Military Housing: Opportunities That Should Be Explored to	 
Improve Housing and Reduce Costs for Unmarried Junior		 
Servicemembers (10-JUN-03, GAO-03-602). 			 
                                                                 
Each year, the Department of Defense (DOD) spends billions of	 
dollars to house unmarried junior enlisted servicemembers,	 
primarily in military barracks. Over the next several years, the 
Army, Navy, and Air Force plan to spend about $6 billion to	 
eliminate barracks with multi-person bathroom facilities and	 
provide private sleeping rooms for all permanent party members.  
Given the cost of the program, GAO looked at (1) the status of	 
efforts to examine the potential for private sector financing,	 
ownership, operation, and maintenance of military barracks; (2)  
the opportunity to reduce the construction costs of barracks	 
through widespread use of residential construction practices; and
(3) whether opportunities exist to make better use of existing	 
barracks.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-602 					        
    ACCNO:   A07107						        
  TITLE:     Military Housing: Opportunities That Should Be Explored  
to Improve Housing and Reduce Costs for Unmarried Junior	 
Servicemembers							 
     DATE:   06/10/2003 
  SUBJECT:   Military cost control				 
	     Military facilities				 
	     Military housing					 
	     Strategic planning 				 
	     Construction costs 				 

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GAO-03-602

Report to the Secretary of Defense

United States General Accounting Office

GAO

June 2003 MILITARY HOUSING Opportunities That Should Be Explored to
Improve Housing and Reduce Costs for Unmarried Junior Servicemembers

GAO- 03- 602

GAO found three areas where DOD could potentially reduce costs in its
unmarried servicemember housing program:

DOD and the services have not determined whether *privatization,* or
private sector financing, ownership, operation, and maintenance of
military barracks is feasible and cost- effective. Barracks privatization
involves a number of unique challenges ranging from the funding of
privatization contracts to the location of privatized barracks. Recently,
each service has independently given increased attention to developing
privatization proposals. A collaborative, rather than independent,
approach could minimize duplication and optimize lessons learned.

DOD could reduce the construction costs of government- owned barracks
through the widespread use of residential construction practices rather
than traditional steel frame, concrete, and cement block. The Army
estimated that residential type construction could reduce barracks
construction costs by 23 percent or more. However, concerns about barracks
durability and unanswered engineering questions have prevented widespread
use of these practices.

DOD*s full use of required existing barracks space could reduce the cost
of housing allowances paid to unmarried junior members to live off base in
local communities. GAO found that the services have authorized housing
allowances for unmarried members to live off base even when existing
barracks space was available. This occurred because of lenient barracks
utilization guidance, which in some cases does not require full use of

existing barracks, and possible noncompliance with guidance. The Air Force
could have potentially reduced annual housing allowances by about $20
million in fiscal year 2002 by fully using available barracks space.

New Style Barracks at Fort Eustis

Source: GAO. Newly constructed barracks at Ft. Eustis, Va., feature
private sleeping rooms and semi- private bathrooms, improving the
servicemember quality of life.

Each year, the Department of Defense (DOD) spends billions of dollars to
house unmarried junior enlisted servicemembers, primarily in military
barracks. Over the next several years, the Army, Navy, and Air Force plan
to spend about $6

billion to eliminate barracks with multi- person bathroom facilities and
provide private sleeping rooms for all permanent party members. Given the
cost of the program, GAO looked at (1) the status of

efforts to examine the potential for private sector financing, ownership,
operation, and maintenance of military barracks; (2) the opportunity to
reduce the construction costs of barracks through widespread use of
residential construction practices; and (3) whether opportunities exist

to make better use of existing barracks.

GAO recommends that the Secretary of Defense promote a coordinated,
focused effort to determine the feasibility and cost

effectiveness of barracks privatization. GAO also recommends that DOD
undertake engineering studies to resolve questions about the use of
residential construction practices, issue guidance to direct the maximum
use of required existing

barracks space, and identify and eliminate any barracks space determined
to be excess. In commenting on a draft of this report, DOD generally
agreed with the recommendations.

www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 602. To view the full report,
including the scope and methodology, click on the link above. For more
information, contact Barry W. Holman at (202) 512- 5581 or holmanb@ gao.
gov. Highlights of GAO- 03- 602, a report to the

Secretary of Defense

June 2003

MILITARY HOUSING

Opportunities That Should Be Explored to Improve Housing and Reduce Costs
for Unmarried Junior Servicemembers

Page i GAO- 03- 602 Military Housing Letter 1 Results in Brief 2
Background 4 DOD and the Military Services Have Not Determined the
Feasibility of Barracks Privatization 9 Residential Construction Practices
Offer Opportunities to Reduce

Costs of Government- Owned Barracks 14 Opportunities Exist to Make Better
Use of Existing Barracks 21 Conclusions 25 Recommendations for Executive
Action 26 Agency Comments and Our Evaluation 27 Appendix I Scope and
Methodology 30

Appendix II Photographs of Old and New Style Barracks and Quarters Aboard
Navy Ships 32

Appendix III Details on Cost Differences in Barracks Built with
Residential and Traditional Construction Practices 35

Appendix IV Comments from the Department of Defense 37

Tables

Table 1: Cost Comparison of Army Barracks with a Private Sector Extended
Stay Hotel 15 Table 2: Cost Comparison of the Different Construction
Practices

at Fort Meade, Maryland, and Fort Bragg, North Carolina 19 Table 3:
Utilization of Air Force Permanent Party Barracks in the United States as
of September 30, 2002 23 Contents

Page ii GAO- 03- 602 Military Housing Figures

Figure 1: Photographs of the Fort Meade, Maryland, Barracks Project and a
Traditional Barracks at Langley Air Force Base, Virginia 18 Figure 2: Old
and New Style Barracks at Fort Eustis, Virginia 32 Figure 3: Typical
Living Quarters and Gang Latrines in Old Style

Barracks and Aboard Ship 33 Figure 4: Typical Living Quarters in New Style
Barracks 34 Abbreviation

DOD Department of Defense

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Page 1 GAO- 03- 602 Military Housing June 10, 2003 The Honorable Donald H.
Rumsfeld Secretary of Defense

Dear Mr. Secretary: Each year the Department of Defense (DOD) spends
billions of dollars to house unmarried servicemembers at their permanent
duty locations in the United States. Unmarried junior enlisted members are
normally required to live on base in furnished living quarters commonly
referred to as barracks. If barracks space is unavailable, these members
can be authorized a housing allowance and live off base in local civilian
communities. Because DOD views housing as a key factor affecting quality
of life, the services have initiated plans to improve barracks living
conditions. Over the next several years, the services plan to spend about
$6 billion to eliminate barracks with multi- person bathroom facilities,
or

*gang latrines,* and provide private sleeping rooms for all permanently
assigned members. 1 The Navy has an additional goal to provide barracks
for approximately 20,000 sailors who currently live aboard ships even when
in homeport. To improve military housing faster than could be achieved if
only traditional military construction funds were used, legislation was
enacted in 1996 at DOD*s request to authorize private sector financing,
ownership, operation, and maintenance of military housing, including
barracks. 2 Because of the cost of the program and the importance of
housing on servicemembers* quality of life, we examined, on the basis of
the Comptroller General*s authority, DOD*s housing program for unmarried
members and explored whether opportunities exist to reduce costs.

1 For reasons of unit cohesion, the Marine Corps plans to provide barracks
rooms shared by two junior enlisted members. 2 The National Defense
Authorization Act for Fiscal Year 1996 (P. L. 104- 106), Feb. 10, 1996.
The *alternative authority for construction and improvement* (i. e., the
military housing privatization program) provided in this legislation was
to expire 5 years after the date of enactment on February 10, 2001.
However, authority for the program was first extended by the National
Defense Authorization Act for Fiscal Year 2001 (P. L. 106- 398), Oct. 30,
2000,

from February 10, 2001, to December 31, 2004. Subsequently, the authority
for the program was extended by the National Defense Authorization Act for
Fiscal Year 2002 (P. L. 107- 107), Dec. 20, 2001, from December 31, 2004,
to December 31, 2012.

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 03- 602 Military Housing Since 1998, we have issued six
reports on DOD*s military housing program* three about the military
housing privatization initiative, one

about the services* barracks design standard, one about DOD*s process for
determining military housing requirements, and one about the opportunity
for the services to reduce future barracks construction costs and improve

quality of life by allowing more unmarried members to live off base. This
report examines additional opportunities for reducing unmarried enlisted
servicemember housing costs and discusses (1) the status of DOD and
military service efforts to examine the potential for private sector
financing, ownership, operation, and maintenance of military barracks; (2)
the opportunity to reduce the construction costs of government- owned

barracks through widespread use of residential construction practices; and
(3) whether opportunities exist to make better use of existing barracks.

