Military Housing: Better Reporting Needed on the Status of the Privatization Program and the Costs of Its Consultants

GAO-04-111 Published: Oct 09, 2003. Publicly Released: Oct 09, 2003.
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Highlights

In 2000, Congress required the Department of Defense (DOD) to report quarterly on the services' expenditures for consultants in support of the military family housing privatization programs. GAO was asked to review the costs of the consultants DOD used to support privatizing housing for servicemembers and their families. This report discusses (1) the number of family housing units the services have privatized, particularly newly constructed or renovated units, and project to be privatized by fiscal year 2005; (2) the portion of privatization support costs used for consultants; (3) the services' consistency in the definition for privatization support and consultant costs; and (4) factors that limit an evaluation of how consultant fees for the military housing initiative compare among the services.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense To illustrate the number of inadequate housing units eliminated and of new or renovated units brought on line through the military housing privatization program, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology and Logistics to track the supporting data and report the number of privatized units renovated and newly constructed to the Congress on a periodic basis.
Closed – Implemented
According to DOD, monitoring the progress of GAO's projects is essential. This function is primarily performed at the installation level. In response to GAO's recommendation, the Housing and Competitive Sourcing Office has implemented steps to track and monitor the rate and number of newly constructed and renovated privatized housing units in its semi-annual Program Evaluation Plan report.
Department of Defense To provide for more consistent and complete data on military housing privatization support costs, the Secretary of Defense should direct the Under Secretary of Defense (Comptroller), in consultation with the Housing and Competitive Sourcing Office, to define privatization support costs for the military services. Specifically, this definition should address the differences in how the services consider the costs of environmental assessments; land boundary surveys; and supervision, inspection, and overhead construction activities associated with the housing privatization program.
Closed – Implemented
In response to GAO's recommendation, in February 2004, the Defense Comptroller issued to the military services a memorandum updating the DOD Financial Management Regulation that defined privatization support costs and addressed the differences in how the services consider the costs of (1) environmental assessments; (2) land boundary surveys; and (3) supervision, inspection, and overhead construction activities associated with the housing privatization program.
Department of Defense To provide for more consistent and complete data on privatization consultant costs, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology, and Logistics, in consultation with the Under Secretary of Defense (Comptroller), to (1) define consultant costs, including a determination of the inclusion of portfolio management costs, for the military services; and (2) include OSD's own program consultant costs associated with its efforts to privatize military housing in the department's quarterly housing privatization report to Congress.
Closed – Implemented
In 2004, the Office of the Under Secretary of Defense (Comptroller) defined privatization support costs in a memo to all the services' comptrollers. The memo stated that these costs are to include all administrative, planning, development, solicitation, award, transition, construction oversight, and portfolio management activities associated with military housing privatization. Also, the Office of the Secretary of Defense (OSD) reported since 2004 its own program consultant costs (and the military services and OSD's post award consultant costs) associated with its efforts to privatize military housing in the department's quarterly housing privatization reports to the Congress.

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