD housing review and in accordance with GAO guidance that accomplishment reports consider net savings over a 5-year period, GAO estimated that the net savings from using the housing allowance option over a five year period would be about 76 percent of dormitory construction costs. Also, the Air Force barracks construction master plan did not show planned barracks construction by fiscal year. Thus, in order to discount the reduction in planned barracks construction costs to present value and to be conservative, GAO assumed that the entire net cost reduction over a 5-year period (76 percent of $335 million or $254.6 million) would occur in 2008 (the last year available in GAO's web-based spreadsheet for calculating present values). This resulted in a present value estimate of $234 million.

DOD officials said that the department's revised housing policy manual directs the military services to seek greater consistency in requiring their servicemembers to live in barracks, or provide justification. These officials said the manual should be finalized around the end of calendar year 2006. Until then, the services and other DOD components are using the draft manual as guide for managing their military family housing and barracks programs. Since our 2003 report, the Army and the Air Force have changed their requirements to allow a larger number of unmarried service members that were required previously to live in barracks to live off base in local community housing.