Our review included interviews with DOD and service housing officials;
analysis of DOD and service data; and site visits to Fort Eustis,
Virginia; Fort Meade, Maryland; Naval Station Norfolk, Virginia; Langley
Air Force Base, Virginia; and Marine Corps Base Quantico, Virginia. A more
detailed description of our scope and methodology is included in appendix
I.

Although the authority for private sector financing, ownership, operation,
and maintenance of military housing was initially approved in 1996, DOD
and the military services have not determined the concept*s feasibility
and cost- effectiveness as it relates to military barracks. In contrast,
DOD has actively pursued this privatization concept for its military
family housing program. Compared to family housing privatization, however,
barracks privatization involves unique challenges, such as the potentially
higher amount of appropriated funds needed to secure a privatization
contract, differences in where private developers and the military prefer
barracks to be located, impacts from unit deployments, and the
availability of funds for housing allowances paid to members occupying
privatized barracks. While each service has separately studied barracks
privatization over the years, DOD has concentrated on family housing
privatization and has provided little centralized direction and focus to
help overcome these challenges. Recently, each service has independently
given increased attention to developing project proposals, with the Navy
hoping to do so by the end of 2003. Without more coordination of
activities to address the challenges associated with barracks
privatization, efforts might be duplicated and potential opportunities to
optimize lessons learned might be lost. Results in Brief

Page 3 GAO- 03- 602 Military Housing Construction costs of government-
owned barracks built and operated on military installations could be
significantly reduced through widespread

use of residential construction practices. Traditional barracks
construction practices call for commercial- type construction that
includes the use of steel frame, concrete, and cement block. Similar
multi- unit housing in the private sector, such as apartments, college
dormitories, and extended stay hotels, normally use residential- type
construction practices that include the use of wood frame construction.
Compared to steel frame, concrete, and cement block construction, the Army
estimated that residential type construction could reduce typical barracks
construction costs by 23 percent or more. For example, at its pilot
barracks project under construction at Fort Meade, Maryland, the Army
estimates that using residential construction practices will cost from
$12,600 to $31,800 less per occupant. Army analyses also indicate that a
barrack*s total costs over its lifetime would be less if constructed with
residential practices because of its lower initial construction costs and
comparable operations and maintenance costs for many building components.
Although the Army and Navy have undertaken three pilot projects, barriers*
including concerns about durability and unanswered questions about the
ability of wood- frame barracks to meet all antiterrorism force protection
requirements* have prevented widespread adoption of these cost- saving
practices.

Additional DOD efforts to fully use existing government- owned barracks
space could reduce the cost of housing allowances paid to unmarried junior
members to live off base in local civilian communities. Our review
corroborated previous reviews from Army and Air Force audit groups, which
found that these services have authorized housing allowances for unmarried
junior members to live off base even when existing barracks space was
available. This occurred because of lenient barracks utilization guidance,
which in some cases does not require full use of existing barracks, and
possible noncompliance with guidance. Simultaneously paying for

unused barracks spaces and housing allowances obviously wastes available
resources. We estimated that the Air Force alone could have potentially
prevented about $20 million in annual housing allowances in

fiscal year 2002 by fully using available barracks space. At the same
time, if the services were to change their barracks occupancy requirements
and permit more junior members to live off base, then the services could
reduce costs by identifying and eliminating excess barracks space.

We are recommending that the Secretary of Defense promote a coordinated,
focused effort to determine the feasibility and costeffectiveness of
barracks privatization by addressing the associated

Page 4 GAO- 03- 602 Military Housing challenges and facilitating the
development of pilot project proposals. We also are recommending that DOD
undertake engineering studies to resolve

questions about the use of residential construction practices for
barracks, issue guidance to direct the maximum use of required existing
barracks, and identify and eliminate any barracks space determined to be
in excess of needs. In comments on a draft of this report, DOD generally
agreed with the report*s recommendations.

Under the overall direction of the Under Secretary of Defense for
Acquisition, Technology and Logistics, the military services provide
onbase furnished living quarters for over 200,000 unmarried enlisted
servicemembers at their permanent duty locations in the United States.
Commonly referred to as barracks, housing for unmarried members is often
cited by DOD officials as a problem area because many military barracks
are old, rundown, and otherwise do not meet contemporary DOD standards for
size, privacy, and other amenities designed to enhance the quality of life
of unmarried members. Junior unmarried members often share dilapidated
barracks rooms with one or two other members and a gang latrine with
occupants from several other rooms. Also, about 20,000 junior enlisted
members assigned to Navy ships continue to live in cramped onboard
quarters even when their ships are in homeport. The living conditions in
barracks are far different from an apartment or townhouse with two
bedrooms, living area, bath, and full kitchen that is the normal housing
standard for junior enlisted married members.

The services have established specific goals and milestones for improving
the housing provided to unmarried junior enlisted members. First, the
services plan to eliminate permanent party barracks* i. e., barracks for
servicemembers at their permanent duty locations* with common bath and
shower facilities, or *gang latrines,* through barracks replacement or
renovation. The Air Force already has achieved this goal and the Army,
Navy, and Marine Corps plan to eliminate gang latrines by fiscal years
2008, 2007, and 2005, respectively. Second, the Army and the Navy plan to
provide each junior enlisted member in the United States a private

sleeping room with a kitchenette and bath shared by one other member*
referred to as the 1+ 1 barracks design standard* by fiscal years 2010 and
2013, respectively. The Air Force, which already provides private sleeping
rooms, plans to eliminate its barracks deficit and replace its worst

barracks by fiscal year 2009. The Marine Corps, given a permanent waiver
from the Secretary of the Navy to use a different barracks design
standard, plans to provide barracks with sleeping rooms and baths shared
by two junior members by fiscal year 2012. Third, the Navy plans to
complete its Background

Page 5 GAO- 03- 602 Military Housing homeport ashore initiative by fiscal
year 2008, which will provide barracks spaces for about 20,000 junior
members who are currently required to live

aboard their ships while in homeport. To improve barracks conditions and
achieve these goals, the services plan to spend about $6 billion over the
next 6 years. Appendix II shows photographs of old and new style barracks
as well as typical living conditions aboard Navy ships.

Service officials state that unmarried junior enlisted servicemembers
should live in barracks to help instill service core values, provide for
team building and mentoring, and meet operational requirements. However,
significant differences exist among the services regarding personnel who
are required to live in barracks. More specifically:  the Army requires
unmarried personnel in pay grades E1 through E6 to

live in barracks,  the Navy requires unmarried personnel in pay grades E1
through E4

with fewer than 4 years of service to live in barracks,  the Air Force
requires unmarried personnel in pay grades E1 through

E4 to live in barracks, and  the Marine Corps requires unmarried
personnel in pay grades E1

through E5 to live in barracks. The Military Housing Privatization
Initiative, authorized by law on February 10, 1996, provided new
authorities that, among other things, allows DOD to provide direct loans,
loan guarantees, and other incentives to encourage private developers to
construct and operate military family and unaccompanied housing (barracks)
either on or off military installations. 3 According to DOD, the
initiative was aimed at solving its inadequate housing problem faster and
more economically by taking advantage of the private sector*s investment
capital and housing construction expertise. With private- sector
investment, DOD planned to obtain at least 3 dollars in military housing
improvements for each dollar that the government invested, thereby
reducing the amount of government funds initially required to revitalize
housing and accelerating the elimination of inadequate housing. Although
there can be exceptions, DOD*s position is that the government*s estimated
total costs for a privatization project also should be equal to or less
than the total costs for the same project financed by military
construction funding. Servicemembers who live in privatized housing
receive a housing

3 The National Defense Authorization Act for Fiscal Year 1996 (P. L. 104-
106), Feb. 10, 1996.

Page 6 GAO- 03- 602 Military Housing allowance to pay for rent and
utilities. In fiscal year 1997, the Congress appropriated $5 million for
the services to use to initiate privatized

barracks projects. However, the Congress rescinded these funds in fiscal
year 1999 because the services had developed no plans for privatized
barracks.

In June 1997, DOD and the Office of Management and Budget agreed to a set
of guidelines that would be used as a frame of reference for scoring
privatization projects. 4 The guidelines state that if a project provides
an occupancy guarantee, then funds for the project must be available and
obligated *up front* at the time the government makes the commitment of

resources. In other words, if a project provides an occupancy guarantee,
then the value of the guarantee* the cumulative value of the rents to be
paid for the housing over the entire contract term* must be obligated at
the beginning of the project. As a result, DOD officials stated that such
a project might not be financially attractive because the amount of
appropriated funds required would be approximately equivalent to the
military construction funding that would be required to build the
barracks. According to DOD officials, this issue has not been a problem
for family housing privatization projects because DOD does not provide
occupancy guarantees and does not mandatorily assign members to family
housing. Military families can choose where to live and the project
contracts

4 Each privatization contract that DOD enters into must be scored for
budget purposes. Scoring seeks to determine the cost that should be
recognized and recorded as an obligation of DOD at the time the contract
is signed. The Office of Management and Budget*s Circular A- 11 provides
guidelines on how obligations should be recorded in the budget. The
guidelines are designed to ensure that the budget records the full amount
of the government*s commitments when a commitment is made.

