Skip to Highlights
Highlights

The Department of Defense (DOD) manages and operates about 577,000 structures worldwide, valued at about $712 billion. DOD has worked for several years to develop models that can reliably estimate the installation support funds needed to sustain these facilities, and plans to spend over $55 billion to support these facilities and operate its bases in fiscal year 2008. Because GAO has identified support infrastructure as a high-risk area that affects DOD's ability to devote funds to other more critical needs, GAO initiated this review under the Comptroller General's authority. This report discusses (1) the reliability of the annual funding estimates produced by the facilities sustainment model, (2) DOD's progress in meeting funding goals for facility sustainment and recapitalization, (3) the extent to which DOD has addressed deferred facility sustainment funding needs, and (4) the status of DOD's efforts to develop a new installation services model. To address these objectives, GAO reviewed the accuracy and support for the model's key inputs, analyzed pertinent documents, and visited eight judgmentally selected installations.

Skip to Recommendations

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense 1. To improve the support provided for DOD's facilities and installation services, the Secretary of Defense should direct the Deputy Under Secretary of Defense (Installations and Environment) to, in order to increase the reliability of the facilities sustainment model, address deferred facility sustainment funding requirements, and advance progress towards implementing the installation services model monitor and ensure compliance with guidance requiring verification of real property inventory records.
Closed - Implemented
In written comments on a draft of this report, DOD concurred with our recommendation to monitor and ensure compliance with guidance requiring verification of real property inventory records. In response, DOD implemented in September 2009 a new data element to its real property inventory records--the asset review date--to provide visibility of the most recent inspection date for each real property asset. According to DOD, this data element provides a direct means of identifying verification dates in the inventory and taking action to update them as required. In addition, to enhance visibility of the review requirement, DOD stated that it now produces an asset review analysis report as part of its validation process for military real property records.
Department of Defense 2. To improve the support provided for DOD's facilities and installation services, the Secretary of Defense should direct the Deputy Under Secretary of Defense (Installations and Environment) to, in order to increase the reliability of the facilities sustainment model, address deferred facility sustainment funding requirements, and advance progress towards implementing the installation services model maintain documentation regarding the basis for the sustainment cost factors used by the model to include the calculations used to determine each factor as well as the reasons for any changes from year to year.
Closed - Implemented
In written comments on a draft of this report, DOD concurred with our recommendation that it maintain documentation regarding the basis for the sustainment cost factors used by the model to include the calculations used to determine each factor as well as the reasons for any changes from year to year. DOD stated that it has maintained documentation for sustainment cost factors since the inception of the facilities sustainment model. However, as noted in this report and as we discussed with DOD officials during our review, the documentation did not always show the basis for the sustainment cost factors, the calculations used to determine each factor, or the reasons for any changes from year to year and that is the basis for our recommendation. DOD also stated that it has revised its documentation standards to improve the level of detail and accessibility. If fully implemented, DOD's action should result in an improved audit trail documenting the basis for each factor's value. In June 2009, DOD instituted procedures to document supporting calculations and reasons for changing cost factors from year to year.
Department of Defense 3. To improve the support provided for DOD's facilities and installation services, the Secretary of Defense should direct the Deputy Under Secretary of Defense (Installations and Environment) to, in order to increase the reliability of the facilities sustainment model, address deferred facility sustainment funding requirements, and advance progress towards implementing the installation services model revert to the previously used ratio analysis method to calculate the values of those sustainment cost factors that are not based on independent data sources.
Closed - Implemented
In written comments on a draft of this report, DOD concurred with our recommendation that it revert to the previously used ratio analysis method to calculate the values of those sustainment cost factors that are not based on independent data sources. DOD stated that it will adopt the GAO-preferred method to inflate the small number of sustainment cost factors generated by ratios beginning in fiscal year 2009. As noted in this report, the "GAO-preferred" method is the method that can result in greater accuracy of the sustainment cost factor values. Also, regarding the "small" number of sustainment cost factors generated by ratios, as noted in this report, DOD has used a ratio analysis to estimate the sustainment cost factors for approximately one-third of DOD's 448 facility categories. In June 2009, DOD revised its analysis to incorporate its previously used ratio analysis method consistent with our recommendation. The change has been incorporated into the FY 2009 cost factors and will continue for future fiscal year cost factor issuances.
