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Highlights

In the Military Construction Authorization Act, 1984, Congress authorized the Section 801 housing program, which provided a means for improving and expanding military family housing through private developers' investment. Under this authority, the Department of Defense (DOD) awarded eight contracts for the construction of on-base housing that typically consisted of two phases: the in-lease (DOD leases all of the units from developers for up to 20 years whether housing is occupied or not) and the out-lease (under some contracts, developers may rent housing to the general public while leasing the land from DOD for up to 30 more years). Based on a mandate in the National Defense Authorization Act for Fiscal Year 2010 conference report, GAO's objectives were to assess (1) the status of contracts for on-base Section 801 military housing, (2) the estimated costs to DOD and local communities that would result from the general public occupying this housing, and (3) the extent to which DOD and the services share information on modifications to the contracts and community interaction experiences. GAO visited five installations with on-base Section 801 housing, analyzed housing contracts, and interviewed relevant officials.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense To ensure that DOD and the military services have all information and possible options they need to revise relevant housing contracts in the future in the best interests of the federal government, the Secretary of Defense should direct the Under Secretary of Defense (Acquisition, Technology and Logistics) to develop a communications process so that all Section 801 housing installations may share information and best practices for negotiating any revisions to military housing contracts and for interacting with communities before allowing the general public's use of on-base housing.
Closed - Implemented
DOD concurred with our recommendation and stated in its agency comments that its Housing Policy Panel meetings with the military services would become the venue for sharing information and best practices for negotiating revisions to its Section 801 contracts and interacting with communities before potentially opening on-base housing to the public's use. We agreed that using the Housing Policy Panel as a sounding board would be an effective first step to ensure that relevant information about on-base Section 801 housing contracts is communicated to the installations that will be entering into their out-leases within the next 1 to 6 years in a timely manner. On November 9, 2010, at its quarterly Housing Policy Panel meeting, DOD discussed our report findings and recommendations and informed the services that they should start presenting best practices for managing and revising 801 contracts at future quarterly Housing Policy Panel meetings. Additionally, at the January 2011 Professional Housing Management Association conference, the Air Force hosted a workshop to provide the housing leads from each of the services with an agenda for DOD's first joint lessons learned session workshop. In a follow-on effort, the Services met on March 16, 2011, to share lessons learned in the management of Section 801 housing contracts. According to Air Force officials, this was the first of several future joint meetings. By establishing this communications process for the services to share their experiences with managing their Section 801 housing contracts, DOD and the services can ensure that the remaining four installations facing potential contract changes will have the timely information to better position the installations to negotiate the most cost-effective contract terms for the federal government.

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