Page 7 GAO- 03- 602 Military Housing include provisions for civilians to
rent privatized housing if military families choose not to live there. 5
Since 1998, we have issued six reports on DOD*s military housing

program* three about the military housing privatization initiative, one
about the services* barracks design standard, one about DOD*s process for
determining military housing requirements, and one about the differences
among the services concerning who is required to live in barracks.

 In July 1998, we reported on several concerns related to the new
military housing privatization program. 6 These included (1) whether
privatization would result in significant cost savings and whether the
long contract terms of many projects might result in building housing that
will not be needed in the future; (2) whether controls were adequate to
protect the government*s interests in the event developers

might not operate and maintain the housing as expected; and (3) whether
DOD would face certain problems if privatized housing units were not fully
used by military members and were subsequently rented to civilians, as the
contracts permit.  In March 1999, we reported on the status of the
services*

implementation of the 1+ 1 barracks design standard. 7 The report also 5
In February 2003, the Congressional Budget Office issued a report, The
Budgetary Treatment of Leases and Public/ Private Ventures, on budget
scoring. The office concluded that (1) DOD*s family housing privatization
projects have been treated in the budget in a manner inconsistent with
federal budgeting principles that require federal financial commitments to
be recognized up front in the budget, and (2) military housing
privatization projects that result in the construction of family housing
on military bases should be reflected in the budget as if they were
investments. This would require the up- front scoring

including the value of the rental payments that will be made over the life
of the project. The report also noted that the Office of Management and
Budget disagrees with this view because DOD may have little, if any,
equity ownership in privatized housing, DOD may not be legally liable for
the projects* debts, and the rental payments are made by individual
servicemembers. The report made no recommendations, stating that the
report*s purpose was to identify the challenges that financing federal
projects through leases and public/ private ventures, such as the military
housing privatization program, pose for congressional control over
spending as well as for the transparency of the budget and its ability to
facilitate cost- effective investment decisions. 6 U. S. General
Accounting Office, Military Housing: Privatization Off to a Slow Start and

Continued Management Attention Needed, GAO/ NSIAD- 98- 178 (Washington, D.
C.: July 17, 1998).

7 U. S. General Accounting Office, Military Housing: Status of the
Services* Implementation of the Current Barracks Design Standard, GAO/
NSIAD- 99- 52 (Washington, D. C.: Mar. 24, 1999). Prior GAO Reports on the

Military Housing Program

Page 8 GAO- 03- 602 Military Housing discussed DOD*s rationale for
adopting the standard, the costs of alternatives to the standard, and
service views of the impact of the

standard from a team- building, individual isolation, or similar
perspective.  In March 2000, we reported that initial implementation
progress for the

privatization program was slow, the services* life- cycle cost analyses
provided inaccurate cost comparisons because DOD had not issued
standardized guidance for preparing the analyses, and DOD lacked a plan
for evaluating the effectiveness of the program. 8 DOD subsequently
quickened the pace of family housing privatization, issued standard
guidance for privatization life- cycle cost analyses, and developed a
program evaluation plan.  In August 2001, we reported that despite
earlier recommendations,

DOD had not implemented a standard process for determining military
housing requirements. 9 In that report, we pointed out that the initiative
to increase housing allowances heightened the urgency for a consistent
process, because the initiative could lessen the demand for military
housing by making housing in local communities more affordable. In January
2003, DOD approved a new standard family housing requirements
determination process.  In June 2002, we noted that by investing about
$185 million of military

construction funds in the first 10 family housing privatization projects,
DOD should obtain housing improvements that would have required about
$1.19 billion in military construction funds had only government funds
been used. 10 We also reported that privatization projects were not
supported by reliable or consistent needs assessments, and the overall
requirement for military housing was not well defined. Further,

although DOD had included provisions in project contracts designed to
protect the government*s interests, our report identified several areas
where DOD could further enhance protections to the government. DOD
responded by outlining ongoing and planned management actions to address
the concerns noted in the report.

8 U. S. General Accounting Office, Military Housing: Continued Concerns in
Implementing the Privatization Initiative, GAO/ NSIAD- 00- 71 (Washington,
D. C.: Mar. 30, 2000). 9 U. S. General Accounting Office, Military
Housing: DOD Needs to Address LongStanding Requirements Determination
Problems, GAO- 01- 889 (Washington, D. C.: Aug. 3, 2001).

10 U. S. General Accounting Office, Military Housing: Management
Improvements Needed As the Pace of Privatization Quickens, GAO- 02- 624
(Washington, D. C.: June 21, 2002).

Page 9 GAO- 03- 602 Military Housing  In January 2003, we reported on the
widely varying standards among the services regarding who should live in
barracks and the effect this

can have on program costs and quality of life. 11 We noted that requiring
more personnel (more pay grades) to live in barracks than is justified
results in increased barracks program and construction costs and has
negative quality- of- life implications because most junior servicemembers
would prefer to live off base. We noted that by allowing junior enlisted
personnel already living off base with a housing allowance to continue to
live off base, the Air Force could reduce planned barracks construction
spending by $420 million. Accordingly, we recommended that the rationale
behind the services* barracks occupancy requirements be based, at least in
part, on the results of objective, systematic analyses that consider the
contemporary needs of junior servicemembers, quality- of- life issues, the
services* mission requirements, and other relevant data that would help
provide a basis for the services* barracks occupancy requirements. While
DOD agreed in principle with our recommendation, it reiterated the
importance of military judgment in such decisions and left unclear the
extent to which it is likely to make changes.

While the services have considered barracks privatization over the past
several years, they have not yet initiated pilot project proposals to
determine the feasibility and cost- effectiveness of private sector
financing, ownership, operation, and maintenance of military barracks.
According to DOD officials, barracks privatization involves unique
challenges compared

to family housing privatization. These challenges range from the
potentially higher amount of appropriated funds needed to secure a
privatization contract (as a result of the services* requirement that
unmarried junior members live in barracks) to the differences in where
private developers and the military prefer barracks to be located.
Deferring to the individual services, DOD has provided limited centralized
direction and focus to help overcome the challenges associated with
barracks privatization. Recently, each service has independently given
increased attention to developing project proposals, with the Navy hoping
to do so by the end of 2003. Still, there are unresolved issues associated
with barracks privatization and, without more coordination of activities
to address these issues, efforts might be duplicated and the benefits from
collaboration might be lost.

11 U. S. General Accounting Office, Military Housing: Opportunity for
Reducing Planned Military Construction Costs for Barracks, GAO- 03- 257R
(Washington, D. C.: Jan. 7, 2003). DOD and the Military

Services Have Not Determined the Feasibility of Barracks Privatization

Page 10 GAO- 03- 602 Military Housing Compared to family housing
privatization, barracks privatization includes unique challenges that,
thus far, have prevented the development of pilot

project proposals. DOD has actively pursued privatization of military
family housing and has awarded contracts to construct or improve about
26,000 family housing units by the end of fiscal year 2002 and has plans
to privatize an additional 96, 000 units by the beginning of fiscal year
2006. The primary problem with privatizing barracks lies in the services*

mandatory assignment policy for unmarried junior enlisted servicemembers
and whether this policy implies that DOD would provide private- sector
housing developers with an occupancy guarantee. Mandatory assignment, if
viewed as an occupancy guarantee, might make a proposed barracks
privatization project financially unattractive because a higher amount of
appropriated funds would be needed to secure the contract than would be
needed for a similar military construction project. Other challenges are
related to barracks locations, unit deployments, and funding for housing
allowances.

The current policy in each service requires mandatory assignment of
unmarried junior members to barracks located on base, provided that space
is available. According to DOD officials, most military leaders support
this policy because they believe that mandatory assignments provide for
military discipline and unit integrity. Mandatory assignments, however,
might result in the need for more appropriations* in comparison to
military construction financing* to cover the obligations that the Office
of Management and Budget determines should be recorded at contract award.
This could make a proposed barracks privatization project financially
unattractive. The amount of appropriations needed hinges on whether the
mandatory assignment policy would provide private- sector housing
developers with a DOD guarantee of occupancy.