Department of Defense 4. To improve the support provided for DOD's facilities and installation services, the Secretary of Defense should direct the Deputy Under Secretary of Defense Installations and Environment) to, in order to increase the reliability of the facilities sustainment model, address deferred facility sustainment funding requirements, and advance progress towards implementing the installation services model issue guidance to the military services that (1) provides a clear definition of deferred facility sustainment requirements and explains when deferred facility sustainment becomes a facility restoration requirement, (2) directs the military services to consistently measure and track deferred sustainment needs, (3) establishes a goal to address deferred facility sustainment needs, and (4) ensures that the military services' financial reporting and disclosure information regarding deferred facility maintenance is consistent with financial reporting requirements.
Closed - Not Implemented
In written comments on a draft of this report, DOD concurred with our recommendation related to deferred facility sustainment requirements stating that it had issued guidance in September 2007 that revised the definition of facility quality ratings to represent deferred sustainment and restoration, revised its methodology for estimating deferred maintenance in its financial reports by using the facility quality ratings, and planned to develop program guidance with the fiscal year 2011 budget process to establish goals to address deferred sustainment requirements. As noted in this report, we were aware of the September 2007 guidance. However, we made our recommendation because our review found that the guidance did not provide a clear definition of deferred facility sustainment requirements, details to the military services on how to implement the revised quality rating guidance, or sufficient details to ensure that future financial reporting of deferred maintenance would be consistent with reporting requirements. We continue to believe that additional guidance is needed to provide a clear definition of deferred facility sustainment requirements, direct the military services to consistently measure and track deferred sustainment needs, and ensure that the military services' financial reporting and disclosure information regarding deferred facility maintenance is consistent with financial reporting requirements. In February 2011, DOD indicated that it planned no further action in response to the recommendation.
Department of Defense 5. To improve the support provided for DOD's facilities and installation services, the Secretary of Defense should direct the Deputy Under Secretary of Defense Installations and Environment) to, in order to increase the reliability of the facilities sustainment model, address deferred facility sustainment funding requirements, and advance progress towards implementing the installation services model establish a milestone for implementing the installation services model for use in estimating DOD's installation services funding requirements.
Closed - Not Implemented
In written comments on a draft of this report, DOD partially concurred with our recommendation to establish a milestone for implementing the installation services model for use in estimating DOD's installation services funding requirements and provide adequate senior level oversight to ensure that the milestone is met. DOD stated that it had established a milestone to implement an installation services model in support of the fiscal year 2012 budget and had made initial progress toward that goal. However, DOD stated that the development process had revealed several obstacles that may require it to reevaluate the goal for at least some installation service functions. Although we believe that DOD's action to establish an implementation goal is a step in the right direction, we also recommended and continue to believe that adequate senior level oversight is needed to ensure that an installation services model is implemented as soon as possible. DOD's comments did not explain to what extent it plans to do this. In June 2009, DOD stated that DOD had suspended work on the Installation Services Model because of a lack of necessary performance standards, manpower staffing standards, and available financial data for each installation service function led to this decision. However, development of the Common Output Levels of Service (COLS) for installation services supporting implementation of the BRAC 2005 Joint Basing decision may provide a more robust framework to develop a viable installation services model. In February 2011, DOD stated that it was monitoring the COLS metrics reported quarterly from the twelve joint bases for some 49 installation functions. However, a new milestone had not been set for implementing the installation services model and DOD provided no assurance that a new milestone would be established. For this reason and because DOD-IG closed the recommendation in February 2011, we closed this recommendation as not implemented.

Full Report