Military Base Closures:

Observations on Legislative Proposal for No-Cost Transfer of Surplus Property

T-NSIAD-99-215: Published: Jul 1, 1999. Publicly Released: Jul 1, 1999.

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David R. Warren
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Pursuant to a congressional request, GAO discussed the proposal to amend the 1988 and 1990 base closure laws, focusing on the: (1) likelihood that the proposed legislation would expedite the property transfer process; and (2) expected financial consequences to the Department of Defense (DOD).

GAO noted that: (1) the proposed legislation provides an opportunity to expedite the economic development conveyance (EDC) process; (2) it would likely alleviate the frustration and burden communities and DOD experience in negotiating agreements; (3) in some instances, the elimination of lengthy negotiations over fair market value issues might have expedited property transfers; (4) however, it is not clear to what extent the legislation would uniformly shorten the timeframe for property transfers; (5) GAO's prior work also shows that other factors, such as communities' abilities to accept property transfers in a timely fashion and environmental cleanup considerations, are the primary factors that determine the pace of property transfers; (6) the legislation would impact 23 pending or anticipated EDCs; (7) however, the amendment would also allow up to 26 existing EDCs to be renegotiated if certain conditions are met; (8) DOD will lose revenue if the proposed amendment is enacted; (9) DOD would likely forgo revenue from the 23 EDCs that are either in the negotiating stage or expected to be submitted on or after April 21, 1999; (10) the extent of lost revenue for these properties would not be known until final agreements are reached; (11) the proposed legislation would also allow the Secretary of Defense to approve changes in prior agreements based on determinations of changes in economic circumstances; (12) DOD estimates that it would lose about $218 million between fiscal year (FY) 2000 and 2043 if all agreements are renegotiated as no-cost conveyances; (13) approximately $87 million, or 40 percent, of this revenue would be lost between FY 2000 and FY 2005, and the remaining revenue would be lost between FY 2006 and FY 2043; and (14) the Department projects the legislation will avoid about $12 million in costs that otherwise would be incurred in maintaining the closed bases prior to transfer.

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