Because there have been no barracks privatization project proposals to
date, it is unclear whether the services* mandatory barracks assignment
policies for junior members might be viewed as an occupancy guarantee.
Office of Management and Budget officials stated that having a mandatory
assignment policy alone would not necessarily guarantee that the rent paid
to the developer over the life of the project would have to be scored up
front. However, if the privatization contract specifically stated that
mandatory assignment would occur, the officials stated that the office
probably would view this as an occupancy guarantee and the project*s
projected rent would be scored up front.

As with family housing projects, Office of Management and Budget officials
stated that the scoring of a barracks project depends on the Barracks
Privatization

Involves Unique Challenges Compared to Family Housing Privatization

Page 11 GAO- 03- 602 Military Housing details and circumstances involved
in a proposed project and the associated risk to the government. Key
issues that might be considered

include whether the project allows the private developer enough autonomy
to manage the project without significant military control and whether the
contract includes provisions for civilians to rent vacant barracks spaces
in the event of reduced government demand. Obviously, such issues present
problems for the services* specifically, the willingness of the services
to relinquish their control of barracks and allow civilians to occupy
vacant barracks spaces. With a specific barracks privatization proposal,
the Office of Management and Budget officials stated they would work with
DOD to address the associated scoring questions.

Although the potentially high amount of appropriated funds needed to
secure a contract appears to be the most significant challenge to barracks
privatization, there are other challenges as noted below.  Barracks
location. According to DOD officials, private developers have

indicated that they would prefer that privatized barracks be located off
base or along an installation*s boundary and be severable from the
installation. Developers would then have greater flexibility in renting
the units to civilians in the event of reduced government demand. However,
the services do not want barracks located off- base or near installations*
perimeter fences largely for force protection reasons and, currently, most
existing barracks are not located along installation boundaries. 
Deployments. In the event of unit deployments, many servicemembers

would not be in the barracks and possibly entire buildings could be empty
for months. As a result, the developer*s normal rental income could be
reduced or eliminated even though the developer would still need to pay
for expenses such as mortgage payments and operations and maintenance
costs. This is less of a problem in privatized family housing because
family members normally continue to occupy the housing and pay rent if the
servicemember deploys.  Funding for housing allowances. Service officials
stated that identifying

and shifting funds to pay housing allowances to servicemembers living in
privatized barracks could be an administrative problem. This is less of a
problem with privatized family housing because military family housing has
a separate operations and maintenance budget account. When a private
developer takes over existing military family housing, funds from the
family housing operations and maintenance account can be shifted to help
pay for housing allowances used to pay rent for the families living in the
housing. However, barracks operations and maintenance is not funded by a
similar separate account. Instead,

Page 12 GAO- 03- 602 Military Housing barracks operations and maintenance
funds are included in each installation*s overall base operating budget.
According to service

officials, it is more difficult to identify, break out, and shift barracks
funding to the personnel accounts to pay housing allowances for a
privatized barracks project.

With its attention largely concentrated on initiating and managing
privatization of military family housing, DOD has provided limited
centralized direction and focus to help the services overcome the
challenges associated with barracks privatization and proceed with pilot
project proposals. Also, in August 1998, 2 years after the military
housing privatization legislation was enacted, DOD shifted primary
responsibility for implementing the privatization program to the
individual services. Since that time, the services have independently
studied the barracks privatization concept but have not developed actual
project proposals. More recently, the services have given increased
attention to exploring barracks privatization, but their efforts continue
to be independent and non- coordinated. The status of barracks
privatization in each service follows.

While no service has yet initiated a barracks privatization project, the
Navy and the Marine Corps currently appear to be the most active among the
services in examining its potential use. Navy officials stated that they
believe barracks privatization offers an opportunity for the Navy to more
quickly meet its barracks improvement goals, including the goal of
providing barracks space for all junior sailors currently required to live
on their ships even while in homeport.

In order for barracks privatization to be feasible, Navy officials
believed that the Navy needed additional authorities not contained in the
Military Housing Privatization Initiative legislation. Specifically, Navy
officials believed that existing housing allowance rates provided more
money than would be needed to develop a privatized barracks project. The
housing

allowance rate for unmarried junior members is targeted to cover the costs
of a one- bedroom apartment in the civilian community. Yet, the barracks
occupancy standard is based on a lesser standard* the modern 1+ 1 barracks
design standard where two members share a module consisting of two small
bedrooms with a kitchenette and bath. As a result, Navy officials believe
the current housing allowance could provide more money than would be
needed to pay rent for a similar design standard in a privatized barracks,
and the rental income received by the private- sector developer would be
more than is needed to finance the construction and DOD Has Provided
Limited

Centralized Direction and Focus for Barracks Privatization

Navy and Marine Corps Efforts to Privatize Barracks

Page 13 GAO- 03- 602 Military Housing management of the project. To
address this situation, the Bob Stump National Defense Authorization Act
for Fiscal Year 2003 provided the Navy with specific legislative authority
to undertake three pilot projects to

privatize barracks. 12 According to Navy officials, the legislation will
allow the Navy to pay occupants* allowances in the amounts needed to
provide the rental income to support the privatized barracks projects and
will allow junior sailors on ships to be assigned to privatized barracks.

With this authority, Navy and Marine Corps officials stated that they plan
to develop specific proposals for privatization. Candidate installations
for barracks privatization include the Naval Station Norfolk, Virginia;
the Naval Station San Diego, California; and the Marine Corps Base Camp
Pendleton, California. Although remaining challenges, such as those noted

above, must be addressed, Navy officials hope that specific proposals will
be developed by the end of calendar year 2003.

In May 1997, the Air Force issued the results of a barracks privatization
feasibility study. The study concluded that privatization was feasible and
recommended that the Air Force pursue development of a barracks
privatization project at one base to further define the concept. However,
the study, which was performed prior to issuance of the budgetary scoring
guidelines for privatization projects, stated that occupancy guarantees
would be provided in order to facilitate private financing. According to
Air Force officials, the study recommendation was not implemented because
of the costs associated with occupancy guarantees and the other challenges
associated with barracks privatization. More recently, however, the Air
Force has again begun to explore the

issue. In August 2002, an Air Force team was formed to establish a
baseline for an Air Force barracks privatization program including the
development of policy and guidance. Air Force officials also stated that
Air Force major commands have been asked to identify potential
privatization candidates. One potential candidate identified was Elmendorf
Air Force Base, Alaska, where a family housing privatization project is
already underway. However, officials stated that they do not expect any
privatized barracks proposals in the near future and that they planned to
monitor the Navy*s progress under its pilot program.

12 The Bob Stump National Defense Authorization Act for Fiscal Year 2003
(P. L. 107- 314), Dec. 2, 2002. Air Force Efforts to Privatize

Barracks

Page 14 GAO- 03- 602 Military Housing Army officials stated that they have
explored the concept of barracks privatization but that they have made
relatively little progress toward

reaching a consensus that the concept should be pursued. They also stated
that they were not optimistic that the many challenges facing barracks
privatization could be overcome and did not expect any project proposals
in the near future. Nevertheless, the Army is continuing to review the
issue. For example, in an April 2002 memorandum, the Army Assistant
Secretary for Installations and Environment stated that the time was right
to pursue the issue and requested the support of the Army*s Training and
Doctrine Command and the Army*s Forces Command in formal studies of
barracks privatization. At the time of our review, no studies had been
completed. In addition, Fort Lewis, Washington, has a barracks

privatization study underway that is expected to be completed in 2003. To
the extent the services continue to rely on government built and operated
barracks on military installations, opportunities exist to reduce costs of
constructing those barracks through adoption of residential construction
practices. In the past, DOD policies generally required that traditional
barracks construction practices use commercial- type construction
including use of steel frame, concrete, and cement block. Similar multi-
unit residential housing in the private sector, such as apartments,
college dormitories, and extended stay hotels, normally use residential
construction practices that include the use of wood frame construction.
Compared to steel frame, concrete, and cement block construction, Army
analyses show that residential construction practices could reduce typical
barracks construction costs by 23 percent or more. DOD policies now
generally allow use of residential construction practices. However, some
barriers still exist to DOD*s adoption of these cost- reducing practices
as a normal way of doing business, including concern about durability and
unanswered questions about the ability of wood- frame barracks to meet all
antiterrorism force protection requirements.

