Military Base Closure:

Questions Relating to Relocating Two Navy Activities to North Island, California

NSIAD-98-90: Published: Apr 30, 1998. Publicly Released: Apr 30, 1998.

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Pursuant to a congressional request, GAO reviewed the Navy's planned relocation and consolidation of the Naval Air Technical Services Facility and the headquarters of the Naval Aviation Engineering Service Unit, located in Philadelphia, Pennsylvania, to the Naval Air Station at North Island, California, focusing on the: (1) current plan's compliance with the Base Closure and Realignment Commission's recommendations; (2) effect of the new alignment on the original savings estimate; (3) cost estimate associated with moving the Technical Services Facility and the Engineering Service Unit functions to North Island; and (4) feasibility of consolidating these functions at less cost in Philadelphia.

GAO noted that: (1) the Navy's current plan to combine the Technical Services Facility and Engineering Service Unit complies with the Commission's recommendations; (2) the Department of Defense (DOD) believes, and GAO agrees, that the Commission's recommendations on closing and moving the activities to North Island are legally binding but that DOD has latitude in how it chooses to organize and manage activities that have been realigned in accordance with the recommendations; (3) however, GAO found no indication that Naval Air Systems Command officials had assessed the cost impact or potential savings to the Navy of consolidating the activities with the Naval Aviation Depot; (4) as a result, the Navy may be missing an opportunity to achieve greater savings by not merging the affected activities with the Aviation Depot; (5) the estimated one-time implementation cost of the planned relocation of the Technical Services Facility and the Engineering Service Unit to North Island is $12.7 million, or about $4.1 million higher than the Commission initially estimated; (6) GAO's work shows the current estimate is based on credible Navy plans and data; (7) the increase over the Commission's estimate appears reasonable and is primarily attributable to the unanticipated renovation of Naval Aviation Depot facilities for housing Technical Services Facility employees and equipment and realistic personnel cost estimates that exceeded the standard cost factors used in the Commission's analysis; (8) although it appears that the personnel costs would have been minimized or avoided by consolidating the affected activities with other Navy activities in Philadelphia, the Navy believes that the planned move provides operational benefits that outweigh the cost of the move; and (9) moreover, consolidation in Philadelphia is not an option because the Commission's recommendations require that the activities be moved to North Island.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: According to Naval Air Systems Command and Navy Base Closure and Realignment program officials, the Navy, through a private consulting firm, recently completed a cost-benefit analysis showing little or no savings potential associated with consolidating the two activities with the North Island Naval Aviation Depot or through any other organizational alignment of the two units than what was originally planned (i.e., forming a separate command). Thus, the cognizant Navy program officials are recommending to the DOD Deputy Under Secretary for Industrial Affairs and Installations that the Navy finalize its consolidation plans for combining the two activities and forming a separate command at North Island, California.

    Recommendation: Because the Navy has not fully analyzed the savings potential associated with the current consolidation plan, the Secretary of Defense should instruct the Secretary of the Navy to conduct such an analysis before finalizing consolidation plans for the two activities and, if appropriate, adjust the plans.

    Agency Affected: Department of Defense


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