The Department of Defense (DOD) operates nearly 70,000 lodging rooms--similar to hotel rooms--and spent nearly $1 billion in 2009 to operate them. In 2002, Congress provided authority to privatize lodging facilities. Army privatized lodging at 10 installations in August 2009 and plans to privatize its remaining domestic facilities in the future. The National Defense Authorization Act for Fiscal Year 2008 requires GAO to review lodging privatization and an Army report. This report addresses (1) the factors the military services considered in their decisions to privatize, (2) challenges in the Army's privatization efforts, (3) the effect of the economic downturn on the Army's privatization program, and (4) the extent to which an Army report required by the act, issued in March 2010, addresses the elements in the law. GAO reviewed documentation and interviewed officials from the Office of the Secretary of Defense, the military services, the developer for the Army's privatization project, and four Army installations where lodging was privatized.
Recommendations for Executive Action
|Department of the Army||1. To better ensure that the Army is spending its financial resources as efficiently as possible, the Secretary of the Army should direct the Assistant Chief of Staff for Installation Management and the Commander, Installation Management Command, working with the Assistant Secretary of the Army (Installations and Environment), to assess the costs and benefits of the Army or a private developer repairing life-safety and critical infrastructure deficiencies at facilities in future groups to be privatized.|
|Department of the Army||2. To facilitate more efficient operations before, during, and after the transition from service-operated to privatized lodging, the Secretary of Army should direct the Assistant Secretary of the Army (Installations and Environment), working with the Assistant Chief of Staff for Installation Management and the Commander, Installation Management Command, and other appropriate stakeholders, to develop a single, comprehensive transition plan for future lodging privatization that includes details on key aspects of privatizing.|
|Department of the Army||3. To facilitate effective implementation of lessons learned into the lodging privatization program, the Secretary of the Army should direct the Assistant Secretary of the Army (Installations and Environment); the Assistant Chief of Staff for Installation Management; the Commander, Installation Management Command; and other stakeholders to clarify how the Army will incorporate lessons learned into its current and future privatization efforts.|