Concerned with the high construction costs of barracks built to the 1+ 1
design standard, the Army began to search for savings opportunities and
concluded that using residential construction practices to build barracks
would cost less than using traditional construction practices. In June
2000, the Army revised its barracks construction guidance to permit Army
construction projects to be of any construction type. Subsequently, the
Army began a pilot barracks project using residential construction
practices at Fort Meade, Maryland. Army Efforts to Privatize

Barracks Residential Construction Practices Offer Opportunities to Reduce
Costs of Government- Owned Barracks

Army Analyses Show That Residential Construction Practices Cost Less

Page 15 GAO- 03- 602 Military Housing As the Army began building new
barracks in accordance with the 1+ 1 barracks design standard adopted in
1995, Army officials became

concerned with the high construction costs of these barracks. To explore
reasons for the high costs and opportunities for savings, the Army Corps
of Engineers performed a study in 1996 that compared the construction
costs of three typical Army 1+ 1 barracks with the construction costs of a
similar private sector multi- unit project* specifically a national brand,
all suites, extended stay hotel. After making adjustments to account for
differences in geographic location and dates of construction, the Army
Corps of Engineers found significant cost differences between the projects
as shown in table 1.

Table 1: Cost Comparison of Army Barracks with a Private Sector Extended
Stay Hotel Difference Factor Average for Army barracks Average for private

extended stay hotel Amount Percent

Construction cost per occupant $48,700 $34,600 $14,100 29 Construction
cost per square foot $131 $56 $75 57 Key amenities and square feet per
occupant  Two occupants share a

bath and kitchenette.

 Common area for socializing.

 372 square feet per occupant.

 Private bath and full kitchen.

 Private living room.

 621 square feet per occupant.

Source: Army Corps of Engineers.

The extended stay hotel provided each occupant with more amenities and
space than the Army barracks at a construction cost per occupant of
$14,100, or 29 percent, less than the barracks* average construction cost
per occupant. The Army Corps of Engineers determined that although many
factors accounted for the cost difference between the projects, the
primary reason was the type of construction used to build the projects.
The barracks were constructed in accordance with Uniform Building Code
type I/ II (commercial) standards that call for non- combustible
construction built from concrete, masonry, and/ or steel. The private
extended stay hotel was constructed in accordance with Uniform Building
Code type V (residential) standards that permit use of any building
material allowed by the code, including wood. The Army Corps of Engineers*
data showed that if the barracks had been built using residential
construction practices instead of traditional barracks construction
practices, the Army*s average construction cost per occupant would have
been about $37,500, a reduction of about $11,200, or 23

percent, per occupant. This study did not address differences in the
barracks* total costs* i. e., construction costs and operations and Army
Concern Over Barracks

Costs Resulted in Search for Savings Opportunities

Page 16 GAO- 03- 602 Military Housing maintenance costs* over their
lifetimes. However, subsequent Army analyses indicate that a barrack*s
total costs over its lifetime would be less

if constructed with residential practices because of its lower initial
construction costs and comparable operations and maintenance costs for
many building components. (See app. III for additional details on the
Army*s analyses.)

A subsequent Army study also concluded that the materials and methods
traditionally used to construct government- owned barracks were more
costly than the materials and methods normally used to construct similar
multi- unit residential buildings in the private sector. In a joint
February 2001 report, the Army*s Assistant Chief of Staff for Installation
Management and the Army Corps of Engineers concluded that using
residential construction practices, similar to the practices used to build
apartment buildings, could achieve considerable cost reductions without
adversely impacting barracks* durability or maintainability. 13 The report
included an additional example comparing barracks built using traditional
construction practices with a residential condominium built using
residential construction practices. Specifically, the report cited an Army
1+ 1 barracks built in fiscal year 2000 at Fort Leavenworth, Kansas. Each

two- bedroom, bath, and kitchenette module had 506 square feet and cost
$193, 000. During this time frame, the construction cost of a 1, 500
square foot residential unit with two bedrooms, two baths, full kitchen,
living room, laundry room, and balcony in a new private condominium
complex in Maryland was $180,000. Although the condominium unit was almost
three times larger than the barracks module, it cost $13,000 less.

The Army revised its barracks construction guidance in recent years to
permit construction projects to be of any construction type, largely in
response to its analyses. When building barracks, the Army had been
following guidance in Military Handbook 1008C, which provides direction

on the design and construction of DOD facilities. 14 The handbook stated
that construction of new buildings should be limited to use of traditional
barracks construction practices. However, in June 2000, the Army Corps

13 U. S. Department of the Army, Report on the Barracks Mid- Program
Review (Washington, D. C.: Feb. 2, 2001). 14 U. S. Department of Defense,
Military Handbook: Fire Protection For Facilities Engineering, Design, And
Construction, Military Handbook 1008C (Washington, D. C.: June 10, 1997).
Because the handbook provided an exception for Navy and Marine Corps
barracks, the handbook*s requirements for barracks construction applied
only to the Army and the Air Force. Army Revised Barracks Construction
Guidance

Page 17 GAO- 03- 602 Military Housing of Engineers issued guidance that
authorized Army construction projects to be of any construction type as
long as they complied with the Uniform

Building Code requirements for the construction type used. Further, in a
July 2002 memorandum, the Army Vice Chief of Staff stated that use of less
restrictive residential practices in barracks construction would improve
soldier quality of life and provide better value to the Army. An enclosure
to this memorandum stated that, although Army barracks traditionally have
been designed in many cases to exceed industry codes and standards, such
an approach is not in the Army*s best economic interests.

A 1+ 1 barracks design project currently under construction at Fort Meade,
Maryland, is the Army*s first barracks to be built using residential
construction practices. According to Army officials, the project calls for
eight new three- story barracks buildings with a total of 576 private
sleeping rooms. The project*s initial design assumed use of traditional
construction practices. However, on the basis of this design, the Army
Corps of Engineers estimated that the project would cost $48 million*

about $11 million more than had been approved for the project. In an
effort to reduce construction costs, the Army decided to redesign the
project using multi- unit residential 1- hour fire resistive construction
practices. After the redesign and solicitation process, the project was
awarded for about $31 million. With the project 83 percent complete in
January 2003, the Army Corps of Engineers estimated that the final project
cost* including supervision and overhead costs and costs of changes and
enhancements to the contracted design* would be about $39 million. In

addition, the project*s estimated completion date was about 8 months ahead
of the contracted completion date of January 2004.

In January 2003, we visited the Fort Meade barracks construction site.
Visually, we noted few differences in the appearance of these barracks
compared to traditional barracks. Figure 1 shows photographs of the Fort
Meade barracks project contrasted with a traditionally constructed
barracks at Langley Air Force Base, Virginia. Fort Meade Barracks Project
Is

Army*s First to Use Residential Construction Practices

Page 18 GAO- 03- 602 Military Housing Figure 1: Photographs of the Fort
Meade, Maryland, Barracks Project and a Traditional Barracks at Langley
Air Force Base, Virginia

For a comparison with the Fort Meade project, we asked the Army for cost
data on two 1+ 1 barracks projects under construction at Fort Bragg, North
Carolina. One project is building 960 rooms using traditional
noncombustible construction practices and the other project is building
608 rooms using traditional 1- hour fire resistive construction practices.
Compared to the Fort Bragg projects, it appears that use of the
residential construction practices in the Fort Meade project will result
in considerable cost reductions* from $12,600 to $31,800 per occupant (see
table 2).

Page 19 GAO- 03- 602 Military Housing Table 2: Cost Comparison of the
Different Construction Practices at Fort Meade, Maryland, and Fort Bragg,
North Carolina

Project Type of construction Cost per square foot Cost per

occupant

Fort Meade Residential: 1- Hour Fire Resistive $113 $38,800 Fort Bragg 1
Traditional:

1- Hour Fire Resistive 136 51,400 Fort Bragg 2 Traditional:

Non- Combustible 193 70,600 Range of cost reductions using residential
construction practices $23 to $80 $12,600 to

$31,800 Source: Department of the Army.

Note: The Army provided costs directly related to the barracks portion of
the projects and adjusted the costs to account for the differences in
construction time frames and geographic locations of the projects. We
estimated cost per occupant by multiplying the cost per square foot by the
project*s gross square feet per occupant. The Fort Meade, Fort Bragg 1,
and Fort Bragg 2 projects provided 343, 378, and 366 gross square feet per
occupant, respectively.

There are barriers to DOD*s widespread adoption of residential
construction practices as a normal way of doing business. Because Army
studies and the pilot project at Fort Meade indicate the potential to
reduce

some costs by using residential construction practices, it would seem that
the services would be eager to adopt these practices for all future
barracks construction projects. However, this has not been the case due to
concerns about barracks durability and concerns related to antiterrorism
force protection issues.

According to Army officials, the services have been reluctant to change
construction practices because of the concern that switching to
residential construction practices would result in barracks that are less
attractive and less durable. However, the officials noted that the
exterior appearance of barracks constructed with residential and
traditional practices normally would be the same. Also, Army analyses
indicate that there is little difference in durability with each type of
construction and a barrack*s total costs over its lifetime would be less
if constructed with residential practices because of its lower initial
construction costs and comparable operations and maintenance costs for
many building components. (See app. III for additional details.) Still,
the officials stated that the idea of switching construction practices
continues to face resistance. Because of this, even the Army had no
definite plans, as of February 2003, for additional barracks construction
using residential construction practices. Barriers Exist to Greater

Use of Residential Construction Practices

Page 20 GAO- 03- 602 Military Housing The Air Force also had no plans to
use residential construction practices for its barracks projects. The
Navy, which has completed two barracks

projects using residential construction practices, has no additional
barracks projects underway or planned using these practices. 15 Another
barrier to widespread adoption of residential construction

practices for barracks relates to unresolved questions on whether use of
these practices would result in barracks that fully complied with new
antiterrorism guidance for force protection. In July 2002, DOD finalized
guidance requiring military components to adhere to common criteria and
minimum construction standards to mitigate antiterrorism vulnerabilities
and terrorist threats. 16 The standards seek to minimize the likelihood of
mass casualties from terrorist attacks against DOD personnel in the
buildings where they work and live. As applied to barracks construction,
two standards in the antiterrorism

force protection guidance are particularly important* standoff distance
and prevention of building collapse. Standoff distance refers to the
minimum distance that buildings should be situated from roads, parking
lots, trash containers, and an installation*s perimeter. According to the
guidance, the easiest and least costly way to achieve appropriate levels
of protection against terrorist threats is to incorporate sufficient
standoff

distance into project designs. In situations where the standoff distance
standards cannot be achieved because land is unavailable, the guidance
calls for building hardening or other techniques to mitigate possible
blast effects. According to Army officials, because most barracks projects
in the United States could be situated to meet required standoff
distances, use of residential construction practices and compliance with
this standard would not be a problem in most instances. Navy officials,
however, stated that enough land to meet required standoff distances was
not available at

many of its installations. The DOD standard for preventing building
collapse applies to buildings of three or more stories and requires that
they be designed with provisions

15 The Navy used residential construction practices to build barracks
projects at Naval Air Station Brunswick, Maine, and Naval Station Newport,
Rhode Island. Compared to the use of traditional construction practices,
Navy officials stated that the use of residential construction practices
reduced the cost per occupant by about one- third. 16 U. S. Department of
Defense, Unified Facilities Criteria: DOD Minimum Antiterrorism

Standards For Buildings, UFC 4- 010- 01 (Washington, D. C.: July 31,
2002).

Page 21 GAO- 03- 602 Military Housing that permit the structure to sustain
local damage without the entire building collapsing. According to Army
officials, questions remain as to

whether barracks built using residential practices would comply with the
collapse standard. They stated that the primary issue is lack of
engineering data. Most available building collapse information addresses
structural systems typical of taller buildings that were not built using
residential construction practices. Army officials also stated that
complying with the collapse standard using residential barracks
construction practices might not be a problem or might be solved with
inexpensive adjustments to construction techniques. Designers do not have
sufficient data on exactly what, if anything, needs to be done to ensure
compliance with the standard when using residential construction
practices.

At the same time, some Army officials also questioned whether the collapse
standard should apply to low- rise three- story barracks buildings. They
noted that industry design standards usually make a distinction in
structural requirements at four stories and above* not at three stories
and above as required by the collapse standard. They further noted that
today*s 1+ 1 barracks design standard provides relatively low occupancy
densities that are more similar to family housing which is exempt from the
force protection requirements as long as a family housing building
contains no more than 12 family units.

The services could minimize housing costs by ensuring full use of existing
barracks space. Having unused government- owned barracks spaces and paying
housing allowances at the same time wastes available resources. Air Force
and Army barracks instructions, however, do not require installations to
use all vacant space before authorizing housing allowances for junior
members to live off base. 17 Our review, as well as previous reviews by
military service audit groups, found that the lenient barracks utilization
guidance, and in some cases noncompliance with the guidance, resulted in
installations paying housing allowances when barracks

vacancies existed. The services could also reduce costs by identifying and
eliminating excess barracks infrastructure if they were to change their
barracks occupancy requirements and permit more junior members to live off
base.

17 Service instructions also permit installation commanders to authorize
junior members to live off base with a housing allowance for certain
reasons other than lack of barracks space, such as for personal hardship
reasons or for members with extensive household

goods. Opportunities Exist to

Make Better Use of Existing Barracks

Page 22 GAO- 03- 602 Military Housing Army instructions allow its
installations to authorize junior members to live off base with a housing
allowance when barracks occupancy reaches

95 percent. Air Force instructions only require that 90 percent of an
installation*s available barracks spaces be used before authorizing junior
members to live off base with a housing allowance. Prior to June 1998, the
Air Force required 95- percent occupancy. Air Force officials stated that
the change was made to facilitate flexibility and to help maintain unit
integrity in barracks assignments. To put these instructions in
perspective, such policies, if practiced in the private sector, would be
the equivalent of the owner of a private apartment complex turning away
prospective

tenants even though 5 to 10 percent of the apartments were vacant* an
action not likely to happen if the owner is concerned about costs and
revenues. Further, allowing 5 to 10 percent of barracks spaces to go
unused appears contrary to the services* policies requiring that all
unmarried junior members live in the barracks as long as space is
available.

In contrast to Army and Air Force instructions, Navy and Marine Corps
instructions state that maximum practical occupancy should be achieved
before junior members are authorized to live off base with a housing

allowance. The Navy instruction specifically states that barracks
utilization should routinely approach 100 percent.

In view of the differences in the services* barracks utilization guidance,
we attempted to review barracks utilization and payment of housing
allowances for unmarried junior members in each of the services. However,
our analysis was limited to the Air Force and the Marine Corps because
only those services require their installations to collect and centrally
report barracks utilization data and the number of members authorized to
live off base. The Navy requires barracks utilization reports, but the
reports do not include the number of members authorized to live off base.
Army officials stated that although utilization data is maintained by each
installation, they had eliminated central reporting requirements years ago
in order to reduce paperwork costs. With centralized data only available
from the Air Force and the Marine Corps, we focused our review

on an analysis of that information. The Air Force reported an inventory of
about 43,400 adequate permanent party barracks rooms in the United States
as of September 30, 2002. Table 3 shows that on September 30, 2002, about
4,700 of these rooms were diverted from normal use for maintenance and
other reasons. Of the remaining rooms, about 35,300, or 91 percent, were
occupied and about Army and Air Force Instructions Do Not

Require Full Utilization of Barracks Space

Actual Barracks Utilization Varied Many Air Force Barracks

Rooms Were Vacant

Page 23 GAO- 03- 602 Military Housing 3,400 rooms, or 9 percent, were
vacant. Among major Air Force installations, the occupancy rates for the
available barracks rooms ranged

from 100 percent at Minot Air Force Base, North Dakota, to 82 percent at
Tinker Air Force Base, Oklahoma.

Table 3: Utilization of Air Force Permanent Party Barracks in the United
States as of September 30, 2002 Number of

rooms a Percentage of total rooms

Percentage of net available

rooms Total 43,400 100

Diverted for maintenance 1,900 4 Diverted for other reasons 2,800 6

Net available 38,700 89 100

Occupied 35,300 81 91 Vacant 3,400 8 9 Source: Department of the Air
Force. a Numbers rounded. Rooms diverted for reasons other than
maintenance include 1,219 rooms set

aside for temporary and student lodging, 527 rooms set aside to
temporarily house members arriving at an installation until they are
assigned to a permanent room, 275 rooms set aside for offices, 218 rooms
set aside for storage, 60 rooms set aside for training, and 507 rooms set
aside for other miscellaneous reasons.

The Air Force also reported that as of September 30, 2002, it had
authorized about 24,100 unmarried junior servicemembers in pay grades E1
through E4 to live off base with a housing allowance. We analyzed this

data to estimate the housing allowance funds that the Air Force could
potentially have prevented if members living off base had been assigned to
the vacant barracks rooms. To do this, we compared* on an installationby-
installation basis* the number of junior servicemembers living off base
with a housing allowance to the number of barracks vacancies on September
30, 2002. Our analysis showed that the vacant barracks spaces could have
accommodated about 2,900 of the junior members who were living off base*
suggesting a practice at variance with the Air Force*s stated policy of
requiring E1 through E4 to live on base in barracks. Had these members
been assigned to the barracks, the Air Force potentially could have
reduced its annual housing allowance costs by about $20 million. Because
the data used in this analysis reflected barracks use on a single date,
September 30, 2002, our analysis reflects results as of this single date.
Also, because barracks occupancy can change daily, results would have
differed if utilization data on another date had been used or if data had
been available to show daily utilization over a period of time.

Page 24 GAO- 03- 602 Military Housing Although Air Force instructions
require that 90 percent of an installation*s available barracks spaces be
used before authorizing junior members to

live off base, some Air Force installations apparently were not in
compliance with this guidance. For example, data for Kirtland Air Force
Base, New Mexico, indicated an 85- percent occupancy rate with 105
vacancies and 392 junior members living off base with a housing allowance.
Similarly, data for McChord Air Force Base, Washington, indicated an 86-
percent occupancy rate with 101 vacancies, and 118 junior members living
off base with a housing allowance. Air Force officials

noted that installation occupancy rates are reported only twice a year and
represent a snapshot in time. Thus, to determine whether installations
reporting less than 90- percent occupancy were not complying with policy
would require a detailed installation level review of occupancy rates over
a period of time and the reasons why members living off base were allowed
to do so. Air Force officials also noted that Air Force commands are
reminded on a regular basis of the importance of complying with
utilization policy and making full use of their barracks.

The Marine Corps data as of September 30, 2002, showed that barracks at
most Marine Corps installations were fully used. Of the few major
installations that reported less than 100- percent utilization, only one
also reported unmarried junior enlisted members living off base with a
housing allowance. In this instance, however, the installation reported
only three junior members with a housing allowance.

Previous reports from service audit groups also have noted that
noncompliance with existing guidance has resulted in installations paying
housing allowances when barracks vacancies existed. For example, in a
February 1999 report on barracks management at Langley Air Force Base,
Virginia, the Air Force Audit Agency stated that housing managers did not

require individual barracks to meet the occupancy goal before authorizing
members to live off base. 18 The report also stated that maintaining
barracks occupancy rates above the Air Force goal would provide direct
savings to the Air Force budget. The Army Audit Agency reported in

January 1997 that Fort Benning, Georgia, had authorized members to live
off base even though barracks utilization was below the Army goal of

18 U. S. Air Force Audit Agency, Installation Report of Audit: Dormitory
Management 1st Fighter Wing, Langley Air Force Base, Virginia, EL099036
(Langley Air Force Base, Va.: Feb. 3, 1999). Nearly All Marine Corps

Barracks Were Occupied Audit Groups Have Reported Noncompliance with
Utilization Guidance

Page 25 GAO- 03- 602 Military Housing 95 percent. 19 The report stated
that the unnecessary authorizations were issued because Fort Benning
decentralized barracks management to the

unit level and did not make sure that each unit fully used its barracks
before authorizing members to live off base with a housing allowance.

While it is important to make full use of existing barracks space, it is
also important that the services maintain an inventory of barracks spaces
only in the numbers actually required. In our January 2003 report, we
discussed the widely varying standards among the services regarding who
should live in barracks and the effect this can have on program costs and
quality of life and recommended that the services review the rationale
behind their barracks occupancy requirements. 20 DOD has left unclear the
extent to which it is likely to make changes in its barracks occupancy
requirements. However, if the services were to change their barracks
occupancy requirements and permit more junior members to live off base
with a housing allowance, then the services could reduce housing costs by
identifying and eliminating excess barracks infrastructure. To use the Air
Force case as an illustration, instead of bringing junior members back on
base to fill up barracks vacancies, the Air Force could officially decide
that many of these members should be allowed to continue to live off base.
This decision would reduce barracks needs and the Air Force could then
consider vacant barracks spaces as excess infrastructure that could be

eliminated to reduce costs. DOD and the services have not fully explored
barracks privatization to determine whether the concept could provide a
better economic value to the government than the use of military
construction financing. Although

the services have separately studied the issues and unique challenges
associated with barracks privatization, DOD has largely concentrated on
family housing privatization and not on promoting a coordinated, focused
effort to address the challenges and develop pilot project proposals to

determine the overall feasibility and merits of barracks privatization.
Without more coordination of activities to address the challenges
associated with barracks privatization, efforts might be duplicated and
potential opportunities to optimize lessons learned might be lost.

19 U. S. Army Audit Agency, Space Utilization: U. S. Army Infantry Center
and Fort Benning, Georgia, AA 97- 97, (Alexandria, Va.: Jan. 6, 1997). 20
See GAO- 03- 257R. Changing Occupancy

Requirements Could Reduce the Need for Barracks Spaces

Conclusions

Page 26 GAO- 03- 602 Military Housing For several reasons, DOD and the
military services have not taken advantage of opportunities to potentially
reduce their housing costs for

unmarried servicemembers through use of residential construction practices
in government- owned barracks construction and better utilization of
existing government- owned barracks. First, widespread adoption of
residential construction practices in building governmentowned barracks
has been hampered because of concerns about barracks durability and
unanswered questions about the ability of wood- frame barracks to meet all
antiterrorism force protection requirements. Without engineering studies
to resolve these questions and, if appropriate, adoption of residential
construction practices, the services could be spending more than is needed
on barracks construction. Second, lenient barracks utilization guidance*
which in some cases does not require full

use of existing government- owned barracks before authorizing housing
allowances for junior members to live off base* and limited enforcement of
existing guidance have led in some cases to the routine acceptance of less
than maximum use of barracks and the payment of housing allowances when
vacancies exist. The establishment of and compliance with guidance that
requires maximum use of required existing barracks* specifically,
utilization that routinely approaches 100 percent before unmarried junior
members are authorized housing allowances* could result in reducing the
services* housing costs for junior members. It is also important that the
services maintain an inventory of barracks spaces only in the numbers
actually required. If the services were to change their barracks occupancy
requirements based on their review of the requirements* rationale and
permit more junior members to live off base, then they could also reduce
costs by identifying and eliminating barracks space that is no longer
needed.

To capitalize on opportunities for reducing housing costs for unmarried
servicemembers, we recommend that the Secretary of Defense direct the
Under Secretary of Defense for Acquisition, Technology and Logistics to:

 Promote a coordinated, focused effort among the military services to
determine the feasibility and cost- effectiveness of barracks
privatization by addressing the associated challenges and facilitating the
development of pilot project proposals. This effort should support the
Navy*s use of the pilot housing privatization authority provided to the
Navy in the Fiscal Year 2003 Bob Stump National Defense Authorization Act,
with lessons learned applied to the other services* efforts.
Recommendations for

Executive Action

Page 27 GAO- 03- 602 Military Housing  Direct the Army Corps of Engineers
and the Naval Facilities Engineering Command to jointly undertake an
engineering study to

resolve questions about use of residential construction practices for
barracks and compliance with antiterrorism force protection requirements.
 Direct the military services to adopt residential construction practices

for future barracks construction projects to the maximum extent practical,
providing that the engineering studies show that barracks built with
residential construction practices can economically meet all force
protection requirements.  Issue guidance directing that the services
maximize use of required

existing barracks space* defined as utilization that routinely approaches
100 percent* before authorizing unmarried junior members to live off base
with a housing allowance.  Direct the military services to identify and
eliminate excess barracks

infrastructure if, by reviewing the rationale behind their barracks
occupancy requirements, they determine that more unmarried junior members
should be permitted to live off base with a housing allowance.

In commenting on a draft of this report, the Director, Competitive
Sourcing and Privatization, fully agreed with four and partially agreed
with one of our recommendations and indicated that actions were underway
or planned to deal with most of them. DOD stated that it was supportive of
initiatives to energize barracks privatization and planned to build on
lessons learned from the Navy*s pilot project to encourage barracks
privatization. DOD also stated that it supports the study and use of
commercial and residential construction standards and use of the
privatization authorities to improve the living conditions for
unaccompanied members as quickly as possible. In addition, it stated that
the Army Corps of Engineers has already begun a study of residential
construction methods and compliance with antiterrorism force protection
requirements using the Fort Meade barracks project as a basis for the
study. Further, as the first step to maximizing use of existing barracks,
programming for new barracks, and divesting of excess infrastructure, DOD
stated that the actual need for barracks space must be determined by
establishing a common requirements process consistent with individual
service missions.

DOD partially agreed with our recommendation to issue guidance directing
the services to maximize use of required existing barracks space. DOD
stated that barracks requirements must first be determined before Agency
Comments

and Our Evaluation

Page 28 GAO- 03- 602 Military Housing issuing such guidance. We agree that
the services should maintain an inventory of barracks spaces only in the
numbers actually required and that if the services were to reduce their
barracks occupancy requirements

and permit more junior members to live off base, then they could reduce
costs by identifying and eliminating barracks space that is no longer
needed, as DOD suggests in its comments. However, on the basis of their
current barracks occupancy requirements and construction plans, the
services have individually determined that most of their existing barracks
spaces are needed. Unless stated barracks occupancy requirements are

reduced, we believe that these spaces should be fully used before
authorizing housing allowances for junior members to live off base and
that additional DOD guidance is needed now to help achieve this. To do
otherwise, results in having unused government- owned barracks spaces and
paying housing allowances at the same time, which wastes available
resources.

DOD*s comments are included in appendix IV of this report. As you know, 31
U. S. C. 720 requires the head of a federal agency to submit a written
statement of the actions taken on our recommendations to the Senate
Committee on Governmental Affairs and the House Committee on Government
Reform not later than 60 days after the date of this report. A written
statement must also be sent to the House and Senate Committees on
Appropriations with the agency*s first request for appropriations made
more than 60 days after the date of this report.

Page 29 GAO- 03- 602 Military Housing We are sending copies of this report
to the appropriate congressional committees, and it will be available at
no charge on GAO*s Web site at

http:// www. gao. gov. If you or your staff have any questions on the
matters discussed in this letter, please contact me at (202) 512- 8412, or
my Assistant Director, Mark Little, at (202) 512- 4673. Gary Phillips, Jim
Ellis,

Sharon Reid, Harry Knobler, and R. K. Wild were major contributors to this
report.

Sincerely yours, Barry W. Holman, Director Defense Capabilities and
Management

Appendix I: Scope and Methodology Page 30 GAO- 03- 602 Military Housing
Our review of DOD*s housing program for unmarried servicemembers focused
on enlisted members at their permanent assignment locations in

the United States* after the members completed recruit and advanced
individual training. We interviewed DOD and service headquarters housing
officials; reviewed applicable DOD and military service policies and
procedures; reviewed barracks improvement plans and milestones; and
visited selected installations to view barracks conditions and discuss
local management practices. Specifically, we visited the Naval Station
Norfolk, Virginia; Langley Air Force Base, Virginia; Fort Eustis,
Virginia; and Marine Corps Base Quantico, Virginia.

To examine opportunities for reducing costs through barracks privatization
and the barriers to developing barracks privatization project proposals,
we examined the laws authorizing and funding the program, reviewed DOD*s
experiences with family housing privatization, interviewed DOD and service
officials, and reviewed available documentation to identify past efforts
and current plans related to barracks privatization. We also discussed
privatization plans and challenges with local officials at the
installations visited and discussed budget scoring issues for barracks
privatization with officials at the Office of Management and Budget.

To examine opportunities for reducing costs through adoption of
residential construction practices for barracks construction, we reviewed
Army studies and analyses in this area. We also obtained and compared
selected cost information for barracks constructed using traditional
practices and for barracks constructed using residential practices. We did
not attempt to validate this cost information. Further, we interviewed

service officials to discuss the services* use of residential construction
practices for barracks and to determine the reasons why the concept has
not been widely adopted. We also visited Fort Meade, Maryland, to observe
construction progress on the Army*s first barracks project that has
incorporated residential construction practices.

To examine opportunities for reducing costs through better utilization of
barracks, we reviewed the services* policies and instructions related to
barracks use, occupancy goals, and justification for authorizing unmarried
junior members to live off base with a housing allowance. To determine
whether greater use of barracks could reduce housing allowance costs, we
obtained and analyzed readily available data showing the number of
barracks vacancies and the number of junior servicemembers living off base
with a housing allowance on September 30, 2002. To estimate the potential
cost reductions, we multiplied the number of members who Appendix I: Scope
and Methodology

Appendix I: Scope and Methodology Page 31 GAO- 03- 602 Military Housing
could have been assigned to the barracks vacancies by the national average
basic allowance for housing rate. We also reviewed prior audit

reports related to barracks utilization from military service audit
organizations.

We conducted our review between May 2002 and April 2003 in accordance with
generally accepted government auditing standards.

Appendix II: Photographs of Old and New Style Barracks and Quarters Aboard
Navy Ships

Page 32 GAO- 03- 602 Military Housing The military services are replacing
old barracks, where junior members often share a sleeping room with one or
two others and share a gang

latrine with occupants from several other rooms, with new barracks, where
in most cases junior members have a private sleeping room and share a bath
and kitchenette with one other member. The Navy*s *homeport ashore*
initiative intends to provide barracks spaces on base for junior members
who are currently required to live in cramped quarters aboard their ships
even when their ships are in homeport. During our visits

to installations, we observed a variety of barracks in conditions ranging
from outdated to newly constructed. Figure 2 shows photographs of typical
old and new style barracks.

Figure 2: Old and New Style Barracks at Fort Eustis, Virginia

At the older barracks, we saw cramped living quarters, peeling paint,
damaged walls and ceilings, and poor heating, ventilation, and air
conditioning systems. On board ship, the space was cramped. Some examples
of the living quarters and gang latrines in old style barracks and aboard
ship are shown in figure 3. Appendix II: Photographs of Old and New

Style Barracks and Quarters Aboard Navy Ships

Appendix II: Photographs of Old and New Style Barracks and Quarters Aboard
Navy Ships

Page 33 GAO- 03- 602 Military Housing Figure 3: Typical Living Quarters
and Gang Latrines in Old Style Barracks and Aboard Ship In contrast, we
observed several newly constructed barracks that provided living quarters
using the 1+ 1 barracks design standard. Some examples of the bedrooms,
shared baths, and shared kitchenettes are shown in

figure 4.

Appendix II: Photographs of Old and New Style Barracks and Quarters Aboard
Navy Ships

Page 34 GAO- 03- 602 Military Housing Figure 4: Typical Living Quarters in
New Style Barracks

Appendix III: Details on Cost Differences in Barracks Built with
Residential and Traditional Construction Practices

Page 35 GAO- 03- 602 Military Housing Compared to traditional steel frame,
concrete, and cement block construction, Army analyses show that use of
residential construction can

reduce typical barracks construction costs by 23 percent or more. Army
analyses also indicate that a barrack*s total costs over its lifetime* i.
e., initial construction costs and annual operations and maintenance
costs* would be less if constructed with residential practices. The lower
*lifecycle costs* from use of residential construction practices results
not only from the lower initial construction costs, but also from
comparable

operations and maintenance costs for many building components regardless
of the type of construction practices used* traditional or residential.
Use of residential construction practices to build barracks could also
reduce renovation costs and result in additional cost reductions in labor
construction costs.

Army officials noted that actual differences in barracks operations and
maintenance costs are dependent on the particular building designs. In
general, however, the officials stated that there should be no significant
operations and maintenance cost differences with use of either traditional

or residential construction practices in many architectural features, such
as exterior and interior finishes, electrical and plumbing systems, doors
and hardware, and windows. For other building components, such as roofs
and heating, ventilation, and air conditioning systems, operations and
maintenance costs could be lower with traditional construction. But,
because of the lower initial construction costs, use of residential
construction practices for such components could still result in lower
costs over the life of the barracks. For example, the roof system for many
traditionally constructed barracks consists of metal and concrete that
would normally last for the entire life of the barracks. When using
residential construction practices, the barracks roof system would
normally consist of heavy- duty shingles that would require replacement
during the life of the barracks. Yet, Army analyses show that a shingle
roof system would have lower life- cycle costs than a metal and concrete
roof system because of its lower initial construction costs.

Army officials also noted that use of residential construction practices
for barracks would result in buildings that could be renovated at lower
costs than traditionally constructed barracks. They stated that many
military buildings, including barracks, become functionally obsolete in 25
years or less because of changed missions or design standards, such as the
change in the barracks design standard in 1995 from multi- person to
private

sleeping rooms. The costs to renovate and reconfigure a traditionally
constructed barracks with masonry interior walls would normally be
Appendix III: Details on Cost Differences in

Barracks Built with Residential and Traditional Construction Practices

Appendix III: Details on Cost Differences in Barracks Built with
Residential and Traditional Construction Practices

Page 36 GAO- 03- 602 Military Housing greater than the costs to renovate
and reconfigure a barracks built with residential construction practices
using wood frame and sheetrock walls.

According to Army officials, use of residential construction practices to
build barracks could result in additional reductions in construction labor
costs. Federal statutes, commonly referred to as the Davis- Bacon Act and
related legislation, require that workers on most government construction
projects be paid according to the prevailing local wage rates as
determined by the Department of Labor. However, there are different
prevailing local wage rate scales depending on the type of construction
being performed. Traditionally, barracks construction has been considered
commercial construction and the commercial wage rate scale has been used
for these projects. In contrast, military family housing construction has
been considered residential construction and the residential wage rate
scale has been used for these projects. According to Army officials, the
residential wage rate scale is normally 5 to 30 percent less than the
commercial wage rate scale. Thus, using residential construction practices
in a low- rise (three stories or less) barracks construction project and
application of the residential, instead of commercial, wage rate scale,
could result in additional reductions in barracks construction costs.

Appendix IV: Comments from the Department of Defense

Page 37 GAO- 03- 602 Military Housing Appendix IV: Comments from the
Department of Defense

Appendix IV: Comments from the Department of Defense Page 38 GAO- 03- 602
Military Housing

Appendix IV: Comments from the Department of Defense

Page 39 GAO- 03- 602 Military Housing (350215)

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